AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
GENERAL MOTORS ACCEPTANCE CORPORATION
A NEW YORK CORPORATION -- I.R.S. EMPLOYER NO. 38-0572512
3044 WEST GRAND BOULEVARD 767 FIFTH AVENUE
DETROIT, MICHIGAN 48202 NEW YORK, NEW YORK 10153
(313-556-5000) (212-418-6120)
AGENT FOR SERVICE
JEROME B. VAN ORMAN, VICE PRESIDENT
GENERAL MOTORS ACCEPTANCE CORPORATION
3044 WEST GRAND BOULEVARD, DETROIT, MICHIGAN 48202 (313-556-1508)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable on or after the effective date of this Registration
Statement.
-----------------
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING
BOX. ___
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED
ON A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT
OF 1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR
INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. X
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. ___
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ___
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. ___
<PAGE>
CALCULATION OF REGISTRATION FEE
==============================================================================
Title of Proposed Proposed
Each Class Amount to be Maximum Maximum
of Securities Registered Offering Aggregate Amount of
to be (1) Price Offering Registration
Registered Per Unit Price (2) Fee
- ------------------------------------------------------------------------------
Medium-Term Notes, Due from
Nine Months to Thirty Years
from Date of Issue $7,125,373,000 100% $7,125,373,000 $2,159,204
==============================================================================
Or, if any Debt Securities (1) are denominated or payable in a foreign or
composite currency or currencies, such principal amount as shall result in an
aggregate initial offering price equivalent to $10,000,000,000, at the time of
initial offering, (2) are issued at an original issue discount, such greater
principal amount as shall result in an aggregate initial offering price of
$10,000,000,000, or (3) are issued with their principal amount payable at
maturity to be determined with reference to a currency exchange rate or other
index, such principal amount as shall result in an aggregate initial offering
price of $10,000,000,000.
(1) The amount of Medium-Term Notes being registered, together with
$2,874,627,000 remaining Medium-Term Notes registered on October 17, 1995
(Registration No. 33-63463), represents the maximum aggregate principal amount
of Medium-Term Notes which, on December 16, 1996, are expected to be offered for
sale.
(2) Estimated solely for the purpose of determining the amount of the
registration fee.
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus included
in this Registration Statement also relates to debt securities of the registrant
remaining unissued under Registration Statement No. 33-63463.
---------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- ------------------------------------------------------------------------------
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
- ------------------------------------------------------------------------------
<PAGE>
PROSPECTUS
U.S.$10,000,000,000
GENERAL MOTORS ACCEPTANCE CORPORATION
MEDIUM-TERM NOTES
DUE FROM NINE MONTHS TO THIRTY YEARS FROM DATE OF ISSUE
General Motors Acceptance Corporation (the "Company") may offer from time
to time its Medium-Term Notes Due from Nine Months to Thirty Years from Date of
Issue (the "Notes"). The Notes offered by this Prospectus will be limited to up
to U.S.$10,000,000,000 aggregate initial offering price or the equivalent
thereof in other currencies, including composite currencies such as the European
Currency Unit ("ECU") (the "Specified Currency"). The Notes will be offered at
varying maturities due from nine months to thirty years from the date of issue
(the "Issue Date"), as selected by the purchaser and agreed to by the Company,
and may be subject to redemption at the option of the Company or repayment at
the option of the holder thereof prior to the maturity date thereof (as further
defined herein, the "Maturity Date"). Each Note will be denominated in U.S.
dollars or in the Specified Currency, as set forth in a Pricing Supplement (the
"Pricing Supplement") to this Prospectus. See "Important Currency Exchange
Information" and "Risk Factors-Foreign Currency Risks."
The interest rate on each Note will be either a fixed rate established by
the Company at the Issue Date of such Note (a "Fixed Rate Note"), which may be
zero in the case of certain Notes issued at a price representing a discount from
the principal amount payable upon the Maturity Date, or at a floating rate as
set forth therein and specified in the applicable Pricing Supplement (a
"Floating Rate Note"). A Fixed Rate Note may pay a level amount in respect of
both interest and principal amortized over the life of the Note (an "Amortizing
Note"). See "Description of Notes-Fixed Rate Notes" and "Description of
Notes-Floating Rate Notes." The principal amount payable at the Maturity Date
of, or any interest and premium, if any, on, a Note, or both, may be determined
by reference to one or more Specified Currencies (a "Currency Indexed Note"), or
by reference to the price of one or more specified securities or commodities or
to one or more securities or commodities exchange indices or other indices or by
other methods (an "Indexed Note," such term to include Currency Indexed Notes)
as described in the applicable Pricing Supplement. See "Description of
Notes-Currency Indexed Notes," "Description of Notes-Other Indexed Notes and
Certain Terms Applicable to All Indexed Notes" and "Risk Factors-Indexed Notes
Risks."
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY PRICING SUPPLEMENT HERETO. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------
PRICE TO AGENT' DISCOUNTS PROCEEDS TO
PUBLIC (1)(2) AND COMMISSIONS (2)(3) COMPANY (2)(3)(4)
Per 100.00% .05% - .60% 99.95% - 99.40%
Note
Total U.S. $10,000,000,000 U.S.$5,000,000 - U.S.$9,995,000,000 -
U.S.$60,000,000 U.S.$9,940,000,000
===============================================================================
(1) Unless otherwise specified in the applicable Pricing Supplement, Notes
will be issued at 100% of their principal amount.
(2) Or the equivalent thereof in the Specified Currency.
(3) The commission payable to Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Salomon Brothers Inc, Morgan Stanley & Co.
Incorporated, Lehman Brothers, Lehman Brothers Inc., J. P. Morgan &
Co., Bear, Stearns & Co. Inc. and UBS Securities Inc. (collectively,
"the Agents") for each Note sold through such Agent will be computed
based upon the Price to Public of such Note and will depend on such
Note's Maturity Date. The Company also may sell Notes to an Agent, as
principal for its own account for resale to one or more investors and
other purchasers at varying prices related to prevailing market prices
at the time of resale, as determined by such Agent, or if so agreed, at
a fixed public offering price. No commission will be payable on any
Notes sold directly to purchasers by the Company. The Company has
agreed to indemnify each Agent against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. See "Plan of
Distribution."
(4) Before deducting expenses payable by the Company estimated at
$2,500,000.
------------------------
Merrill Lynch & Co.
Salomon Brothers Inc
Morgan Stanley & Co. Incorporated
Lehman Brothers
J. P. Morgan & Co.
Bear, Stearns & Co. Inc.
UBS Securities Inc.
December , 1996.
<PAGE>
Unless otherwise specified in the applicable Pricing Supplement, interest
on each Fixed Rate Note (other than an Amortizing Note) is payable semiannually
each April 1 and October 1 (a "Semiannual Pay Note") or, if annually, each
October 1 (an "Annual Pay Note"), as selected by the purchaser and agreed to by
the Company, and at Maturity (as defined herein). Interest on each Floating Rate
Note is payable on the dates set forth herein and in the applicable Pricing
Supplement. Amortizing Notes will pay principal and interest semiannually each
April 1 and October 1, or quarterly each January 1, April 1, July 1 and October
1, and, in either case, at Maturity, or otherwise, as specified in the
applicable Pricing Supplement. See "Description of Notes-Payment of Principal
and Interest." Interest rates, interest rate formulae and other variable terms
are subject to change by the Company, but no change will affect any Note already
issued or as to which an offer to purchase has been accepted by the Company.
The Notes may be issued in whole or in part in the form of one or more
global Notes to be deposited with or on behalf of The Depository Trust Company
("DTC") or other depositary (DTC or such other depositary as is specified in the
applicable Pricing Supplement is herein referred to as the "Depositary") and
registered in the name of the Depositary's nominee. Beneficial interests in the
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by the Depositary and, with respect to the beneficial owners'
interests, by the Depositary's participants. Notes will not be issuable as
certificated Notes except under the limited circumstances described herein. See
"Description of Notes-Delivery and Form."
Unless otherwise specified in the applicable Pricing Supplement, Notes
will be issued only in registered form in minimum denominations of U.S.$5,000
(and any amount in excess thereof that is an integral multiple of U.S.$1,000)
or, in the case of Notes denominated in a Specified Currency other than U.S.
dollars, the authorized denominations set forth in the applicable Pricing
Supplement. See "Description of Notes-General." Unless otherwise specified in
the applicable Pricing Supplement, the Notes may not be redeemed by the Company
or repaid at the option of the holder prior to their Maturity. See "Description
of Notes-Redemption and Repayment." Notes will be transferable without service
charge.
The Specified Currency, any applicable interest rate or formula, the issue
price, the Maturity Date, any interest payment dates, any principal payment
dates, any redemption and/or repayment provisions, whether such Note is a Fixed
Rate Note, a Floating Rate Note, an Amortizing Note or an Indexed Note, and any
other terms applicable to each Note and established at the time of offering,
unless otherwise described herein, will be described in the applicable Pricing
Supplement.
The Notes are being offered on a continuous basis for sale by the Company
through one or more of the Agents listed below and each of the Agents has agreed
to use its reasonable best efforts to solicit offers to purchase the Notes. In
addition, the Notes may be sold by the Company to any Agent as principal for its
own account for resale to one or more investors and other purchasers at varying
prices related to prevailing market prices at the time of resale, as determined
by such Agent, or, if so agreed, at a fixed public offering price. The Notes may
also be sold by the Company directly to purchasers. In addition, the Company may
arrange for the Notes to be sold through other agents, dealers or underwriters.
Unless otherwise specified in an applicable Pricing Supplement, the Notes will
not be listed on any securities exchange, and there can be no assurance that the
Notes offered hereby will be sold or that there will be a secondary market for
the Notes. The Agents have advised the Company that they may from time to time
purchase and sell Notes in the secondary market, but the Agents are not
obligated to do so. No termination date for the offering of the Notes has been
established. The Company reserves the right to withdraw, cancel or modify the
offer made hereby without notice. The Company or the Agent that solicits any
offer may reject such offer in whole or in part. See "Plan of Distribution."
No dealer, salesman or any other person has been authorized to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus and any Pricing Supplement in connection with the
offer contained in this Prospectus and any Pricing Supplement and, if given or
made, such information or representation must not be relied upon as having been
authorized by the Company or by any Agent. Neither the delivery of this
Prospectus and any Pricing Supplement nor any sale made thereunder shall, under
any circumstances, create any implication that the information therein is
correct at any time subsequent to the date thereof. This Prospectus and any
Pricing Supplement shall not constitute an offer to sell or a solicitation of an
offer to buy any of the Notes offered hereby by anyone in any jurisdiction in
which such offer or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to any person to whom it
is unlawful to make such offer or solicitation.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information filed by the
Company with the Commission can be inspected, and copies may be obtained at
prescribed rates, at the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, as well as at the following Regional
Offices of the Commission at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511 and Seven World Trade Center, Suite 1300, New
York, New York 10048. Such material may also be accessed electronically by means
of the Commission's home page on the Internet at http://www.sec.gov. Reports and
other information concerning the Company can also be inspected at the offices of
the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (including all amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Notes. As permitted by the rules and regulations of the Commission, this
Prospectus does not contain all the information set forth in the Registration
Statement and the exhibits thereto and to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1995 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996 filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act are incorporated by reference in this
Prospectus.
<PAGE>
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the Notes shall
be deemed to be incorporated by reference in this Prospectus and to be a part
thereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST, TO EACH
PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, A COPY OF ANY OR ALL OF THE
DOCUMENTS DESCRIBED ABOVE WHICH HAVE BEEN INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS. SUCH REQUEST SHOULD BE
DIRECTED TO:
G. E. GROSS, COMPTROLLER
GENERAL MOTORS ACCEPTANCE CORPORATION
3044 WEST GRAND BOULEVARD, ANNEX 103
DETROIT, MICHIGAN 48202
(313) 556-1240
RISK FACTORS
THIS PROSPECTUS DOES NOT DESCRIBE ALL OF THE RISKS OF AN INVESTMENT IN
NOTES THAT RESULT FROM SUCH NOTES BEING DENOMINATED OR PAYABLE IN OR DETERMINED
BY REFERENCE TO A CURRENCY OR COMPOSITE CURRENCY OTHER THAN UNITED STATES
DOLLARS OR TO ONE OR MORE INTEREST RATES, CURRENCIES, OR OTHER INDICES OR
FORMULAS, EITHER AS SUCH RISKS EXIST AT THE DATE OF THIS PROSPECTUS OR AS THEY
MAY CHANGE FROM TIME TO TIME. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN
FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN SUCH
NOTES. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE
UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS OR TRANSACTIONS
INVOLVING THE APPLICABLE INTEREST RATE, CURRENCY, OR OTHER INDICES OR FORMULAS.
RISKS ASSOCIATED WITH EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes that are denominated in, or the payment of which is
related to the value of, a Specified Currency other than U.S. dollars ("Foreign
Currency Notes") entails significant risks that are not associated with a
similar investment in a security denominated in U.S. dollars. Similarly, an
investment in a Currency Indexed Note entails significant risks that are not
associated with a similar investment in non-Indexed Notes. See "Risk
Factors-Indexed Notes Risks." Such risks include, without limitation, the
possibility of significant changes in the rate of exchange between United States
dollars and such Specified Currency (and, in the case of Currency Indexed Notes,
the rate of exchange between the Specified Currency and the Indexed Currency for
such Currency Indexed Note), changes resulting from official redenomination with
respect to a Specified Currency (or, in the case of each Currency Indexed Note,
with respect to the Specified Currency or the Indexed Currency therefor) and the
possibility of the imposition or modification of foreign exchange controls by
either the United States or foreign governments. Such risks generally depend on
economic and political events over which the Company has no control. In recent
years, rates of exchange between the U.S. dollar and certain foreign currencies,
and between certain foreign currencies and other foreign currencies, have been
highly volatile and such volatility may be expected in the future. The exchange
rate between the U.S. dollar and a foreign currency or composite currency is at
any moment a result of the supply and demand for such currency or the currencies
comprising such composite currency, and changes in the rate result over time
from the interaction of many factors, among which are rates of inflation,
interest rate levels, balance of payments and the extent of governmental
surpluses or deficits in the countries of such currencies. These factors are in
turn sensitive to the monetary, fiscal and trade policies pursued by such
governments and those of other countries important to international trade and
finance. Fluctuations in any particular exchange rate that have occurred in the
past are not necessarily indicative, however, of fluctuations in the rate that
may occur during the term of any Foreign Currency Note or any Currency Indexed
Note.
Depreciation of the Specified Currency for a Foreign Currency Note against
U.S. dollars would result in a decrease in the effective yield of such Foreign
Currency Note below its applicable interest rate and, in certain circumstances,
could result in a loss to the investor on a U.S. dollar basis. Similarly,
depreciation of the Denominated Currency with respect to a Currency Indexed Note
against the applicable Indexed Currency would result in the principal amount
payable with respect to such Currency Indexed Note at the Maturity Date being
less than the Face Amount of such Currency Indexed Note which, in turn, would
decrease the effective yield of such Currency Indexed Note below its stated
interest rate and, in certain circumstances, could also result in a loss of all
or a substantial portion of the principal of such Note to the investor. See
"Description of Notes---Currency Indexed Notes."
Governments have from time to time imposed, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a Specified Currency at the time of payment of principal of, premium, if any,
or interest, if any, on, a Foreign Currency Note. There can be no assurances
that exchange controls will not restrict or prohibit payments of principal, and
premium, if any, or interest, if any, in any Specified Currency other than U.S.
dollars. In addition to the risks associated with relative currency valuations
discussed above, the imposition of exchange controls might impact the liquidity
of any Note denominated in, or the value of which is linked to, a foreign
currency. Even if there are no actual exchange controls, it is possible that the
Specified Currency for such Note would not be available to the Company when
payments on such Note are due because of circumstances beyond the control of the
Company. In that event, the Company will make required payments in U.S. dollars
on the basis described herein. See "Description of Notes---Payment Currency" and
"Description of Notes---Currency Indexed Notes--Payment of Principal and
Interest."
The information set forth in this Prospectus is directed to prospective
purchasers who are residents of the United States, and the Company disclaims any
responsibility to advise prospective purchasers who are residents of countries
other than the United States with respect to any matters that may affect the
purchase, holding or receipt of payments of principal of, premium, if any, and
interest, if any, on, the Notes. Persons who are not residents of the United
Sates should consult their own legal advisors with regard to such matters.
<PAGE>
Pricing Supplements relating to Foreign Currency Notes or Currency Indexed
Notes will contain information concerning historical exchange rates for the
applicable Specified Currency against the U.S. dollar or other relevant
currency, (including in the case of Currently Indexed Notes, the applicable
Indexed Currency), a description of the currency or currencies and any exchange
controls affecting such currency or currencies. The information contained
therein concerning exchange rates is furnished as a matter of information only
and should not be regarded as indicative of the range of or trends in
fluctuations in currency exchange rates that may occur in the future.
RISKS ASSOCIATED WITH INDEXED NOTES
An investment in Notes indexed, as to principal or interest, or both, to
one or more values of currencies (including exchange rates between currencies),
commodities or interest rate indices entails significant risks that are not
associated with similar investments in a conventional fixed-rate debt security.
If the interest rate of such a Note is so indexed, it may result in an interest
rate that is less than that payable on a conventional fixed-rate debt security
issued at the same time, including the possibility that no interest will be
paid, and, if the principal amount payable at maturity may be less than the
original purchase price of such Note if allowed pursuant to the terms of such
Note, including the possibility that no principal will be paid. The secondary
market for such Notes will be affected by a number of factors, independent of
the creditworthiness of the issuer and the value of the applicable currency,
commodity or interest rate index, including the volatility of the applicable
currency, commodity or interest rate index, the time remaining to the Maturity
of such Notes, the amount outstanding of such Notes and market interest rates.
The value of the applicable currency, commodity or interest rate index depends
on a number of interrelated factors, including economic, financial and political
events, over which the Company has no control. Additionally, if the formula used
to determine the principal amount or interest payable with respect to such Notes
contains a multiple or leverage factor, the effect of any change in the
applicable currency, commodity or interest rate index will be increased. The
historical experience of the relevant currencies, commodities or interest rate
indices should not be taken as an indication of future performance of such
currencies, commodities or interest rate indices during the term of any Note.
Accordingly, prospective investors should consult their own financial and legal
advisors as to the risks entailed by an investment in such Notes and the
suitability of such Notes in light of their particular circumstances.
JUDGMENTS
The Notes will be governed by and construed in accordance with the laws of
the State of New York. In the event an action based on Notes denominated in a
Specified Currency other than U.S. dollars were commenced in a court in the
United States, it is likely that such court would grant a judgment relating to
the Notes only in U.S. dollars. If an action based on Notes denominated in a
Specified Currency other than U.S. dollars were commenced in a New York court,
however, such court would render or enter a judgment or decree in the Specified
Currency. Such judgment would then be converted into U.S. dollars at the rate of
exchange prevailing on the date of the entry of the judgment or decree.
<PAGE>
EFFECT OF OPTIONAL REDEMPTION
Any optional redemption of Notes might affect the market value of such
Notes. Since the Company may be expected to redeem such Notes when prevailing
interest rates are relatively low, an investor might not be able to reinvest the
redemption proceeds at an effective interest rate as high as the interest rate
on such Notes.
NO ESTABLISHED TRADING MARKET
The Notes will not have an established trading market when issued, and
there can be no assurance of a secondary market for the Notes or the
continued liquidity of such market if one develops. See "Plan of
Distribution."
CREDIT RATINGS
Any credit ratings assigned to the Company's medium-term note program may
not reflect the potential impact of all risks related to structure and other
factors on the market value of the Notes. Accordingly, prospective investors
should consult their own financial and legal advisors as to the risks entailed
by an investment in the Notes and the suitability of such Notes in light of
their particular circumstances.
PRINCIPAL EXECUTIVE OFFICES
General Motors Acceptance Corporation has its principal office at 767
Fifth Avenue, New York, New York 10153 (Tel. No. 212-418-6120) and
administrative offices at 3044 West Grand Boulevard, Detroit, Michigan 48202
(Tel. No. 313-556-5000).
RATIO OF EARNINGS TO FIXED CHARGES
NINE MONTHS ENDED
SEPTEMBER 30 YEARS ENDED DECEMBER 31
------------------ -----------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
1.43 1.35 1.36 1.33 1.33 1.35 1.23
The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes and fixed charges by the fixed charges. This ratio
includes the earnings and fixed charges of the Company and its consolidated
subsidiaries; fixed charges consist of interest, debt discount and expense and
the portion of rentals for real and personal properties in an amount deemed to
be representative of the interest factor.
USE OF PROCEEDS
The net proceeds from the sale of the Notes will be added to the general
funds of the Company and will be available for the purchase of receivables, the
making of loans or the repayment of debt. Such proceeds initially may be used to
reduce short-term borrowings or invested in short-term securities.
<PAGE>
DESCRIPTION OF NOTES
The terms and conditions set forth herein will apply to each Note unless
otherwise specified herein or in the applicable Pricing Supplement and in such
Note.
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will be denominated in U.S. dollars, and payment of principal of, premium, if
any, and interest, if any, on, the Notes will be made in U.S. dollars. If any
Note is not to be denominated in U.S. dollars, the applicable Pricing Supplement
will specify the currency or currencies, including composite currencies such as
the ECU, in which such Note is to be denominated (the "Specified Currency") and,
if different, the currency or currencies in which the principal, premium, if
any, and interest, if any, with respect to such Note are to be paid, along with
any other terms relating to the non-U.S. dollar denomination, including exchange
rates for the Specified Currency as against the U.S. dollar at selected times
during the last five years, and any exchange controls or other foreign currency
risks relating to such Specified Currency. See "Foreign Currency Risks."
GENERAL
The Notes will be limited to U.S.$10,000,000,000 aggregate initial
offering price, or the equivalent thereof in one or more Specified Currencies.
The Notes will be issued under an Indenture dated as of December 1, 1993 between
the Company and Citibank, N.A., as Trustee, as supplemented from time to time
(the "Indenture"). The Indenture does not limit the amount of additional
unsecured indebtedness ranking equally and ratably with the Notes that the
Company may incur and the Company may, from time to time, without the consent of
the holders of the Notes, provide for the issuance of Notes under the Indenture
in addition to the U.S.$10,000,000,000 aggregate initial offering price of the
Notes offered hereby. The U.S. dollar equivalent of Notes denominated in a
Specified Currency other than U.S. dollars will be determined on the Business
Day (as defined below) prior to the date of acceptance by the Company for a
purchase of Notes, on the basis of the Market Exchange Rate (as defined below)
for such Specified Currency. The statements herein concerning the Notes and the
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all the provisions of the Indenture, including
the definitions therein of certain terms. Whenever particular provisions of the
Indenture or defined terms contained in the Indenture are referred to, such
provisions and defined terms are incorporated herein by reference as a part of
the statements made, and the statements are qualified in their entirety by such
reference.
The Notes will constitute unsecured and unsubordinated indebtedness of the
Company and will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of the Company.
Notes will be offered on a continuing basis and will mature on any day
nine months to thirty years from the Issue Date, as selected by the purchaser
and agreed to by the Company. Each Note will bear interest from the Issue Date
(as defined below) at either (a) a fixed rate ("Fixed Rate Notes"), which may be
zero in the case of a Note issued at an Issue Price (as defined below)
representing a substantial discount from the principal amount payable upon the
Maturity Date (a "Zero-Coupon Note") or (b) a floating rate or rates determined
by reference to one or more Base Rates (as defined herein), which may be
adjusted by a Spread and/or Spread Multiplier (each as defined below) ("Floating
Rate Notes").
Each Note will be issued in fully registered form without coupons and will
be represented by a global Note registered in the name of a nominee of the
Depositary. Except as set forth herein, Notes will be issuable only in global
form. See "Description of Notes-Delivery and Form" below. All Notes issued on
the same day and having the same terms (including, but not limited to, the same
designation, the same currency, Interest Payment Dates (as defined below), rate
of interest, Maturity Date and redemption or repayment provisions) may be
represented by a single Note. A beneficial interest in a Note will be shown on,
and transfers thereof will be effected only through, records maintained by the
Depositary or its participants. Payments of principal of, premium, if any, and
interest, if any, on, Notes represented by a Note will be made by the Company or
its paying agent to the Depositary or its nominee. Unless otherwise specified in
the applicable Pricing Supplement, DTC will be the Depositary. See "Description
of Notes-Delivery and Form."
Unless otherwise specified in the applicable Pricing Supplement, the
authorized denominations of Notes denominated in U.S. dollars will be U.S.$5,000
and any amount in excess thereof that is an integral multiple of U.S.$1,000. The
authorized denominations of Notes denominated in a Specified Currency other than
U.S. dollars will be as set forth in the applicable Pricing Supplement.
Interest rates offered by the Company with respect to the Notes may differ
depending upon, among other things, the aggregate principal amount of the Notes
purchased in any single transaction.
The principal amount of the Notes will be payable at Maturity at the
Corporate Trust Office of Citibank, N.A., Corporate Trust Services, 111 Wall
Street, 5th Floor, New York, New York 10043, or at such other place as the
Company may designate.
Unless otherwise specified in the applicable Pricing Supplement, the Notes
may not be redeemed by the Company, or repaid at the option of the holder, or
both, prior to their Maturity Date. Unless otherwise specified in the applicable
Pricing Supplement, the Notes, other than Amortizing Notes, will not be subject
to any sinking fund. See "Description of Notes-Redemption and Repayment."
Unless otherwise specified in the applicable Pricing Supplement, the
amount of any Original Issue Discount Note (as such term is defined in
"Description of Notes - Original Issue Discount Notes") payable in the event of
redemption by the Company, repayment at the option of the holder or acceleration
of Maturity, in lieu of the stated principal amount due at the Maturity Date,
will be the Amortized Face Amount of such Original Issue Discount Note as of the
date of such redemption, repayment or acceleration. For the purposes of
determining whether holders of the requisite amount of Notes outstanding under
the Indenture have made a demand or given a notice or waiver or taken any other
action, the outstanding principal amount of any Original Issue Discount Note
shall be deemed to be the Amortized Face Amount. The "Amortized Face Amount" of
an Original Issue Discount Note shall be the amount equal to (a) the Issue Price
of an Original Issue Discount Note set forth in the applicable Pricing
Supplement plus (b) the portion of the difference between the Issue Price and
the principal amount of such Original Issue Discount Note that has accrued at
the yield to maturity set forth in the Pricing Supplement (computed in
accordance with generally accepted United States bond yield computation
principles) at the date as of which the Amortized Face Amount is calculated, but
in no event shall the Amortized Face Amount of such Original Issue Discount Note
exceed its stated principal amount. See also "United States Federal Taxation -
Tax Consequences to U.S. Holders-Original Issue Discount Notes."
Unless otherwise specified herein, the Pricing Supplement relating to each
Note or Notes will describe the following terms, as applicable: (1) the
Specified Currency with respect to such Note (and, if such Specified Currency is
other than U.S. dollars, certain other terms relating to such Note); (2) whether
such Note is a Fixed Rate Note, a Floating Rate Note, an Amortizing Note or a
Zero-Coupon Note or other Original Issue Discount Note; (3) whether such Note is
a Currency Indexed Note or other Indexed Note, and if so the special terms
thereof; (4) the price (which may be expressed as a percentage of the aggregate
initial public offering price thereof) at which such Note will be issued to the
public (the "Issue Price"); (5) the date on which such Note will be issued to
the public (the "Issue Date"); (6) the Maturity Date of such Note; (7) if such
Note is a Fixed Rate Note, the rate per annum at which such Note will bear
interest, if any (the "Interest Rate"); (8) if such Note is a Floating Rate
Note, the Base Rate or Rates, the Initial Interest Rate or formula for
determining such, the Interest Reset Period, the Interest Reset Dates, the
Interest Payment Period, the Interest Payment Dates, the Index Maturity, the
Maximum Interest Rate and the Minimum Interest Rate, if any, and the Spread
and/or Spread Multiplier, if any (all as defined herein), and any other terms
relating to the particular method of calculating the Interest Rate for such
Note; (9) if such Note is an Amortizing Note, whether payments of principal
thereof and interest thereon will be made quarterly or semiannually, and the
redemption or repayment information in respect thereof; (10) whether the
interest rate on such Note may be reset upon the occurrence of certain events or
at the option of the Company; (11) whether such Note may be redeemed at the
option of the Company, or repaid at the option of the holder, prior to its
Maturity Date, and if so, the provisions relating to such redemption or
repayment; (12) certain special United States Federal income tax consequences of
the purchase, ownership and disposition of certain Notes, if any; and (13) any
other terms of such Note not inconsistent with the provisions of the Indenture.
GLOSSARY
Reference is made to the Indenture and the forms of Notes filed as
exhibits to the Registration Statement to which this Prospectus relates for the
full definition of certain terms used in this Prospectus, as well as any
capitalized terms used herein for which no definition is provided. Set forth
below are definitions of certain terms used in this Prospectus with respect to
the Notes.
"Business Day" with respect to any Note means, unless otherwise specified
in the applicable Pricing Supplement, any day, other than a Saturday or Sunday,
that meets each of the following applicable requirements: such day is (a) not a
day on which banking institutions are authorized or required by law, regulation
or executive order to be closed in The City of New York, (b) if the Note is
denominated in a Specified Currency other than U.S. dollars or ECU, (x) not a
day on which banking institutions are authorized or required by law, regulation
or executive order to close in the Principal Financial Center of the country
issuing the Specified Currency and (y) a day on which banking institutions in
such Principal Financial Center are carrying out transactions in such Specified
Currency, (c) if the Note is denominated in ECU, an ECU clearing day, as
determined by the ECU Banking Association in Paris, (d) if the Note is
denominated in a composite currency other than ECU, as specified in the
applicable Pricing Supplement and (e) with respect to London Inter Bank Offer
Rate Notes ("LIBOR Notes"), is also a London Banking Day. "London Banking Day"
means any day on which dealings in deposits in the Index Currency are transacted
in the London interbank market. "Principal Financial Center" will generally be
the capital city of the country of the Specified Currency, except that with
respect to U.S. dollars and ECUs, the Principal Financial Center shall be The
City of New York and Luxembourg, respectively;
"Interest Payment Date" with respect to any Note means a date (other than
at Maturity) on which, under the terms of such Note, regularly scheduled
interest shall be payable;
"Maturity Date" with respect to any Note means the date on which such Note
will mature, as specified thereon, and "Maturity" means the date on which the
principal of a Note or an installment of principal becomes due and payable in
full in accordance with its terms and the terms of the Indenture, whether at its
Maturity Date or by declaration of acceleration, call for redemption at the
option of the Company, repayment at the option of the holder, or otherwise; and
"Regular Record Date" with respect to any Interest Payment Date for Fixed
Rate Notes means, unless otherwise specified in the applicable Pricing
Supplement, the date (whether or not a Business Day) which is the fifteenth day
of the calendar month preceding such Interest Payment Date. "Regular Record
Date" with respect to any Interest Payment Date for Notes other than Fixed Rate
Notes means, unless otherwise specified in the applicable Pricing Supplement,
the date (whether or not a Business Day) 15 calendar days prior to such Interest
Payment Date.
References herein to "U.S. dollars" or "U.S. $" or "$" are to the
currency of the United States of America.
DELIVERY AND FORM
Upon issue, all Fixed Rate Notes having the same Issue Date, interest
rate, if any, amortization schedule, if any, Maturity Date and other terms, if
any, will be represented by one or more fully registered global Notes (the
"Global Notes") and all Floating Rate Notes having the same Issue Date, Initial
Interest Rate, Base Rate, Interest Period, Interest Payment Dates, Index
Maturity, Spread and/or Spread Multiplier, if any, Minimum Interest Rate, if
any, Maximum Interest Rate, if any, Maturity Date and other terms, if any, will
be represented by one or more Global Notes; provided, however, that no single
Global Note shall exceed U.S.$200,000,000. Each such Global Note representing
Notes will be deposited with, or on behalf of, the Depositary and registered in
the name of the Depositary or a nominee thereof.
The Depository Trust Company ("DTC") will be the initial Depositary with
respect to the Notes. DTC has advised the Company and the Agents that it is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered under the Exchange Act. The Depositary was created to hold securities
of its participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. DTC's participants include
securities brokers and dealers (including the Agents), banks, trust companies,
clearing corporations and certain other organizations, some of whom (and/or
their representatives) own DTC. Access to DTC's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly. Persons who are not participants may beneficially own
securities held by DTC only through participants. The rules applicable to DTC
and its participants are on file with the Commission.
Upon the issuance by the Company of Notes represented by a Global Note,
the Depositary will credit, on its book-entry registration and transfer system,
the participants' accounts with the respective principal amounts of the Notes
represented by such Global Note beneficially owned by such participants. The
accounts to be credited shall be designated by the Agents of such Notes, or the
Company, if such Notes are offered and sold directly by the Company, as the case
may be. Ownership of beneficial interests in a Global Note will be limited to
participants or persons that hold interests through participants. Ownership of
beneficial interests in Notes represented by a Global Note or Notes will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the Depositary (with respect to interests of participants
in the Depositary), or by participants in the Depositary or persons that may
hold interests through such participants (with respect to persons other than
participants in the Depositary). The laws of some states require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Note.
So long as the Depositary for a Global Note, or its nominee, is the
registered owner of the Global Note, the Depositary or its nominee, as the case
may be, will be considered the sole owner or holder of the Notes represented by
such Global Note for all purposes under the Indenture. Except as provided below,
owners of beneficial interests in Notes represented by a Global Note or Notes
will not be entitled to have Notes represented by such Global Note registered in
their names, will not receive or be entitled to receive physical delivery of
Notes in definitive form and will not be considered the owners or holders
thereof under the Indenture.
Accordingly, each person owning a beneficial interest in a Global Note
must rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest, to exercise any rights of a holder under the Indenture or a Global
Note. The Company understands that under existing policy of the Depositary and
industry practices, in the event that the Company requests any action of holders
or that an owner of a beneficial interest in such a Global Note desires to give
any notice or take any action which a holder is entitled to give or take under
the Indenture or a Global Note, the Depositary would authorize the participants
holding the relevant beneficial interests to give such notice or take such
action. Any beneficial owner that is not a participant must rely on the
contractual arrangements it has directly, or indirectly through its financial
intermediary, with a participant to give such notice or take such action.
Payments of principal of, premium, if any, and interest, if any, on, the
Notes represented by a Global Note registered in the name of the Depositary or
its nominee will be made by the Company through the Trustee to the Depositary or
its nominee, as the case may be, as the registered owner of a Global Note. None
of the Company, the Trustee, any Paying Agent or any other agent of the Company
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests of a Global
Note or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests. The Company expects that the Depositary, upon
receipt of any payment of principal, premium, if any, or interest, if any, in
respect of a Global Note, will immediately credit the accounts of the related
participants with payment in amounts proportionate to their respective holdings
in principal amount of beneficial interest in such Global Note as shown on the
records of the Depositary. The Company also expects that payments by
participants to owners of beneficial interests in a Global Note will be governed
by standing customer instructions and customary practices as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name" and will be the responsibility of such participants.
If the Depositary is at any time unwilling or unable to continue as
depository or ceases to be a clearing agency registered under the Exchange Act
and a successor depository registered as a clearing agency under the Exchange
Act is not appointed by the Company within 90 days, the Company will issue
certificated Notes in exchange for all the Global Notes. In addition, the
Company may at any time and in its sole discretion determine not to have the
Notes represented by the Global Note and, in such event, will issue certificated
Notes in exchange for all the Global Notes. In either instance, an owner of a
beneficial interest in a Global Note will be entitled to have certificated Notes
equal in principal amount to such beneficial interest registered in its name and
will be entitled to physical delivery of such certificated Notes. Such
certificated Notes shall be registered in such name or names as the Depositary
shall instruct the Trustee. It is expected that such instructions may be based
upon directions received by the Depositary from participants with respect to
beneficial interests in such Global Notes. Certificated Notes so issued will be
issued in denominations of U.S.$5,000 or more (in multiples of U.S.$1,000) and
will be issued in registered form only, without coupons. No service charge will
be made for any transfer or exchange of such certificated Notes, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Section 2.07 of the Indenture.)
PAYMENT CURRENCY
Unless otherwise specified in the applicable Pricing Supplement, and
except as otherwise described herein with respect to Currency Indexed Notes,
principal, and premium, if any, and interest, if any, will be paid by the
Company in U.S. dollars in the manner described in the following paragraphs,
even if a Note is denominated in a Specified Currency other than U.S. dollars;
provided, however, that the holder of such Note may (unless the Pricing
Supplement and the Note so indicate otherwise) elect to receive all such
payments in such Specified Currency (subject to certain conditions described at
"Foreign Currency Risks-Payment Currency") by delivery of a written request to
the Company's paying agent (the "Paying Agent") in The City of New York. Any
such election must be received by the Paying Agent on or prior to the applicable
Regular Record Date or at least 15 calendar days prior to Maturity, as the case
may be, and no such election or change of election may be made with respect to
payments on any Note with respect to which (i) an Event of Default has occurred,
(ii) the Company has exercised any of its discharge or defeasance options or
(iii) the Company has given a notice of redemption. Such election shall remain
in effect unless and until changed by written notice to the Paying Agent, but
the Paying Agent must receive written notice of any such change on or prior to
the applicable Regular Record Date or at least 15 calendar days prior to
Maturity, as the case may be. Until the Notes are paid or payment thereof is
provided for, the Company will, at all times, maintain a Paying Agent in The
City of New York capable of performing the duties described herein to be
performed by the Paying Agent. The Company has initially appointed Citibank,
N.A., New York, New York as Paying Agent under the Indenture. The Company will
notify the holders of the Notes in accordance with the Indenture of any change
in the Paying Agent or its address. Except as may otherwise be provided in a
Pricing Supplement with respect to Foreign Currency Notes, all currency exchange
costs will be borne by the Company unless any holder of a Note has made the
election referred to in the proviso in the first sentence in this paragraph. In
the case of such election, each electing holder of a Note shall bear the
currency exchange costs related to such Note, if any, by deductions from the
payments otherwise due such holder.
Unless otherwise specified in the applicable Pricing Supplement, in the
case of a Note denominated in a Specified Currency other than U.S. dollars, the
amount of U.S. dollar payments in respect of such Note will be determined by the
Company or an agent for the Company as specified in the applicable Pricing
Supplement (the "Exchange Rate Agent"), based on the indicative quotation in The
City of New York selected by such Exchange Rate Agent at approximately 11:00
A.M., New York City time, on the second Business Day preceding the applicable
payment date that yields the largest number of U.S. dollars upon conversion of
the Specified Currency. Unless otherwise specified in the applicable Pricing
Supplement, such selection shall be made from among the quotations appearing on
the bank composite or multi-contributor pages of the Reuters Monitor Foreign
Exchange Service, or if not available, the Telerate Monitor Foreign Exchange
Service. If such quotations are unavailable from either such foreign exchange
service, such election shall (unless otherwise specified in the applicable
Pricing Supplement) be made from the quotations received by the Exchange Rate
Agent from three recognized foreign exchange dealers in The City of New York
selected by the Exchange Rate Agent and approved by the Company (one of which
may be the Exchange Rate Agent) (the "Exchange Rate") for the purchase by the
quoting dealer, for settlement on such payment date, of the Specified Currency
for U.S. dollars. If no such bid quotations are available, payments will be made
in the Specified Currency unless such Specified Currency is unavailable due to
the imposition of exchange controls or to other circumstances beyond the
Company's control or is no longer used by the government of the country issuing
such Specified Currency or for the settlement of transactions by public
institutions of or within the international banking community, in which case the
Company will be entitled to make payments in U.S. dollars on the basis of the
noon buying rate in The City of New York for cable transfers in the Specified
Currency as certified for customs purposes by the Federal Reserve Bank of New
York (the "Market Exchange Rate") for such Specified Currency on the second
Business Day prior to such payment date, or on such other basis as shall be
specified in the applicable Pricing Supplement. In the event such Market
Exchange Rate is not then available, the Company will be entitled to make
payments in U.S. dollars (i) if such Specified Currency is not a composite
currency, on the basis of the most recently available Market Exchange Rate for
such Specified Currency or (ii) if such Specified Currency is a composite
currency, including without limitation, ECU, in an amount determined by the
Exchange Rate Agent to be the sum of the results obtained by multiplying the
number of units of each component currency of such composite currency, as of the
most recent date on which such composite currency was used, by the Market
Exchange Rate for such component currency on the second Business Day prior to
such payment date (or if such Market Exchange Rate is not then available, by the
most recently available Market Exchange Rate for such component currency, or as
otherwise specified in the applicable Pricing Supplement). Any payment made
under such circumstances in U.S. dollars where the required payment is in a
Specified Currency other than U.S. dollars will not constitute an Event of
Default.
Unless otherwise specified in the applicable Pricing Supplement, if a
holder of a Note denominated in a foreign currency other than ECU shall have
elected to receive payments of principal of, and premium, if any, and interest,
if any, on such Note in such foreign currency as described above, and such
foreign currency is unavailable as of the due date for any such payments because
of the imposition of exchange controls or other circumstances beyond the
Company's control, or is no longer used by the government of the country issuing
such foreign currency or for the settlement of transactions by public
institutions of or within the international banking community, then all payments
due on that due date with respect to such Note shall be made in U.S. dollars
until such foreign currency is available or is so used. The amount so payable on
any date in such foreign currency shall be converted into U.S. dollars at a rate
determined by the Exchange Rate Agent on the basis of the most recently
available Market Exchange Rate or as otherwise specified in the applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, if a
holder of a Note denominated in ECU shall have elected to receive payments of
principal of and premium, if any, and interest, if any, on such Note in ECU as
described above, and ECU are unavailable as of the due date for any such
payments because of the imposition of exchange controls or other circumstances
beyond the Company's control, or is no longer used in the European Monetary
System, then all payments due on that due date with respect to such Note shall
be made in U.S. dollars until the ECU is available or is so used. The amount so
payable on any date in ECU shall be converted into U.S. dollars at a rate
determined by the Exchange Rate Agent as of the second Business Day prior to the
date on which such payment is due on the following basis: The component
currencies of the ECU for this purpose shall be the currency amounts that were
components of the ECU as of the last date on which ECU were used in the European
Monetary System. The equivalent of ECU in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of such component currencies. The U.S.
dollar equivalent of each of such component currencies shall be determined by
the Exchange Rate Agent on the basis of the most recently available Market
Exchange Rate for each such component currency, or as otherwise indicated in the
applicable Pricing Supplement.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a component
shall be divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated component currencies
expressed in such single currency. If any component currency is divided into two
or more currencies, the amount of that currency as a component shall be replaced
by the amounts of such two or more currencies having an aggregate value on the
date of division equal to the amount of the former component currency
immediately before such division.
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion (except to the extent expressly provided herein that
any determination made by an Exchange Rate Agent that is not the Company is
subject to approval by the Company) and, in the absence of manifest error, shall
be conclusive for all purposes and binding on holders of the Notes.
Each Note will provide that, in the event of an official redenomination of
a Specified Currency (including, without limitation, an official redenomination
of a Specified Currency that is a composite currency) the obligations of the
Company with respect to payments on Notes denominated in such Specified Currency
shall, in all cases, be deemed immediately following such redenomination to
provide for the payment of that amount of redenominated currency representing
the amount of such obligations immediately before such redenomination. Except to
the extent Currency Indexed Notes provide for the adjustment of the principal
amount payable at maturity thereof pursuant to application of the formulae
described under "Description of Notes-Currency Indexed Notes-Payment of
Principal and Interest," or any other formulae provided for in the applicable
Pricing Supplement, Notes will not provide for any adjustment to any amount
payable under the Notes as a result of (a) any change in the value of a
Specified Currency relative to any other currency due solely to fluctuations in
exchange rates or (b) any redenomination of any component currency of any
composite currency (unless such composite currency is itself officially
redenominated).
Currently, there are limited facilities in the United States for
conversion of U.S. dollars into foreign currencies, and vice versa. In addition,
banks do not generally offer non-U.S. dollar denominated checking or savings
account facilities in the United States. Accordingly, payments on Notes made in
a Specified Currency other than U.S. dollars will be made from an account with a
bank located outside the United States, unless otherwise specified in the
applicable Pricing Supplement.
INTEREST AND PRINCIPAL PAYMENTS
Except as described below and unless otherwise specified in the applicable
Pricing Supplement, interest on the Notes and principal of Amortizing Notes (in
each case other than interest or, in the case of Amortizing Notes, principal
paid at Maturity), will be paid by mailing a check (unless otherwise specified
in the applicable Pricing Supplement, from an account at a bank located outside
the United States if such check is payable in a currency other than U.S.
dollars) to the holder at the address of such holder appearing on the security
register of the Company on the applicable Regular Record Date; provided,
however, that, unless otherwise specified in the applicable Pricing Supplement,
in the case of a Note issued between a Regular Record Date and the Interest
Payment Date relating to such Regular Record Date, interest (and, in the case of
an Amortizing Note, principal) on such Note for the period beginning on the
Issue Date and ending on such Interest Payment Date shall be paid on the
Interest Payment Date following the succeeding Regular Record Date to the
registered holder on such succeeding Regular Record Date. Notwithstanding the
foregoing, a holder of U.S.$10,000,000 or more in aggregate principal amount of
Notes of like tenor and term (or a holder of the equivalent thereof in a
Specified Currency other than U.S. dollars) shall be entitled to receive such
interest (and, in the case of Amortizing Notes, principal payments) in
immediately available funds, but only if complete and appropriate instructions
have been received in writing by the Paying Agent on or prior to the applicable
Regular Record Date. Owners of beneficial interests in a Note will be paid in
accordance with the Depositary's and the participant's procedures in effect from
time to time as described under "Description of Notes - Delivery and Form."
Simultaneously with the election by any holder of a Note to receive payments in
a Specified Currency other than U.S. dollars (as provided above), such holder
may, if so entitled as described above, elect to receive such payments in
immediately available funds by providing complete and appropriate instructions
to the Paying Agent, and all payments in respect of principal of, and premium,
if any, and interest, if any, on such Note will be made in immediately available
funds to an account maintained by the payee with a bank located outside the
United States, or as otherwise provided in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, payments of
principal, and premium, if any, and interest, if any, at Maturity will be made
in immediately available funds (unless otherwise specified in the applicable
Pricing Supplement, payable to an account maintained by the payee with a bank
located outside the United States if payable in a Specified Currency other than
U.S. dollars) upon surrender of the Note at the office of the Paying Agent,
provided that the Note is presented to the Paying Agent in time for the Paying
Agent to make such payments in such funds in accordance with its normal
procedures. See "Important Currency Exchange Information." Unless otherwise
specified in the applicable Pricing Supplement, principal and, premium, if any,
and interest, if any, payable at Maturity of a Note will be paid by the Paying
Agent by wire transfer in immediately available funds to an account specified by
the Depositary. Unless otherwise specified in the applicable Pricing Supplement,
payments of interest on a Note, and principal of Amortizing Notes in global form
(in each case, other than at Maturity) will be made in same-day funds in
accordance with existing arrangements between the Paying Agent and the
Depositary. The Company will pay any administrative costs imposed by banks in
connection with making payments in immediately available funds, but any tax,
assessment or governmental charge imposed upon payments, including, without
limitation, any withholding tax, will be borne by the holders of the Notes in
respect of which such payments are made.
Certain Notes, including Original Issue Discount Notes, may be considered
to be issued with original issue discount which must be included in income for
United States Federal income tax purposes at a constant rate, prior to the
receipt of the cash attributable to that income. See "Tax Consequences to U.S.
Holders-Original Issue Discount Notes." Unless otherwise specified in the
applicable Pricing Supplement, if the principal of any Original Issue Discount
Note is declared to be due and payable immediately as described under
"Description of Debt Securities-Events of Default," the amount of principal due
and payable with respect to such Note shall be limited to the aggregate
principal amount of such Note multiplied by the sum of its Issue Price
(expressed as a percentage of the aggregate principal amount) plus the original
issue discount amortized from the Issue Date to the date of declaration which
amortization shall be calculated using the "interest method" (computed in
accordance with generally accepted accounting principles in effect on the date
of declaration). Special considerations applicable to any such Notes will be set
forth in the applicable Pricing Supplement.
The Interest Payment Dates for Fixed Rate Notes shall be as described
below under "Fixed Rate Notes," and the Interest Payment Dates for Floating Rate
Notes shall be as indicated in the applicable Pricing Supplement.
<PAGE>
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from and including its Issue Date
at the rate per annum set forth thereon and in the applicable Pricing Supplement
until the principal amount thereof is paid, or made available for payment, in
full, except as described below under "Description of Notes-Subsequent Interest
Periods" and "Description of Notes-Extension of Maturity." Unless otherwise
specified in the applicable Pricing Supplement, interest on each Fixed Rate Note
(other than a Zero-Coupon Note or an Amortizing Note) will be payable, as
selected by the purchaser, either semiannually each April 1 and October 1, or
annually each October 1, and at Maturity. Unless otherwise specified in the
applicable Pricing Supplement, principal of and interest on each Amortizing Note
will be payable, as selected by the purchaser, either quarterly each January 1,
April 1, July 1 and October 1, or semiannually each April 1 and October 1, as
set forth in the applicable Pricing Supplement, and, in either case, at
Maturity. Payments with respect to Amortizing Notes will be applied first to
interest due and payable thereon and then to the reduction of the unpaid
principal amount thereof. A table setting forth repayment information in respect
of each Amortizing Note will be set forth in the applicable Pricing Supplement.
Each payment of interest on a Fixed Rate Note shall include accrued interest
from and including the Issue Date or from and including the last day in respect
of which interest has been paid (or duly provided for), as the case may be, to,
but excluding, the Interest Payment Date or date of Maturity, as the case may
be.
Any payment of principal, and premium, if any, or interest required to be
made on a Fixed Rate Note on a day which is not a Business Day need not be made
on such day, but may be made on the next succeeding Business Day with the same
force and effect as if made on such day, and no additional interest shall accrue
as a result of such delayed payment. Unless otherwise specified in the
applicable Pricing Supplement, any interest on Fixed Rate Notes will be computed
on the basis of a 360-day year of twelve 30-day months. The interest rates the
Company will agree to pay on newly-issued Fixed Rate Notes are subject to change
without notice by the Company from time to time, but no such change will affect
any Fixed Rate Notes already issued or as to which an offer to purchase has been
accepted by the Company.
FLOATING RATE NOTES
Except for the period from the Issue Date to the first Interest Reset Date
(as defined below) set forth in the applicable Pricing Supplement, each Floating
Rate Note will bear interest at a rate determined by reference to either (i) an
interest rate base (the "Base Rate"), which may be adjusted by a Spread and/or a
Spread Multiplier (each as defined below) or (ii) an interest rate which may be
by reference to two or more Base Rates, as adjusted by the corresponding Spread
and/or a Spread Multiplier for such related Base Rate or Rates (as will be
specified in the applicable Pricing Supplement). The "Spread" is the number of
basis points (one basis point equals one hundredth of a percentage point) to be
added to or subtracted from the related Base Rate applicable to the interest
rate for such Floating Rate Note, and the "Spread Multiplier" is the percentage
of the related Base Rate applicable to such Base Rate Note by which said Base
Rate is to be multiplied to determine the applicable interest rate on such
Floating Rate Note. Each Floating Rate Note and the applicable Pricing
Supplement will specify the Index Maturity and the Spread and/or Spread
Multiplier, if any, applicable to each such Floating Rate Note. The "Index
Maturity" for any Floating Rate Note is the period of maturity of the instrument
or obligation from which the Base Rate is calculated and will be specified in
the applicable Pricing Supplement. The Spread, Spread Multiplier, Index Maturity
and other variable terms of the Floating Rate Notes are subject to change by the
Company from time to time, but no such change will affect any Note already
issued or as to which an offer to purchase has been accepted by the Company.
The applicable Pricing Supplement will designate one of the following Base
Rates as applicable to a Floating Rate Note: (a) the Certificate of Deposit Rate
(a "CD Rate Note"), (b) the Commercial Paper Rate (a "Commercial Paper Rate
Note"), (c) the Federal Funds Rate (a "Federal Funds Rate Note"), (d) LIBOR (a
"LIBOR Note"), (e) the Prime Rate (a "Prime Rate Note"), (f) the Treasury Rate
(a "Treasury Rate Note"), (g) the CMT Rate ("a CMT Rate Note") or (h) such other
Base Rate or interest rate formula as is set forth in such Pricing Supplement
and in such Floating Rate Note.
As specified in the applicable Pricing Supplement, a Floating Rate Note
may also have either or both of the following: (i) a maximum numerical
limitation, or ceiling, on the rate at which interest may accrue during any
Interest Period ("Maximum Interest Rate") and/or (ii) a minimum numerical
limitation, or floor, on the rate at which interest may accrue during any
Interest Period ("Minimum Interest Rate"). In addition to any Maximum Interest
Rate that may be applicable to any Floating Rate Note pursuant to the above
provisions, the interest rate on a Floating Rate Note will in no event be higher
than the maximum rate permitted by applicable law (including, without
limitation, New York law, which is stated to govern the Notes and the
Indenture), as the same may be modified by United States law of general
application. Under present New York law, the maximum rate of interest, with
certain exceptions, for any loan in an amount less than U.S.$250,000 is 16% and
for any loan in the amount of U.S.$250,000 or more but less than U.S.$2,500,000
is 25% per annum on a simple interest basis. These limits do not apply to loans
of U.S.$2,500,000 or more.
Each Floating Rate Note and the applicable Pricing Supplement will specify
whether the rate of interest on such Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semiannually or annually (each an "Interest Reset
Period") and the date on which such interest rate will reset (each an "Interest
Reset Date"). Unless otherwise specified in the applicable Pricing Supplement,
the Interest Reset Date will be, in the case of Floating Rate Notes that reset
daily, each Business Day; in the case of Floating Rate Notes (other than
Treasury Rate Notes) that reset weekly, the Wednesday of each week; in the case
of Treasury Rate Notes that reset weekly, the Tuesday of each week (except as
provided below); in the case of Floating Rate Notes that reset monthly, the
third Wednesday of each month; in the case of Floating Rate Notes that reset
quarterly, the third Wednesday of January, April, July and October; in the case
of Floating Rate Notes that reset semiannually, the third Wednesday of the two
months of each year specified in the applicable Pricing Supplement; and in the
case of Floating Rate Notes that reset annually, the third Wednesday of the
month specified in the applicable Pricing Supplement; provided, however, that
the interest rate in effect from the Issue Date to the first Interest Reset Date
will be the Initial Interest Rate (as defined below). If any Interest Reset Date
for any Floating Rate Note would otherwise be a day that is not a Business Day,
such Interest Reset Date shall be postponed to the next succeeding Business Day,
except that, in the case of a LIBOR Note, if such Business Day would fall in the
next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day. The interest rate or the formula for
establishing the interest rate in effect with respect to a Floating Rate Note
from the Issue Date to the first Interest Reset Date (the "Initial Interest
Rate") will be specified in the applicable Pricing Supplement.
Except as provided below, and unless otherwise specified in the applicable
Pricing Supplement, interest on Floating Rate Notes will be payable, in the case
of Floating Rate Notes with a daily, weekly or monthly Interest Reset Date, on
the third Wednesday of each month or on the third Wednesday of January, April,
July and October, as specified in the applicable Pricing Supplement; in the case
of Floating Rate Notes with a quarterly Interest Reset Date, on the third
Wednesday of January, April, July and October; in the case of Floating Rate
Notes with a semiannual Interest Reset Date, on the third Wednesday of the two
months of each year specified in the applicable Pricing Supplement; and in the
case of Floating Rate Notes with an annual Interest Reset Date, on the third
Wednesday of the month specified in the applicable Pricing Supplement, and in
each case at Maturity. Subject to the next succeeding sentence, unless otherwise
specified in the applicable Pricing Supplement, if an Interest Payment Date
(other than at Maturity) with respect to any Floating Rate Note would fall on a
day that is not a Business Day, such Interest Payment Date shall be postponed to
the next succeeding Business Day, except that, in the case of LIBOR Notes, if
such Business Day would fall in the next succeeding calendar month, such
Interest Payment Date will be the immediately preceding Business Day. Any
payment of principal, and premium, if any, and interest required to be made on a
Floating Rate Note at Maturity that is not a Business Day will be made on the
next succeeding Business Day, with the same force and effect as if made on any
such date and no additional interest shall accrue as a result of any such
delayed payment.
Unless otherwise specified in the applicable Pricing Supplement, the
interest payable on each Interest Payment Date or at Maturity for Floating Rate
Notes will be the amount of interest accrued from and including the Issue Date
or from and including the last Interest Payment Date to which interest has been
paid to, but excluding, such Interest Payment Date or date of Maturity, as the
case may be (an "Interest Period").
Unless otherwise specified in the applicable Pricing Supplement, with
respect to a Floating Rate Note, accrued interest will be calculated by
multiplying the principal amount of such Floating Rate Note by an accrued
interest factor. Unless otherwise specified in the applicable Pricing
Supplement, such accrued interest factor will be computed by adding the interest
factors calculated for each day in the Interest Period for which accrued
interest is being calculated. Unless otherwise specified in the applicable
Pricing Supplement, the interest factor for each such day is computed by
dividing the interest rate applicable on such day by 360, in the cases of CD
Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes, Prime Rate
Notes and LIBOR Notes, or by the actual number of days in the year, in the case
of Treasury Rate Notes or CMT Rate Notes. The interest rate applicable to any
day that is an Interest Reset Date is the interest rate as determined, in
accordance with the procedures hereinafter set forth, with respect to the
Interest Determination Date (as defined below) pertaining to such Interest Reset
Date. The interest rate applicable to any other day is the interest rate in
effect on the immediately preceding Interest Reset Date (or, if none, the
Initial Interest Rate).
Unless otherwise specified in the applicable Pricing Supplement, all
percentages resulting from any calculation of the rate of interest on a Floating
Rate Note will be rounded, if necessary, to the nearest one hundred-thousandth
of a percent (.0000001), with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or
.0987655)), and all U.S. dollars amounts used in or resulting from such
calculation on Floating Rate Notes will be rounded to the nearest cent or, in
the case of Notes denominated other than in U.S. dollars, the nearest unit (with
one-half cent or unit being rounded upwards).
Unless otherwise specified in the applicable Pricing Supplement, the
"Interest Determination Date" pertaining to an Interest Reset Date for CD Rate
Notes, CMT Rate Notes, Commercial Paper Rate Notes, Prime Rate Notes and Federal
Funds Rate Notes will be the second Business Day preceding such Interest Reset
Date; the Interest Determination Date pertaining to an Interest Reset Date for a
LIBOR Note will be the second London Banking Day preceding such Interest Reset
Date; and the Interest Determination Date pertaining to an Interest Reset Date
for a Treasury Rate Note will be the day of the week in which such Interest
Reset Date falls on which direct obligations of the United States ("Treasury
Bills") of the applicable Index Maturity (as specified on the face of such
Treasury Rate Note) are auctioned. Treasury Bills are normally sold at auction
on Monday of each week, unless that day is a legal holiday, in which case the
auction is normally held on the following Tuesday, except that such auction may
be held on the preceding Friday. If, as the result of a legal holiday, an
auction is so held on the preceding Friday, such Friday will be the Interest
Determination Date pertaining to the Interest Reset Date occurring in the next
succeeding week. If an auction falls on a day that is an Interest Reset Date,
such Interest Reset Date will be the next following Business Day. Unless
otherwise specified in the applicable Pricing Supplement, the Interest
Determination Date pertaining to a Note, the interest rate of which is
determined with reference to two or more Base Rates, will be the first Business
Day which is at least two Business Days prior to such Interest Reset Date for
such Note on which each Base Rate shall be determinable.
Unless otherwise specified in the applicable Pricing Supplement, the
"Calculation Date," where applicable, pertaining to an Interest Determination
Date will be the earlier of (i) the tenth calendar day after such Interest
Determination Date, or, if such day is not a Business Day, the next succeeding
Business Day or (ii) the Business Day preceding the applicable Interest Payment
Date or Maturity as the case may be.
The applicable Pricing Supplement shall specify a calculation agent (the
"Calculation Agent"), which may be the Company, with respect to any issue of
Floating Rate Notes. Upon the request of the holder of any Floating Rate Note,
the Calculation Agent will provide the interest rate then in effect and, if
determined, the interest rate that will become effective on the next Interest
Reset Date with respect to such Floating Rate Note. If at any time the Trustee
is not the Calculation Agent, the Company will notify the Trustee of each
determination of the interest rate applicable to any such Floating Rate Note.
The interest rate in effect with respect to a Floating Rate Note from the
Issue Date to the first Interest Reset Date will be the Initial Interest Rate.
The interest rate for each subsequent Interest Rate Date will be determined by
the Calculation Agent as follows:
<PAGE>
CD RATE NOTES
CD Rate Notes will bear interest at the interest rates (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any and
subject to the Minimum Interest Rate and the Maximum Interest Rate, if any)
specified in the CD Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "CD
Rate" means, with respect to any Interest Determination Date, the rate on such
date for negotiable certificates of deposit having the Index Maturity designated
in the applicable Pricing Supplement as published by the Board of Governors of
the Federal Reserve System in "Statistical Release H.15(519), Selected Interest
Rates," or any successor publication of the Board of Governors of the Federal
Reserve System ("H.15(519)") under the heading "CDs (Secondary Market)," or, if
not so published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the CD Rate will be the rate on
such Interest Determination Date for negotiable certificates of deposit of the
applicable Index Maturity as published by the Federal Reserve Bank of New York
in its daily statistical release, "Composite 3:30 P.M. Quotations for U.S.
Government Securities," or any successor publication of the Federal Reserve Bank
of New York (the "Composite Quotations") under the heading "Certificates of
Deposit." If such rate is not yet published in either Release H.15(519) or the
Composite Quotations by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the CD Rate on such Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York
City time, on such Interest Determination Date, of three leading nonbank dealers
in negotiable U.S. dollar certificates of deposit in The City of New York
selected by the Calculation Agent, after consultation with the Company, for
negotiable certificates of deposit of major United States money center banks (in
the market for negotiable certificates of deposit) with a remaining maturity
closest to the applicable Index Maturity in a denomination of U.S.$5,000,000;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the rate of interest in
effect for the applicable period will be the rate of interest in effect on such
Interest Determination Date. All references in this Prospectus or any applicable
Pricing Supplement to "Release H.15(519)" shall also be references to any
successor publication to Release H.15(519).
CD Rate Notes, like other Notes, are not deposit obligations of a bank and
are not insured by the Federal Deposit Insurance Corporation.
COMMERCIAL PAPER RATE NOTES
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread and/or
the Spread Multiplier, if any, and subject to the Minimum Interest Rate and the
Maximum Interest Rate, if any) specified in the Commercial Paper Rate Notes and
in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Commercial Paper Rate" means, with respect to any Interest Determination Date,
the Money Market Yield (as defined below) on such date of the rate for
commercial paper having the Index Maturity specified in the applicable Pricing
Supplement, as such rate shall be published in H.l5(519) under the heading
"Commercial Paper." In the event that such rate is not published prior to 9:00
A.M., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the Commercial Paper Rate shall be the Money Market
Yield on such Interest Determination Date of the rate for commercial paper of
the applicable Index Maturity as published in the Composite Quotations under the
heading "Commercial Paper." If such rate is not yet published in either
H.15(519) or the Composite Quotations by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the
Commercial Paper Rate shall be the Money Market Yield of the arithmetic mean of
the offered rates as of 11:00 A.M., New York City time, on such Interest
Determination Date of three leading dealers of commercial paper in The City of
New York selected by the Calculation Agent, after consultation with the Company,
for commercial paper of the applicable Index Maturity, placed for industrial
issuers whose bond rating is "AA," or the equivalent, from a nationally
recognized statistical rating agency; provided that if the dealers selected as
aforesaid by the Calculation Agent are not quoting offered rates as mentioned in
this sentence, the rate of interest in effect for the applicable period will be
the rate of interest in effect on such Interest Determination Date.
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
Money Market Yield = D X 360 x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the Interest Period for which interest is being calculated.
FEDERAL FUNDS RATE NOTES
Federal Funds Rate Notes will bear interest at the interest rates
(calculated with reference to the Federal Funds Rate and the Spread and/or the
Spread Multiplier, if any, and subject to the Minimum Interest Rate and the
Maximum Interest Rate, if any) specified in the Federal Funds Rate Notes and in
the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Federal Funds Rate" means, with respect to any Interest Determination Date, the
rate on such date for Federal Funds as published in H.15(519) under the heading
"Federal Funds (Effective)" or, if not so published by 9:00 A.M., New York City
time, on the Calculation Date pertaining to such Interest Determination Date,
the Federal Funds Rate will be the rate on such Interest Determination Date as
published in the Composite Quotations under the heading "Federal Funds/Effective
Rate." If such rate is not yet published in either H.15(519) or the Composite
Quotations by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, then the Federal Funds Rate for such
Interest Determination Date will be calculated by the Calculation Agent and will
be the arithmetic mean of the rates for the last transaction in overnight
Federal Funds arranged by three leading brokers of Federal Funds transactions in
The City of New York selected by the Calculation Agent, after consultation with
the Company, as of 9:00 A.M., New York City time, on such Interest Determination
Date; provided, however, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the rate of
interest in effect for the applicable period will be the rate of interest in
effect on such Interest Determination Date.
LIBOR NOTES
LIBOR NOTES will bear interest at the interest rate (calculated with
reference to LIBOR and the Spread and/or the Spread Multiplier, if any, and
subject to the Minimum Interest Rate and the Maximum Interest Rate, if any)
specified in the LIBOR Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR"
means the rate determined by the Calculation Agent in accordance with the
following provisions:
(i) With respect to an Interest Determination Date relating to a LIBOR Note or
any Floating Rate Note for which the interest rate is determined with reference
to LIBOR, LIBOR will be either (a) if "LIBOR Reuters" is specified in the
applicable Pricing Supplement, the arithmetic mean of the offered rates (unless
the specified Designated LIBOR Page by its terms provides only for a single
rate, in which case such single rate shall be used) for deposits in the Index
Currency having the Index Maturity designated in the applicable Pricing
Supplement, commencing on the second London Banking Day immediately following
that Interest Determination Date, that appear on the Designated LIBOR Page
specified in the applicable Pricing Supplement as of 11:00 A.M. London time, on
that Interest Determination Date, if at least two such offered rates appear
(unless, as aforesaid, only a single rate is required) on such Designated LIBOR
Page or (b) if "LIBOR Telerate" is specified in the applicable Pricing
Supplement, the rate for deposits in the Index Currency having the Index
Maturity designated in the applicable Pricing Supplement commencing on the
second London Banking Day immediately following that Interest Determination Date
that appears on the Designated LIBOR Page specified in the applicable Pricing
Supplement as of 11:00 A.M. London time, on that Interest Determination Date. If
fewer than two offered rates appear, or no rate appears, as applicable, LIBOR in
respect of the related Interest Determination Date will be determined as if the
parties had specified the rate described in clause (ii) below.
(ii) With respect to an Interest Determination Date on which fewer than
two offered rates appear, or no rate appears, as the case may be, on the
applicable Designated LIBOR Page as specified in clause (i) above, the
Calculation Agent will request the principal London offices of each of four
major reference banks in the London interbank market, as selected by the
Calculation Agent, after consultation with the Company, to provide the
Calculation Agent with its offered quotation for deposits in the Index Currency
for the period of the Index Maturity designated in the applicable Pricing
Supplement, commencing on the second London Banking Day immediately following
such Interest Determination Date, to prime banks in the London interbank market
at approximately 11:00 A.M., London time, on such Interest Determination Date
and in a principal amount that is representative for a single transaction in
such Index Currency in such market at such time. If at least two such quotations
are provided, LIBOR determined on such Interest Determination Date will be the
arithmetic mean of such quotations. If fewer than two quotations are provided,
LIBOR determined on such Interest Determination Date will be the arithmetic mean
of the rates quoted at approximately 11:00 A.M., in the applicable Principal
Financial Center, on such Interest Determination Date by three major banks in
such Principal Financial Center selected by the Calculation Agent, after
consultation with the Company, for loans in the Index Currency to leading
European banks, having the Index Maturity designated in the applicable Pricing
Supplement, commencing on the second London Banking Day immediately following
the Interest Determination Date, and in a principal amount that is
representative for a single transaction in such Index Currency in such market at
such time; provided, however, that if the banks so selected by the Calculation
Agent are not quoting as mentioned in this sentence, LIBOR determined on such
Interest Determination Date will be LIBOR in effect on such Interest
Determination Date.
"Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for which LIBOR
shall be calculated. If no such currency is specified in the applicable Pricing
Supplement, the Index Currency shall be U.S. dollars.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is designated
in the applicable Pricing Supplement, the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank rates of major
banks for the applicable Index Currency or (b) if "LIBOR Telerate" is designated
in the applicable Pricing Supplement, the display on the Dow Jones Telerate
Service for the purpose of displaying the London interbank rates of major banks
for the applicable Index Currency. If neither LIBOR Reuters nor LIBOR Telerate
is specified in the applicable Pricing Supplement, LIBOR for the applicable
Index Currency will be determined as if LIBOR Telerate (and, if the U.S. dollar
is the Index Currency, page 3750) had been specified.
PRIME RATE NOTES
Prime Rate Notes will bear interest at the interest rate (calculated with
reference to the Prime Rate and the Spread and/or the Spread Multiplier, if any,
and subject to the Minimum Interest Rate and the Maximum Interest Rate, if any)
specified in the Prime Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Prime Rate" means, with respect to any Interest Determination Date, the rate on
such date as published in H.15(519) under the heading "Bank Prime Loan." If such
rate is not published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Prime Rate will be
determined by the Calculation Agent and will be the arithmetic mean of the rates
of interest publicly announced by each bank named on the "Reuters Screen
USPRIME1 Page" (as defined below) as such bank's prime rate or base lending rate
as in effect for such Interest Determination Date. "Reuters Screen USPRIME1"
means the display designated as page "USPRIME1" on the Reuters Monitor Money
Rates Service (or such other page as may replace the USPRIME1 page on that
service for the purpose of displaying prime rates or base lending rates of major
United States banks). If fewer than four such rates but more than one such rate
appear on the Reuters Screen USPRIME1 Page for such Interest Determination Date,
the Prime Rate will be determined by the Calculation Agent and will be the
arithmetic mean of the prime rates quoted on the basis of the actual number of
days in the year divided by 360 as of the close of business on such Interest
Determination Date by four major money center banks in The City of New York
selected by the Calculation Agent, after consultation with the Company. If fewer
than two such rates appear on the Reuters Screen USPRIME1 Page, the Prime Rate
will be calculated by the Calculation Agent and will be determined as the
arithmetic mean of the prime rates furnished in The City of New York by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any State thereof, in each case
having total equity capital of at least U.S.$500,000,000 and being subject to
supervision or examination by federal or state authority, selected by the
Calculation Agent, after consultation with the Company, to provide such rate or
rates; provided, however, that if the banks or trust companies selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the rate of interest in effect for the applicable period will be the
rate of interest in effect on such Interest Determination Date.
TREASURY RATE NOTES
Treasury Rate Notes will bear interest at the interest rates (calculated
with reference to the Treasury Rate and the Spread and/or the Spread Multiplier,
if any, and subject to the Minimum Interest Rate and the Maximum Interest Rate,
if any) specified in the Treasury Rate Notes and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Treasury Rate" means, with respect to any Interest Determination Date, the rate
for the auction held on such Interest Determination Date of direct obligations
of the United States ("Treasury Bills") having the Index Maturity designated in
the applicable Pricing Supplement, as published in H.l5(519) under the heading
"Treasury bills-auction average (investment)" or, if not so published by 9:00
A.M., New York City time on the Calculation Date pertaining to such Interest
Determination Date, the auction average rate (expressed as a bond equivalent, on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) as otherwise announced by the United States Department of the Treasury.
In the event that the results of the auction of Treasury Bills having the
applicable Index Maturity designated in the applicable Pricing Supplement are
not published or reported as provided above by 3:00 P.M., New York City time, on
such Calculation Date or if no such auction is held on such Interest
Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such Interest
Determination Date, of three leading primary United States government securities
dealers selected by the Calculation Agent, after consultation with the Company,
for the issue of Treasury Bills with a remaining maturity closest to the Index
Maturity designated in the applicable Pricing Supplement; provided, however,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting bid rates as mentioned in this sentence, the interest rate for the
applicable period will be the interest rate in effect on such Interest
Determination Date.
CMT RATE NOTES
Unless otherwise specified in the applicable Pricing Supplement, "CMT
Rate" means, with respect to any Interest Determination Date relating to a
Floating Rate Note for which the interest rate is determined with reference to
the CMT Rate (a "CMT Rate Interest Determination Date"), the rate displayed on
the Designated CMT Telerate Page under the caption "...Treasury Constant
Maturities...Federal Reserve Board Release H.15...Mondays Approximately 3:45
P.M.," under the column for the Designated CMT Maturity Index for (i) if the
Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the
week, or the month, as applicable, ended immediately preceding the week in which
the related CMT Rate Interest Determination Date occurs. If such rate is no
longer displayed on the relevant page or is not displayed by 3:00 P.M., New York
City time, on the related Calculation Date, then the CMT Rate for such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519). If such
rate is no longer published or is not published by 3:00 P.M., New York City
time, on the related Calculation Date, then the CMT Rate on such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the Board
of Governors of the Federal Reserve System or the United States Department of
the Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519). If such information is not provided by 3:00 P.M., New York
City time, on the related Calculation Date, then the CMT Rate on the CMT Rate
Interest Determination Date will be calculated by the Calculation Agent and will
be a yield to maturity, based on the arithmetic mean of the secondary market
closing offer side prices as of approximately 3:30 P.M., New York City time, on
such CMT Rate Interest Determination Date reported, according to their written
records, by three leading primary United States government securities dealers
(each, a "Reference Dealer") in the City of New York (which may include the
Agent or its affiliates) selected by the Calculation Agent (from five such
Reference Dealers selected by the Calculation Agent, after consultation with the
Company, and eliminating the highest quotation (or, in the event of equality,
one of the highest) and the lowest quotation (or, in the event of equality, one
of the lowest)), for the most recently issued direct noncallable fixed rate
obligations of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent is unable to obtain three such Treasury Note quotations, the
CMT Rate on such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market offer side prices as of approximately 3:30 P.M., New
York City time, on such CMT Rate Interest Determination Date of three Reference
Dealers in the City of New York (from five such Reference Dealers selected by
the Calculation Agent, after consultation with the Company, and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest)), for
Treasury Notes with an original maturity of the number of years that is the next
highest to the Designated CMT Maturity Index and a remaining term to maturity
closest to the designated CMT Maturity Index and in an amount of at least $100
million. If three or four (and not five) of such Reference Dealers are quoting
as described above, then the CMT Rate will be based on the arithmetic mean of
the offer prices obtained and neither the highest nor the lowest of such quotes
will be eliminated; provided, however, that if fewer than three Reference
Dealers so selected by the Calculation Agent are quoting as mentioned herein,
the CMT Rate determined as of such CMT Rate Interest Determination Date will be
the CMT Rate in effect on such CMT Rate Interest Determination Date. If two
Treasury Notes with an original maturity as described in the second preceding
sentence have remaining terms to maturity equally close to the Designated CMT
Maturity Index, the Calculation Agent will obtain from five Reference Dealers
quotations for the Treasury Note with the shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page specified in the applicable Pricing Supplement (or any other
page as may replace such page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519)) for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519). If no such
page is specified in the applicable Pricing Supplement, the designated CMT
Telerate Page shall be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable Pricing Supplement with respect to which the CMT
Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.
ORIGINAL ISSUE DISCOUNT NOTES
Notes may be issued at a price less than their stated redemption price at
maturity, other than by an amount which is less than a DE MINIMIS amount (0.25%
of the stated redemption price at maturity multiplied by the number of complete
years to maturity) resulting in such Notes being treated as if they were issued
with original issue discount for United States Federal income tax purposes
("Original Issue Discount Notes"). Such Original Issue Discount Notes may
currently pay no interest or interest at a rate which at the time of issuance is
below market rates. See "United States Federal Taxation - Tax Consequences to
U.S. Holders - Original Issue Discount Notes." Certain additional considerations
relating to any Original Issue Discount Notes will be described in the Pricing
Supplement relating thereto.
CURRENCY INDEXED NOTES
The Company may from time to time offer Notes as to which the principal
amount payable at Maturity and/or the rate of interest thereon is determined by
reference to the rate of exchange between the currency or composite currency in
which such Notes ("Currency Indexed Notes") are denominated (the "Denominated
Currency") and the other currency or currencies or composite currency or
composite currencies specified as the Indexed Currency (the "Indexed Currency")
in the applicable Pricing Supplement, or as determined in such other manner as
may be specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, (a)
holders of Currency Indexed Notes will be entitled to receive a principal amount
in respect of such Currency Indexed Notes exceeding the amount designated as the
face amount of such Currency Indexed Notes in the applicable Pricing Supplement
(the "Face Amount") if, at Maturity, the rate at which the Denominated Currency
can be exchanged for the Indexed Currency is greater than the rate of such
exchange designated as the Base Exchange Rate, expressed in units of the Indexed
Currency per one unit of the Denominated Currency, in the applicable Pricing
Supplement (the "Base Exchange Rate") and (b) holders of Currency Indexed Notes
will be entitled to receive a principal amount in respect of such Currency
Indexed Notes less than the Face Amount of such Currency Indexed Notes if, at
Maturity, the rate at which the Denominated Currency can be exchanged for the
Indexed Currency is less than such Base Exchange Rate, in each case determined
as described below under "Currency Indexed Notes - Payment of Principal and
Interest." Information as to the relative historical value (which information is
not necessarily indicative of relative future value) of the applicable
Denominated Currency against the applicable Indexed Currency, any exchange
controls applicable to such Denominated Currency or Indexed Currency and certain
tax consequences to holders will be set forth in the applicable Pricing
Supplement. See "Foreign Currency Risks" and "Indexed Notes Risks."
PAYMENT OF PRINCIPAL AND INTEREST
Unless otherwise specified in the applicable Pricing Supplement, interest
will be payable by the Company in the Denominated Currency based on the Face
Amount of the Currency Indexed Notes and at the rate and times and in the manner
set forth herein and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, principal
of a Currency Indexed Note will be payable by the Company in the Denominated
Currency at Maturity. The amount of such principal shall equal the Face Amount
of the Currency Indexed Note, plus or minus an amount of the Denominated
Currency determined by the Exchange Rate Agent specified in the applicable
Pricing Supplement, which may be the Company, by reference to the difference
between the Base Exchange Rate and the rate at which the Denominated Currency
can be exchanged for the Indexed Currency as determined on the second Exchange
Rate day (the "Determination Date") prior to Maturity of such Currency Indexed
Note by the Exchange Rate Agent. Such rate of exchange shall be based upon the
arithmetic mean of the open market spot offer quotations for the Indexed
Currency (spot bid quotations for the Denominated Currency) obtained by the
Exchange Rate Agent from the Reference Dealers (as defined below) in The City of
New York at 11:00 A.M., New York City time, on the Determination Date, for an
amount of Indexed Currency equal to the aggregate Face Amount of such Currency
Indexed Note multiplied by the Base Exchange Rate, with settlement at Maturity
to be in the Denominated Currency (such rate of exchange, as so determined and
expressed in units of the Indexed Currency per one unit of the Denominated
Currency, is hereafter referred to as the "Spot Rate"). If such quotations from
the Reference Dealers are not available on the Determination Date due to
circumstances beyond the control of the Company or the Exchange Rate Agent, the
Spot Rate will be determined on the basis of the most recently available
quotations from the Reference Dealers. As used herein, the term "Reference
Dealers" shall mean the three banks or firms specified as such in the applicable
Pricing Supplement or, if any of them shall be unwilling or unable to provide
the requested quotations, such other major money center bank or banks in The
City of New York selected by the Exchange Rate Agent, in consultation with the
Company, to act as Reference Dealer or Dealers in replacement therefor. In the
absence of manifest error, the determination by the Exchange Rate Agent of the
Spot Rate and the principal amount of Currency Indexed Notes payable at Maturity
thereof shall be final and binding on the Company and the holders of such
Currency Indexed Notes.
See "Description of Notes-Payment Currency" for a discussion of the
procedures followed by the Exchange Rate Agent if the Denominated Currency of a
Currency Indexed Note is unavailable as of the due date for any payment thereon
because of the imposition of exchange controls or other circumstances beyond the
Company's control or such Denominated Currency is no longer used as discussed
therein.
The formula to be used by the Exchange Rate Agent to determine the
principal amount of a Currency Indexed Note payable at Maturity will be
specified in the applicable Pricing Supplement.
<PAGE>
OTHER INDEXED NOTES AND CERTAIN TERMS APPLICABLE TO ALL INDEXED NOTES
The Notes may be issued as Indexed Notes, other than Currency Indexed
Notes, the principal amount of which payable at Maturity and/or the interest
thereon, or both, may be determined by reference to the price of one or more
specified securities or commodities, to one or more securities or commodities
exchange indices or other indices or by other methods or formulae. Holders of
Indexed Notes may receive a principal amount at Maturity that is greater than or
less than the face amount of such Notes depending upon the fluctuation of the
relative value, rate or price of the specified index. The Pricing Supplement
relating to such an Indexed Note will describe, as applicable, the method by
which the amount of interest payable and the amount of principal payable at the
Maturity Date in respect of such Indexed Note will be determined, certain
special tax consequences of the purchase, ownership or disposition to holders of
such Notes, certain risks associated with an investment in such Notes and other
information relating to such Notes. See "Risk Factors."
PROSPECTIVE INVESTORS SHOULD CONSULT WITH THEIR OWN FINANCIAL AND LEGAL
ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN CURRENCY INDEXED OR OTHER
INDEXED NOTES. SUCH AN INVESTMENT ENTAILS SIGNIFICANT RISKS THAT ARE NOT
ASSOCIATED WITH A SIMILAR INVESTMENT IN A SECURITY THE PRINCIPAL AMOUNT OF WHICH
PAYABLE AT MATURITY IS NOT DETERMINED BY CURRENCY EXCHANGE RATES OR SECURITIES
OR COMMODITIES EXCHANGE INDICES OR OTHER INDICES AND IS NOT AN APPROPRIATE
INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO SUCH
TRANSACTIONS.
Unless otherwise specified in the applicable Pricing Supplement, (a) for
the purpose of determining whether holders of the requisite principal amount of
Notes outstanding under the Indenture have made a demand or given a notice or
waiver or taken any other action, the outstanding principal amount of Indexed
Notes (including Currency Indexed Notes) will be deemed to be the face amount
thereof and (b) in the event of an acceleration of the Maturity Date of an
Indexed Note, the principal amount payable to the holder of such Note upon
acceleration will be the principal amount determined by reference to the formula
by which the principal amount of such Note would be determined on the Maturity
Date thereof, as if the date of acceleration were the Maturity Date.
SUBSEQUENT INTEREST PERIODS
The Pricing Supplement relating to each Note will indicate whether the
Company has the option with respect to such Note to reset the interest rate, in
the case of a Fixed Rate Note, or to reset the Spread and/or Spread Multiplier,
in the case of a Floating Rate Note, and, if so, the date or dates on which such
interest rate or such Spread and/or Spread Multiplier, as the case may be, may
be reset (each an "Optional Reset Date"). If the Company has such option with
respect to any Note, the following procedures shall apply, unless modified as
set forth in the applicable Pricing Supplement.
The Company may exercise such option with respect to a Note by notifying
the Trustee of such exercise at least 50 but not more than 60 days prior to an
Optional Reset Date for such Note. Not later than 40 days prior to such Optional
Reset Date, the Trustee will mail to the holder of such Note a notice (the
"Reset Notice") setting forth (i) the election of the Company to reset the
interest rate, in the case of a Fixed Rate Note, or the Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, (ii) such new interest rate or
such new Spread and/or Spread Multiplier, as the case may be and (iii) the
provisions, if any, for redemption or repayment during the period from such
Optional Reset Date to the next Optional Reset Date or, if there is no such next
Optional Reset Date, to the Maturity Date of such Note (each such period a
"Subsequent Interest Period"), including the date or dates on which or the
period or periods during which and the price or prices at which such redemption
may occur during such Subsequent Interest Period. Upon the transmittal by the
Trustee of a Reset Notice to the holder of a Note, such new interest rate or
such new Spread and/or Spread Multiplier, as the case may be, shall take effect
automatically, and, except as modified by the Reset Notice and as described in
the next paragraph, such Note will have the same terms as prior to the
transmittal of such Reset Notice.
Notwithstanding the foregoing, not later than 20 days prior to an Optional
Reset Date for a Note, the Company may, at its option, revoke the interest rate,
in the case of a Fixed Rate Note, or the Spread and/or Spread Multiplier, in the
case of a Floating Rate Note, provided for in the Reset Notice and establish an
interest rate, in the case of a Fixed Rate Note, or a Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, that is higher than the
interest rate, Spread and/or Spread Multiplier, as the case may be, provided for
in the Reset Notice, for the Subsequent Interest Period commencing on such
Optional Reset Date by causing the Trustee to transmit notice of such higher
interest rate or higher Spread and/or Spread Multiplier, as the case may be, to
the holder of such Note. Such notice shall be irrevocable. All Notes with
respect to which the interest rate or Spread and/or Spread Multiplier is reset
on an Optional Reset Date and with respect to which the holders of such Notes
have not tendered such Notes for repayment (or have validly revoked any such
tender) pursuant to the next succeeding paragraph will bear such higher interest
rate, in the case of a Fixed Rate Note, or higher Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, for the Subsequent Interest
Period.
If the Company elects to reset the interest rate or the Spread and/or
Spread Multiplier of a Note as described above, the holder of such Note will
have the option to elect repayment of such Note by the Company on any Optional
Reset Date at a price equal to the aggregate principal amount thereof
outstanding on, plus any accrued interest to, such Optional Reset Date. In order
for a Note to be so repaid on an Optional Reset Date, the holder thereof must
follow the procedures set forth below under "Redemption and Repayment" for
optional repayment, except that the period for delivery of such Note or
notification to the Trustee shall be at least 25 but not more than 35 days prior
to such Optional Reset Date and except that a holder who has tendered a Note for
repayment pursuant to a Reset Notice may, by written notice to the Trustee,
revoke any such tender for repayment until the close of business on the tenth
day prior to such Optional Reset Date.
EXTENSION OF MATURITY
The Pricing Supplement relating to each Note (other than an Amortizing
Note) will indicate whether the Company has the option to extend the maturity of
such Note for one or more periods of one or more whole years (each an "Extension
Period") up to but not beyond the date (the "Final Maturity Date") set forth in
such Pricing Supplement. If the Company has such option with respect to any Note
(other than an Amortizing Note), the following procedures shall apply, unless
modified as set forth in the applicable Pricing Supplement (which will contain
complete details concerning such option by the Company to extend the maturity of
a Note (other than an Amortizing Note)).
The Company may exercise such option with respect to a Note by notifying
the Trustee of such exercise at least 45 but not more than 60 days prior to the
Maturity Date of such Note originally in effect prior to the exercise of such
option (the "Original Maturity Date") or, if the Maturity Date of such Note has
already been extended prior to the Maturity Date then in effect (an "Extended
Maturity Date"). No later than 40 days prior to the Original Maturity Date or an
Extended Maturity Date, as the case may be (each, a "Maturity Date"), the
Trustee will mail to the holder of such Note a notice (the "Extension Notice")
relating to such Extension Period, setting forth (i) the election of the Company
to extend the Original Maturity Date, (ii) the new Maturity Date, (iii) in the
case of a Fixed Rate Note, the interest rate applicable to the Extension Period
or, in the case of a Floating Rate Note, the Spread and/or Spread Multiplier
applicable to the Extension Period and (iv) the provisions, if any, for
redemption during the Extension Period, including the date or dates on which or
the period or periods during which and the price or prices at which such
redemption may occur during the Extension Period. Upon the mailing by the
Trustee of an Extension Notice to the holder of a Note, the Original Maturity
Date shall be extended automatically as set forth in the Extension Notice, and,
except as modified by the Extension Notice and as described in the next
paragraph, such Note will have the same terms as prior to the mailing of such
Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the
Original Maturity Date for a Note, the Company may, at its option, revoke the
interest rate, in the case of a Fixed Rate Note, or the Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, provided for in the Extension
Notice and establish an interest rate, in the case of a Fixed Rate Note, or a
Spread and/or Spread Multiplier, in the case of a Floating Rate Note, that is
higher than the interest rate, Spread and/or Spread Multiplier, as the case may
be, provided for in the Extension Notice for the Extension Period, by mailing or
causing the Trustee to transmit notice of such higher interest rate or higher
Spread and/or Spread Multiplier, as the case may be, to the holder of such Note.
Such notice shall be irrevocable. All Notes with respect to which the Maturity
Date is extended and with respect to which the holders of such Notes have not
tendered such Notes for repayment (or have validly revoked any such tender)
pursuant to the next succeeding paragraph will bear such higher interest rate,
in the case of a Fixed Rate Note, or higher Spread and/or Spread Multiplier, in
the case of a Floating Rate Note, for the Extension Period.
If the Company elects to extend the Maturity Date of a Note, the holder of
such Note will have the option to elect repayment of such Note by the Company on
the Original Maturity Date at a price equal to the principal amount thereof plus
any accrued interest to such date. In order for a Note to be so repaid on the
Original Maturity Date, the holder thereof must follow the procedures set forth
below under "Redemption and Repayment" for optional repayment, except that the
period for delivery of such Note or notification to the Trustee shall be at
least 30 but not more than 35 days prior to the Original Maturity Date and
except that a holder who has tendered a Note for repayment pursuant to an
Extension Notice may, by written notice to the Trustee, revoke any such tender
for repayment until the close of business on the tenth day prior to the Original
Maturity Date.
<PAGE>
REDEMPTION AND REPAYMENT
Unless otherwise provided in the applicable Pricing Supplement, the Notes
will not be redeemable prior to the Maturity Date at the option of the Company
or repayable prior to the Maturity Date at the option of the holder. Unless
otherwise specified in the applicable Pricing Supplement, the Notes, except for
Amortizing Notes, will not be subject to any sinking fund.
If applicable, the Pricing Supplement relating to each Note will indicate
that the Note will be redeemable at the option of the Company or repayable at
the option of the holder on a date or dates specified prior to its Maturity Date
and, unless otherwise specified in such Pricing Supplement, at a price equal to
100% of the principal amount thereof, together with accrued interest to the date
of redemption or repayment, unless such Note was issued with original issue
discount, in which case the Pricing Supplement will specify the amount payable
upon such redemption or repayment.
The Company may redeem any of the Notes that are redeemable and remain
outstanding either in whole or from time to time in part, upon not less than 30
nor more than 60 days' notice. Unless otherwise specified in the applicable
Pricing Supplement, if less than all of the Notes with like tenor and terms are
to be redeemed, the Notes to be redeemed shall be selected by the Trustee by
such method as the Trustee shall deem fair and appropriate.
Unless otherwise specified in the applicable Pricing Supplement, in order
for a Note to be repaid at the option of the holder thereof, the Company must
receive at least 30 days but not more than 45 days prior to the repayment date,
the global Note with the form entitled "Option to Elect Repayment" duly
completed. Exercise of the repayment option by the holder of a Note shall be
irrevocable, except as otherwise provided under "Description of Notes-Subsequent
Interest Periods" and "Description of Notes-Extensions of Maturity." With
respect to the Notes, the Depositary's nominee is the holder of such Notes and
therefore will be the only entity that can exercise a right to repayment. See
"Description of Notes-Delivery and Form." In order to ensure that the
Depositary's nominee will timely exercise a right to repayment with respect to a
particular beneficial interest in a Note, the beneficial owner of such interest
must instruct the broker or other direct or indirect participant through which
it holds a beneficial interest in such Note to notify the Depositary of its
desire to exercise a right to repayment. Different firms have different cut-off
times for accepting instructions from their customers and, accordingly, each
beneficial owner should consult the broker or other direct or indirect
participant through which it holds an interest in a Note in order to ascertain
the cut-off time by which such an instruction must be given in order for timely
notice to be delivered to the Depositary. Conveyance of notices and other
communications by the Depositary to participants, by participants to indirect
participants and by participants and indirect participants to beneficial owners
of the Notes will be governed by agreements among them, subject to any statutory
or regulated requirements as may be in effect from time to time.
If applicable, the Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws or regulations in
connection with any such repurchase.
<PAGE>
The Company may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Company may, at the
discretion of the Company, be held or resold or surrendered to the Trustee for
cancellation.
IMPORTANT CURRENCY EXCHANGE INFORMATION
Unless otherwise set forth in the applicable Pricing Supplement, each
Purchaser of a Note is required to pay for such Note in the Specified Currency
thereof in immediately available funds, and payments of principal of, premium,
if any, and interest, if any, on, such Note will be made in the Specified
Currency. Currently, there are limited facilities in the United States for
conversion of U.S. dollars into foreign currencies or currency units and vice
versa and few banks offer non-U.S. dollar checking or savings account facilities
in the United States. Accordingly, unless otherwise specified in a Pricing
Supplement or unless alternative arrangements are made, payment of principal of,
premium, if any, and interest, if any, on, Notes in a Specified Currency other
than U.S. dollars will be made to an account at a bank outside the United
States. See "Foreign Currency Risks." However, if requested by a prospective
purchaser of Notes denominated in a Specified Currency other than U.S. dollars,
the Agent soliciting the offer to purchase will use reasonable efforts to
arrange for the conversion of U.S. dollars into such Specified Currency to
enable the purchaser to pay for such Notes. Such request must be made on or
before the third Business Day preceding the date of delivery of the Notes, or by
such other date as is determined by such Agent. Each such conversion will be
made by the relevant Agent on such terms and subject to such conditions,
limitations and charges as such Agent may from time to time establish in
accordance with its regular foreign exchange practice. All costs of any such
exchange will be borne by the purchasers of the Notes.
OTHER/ADDITIONAL PROVISIONS; ADDENDUM
Any provision with respect to the Notes, including the specification and
determination of one or more Interest Rate Bases, the calculation of the
interest rate applicable to a Floating Rate Note, the Interest Payment Dates,
the Maturity Date or any other term relating thereto, may be modified and/or
supplemented as specified under "Other/Additional Provisions" on the face
thereof or in an Addendum relating thereto, if so specified on the face thereof.
Such provisions will be described in the applicable Pricing Supplement.
UNITED STATES FEDERAL TAXATION
GENERAL
In the opinion of the Company's tax counsel, the following general summary
describes all material United States Federal income tax consequences of the
ownership and disposition of the Notes. This summary provides general
information only and is directed solely to original holders purchasing Notes at
the "issue price" (as defined below) and who hold the Notes as capital assets
within the meaning of Section 1221 of the Internal Revenue Code of 1986, as
amended (the "Code"), and does not purport to discuss all United States Federal
income tax consequences that may be applicable to particular categories of
investors that may be subject to special rules, such as banks, insurance
companies, dealers in securities, persons holding Notes as part of a "straddle"
conversion transaction, hedging, or other integrated transaction. In addition,
the United States Federal income tax consequences of holding a particular Note
will depend, in part, on the particular terms of such Note as set forth in the
applicable Pricing Supplement. Finally, this summary does not discuss Original
Issue Discount Notes which qualify as "applicable high-yield discount
obligations" under Section 163(i) of the Code. Holders of Original Issue
Discount Notes which are "applicable high-yield discount obligations" may be
subject to special rules which will be set forth in an applicable Pricing
Supplement. Holders are advised to consult their own tax advisors with regard to
the application of the United States Federal income tax laws to their particular
situations as well as any tax consequences arising under the laws of any state,
local or foreign tax jurisdiction.
This summary is based on the Code, United States Treasury Regulations
(including proposed regulations and temporary regulations) promulgated
thereunder, rulings, official pronouncements and judicial decisions as of the
date of this Prospectus. The authorities on which this summary is based are
subject to change or differing interpretations, which could apply retroactively,
so as to result in United States Federal income tax consequences different from
those discussed below.
For purposes of the following discussion, "U.S. Holder" means a beneficial
owner of a Note that is (i) for United States Federal income tax purposes a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any political subdivision thereof, (iii) an estate or trust the income of
which is subject to United States Federal income taxation regardless of its
source, or (iv) any other Holder whose income is effectively connected with such
Holder's conduct of a United States trade or business. The term also includes
certain former citizens or long-term permanent residents of the United States.
<PAGE>
TAX CONSEQUENCES TO U.S. HOLDERS
PAYMENTS OF INTEREST
Interest on a Note (whether denominated in U.S. dollars or in other than
U.S. dollars) that is not an Original Issue Discount Note will generally be
taxable to a U.S. Holder as ordinary interest income at the time it is accrued
or is received in accordance with the U.S. Holder's method of accounting for tax
purposes.
All payments of interest on a Note that matures one year or less from its
date of issuance will be included in the stated redemption price at the maturity
of the Note and will be taxed in the manner described below under "Original
Issue Discount Notes".
Special rules governing the treatment of interest paid with respect to
Original Issue Discount Notes, including certain Floating Rate Notes, Foreign
Currency Notes, Currency Indexed Notes and other Indexed Notes are described
under "Original Issue Discount Notes", "Foreign Currency Notes" and "Currency
Indexed Notes and Other Indexed Notes" below.
ORIGINAL ISSUE DISCOUNT NOTES
The following summary is generally based upon the Treasury Regulations
concerning the treatment of debt instruments issued with original issue discount
(the "OID Regulations"). Under the OID Regulations, a Note that is issued for an
amount less than its stated redemption price at maturity will generally be
considered to have been issued at an original issue discount. The issue price of
a Note is equal to the first price to the public (not including bond houses,
brokers or similar persons or organizations acting in the capacity of
underwriters, placement agents or wholesalers) at which a substantial amount of
the Notes is sold for money. The stated redemption price at maturity of a Note
is generally equal to the sum of all payments to be made on such Note other than
"qualified stated interest" payments. With respect to a Note, "qualified stated
interest" is stated interest unconditionally payable as a series of payments in
cash or property (other than debt instruments of the issuer) at least annually
during the entire term of the Note and equal to the outstanding principal
balance of the Note multiplied by a single fixed rate of interest.
Under the OID Regulations, Variable Rate Notes are subject to special
rules. Subject to certain exceptions, a variable rate of interest is a
"qualified floating rate" if variations in the value of the rate can reasonably
be expected to measure contemporaneous fluctuations in the cost of newly
borrowed funds in the currency in which the Note is denominated. A variable rate
will be considered a qualified floating rate if the variable rate equals (i) the
product of an otherwise qualified floating rate and a fixed multiple (i.e., a
Spread Multiplier) that is greater than zero but not more than 1.35 or (ii) an
otherwise qualified floating rate (or the product described in clause (i)) plus
or minus a fixed rate (i.e., a Spread). If the variable rate equals the product
of an otherwise qualified floating rate and a single fixed multiplier greater
than 1.35, however, such rate generally constitutes an "objective rate,"
described more fully below. A variable rate will not be considered a qualified
floating rate if the variable rate is subject to a cap, floor, governor (i.e., a
restriction on the amount of increase or decrease in the stated interest rate)
or similar restriction that is reasonably expected as of the issue date to cause
the yield on the Note to be significantly more or less than the expected yield
determined without the restriction (other than a cap, floor or governor that is
fixed throughout the term of the Note).
Subject to certain exceptions, an "objective rate" is defined as a rate
(other than a qualified floating rate) that is determined using a single fixed
formula and that is based on (i) one or more qualified floating rates, (ii) one
or more rates where each rate would be a qualified floating rate for a Note
denominated in a currency other than the currency in which the Note is
denominated, (iii) the yield or changes in the price of one or more items of
personal property (other than stock or debt of the Company or a related party)
that is "actively traded," or (iv) a combination of the rates described in
clauses (i), (ii) and (iii) of this sentence. A variable rate of interest on a
Note will not be considered an objective rate if it is reasonably expected that
the average value of the rate during the first half of the Note's term will be
either significantly less than or significantly greater than the average value
of the rate during the final half of the Note's term.
If interest on a Note is stated at a fixed rate for an initial period of
less than one year (e.g., an Initial Interest Rate) followed by a variable rate
that is either a qualified floating rate or an objective rate for a subsequent
period, and the value of the variable rate on the issue date is intended to
approximate the fixed rate, the fixed rate and the variable rate together
constitute a single qualified floating rate or objective rate. If a Floating
Rate Note provides for two or more qualified floating rates that can reasonably
be expected to have approximately the same values throughout the term of the
Note, the qualified floating rates together constitute a single qualified
floating rate. Two or more rates will be conclusively presumed to meet the
requirements of the preceding sentences if the values of the applicable rates on
the issue date are within 1/4 of 1 percent of each other. In addition, in order
to be treated as qualified stated interest (rather than contingent payments, as
discussed below), the qualified floating rate or objective rate in effect at a
given time for a Note must be set at a value of that rate on any day that is no
earlier than three months prior to the first day on which that value is in
effect and no later than one year following that first day.
Special tax considerations (including possible original issue discount)
may arise with respect to Notes which provide for interest at (i) more than one
qualified floating rate, (ii) a single fixed rate and one or more qualified
floating rates, or (iii) in certain cases a single fixed rate and a single
objective rate. In the event Notes of this type are issued, the United States
Federal income tax consequences to purchasers and holders thereof will be
discussed in the applicable Pricing Supplement. Purchasers of such Notes should
carefully examine the Pricing Supplement and should consult their tax advisors
regarding the purchase, ownership and disposition of such Notes.
Notwithstanding the general definition of original issue discount above, a
Note will not be considered to have been issued with an original issue discount
if the amount of such original issue discount is less than a DE MINIMIS amount
equal to 0.25% of the stated redemption price at maturity multiplied by the
number of complete years to maturity (or, in the case of a Note providing for
payments prior to maturity of amounts other than qualified stated interest, the
weighted average maturity). Holders of Notes with a DE MINIMIS amount of
original issue discount will include such original issue discount in income, as
capital gain, on a pro rata basis as principal payments are made on the Note.
A U.S. Holder of an Original Issue Discount Note (other than certain U.S.
Holders of Short-Term Original Issue Discount Notes, as defined below) will be
required to include qualified stated interest in income at the time it is
received or accrued in accordance with such U.S. Holder's method of accounting.
A U.S. Holder of an Original Issue Discount Note that matures more than
one year from its date of issuance will be required to include original issue
discount in income as it accrues, in accordance with a constant yield method
based on a compounding of interest, before the receipt of cash payments
attributable to such income. The amount of original issue discount includable in
income is equal to the sum of the "daily portions" of the original issue
discount for each day during the taxable year on which the U.S. Holder held such
Note. The "daily portion" is the original issue discount for the "accrual
period" that is allocated ratably to each day in the accrual period. The
original issue discount for an accrual period is equal to the excess, if any, of
(a) the product of the "adjusted issue price" of an Original Issue Discount Note
at the beginning of such accrual period and its "yield to maturity" over (b) the
amount of any qualified stated interest allocable to the accrual period. The
"accrual period" is the interval (not to exceed one year) that ends no later
than the date of any scheduled payment of principal or interest. The Company
will specify the accrual period it intends to use in the applicable Pricing
Supplement but a U.S. Holder is not required to use the same accrual period for
purposes of determining the amount of original issue discount includable in its
income for a taxable year. The adjusted issue price of a Note at the beginning
of an accrual period is equal to the issue price of such Note, increased by the
aggregate amount of original issue discount with respect to such Note that
accrued in prior accrual periods, and reduced by the amount of any payment on
the Note in prior accrual periods of amounts other than a payment of qualified
stated interest. Under these rules, U.S. Holder's generally will have to include
in income increasingly greater amounts of original issue discount in successive
accrual periods.
Under the OID Regulations, a U.S. Holder may make an election (the
"Constant Yield Election") to include in gross income its entire return on a
Note (i.e., the excess of all remaining payments to be received on the Note over
the amount paid for the Note by such Holder) in accordance with a constant yield
method based on the compounding of interest. Special rules apply to elections
made with respect to Notes with amortizable bond premium and U.S. Holders
considering such an election should consult their own tax advisor.
In general, a cash method U.S. Holder of an Original Issue Discount Note
that matures one year or less from its date of issuance (a "Short-Term Original
Issue Discount Note") is not required to accrue original issue discount on such
Note for United States Federal income tax purposes unless it elects to do so.
U.S. Holders who make such an election, U.S. Holders who report income for
United States Federal income tax purposes on the accrual method and certain
other U.S. Holders, including banks and dealers in securities, are required to
include original issue discount in income on such Short-Term Original Issue
Discount Notes as it accrues on a straight-line basis, unless an election is
made to use the constant yield method (based on a daily compounding). In the
case of a U.S. Holder who is not required and does not elect to include original
issue discount in income currently, any gain realized on the sale, exchange or
redemption of the Short-Term Original Issue Discount Note will be ordinary
income to the extent of the original issue discount accrued. In addition, such
U.S. Holder will be required to defer deductions for any interest paid on
indebtedness incurred to purchase or carry Short-Term Original Issue Discount
Notes in an amount not exceeding the deferred interest income, until such
deferred interest income is recognized.
Certain Notes may be redeemable at the option of the Company prior to the
Maturity Date, or repayable at the option of the U.S. Holder prior to the
Maturity Date. Notes containing such features may be subject to rules that
differ from the general rules discussed above. U.S. Holders intending to
purchase Notes with any such features should carefully examine the applicable
Pricing Supplement and should consult with their own tax advisors with respect
to such features, since the tax consequences with respect to original issue
discount will depend, in part, on the particular terms and the particular
features of the purchased Note.
BOND PREMIUM
If a U.S. Holder purchases a Note for an amount less than its stated
redemption price at maturity, or in the case of an Original Issue Discount Note,
its adjusted issue price, the amount of the difference will be treated as
"market discount," unless such excess is less than a specified DE MINIMIS
amount.
In general, market discount will be considered to accrue ratably during
the period from the date of acquisition to the maturity date of the Note, unless
the Holder elects (on a Note by Note basis) to accrue on the basis of a constant
interest rate. Any gain recognized on the retirement or disposition of a Market
Discount Note will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on such Note. Alternatively, a
Holder may elect to include market discount in income currently as it accrued
(on either a ratable or constant interest rate basis). Such election shall apply
to all debt instruments with market discount acquired by the electing Holder
during that taxable year and all subsequent years. Absent such an election, a
Holder may be required to defer the deduction of all or a portion of the
interest paid or accrued on any indebtedness incurred or maintained to purchase
or carry such Note until the maturity or disposition of such Note.
If a U.S. Holder purchases a Note for an amount that is greater than the
stated redemption price at maturity, such Holder will be considered to have
purchased such Note with "amortizable bond premium" equal in amount to such
excess, and generally will not be required to include any original issue
discount in income. A U.S. Holder may elect (in accordance with applicable Code
provisions) to amortize such premium, using a constant yield method, over the
remaining term of the Note (where such Note is not callable prior to its
maturity date). If such Note may be called prior to maturity after the U.S.
Holder has acquired it, the amount of amortizable bond premium is determined
with reference to either the amount payable on maturity or, if it results in a
smaller premium, attributable to the period through the earlier call date with
reference to the amount payable on the earlier call date. A U.S. Holder who
elects to amortize bond premium must reduce his tax basis in the Note by the
amount of the premium amortized in any year. An election to amortize bond
premium applies to all taxable debt obligations then owned and thereafter
acquired by the U.S. Holder and may be revoked only with the consent of the
Internal Revenue Service. If a Holder makes a Constant Yield Election for a Note
with amortizable bond premium, such election will result in a deemed election to
amortize bond premium for all of the Holder's debt instruments with amortizable
bond premium and may be revoked only with the permission of the Internal Revenue
Service with respect to debt instruments acquired after revocation.
An Original Issue Discount Note purchased for an amount that is greater
than its adjusted issue price, but less than or equal to the sum of all amounts
payable on the Note (other than qualified stated interest), will be considered
to have been purchased at an "acquisition premium." A U.S. Holder will reduce
the amount of original issue discount which such Holder includes in income for
any taxable year by the fraction, the numerator of which is the excess of the
cost of the Note over its adjusted issue price and denominator of which is the
excess of the sum of all amounts payable on the Note after the purchase date
(other than qualified stated interest) over the adjusted issue price.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the sale, exchange or redemption of a Note, a U.S. Holder will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or redemption (except to the extent such amount
is attributable to accrued and unpaid interest) and the U.S. Holder's adjusted
tax basis in the Note. A U.S. Holder's adjusted tax basis in a Note will
generally be the U.S. dollar cost of the Note to such U.S. Holder, increased by
the amount of any original issue discount previously included in income by the
U.S. Holder with respect to such Note and reduced by any amortized premium and
any principal payments received by the U.S. Holder and, in the case of an
Original Issue Discount Note, by the amounts of any other payments that do not
constitute qualified stated interest.
In general, gain or loss realized on the sale, exchange or redemption of a
Note will be capital gain or loss (except in the case of a Short-Term Original
Issue Discount Note, to the extent of any original issue discount not previously
included in such U.S. Holder's taxable income), and will be long-term capital
gain or loss if at the time of sale, exchange or redemption, the Note has been
held for more than one year. Under current law, the excess of net long-term net
capital gains over net short-term capital losses is taxed at a lower rate than
ordinary income for certain non-corporate taxpayers. The distinction between
capital gain or loss is also relevant for purposes of, among other things,
limitations on the deductibility of capital losses.
If a U.S. Holder disposes of only a portion of a Note pursuant to a
redemption or repayment, such disposition will be treated as a pro rata
prepayment in retirement of a portion of a debt instrument. Generally, the
resulting gain or loss would be calculated by assuming that the original Note
being tendered consists of two instruments, one that is retired (or repaid), and
one that remains outstanding. The adjusted issue price, U.S. Holder's adjusted
basis, and the accrued but unpaid original issue discount of the original Note,
determined immediately before the disposition, would be allocated between these
two instruments based on the portion of the instrument that is treated as
retired by the pro rata prepayment.
SUBSEQUENT INTEREST PERIODS AND EXTENSIONS OF MATURITY
If so specified in the applicable Pricing Supplement relating to a Note,
the Company may have the option (a) to reset the interest rate, in the case of a
Fixed Rate Note, or to reset the Spread and/or the Spread Multiplier, in the
case of a Floating Rate Note and/or (b) to extend the Maturity of such Note. See
"Description of Notes---Subsequent Interest Periods" and "Description of
Notes--- Extension of Maturity." These type of Notes may be subject to special
rules for determining interest income or gain or loss. A description of the
United States Federal income tax consequences to a U.S. Holder of these Notes
will be contained in the applicable Pricing Supplement.
<PAGE>
FOREIGN CURRENCY NOTES
The United States Federal income tax consequences to a U.S. Holder of the
ownership and disposition of Notes that are denominated in, or provide for
payments determined by reference to, a currency or currency unit other than the
United States dollar ("Foreign Currency Notes") will be summarized in the
applicable Pricing Supplement.
NOTES LINKED TO COMMODITIES, SECURITIES, INDEXES OR OTHER FACTORS
The United States Federal income tax consequences to a U.S. Holder of the
ownership and disposition of Notes that have principal or interest determined by
reference to one or more specified commodity prices, securities, equity or
commodity indices or other factors will vary depending on the exact terms of the
Notes and related factors. Notes containing any of such features may be subject
to rules that differ from the general rules discussed above. U.S. Holders
intending to purchase such Notes should refer to the discussion relating to
taxation in the applicable Pricing Supplement.
NOTES SUBJECT TO CONTINGENCIES
The Treasury has proposed new regulations concerning the proper treatment
of contingent payment debt instruments. The proposed effective date of the
regulations is 60 days after the date the regulations are finalized. Notes
containing contingent payments may be subject to rules that differ from those
described above, or presently proposed in the proposed regulations. A
description of the proposed treatment of contingent Notes will be summarized in
the applicable Pricing Supplement.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding and information reporting requirements may apply to
certain payments of principal, premium and interest (including original issue
discount) on a Note, and to payments of proceeds of the sale or redemption of a
Note, to certain non-corporate U.S. Holders. The Company, its agent, a broker,
the relevant Trustee or any paying agent, as the case may be, will be required
to withhold from any payment a tax equal to 31 percent of such payment if the
U.S. Holder fails to furnish or certify his correct taxpayer identification
number (social security number or employer identification number) to the payor
in the manner required, fails to certify that such U.S. Holder is not subject to
backup withholding, or otherwise fails to comply with the applicable
requirements of the backup withholding rules. Any amounts withheld under the
backup withholding rules from a payment to a Holder may be credited against such
Holder's United States Federal income tax and may entitle such Holder to a
refund, provided that the required information is furnished to the United States
Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS
WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF
THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER
TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
CERTAIN COVENANTS AS TO LIENS
The only financial covenant applicable to the Notes is that described
below. That covenant requires that the Notes be equally and ratably secured in
the circumstances described therein but has no special application merely by
virtue of the occurrence of any transaction or series of transactions resulting
in material changes in the Company's debt-to-equity ratio.
The Company will covenant in the Notes that so long as any of the Notes
remain outstanding, it will not pledge or otherwise subject to any lien any of
its property or assets unless the Notes are secured by such pledge or lien
equally and ratably with any and all other obligations and indebtedness secured
thereby so long as any such other obligations and indebtedness shall be so
secured. Such covenant does not apply to:
(a) the pledge of any assets to secure any financing by the Company of the
exporting of goods to or between, or the marketing thereof in, foreign countries
(other than Canada), in connection with which the Company reserves the right, in
accordance with customary and established banking practice, to deposit, or
otherwise subject to a lien, cash, securities or receivables, for the purpose of
securing banking accommodations or as to the basis for the issuance of bankers'
acceptances or in aid of other similar borrowing arrangements;
(b) the pledge of receivables payable in foreign currencies (other than
Canadian dollars) to secure borrowings in foreign countries (other than Canada);
(c) any deposit of assets of the Company with any surety company or clerk
of any court, or in escrow, as collateral in connection with, or in lieu of, any
bond on appeal by the Company from any judgment or decree against it, or in
connection with other proceedings in actions at law or in equity by or against
the Company;
(d) any lien or charge on any property, tangible or intangible, real or
personal, existing at the time of acquisition of such property (including
acquisition through merger or consolidation) or given to secure the payment of
all or any part of the purchase price thereof or to secure any indebtedness
incurred prior to, at the time of, or within 60 days after, the acquisition
thereof for the purpose of financing all or any part of the purchase price
thereof; and
(e) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any lien, charge or pledge
referred to in the foregoing (a) to (d) inclusive of this paragraph; provided,
however, that the amount of any and all obligations and indebtedness secured
thereby shall not exceed the amount thereof so secured immediately prior to the
time of such extension, renewal or replacement and that such extension, renewal
or replacement shall be limited to all or a part of the property which secured
the charge or lien so extended, renewed or replaced (plus improvements on such
property). (Section 12.01 of the Indenture.)
<PAGE>
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than 66-2/3% in aggregate principal
amount of the Notes at the time outstanding under the Indenture, to modify the
Indenture or any supplemental indenture or the rights of the holders of the
Notes; provided that no such modification shall (i) change the fixed maturity of
any such Note, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, without the consent of the
holder of each such Note so affected or (ii) reduce the aforesaid percentage of
Notes of any series outstanding under the Indenture, the consent of the holders
of which is required for any such modification, without the consent of the
holders of all Notes then outstanding under the Indenture. (Section 10.02 of the
Indenture.)
EVENTS OF DEFAULT
An Event of Default with respect to the Notes is defined in the Indenture
as being: (a) default in payment of any principal of, or premium, if any, on,
the Notes; (b) default for 30 days in payment of any interest on any of the
Notes; (c) default for 30 days after notice in performance of any other covenant
in the Indenture; or (d) certain events of bankruptcy, insolvency or
reorganization. (Section 6.01 of the Indenture.)
In case an Event of Default shall occur and be continuing with respect to
the Notes, the Trustee or the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding may declare the principal amount
of the Notes to be due and payable. Any Event of Default with respect to the
Notes may be waived by the holders of a majority in aggregate principal amount
of the outstanding Notes except in a case of failure to pay principal of or
interest on such Notes for which payment had not been subsequently made.
(Section 6.06 of the Indenture.) The Company is required to file with the
Trustee annually a certificate as to the absence of certain defaults under the
terms of the Indenture. (Section 11.04 of the Indenture.)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
shall be under no obligation to exercise any of its rights or powers under the
Indenture at the request, order or direction of any of the Noteholders, unless
such Noteholders shall have offered to the Trustee reasonable indemnity or
security. (Sections 7.01 and 7.02) of the Indenture.)
Subject to such provisions for the indemnification of the Trustee and to
certain other limitations, the holders of a majority in principal amount of the
Notes at the time outstanding shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee. (Section 6.06 of the
Indenture.)
<PAGE>
CONCERNING THE TRUSTEE
Citibank, N.A. is the Trustee under the Indenture. Citibank, N.A. acts as
depository for funds of, makes loans to, acts as trustee and performs certain
other services for, the Company and certain of its affiliates in the normal
course of its business. It is also one of the investment managers of the pension
trust funds established by General Motors Corporation. As trustee of various
trusts, it has purchased securities of the Company and certain of its
affiliates.
CONCERNING THE PAYING AGENTS
The Company shall maintain one or more Paying Agents for the payment of
the principal of, premium, if any, and interest, if any, on, the Notes. Section
4.02 of the Indenture.) The Company has initially appointed Citibank, N.A. as
the Company's Paying Agent for the Notes.
PLAN OF DISTRIBUTION
Under the terms of Selling Agent Agreements, each dated as of December
___, 1996, the Notes are offered on a continuing basis by the Company through
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon
Brothers Inc, Morgan Stanley & Co. Incorporated, Lehman Brothers, Lehman
Brothers Inc., J. P. Morgan Securities Inc., Bear, Stearns & Co. Inc. and UBS
Securities Inc., who have agreed to use their reasonable best efforts to solicit
purchases of the Notes. The Company may appoint additional Agents to solicit
sales of the Notes; provided, however, that any such solicitation and sale of
the Notes shall be on the same terms and conditions to which the Agents have
agreed. In addition, the Company may arrange for the Notes to be sold through
other agents, dealers or underwriters. The Company may sell Notes directly to
investors on its own behalf. The Company will pay each Agent a commission in the
form of a discount ranging from .05% to .60% of the initial offering price of
each Note sold through such Agent, depending upon the Maturity Date thereof. No
commission will be payable to the Agents on Notes sold directly to purchasers by
the Company. The Company will have the sole right to accept offers to purchase
Notes and may reject any proposed purchase of Notes in whole or in part, whether
placed directly with the Company or through an Agent. Each Agent will have the
right, in its discretion reasonably exercised, to reject any proposed purchase
of Notes in whole or in part. The Company reserves the right to withdraw, cancel
or modify the offer without notice.
The Company may also sell Notes to an Agent as principal for its own
account at a discount equal to the commission applicable to any agency sale of a
Note of identical maturity, unless otherwise specified in the applicable Pricing
Supplement. Such Notes may be resold to one or more investors and other
purchasers at varying prices relating to prevailing market prices at the time of
resale as determined by the Agent or, if so specified in an applicable Pricing
Supplement, for resale at a fixed public offering price. In addition, the Agents
may offer the Notes they have purchased as principal to other dealers. The
Agents may sell Notes to any dealer at a discount and, unless otherwise
specified in the applicable Pricing Supplement, such discount allowed to any
dealer will not, during the distribution of the Notes, be in excess of the
discount to be received by such Agent from the Company. After the initial public
offering of Notes to be resold by an Agent to investors and other purchasers,
the public offering price (in the case of Notes to be resold at a fixed public
offering price), concession and discount may be changed.
Each Agent may be deemed to be an "underwriter" within the meaning of the
Securities Act. The Company has agreed to indemnify the Agents against certain
liabilities, including liabilities under the Securities Act.
No Note will have an established trading market when issued. The Company
does not intend to apply for the listing of the Notes on any securities
exchange, but has been advised by the Agents that the Agents intend to make a
market in the Notes as permitted by applicable laws and regulations. The Agents
are not obligated to do so, however, and the Agents may discontinue making a
market at any time without notice. No assurance can be given as to the liquidity
of any trading market for any Notes.
------------------
Dennis Weatherstone, a director of J. P. Morgan & Co. Incorporated, of
which J. P. Morgan Securities Inc. is an indirect, wholly-owned subsidiary,
is a director of General Motors Corporation. In the ordinary course of their
respective businesses, affiliates of the Agents have engaged, and will in the
future engage, in commercial banking and investment banking transactions with
the Company and certain of its affiliates.
LEGAL OPINIONS
The validity of the Notes offered hereby will be passed upon for the
Company by Martin I. Darvick, Esq., Assistant General Counsel of the Company,
and for the Agents by Davis Polk & Wardwell. Mr. Darvick owns shares and holds
options to purchase shares of General Motors Corporation $1-2/3 par value common
stock. Davis Polk & Wardwell acts as counsel to the Executive Compensation
Committee of the Board of Directors of General Motors Corporation and has acted
as counsel to the Company and certain of its affiliates in various matters.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference from the Company's Annual Report on Form 10-K have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
<PAGE>
GMAC FINANCIAL SERVICES
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses to be incurred in
connection with the offering described in the Registration Statement:
Securities and Exchange Commission registration fee..... $2,159,204
Blue Sky filing and counsel fees........................ 25,000
Fees and expenses of Trustee............................ 5,000
Printing and engraving Notes............................ 5,000
Printing Registration Statement, Prospectus
and other documents.................................. 40,000
Accountants' fees ...................................... 15,000
Rating Agencies' fees ............................... 150,000
Miscellaneous expenses.................................. 100,796
----------
Total................................................ $2,500,000
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under sections 7015 and 7018-7023 of the New York Banking Law the Company
may or shall, subject to various exceptions and limitations, indemnify its
directors or officers and may purchase and maintain insurance as follows:
a. If a director or officer is made or threatened to be a party to an
action by or in the right of the Company to procure a judgment in its favor, by
reason of the fact that he is or was a director or officer of the Company or is
or was serving at the request of the Company as a director or officer of some
other enterprise (including, without limitation, an employee benefit plan), the
Company may indemnify him against amounts paid in settlement and reasonable
expenses, including attorney's fees, incurred in the defense or settlement of
such action or an appeal therein, if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in (or, in the case of
service for any other enterprise, not opposed to) the best interests of the
Company, except that no indemnification is available under such statutory
provisions in respect of a threatened action or a pending action which is
settled or otherwise disposed of, or any claim or issue or matter as to which
such person is found liable to the Company, unless in each such case a court
determines that such person is fairly and reasonably entitled to indemnity for
such amount as the court deems proper.
b. With respect to any action or proceeding other than one by or in the
right of the Company to procure a judgment in its favor, if a director or
officer is made or threatened to be made a party by reason of the fact that he
was a director or officer of the Company, or served some other enterprise
(including, without limitation, an employee benefit plan) at the request of the
Company, the Company may indemnify him against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorney's fees, incurred as a
result of such action or proceeding or an appeal therein, if he acted in good
faith for a purpose which he reasonably believed to be in (or, in the case of
service for any other enterprise, not opposed to) the best interests of the
Company and, in criminal actions or proceedings, in addition, had no reasonable
cause to believe that his conduct was unlawful.
c. A director or officer who has been wholly successful, on the merits
or otherwise, in the defense of a civil or criminal action or proceeding of
the character described in paragraphs a. or b. above, shall be entitled to
indemnification as authorized in such paragraphs.
d. The Company may purchase and maintain insurance to indemnify directors
and officers in instances in which they may not otherwise be indemnified by the
Company under the provisions of the Banking Law, provided that the contract of
insurance provides for a retention amount and for co-insurance, except that no
such insurance may provide for any payment, other than cost of defense, to or on
behalf of any director or officer if a judgment or other final adjudication
adverse to such director or officer establishes that his acts of active and
deliberate dishonesty were material to the cause of action so adjudicated or
that he personally gained in fact a financial profit or other advantage to which
he was not legally entitled.
The foregoing statement is subject to the detailed provisions of sections
7015 and 7018-7023 of the New York Banking Law.
As a subsidiary of General Motors Corporation, the Company is insured
against liabilities which it may incur by reason of the foregoing provisions of
the New York Banking Law and directors and officers of the Company are insured
against some liabilities which might arise out of their employment and not be
subject to indemnification under said Banking Law.
Pursuant to resolutions adopted by the Board of Directors of General
Motors Corporation, that company to the fullest extent permissible under law
will indemnify, and has purchased insurance on behalf of, directors or officers
of the Company, or any of them, who incur or are threatened with personal
liability, including expenses, under the Employee Retirement Income Security Act
of 1974 or any amendatory or comparable legislation or regulation thereunder.
<PAGE>
ITEM 16. EXHIBITS.
*1 Form of Selling Agent Agreement.
*4 Form of Indenture, dated as of December 1, 1993, between the
Company and Citibank, N.A., Trustee.
*4(a)(1) Form of Medium-Term Note (Semi-Annual) in global form included in
Exhibit 4.
*4(a)(2) Form of Medium-Term Note (Annual) in global form included in Exhibit
4.
5 Opinion and Consent of Martin I. Darvick, Esq., Assistant General
Counsel of the Company.
8 Opinion and consent of tax counsel.
12 Calculation of Ratio of Earnings to Fixed Charges.
23(a) Consent of Deloitte & Touche LLP.
23(b) Consent of Counsel included in Exhibit 5.
25 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Citibank, N.A.
99 Underwriter representations of compliance with Rule 15c2-8 under the
Securities Exchange Act of 1934, as amended.
*Incorporated by reference from Registration No. 33-51381 dated December 9,
1993.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(3) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(4) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby further undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors and officers of the Company
pursuant to the provisions discussed in Item 15 above, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefor, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director or officer of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director or officer in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, General Motors Acceptance Corporation, certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing
Form S-3 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Detroit,
and State of Michigan, on the 16th day of December, 1996.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
s/ J. Michael Losh
----------------------------------------
(J. Michael Losh, Chairman of the Board)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on December 16, 1996 by the following
persons in the capacities indicated.
SIGNATURE TITLE
s/ J. Michael Losh
- -------------------------
(J. Michael Losh) Chairman of
the Board
and Director
s/ John R. Rines
- -------------------------
(John R. Rines) President and
Director
s/ Eric A. Feldstein
- -------------------------
(Eric A. Feldstein) Executive Vice President and
Chief Financial Officer
s/ Gerald E. Gross
- ------------------------- Comptroller
(Gerald E. Gross) (Chief Accounting
Officer)
s/ Richard J. S. Clout
- ------------------------- Executive Vice
(Richard J. S. Clout) President and
Director
<PAGE>
s/ John D. Finnegan
- ------------------------- Director
(John D. Finnegan)
s/ John E. Gibson
- ------------------------- Executive Vice
(John E. Gibson) President and
Director
s/ Leon J. Krain
- ----------------------- Director
(Leon J. Krain)
s/ Harry J. Pearce
- ------------------------- Director
(Harry J. Pearce)
s/ W. Allen Reed
- ------------------------- Director
(W. Allen Reed)
s/ John F. Smith, Jr.
- ------------------------- Director
(John F. Smith, Jr.)
s/ Ronald L. Zarrella
- ------------------------- Director
(Ronald L. Zarrella)
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE NO.
*1 Form of Selling Agent Agreement.........................
*4 Form of Indenture, dated as of December 1, 1993, between
the Company and Citibank, N.A., Trustee.................
*4(a)(1) Form of Medium-Term Note (Semi-Annual) in global form
included in Exhibit 4...................................
*4(a)(2) Form of Medium-Term Note (Annual) in global form
included in Exhibit 4...................................
5 Opinion and Consent of Martin I. Darvick, Esq.,
Assistant General Counsel of the Company................
8 Opinion and Consent of Tax Counsel......................
12 Calculation of Ratio of Earnings to Fixed Charges.......
23(a) Consent of Deloitte & Touche LLP. ......................
23(b) Consent of Counsel included in Exhibit 5................
25 Form T-1 Statement of Eligibility and Qualification
under the Trust Indenture Act of 1939 of
Citibank, N.A...........................................
99 Underwriter representations of compliance with Rule
15c2-8 under the Securities Exchange Act of 1934,
as amended..............................................
* Incorporated by reference from Registration No. 33-51381 dated
December 9, 1993.
EXHIBIT 5
GENERAL MOTORS ACCEPTANCE CORPORATION
3031 WEST GRAND BOULEVARD
DETROIT, MICHIGAN 48202
December 16, 1996
GENERAL MOTORS ACCEPTANCE CORPORATION
3044 WEST GRAND BOULEVARD
DETROIT, MICHIGAN 48202
Dear Sirs:
As Assistant General Counsel of General Motors Acceptance Corporation (the
"Company") in connection with the proposed issue and sale of Medium-Term Notes
Due Nine Months to Thirty Years from Date of Issue (the "Notes") pursuant to a
Registration Statement filed this date, I advise that in my opinion you have
full power and authority under the laws of New York, the State of your
incorporation, and under your Restated Organization Certificate to borrow the
money and to contract the indebtedness to be evidenced by the said Notes.
It is my further opinion that the Indenture, dated as of December 1, 1993,
with Citibank, N.A., Trustee has been duly authorized, executed and delivered
and that the Notes, when duly executed and authenticated as provided in the
Indenture, issued and paid for, will be valid and legally binding obligations of
the Company in accordance with and subject to the terms thereof and of the
Indenture.
I hereby consent to the use of the foregoing opinion as Exhibit 5 of your
Registration Statement filed with the United States Securities and Exchange
Commission under the Securities Act of 1933, as amended, with respect to the
above mentioned Notes and to the use of my name in such Registration Statement
and in the related Prospectus under the heading "Legal Opinions".
Very truly yours,
s/ Martin I. Darvick
-------------------------
Martin I. Darvick
Assistant General Counsel
EXHIBIT 8
December 16, 1996
General Motors Acceptance Corporation
3031 West Grand Boulevard
P.O. Box 33123
Detroit, MI 48232
Dear Sirs:
In connection with the General Motors Acceptance Corporation (the "Company")
Prospectus for the proposed issue and sale of Medium-Term Notes Due Nine Months
to Thirty Years from Date of Issue (the "Notes"), I have acted as tax counsel to
the Company, and in that capacity have furnished certain opinions to it. I
hereby confirm to you that the opinion as set forth under the heading "United
States Federal Taxation" in the Prospectus covering such notes which is part of
the registration statement to which this letter is attached as an exhibit. As
indicated in the opinion, the discussion sets forth a general summary of certain
United States Federal income tax consequences of the ownership and disposition
of the Notes as applied to original holders purchasing Notes at the issue price.
Holders are advised to consult their own tax advisors with regard to the
application of the income tax laws to their particular situations as well as any
tax consequences arising under the laws of any state, local or foreign tax
jurisdiction.
I hereby consent to the filing with the Securities and Exchange Commission of
this opinion as an exhibit to the Registration Statement, as amended, and to the
reference to tax counsel under the heading "United States Federal Taxation" in
the Prospectus. By providing the foregoing consent, I do not admit that tax
counsel fall within the category of persons whose consent is required under
section 7 of the Securities Act of 1933, as amended.
Yours very truly,
s/ Robert N. Deit
------------------
Robert N. Deitz
Senior Tax Counsel
EXHIBIT 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
General Motors Acceptance Corporation on Form S-3 of our report dated January
29, 1996, appearing in the Annual Report on Form 10-K of General Motors
Acceptance Corporation for the year ended December 31, 1995 and to the reference
to us under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Detroit, Michigan
December 16, 1996
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a Trustee
pursuant to Section 305 (b)(2) ___
------------------------
CITIBANK, N.A.
(Exact name of trustee as specified in its charter)
13-5266470
---------------------
(I.R.S. employer
identification no.)
399 Park Avenue, New York, New York 10043
- ----------------------------------- -------------
(Address of principal executive office) (Zip Code)
-----------------------
GENERAL MOTORS ACCEPTANCE CORPORATION
(Exact name of obligor as specified in its charter)
New York 38-0572512
- ------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
767 FIFTH AVENUE 10153
NEW YORK, NEW YORK ----------
(Zip Code)
3044 WEST GRAND BOULEVARD 48202
DETROIT, MICHIGAN ----------
- ---------------------------------------- (Zip Code)
(Address of principal executive offices)
-----------------------
MEDIUM TERM NOTES DUE FROM A MINIMUM OF
9 MONTHS FROM DATE OF ISSUE
(Title of the indenture securities)
Item 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
NAME ADDRESS
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of New York New York, NY
33 Liberty Street
New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. LIST OF EXHIBITS.
Exhibit 1 - Copy of Articles of Association of the Trustee, as now
in effect. (Exhibit 1 to T-1 to Registration Statement No. 2-79983)
Exhibit 2 - Copy of certificate of authority of the Trustee to
commence business. (Exhibit 2 to T-1 to Registration Statement No.
2-29577).
Exhibit 3 - Copy of authorization of the Trustee to exercise
corporate trust powers. (Exhibit 3 to T-1 to Registration Statement
No. 2-55519)
Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4 to
T-1 to Registration Statement No. 33-34988)
Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the Trustee required by Section 321(b) of
the Trust Indenture Act of 1939. (Exhibit 6 to T-1 to Registration
Statement No. 33-19227.)
Exhibit 7 - Copy of the latest Report of Condition of Citibank,
N.A.(as of September 30, 1996 -attached)
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York and State of New York, on the 13th day
of December, 1996.
CITIBANK, N.A.
/S/ Robert T. Kirchner
----------------------
By: Robert T. Kirchner
Vice President
<PAGE>
Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATING
DOMESTIC AND FOREIGN
SUBSIDIARIES OF
Citibank, N. A.
of New York in the State of New York, at the close of business on September 30,
1996 published in response to call made by Comptroller of the Currency, under
Title 12, United States Code, Section 161, Charter Number 1461 Comptroller
of the Currency Northeastern District.
ASSETS
Thousands
of dollars
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin $ 8,647,000
Interest-bearing balances: 13,006,000
Held-to-maturity securities 0
Available-for-sale securities 22,101,000
Federal funds sold and
securities purchased under
agreements to resell in
domestic offices of the
bank and of its Edge and
Agreement subsidiaries,
and in IBFs: Federal
funds sold 4,263,000
Securities purchased under
agreements to resell 370,000
Loans and lease financing receivables:
Loans and leases, net of
unearned income $147,806,000
LESS: Allowance for loan and
lease losses 4,386,000
LESS: Allocated transfer risk
reserve 0
------------
Loans and leases, net of unearned
income, allowance and reserve 143,420,000
Trading assets 24,655,000
Premises and fixed assets
(including capitalized leases) 3,547,000
Other real estate owned 708,000
Investments in unconsolidated
subsidiaries and associated companies 1,220,000
Customers' liability to this bank on
acceptances outstanding 2,270,000
Intangible assets 105,000
Other assets 7,084,000
------------
TOTAL ASSETS $231,396,000
============
LIABILITIES
Deposits:
In domestic offices $ 35,623,000
Noninterest-bearing $ 13,178,000
Interest-bearing 22,445,000
------------
In foreign offices, Edge and Agreement
subsidiaries, and IBFs 130,945,000
Noninterest-bearing 8,792,000
Interest-bearing 122,153,000
------------
Federal funds purchased and securities
sold under agreements to repurchase in
domestic offices of the bank and of its
Edge and Agreement subsidiaries, and
in IBFs:
Federal funds purchased 1,872,000
Securities sold under agreements
to repurchase 398,000
Demand notes issued to the U.S.
Treasury 0
Trading liabilities 17,042,000
Other borrowed money:
With a remaining maturity of one year
or less 9,839,000
With a remaining maturity of more than
one year 4,014,000
Mortgage indebtedness and obligations
under capitalized leases 137,000
Bank's liability on acceptances
executed and outstanding 2,316,000
Subordinated Notes and debentures 4,700,000
Other liabilities 8,549,000
------------
TOTAL LIABILITIES $215,435,000
============
Limited-life preferred stock
and related surplus 0
EQUITY CAPITAL
Perpetual preferred stock and
related surplus 0
Common stock $ 751,000
Surplus 6,895,000
Undivided profits and capital reserves 8,308,000
Net unrealized holding gains (losses)
on available-for-sale securities 590,000
Cumulative foreign currency translation
adjustments (583,000)
------------
TOTAL EQUITY CAPITAL $ 15,961,000
------------
TOTAL LIABILITIES AND LIMITED-LIFE
PREFERRED STOCK, AND EQUITY CAPITAL $231,396,000
============
<PAGE>
I, Roger W. Trupin, Controller of the above-named bank do hereby declare
that this Report of Condition is true and correct to the best of my knowledge
and belief.
ROGER W. TRUPIN
We, the undersigned directors, attest to the correctness of this Report of
Condition. We declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions and
is true and correct.
PAUL J. COLLINS
JOHN S. REED
WILLIAM R. RHODES
DIRECTORS
EXHIBIT 99
Merrill Lynch
Pierce, Fenner & Smith Inc.
World Financial Center
North Tower
New York, New York 10281-1323
212 449 1000
MERRILL LYNCH
December 13, 1996
We confirm that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, a dealer in the General Motors Acceptance Corporation Medium Term
Note Program (the "Program"), has acted in compliance with Rule 15c2-8 (the
"Rule") under the Securities Exchange Act of 1934, as amended, solely to the
extent the Rule is applicable in the offering of Medium Term Notes under the
Program.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
s/ Scott G. Primrose
- ---------------------
Name: Scott G. Primrose
Title: Authorized Signatory
<PAGE>
<PAGE 2>
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
212-783-7000
----------------
SALOMON BROTHERS
----------------
December 13, 1996
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, Michigan 48202
To whom it may concern:
We confirm that Salomon Brothers Inc, a dealer in the General Motors Acceptance
Corporation Medium Term Note Program (the "Program"), has acted in compliance
with Rule 15c2-8 (the "Rule") under the Securities Exchange Act of 1934, as
amended, solely to the extent the Rule is applicable in the offering of
Medium Term Notes under the Program.
By: s/ Martha D. Bailey
- -------------------------
Martha D. Bailey
Vice President
<PAGE>3
UBS SECURITIES LLC
December 13, 1996
We confirm that UBS Securities LLC, a dealer in the General Motors Acceptance
Corporation Medium Term Note Program (the "Program"), has acted in compliance
with Rule 15c2-8 (the "Rule") under the Securities Exchange Act of 1934, as
amended, solely to the extent the Rule is applicable in the offering of Medium
Term Notes under the Program.
UBS SECURITIES LLC
By: s/ Gordon Burns
----------------------
Gordon Burns
Managing Director
299 Park Avenue, New York, N.Y. 10171-0026
(212)821-4000, Cable Address: Ubssecur
<PAGE>4
MORGAN STANLEY
MORGAN STANLEY & CO.
INCORPORATED
1585 BROADWAY
NEW YORK, NEW YORK 10036
(212) 761-4000
December 13, 1996
Lisa Gracin
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, Michigan 48202
This letter is to confirm that Morgan Stanley & Co. Incorporated, a dealer
in the General Motors Acceptance Corporation Medium-Term Note Program (the
"Program"), has acted in compliance with Rule 15c2-8 (the "Rule") under the
Securities Exchange Act of 1934, as amended, solely to the extent the Rule is
applicable in the offering of Medium-Term Notes under the Program.
Please do not hesitate to call me on (212) 761-1888 if you have any
questions.
Best regards,
s/ Michael M. Fusco
-------------------
Michael M. Fusco
<PAGE>5
LEHMAN BROTHERS
December 13, 1996
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, MI 48202
Dear Sirs:
We confirm that Lehman Brothers Inc., a dealer in the General Motors Acceptance
Corporation Medium Term Note Program (the "Program"), has acted in compliance
with Rule 15c2-8 (the "Rule") under the Securities Exchange Act of 1934, as
amended, solely to the extent the Rule is applicable in the offering of Medium
Term Notes under the Program.
s/ J. Wiqdortz
- -----------------------
Name: J. Wiqdortz
Title: Managing Director
LEHMAN BROTHERS INC.
<PAGE>6
J.P. MORGAN
J.P. Morgan Securities Inc.
60 Wall Street
New York NY
10260-0060
December 13, 1996
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, Michigan 48202
Dear Sir or Madam:
We confirm that J.P. Morgan Securities Inc., a dealer in the General Motors
Acceptance Corporation Medium Term Note Program (the "Program"), has acted in
compliance with Rule 15c2-8 (the "Rule") under the Securities Exchange Act of
1934, as amended, solely to the extent the Rule is applicable in the offering of
Medium Term Notes under the Program.
J.P. MORGAN SECURITIES, INC.
By: s/ Maria Sramek
- ------------------------
Name: Maria Sramek
Title: Vice President
<PAGE>7
BEAR STEARNS
BEAR, STEARNS, & CO. INC.
245 PARK AVENUE
NEW YORK, NEW YORK 10167
(212) 272-2000
ATLANTA * BOSTON
CHICAGO * DALLAS * LOS ANGELES
NEW YORK * SAN FRANCISCO
AMSTERDAM * GENEVA * HONG KONG
LONDON * PARIS * TOKYO
December 13, 1996
Mr. David C. Walker
Director of Liability Management
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, Michigan 48202
Dear Mr. Walker:
We confirm that Bear, Stearns & Co. Inc., a dealer in the General Motors
Acceptance Corporation Medium Term Note Program (the "Program"), has acted in
compliance with Rule 15c2-8 (the "Rule") under the Securities Exchange Act of
1934, as amended, solely to the extent the Rule is applicable in the offering of
Medium Term Notes under the Program.
Very truly yours,
s/ Lee A. Sachs
- ---------------
Lee A. Sachs
Senior Managing Director
EXHIBIT 12
GENERAL MOTORS ACCEPTANCE CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES
(In millions of dollars)
Nine Months Ended
September 30
--------------------
1996 1995
---- ----
Consolidated net income*........................... $ 966.4 $ 767.8
Provision for income taxes......................... 641.6 528.5
-------- --------
Consolidated income before income taxes............ 1,608.0 1,296.3
-------- --------
Fixed charges
Interest, debt discount and expense.......... 3,684.6 3,718.0
Portion of rentals representative of the
interest factor............................. 42.4 38.5
-------- --------
Total fixed charges................................ 3,727.0 3,756.5
-------- --------
Earnings available for fixed charges............... $5,335.0 $5,052.8
======== ========
Ratio of earnings to fixed charges................. 1.43 1.35
======== ========
Years Ended December 31
--------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Consolidated net income* $1,031.0 $ 927.1 $ 981.1 $1,218.7 $1,038.2
Provision for income taxes 752.2 512.7 591.7 882.3 610.0
-------- -------- -------- -------- --------
Consolidated income before
income taxes........... 1,783.2 1,439.8 1,572.8 2,101.0 1,648.2
-------- -------- -------- -------- --------
Fixed Charges
Interest, debt discount
and expense.......... 4,936.3 4,230.9 4,721.2 5,828.6 6,844.7
Portion of rentals
representative of the
interest factor...... 54.5 51.2 43.6 31.7 30.3
-------- -------- -------- -------- --------
Total fixed charges...... 4,990.8 4,282.1 4,764.8 5,860.3 6,875.0
-------- -------- -------- -------- --------
Earnings available for
fixed charges.......... $6,774.0 $5,721.9 $6,337.6 $7,961.3 $8,523.2
======== ======== ======== ======== ========
Ratio of earnings to
fixed charges.......... 1.36 1.33 1.33 1.35 1.23
======== ======== ======== ======== ========
* Before cumulative effect of accounting change of ($7.4) million in 1994,
($282.6) million in 1992 and $331.5 million in 1991.
