FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 9, 1996
REGISTRATION NO.333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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GENERAL MOTORS CORPORATION
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State of Delaware 38-0572515
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
767 Fifth Avenue, New York, New York 10153-0075; (212) 418-6100
3044 West Grand Boulevard, Detroit, Michigan 48202-3091; (313) 556-5000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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J. Michael Losh
Executive Vice President
General Motors Corporation
3044 West Grand Boulevard
Detroit, Michigan 48202-3091
(313) 556-3549
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Martin I. Darvick, Esq. Francis J. Morison, Esq.
General Motors Corporation Davis Polk & Wardwell
3031 West Grand Boulevard 450 Lexington Avenue
Detroit, Michigan 48202-3091 New York, New York 10017-3904
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please 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. / /
CALCULATION OF REGISTRATION FEE
===============================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS AMOUNT OFFERING AGGREGATE AMOUNT OF
OF SECURITIES TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED*(1)(2) UNIT PRICE(3) FEE
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Debt Securities $1,300,000,000 Various $1,300,000,000 $393,939.39
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Debt Warrants (2)
_______________________________________________________________________________
*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 $1,811,000,000, 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 $1,811,000,000, 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 $1,811,000,000.
(1) The amount of Debt Securities and Debt Warrants (the "Securities")
being registered together with $511,000,000 remaining Debt Securities
registered on November 14, 1995 (Registration No. 33-64229), represents the
maximum aggregate principal amount of Securities which, on or after October
9, 1996, are expected to be offered for sale.
(2) Debt Warrants may be offered and sold entitling the holder to
purchase any of the Debt Securities as permitted by Rule 457(g); no
registration fee is attributable to the Debt Warrants registered hereby.
(3) 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 registered and remaining unissued under Registration Statement
No. 33-64229
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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.
<PAGE>
PROSPECTUS
GENERAL MOTORS CORPORATION
DEBT SECURITIES
WARRANTS TO PURCHASE DEBT SECURITIES
General Motors Corporation (the "Corporation" or "General Motors"),
directly, through agents designated from time to time, or through dealers or
underwriters also to be designated, may offer from time to time its debt
securities (the "Debt Securities") or its warrants to purchase any of the
Debt Securities (the "Debt Warrants"), for issuance and sale, at an aggregate
initial offering price not to exceed $1,300,000,000 or the equivalent thereof
in other currencies, including composite currencies such as the European
Currency Unit ("ECU") (the "Specified Currency"), on terms to be determined
at the time of sale. The Debt Securities and the Debt Warrants are herein
collectively called the "Offered Securities." The Securities may be offered
either together or separately and in one or more series, in amounts, at
prices and on terms to be set forth in supplements to this Prospectus. The
Securities may be sold for U.S. dollars or the Specified Currency and the
principal of and any premium and interest on the Securities may likewise be
payable in U.S. dollars or the Specified Currency. The Specified Currency
for which the Securities may be purchased and the Specified Currency in which
principal of and any premium and interest on the Securities may be payable
are set forth in the accompanying Prospectus Supplement (the "Prospectus
Supplement").
The Debt Securities will be issued in fully registered definitive form
("Certificated Securities") or in the form of global securities which may be
held and registered only in the name of a depositary institution ("Book-Entry
Securities").
The terms of the Debt Securities, including the specific designation,
aggregate principal amount, authorized denominations, purchase price,
maturity, interest rate (which may be fixed or variable) and time of payment
of interest, if any, any redemption or repayment terms, and the Specified
Currency in which the Debt Securities shall be payable (and similar
information with respect to the Debt Securities purchasable upon exercise of
each Debt Warrant), are set forth in the accompanying Prospectus Supplement
(the "Prospectus Supplement"). Where Debt Warrants are to be offered, a
Prospectus Supplement shall set forth the offering price and terms of the
Debt Warrants, including the purchase price, exercise price or prices,
detachability, expiration date or dates, exercise period or periods, the
Specified Currency in which such Debt Warrants are exercisable, the price or
prices, if any, at which the Debt Warrants may be redeemed at the option of
the holder or will be redeemed upon expiration, and the Warrant Agent acting
under the Warrant Agreement pursuant to which the Debt Warrants are to be
issued.
The Securities may be sold directly by the Corporation, through agents
of the Corporation designated from time to time, or through underwriters or
dealers, or through a combination of such methods. If any agents,
underwriters or dealers are involved in the sale of the Offered Securities,
the names of such agents, underwriters or dealers and any applicable
commissions or discounts are set forth in the accompanying Prospectus
Supplement. Any Agents, underwriters or dealers participating in the
offering may be deemed "underwriters" within the meaning of the Securities
Act of 1933, as amended. See "Plan of Distribution" for possible
indemnification arrangements for the agents, underwriters and dealers. The
Corporation reserves the sole right to accept and, together with its agents
from time to time, to reject in whole or in part any proposed purchase of
Securities to be made directly or through agents.
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. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is October__, 1996
<PAGE>
No dealer, salesman or any other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus, Prospectus Supplement, and Pricing Supplement,
if any, and, if given or made, such information or representation must not be
relied upon as having been authorized by the Corporation or by any agent,
underwriter or dealer. Neither the delivery of this Prospectus, Prospectus
Supplement and Pricing Supplement, if any, 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, Prospectus Supplement and Pricing Supplement, if any, shall not
constitute an offer to sell or a solicitation of an offer to buy any of the
Securities 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 Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information can be inspected, and copies
may be obtained at the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates, as well as at the
following Regional Offices of the Commission: Citicorp Center, 500 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. The Corporation's Common Stock, $1-2/3 Par
Value, is listed on the New York, Chicago, Pacific and Philadelphia Stock
Exchanges. Reports, proxy statements and other information concerning the
Corporation can also be inspected at the offices of the New York Stock
Exchange, Inc., 11 Wall Street, New York, New York 10005, where the
Corporation's Common Stock, $1-2/3 Par Value and Class H Common Stock, $.10
par value, are listed and at the offices of the following other stock
exchanges where the Common Stock, $1-2/3 Par Value, is listed in the United
States: the Chicago Stock Exchange, Inc., One Financial Place, 440 South
LaSalle Street, Chicago, Illinois 60605, the Pacific Stock Exchange, Inc.,
233 South Beaudry Avenue, Los Angeles, California 90012 and 301 Pine Street,
San Francisco, California 94104, and the Philadelphia Stock Exchange, Inc.,
1900 Market Street, Philadelphia, Pennsylvania 19103.
The Prospectus constitutes a part of a Registration Statement filed by
the Corporation with the Commission under the Securities Act of 1933, as
amended (the "Securities Act of 1933"). This Prospectus omits certain of the
information contained in the Registration Statement in accordance with the
rules and regulations of the Commission. Reference is hereby made to the
Registration Statement and related exhibits for further information with
respect to the Corporation and the Offered Securities. Statements contained
herein concerning the provisions of any document are not necessarily complete
and, in each instance, reference is made to the copy of such document filed
as an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1995, as amended, Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996 and June 30, 1996 and Reports on Form 8-K
dated January 29, 1996, February 26, 1996, March 12, 1996, April 19, 1996,
May 29, 1996 and June 7, 1996, 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 Corporation 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
Securities shall be deemed to be incorporated by reference in this Prospectus
and to be a part thereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Corporation 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 or may be
incorporated by reference in this Prospectus, other than exhibits to such
documents. Such request should be directed to:
GENERAL MOTORS CORPORATION
3044 WEST GRAND BOULEVARD, ROOM 11-243
DETROIT, MICHIGAN 48202-3091
(Telephone Number: (313) 556-2044)
-----------------------------------
GENERAL MOTORS CORPORATION
While the major portion of General Motors' operations is derived from
the automotive products industry segment, General Motors also has financing
and insurance operations and produces products and provides services in other
industry segments. The automotive products segment consists of the design,
manufacture, assembly and sale of automobiles, trucks and related parts and
accessories. General Motors financing and insurance operations assist in the
merchandising of General Motors' products as well as other products. General
Motors Acceptance Corporation ("GMAC") and its subsidiaries offer financial
services and certain types of insurance to dealers and customers. In
addition, GMAC and its subsidiaries are engaged in mortgage banking and
investment services. General Motors' other products segment consists of
military vehicles, radar and weapon control systems, guided missile systems
and defense and commercial satellites; the design, installation and operation
of business information and telecommunications systems; as well as the
design, development and manufacture of locomotives. For additional
information on General Motors, see the General Motors Annual Report on Form
10-K for the year ended December 31, 1995, as amended, which is incorporated
herein by reference, and the other documents incorporated herein by reference.
General Motors principal executive offices are located at 3044 West
Grand Boulevard, Detroit, Michigan 48202-3091 (Telephone Number (313)
556-5000), and 767 Fifth Avenue, New York, New York 10153-0075 (Telephone
Number (212) 418-6100).
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, net
proceeds from the sale of the Securities will be used for general Corporate
purposes, including the repayment of existing indebtedness.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratio of earnings from
continuing operations to fixed charges for the Corporation for the periods
indicated.
Six Months
Ended
June 30 Years Ended December 31
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1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
2.46 3.06 2.39 2.35 1.26 * *
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*In the years 1992 and 1991, earnings from continuing operations were
inadequate to cover fixed charges by $4,063.7 million and $6,285.3 million,
respectively.
For purposes of computing the ratio of earnings to fixed charges,
"earnings" consist of consolidated income (loss) before cumulative effect of
accounting change plus income taxes (credit) and fixed charges included in
net income (loss) after eliminating the amortization of capitalized interest
and the undistributed (earnings) losses of associates; "fixed charges"
consist of interest and related charges on debt, that portion of rentals
deemed to be interest, and interest capitalized in the period.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets
forth certain general terms and provisions of the Debt Securities to which
any Prospectus Supplement may relate. The particular terms of the Debt
Securities in respect of which this Prospectus is being delivered and the
extent, if any, to which such general provisions may not apply thereto will
be described in the Prospectus Supplement relating to such Debt Securities.
The Debt Securities offered hereby are to be issued under an Indenture
(the "Indenture"), dated as of December 7, 1995, between the Corporation and
Citibank, N.A., as Trustee (the "Trustee"), a copy of which is filed as an
exhibit to the Registration Statement. The following statements are subject
to the detailed provisions of the Indenture, a copy of which is filed as an
exhibit to the Registration Statement. Numerical references in parentheses
below are to sections in the Indenture. Wherever particular provisions of
the Indenture are referred to, such provisions are incorporated by reference
as a part of the statements made, and the statements are qualified in their
entirety by such reference. Capitalized terms used in this description but
not defined herein have the meanings provided in the Indenture.
GENERAL
The Indenture does not limit the amount of Debt Securities that can be
issued thereunder and provides that Debt Securities may be issued thereunder
up to the aggregate principal amount which may be authorized from time to
time by the Corporation.
Reference is made to the Prospectus Supplement relating to the
particular series of Debt Securities offered thereby for the following terms
of the Debt Securities (to the extent such terms are applicable to such Debt
Securities):
(i) the designation of such Debt Securities;
(ii) the authorized denominations and the aggregate principal amount
of such Debt Securities;
(iii) the percentage of their principal amount at which such Debt
Securities will be issued;
(iv) the date or dates on which such Debt Securities will mature (or
the manner of determining the same);
(v) the rate or rates per annum, if any, which may be fixed or
variable, at which such Debt Securities will bear interest, if any,
and, if the rate is variable, the manner of calculation thereof;
(vi) the date or dates from which interest, if any, shall accrue or the
method by which such date or dates shall be determined and the
date or dates at which such interest, if any, will be payable and
the record dates therefor;
(vii) the period or periods within which, the terms and conditions upon
which, such Debt Securities may be redeemed and the redemption
price or prices;
(viii) any mandatory or optional sinking fund or analogous provisions;
(ix) the provisions, if any, for the defeasance of the Debt Securities;
(x) the form (registered or bearer) in which Debt Securities may be
issued, any restrictions applicable to the exchange of one form
for another and to the offer, sale and delivery of Debt Securities
in either form;
(xi) whether and under what circumstances the Corporation will pay
additional amounts (the "Additional Amounts") on Debt Securities
held by a person who is not a United States person (as defined in
the Prospectus Supplement) in respect of specified taxes,
assessments or other governmental charges withheld or deducted,
and if so, whether the Corporation has the option to redeem the
affected Debt Securities rather than pay such Additional Amounts;
(xii) the Specified Currency for which such Debt Securities may be
purchased and the Specified Currency in which the principal of,
and premium, if any, and interest, if any, on, such Debt Securities
may be payable;
(xiii) the exchanges, if any, on which such Debt Securities may be
listed;
(xiv) whether such Debt Securities are to be issued in book-entry form
and, if so, the identify of the Depositary for such book-entry
Securities;
(xv) the place or places where the principal of, premium, if any, and
interest, if any, on the Debt Securities will be payable; and
(xvi) any other specific terms of the Debt Securities, including any
additional covenants applicable to such Debt Securities and any
terms which may be required or advisable under applicable laws or
regulations. (Sections 2.04 and 4.02 of the Indenture.)
The Securities will be unsecured and will rank equally and ratably with
all other unsecured and unsubordinated indebtedness of the Corporation (other
than obligations preferred by mandatory provisions of law).
Unless otherwise specified in a Prospectus Supplement, principal,
premium, if any, interest, if any, and Additional Amounts, if any, will be
payable, and, unless the Debt Securities are issued in book-entry form, the
Debt Securities offered hereby will be transferable, at the office of the
Trustee, 111 Wall Street, New York, New York 10043, provided that payment of
interest may be made at the option of the Corporation by check mailed to the
address of the person entitled thereto. Principal of and premium, if any,
interest, if any, and Additional Amounts, if any, on Debt Securities in
bearer form, and coupons appertaining thereto (the "Coupons"), if any, will
be payable against surrender of such Debt Securities or Coupons, as the case
may be, subject to any applicable laws and regulations, at such paying
agencies outside the United States as the Corporation may appoint from time
to time at the places and subject to the restrictions set forth in the
Indenture, the Debt Securities and the Prospectus Supplement. (Section 4.02
of the Indenture.) Debt Securities in bearer form and the Coupons, if any,
appertaining thereto will be transferable by delivery. No service charge
will be made for any transfer or exchange of such Debt Securities, but the
Corporation may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. (Section 2.05 of the
Indenture.)
Debt Securities may be issued, from time to time, with the principal
amount payable on any principal payment date, or the amount of interest
payable on any interest payment date, to be determined by reference to one or
more currency exchange rates, commodity prices, equity indices or other
factors. Holders of such Debt Securities may receive a principal amount on
any principal payment date, or a payment of interest on any interest payment
date, that is greater than or less than the amount of principal or interest
otherwise payable on such dates, depending upon the value on such dates of
the applicable currencies, commodities, equity indices or other factors.
Information as to the methods for determining the amount of principal or
interest payable on any date, the currencies, commodities, equity indices or
other factors to which the amount payable on such date is linked and certain
additional United States Federal income tax considerations will be set forth
in the Prospectus Supplement relating thereto.
As used herein, the term Debt Securities shall include Debt Securities
denominated in United States dollars or, at the option of the Corporation if
so specified in the applicable Prospectus Supplement, in any other freely
transferable currency or units based on or relating to foreign currencies,
including European Currency Units.
If a Prospectus Supplement specifies that Debt Securities are
denominated in a currency or currency unit other than United States dollars,
such Prospectus Supplement shall also specify the denominations in which such
Debt Securities will be issued and the coin or currency in which the
principal, premium, if any, and interest, if any, on such Debt Securities,
will be payable, which may be United States dollars based upon the exchange
rate for such other currency existing on or about the time a payment is due.
Some of the Debt Securities may be issued as discounted Debt Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below their stated
principal amount. Special considerations applicable to the Debt Securities
of any series, including any special United States Federal income tax
consequences applicable to any discounted Debt Securities or to certain Debt
Securities issued at par which are treated as having been issued at discount
or to Debt Securities denominated or payable in foreign currencies or
currency units, will be described in the Prospectus Supplement relating
thereto.
If a Prospectus Supplement specifies that the Debt Securities will have
a redemption option, the "Option to Elect Repurchase" constitutes an issuer
tender offer under the Exchange Act. The Corporation will comply with all
issuer tender offer rules and regulations under the Exchange Act, including
Rule 14e-1, if such redemption option is elected, including making any
required filings with the Commission and the furnishing of certain
information to the holders of the Debt Securities.
BOOK-ENTRY SECURITIES - DELIVERY AND FORM
Unless otherwise indicated in the Prospectus Supplement, the Debt
Securities will be issued in the form of one or more fully registered global
securities (collectively, the "Registered Global Debt Securities") which will
be deposited with or on behalf of The Depository Trust Corporation ("DTC") or
other depositary (DTC or such other depositary as is specified in the
applicable Prospectus Supplement is herein referred to as the "Depositary")
and registered in the name of the Depositary or the Depositary's nominee. No
single Registered Global Security shall exceed U.S.$200,000,000. Except as
set forth below, the Registered Global Debt Securities may be transferred, in
whole and not in part, only to another nominee of the Depositary or to a
successor of the Depositary or its nominee.
DTC has advised the Corporation 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. DTC 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 and/or underwriters named in any
Prospectus Supplement), 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 Corporation of Securities represented by a
Registered Global Debt Security, the Depositary will credit, on its
book-entry registration and transfer system, the participants' accounts with,
the respective principal amounts of the Securities represented by such
Registered Global Debt Security beneficially owned by such participants. The
accounts to be credited shall be designated by the agents, underwriters or
dealers participating in the distribution of such Securities, or the
Corporation, if such Securities are offered and sold directly by the
Corporation, as the case may be. Ownership of beneficial interests in a
Registered Global Debt Security will be limited to participants or persons
that hold interests through participants. Ownership of beneficial interests
in Securities represented by a Registered Global Debt Security 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 Registered Global Debt Security.
So long as the Depositary for a Registered Global Debt Security, or its
nominee, is the registered owner of the Registered Global Debt Security, the
Depositary or its nominee, as the case may be, will be considered the sole
owner or holder of the Book-Entry Securities represented by such Registered
Global Debt Security for all purposes under the Indenture. Except as
provided below, owners of beneficial interests in Book-Entry Securities
represented by a Registered Global Debt Security or Securities will not be
entitled to have Book-Entry Securities represented by such Registered Global
Debt Securities registered in their names, will not receive or be entitled to
receive physical delivery of Book-Entry Securities 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 Registered
Global Debt Security 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 Registered Global Debt Security. The
Corporation understands that under existing policy of the Depositary and
industry practices, in the event that the Corporation requests any action of
holders or that an owner of a beneficial interest in such a Registered Global
Debt Security desires to give any notice or take any action which a holder is
entitled to give or take under the Indenture or a Registered Global Debt
Security, 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 Securities represented by a Registered Global Debt Security registered in
the name of the Depositary or its nominee will be made by the Corporation
through the Trustee to the Depositary or its nominee, as the case may be, as
the registered owner of a Registered Global Debt Security. None of the
Corporation, the Trustee, any paying agent or any other agent of the
Corporation 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 Registered Global Debt Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. The Corporation expects that the Depositary, upon receipt of any
payment of principal, premium, if any, or interest, if any, in respect of a
Registered Global Debt Security, 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
Registered Global Debt Security as shown on the records of the Depositary.
The Corporation also expects that payments by participants to owners of
beneficial interests in a Registered Global Debt Security 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 under the Exchange Act and a
successor depositary registered as a clearing agency under the Exchange Act
is not appointed by the Corporation within 90 days, the Corporation will
issue Debt Securities in definitive form in exchange for all the Registered
Global Debt Securities. In addition, the Corporation may at any time, and in
its sole discretion, determine not to have the Debt Securities represented by
the Registered Global Debt Securities and, in such event, will issue Debt
Securities in definitive form in exchange for all the Registered Global Debt
Securities. In either instance, an owner of a beneficial interest in
Registered Global Debt Securities will be entitled to have Debt Securities
equal in principal amount to such beneficial interest registered in its name
and will be entitled to physical delivery of such Debt Securities in
definitive form. Debt Securities so issued in definitive form will be issued
in denominations of $1,000 and integral multiples thereof and will be issued
in registered form only, without Coupons; however, Medium-Term Notes issued
pursuant to a Prospectus Supplement will be issued in denominations of
$100,000 or any amount in excess thereof which is an integral multiple of
$1,000 (or in such other denominations as shall be provided in an applicable
Pricing Supplement) and will be issued in registered form only, without
Coupons. No service charge will be made for any transfer or exchange of such
Debt Securities, but the Corporation may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection
therewith. (Section 2.05 of the Indenture.)
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Corporation believes to be
reliable, but the Corporation takes no responsibility for the accuracy
thereof.
The Debt Securities of a series may also be issued in the form of one
or more bearer global securities (a "Bearer Global Debt Security") that will
be deposited with a common depositary for the Euroclear System and Cedel
Bank, societe anonyme or with a nominee for such depositary identified in the
Prospectus Supplement relating to such series. The specific terms and
procedures, including the specific terms of the depositary arrangement, with
respect to any portion of a series of Debt Securities to be represented by a
Bearer Global Debt Security will be described in the Prospectus Supplement
relating to such series.
CERTAIN COVENANTS
Definitions Applicable to Covenants. The following definitions shall be
applicable to the covenants specified below:
(i) "Attributable Debt" means, at the time of determination as to
any lease, the present value (discounted at the actual rate, if stated,
or, if no rate is stated, the implicit rate of interest of such lease
transaction as determined by the chairman, president, any vice
chairman, any vice president, the treasurer or any assistant treasurer
of the Corporation), calculated using the interval of scheduled rental
payments under such lease, of the obligation of the lessee for net
rental payments during the remaining term of such lease (excluding any
subsequent renewal or other extension options held by the lessee). The
term "net rental payments" means, with respect to any lease for any
period, the sum of the rental and other payments required to be paid in
such period by the lessee thereunder, but not including, however, any
amounts required to be paid by such lessee (whether or not designated
as rental or additional rental) on account of maintenance and repairs,
insurance, taxes, assessments, water rates, indemnities or similar
charges required to be paid by such lessee thereunder or any amounts
required to be paid by such lessee thereunder contingent upon the
amount of sales, earnings or profits or of maintenance and repairs,
insurance, taxes, assessments, water rates, indemnities or similar
charges; provided, however, that, in the case of any lease which is
terminable by the lessee upon the payment of a penalty in an amount
which is less than the total discounted net rental payments required to
be paid from the later of the first date upon which such lease may be
so terminated and the date of the determination of net rental payments,
"net rental payments" shall include the then-current amount of such
penalty from the later of such two dates, and shall exclude the rental
payments relating to the remaining period of the lease commencing with
the later of such two dates.
(ii) "Debt" means notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed.
(iii) "Manufacturing Subsidiary" means any Subsidiary (A)
substantially all the property of which is located within the
continental United States of America, (B) which owns a Principal
Domestic Manufacturing Property and (C) in which the Corporation's
investment, direct or indirect and whether in the form of equity, debt,
advances or otherwise, is in excess of $2,500,000,000 as shown on the
books of the Corporation as of the end of the fiscal year immediately
preceding the date of determination; provided, however, that
"Manufacturing Subsidiary" shall not include Hughes Electronics
Corporation and its Subsidiaries, General Motors Acceptance Corporation
and its Subsidiaries (or any corporate successor of any of them) or any
other Subsidiary which is principally engaged in leasing or in
financing installment receivables or otherwise providing financial or
insurance services to the Corporation or others or which is principally
engaged in financing the Corporation's operations outside the
continental United States of America.
(iv) "Mortgage" means any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other
similar encumbrance.
(v) "Principal Domestic Manufacturing Property" means any
manufacturing plant or facility owned by the Corporation or any
Manufacturing Subsidiary which is located within the continental United
States of America and, in the opinion of the Board of Directors, is of
material importance to the total business conducted by the Corporation
and its consolidated affiliates as an entity.
(vi) "Subsidiary" means any corporation of which at least a
majority of the outstanding stock having by the terms thereof ordinary
voting power to elect a majority of the board of directors of such
corporation (irrespective of whether or not at the time stock of any
other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the
time owned by the Corporation, or by one or more Subsidiaries, or by
the Corporation and one or more Subsidiaries. (Section 4.08 of the
Indenture.)
Limitation on Liens. For the benefit of the Debt Securities, the Corporation
will not, nor will it permit any Manufacturing Subsidiary to, issue or assume
any Debt secured by a Mortgage upon any Principal Domestic Manufacturing
Property of the Corporation or any Manufacturing Subsidiary or upon any
shares of stock or indebtedness of any Manufacturing Subsidiary (whether such
Principal Domestic Manufacturing Property, shares of stock or indebtedness
are now owned or hereafter acquired) without in any such case effectively
providing concurrently with the issuance or assumption of any such Debt that
the Debt Securities (together with, if the Corporation shall so determine,
any other indebtedness of the Corporation or such Manufacturing Subsidiary
ranking equally with the Debt Securities and then existing or thereafter
created) shall be secured equally and ratably with such Debt, unless the
aggregate amount of Debt issued or assumed and so secured by Mortgages,
together with all other Debt of the Corporation and its Manufacturing
Subsidiaries which (if originally issued or assumed at such time) would
otherwise be subject to the foregoing restrictions, but not including Debt
permitted to be secured under clauses (i) through (vi) of the immediately
following paragraph, does not at the time exceed 20% of the stockholders'
equity of the Corporation and its consolidated subsidiaries, as determined in
accordance with generally accepted accounting principles and shown on the
audited consolidated balance sheet contained in the latest published annual
report to the stockholders of the Corporation.
The above restrictions shall not apply to Debt secured by:
(i) Mortgages on property, shares of stock or indebtedness of any
corporation existing at the time such corporation becomes a
Manufacturing Subsidiary;
(ii) Mortgages on property existing at the time of acquisition of
such property by the Corporation or a Manufacturing Subsidiary, or
Mortgages to secure the payment of all or any part of the purchase
price of such property upon the acquisition of such property by the
Corporation or a Manufacturing Subsidiary or to secure any Debt
incurred prior to, at the time of, or within 180 days after, the later
of the date of acquisition of such property and the date such property
is placed in service, for the purpose of financing all or any part of
the purchase price thereof, or Mortgages to secure any Debt incurred
for the purpose of financing the cost to the Corporation or a
Manufacturing Subsidiary of improvements to such acquired property;
(iii) Mortgages securing Debt of a Manufacturing Subsidiary owing
to the Corporation or to another Subsidiary;
(iv) Mortgages on property of a corporation existing at the time
such corporation is merged or consolidated with the Corporation or a
Manufacturing Subsidiary or at the time of a sale, lease or other
disposition of the properties of a corporation as an entirety or
substantially as an entirety to the Corporation or a Manufacturing
Subsidiary;
(v) Mortgages on property of the Corporation or a Manufacturing
Subsidiary in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any State thereof, or in
favor of any other country, or any political subdivision thereof, to
secure partial, progress, advance or other payments pursuant to any
contract or statute or to secure any indebtedness incurred for the
purpose of financing all or any part of the purchase price or the cost
of construction of the property subject to such Mortgages; or
(vi) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any
Mortgage referred to in the foregoing clauses (i) to (v); provided,
however, that the principal amount of Debt secured thereby shall not
exceed by more than 115% the principal amount of Debt so secured at 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 Mortgage so extended, renewed or replaced
(plus improvements on such property). (Section 4.06 of the Indenture.)
Limitation on Sale and Lease-Back. For the benefit of the Debt Securities,
the Corporation will not, nor will it permit any Manufacturing Subsidiary to,
enter into any arrangement with any person providing for the leasing by the
Corporation or any Manufacturing Subsidiary of any Principal Domestic
Manufacturing Property owned by the Corporation or any Manufacturing
Subsidiary on the date that the Debt Securities are originally issued (except
for temporary leases for a term of not more than five years and except for
leases between the Corporation and a Manufacturing Subsidiary or between
Manufacturing Subsidiaries), which property has been or is to be sold or
transferred by the Corporation or such Manufacturing Subsidiary to such
person, unless either:
(i) the Corporation or such Manufacturing Subsidiary would be
entitled, pursuant to the provisions of the covenant on limitation on
liens described above, to issue, assume, extend, renew or replace Debt
secured by a Mortgage upon such property equal in amount to the
Attributable Debt in respect of such arrangement without equally and
ratably securing the Debt Securities; provided, however, that from and
after the date on which such arrangement becomes effective the
Attributable Debt in respect of such arrangement shall be deemed for
all purposes under the covenant on limitation on liens described above
and this covenant on limitation on sale and lease-back to be Debt
subject to the provisions of the covenant on limitation on liens
described above (which provisions include the exceptions set forth in
clauses (i) through (vi) of such covenant), or
(ii) the Corporation shall apply an amount in cash equal to the
Attributable Debt in respect of such arrangement to the retirement
(other than any mandatory retirement or by way of payment at maturity),
within 180 days of the effective date of any such arrangement, of Debt
of the Corporation or any Manufacturing Subsidiary (other than Debt
owned by the Corporation or any Manufacturing Subsidiary) which by its
terms matures at or is extendible or renewable at the option of the
obligor to a date more than twelve months after the date of the
creation of such Debt. (Section 4.07 of the Indenture.)
DEFEASANCE
If the terms of a particular series of Debt Securities so provide, the
Corporation may, at its option, (a) discharge its indebtedness and its
obligations under the Indenture with respect to such series or (b) not comply
with certain covenants contained in the Indenture with respect to such
series, in each case by depositing funds or obligations issued or guaranteed
by the United States of America with the Trustee. The Prospectus Supplement
will more fully describe the provisions, if any, relating to such
defeasance. (Section 12.02 of the Indenture.)
MODIFICATION OF THE INDENTURE
The Indenture provides that the Corporation and the Trustee may enter
into supplemental indentures without the consent of the holders of the Debt
Securities to (a) evidence the assumption by a successor corporation of the
obligations of the Corporation, (b) add covenants for the protection of the
holders of the Debt Securities, (c) add or change any of the provisions of
the Indenture to permit or facilitate the issuance of Debt Securities of any
series in bearer form, (d) cure any ambiguity or correct any inconsistency in
such Indenture, (e) establish the form or terms of Debt Securities of any
series as permitted by the terms of the Indenture and (f) evidence the
acceptance of appointment by a successor trustee. (Section 10.01 of the
Indenture.)
The Indenture also contains provisions permitting the Corporation and
the Trustee to modify or amend the Indenture or any supplemental indenture or
the rights of the holders of the Debt Securities issued thereunder, with the
consent of the holders of not less than a majority in principal amount of the
Debt Securities of all series at the time outstanding under such Indenture
which are affected by such modification or amendment (voting as one class),
provided that no such modification shall (i) extend the fixed maturity of any
Debt Securities, or reduce the principal amount thereof, or premium, if any,
or reduce the rate or extend the time of payment of interest or Additional
Amounts thereon, or reduce the amount due and payable upon acceleration of
the maturity thereof or the amount provable in bankruptcy, or make the
principal of, or interest, premium or Additional Amounts on, any Debt
Security payable in any coin or currency other than that provided in such
Debt Security, (ii) impair the right to initiate suit for the enforcement of
any such payment on or after the stated maturity thereof, or (iii) reduce the
aforesaid percentage of Debt Securities, the consent of the holders of which
is required for any such modification, or the percentage required for the
consent of the holders to waive defaults, without the consent of the holder
of each Debt Security so affected. (Section 10.02 of the Indenture.)
EVENTS OF DEFAULT
An Event of Default with respect to any series of Debt Securities is
defined in the Indenture as being: (a) default in payment of any principal
or premium, if any, on such series; (b) default for 30 days in payment of any
interest or Additional Amounts on such series; (c) default for 90 days after
notice in performance of any other covenant applicable to the Debt
Securities; or (d) certain events of bankruptcy, insolvency or
reorganization. (Section 6.01 of the Indenture.)
No Event of Default with respect to a particular series of Debt
Securities issued under the Indenture necessarily constitutes an Event of
Default with respect to any other series of Debt Securities issued
thereunder. In case an Event of Default under clause (a), (b) or (c) shall
occur and be continuing with respect to any series, the Trustee or the
holders of not less than 25% in aggregate principal amount of Debt Securities
of each such series then outstanding may declare the principal (or, in the
case of discounted Debt Securities, the amount specified in the terms
thereof) of such series to be due and payable. In case an Event of Default
under clause (d) shall occur and be continuing, the Trustee or the holders of
not less than 25% in aggregate principal amount of all the Debt Securities
then outstanding (voting as one class) may declare the principal (or, in the
case of discounted Debt Securities, the amount specified in the terms
thereof) of all outstanding Debt Securities to be due and payable. Any Event
of Default with respect to a particular series of Debt Securities may be
waived by the holders of a majority in aggregate principal amount of the
outstanding Debt Securities of such series (or of all the outstanding Debt
Securities, as the case may be), except in a case of failure to pay principal
or premium, if any, or interest or Additional Amounts in respect of such Debt
Security for which payment had not been subsequently made. (Section 6.01 of
the Indenture.) The Indenture provides that the Trustee may withhold notice
to the securityholders of any default (except in payment of principal,
premium, if any, or interest or Additional Amounts) if it considers it in the
interests of the securityholders to do so. (Section 6.07 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
securityholders, unless such securityholders shall have offered to the
Trustee reasonable indemnity. (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 aggregate principal
amount of the Debt Securities of all series affected (voting as one class) 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.)
CONCERNING THE TRUSTEE
Citibank, N.A. is the Trustee under the Indenture. Citibank, N.A. acts
as depositary for funds of, makes loans to, acts as trustee and performs
certain other services for, the Corporation and certain of its subsidiaries
and affiliates in the normal course of its business.
DESCRIPTION OF DEBT WARRANTS
GENERAL
The Corporation may issue, together with Debt Securities or separately,
Debt Warrants for the purchase of Debt Securities. If the Debt Warrants are
issued together with any Debt Securities, they may be attached to or traded
separately from such Debt Securities. The Debt Warrants are to be issued
under one or more separate Warrant Agreements (each a "Debt Warrant
Agreement") between the Corporation and a banking institution organized under
the laws of the United States or one of the States thereof (each a "Warrant
Agent").
The following statements with respect to the Debt Warrants are
summaries of the Debt Warrant Agreement, a form of which is filed as an
exhibit to the Registration Statement. Such summaries of certain provisions
of the Debt Warrant Agreement and the Debt Warrants do not purport to be
complete and such summaries are subject to the detailed provisions of the
Debt Warrant Agreement to which reference is hereby made for a full
description of such provisions, including the definition of certain terms
used herein, and for other information regarding the Debt Warrants. Wherever
particular provisions of the Debt Warrant Agreement or terms defined therein
are referred to, such provisions or definitions are incorporated by reference
as a part of the statements made, and the statements are qualified in their
entirety by such reference.
The Debt Warrants will be evidenced by Debt Warrant Certificates (the
"Debt Warrant Certificates") and, except as otherwise specified in the
Prospectus Supplement accompanying this Prospectus, may be traded separately
from any Debt Securities with which they may be issued. Debt Warrant
Certificates may be exchanged for new Debt Warrant Certificates of different
denominations at the office of the Warrant Agent. The holder of a Debt
Warrant does not have any of the rights of a holder of a Debt Security in
respect of, and is not entitled to any payments on, any Debt Securities
issuable (but not yet issued) upon exercise of the Debt Warrants. The Debt
Warrants may be issued in one or more series, and reference is made to the
Prospectus Supplement accompanying this Prospectus relating to the particular
series of Debt Warrants offered thereby for the terms of, and other
information with respect to, such Debt Warrants, including:
(i) the title and the aggregate number of Debt Warrants;
(ii) the designation, aggregate principal amount, currency or
currencies and terms of the Debt Securities that may be
purchased upon exercise of the Debt Warrants;
(iii) the price or prices at which such Debt Warrants are
exercisable;
(iv) the currency or currencies in which such Debt Warrants are
exercisable;
(v) the places at which such Debt Warrants are exercisable and
the date on which the right to exercise the Debt Warrants
shall commence and the date on which such right shall
expire (the "Debt Warrant Expiration Date") or, if the Debt
Warrants are not continuously exercisable throughout such
period, the specific date or dates on which they will be
exercisable (each, a "Debt Warrant Exercise Date", which
term shall also mean, with respect to Debt Warrants
continuously exercisable for a period of time, every date
during such period);
(vi) the terms of any mandatory or optional call provisions;
(vii) the price or prices, if any, at which the Debt Warrants may
be redeemed at the option of the holder or will be redeemed
upon expiration;
(viii) the identity of the Debt Warrant Agent;
(ix) the exchanges, if any, on which such Debt Warrants may be
listed;
(x) whether such Debt Warrants shall be issued in book-entry
form;
(xi) if applicable, the designation and terms of the Debt
Securities with which the Debt Warrants are issued and the
number of Debt Warrants issued with each of such Debt
Securities;
(xii) if applicable, the date on and after which the Debt
Warrants and the related Debt Securities will be separately
transferable;
(xiii) whether the Debt Warrant Certificates will be in
registered form or bearer form or both;
(xiv) any applicable United States Federal income tax
consequences;
(xv) the price at which the Debt Warrants will be issued; and
(xvi) any other terms of the Debt Warrants.
EXERCISE OF DEBT WARRANTS
Debt Warrants in registered form may be exercised by payment to the
Warrant Agent of the exercise price, in each case in such currency or
currencies as are specified in the Debt Warrant, and by communicating to the
Warrant Agent the identity of the Debt Warrantholder and the number of Debt
Warrants to be exercised. Upon receipt of payment and the Debt Warrant
Certificate properly completed and duly executed, at the office of the
Warrant Agent, the Warrant Agent will, as soon as practicable, arrange for
the issuance of the applicable Debt Securities, the form of which shall be
set forth in the Prospectus Supplement. If less than all of the Debt
Warrants evidenced by a Debt Warrant Certificate are exercised, a new Debt
Warrant Certificate will be issued for the remaining amounts of Debt
Warrants. A more complete summary for the exercise of Debt Warrants in
registered form and for exercises of Debt Warrants in bearer form is
contained in the Prospectus Supplement accompanying this Prospectus.
PLAN OF DISTRIBUTION
The Corporation may sell the Securities being offered hereby in any of
four ways: (i) directly to purchasers, (ii) through agents, (iii) through
underwriters, and (iv) through dealers.
Offers to purchase Securities may be solicited directly by the
Corporation or by agents designated by the Corporation from time to time.
Any such agent, who may be deemed to be an underwriter as that term is
defined in the Securities Act of 1933, involved in the offer or sale of the
Securities in respect of which this Prospectus is delivered will be named,
and any commissions payable by the Corporation to such agent set forth, in
the Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a reasonable best efforts basis
for the period of its appointment (ordinarily five business days or less).
Agents may be entitled under agreements which may be entered into with the
Corporation to indemnification by the Corporation against certain civil
liabilities, including liabilities under the Securities Act of 1933, and may
be customers of, engage in transactions with, or perform services for, the
Corporation and its subsidiaries in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale, the
Corporation will enter into an underwriting agreement with such underwriters
at the time of sale to them and the names of the underwriters and the terms
of the transaction will be set forth in the Prospectus Supplement, which will
be used by the underwriters to make resales of the Securities in respect of
which this Prospectus is delivered to the public. The underwriters may be
entitled, under the relevant underwriting agreement, to indemnification by
the Corporation against certain liabilities, including liabilities under the
Securities Act of 1933.
Among others, one or more of the following firms may act as managing
underwriter(s) with respect to the offering of the Securities: Bear, Stearns
& Co. Inc., Lehman Brothers, Lehman Brothers Inc., Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith, J.P. Morgan Securities Inc., Morgan
Stanley & Co. Incorporated and Salomon Brothers Inc.
If a dealer is utilized in the sale of the Securities in respect of
which this Prospectus is delivered, the Corporation will sell such Securities
to the dealer as principal. The dealer may then resell such Securities to
the public at varying prices to be determined by such dealer at the time of
resale. Dealers may be entitled to indemnification by the Corporation
against certain liabilities, including liabilities under the Securities Act
of 1933.
If so indicated in the applicable Prospectus Supplement, the
Corporation will authorize agents and underwriters to solicit offers by
certain institutions to purchase Securities from the Corporation at the
public offering price set forth in the Prospectus Supplement pursuant to
Delayed Delivery Contracts ("Contracts") providing for payment and delivery
on the date stated in the Prospectus Supplement. Each Contract will be for
an amount not less than, and unless the Corporation otherwise agrees the
aggregate principal amount of Securities sold pursuant to Contracts shall be
not less nor more than, the respective amounts stated in the Prospectus
Supplement. Institutions with whom Contracts, when authorized, may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions, and other
institutions but shall in all cases be subject to the approval of the
Corporation. Contracts will not be subject to any conditions except that the
purchase by an institution of the Securities covered by its Contract shall
not at the time of delivery be prohibited under the laws of any jurisdiction
in the United States to which such institution is subject. A commission
indicated in the applicable Prospectus Supplement will be paid to
underwriters and agents soliciting purchases of Securities pursuant to
Contracts accepted by the Corporation.
The place and time of delivery for the Securities in respect of which
this Prospectus is delivered are set forth in the accompanying Prospectus
Supplement.
-------------------
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 the 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
General Motors and certain of its affiliates.
EXPERTS
The consolidated financial statements and the financial statement
schedule included in the Corporation's 1995 Annual Report on Form 10-K, as
amended, incorporated by reference herein, have been audited by Deloitte &
Touche LLP (as to financial statements and the financial statement schedule
of General Motors and as to financial statements of Hughes Electronics
Corporation) and KPMG Peat Marwick LLP (as to financial statements of
Electronic Data Systems Corporation), independent auditors, as stated in
their respective reports appearing therein, and have been so incorporated by
reference in reliance upon such reports given upon the authority of such
firms as experts in accounting and auditing.
LEGAL OPINIONS
Unless otherwise indicated in the Prospectus Supplement relating to the
Securities, the legality of the Securities will be passed upon for the
Corporation by Martin I. Darvick, Attorney, Legal Staff, of the Corporation.
Mr. Darvick owns shares, and has options to purchase shares, of the
Corporation's Common Stock, $1-2/3 Par Value.
Unless otherwise indicated in the Prospectus Supplement relating to the
Securities, certain legal matters relating to the Securities will be passed
upon for the Underwriters by Davis Polk & Wardwell. Davis Polk & Wardwell
acts as counsel to the Executive Compensation Committee of the Board of
Directors of the Corporation and has acted as counsel for the Corporation and
its subsidiaries in various matters.
---------------------
No dealer, salesman or any other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus, Prospectus Supplement, and Pricing Supplement,
if any, and, if given or made, such information or representation must not be
relied upon as having been authorized by the Corporation nor by any agent,
underwriter or dealer. Neither the delivery of this Prospectus, Prospectus
Supplement and Pricing Supplement, if any, 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, Prospectus Supplement and Pricing Supplement, if any, shall not
constitute an offer to sell or a solicitation of an offer to buy any of the
Securities 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.
--------------------
TABLE OF CONTENTS
PAGE
Available Information.................
Incorporation of Certain..............
Documents by Reference.............
General Motors Corporation............
Use of Proceeds.......................
Ratios of Earnings to Fixed
Charges.............................
Description of Debt Securities........
Description of Debt Warrants..........
Plan of Distribution..................
Experts...............................
Legal Opinions........................
GENERAL MOTORS CORPORATION
DEBT SECURITIES
DEBT WARRANTS
Prospectus Dated October__, 1996
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 this Registration Statement:
Securities and Exchange Commission registration fee............. $393,939
Blue Sky filing and counsel fees................................ 25,000
Fees and expenses of Trustee and Debt Warrant Agent............. 20,000
Printing Registration Statement, Prospectus,
Indenture, Debt Warrant Agreement and other documents......... 40,000
Auditors' fees.................................................. 20,000
Rating Agencies' fees........................................... 180,000
Miscellaneous expenses.......................................... 25,000
--------
Total........................................................... $703,939
========
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ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the Delaware Corporation Law, the Corporation is
empowered to indemnify its directors and officers in the circumstances
therein provided.
The Corporation's Certificate of Incorporation, as amended, provides
that no director shall be personally liable to the Corporation 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 Corporation, 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 V of its By-Laws, the Corporation 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 Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee, fiduciary or member of any
other corporation, partnership, joint venture, trust, organization or other
enterprise. The Corporation 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 Corporation. The Corporation
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 V of the By-Laws or
otherwise. If a claim for indemnification or advancement of expenses by an
officer or director under Article V of the By-Laws is not paid in full within
ninety days after a written claim therefor has been received by the
Corporation, 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 any such action the Corporation
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 V 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 Corporation's Certificate of
Incorporation or By-Laws, agreement, vote of stockholders or disinterested
directors or otherwise.
The Corporation is insured against liabilities which it may incur by
reason of Article V of its By-Laws. In addition, directors and officers are
insured, at the Corporation's expense, against some liabilities which might
arise out of their employment and not be subject to indemnification under
Article V of the By-Laws.
Pursuant to a resolution adopted by the Board of Directors on December
1, 1975, the Corporation to the fullest extent permissible under law will
indemnify, and has purchased insurance on behalf of, directors or officers of
the Corporation, or any of them, who incur or are threatened with personal
liability, including expenses, under the Employee Retirement Income Security
Act of 1974, as amended, or any amendatory or comparable legislation or
regulation thereunder.
ITEM 16. EXHIBITS
*1(a) -- Form of proposed Underwriting Agreement (including Form of
Delayed Delivery Contract)
*1(b) -- Form of proposed Purchase Agreement
*1(c) -- Form of proposed Selling Agent Agreement
1(d) -- Form of Prospectus Supplement (Medium-Term Notes)
*4(a) -- Form of proposed Indenture, dated as of December 7, 1995,
between the Corporation and Citibank, N.A., Trustee
*4(b) -- Form of proposed Debt Warrant Agreement
*4(c) -- Form of Debt Warrant Certificate (included in Exhibit 4(b))
*4(d) -- Forms of Global Note and Medium-Term Notes
5 -- Opinion and Consent of Martin I. Darvick, Esq., Attorney,
Legal Staff of the Corporation
8 -- Opinion and Consent of Robert N. Deitz, Tax Counsel of the
Tax Staff of the Corporation
12 -- Computation of Ratios of Earnings to Fixed Charges for the
five years ended December 31, 1995 and the six months ended
June 30, 1996 and 1995 incorporated by reference to Exhibit
12 to the following documents:
(a) annual reports on Form 10-K of General Motors
Corporation for the years ended December 31, 1995, 1994 and
1993;
(b) quarterly report on Form 10-Q of General Motors
Corporation for the quarter ended June 30, 1996
23(a) -- Consent of Deloitte & Touche LLP
23(b) -- Consent of KPMG Peat Marwick LLP
23(c) -- 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.
- ------------------
* Incorporated by reference to Exhibits 1 through 4(d), respectively, to
Registration Statement No. 33-41557.
<PAGE>
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 the 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 l5(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement;
(2) That for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(3) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(4) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned registrant hereby further undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to section 13(a) or
section l5(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
Corporation pursuant to the provisions discussed in Item 15 above, or
otherwise, the Corporation 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, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the Corporation of expenses incurred or paid by a
director or officer of the Corporation 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 Corporation 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 Corporation, certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on 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 October 9, 1996.
GENERAL MOTORS CORPORATION
By: /s/ JOHN F. SMITH, JR.
-----------------------------------
(John F. Smith, Jr., Chairman of the
Board of Directors, Chief Executive
Officer and President and Director)
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed on October 9, 1996 by the following persons in the
capacities indicated.
SIGNATURE TITLE
/s/ JOHN F. SMITH, JR. Chairman of the Board of Directors,
- ---------------------- Chief Executive Officer and President
(John F. Smith, Jr.)
/s/ J. MICHAEL LOSH Executive Vice President and ) (Principal
- ------------------- Chief Financial Officer ) Financial
(J. Michael Losh) ) Officers)
/s/ LEON J. KRAIN Vice President and Group Executive)
- ----------------- )
(Leon J. Krain) )
/s/ JOHN D. FINNEGAN Vice President and Treasurer )
- --------------------
(John D. Finnegan)
/s/ WALLACE W. CREEK Comptroller ) (Principal
- -------------------- ) Accounting
(Wallace W. Creek) ) Officers)
/s/ JAMES H. HUMPHREY Chief Accounting Officer )
- --------------------- )
(James H. Humphrey)
/s/ ANNE L. ARMSTRONG Director
- ---------------------
(Anne L. Armstrong)
/s/ JOHN H. BRYAN Director
- -----------------
(John H. Bryan)
/s/ THOMAS E. EVERHART Director
- ----------------------
(Thomas E. Everhart)
/s/ CHARLES T. FISHER, III Director
- --------------------------
(Charles T. Fisher, III)
/s/ J. WILLARD MARRIOTT, JR. Director
- ----------------------------
(J. Willard Marriott, Jr.)
/s/ ANN D. McLAUGHLIN Director
- ---------------------
(Ann D. McLaughlin)
/s/ EDMUND T. PRATT, JR. Director
- ------------------------
(Edmund T. Pratt, Jr.)
/s/ HARRY J. PEARCE Director
- -------------------
(Harry J. Pearce)
/s/ ECKARD PFEIFFER Director
- -------------------
(Eckard Pfeiffer)
/s/ JOHN G. SMALE Director
- -----------------
(John G. Smale)
/s/ LOUIS W. SULLIVAN Director
- ---------------------
(Louis W. Sullivan)
/s/ DENNIS WEATHERSTONE Director
- -----------------------
(Dennis Weatherstone)
/s/ THOMAS H. WYMAN Director
- -------------------
(Thomas H. Wyman)
------------------
<PAGE>
EXHIBIT INDEX
Page
EXHIBIT No.
*1(a) Form of proposed Underwriting Agreement (including Form
of Delayed Delivery Contract)
*1(b) Form of proposed Purchase Agreement
*1(c) Form of proposed Selling Agent Agreement
1(d) Form of Prospectus Supplement (Medium-Term Notes)
*4(a) Form of Indenture, dated as of December 7, 1995,
between the Corporation and Citibank, N.A., Trustee
*4(b) Form of proposed Debt Warrant Agreement
*4(c) Form of Debt Warrant Certificate (included in Exhibit 4(b))
*4(d) Forms of Global Note and Medium-Term Notes
5 Opinion and Consent of Martin I. Darvick, Esq., Attorney,
Legal Staff of the Corporation
8 Opinion and Consent of Robert N. Deitz, Tax Counsel of the
Tax Staff of the Corporation
12 Computation of Ratios of Earnings to Fixed Charges for the
five years ended December 31, 1995 and the six months ended
June 30, 1996 and 1995 incorporated by reference to Exhibit
12 to the following documents:
(a) annual reports on Form 10-K of General Motors
Corporation for the years ended December 31, 1995, 1994
and 1993;
(b) quarterly report on Form 10-Q of General Motors
Corporation for the quarter ended June 30, 1996
23(a) Consent of Deloitte & Touche LLP
23(b) Consent of KPMG Peat Marwick LLP
23(c) 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.
(filed separately))
-------------------------
* Incorporated by reference to Exhibits 1 through 4(d), respectively, to
Prospectus Supplement EXHIBIT 1d
(To Prospectus Dated October__, 1996)
U.S. $1,300,000,000
GENERAL MOTORS CORPORATION
MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
General Motors Corporation (the "Corporation") may offer from time to time
its Medium-Term Notes Due Nine Months or More from Date of Issue (the "Notes").
The Notes offered by this Prospectus Supplement will be limited to up to U.S.
$1,300,000,000 aggregate initial offering price or the equivalent thereof in
other currencies, including composite currencies such as the European Currency
Unit ("ECU") (the "Specified Currency"), subject to reduction as a result of the
sale of other Debt Securities or Debt Warrants to purchase other Debt Securities
(as such capitalized terms are defined in the accompanying Prospectus). The
Notes will be offered at varying maturities due nine months or more from the
date of issue (the "Issue Date"), as selected by the purchaser and agreed to by
the Corporation, and may be subject to redemption at the option of the
Corporation 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
Supplement. See "Important Currency Exchange Information" and "Risk Factors
- -Foreign Currency Risks."
The interest rate on each Note will be either a fixed rate established by
the Corporation 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
substantial discount from the principal amount payable upon the Maturity Date,
or at a floating rate as set forth therein and specified in the applicable
Pricing Supplement (a "Floating Rate Note"). A Fixed Rate Note may pay a level
amount in respect of both interest and principal amortized over the life of the
Note (an "Amortizing Note"). See "Description of Notes---Fixed Rate Notes" and
"Description of Notes---Floating Rate Notes." The principal amount payable at
the Maturity Date of, or any interest and premium, if any, on, a Note, or both,
may be determined by reference to one or more Specified Currencies (a "Currency
Indexed Note"), or by reference to the price of one or more specified securities
or commodities or to one or more securities or commodities exchange indices or
other indices or by other methods (an "Indexed Note," such term to include
Currency Indexed Notes) as described in the applicable Pricing Supplement. See
"Description of Notes---Currency Indexed Notes," "Description of Notes---Other
Indexed Notes and Certain Terms Applicable to All Indexed Notes" and "Risk
Factors Indexed Notes Risks."
Unless otherwise specified in the applicable Pricing Supplement, interest
on each Fixed Rate Note (other than an Amortizing Note) is payable semiannually
each May 15 and November 15 (a "Semiannual Pay Note") or, if annually, May l5
(an "Annual Pay Note"), as selected by the purchaser and agreed to by the
Corporation, 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
May 15 and November 15, or quarterly each February l5, May 15, August 15 and
November 15, and, in either case, at Maturity, or otherwise, as specified in the
applicable Pricing Supplement. See "Description of Notes---Payment of Principal
and Interest." Interest rates, interest rate formulae and other variable terms
are subject to change by the Corporation, but no change will affect any Note
already issued or as to which an offer to purchase has been accepted by the
Corporation.
The Notes may be issued in whole or in part in the form of a certificate
issued in definitive form (a "Certificated Note") or in the form of a master
Note to be deposited with or on behalf of The Depository Trust Corporation
("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 representing book-entry notes
(a "Book-Entry Note"). The Certificated Notes and the Book-Entry Notes are
hereinafter together referred to as the "Notes." Beneficial interests in
Book-Entry 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. Book-Entry Notes
will not be issuable as Certificated Notes except under limited circumstances
described herein. See "Description of Notes---Book-Entry Notes."
Unless otherwise specified in the applicable Pricing Supplement, Notes
will be issued only in registered form in minimum denominations of U.S. $100,000
(and any amount in excess thereof that is an integral multiple of U.S. $l,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
Corporation 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, whether
such Note will be represented by a global 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 Corporation may also issue from time to time warrants to purchase
Notes ("Note Warrants"). The Note Warrants may be issued together with or
separately from any Notes and, if issued together with Notes, may be attached to
or separate from such Notes. The particular terms of any issue of Note Warrants,
the terms of the Warrant Agreement under which such Note Warrants are issued,
the Notes issuable upon exercise of such Note Warrants, any initial public
offering price, any net proceeds to the Corporation and any other specific terms
of such issue of Note Warrants will be set forth in a supplement to this
Prospectus Supplement respecting such issue of Note Warrants (a "Note Warrant
Supplement"). Unless accompanied by a Note Warrant Supplement, no Note Warrants
are offered by this Prospectus Supplement.
--------------
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 SUPPLEMENT, ANY PRICING
SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
---------------------
Price to Agent's Discounts and Proceeds to
Public (1)(2) Commissions (2)(3) Corporation (2)(3)(4)
------------- --------------------- ---------------------
Per Note l00.00% .05%---.75% 99.95%---99.25%
Total U.S. $1,300,000,000 U.S. $650,000- U.S. $1,290,250,000-
U.S. $9,750,000 U.S. $1,299,350,000
(1) Unless otherwise specified in the applicable Pricing Supplement, Notes will
be issued at 100% of their principal amount.
(2) Or the equivalent thereof in the Specified Currency.
(3) The commission payable to Morgan Stanley & Co, Incorporated, Bear,
Stearns & Co. Inc., Lehman Brothers, Lehman Brothers Inc., Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J. P. Morgan & Co.
and Salomon Brothers Inc, (collectively, "the Agents") for each Note sold
through such Agent will be computed based upon the Price to Public of such
Note and will depend on such Note's Maturity Date. The Corporation 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
Corporation. The Corporation 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 Corporation estimated at
$1,000,000.
Offers to purchase the Notes are being solicited from time to time by the
Corporation through one or more of the Agents listed below and each of the
Agents have agreed to use its reasonable best efforts to solicit offers to
purchase the Notes. In addition, the Notes may be sold by the Corporation 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 Corporation reserves the right to sell Notes directly on its
own behalf in those jurisdictions where it is authorized to do so. In addition,
the Corporation may arrange for the Notes to be sold through other agents,
dealers or underwriters. Unless specified in the 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 Corporation that
they may from time to time purchase and sell Notes in the secondary market, but
the Agents are not obligated to do so. No termination date for the offering of
the Notes has been established. The Corporation reserves the right to withdraw,
cancel or modify the offer made hereby without notice. The Corporation or the
Agent that solicits any offer may reject such offer in whole or in part. See
"Plan of Distribution."
-----------------------
Morgan Stanley & Co. Incorporated
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Merrill Lynch & Co.
J. P. Morgan & Co.
Salomon Brothers Inc
The date of this Prospectus Supplement is October __, 1996.
<PAGE>
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 Supplement, any Pricing Supplement and the
accompanying Prospectus in connection with the offer contained in this
Prospectus Supplement, any Pricing Supplement and the accompanying Prospectus
and, if given or made, such information or representation must not be relied
upon as having been authorized by the Corporation or by any Agent. Neither the
delivery of this Prospectus Supplement, any Pricing Supplement and the
accompanying Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information therein is correct at
any time subsequent to the date thereof or that there has been no change in the
affairs of the Corporation since the dates as of which information is given in
this Prospectus Supplement, any Pricing Supplement and in the accompanying
Prospectus. This Prospectus Supplement, any Pricing Supplement and the
accompanying Prospectus shall not constitute an offer to sell or a solicitation
or 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.
RISK FACTORS
THIS PROSPECTUS SUPPLEMENT 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 SUPPLEMENT
OR AS THEY MAY CHANGE FROM TIME TO TIME. PROSPECTIVE INVESTORS SHOULD CONSULT
THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT
IN SUCH NOTES. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO
ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS OR
TRANSACTIONS INVOLVING THE APPLICABLE INTEREST RATE, CURRENCY, OR OTHER INDICES
OR FORMULAS.
RISKS ASSOCIATED WITH EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes that are denominated in, or the payment of which is
related to the value of, a Specified Currency other than U.S. dollars ("Foreign
Currency Notes") entails significant risks that are not associated with a
similar investment in a security denominated in U.S. dollars. Similarly, an
investment in a Currency Indexed Note entails significant risks that are not
associated with a similar investment in non-Indexed Notes. See "Risk
Factors-Indexed Notes Risks." Such risks include, without limitation, the
possibility of significant changes in the rate of exchange between United States
dollars and such Specified Currency (and, in the case of Currency Indexed Notes,
the rate of exchange between the Specified Currency and the Indexed Currency for
such Currency Indexed Note), changes resulting from official redenomination with
respect to a Specified Currency (or, in the case of each Currency Indexed Note,
with respect to the Specified Currency or the Indexed Currency therefor) and the
possibility of the imposition or modification of foreign exchange controls by
either the United States or foreign governments. Such risks generally depend on
economic and political events over which the Corporation has no control. In
recent years, rates of exchange between the U.S. dollar and certain foreign
currencies, and between certain foreign currencies and other foreign currencies,
have been highly volatile and such volatility may be expected in the future. The
exchange rate between the U.S. dollar and a foreign currency or composite
currency is at any moment a result of the supply and demand for such currency or
the currencies comprising such composite currency, and changes in the rate
result over time from the interaction of many factors, among which are rates of
inflation, interest rate levels, balance of payments and the extent of
governmental surpluses or deficits in the countries of such currencies. These
factors are in turn sensitive to the monetary, fiscal and trade policies pursued
by such governments and those of other countries important to international
trade and finance. Fluctuations in any particular exchange rate that have
occurred in the past are not necessarily indicative, however, of fluctuations in
the rate that may occur during the term of any Foreign Currency Note or any
Currency Indexed Note.
Depreciation of the Specified Currency for a Foreign Currency Note against
U.S. dollars would result in a decrease in the effective yield of such Foreign
Currency Note below its applicable interest rate and, in certain circumstances,
could result in a loss to the investor on a U.S. dollar basis. Similarly,
depreciation of the Denominated Currency with respect to a Currency Indexed Note
against the applicable Indexed Currency would result in the principal amount
payable with respect to such Currency Indexed Note at the Maturity Date being
less than the Face Amount of such Currency Indexed Note which, in turn, would
decrease the effective yield of such Currency Indexed Note below its stated
interest rate and, in certain circumstances, could also result in a loss of all
or a substantial portion of the principal of such Note to the investor. See
"Description of Notes---Currency Indexed Notes."
Governments have from time to time imposed, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a Specified Currency at the time of payment of principal of, premium, if any,
or interest, if any, on, a Foreign Currency Note. There can be no assurances
that exchange controls will not restrict or prohibit payments of principal, and
premium, if any, or interest, if any, in any Specified Currency other than U.S.
dollars. In addition to the risks associated with relative currency valuations
discussed above, the imposition of exchange controls might impact the liquidity
of any Note denominated in, or the value of which is linked to, a foreign
currency. Even if there are no actual exchange controls, it is possible that the
Specified Currency for such Note would not be available to the Corporation when
payments on such Note are due because of circumstances beyond the control of the
Corporation. In that event, the Corporation 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 Supplement is directed to
prospective purchasers who are residents of the United States, and the
Corporation 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 Currently Indexed Notes, the applicable
Indexed Currency), a description of the currency or currencies and any exchange
controls affecting such currency or currencies. The information contained
therein concerning exchange rates is furnished as a matter of information only
and should not be regarded as indicative of the range of or trends in
fluctuations in currency exchange rates that may occur in the future.
RISKS ASSOCIATED WITH INDEXED NOTES RISKS
An investment in Notes indexed, as to principal or interest, or both, to
one or more values of currencies (including exchange rates between currencies),
commodities or interest rate indices entails significant risks that are not
associated with similar investments in a conventional fixed-rate debt security.
If the interest rate of such a Note is so indexed, it may result in an interest
rate that is less than that payable on a conventional fixed-rate debt security
issued at the same time, including the possibility that no interest will be
paid, and, if the principal amount payable at maturity may be less than the
original purchase price of such Note if allowed pursuant to the terms of such
Note, including the possibility that no principal will be paid. The secondary
market for such Notes will be affected by a number of factors, independent of
the creditworthiness of the issuer and the value of the applicable currency,
commodity or interest rate index, including the volatility of the applicable
currency, commodity or interest rate index, the time remaining to the Maturity
of such Notes, the amount outstanding of such Notes and market interest rates.
The value of the applicable currency, commodity or interest rate index depends
on a number of interrelated factors, including economic, financial and political
events, over which the Corporation 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 Corporation 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 Corporation'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.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (which constitute "Debt Securities" as described in the accompanying
Prospectus) supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of Debt Securities set forth
under the heading "Description of Debt Securities" in the accompanying
Prospectus, to which reference is hereby made. The particular terms of the Notes
sold pursuant to any Pricing Supplement will be described therein.
THE TERMS AND CONDITIONS SET FORTH HEREIN WILL APPLY TO EACH NOTE UNLESS
OTHERWISE SPECIFIED HEREIN OR IN THE APPLICABLE PRICING SUPPLEMENT AND IN SUCH
NOTE.
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will be denominated in U.S. dollars, and payment of principal of, premium, if
any, and interest, if any, on, the Notes will be made in U.S. dollars. If any
Note is not to be denominated in U.S. dollars, the applicable Pricing Supplement
will specify the currency or currencies, including composite currencies such as
the ECU, in which such Note is to be denominated (the "Specified Currency") and,
if different, the currency or currencies in which the principal, premium, if
any, and interest, if any, with respect to such Note are to be paid, along with
any other terms relating to the non-U.S. dollar denomination, including exchange
rates for the Specified Currency as against the U.S. dollar at selected times
during the last five years, and any exchange controls or other foreign currency
risks relating to such Specified Currency. See "Foreign Currency Risks."
<PAGE>
GENERAL
The Notes offered by this Prospectus Supplement will be limited to U.S.
$1,300,000,000 aggregate initial offering price, or the equivalent thereof in
one or more Specified Currencies, less an amount equal to the aggregate initial
offering price of any other Debt Securities or Debt Warrants to purchase Debt
Securities covered by the Registration Statement of which this Prospectus
Supplement is a part and sold by the Corporation. The Notes will be issued under
an Indenture dated as of December 7, 1995 between the Corporation and Citibank,
N.A., as Trustee, as supplemented from time to time (the "Indenture"), which
Indenture is further described under "Description of Debt Securities" in the
accompanying Prospectus. The Indenture does not limit the amount of additional
unsecured indebtedness ranking equally and ratably with the Notes that the
Corporation may incur and the Corporation 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.$1,300,000,000, 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
Corporation 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, of which the Notes offered by this Prospectus Supplement will
form a part, constitute one series of Securities (as defined in the Indenture),
unlimited as to principal amount, established by the Corporation pursuant to the
Indenture.
The Notes will constitute unsecured and unsubordinated indebtedness of the
Corporation and will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of the Corporation. See "Description of Debt
Securities---General" in the accompanying Prospectus.
Notes will be offered on a continuing basis and will mature on any day
nine months or more from the Issue Date, as selected by the purchaser and agreed
to by the Corporation, and may be subject to redemption at the option of the
Corporation or repayment at the option of the holder prior to their Maturity
Date. Each Note will bear interest from the Issue Date (as defined below) at
either (a) a fixed rate ("Fixed Rate Notes"), which may be zero in the case of a
Note issued at an Issue Price (as defined below) representing a substantial
discount from the principal amount payable upon the Maturity Date (a
"Zero-Coupon Note"), or (b) a floating rate or rates determined by reference to
one or more Base Rates (as defined herein), which may be adjusted by a Spread
and/or Spread Multiplier (each as defined below) ("Floating Rate Notes").
Each Note will be issued in fully registered form without coupons and will
be represented by either a Certificated Note or by a single master security (the
"Master Security") representing Book-Entry Notes. The Master Security will be
registered in the name of a nominee of the Depositary. Except as set forth
herein, Book-Entry Notes will be issuable only in global form. No Book-Entry
Note shall represent any Certificated Note and Certificated Notes will not be
exchangeable for Book-Entry Notes, except as described below under "Description
of Notes---Book-Entry Notes---Delivery and Form" and the accompanying Prospectus
under "Description of Debt Securities---Book-Entry Notes---Delivery and Form."
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 Book-Entry Note. A beneficial
interest in a Book-Entry 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 Book-Entry Note will be made by the Corporation 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 Notes---Delivery and Form" and "Description of Debt
Securities---Book-Entry Notes---Delivery and Form" in the accompanying
Prospectus.
Unless otherwise specified in the applicable Pricing Supplement, the
authorized denominations of Notes denominated in U.S. dollars will be
U.S.$100,000 and any amount in excess thereof that is an integral multiple of
U.S.$l,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 Corporation 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 the Maturity Date 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
Corporation may designate.
Certificated Notes will be transferable by the registered holders thereof
or by their attorneys duly authorized in writing 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 Corporation may designate,
without charge except for any tax or other governmental charge imposed in
connection therewith, and in the manner and subject to the limitations provided
in the Indenture, and upon surrender of the Certificated Notes. Upon any such
transfer, a new Certificated Note or Notes in authorized denominations for an
equal aggregate principal amount having identical terms will be issued to the
transferee in exchange therefor.
Unless otherwise specified in the applicable Pricing Supplement, the Notes
may not be redeemed by the Corporation, 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 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 Corporation, 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 of 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 such 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 Consequences to U.S. Holders---Original Issue Discount Notes."
Unless otherwise specified herein, the Pricing Supplement relating to each
Note or Notes will describe the following terms, as applicable: (1) the
Specified Currency with respect to such Note (and, if such Specified Currency is
other than U.S. dollars, certain other terms relating to such Note); (2) whether
such Note is a Fixed Rate Note, a Floating Rate Note, an Amortizing Note or a
Zero-Coupon Note or other Original Issue Discount Note; (3) whether such Note is
a Currency Indexed Note or other Indexed Note, and if so the 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; (l0) whether the interest rate on such Note may be reset
upon the occurrence of certain events or at the option of the Corporation; (11)
whether such Note may be redeemed at the option of the Corporation, and/or
repaid at the option of the holder, prior to its Maturity Date, and if so, the
provisions relating to such redemption or repayment; (l2) whether such Note will
be issued initially as a Book-Entry Note or as a Certificated Note; (13) certain
special United States Federal income tax consequences of the purchase, ownership
and disposition of certain Notes, if any, and (l4) any other terms of such Note
not inconsistent with the provisions of the Indenture.
GLOSSARY
Reference is made to the Indenture, the Prospectus and the forms of Notes
filed as exhibits to the Registration Statement to which this Prospectus
Supplement relates for the full definition of certain terms used in this
Prospectus Supplement, as well as any capitalized terms used in this Prospectus
Supplement, for which no definition is provided. Set forth below are definitions
of certain terms used in this Prospectus Supplement 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;
"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 Corporation, 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
calendar 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 NOTES---DELIVERY AND FORM
Upon issue, all Book-Entry Notes will be represented by the Master
Security. See "Description of Debt Securities---Book-Entry Notes---Delivery
and Form" in the accompanying Prospectus.
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
Corporation in U.S. dollars in the manner described in the following paragraphs,
even if a Note is denominated in a Specified Currency other than U.S. dollars;
provided, however, that the holder of such Note may (unless the Pricing
Supplement and the Note so indicate otherwise) elect to receive all such
payments in such Specified Currency (subject to certain conditions described at
"Foreign Currency Risks---Payment Currency") by delivery of a written request to
the Corporation'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 Corporation has exercised any of its discharge or defeasance options,
or (iii) the Corporation 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 Corporation 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 Corporation has initially appointed Citibank,
N.A., New York, New York as Paying Agent under the Indenture. The Corporation
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 Corporation 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
Corporation or an agent for the Corporation as specified in the applicable
Pricing Supplement (the "Exchange Rate Agent"), based on the indicative
quotation in The City of New York selected by such Exchange Rate Agent at
approximately 11:00 a.m., New York City time, on the second Business Day
preceding the applicable payment date, that yields the largest number of U.S.
dollars upon conversion of the Specified Currency. Unless otherwise specified in
the applicable Pricing Supplement, such selection shall be made from among the
quotations appearing on the bank composite or multi-contributor pages of the
Reuters Monitor Foreign Exchange Service, or if not available, the Telerate
Monitor Foreign Exchange Service. If such quotations are unavailable from either
such foreign exchange service, such election shall (unless otherwise specified
in the applicable Pricing Supplement) be made from three recognized foreign
exchange dealers in The City of New York selected by the Exchange Rate Agent and
approved by the Corporation (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 Corporation'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 Corporation 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 Corporation 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 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
Corporation'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 sold. 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 Corporation's control, or is no longer used in the European Monetary
System, then all payments due on that due date with respect to such Note shall
be made in U.S. dollars until the ECU is available or is so used. The amount so
payable on any date in ECU shall be converted into U.S. dollars at a rate
determined by the Exchange Rate Agent as of the second Business Day prior to the
date on which such payment is due on the following basis: The component
currencies of the ECU for this purpose shall be the currency amounts that were
components of the ECU as of the last date on which ECU were used in the European
Monetary System. The equivalent of ECU in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of such component currencies. The U.S.
dollar equivalent of each of such component currencies shall be determined by
the Exchange Rate Agent on the basis of the most recently available Market
Exchange Rate for each such component currency, or as otherwise indicated in the
applicable Pricing Supplement.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a component
shall be divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated component currencies
expressed in such single currency. If any component currency is divided into two
or more currencies, the amount of that currency as a component shall be replaced
by the amounts of such two or more currencies having an aggregate value on the
date of division equal to the amount of the former component currency
immediately before such division.
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion (except to the extent expressly provided herein that
any determination made by an Exchange Rate Agent that is not the Corporation is
subject to approval by the Corporation) 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
Corporation 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
Unless otherwise specified in the applicable Pricing Supplement, interest
on the Notes and principal of Amortizing Notes (in each case other than interest
or, in the case of Amortizing Notes, principal paid at Maturity), will be paid
by mailing a check (unless otherwise specified in the applicable Pricing
Supplement) from an account at a bank located outside the United States if such
check is payable in a currency other than U.S. dollars) to the holder at the
address of such holder appearing on the security register of the Corporation 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 next
succeeding Regular Record Date.
Notwithstanding the foregoing, a holder of U.S.$l0,000,000 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
Book-Entry 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 Notes---Delivery and Form" herein and
"Description of Debt Securities---Book-Entry Notes---Delivery and Form" in the
accompanying Prospectus. 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 Book-Entry 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 Book-Entry 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 Corporation 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---Event of Default" in the accompanying
Prospectus, 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.
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 May 15 and November 15,
or annually on each May l5, 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 February
l5, May 15, August 15, and November 15, or semiannually on each May l5 and
November 15, 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 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 Corporation will
agree to pay on newly-issued Fixed Rate Notes are subject to change without
notice by the Corporation 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 Corporation.
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
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 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
Corporation 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 Corporation.
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 l6% 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 February, May, August and November; 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 February, May,
August and November, 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 February, May, August and November; in the case of Floating Rate
Notes with a semiannual Interest Reset Date, on the third Wednesday of the two
months of each year specified in the applicable Pricing Supplement; and in the
case of Floating Rate Notes with an annual 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. dollar amounts used in or resulting from such
calculation on Floating Rate Notes will be rounded to the nearest cent or, in
the case of Notes denominated other than in U.S. dollars, the nearest unit (with
one-half cent or unit being rounded upwards).
Unless otherwise specified in the applicable Pricing Supplement, the
"Interest Determination Date" pertaining to an Interest Reset Date for CD Rate
Notes, CMT Rate Notes, Commercial Paper Rate Notes, Prime Rate Notes and Federal
Funds Rate Notes will be the second Business Day preceding such Interest Reset
Date; the Interest Determination Date pertaining to an Interest Reset Date for a
LIBOR Note will be the second London Banking Day preceding such Interest Reset
Date; and the Interest Determination Date pertaining to an Interest Reset Date
for a Treasury Rate Note will be the day of the week in which such Interest
Reset Date falls on which direct obligations of the United States ("Treasury
Bills") of the applicable Index Maturity (as specified on the face of such
Treasury Rate Note) are auctioned. Treasury Bills are normally sold at auction
on Monday of each week, unless that day is a legal holiday, in which case the
auction is normally held on the following Tuesday, except that such auction may
be held on the preceding Friday. If, as the result of a legal holiday, an
auction is so held on the preceding Friday, such Friday will be the Interest
Determination Date pertaining to the Interest Reset Date occurring in the next
succeeding week. If an auction falls on a day that is an Interest Reset Date,
such Interest Reset Date will be the next following Business Day. Unless
otherwise specified in the applicable Pricing Supplement, the Interest
Determination Date pertaining to a Note, the interest rate of which is
determined with reference to two or more Base Rates, will be the first Business
Day which is at least two Business Days prior to such Interest Reset Date for
such Note on which each Base Rate shall be determinable.
Unless otherwise specified in the applicable Pricing Supplement, the
"Calculation Date," where applicable, pertaining to an Interest Determination
Date will the earlier of (i) the tenth calendar day after such Interest
Determination Date, or, if any 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 Corporation, 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 Corporation 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:
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.l5(5l9), Selected Interest
Rates," or any successor publication of the Board of Governors of the Federal
Reserve System ("H.l5(5l9)") 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 Corporation, 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 Supplement 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
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 applicable Index Maturity specified in the
applicable Pricing Supplement, as such rate shall be published in H.l5(5l9)
under the heading "Commercial Paper." In the event that such rate is not
published prior to 9:00 a.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the Commercial Paper Rate
shall be the Money Market Yield on such Interest Determination Date of the rate
for commercial paper of the applicable Index Maturity as published in the
Composite Quotations under the heading "Commercial Paper." If such rate is not
yet published in either H.15(519) or the Composite Quotations by 3:00 p.m., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the Commercial Paper Rate shall be the Money Market
Yield of the arithmetic mean of the offered rates as of 11:00 a.m., New York
City time, on such Interest Determination Date of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent,
after consultation with the Corporation, 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.
<PAGE>
"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
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 Corporation, 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 Spread Multiplier, if any, and subject
to the Minimum Interest Rate and the Maximum Interest Rate, if any) specified in
the LIBOR Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR"
means the rate determined by the Calculation Agent in accordance with the
following provisions:
(i) With respect to an Interest Determination Date relating to a LIBOR
Note or any Floating Rate Note for which the interest rate is determined with
reference to LIBOR, LIBOR will be either (a) if "LIBOR Reuters" is specified in
the applicable Pricing Supplement, the arithmetic mean of the offered rates
(unless the specified Designated LIBOR Page by its terms provides only for a
single rate, in which case such single rate shall be used) for deposits in the
Index Currency having the Index Maturity designated in the applicable Pricing
Supplement, commencing on the second London Banking Day immediately following
that Interest Determination Date, that appear on the Designated LIBOR Page
specified in the applicable Pricing Supplement as of 11:00 a.m. London time, on
that Interest Determination Date, if at least two such offered rates appear
(unless, as aforesaid, only a single rate is required) on such Designated LIBOR
Page or (b) if "LIBOR Telerate" is specified in the applicable Pricing
Supplement, the rate for deposits in the Index Currency having the Index
Maturity designated in the applicable Pricing Supplement commencing on the
second London Banking Day immediately following that Interest Determination Date
that appears on the Designated LIBOR Page specified in the applicable Pricing
Supplement as of 11:00 a.m. London time, on that Interest Determination Date. If
fewer than two offered rates appear, or no rate appears, as applicable, LIBOR in
respect of the related Interest Determination Date will be determined as if the
parties had specified the rate described in clause (ii) below.
(ii) With respect to any 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 ranks in the London interbank market, as selected by the
Calculation Agent, after consultation with the Corporation, 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 Corporation, for loans in the Index Currency to leading
European banks, having the Index Maturity designated in the applicable Pricing
Supplement, commencing on the second London Banking Day immediately following
the Interest Determination Date, and in a principal amount that is
representative for a single transaction in such Index Currency in such market at
such time; provided, however, that if the banks so selected by the Calculation
Agent are not quoting as mentioned in this sentence, LIBOR determined on such
Interest Determination Date will be LIBOR in effect on such Interest
Determination Date.
"Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for which LIBOR
shall be calculated. If no such currency is specified in the applicable Pricing
Supplement, the Index Currency shall be U.S. dollars.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is designated
in the applicable Pricing Supplement, the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank rates of major
banks for the applicable Index Currency or (b) if "LIBOR Telerate" is designated
in the applicable Pricing Supplement, the display on the Dow Jones Telerate
Service for the purpose of displaying the London interbank rates of major banks
for the applicable Index Currency. If neither LIBOR Reuters nor LIBOR Telerate
is specified in the applicable Pricing Supplement, LIBOR for the applicable
Index Currency will be determined as if LIBOR Telerate (and, if the U.S. dollar
is the Index Currency, page 3750) had been specified.
PRIME RATE NOTES
Prime Rate Notes will bear interest at the interest rate (calculated with
reference to the Prime Rate and the Spread and/or 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.l5(5l9) 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
Page" 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 Corporation. 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 Corporation, to provide such rate
or rates; provided 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 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(5l9) under the heading
"Treasury Bills---auction average (investment)" or, if not so published by 9:00
a.m., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the auction average rate (expressed as a bond equivalent, on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) as otherwise announced by the United States Department of the Treasury.
In the event that the results of the auction of Treasury Bills having the
applicable Index Maturity designated in the applicable Pricing Supplement are
not published or reported as provided above by 3:00 p.m., New York City time, on
such Calculation Date or if no such auction is held on such Interest
Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 p.m., New York City time, on such Interest
Determination Date, of three leading primary United States government securities
dealers selected by the Calculation Agent, after consultation with the
Corporation, for the issue of Treasury Bills with a remaining maturity closest
to the applicable Index Maturity; 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
Corporation, and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for the most recently issued direct noncallable
fixed rate obligations of the United States ("Treasury Notes") with an original
maturity of approximately the Designated CMT Maturity Index and a remaining term
to maturity of not less than such Designated CMT Maturity Index minus one year.
If the Calculation Agent is unable to obtain three such Treasury Note
quotations, the CMT Rate on such CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity based on the
arithmetic mean of the secondary market offer side prices as of approximately
3:30 P.M., New York City time, on such CMT Rate Interest Determination Date of
three Reference Dealers in the City of New York (from five such Reference
Dealers selected by the Calculation Agent, after consultation with the
Corporation, and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for Treasury Notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the designated CMT Maturity
Index and in an amount of at least $100 million. If three or four (and not five)
of such Reference Dealers are quoting as described above, then the CMT Rate will
be based on the arithmetic mean of the offer prices obtained and neither the
highest nor the lowest of such quotes will be eliminated; provided, however,
that if fewer than three Reference Dealers so selected by the Calculation Agent
are quoting as mentioned herein, the CMT Rate determined as of such CMT Rate
Interest Determination Date will be the CMT Rate in effect on such CMT Rate
Interest Determination Date. If two Treasury Notes with an original maturity as
described in the second preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the Calculation Agent will
obtain from five Reference Dealers quotations for the Treasury Note with the
shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page specified in the applicable Pricing Supplement (or any other
page as may replace such page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519)) for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519). If no such
page is specified in the applicable Pricing Supplement, the designated CMT
Telerate Page shall be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable Pricing Supplement with respect to which the CMT
Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.
ORIGINAL ISSUE DISCOUNT NOTES
Notes may be issued at a price less than their stated redemption price at
maturity, other than by an amount which is less than a DE MINIMIS amount (0.25%
of the stated redemption price at maturity multiplied by the number of complete
years to maturity) resulting in such Notes being treated as if they were issued
with original issue discount for United Sates 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 Corporation may from time to time offer Notes as to which the
principal amount payable at Maturity and/or the rate of interest thereon is
determined by reference to the rate of exchange between the currency or
composite currency in which such Notes ("Currency Indexed Notes") are
denominated (the "Denominated Currency") and the other currency or currencies or
composite currency or composite currencies specified as the Indexed Currency
(the "Indexed Currency") in the applicable Pricing Supplement, or as determined
in such other manner as may be specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, (a)
holders of Currency Indexed Notes will be entitled to receive a principal amount
in respect of such Currency Indexed Notes exceeding the amount designated as the
face amount of such Currency Indexed Notes in the applicable Pricing Supplement
(the "Face Amount") if, at Maturity, the rate at which the Denominated Currency
can be exchanged for the Indexed Currency is greater than the rate of such
exchange designated as the Base Exchange Rate, expressed in units of the Indexed
Currency per one unit of the Denominated Currency, in the applicable Pricing
Supplement (the "Base Exchange Rate") and (b) holders of Currency Indexed Notes
will be entitled to receive a principal amount in respect of such Currency
Indexed Notes less than the Face Amount of such Currency Indexed Notes if, at
Maturity, the rate at which the Denominated Currency can be exchanged for the
Indexed Currency is less than such Base Exchange Rate, in each case determined
as described below under "Currency Indexed Notes---Payment of Principal and
Interest." Information as to the relative historical value (which information is
not necessarily indicative of relative future value) of the applicable
Denominated Currency against the applicable Indexed Currency, any exchange
controls applicable to such Denominated Currency or Indexed Currency and certain
tax consequences to holders will be set forth in the applicable Pricing
Supplement. See "Foreign Currency Risks" and "Indexed Notes Risks."
PAYMENT OF PRINCIPAL AND INTEREST
Unless otherwise specified in the applicable Pricing Supplement, interest
will be payable by the Corporation 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 Corporation 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 Corporation, 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 Exchange Rate Agent or the Corporation,
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
Corporation, to act as Reference Dealer or Dealers in replacement therefor. In
the absence of manifest error, the determination by the Exchange Rate Agent of
the Spot Rate and the principal amount of Currency Indexed Notes payable at
Maturity thereof shall be final and binding on the Corporation 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 thereof
because of the imposition of exchange controls or other circumstances beyond the
Corporation'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 similar methods or formulae.
Holders of Indexed Notes may receive a principal amount at Maturity that is
greater than or less than the face amount of such Notes depending upon the
fluctuation of the relative value, rate or price of the specified index. The
Pricing Supplement relating to such an Indexed Note will describe, as
applicable, the method by which the amount of interest payable and the amount of
principal payable at the Maturity Date in respect of such Indexed Note will be
determined, certain special tax consequences of the purchase, ownership or
disposition to holders of such Notes, certain risks associated with an
investment in such Notes and other information relating to such Notes. See
"Risks Factors."
PROSPECTIVE INVESTORS SHOULD CONSULT WITH THEIR OWN FINANCIAL AND LEGAL
ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN CURRENCY INDEXED OR OTHER
INDEXED NOTES. SUCH AN INVESTMENT ENTAILS SIGNIFICANT RISKS THAT ARE NOT
ASSOCIATED WITH A SIMILAR INVESTMENT IN A SECURITY THE PRINCIPAL AMOUNT OF WHICH
PAYABLE AT MATURITY IS NOT DETERMINED BY CURRENCY EXCHANGE RATES OR SECURITIES
OR COMMODITIES EXCHANGE INDICES OR OTHER INDICES AND IS NOT AN APPROPRIATE
INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO SUCH
TRANSACTIONS.
Unless otherwise specified in the applicable Pricing Supplement, (a) for
the purpose of determining whether holders of the requisite principal amount of
Debt Securities 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
Corporation 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 Corporation has
such option with respect to any Note, the following procedures shall apply,
unless modified as set forth in the applicable Pricing Supplement.
The Corporation 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 Corporation 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 Corporation 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 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 Corporation 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 Corporation 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 Corporation has the option to extend the
maturity of such Note for 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 Corporation has such option with respect to any Note
(other than an Amortizing Note), the following procedures shall apply, unless
modified as set forth in the applicable Pricing Supplement (which will contain
complete details concerning such option by the Corporation to extend the
maturity of a Note (other than an Amortizing Note)).
The Corporation 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 Corporation 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 Corporation 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 Corporation 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
Corporation 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.
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
Corporation 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 Corporation 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 Corporation 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 Corporation
must receive at least 30 days but not more than 45 days prior to the repayment
date, the Note with the form entitled "Option to Elect Repayment" on the reverse
of the Note duly completed. Exercise of the repayment option by the holder of a
Note shall be irrevocable, except as otherwise provided under "Description of
Notes---Subsequent Interest Periods" and "Description of Notes---Extensions of
Maturity." The repayment option may be exercised by the holder of a Note for
less than the aggregate principal amount of the Note then outstanding provided
that the principal amount of the Note remaining outstanding after repayment is
an authorized denomination.
With respect to a Book-Entry Note, the Depositary's nominee will be the
holder of such Book-Entry Note and therefore will be the only entity that can
exercise a right to repayment. See "Description of Notes---Book-Entry Notes." 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 Book-Entry 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
Book-Entry 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 Book-Entry 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 Book-Entry
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 Corporation 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 purchase.
The Corporation may at any time purchase Notes at any price or prices in
the open market or otherwise. Notes so purchased by the Corporation may, at the
discretion of the Corporation, be held or resold or surrendered to the Trustee
for cancellation.
IMPORTANT CURRENCY EXCHANGE INFORMATION
Unless otherwise set forth in the applicable Pricing Supplement, each
Purchaser of a Note is required to pay for such Notes in the Specified Currency
thereof in immediately available funds, and payments of principal of, premium,
if any, and interest, if any, on, such Note will be made in the Specified
Currency. Currently, there are limited facilities in the United States for
conversion of U.S. dollars into foreign currencies or currency units and vice
versa and few banks offer non-U.S. dollar checking or savings account facilities
in the United States. Accordingly, unless otherwise specified in a Pricing
Supplement or unless alternative arrangements are made, payment of principal of,
premium, if any, and interest, if any, on, Notes in a Specified Currency other
than U.S. dollars will be made to an account at a bank outside the United
States. See "Foreign Currency Risks." However, if requested by a prospective
purchaser of Notes denominated in a Specified Currency other than U.S. dollars,
the Agent soliciting the offer to purchase will use reasonable efforts to
arrange for the conversion of U.S. dollars into such Specified Currency to
enable the purchaser to pay for such Notes. Such request must be made on or
before the third Business Day preceding the date of delivery of the Notes, or by
such other date as is determined by such Agent. Each such conversion will be
made by the relevant Agent on such terms and subject to such conditions,
limitations and charges as such Agent may from time to time establish in
accordance with its regular foreign exchange practice. All costs of any such
exchange will be borne by the purchasers of the Notes.
OTHER/ADDITIONAL PROVISIONS; ADDENDUM
Any provision with respect to the Notes, including the specification and
determination of one or more Interest Rate Bases, the calculation of the
interest rate applicable to a Floating Rate Note, the Interest Payment Dates,
the Maturity Date or any other term relating thereto, may be modified and/or
supplemented as specified under "Other/Additional Provisions" on the face
thereof or in an Addendum relating thereto, if so specified on the face thereof.
Such provisions will be described in the applicable Pricing Supplement.
UNITED STATES FEDERAL TAXATION
GENERAL
In the opinion of the Corporation's tax counsel, the following general
summary describes all material United States Federal income tax consequences of
the ownership and disposition of the Notes. This summary provides general
information only and is directed solely to original holders purchasing Notes at
the "issue price" (as defined below) and who hold the Notes as capital assets
within the meaning of Section 1221 of the Internal Revenue Code of 1986, as
amended (the "Code"), and does not purport to discuss all United States Federal
income tax consequences that may be applicable to particular categories of
investors that may be subject to special rules, such as banks, insurance
companies, dealers in securities, persons holding Notes as part of a "straddle"
conversion, transaction hedging or other integrated transaction. In addition,
the United States Federal income tax consequences of holding a particular Note
will depend, in part, on the particular terms of such Note as set forth in the
applicable Pricing Supplement. Finally, this summary does not discuss Original
Issue Discount Notes which qualify as "applicable high-yield discount
obligations" under Section 163(i) of the Code. Holders of Original Issue
Discount Notes which are "applicable high-yield discount obligations" may be
subject to special rules which will be set forth in an applicable Pricing
Supplement. Holders are advised to consult their own tax advisors with regard to
the application of the United States Federal income tax laws to their particular
situations as well as any tax consequences arising under the laws of any state,
local or foreign tax jurisdiction.
This summary is based on the Code, United States Treasury Regulations
(including proposed regulations and temporary regulations) promulgated
thereunder, rulings, official pronouncements and judicial decisions as of the
date of this Prospectus Supplement. The authorities on which this summary is
based are subject to change or differing interpretations, which could apply
retroactively, so as to result in United States Federal income tax consequences
different from those discussed below.
For purposes of the following discussion, "U.S. Holder" means a beneficial
owner of a Note that is (i) for United States Federal income tax purposes a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any political subdivision thereof, (iii) an estate or trust the income of
which is subject to United States Federal income taxation regardless of its
source, or (iv) any other Holder whose income is effectively connected with such
Holder's conduct of a United States trade or business. The term also includes
certain former citizens or long-term permanent residents of the United States.
TAX CONSEQUENCES TO U.S. HOLDERS
PAYMENTS OF INTEREST
Interest on a Note (whether denominated in U.S. dollars or in other than
U.S. dollars) that is not an Original Issue Discount Note will generally be
taxable to a U.S. Holder as ordinary interest income at the time it is accrued
or is received in accordance with the U.S. Holder's method of accounting for tax
purposes.
All payments of interest on a Note that matures one year or less from its
date of issuance will be included in the stated redemption price at the maturity
of the Note and will be taxed in the manner described below under "Original
Issue Discount Notes".
Special rules governing the treatment of interest paid with respect to
Original Issue Discount Notes, including certain Floating Rate Notes, Foreign
Currency Notes, Currency Indexed Notes and other Indexed Notes are described
under "Original Issue Discount Notes", "Foreign Currency Notes" and "Currency
Indexed Notes and Other Indexed Notes" below.
ORIGINAL ISSUE DISCOUNT NOTES
The following summary is generally based upon the Treasury Regulations
concerning the treatment of debt instruments issued with original issue discount
(the "OID Regulations"). Under the OID Regulations, a Note that is issued for an
amount less than its stated redemption price at maturity will generally be
considered to have been issued at an original issue discount. The issue price of
a Note is equal to the first price to the public (not including bond houses,
brokers or similar persons or organizations acting in the capacity of
underwriters, placement agents or wholesalers) at which a substantial amount of
the Notes is sold for money. The stated redemption price at maturity of a Note
is generally equal to the sum of all payments to be made on such Note other than
"qualified stated interest" payments. With respect to a Note, "qualified stated
interest" is stated interest unconditionally payable as a series of payments in
cash or property (other than debt instruments of the issuer) at least annually
during the entire term of the Note and equal to the outstanding principal
balance of the Note multiplied by a single fixed rate of interest.
Under the OID Regulations, Variable Rate Notes are subject to special
rules. Subject to certain exceptions, a variable rate of interest is a
"qualified floating rate" if variations in the value of the rate can reasonably
be expected to measure contemporaneous fluctuations in the cost of newly
borrowed funds in the currency in which the Note is denominated. A variable rate
will be considered a qualified floating rate if the variable rate equals (i) the
product of an otherwise qualified floating rate and a fixed multiple (i.e., a
Spread Multiplier) that is greater than zero but not more than 1.35 or (ii) an
otherwise qualified floating rate (or the product described in clause (i)) plus
or minus a fixed rate (i.e., a Spread). If the variable rate equals the product
of an otherwise qualified floating rate and a single fixed multiplier greater
than 1.35, however, such rate generally constitutes an "objective rate,"
described more fully below. A variable rate will not be considered a qualified
floating rate if the variable rate is subject to a cap, floor, governor (i.e., a
restriction on the amount of increase or decrease in the stated interest rate)
or similar restriction that is reasonably expected as of the issue date to cause
the yield on the Note to be significantly more or less than the expected yield
determined without the restriction (other than a cap, floor or governor that is
fixed throughout the term of the Note).
Subject to certain exceptions, an "objective rate" is defined as a rate
(other than a qualified floating rate) that is determined using a single fixed
formula and that is based on (i) one or more qualified floating rates, (ii) one
or more rates where each rate would be a qualified floating rate for a Note
denominated in a currency other than the currency in which the Note is
denominated, (iii) the yield or changes in the price of one or more items of
personal property (other than stock or debt of the Corporation or a related
party) that is "actively traded," or (iv) a combination of the rates described
in clauses (i), (ii) and (iii) of this sentence. A variable rate of interest on
a Note will not be considered an objective rate if it is reasonably expected
that the average value of the rate during the first half of the Note's term will
be either significantly less than or significantly greater than the average
value of the rate during the final half of the Note's term.
If interest on a Note is stated at a fixed rate for an initial period of
less than one year (e.g., an Initial Interest Rate) followed by a variable rate
that is either a qualified floating rate or an objective rate for a subsequent
period, and the value of the variable rate on the issue date is intended to
approximate the fixed rate, the fixed rate and the variable rate together
constitute a single qualified floating rate or objective rate. If a Floating
Rate Note provides for two or more qualified floating rates that can reasonably
be expected to have approximately the same values throughout the term of the
Note, the qualified floating rates together constitute a single qualified
floating rate. Two or more rates will be conclusively presumed to meet the
requirements of the preceding sentences if the values of the applicable rates on
the issue date are within 1/4 of 1 percent of each other. In addition, in order
to be treated as qualified stated interest (rather than contingent payments, as
discussed below), the qualified floating rate or objective rate in effect at a
given time for a Note must be set at a value of that rate on any day that is no
earlier than three months prior to the first day on which that value is in
effect and no later than one year following that first day.
Special tax considerations (including possible original issue discount)
may arise with respect to Notes which provide for interest at (i) more than one
qualified floating rate, (ii) a single fixed rate and one or more qualified
floating rates, or (iii) in certain cases a single fixed rate and a single
objective rate. In the event Notes of this type are issued, the United States
Federal income tax consequences to purchasers and holders thereof will be
discussed in the applicable Pricing Supplement. Purchasers of such Notes should
carefully examine the Pricing Supplement and should consult their tax advisors
regarding the purchase, ownership and disposition of such Notes.
Notwithstanding the general definition of original issue discount above, a
Note will not be considered to have been issued with an original issue discount
if the amount of such original issue discount is less than a DE MINIMIS amount
equal to 0.25% of the stated redemption price at maturity multiplied by the
number of complete years to maturity (or, in the case of a Note providing for
payments prior to maturity of amounts other than qualified stated interest, the
weighted average maturity). Holders of Notes with a DE MINIMIS amount of
original issue discount will include such original issue discount in income, as
capital gain, on a pro rata basis as principal payments are made on the Note.
A U.S. Holder of an Original Issue Discount Note (other than certain U.S.
Holders of Short-Term Original Issue Discount Notes, as defined below) will be
required to include qualified stated interest in income at the time it is
received or accrued in accordance with such U.S. Holder's method of accounting.
A U.S. Holder of an Original Issue Discount Note that matures more than
one year from its date of issuance will be required to include original issue
discount in income as it accrues, in accordance with a constant yield method
based on a compounding of interest, before the receipt of cash payments
attributable to such income. The amount of original issue discount includable in
income is equal to the sum of the "daily portions" of the original issue
discount for each day during the taxable year on which the U.S. Holder held such
Note. The "daily portion" is the original issue discount for the "accrual
period" that is allocated ratably to each day in the accrual period. The
original issue discount for an accrual period is equal to the excess, if any, of
(a) the product of the "adjusted issue price" of an Original Issue Discount Note
at the beginning of such accrual period and its "yield to maturity" over (b) the
amount of any qualified stated interest allocable to the accrual period. The
"accrual period" is the interval (not to exceed one year) that ends no later
than the date of any scheduled payment of principal or interest. The Corporation
will specify the accrual period it intends to use in the applicable Pricing
Supplement but a U.S. Holder is not required to use the same accrual period for
purposes of determining the amount of original issue discount includable in its
income for a taxable year. The adjusted issue price of a Note at the beginning
of an accrual period is equal to the issue price of such Note, increased by the
aggregate amount of original issue discount with respect to such Note that
accrued in prior accrual periods, and reduced by the amount of any payment on
the Note in prior accrual periods of amounts other than a payment of qualified
stated interest. Under these rules, U.S. Holder's generally will have to include
in income increasingly greater amounts of original issue discount in successive
accrual periods.
Under the OID Regulations, a U.S. Holder may make an election (the
"Constant Yield Election") to include in gross income its entire return on a
Note (i.e., the excess of all remaining payments to be received on the Note over
the amount paid for the Note by such Holder) in accordance with a constant yield
method based on the compounding of interest. Special rules apply to elections
made with respect to Notes with amortizable bond premium and U.S. Holders
considering such an election should consult their own tax advisor.
In general, a cash method U.S. Holder of an Original Issue Discount Note
that matures one year or less from its date of issuance (a "Short-Term Original
Issue Discount Note") is not required to accrue original issue discount on such
Note for United States Federal income tax purposes unless it elects to do so.
U.S. Holders who make such an election, U.S. Holders who report income for
United States Federal income tax purposes on the accrual method and certain
other U.S. Holders, including banks and dealers in securities, are required to
include original issue discount in income on such Short-Term Original Issue
Discount Notes as it accrues on a straight-line basis, unless an election is
made to use the constant yield method (based on a daily compounding). In the
case of a U.S. Holder who is not required and does not elect to include original
issue discount in income currently, any gain realized on the sale, exchange or
redemption of the Short-Term Original Issue Discount Note will be ordinary
income to the extent of the original issue discount accrued. In addition, such
U.S. Holder will be required to defer deductions for any interest paid on
indebtedness incurred to purchase or carry Short-Term Original Issue Discount
Notes in an amount not exceeding the deferred interest income, until such
deferred interest income is recognized.
Certain Notes may be redeemable at the option of the Corporation prior to
the Maturity Date, or repayable at the option of the U.S. Holder prior to the
Maturity Date. Notes containing such features may be subject to rules that
differ from the general rules discussed above. U.S. Holders intending to
purchase Notes with any such features should carefully examine the applicable
Pricing Supplement and should consult with their own tax advisors with respect
to such features, since the tax consequences with respect to original issue
discount will depend, in part, on the particular terms and the particular
features of the purchased Note.
BOND PREMIUM
If a U.S. Holder purchases a Note for an amount less than its stated
redemption price at maturity, or in the case of an Original Issue Discount Note,
its adjusted issue price, the amount of the difference will be treated as
"market discount," unless such excess is less than a specified DE MINIMIS
amount.
In general, market discount will be considered to accrue ratably during
the period from the date of acquisition to the maturity date of the Note, unless
the Holder elects (on a Note by Note basis) to accrue on the basis of a constant
interest rate. Any gain recognized on the retirement or disposition of a Market
Discount Note will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on such Note. Alternatively, a
Holder may elect to include market discount in income currently as it accrued
(on either a ratable or constant interest rate basis). Such election shall apply
to all debt instruments with market discount acquired by the electing Holder
during that taxable year and all subsequent years. Absent such an election, a
Holder may be required to defer the deduction of all or a portion of the
interest paid or accrued on any indebtedness incurred or maintained to purchase
or carry such Note until the maturity or disposition of such Note.
If a U.S. Holder purchases a Note for an amount that is greater than the
stated redemption price at maturity, such Holder will be considered to have
purchased such Note with "amortizable bond premium" equal in amount to such
excess, and generally will not be required to include any original issue
discount in income. A U.S. Holder may elect (in accordance with applicable Code
provisions) to amortize such premium, using a constant yield method, over the
remaining term of the Note (where such Note is not callable prior to its
maturity date). If such Note may be called prior to maturity after the U.S.
Holder has acquired it, the amount of amortizable bond premium is determined
with reference to either the amount payable on maturity or, if it results in a
smaller premium, attributable to the period through the earlier call date with
reference to the amount payable on the earlier call date. A U.S. Holder who
elects to amortize bond premium must reduce his tax basis in the Note by the
amount of the premium amortized in any year. An election to amortize bond
premium applies to all taxable debt obligations then owned and thereafter
acquired by the U.S. Holder and may be revoked only with the consent of the
Internal Revenue Service. If a Holder makes a Constant Yield Election for a Note
with amortizable bond premium, such election will result in a deemed election to
amortize bond premium for all of the Holder's debt instruments with amortizable
bond premium and may be revoked only with the permission of the Internal Revenue
Service with respect to debt instruments acquired after revocation.
An Original Issue Discount Note purchased for an amount that is greater
than its adjusted issue price, but less than or equal to the sum of all amounts
payable on the Note (other than qualified stated interest), will be considered
to have been purchased at an "acquisition premium." A U.S. Holder will reduce
the amount of original issue discount which such Holder includes in income for
any taxable year by the fraction, the numerator of which is the excess of the
cost of the Note over its adjusted issue price and denominator of which is the
excess of the sum of all amounts payable on the Note after the purchase date
(other than qualified stated interest) over the adjusted issue price.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the sale, exchange or redemption of a Note, a U.S. Holder will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or redemption (except to the extent such amount
is attributable to accrued and unpaid interest) and the U.S. Holder's adjusted
tax basis in the Note. A U.S. Holder's adjusted tax basis in a Note will
generally be the U.S. dollar cost of the Note to such U.S. Holder, increased by
the amount of any original issue discount previously included in income by the
U.S. Holder with respect to such Note and reduced by any amortized premium and
any principal payments received by the U.S. Holder and, in the case of an
Original Issue Discount Note, by the amounts of any other payments that do not
constitute qualified stated interest.
In general, gain or loss realized on the sale, exchange or redemption of a
Note will be capital gain or loss (except in the case of a Short-Term Original
Issue Discount Note, to the extent of any original issue discount not previously
included in such U.S. Holder's taxable income), and will be long-term capital
gain or loss if at the time of sale, exchange or redemption, the Note has been
held for more than one year. Under current law, the excess of net long-term net
capital gains over net short-term capital losses is taxed at a lower rate than
ordinary income for certain non-corporate taxpayers. The distinction between
capital gain or loss is also relevant for purposes of, among other things,
limitations on the deductibility of capital losses.
If a U.S. Holder disposes of only a portion of a Note pursuant to a
redemption or repayment, such disposition will be treated as a pro rata
prepayment in retirement of a portion of a debt instrument. Generally, the
resulting gain or loss would be calculated by assuming that the original Note
being tendered consists of two instruments, one that is retired (or repaid), and
one that remains outstanding. The adjusted issue price, U.S. Holder's adjusted
basis, and the accrued but unpaid original issue discount of the original Note,
determined immediately before the disposition, would be allocated between these
two instruments based on the portion of the instrument that is treated as
retired by the pro rata prepayment.
SUBSEQUENT INTEREST PERIODS AND EXTENSIONS OF MATURITY
If so specified in the applicable Pricing Supplement relating to a Note,
the Company may have the option (a) to reset the interest rate, in the case of a
Fixed Rate Note, or to reset the Spread and/or the Spread Multiplier, in the
case of a Floating Rate Note and/or (b) to extend the Maturity of such Note. See
"Description of Notes---Subsequent Interest Periods" and "Description of
Notes--- Extension of Maturity." These type of Notes may be subject to special
rules for determining interest income or gain or loss. A description of the
United States Federal income tax consequences to a U.S. Holder of these Notes
will be contained in the applicable Pricing Supplement.
FOREIGN CURRENCY NOTES
The United States Federal income tax consequences to a U.S. Holder of the
ownership and disposition of Notes that are denominated in, or provide for
payments determined by reference to, a currency or currency unit other than the
United States dollar ("Foreign Currency Notes") will be summarized in the
applicable Pricing Supplement.
NOTES LINKED TO COMMODITIES, SECURITIES, INDEXES OR OTHER FACTORS
The United States Federal income tax consequences to a U.S. Holder of the
ownership and disposition of Notes that have principal or interest determined by
reference to one or more specified commodity prices, securities, equity or
commodity indices or other factors will vary depending on the exact terms of the
Notes and related factors. Notes containing any of such features may be subject
to rules that differ from the general rules discussed above. U.S. Holders
intending to purchase such Notes should refer to the discussion relating to
taxation in the applicable Pricing Supplement.
NOTES SUBJECT TO CONTINGENCIES
The Treasury has proposed new regulations concerning the proper treatment
of contingent payment debt instruments. The proposed effective date of the
regulations is 60 days after the date the regulations are finalized. Notes
containing contingent payments may be subject to rules that differ from those
described above, or presently proposed in the proposed regulations. A
description of the proposed treatment of contingent Notes will be summarized in
the applicable Pricing Supplement.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding and information reporting requirements may apply to
certain payments of principal, premium and interest (including original issue
discount) on a Note, and to payments of proceeds of the sale or redemption of a
Note, to certain non-corporate U.S. Holders. The Corporation, its agent, a
broker, the relevant Trustee or any paying agent, as the case may be, will be
required to withhold from any payment a tax equal to 31 percent of such payment
if the U.S. Holder fails to furnish or certify his correct taxpayer
identification number (social security number or employer identification number)
to the payor in the manner required, fails to certify that such U.S. Holder is
not subject to backup withholding, or otherwise fails to comply with the
applicable requirements of the backup withholding rules. Any amounts withheld
under the backup withholding rules from a payment to a holder may be credited
against such holder's United States Federal income tax and may entitle such
holder to a refund, provided that the required information is furnished to the
United States Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS
WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF
THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER
TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
PLAN OF DISTRIBUTION
Under the terms of Selling Agent Agreements, each dated as of October __,
1996, the Notes are offered on a continuing basis by the Corporation through
Bear, Stearns & Co. Inc., Lehman Brothers, Lehman Brothers Inc., Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J. P. Morgan Securities
Inc., and Salomon Brothers Inc, who have agreed to use their reasonable best
efforts to solicit purchases of the Notes. The Corporation 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 Corporation may
arrange for the Notes to be sold through other agents, dealers or underwriters.
The Corporation may sell Notes directly to investors on its own behalf. Unless
otherwise specified in the applicable Pricing Supplement, the Corporation 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 Corporation. The Corporation will have
the sole right to accept offers to purchase Notes and may reject any proposed
purchase of Notes in whole or in part. Each Agent will have the right, in its
discretion reasonably exercised, to reject any proposed purchase of Notes in
whole or in part. The Corporation reserves the right to withdraw, cancel or
modify the offer without notice
The Corporation 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 Corporation. 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 of 1933, as amended. The Corporation has agreed to indemnify the
Agents against certain liabilities, including liabilities under the Securities
Act of 1933, as amended.
No Note will have an established trading market when issued. The
Corporation 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.
--------------------
EXHIBIT 5
GENERAL MOTORS CORPORATION
3031 WEST GRAND BOULEVARD
DETROIT, MICHIGAN 48202
October 9, 1996
GENERAL MOTORS CORPORATION
3044 West Grand Boulevard
Detroit, Michigan 48202
Dear Sirs:
As Attorney for General Motors Corporation (the "Corporation") in
connection with the registration of your Debt Securities and Debt Warrants (the
"Securities") which will be offered by the Corporation at an aggregate price of
up to $1,300,000,000, for issuance from time to time pursuant to Rule 415 of the
Securities Act of 1933, as amended, 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 Securities.
It is my further opinion that the Indenture dated as of December 7, 1995,
with Citibank, N.A., as Trustee (the "Indenture"), has been duly authorized,
executed and delivered and that the Debt Securities, as provided in the
Indenture, and the Debt Warrants, as provided in the Debt Warrant Agreement,
when duly authorized, executed and authenticated, issued and paid for, will be
valid and legally binding obligations of the Corporation in accordance with and
subject to the terms thereof and of the Indenture and the Debt Warrant
Agreement, as the case may be.
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 Securities 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
Attorney
EXHIBIT 8
GENERAL MOTORS CORPORATION
3044 WEST GRAND BOULEVARD
DETROIT, MICHIGAN 48202
October 8, 1996
General Motors Corporation
3044 West Grand Boulevard
Detroit, MI 48202
Dear Sirs:
In connection with the General Motors 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 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 and to the reference to
tax counsel under the heading "United States Federal Taxation" in each of the
Prospectus Supplements. 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.
/s/ Robert N. Deitz
-------------------
Robert N. Deitz
Senior Tax Counsel
EXHIBIT 23(a)
CONSENT OF INDEPENDENT AUDITORS
GENERAL MOTORS CORPORATION:
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of General Motors Corporation of our reports dated January 29,
1996 appearing in the Annual Report on Form 10-K of General Motors
Corporation for the year ended December 31, 1995, as amended, and to the
reference to us under the heading "Experts" in the Prospectus, which is part
of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
Detroit, Michigan
October 9, 1996
EXHIBIT 23(b)
CONSENT OF INDEPENDENT AUDITORS
THE BOARDS OF DIRECTORS
ELECTRONIC DATA SYSTEMS CORPORATION
GENERAL MOTORS CORPORATION
We hereby consent to the use of our report incorporated herein by reference and
to the reference to our firm under the heading "Experts" in the Prospectus.
/s/ KPMG PEAT MARWICK LLP
- -------------------------
Dallas, Texas
October 9, 1996
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a Trustee
pursuant to Section 305 (b)(2) ___
------------------------
CITIBANK, N.A.
(Exact name of trustee as specified in its charter)
13-5266470
-------------------
(I.R.S. employer
identification no.)
399 Park Avenue, New York, New York 10043
- ----------------------------------- ----------
(Address of principal executive office) (Zip Code)
-----------------------
GENERAL MOTORS CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 38-0572515
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
767 FIFTH AVENUE 10153
NEW YORK, NEW YORK (Zip Code)
3044 WEST GRAND BOULEVARD 48202
DETROIT, MICHIGAN (Zip Code)
- ----------------------------------------
(Address of principal executive offices)
-----------------------
DEBT SECURITIES
(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 a 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 June 30, 1996 -attached)
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York and State of New York, on the 9th day of
October, 1996.
CITIBANK, N.A.
/S/P. DEFELICE
--------------------
By: P. DeFelice
Vice President
3
<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 June 30, 1996
published in response to call made by Comptroller of the Currency, under Title
12, United States Code, Section 161, Charter Number 1461 Comptroller of the
Currency Northeastern District.
ASSETS
Thousands
of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances
and currency and coin $ 7,503,000
Interest-bearing balances: 11,133,000
Held-to-maturity securities 0
Available-for-sale securities 19,790,000
Federal funds sold and
securities purchased under
agreements to resell in
domestic offices of the
bank and of its Edge and
Agreement subsidiaries,
and in IBFs: Federal
funds sold 3,275,000
Securities purchased under
agreements to resell 289,000
Loans and lease financing receivables:
Loans and leases, net of
unearned income $148,323,000
LESS: Allowance for loan and
lease losses 4,426,000
LESS: Allocated transfer risk
reserve 0
------------
Loans and leases, net of unearned
income, allowance and reserve 143,897,000
Trading assets 25,876,000
Premises and fixed assets
(including capitalized leases) 3,477,000
Other real estate owned 757,000
Investments in unconsolidated
subsidiaries and associated companies 1,165,000
Customers' liability to this bank on
acceptances outstanding 1,981,000
Intangible assets 59,000
Other assets 7,733,000
------------
TOTAL ASSETS $266,935,000
============
LIABILITIES
Deposits:
In domestic offices $ 34,406,000
Noninterest-bearing $ 11,994,000
Interest-bearing 22,412,000
------------
In foreign offices, Edge and Agreement
subsidiaries, and IBFs 128,771,000
Noninterest-bearing 8,568,000
Interest-bearing 120,203,000
------------
Federal funds purchased and securities
sold under agreements to repurchase in
domestic offices of the bank and of its
Edge and Agreement subsidiaries, and
in IBFs:
Federal funds purchased 1,687,000
Securities sold under agreements
to repurchase 458,000
Demand notes issued to the U.S.
Treasury 0
Trading liabilities 16,538,000
Other borrowed money:
With a remaining maturity of one year
or less 9,864,000
With a remaining maturity of more than
one year 4,695,000
Mortgage indebtedness and obligations
under capitalized leases 138,000
Bank's liability on acceptances
executed and outstanding 2,033,000
Subordinated Notes and debentures 4,700,000
Other liabilities 8,230,000
------------
TOTAL LIABILITIES $211,520,000
============
Limited-life preferred stock
and related surplus 0
EQUITY CAPITAL
Perpetual preferred stock and
related surplus 0
Common stock $ 751,000
Surplus 6,863,000
Undivided profits and capital reserves 8,036,000
Net unrealized holding gains (losses)
on available-for-sale securities 343,000
Cumulative foreign currency translation
adjustments (578,000)
------------
TOTAL EQUITY CAPITAL $ 15,415,000
------------
TOTAL LIABILITIES AND LIMITED-LIFE
PREFERRED STOCK, AND EQUITY CAPITAL $226,935,000
============
<PAGE>
I, Roger W. Trupin, Controller of the above-named bank do hereby declare
that this Report of Condition is true and correct to the best of my knowledge
and belief.
ROGER W. TRUPIN
We, the undersigned directors, attest to the correctness of this Report of
Condition. We declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions and
is true and correct.
PAUL J. COLLINS
JOHN S. REED
WILLIAM R. RHODES
DIRECTORS
