AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 21, 1998
REGISTRATION NO. 333-XXXXX
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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
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GENERAL MOTORS ACCEPTANCE CORPORATION
A Delaware Corporation -- I.R.S. Employer No. 38-0572512
3044 West Grand Boulevard
Detroit, Michigan 48202
(313-556-5000)
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.
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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 AMOUNT
OF SECURITIES REGISTERED OFFERING AGGREGATE 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 $9,391,880,000 100% $9,391,880,000 $2,846,024
==============================================================================
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
$608,120,000 remaining Medium-Term Notes registered on December 16, 1996
(Registration No. 333-17943), represents the maximum aggregate principal amount
of Medium-Term Notes which, on July 21, 1998, 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. 333-17943.
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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.
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- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
SUBJECT TO COMPLETION
PROSPECTUS DATED JULY 21, 1998
<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-Risks Associated With Exchange
Rates and Exchange Controls" and "Risk Factors-Judgments."
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-Risks
Associated With Indexed Notes."
----------------------
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 AGENTS' 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. U.S.$5,000,000 - U.S.$9,995,000,000 -
$10,000,000,000 U.S.$60,000,000 U.S.$9,940,000,000
===============================================================================
<PAGE>
(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 Inc., J.P. Morgan Securities Inc., Bear,
Stearns & Co. Inc. and Warburg Dillon Read LLC (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
$2,600,000.
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MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
MORGAN STANLEY DEAN WITTER
LEHMAN BROTHERS
J.P. MORGAN & CO.
BEAR, STEARNS & CO. INC.
WARBURG DILLON READ LLC
July 21, 1998.
<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-Currency Indexed 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-Book-Entry; 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.$1,000
(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 from time to time 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
<PAGE>
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, 1997 and Quarterly Report on Form 10-Q for the quarter ended March 31, 1998
filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
are incorporated by reference in this Prospectus.
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.
<PAGE>
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
MAIL CODE 482-1X1-103
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-Risks Associated With Indexed Notes." 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
<PAGE>
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.
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 Currency 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
<PAGE>
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.
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.
<PAGE>
PRINCIPAL EXECUTIVE OFFICES
General Motors Acceptance Corporation has its principal executive
offices at 3044 West Grand Boulevard, Detroit, Michigan 48202 (Tel. No.
313-556-5000).
RATIO OF EARNINGS TO FIXED CHARGES
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
---------------------- ------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
1.37 1.49 1.42 1.41 1.36 1.33 1.33
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 and discount 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 "Risk Factors-Risks Associated
With Exchange Rates and Exchange Controls" and "Risk Factors-Judgments."
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, as
amended by a First Supplemental Indenture dated as of January 1, 1998 (together,
the "Indenture") between the Company and Citibank, N.A., as Trustee. 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 from time to time by the Company 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").
<PAGE>
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-Book-Entry; 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-Book-Entry; 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.$1,000
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."
<PAGE>
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 form 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 Indexed 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;
<PAGE>
"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.
BOOK-ENTRY; 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
<PAGE>
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
depositary or ceases to be a clearing agency registered under the Exchange Act
and a successor depositary 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
<PAGE>
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.$1000 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
"Risk Factors-Risks Associated With Exchange Rates and Exchange Controls") 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
<PAGE>
Exchange Service, or if not available, the Dow Jones Markets Limited (or
successor) 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
<PAGE>
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
<PAGE>
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 - Book-Entry; 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.
<PAGE>
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
<PAGE>
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 on a Maturity Date 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 such Maturity 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
<PAGE>
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-Nonfinancial." 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
<PAGE>
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, however, 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:
<PAGE>
(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
<PAGE>
Telerate" is designated in the applicable Pricing Supplement, the display on Dow
Jones Markets Limited (or successor 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
<PAGE>
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
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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
Markets Limited (or successor page or successor service) 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
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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 "Risk Factors-Risks Associated With Exchange Rates and Exchange
Controls" and "Risk Factors-Risks Associated With Indexed Notes."
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
<PAGE>
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.
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 ("Indexed
Notes"). 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 - Risks Associated With Indexed Notes."
PROSPECTIVE INVESTORS SHOULD CONSULT WITH THEIR OWN FINANCIAL AND LEGAL
ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN CURRENCY INDEXED NOTES 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
<PAGE>
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
<PAGE>
(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-Extension 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-Book-Entry; 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.
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.
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, payments 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 "Risk Factors-Risks Associated With Exchange Rates and Exchange
Controls" and "Risk Factors-Judgments." 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.
UNITED STATES FEDERAL TAXATION
GENERAL
In the opinion of the Company's tax counsel, the following general
summary describes the principal 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 or persons who
have ceased to be United States citizens or to be taxed as resident aliens. In
addition, the United States Federal income tax consequences of holding a
<PAGE>
particular Note will depend, in part, on the particular terms of such Note as
set forth in the 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 for United States Federal income tax purposes
(i) 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 the income of which is
subject to United States Federal income taxation regardless of its source, or
(iv) a trust if (a) a court within the United States is able to exercise primary
supervision over the administration of the trust and (b) one or more United
States persons have the authority to control all substantial decisions of the
trust.
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 govern 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, as described
under "Original Issue Discount Notes", "Foreign Currency Notes" and "Indexed
Notes, Currency Indexed Notes and Other Notes Subject to Contingencies" 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 Company) 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.
<PAGE>
In addition, stated interest on Floating Rate Notes providing for one
or more qualified floating rates of interest, a single fixed rate and one or
more qualified floating rates, a single objective rate, or a single fixed rate
and a single objective rate that is a qualified inverse floating rate will
generally constitute qualified stated interest if such stated interest is
unconditionally payable at least annually during the term of the Note at a rate
that is considered to be a single qualified floating rate or a single objective
rate as described below.
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 .65 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 may not be considered a qualified
floating rate if the variable rate is subject to a Maximum Interest Rate,
Minimum 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 (unless the
restriction 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 objective financial or economic information. An
objective rate does not include a rate based on information that is within the
control of the Company (or a related party) or that is unique to the
circumstances of the Company (or a related party), such as dividends, profits,
or the value of the Company's stock. In addition, 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 one year or less (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.
<PAGE>
Special tax considerations (including possible original issue discount)
may arise with respect to Floating Rate Notes providing for (i) one Base Rate
followed by one or more Base Rates, (ii) a single fixed rate followed by a
qualified floating rate or (iii) a Spread Multiplier. Prospective U.S. Holders
of Floating Rate Notes with any of such features should carefully examine the
applicable Pricing Supplement and should consult their tax advisors with respect
to such a feature since the tax consequences will depend, in part, on the
particular terms of the Note.
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. Generally,
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. Holders 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 all interest that accrues
on a Note in accordance with a constant yield method based on the compounding of
interest. Special rules apply to such elections and U.S. Holders considering
such an election should consult their own tax advisor.
The OID Regulations contain aggregation rules stating that, in certain
circumstances, if more than one type of Note is issued as part of the same
issuance of securities to a single holder, some or all of such Notes may be
treated together as a single debt instrument with a single issue price, maturity
date, yield to maturity and stated redemption price at maturity for purposes of
calculating and accruing any original issue discount. Unless otherwise provided
in the applicable Pricing Supplement, the Company does not expect to treat any
of the Notes as being subject to the aggregation rules for purposes of computing
original issue discount.
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.
BOND PREMIUM
If a U.S. Holder purchases a Note for an amount that is greater than
the amount payable 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 over the remaining term of the Note, based on the U.S.
Holder's yield to maturity with respect to the Note. A U.S. Holder may generally
use the amortizable bond premium allocable to an accrual period to offset
qualified stated interest required to be included in the U.S. Holder's income
with respect to the Note in that accrual period. Under recently promulgated
regulations, if the amortizable bond premium allocable to an accrual period
exceeds the amount of qualified stated interest allocable to such accrual
period, such excess would be allowed as a deduction for such accrual period, but
only to the extent of the U.S. Holder's prior interest inclusions on the Note.
Any excess is generally carried forward and allocable to the next accrual
period. A U.S. Holder who elects to amortize bond premium must reduce his tax
basis in the Note as described below under "Sale, Exchange or Redemption of the
Notes." An election to amortize bond premium applies to all taxable debt
obligations held by the U.S. Holder at the beginning of the first taxable year
to which the election applies or 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.
<PAGE>
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 (excluding any amounts attributable
to unpaid qualified stated interest accrued between interest payment dates,
which will be includable in income as interest in accordance with the U.S.
Holder's method of accounting) 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 cost of
the Note to such U.S. Holder, increased by the amount of any original issue
discount previously includable in income by the U.S. Holder with respect to such
Note and reduced by any principal payments received by the U.S. Holder, any
amortizable bond premium used to offset qualified stated interest and certain
bond premium allowed as a deduction 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 that is not an Indexed Note, a Currency Indexed Note or a Floating
Rate Note that provides for contingent payments 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). Prospective investors should consult their tax advisors
regarding the treatment of capital gains (which may be taxed at lower rates than
ordinary income for taxpayers who are individuals, trusts or estates) and losses
(the deductibility of which is subject to limitations).
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.
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.
INDEXED NOTES, CURRENCY INDEXED NOTES AND OTHER NOTES SUBJECT TO CONTINGENCIES
The United States Federal income tax consequences to a U.S. Holder of
the ownership and disposition of Indexed Notes or other Notes that provide for
one or more contingent payments will vary depending on the exact terms of the
Notes and related factors, and the proper treatment of principal of and interest
on Currency Indexed Notes is uncertain at this time. Such Notes 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.
<PAGE>
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 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
applicable 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
<PAGE>
(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 clauses (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
principal of, and 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 July __,
1998, the Notes are offered from time to time by the Company through Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon
Brothers Inc, Morgan Stanley & Co. Incorporated, Lehman Brothers Inc., J.P.
Morgan Securities Inc., Bear, Stearns & Co. Inc. and Warburg Dillon Read LLC,
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.
<PAGE>
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 and owns shares of General Motors Corporation Class H common stock $0.10
par value. 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...... $2,803,600
Fees and expenses of Trustee............................. 5,000
Printing Registration Statement, Prospectus
and other documents.................................. 40,000
Accountants' fees ....................................... 15,000
Rating Agencies' fees ................................... 150,000
Miscellaneous expenses................................... 13,600
------
Total................................................ $3,000,000
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the Delaware Corporation Law, the Company is empowered
to indemnify its directors and officers in the circumstances therein provided.
The Company's Certificate of Incorporation, as amended, provides that no
director shall be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174,
or any successor provision thereto, of the Delaware Corporation Law, or (iv) for
any transaction from which the director derived an improper personal benefit.
Under Article VI of its By-Laws, the Company shall indemnify and advance
expenses to every director and officer (and to such person's heirs, executors,
administrators or other legal representatives) in the manner and to the full
extent permitted by applicable law as it presently exists, or may hereafter be
amended, against any and all amounts (including judgments, fines, payments in
settlement, attorneys' fees and other expenses) reasonably incurred by or on
behalf of such person in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "proceeding"), in which such director or officer was or is made
or is threatened to be made a party or is otherwise involved by reason of the
fact that such person is or was a director or officer of the Company, or is or
was serving at the request of the Company as a director, officer, employee,
fiduciary or member of any other corporation, partnership, joint venture, trust,
organization or other enterprise. The Company shall not be required to indemnify
a person in connection with a proceeding initiated by such person if the
proceeding was not authorized by the Board of Directors of the Company. The
Company shall pay the expenses of directors and officers incurred in defending
any proceeding in advance of its final disposition ("advancement of expenses");
provided, however, that the payment of expenses incurred by a director or
officer in advance of the final disposition of the proceeding shall be made only
upon receipt of an undertaking by the director or officer to repay all amounts
advanced if it should be ultimately determined that the director or officer is
not entitled to be indemnified under Article VI of the By-Laws or otherwise. If
a claim for indemnification or advancement of expenses by an officer or director
under Article VI of the By-Laws is not paid in full within ninety days after a
written claim therefor has been received by the Company, the claimant may file
suit to recover the unpaid amount of such claim, and if successful in whole or
in part, shall be entitled to be paid the expense of prosecuting such claim. In
<PAGE>
any such action the Company shall have the burden of proving that the claimant
was not entitled to the requested indemnification or advancement of expenses
under applicable law. The rights conferred on any person by Article VI of the
By-Laws shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Company's Certificate of
Incorporation or By-Laws, agreement, vote of stockholders or disinterested
directors or otherwise. The Company's obligation, if any, to indemnify any
person who was or is serving at its request as a director, officer or employee
of another corporation, partnership, joint venture, trust, organization or other
enterprise shall be reduced by any amount such person may collect as
indemnification from such other corporation, partnership, joint venture, trust,
organization or other enterprise.
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 Delaware General Corporation 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 General Corporation 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) First Supplemental Indenture, dated as of January 1, 1998,
between the Company and Citibank N.A., Trustee.
*4(a)(2) Form of Medium-Term Note (Semi-Annual) in global form included
in Exhibit 4.
*4(a)(3) 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 Statement 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.
<PAGE>
(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 21st day of July, 1998.
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 July 21, 1998 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 D. FINNEGAN
- -------------------------
(John D. Finnegan) President, Chief Executive
Officer and Director
s/ WILLIAM F. MUIR
- -------------------------
(William F. Muir) 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/ ERIC A. FELDSTEIN
- ------------------------- Director
(Eric A. Feldstein)
s/ JOHN E. GIBSON
- ------------------------- Executive Vice
(John E. Gibson) President and
Director
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) First Supplemental Indenture, dated as of January 1, 1998,
between the Company and Citibank N.A., Trustee.
*4(a)(2) Form of Medium-Term Note (Semi-Annual) in global form
included in Exhibit 4....................................
*4(a)(3) 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 Statement No. 33-51381 dated
December 9, 1993.
EXHIBIT 4 (a)(1)
FIRST SUPPLEMENTAL INDENTURE, dated as of January 1, 1998, between General
Motors Acceptance Corporation, a corporation duly organized and existing under
the laws of the State of New York (hereafter called the "Company"), General
Motors Acceptance Corporation, a corporation duly organized and existing under
the laws of the State of Delaware, and Citibank, N.A., a corporation duly
organized and existing under the laws of the State of New York, as Trustee
(hereafter called the "Trustee," which term shall include any successor trustee
appointed pursuant to Article Seven of the Indenture hereafter referred to).
W I T N E S S E T H:
WHEREAS, the Company and the Trustee have heretofore executed and delivered the
Indenture, dated as of December 1, 1993, between the Company and the Trustee,
providing for the issuance from time to time of one or more series of securities
evidencing unsecured indebtedness of the Company (hereinafter called the
"Securities"). Terms used in this First Supplemental Indenture which are defined
in the Indenture shall have the meanings assigned to them in the Indenture;
WHEREAS, this First Supplemental Indenture amends the Indenture, pursuant to
Section 10.01 thereof in order to permit the succession of another corporation
to the Company and the assumption by such successor corporation of the
covenants, agreements and obligations of the Company pursuant to Article Eleven
of the Indenture;
WHEREAS, the Company has entered into an Agreement and Plan of Merger with GMAC
Financial Services Corporation, a Delaware corporation, dated January 1, 1998,
with GMAC Financial Services Corporation being the surviving entity of such
merger (the "Merger"); and
WHEREAS, upon consummation of such Merger, the name of GMAC Financial Services
Corporation was changed to General Motors Acceptance Corporation, a Delaware
corporation ("New GMAC"); such name change together with the Merger (the
"Transaction");
WHEREAS, New GMAC is not in default in the performance of any covenant or
condition contained in the Indenture immediately after the Merger;
NOW, THEREFORE, for and in consideration of the premises and the purchase of the
Securities by the holders thereof, the Company and New GMAC covenant and agree,
for the equal and proportionate benefit of the respective holders from time to
time hereafter of the Securities, as follows:
<PAGE>
ARTICLE ONE
New GMAC hereby expressly assumes the due and punctual payment of the principal
of (and premium, if any) and interest on all the Securities, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of the Indenture to be performed by the Company.
All references in the Indenture to "Company" shall mean New GMAC until a
successor corporation shall have become such pursuant to the applicable
provisions of the Indenture and New GMAC hereby assumes all of the covenants,
agreements and obligations of the Company pursuant to Article Eleven of the
Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all of the day and year first above written.
[SEAL] GENERAL MOTORS ACCEPTANCE
CORPORATION, a New York corporation
ATTEST:
__________________________ By:_______________________________
Secretary Title:
[SEAL] GENERAL MOTORS ACCEPTANCE
CORPORATION, a Delaware corporation
ATTEST:
__________________________ By:_______________________________
Secretary Title:
<PAGE>
[SEAL] CITIBANK, N.A., TRUSTEE
ATTEST:
__________________________ By:_______________________________
Assistant Secretary Title:
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
On the first day of January, 1998, before me personally came , to me
known, who, being by me duly sworn, did depose and say that he is a Vice
President of GENERAL MOTORS ACCEPTANCE CORPORATION, a Delaware corporation, one
of the corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
[NOTARIAL SEAL]
---------------------------
Notary Public
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
On the first day of January, 1998, before me personally came , to me
known, who, being by me duly sworn, did depose and say that he is a Vice
President of GENERAL MOTORS ACCEPTANCE CORPORATION, a New York corporation, one
of the corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
[NOTARIAL SEAL]
---------------------------
Notary Public
<PAGE>
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On the first day of January, 1998, before me personally came ,
to me known, who, being by me duly sworn, did depose and say that he is a Vice
President of CITIBANK, N.A., one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the By-Laws of said corporation, and that he signed his
name thereto by like authority.
[NOTARIAL SEAL]
---------------------------
Notary Public
EXHIBIT 5
GENERAL MOTORS ACCEPTANCE CORPORATION
3031 WEST GRAND BOULEVARD
DETROIT, MICHIGAN 48202
July 21, 1998
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 Delaware, the State of your
incorporation, and under your Certificate of Incorporation, as amended, 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, as amended by a First Supplemental Indenture
dated as of January 1, 1998, 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 12
<TABLE>
GENERAL MOTORS ACCEPTANCE CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES
(In millions of dollars)
<CAPTION>
Three Months Ended
March 31,
------------------
1998 1997
-------- --------
<S> <C> <C>
Consolidated net income ................................. $ 349.3 $ 372.0
Provision for income taxes .............................. 165.5 258.5
-------- --------
Consolidated income before income taxes ................. 514.8 630.5
-------- --------
Fixed Charges
Interest and discount ................................. 1,384.4 1,265.8
Portion of rentals representative
of the interest factor .............................. 18.2 14.8
-------- --------
Total fixed charges ..................................... 1,402.6 1,280.6
-------- --------
Earnings available for fixed charges .................... $1,917.4 $1,911.1
======== ========
Ratio of earnings to fixed charges ...................... 1.37 1.49
======== ========
</TABLE>
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Consolidated net income* .. $1,301.1 $1,240.5 $1,031.0 $ 927.1 $ 981.1
Provision for income taxes 912.9 837.2 752.2 512.7 591.7
-------- -------- -------- -------- --------
Consolidated income before
income taxes ............ 2,214.0 2,077.7 1,783.2 1,439.8 1,572.8
-------- -------- -------- -------- --------
Fixed Charges
Interest and discount ... 5,255.5 4,937.5 4,936.3 4,230.9 4,721.2
Portion of rentals
representative of the
interest factor ....... 69.8 77.8 54.5 51.2 43.6
-------- -------- -------- -------- --------
Total fixed charges ....... 5,325.3 5,015.3 4,990.8 4,282.1 4,764.8
-------- -------- -------- -------- --------
Earnings available for
fixed charges ........... $7,539.3 $7,093.0 $6,774.0 $5,721.9 $6,337.6
======== ======== ======== ======== ========
Ratio of earnings to
fixed charges ........... 1.42 1.41 1.36 1.33 1.33
======== ======== ======== ======== ========
<FN>
* Before cumulative effect of accounting change of ($7.4) million in 1994.
</FN>
</TABLE>
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 26, 1998, appearing in the Annual Report on Form 10-K of General
Motors Acceptance Corporation for the year ended December 31, 1997 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
July 21, 1998
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)
NEW YORK 13-5266470
- --------------------------- -------------------
(State of incorporation (I.R.S. employer
if not a U.S. national bank 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)
DELAWARE 38-0572512
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
3044 WEST GRAND BOULEVARD
DETROIT, MICHIGAN 48202
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
-----------------------
MEDIUM TERM NOTES
----------------------------------
(Title of the indenture securities)
<PAGE>
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.
List below all exhibits filed as part of this Statement of
Eligibility.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as exhibits hereto.
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 March 31, 1998 - 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 20th day
of July, 1998.
CITIBANK, N.A.
/s/Wafaa Orfy
----------------------
By: Wafaa Orfy
Senior Trust Officer
<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 March 31, 1998
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 $ 6,890,000
Interest-bearing balances: 14,848,000
Held-to-maturity securities 0
Available-for-sale securities 31,464,000
Federal funds sold and securities purchased under
agreements to resell 19,345,000
Loans and lease financing receivables:
Loans and leases, net of unearned income $159,106,000
LESS: Allowance for loan and lease losses 4,259,000
------------
Loans and leases, net of unearned
income, allowance, and reserve 154,847,000
Trading assets 36,633,000
Premises and fixed assets (including capitalized leases) 3,376,000
Other real estate owned 485,000
Investments in unconsolidated
subsidiaries and associated companies 1,386,000
Customers' liability to this bank on
acceptances outstanding 1,824,000
Intangible assets 160,000
Other assets 9,670,000
------------
TOTAL ASSETS $280,928,000
============
LIABILITIES
Deposits:
In domestic offices $ 37,884,000
Noninterest-bearing $ 12,822,000
Interest-bearing 25,062,000
------------
In foreign offices, Edge and Agreement
subsidiaries, and IBFs 155,776,000
Noninterest-bearing 9,878,000
Interest-bearing 145,898,000
------------
Federal funds purchased and securities sold under
agreements to repurchase 7,429,000
Trading liabilities 29,266,000
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less 9,518,000
With a remaining maturity of more than one year
through three years 2,340,000
With a remaining maturity of more than three years 898,000
Bank's liability on acceptances executed and outstanding 1,992,000
Subordinated notes and debentures 5,600,000
Other liabilities 12,507,000
------------
TOTAL LIABILITIES $263,210,000
============
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock $ 751,000
Surplus 7,604,000
Undivided profits and capital reserves 9,617,000
Net unrealized holding gains (losses)
on available-for-sale securities 443,000
Cumulative foreign currency translation adjustments (697,000)
------------
TOTAL EQUITY CAPITAL $ 17,718,000
------------
TOTAL LIABILITIES, LIMITED-LIFE
PREFERRED STOCK, AND EQUITY CAPITAL $280,928,000
============
<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
---------------
CONTROLLER
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 Incorporated
World Financial Center
North Tower
New York, New York 10281-1310
212 449 1000
MERRILL LYNCH
July 17, 1998
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, MI 48202
To Whom It May Concern:
We confirm that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, an Underwriter for 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,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: s/ Scott G. Primrose
- --------------------------
Name: Scott G. Primrose
Title: Authorized Signatory
<PAGE>
SALOMON SMITH BARNEY
A Member of TravelersGroup
July 20, 1998
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, MI 48202
Attention: Rick Buxton
Re: GMAC Debt Securities
Dear Sirs:
We confirm that Salomon Brothers Inc, an Underwriter for 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.
SALOMON BROTHERS INC
By: s/ Martha D. Bailey
------------------------
Name: Martha D. Bailey
Title: Vice President
<PAGE>
MORGAN STANLEY DEAN WITTER
1585 BROADWAY
NEW YORK, NEW YORK 10036
(212) 761-4000
July 16, 1998
Rick Buxton
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, MI 48202
Dear Rick:
We confirm that Morgan Stanley & Co. Incorporated, an Underwriter for 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/ Michael Fusco
----------------
Michael Fusco
Vice President
<PAGE>
LEHMAN BROTHERS
July 20, 1998
Mr. Rick Buxton
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, MI 48202
Dear Rick:
We confirm that Lehman Brothers Inc., an Underwriter for 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.
LEHMAN BROTHERS INC.
By: s/ Robert Swindell
-------------------------
Name: Robert Swindle
Title: Managing Director
LEHMAN BROTHERS
3 WORLD FINANCIAL CENTER NEW YORK, NY 10285
<PAGE>
J.P. MORGAN
J.P. Morgan Securities Inc.
60 Wall Street
New York NY
10260-0060
July 20, 1998
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, MI 48202
Ladies and Gentlemen:
Re: General Motors Acceptance Corporation 415 Shelf Registration
We confirm that J.P. Morgan Securities Inc., an Underwriter for General Motors
Acceptance Corporation Debt Securities 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 Debt Securities.
J.P. MORGAN SECURITIES INC.
By: s/ Margaret Brody
------------------
Name: Margaret Brody
Title: Managing Director
<PAGE>
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
GENEVA * HONG KONG
LONDON * PARIS * TOKYO
July 17, 1998
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 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 to the offering of Medium
Term Notes under the Program.
Very truly yours,
By: s/ Paul M. Friedman
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Name: Paul M. Friedman
Title: Senior Managing Director
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WARBURG DILLON READ
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, MI 48202
July 17, 1998
Attention: Rick Buxton
General Motors Acceptance Corporation Medium Term Note Program
Dear Sir:
We confirm that Warburg Dillon Read LLC, an Underwriter for 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.
WARBURG DILLON READ
By: s/ Michael P. Hynes
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Name: Michael P. Hynes
Title: Authorized Signature
EXHIBIT 8
July 21, 1998
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. Deitz
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Robert N. Deitz
Senior Tax Counsel
