FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 17, 1998
REGISTRATION NO.333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
___________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GENERAL MOTORS CORPORATION
________________
State of Delaware 38-0572515
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
200 Renaissance Center, Detroit, Michigan 48265-2000; (313) 556-5000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
________________
Peter R. Bible
Chief Accounting Officer
General Motors Corporation
200 Renaissance Center
Detroit, Michigan 48265-2000
(313) 667-3485
(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/
<PAGE>
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
TITLE OF EACH MAXIMUM MAXIMUM
CLASS OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO TO BE PRICE PER OFFERING REGISTRATION
BE REGISTERED REGISTERED(1)(2) UNIT PRICE(3) FEE
- --------------------------------------------------------------------------------
Debt Securities $3,000,000,000 Various $3,000,000,000 $909,090
- --------------------------------------------------------------------------------
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 $3,210,746,000, 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
$3,210,746,000, 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 $3,210,746,000.
(1) The amount of Debt Securities and Warrants (the "Securities") being
registered together with $210,746,000 remaining Debt Securities registered on
October 9, 1996 (Registration No. 333-13797), represents the maximum aggregate
principal amount of Securities which, on or after August 17, 1998, are expected
to be offered for sale.
(2) 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 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.
333-13797.
<PAGE>
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.
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") and/or its warrants (the "Warrants") to
purchase any of the Debt Securities, for issuance and sale, at an aggregate
initial offering price not to exceed $3,000,000,000 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 Warrants are herein collectively called the
"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, where applicable, 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 Warrant), are set forth in the accompanying Prospectus Supplement (the
"Prospectus Supplement"). Where Warrants are to be offered, a Prospectus
Supplement shall set forth the offering price and terms of the Warrants,
including the purchase price, exercise price or prices, detachability,
expiration date or dates, exercise period or periods, the Specified Currency in
<PAGE>
which such Warrants are exercisable, the price or prices, if any, at which the
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 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 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 August __, 1998
<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. Reports,
proxy statements and other information concerning the Corporation can also be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad 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 Corporation's 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
<PAGE>
Corporation and the 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, 1997, as amended, Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998 and Reports on Form 8-K dated January 9, 1998,
January 26, 1998, February 9, 1998, March 2, 1998, April 16, 1998, June 30,
1998, July 8, 1998, July 9, 1998, July 14, 1998(2), July 30, 1998 and August 3,
1998, filed with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act are incorporated by reference in this Prospectus.
All documents filed by the 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
MAIL CODE: 482-111-238
3044 WEST GRAND BOULEVARD
DETROIT, MICHIGAN 48202-3091
(TELEPHONE NUMBER: (313) 556-2044)
________________
GENERAL MOTORS CORPORATION
<PAGE>
While the major portion of General Motors operations is derived from the
automotive industry, General Motors also has financing and insurance operations
and produces products and provides services in other industries. General Motors
participates in the automotive industry through the activities of its automotive
business operating segments: General Motors-North American Operations (GM-NAO);
Delphi Automotive Systems (Delphi); and General Motors International Operations
(GMIO). GM-NAO designs, manufactures and markets vehicles primarily in North
America under the following nameplates: Chevrolet, Pontiac, GMC, Oldsmobile,
Buick, Cadillac and Saturn. Delphi is a diverse supplier of automotive systems
and components. Delphi offers products and services in the areas of chassis,
interior, lighting, electronics, power and signal distribution, energy and
engine management, steering and thermal systems. GMIO meets the demands of
customers outside North America with vehicles designed, manufactured and
marketed under the following nameplates: Opel, Vauxhall, Holden, Isuzu, Saab,
Chevrolet, GMC and Cadillac. General Motors financing and insurance operations
primarily relate to General Motors Acceptance Corporation (GMAC). GMAC provides
a broad range of financial services, including consumer vehicle financing,
full-service leasing and fleet leasing, dealer financing, car and truck extended
service contracts, residential and commercial mortgage services, and vehicle and
homeowners insurance. GM's other operations relate to its Hughes Electronics
Corporation subsidiary, which is the telecommunications and space business, and
the design, manufacturing and marketing of locomotives and heavy-duty
transmissions.
General Motors principal executive offices are located at 200 Renaissance
Center, Detroit, Michigan 48265-2000 (Telephone Number (313) 556-5000).
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.
RATIO 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
------------ ----------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
1.87 2.93 2.21 2.10 2.39 2.35 1.26
<PAGE>
The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes and fixed charges by the fixed charges. This ratio
includes the earnings and fixed charges of the Corporation and its consolidated
subsidiaries; fixed charges consist of interest and discount and the portion of
rentals for real and personal properties in an amount deemed to be
representative of the interest factor.
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. 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.
The Indenture provides that, in addition to the Debt Securities offered
hereby, additional Debt Securities may be issued thereunder without limitation
as to aggregate principal amount, except as authorized from time to time by the
Corporation's Board of Directors. (Section 2.01 of the Indenture.)
GENERAL
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;
<PAGE>
(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.)
<PAGE>
The Debt 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.
<PAGE>
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 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.
<PAGE>
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.
<PAGE>
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 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
<PAGE>
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
<PAGE>
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;
<PAGE>
(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:
<PAGE>
(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
<PAGE>
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
<PAGE>
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 WARRANTS
GENERAL
The Corporation may issue, together with Debt Securities or separately,
Warrants for the purchase of Debt Securities. If the Warrants are issued
together with any Debt Securities, they may be attached to or traded separately
from such Debt Securities. The Warrants are to be issued under one or more
separate Warrant Agreements (each a "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 Warrants are summaries of the
Warrant Agreement, a form of which is filed as an exhibit to the Registration
Statement. Such summaries of certain provisions of the Warrant Agreement and the
Warrants do not purport to be complete and such summaries are subject to the
detailed provisions of the 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 Warrants. Wherever
particular provisions of the 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 Warrants will be evidenced by Warrant Certificates (the "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. Warrant Certificates may be exchanged for new
Warrant Certificates of different denominations at the office of the Warrant
Agent. The holder of a 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 Warrants.
<PAGE>
The 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 Warrants offered thereby for the terms of, and other
information with respect to, such Warrants, including: (i) the title and the
aggregate number of Warrants; (ii) the designation, aggregate principal amount,
currency or currencies and terms of the Debt Securities that may be purchased
upon exercise of the Warrants; (iii) the price or prices at which such Warrants
are exercisable; (iv) the currency or currencies in which such Warrants are
exercisable; (v) the places at which such Warrants are exercisable and the date
on which the right to exercise the Warrants shall commence and the date on which
such right shall expire (the "Warrant Expiration Date") or, if the Warrants are
not continuously exercisable throughout such period, the specific date or dates
on which they will be exercisable (each, a "Warrant Exercise Date", which term
shall also mean, with respect to 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
Warrants may be redeemed at the option of the holder or will be redeemed upon
expiration; (viii) the identity of the Warrant Agent; (ix) the exchanges, if
any, on which such Warrants may be listed; (x) whether such Warrants shall be
issued in book-entry form; (xi) if applicable, the designation and terms of the
Debt Securities with which the Warrants are issued and the number of Warrants
issued with each of such Debt Securities; (xii) if applicable, the date on and
after which the Warrants and the related Debt Securities will be separately
transferable; (xiii) whether the 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 Warrants will be issued; and (xvi) any
other terms of the Warrants.
EXERCISE OF WARRANTS
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 Warrant, and by communicating to the Warrant Agent the identity
of the Warrantholder and the number of Warrants to be exercised. Upon receipt of
payment and the 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
Warrants evidenced by a Warrant Certificate are exercised, a new Warrant
Certificate will be issued for the remaining amounts of Warrants. A more
complete summary for the exercise of Warrants in registered form and for
exercises of 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.
<PAGE>
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., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith, J.P.
Morgan Securities Inc., Morgan Stanley Dean Witter, Morgan Stanley & Co.
Incorporated, Salomon Smith Barney 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.
<PAGE>
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 1997 Annual Report on Form 10-K, as amended,
incorporated by reference herein, have been audited by Deloitte & Touche LLP,
independent public accountants, as stated in their reports appearing therein,
and have been so incorporated by reference in reliance upon such reports given
upon the authority of such firm 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 and owns shares of the Corporation's Class H
Common Stock, $0.10 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.
<PAGE>
TABLE OF CONTENTS
PAGE
Available Information ..........................
Incorporation of Certain
Documents by Reference ......................
General Motors Corporation......................
Use of Proceeds.................................
Ratio of Earnings to Fixed
Charges.......................................
Description of Debt Securities..................
Description of Warrants.........................
Plan of Distribution............................
Experts.........................................
Legal Opinions..................................
GENERAL MOTORS CORPORATION
DEBT SECURITIES
WARRANTS
Prospectus Dated August ___, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses to be incurred in
connection with the offering described in this Registration Statement:
Securities and Exchange Commission registration fee............. $909,090
Fees and expenses of Trustee and Warrant Agent.................. 10,000
Printing Registration Statement, Prospectus,
Indenture, Warrant Agreement and other documents.............. 40,000
Accountants' fees............................................... 15,000
Rating Agencies'fees............................................ 150,000
Miscellaneous expenses.......................................... 75,910
----------
Total.................................................................$1,200,000
==========
________________
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
<PAGE>
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 Indenture, dated as of December 7, 1995,
between the Corporation and Citibank, N.A., Trustee
*4(b) -- Form of proposed Warrant Agreement
*4(c) -- Form of 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 Ratio of Earnings to Fixed Charges for the
five years ended December 31, 1997 incorporated by
reference to Exhibit 12 to the annual reports on Form 10-K
of General Motors Corporation for the years ended December
31, 1997, as amended, 1996 and 1995, as amended
23(a) -- Independent Auditors' Consent
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
<PAGE>
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
August 17, 1998.
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 August 17, 1998 by the following persons in the
capacities indicated.
SIGNATURE TITLE
- --------- -----
/S/ JOHN F. SMITH, JR.
- ---------------------- Chairman of the Board of Directors,
(John F. Smith, Jr.) Chief Executive Officer and President
/S/ J. MICHAEL LOSH Executive Vice President and )(Principal
- ------------------- Chief Financial Officer ) Financial
(J. Michael Losh) ) Officers)
/S/ ERIC A. FELDSTEIN Vice President and Treasurer )
- --------------------- )
(Eric A. Feldstein) )
/S/ WALLACE W. CREEK Comptroller )(Principal
- -------------------- Principal Accounting Officers ) Accounting
(Wallace W. Creek) ) Officers)
/S/ PETER R. BIBLE Chief Accounting Officer )
- ------------------ )
(Peter R. Bible) )
<PAGE>
/S/ PERCY N. BARNEVIK Director
- ---------------------
(Percy N. Barnevik)
/S/ JOHN H. BRYAN Director
- -----------------
(John H. Bryan)
/S/ THOMAS E. EVERHART Director
- ----------------------
(Thomas E. Everhart)
/S/GEORGE M.C. FISHER Director
- ---------------------
(George M.C. Fisher)
/S/KAREN KATEN Director
- --------------
(Karen Katen)
/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/ 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
Exhibit Page 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 Warrant Agreement
*4(c) Form of 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 Ratio of Earnings to Fixed Charges for
the five years ended December 31, 1997 incorporated by
reference to Exhibit 12 to the annual reports on Form 10-K
of General Motors Corporation for the years ended December
31, 1997, as amended, 1996 and 1995, as amended
23(a) Independent Auditors' Consent
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
Registration No. 33-41557.
EXHIBIT 5
GENERAL MOTORS CORPORATION
3031 WEST GRAND BOULEVARD
DETROIT, MICHIGAN 48202
August 17, 1998
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 Warrants (the
"Securities") which will be offered by the Corporation at an aggregate price of
up to $3,000,000,000, 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 Warrants, as provided in the 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 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,
Martin I. Darvick
Attorney
EXHIBIT 8
GENERAL MOTORS CORPORATION
3044 WEST GRAND BOULEVARD
DETROIT, MICHIGAN 48202
August 17, 1998
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)
INDEPENDENT AUDITORS' CONSENT
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 26, 1998
appearing in the Annual Report on Form 10-K of General Motors Corporation for
the year ended December 31, 1997, 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
August 13, 1998
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a Trustee
pursuant to Section 305 (b)(2) ___
------------------------
CITIBANK, N.A.
--------------------------------------------------
(Exact name of trustee as specified in its charter)
NEW YORK 13-5266470
- -------------------------- ------------------
(State of incorporation (I.R.S. employer
if not a U.S. national bank identification no.)
399 PARK AVENUE, NEW YORK, NEW YORK 10043
- -------------------------------------- ---------
(Address of principal executive office) (Zip Code)
-----------------------
GENERAL MOTORS 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.)
100 RENAISSANCE CENTER
DETROIT, MICHIGAN 48243
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
-----------------------
DEBT SECURITIES
-----------------------------------
(Title of the indenture securities)
Item 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
NAME ADDRESS
---- -------
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of New York New York, NY
33 Liberty Street
New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
<PAGE>
Item 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as exhibits hereto.
Exhibit 1 - Copy of Articles of Association of the Trustee, as now in
effect. (Exhibit 1 to T-1 to Registration Statement No. 2-79983)
Exhibit 2 - Copy of certificate of authority of the Trustee to
commence business. (Exhibit 2 to T-1 to Registration Statement No.
2-29577).
Exhibit 3 - Copy of authorization of the Trustee to exercise corporate
trust powers. (Exhibit 3 to T-1 to Registration Statement No.
2-55519).
Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4 to T-1
to Registration Statement No. 33-34988).
Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the Trustee required by Section 321(b) of
the Trust Indenture Act of 1939. (Exhibit 6 to T-1 to Registration
Statement No. 33-19227.)
Exhibit 7 - Copy of the latest Report of Condition of Citibank,
N.A.(as of March 31, 1998 - attached)
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York and State of New York, on the 20th day
of July, 1998.
CITIBANK, N.A.
/s/Wafaa Orfy
----------------------
By: Wafaa Orfy
Senior Trust Officer
<PAGE>
Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATING
DOMESTIC AND FOREIGN
SUBSIDIARIES OF
Citibank, N. A.
of New York in the State of New York, at the close of business on March 31, 1998
published in response to call made by Comptroller of the Currency, under Title
12, United States Code, Section 161, Charter Number 1461 Comptroller of the
Currency Northeastern District.
ASSETS
Thousands
of dollars
----------
Cash and balances due from depository institutions:
Noninterest-bearing balances
and currency and coin $ 6,890,000
Interest-bearing balances: 14,848,000
Held-to-maturity securities 0
Available-for-sale securities 31,464,000
Federal funds sold and securities purchased under
agreements to resell 19,345,000
Loans and lease financing receivables:
Loans and leases, net of unearned income $159,106,000
LESS: Allowance for loan and lease losses 4,259,000
------------
Loans and leases, net of unearned
income, allowance, and reserve 154,847,000
Trading assets 36,633,000
Premises and fixed assets (including capitalized leases) 3,376,000
Other real estate owned 485,000
Investments in unconsolidated
subsidiaries and associated companies 1,386,000
Customers' liability to this bank on
acceptances outstanding 1,824,000
Intangible assets 160,000
Other assets 9,670,000
------------
TOTAL ASSETS $280,928,000
============
LIABILITIES
Deposits:
In domestic offices $ 37,884,000
Noninterest-bearing $ 12,822,000
Interest-bearing 25,062,000
------------
In foreign offices, Edge and Agreement
subsidiaries, and IBFs 155,776,000
Noninterest-bearing 9,878,000
Interest-bearing 145,898,000
------------
Federal funds purchased and securities sold under
agreements to repurchase 7,429,000
Trading liabilities 29,266,000
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
<PAGE>
With a remaining maturity of one year or less 9,518,000
With a remaining maturity of more than one year
through three years 2,340,000
With a remaining maturity of more than three years 898,000
Bank's liability on acceptances executed and outstanding 1,992,000
Subordinated notes and debentures 5,600,000
Other liabilities 12,507,000
------------
TOTAL LIABILITIES $263,210,000
============
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock $ 751,000
Surplus 7,604,000
Undivided profits and capital reserves 9,617,000
Net unrealized holding gains (losses)
on available-for-sale securities 443,000
Cumulative foreign currency translation adjustments (697,000)
------------
TOTAL EQUITY CAPITAL $ 17,718,000
------------
TOTAL LIABILITIES, LIMITED-LIFE
PREFERRED STOCK, AND EQUITY CAPITAL $280,928,000
============
<PAGE>
I, Roger W. Trupin, Controller of the above-named bank do hereby
declare that this Report of Condition is true and correct to the best of my
knowledge and belief.
ROGER W. TRUPIN
CONTROLLER
We, the undersigned directors, attest to the correctness of this Report
of Condition. We declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions and
is true and correct.
PAUL J. COLLINS
JOHN S. REED
WILLIAM R. RHODES
DIRECTORS
EXHIBIT 1(D)
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED AUGUST, 1998)
U.S. $3,000,000,000
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. $3,000,000,000 aggregate initial offering price or the equivalent
thereof in other currencies, including composite currencies such as the European
Currency Unit ("ECU") (the "Specified Currency"), subject to reduction as a
result of the sale of other Debt Securities or 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
- -Risks Associated With Exchange Rates and Exchange Controls" and "Risk Factors
- -Judgments."
The interest rate on each Note will be either a fixed rate established
by the 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
discount from the principal amount payable upon the Maturity Date, or at a
floating rate as set forth therein and specified in the applicable Pricing
Supplement (a "Floating Rate Note"). A Fixed Rate Note may pay a level amount in
respect of both interest and principal amortized over the life of the Note (an
"Amortizing Note"). See "Description of Notes---Fixed Rate Notes" and
"Description of Notes---Floating Rate Notes." The principal amount payable at
the Maturity Date of, or any interest and premium, if any, on, a Note, or both,
may be determined by reference to one or more Specified Currencies (a "Currency
Indexed Note"), or by reference to the price of one or more specified securities
or commodities or to one or more securities or commodities exchange indices or
other indices or by other methods (an "Indexed Note," such term to include
Currency Indexed Notes) as described in the applicable Pricing Supplement. See
"Description of Notes---Currency Indexed Notes," "Description of Notes---Other
Indexed Notes and Certain Terms Applicable to All Indexed Notes" and "Risk
Factors Risks Associated With Indexed Notes."
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, each 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
<PAGE>
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---Currency Indexed 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 the
limited circumstances described herein. See "Description of Notes---Book-Entry
Notes---Delivery and Form."
Unless otherwise specified in the applicable Pricing Supplement, Notes
will be issued only in registered form in minimum denominations of U.S. $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
<PAGE>
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. $3,000,000,000 U.S. $1,500,000 U.S. $2,977,500,000-
U.S. $22,500,000 U.S. $2,998,500,000
(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 Bear, Stearns & Co. Inc., Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J. P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated 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 payabl by the Corporation estimated at
$1,200,000.
<PAGE>
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."
--------------------
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO.
J. P. MORGAN & CO.
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
The date of this Prospectus Supplement is August __, 1998.
<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 thereunder 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
of an offer to buy any of the Notes offered hereby by anyone in any jurisdiction
in which such offer or solicitation is not authorized or in which the person
making such offer or solicitation is not qualified to do so or to any person to
whom it is unlawful to make such offer or solicitation.
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-Risks Associated With Indexed Notes." Such risks include, without
limitation, the possibility of significant changes in the rate of exchange
between United States dollars and such Specified Currency (and, in the case of
Currency Indexed Notes, the rate of exchange between the Specified Currency and
the Indexed Currency for such Currency Indexed Note), changes resulting from
official redenomination with respect to a Specified Currency (or, in the case of
each Currency Indexed Note, with respect to the Specified Currency or the
Indexed Currency therefor) and the possibility of the imposition or modification
of foreign exchange controls by either the United States or foreign governments.
<PAGE>
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
<PAGE>
are residents of countries other than the United States with respect to any
matters that may affect the purchase, holding or receipt of payments of
principal of, premium, if any, and interest, if any, on, the Notes. Persons who
are not residents of the United Sates should consult their own legal advisors
with regard to such matters.
Pricing Supplements relating to Foreign Currency Notes or Currency
Indexed Notes will contain information concerning historical exchange rates for
the applicable Specified Currency against the U.S. dollar or other relevant
currency, (including in the case of Currency Indexed Notes, the applicable
Indexed Currency), a description of the currency or currencies and any exchange
controls affecting such currency or currencies. The information contained
therein concerning exchange rates is furnished as a matter of information only
and should not be regarded as indicative of the range of or trends in
fluctuations in currency exchange rates that may occur in the future.
RISKS ASSOCIATED WITH INDEXED NOTES
An investment in Notes indexed, as to principal or interest, or both,
to one or more values of currencies (including exchange rates between
currencies), commodities or interest rate indices entails significant risks that
are not associated with similar investments in a conventional fixed-rate debt
security. If the interest rate of such a Note is so indexed, it may result in an
interest rate that is less than that payable on a conventional fixed-rate debt
security issued at the same time, including the possibility that no interest
will be paid, and, if the principal amount payable at maturity may be less than
the original purchase price of such Note if allowed pursuant to the terms of
such Note, including the possibility that no principal will be paid. The
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
<PAGE>
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
<PAGE>
will specify the currency or currencies, including composite currencies such as
the ECU, in which such Note is to be denominated (the "Specified Currency") and,
if different, the currency or currencies in which the principal, premium, if
any, and interest, if any, with respect to such Note are to be paid, along with
any other terms relating to the non-U.S. dollar denomination, including exchange
rates for the Specified Currency as against the U.S. dollar at selected times
during the last five years, and any exchange controls or other foreign currency
risks relating to such Specified Currency. See "Risk Factors-Risks Associated
with Exchange Rates and Exchange Controls" and "Risk Factors-Judgments."
GENERAL
The Notes offered by this Prospectus Supplement will be limited to U.S.
$3,000,000,000 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.$3,000,000,000 aggregate initial offering price
of the Notes offered hereby. The U.S. dollar equivalent of Notes denominated in
a Specified Currency other than U.S. dollars will be determined on the Business
Day (as defined below) prior to the date of acceptance by the 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 from time to time by the Corporation 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
<PAGE>
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 Securities---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 Securities---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 Maturity at the
Corporate Trust Office of Citibank, N.A., Corporate Trust Services, 111 Wall
Street, 5th Floor, New York, New York 10043, or at such other place as the
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
<PAGE>
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 an Original Issue Discount Note set forth in the
applicable Pricing Supplement plus (b) the portion of the difference between the
Issue Price and the principal amount of such Original Issue Discount Note that
has accrued at the yield to maturity set forth in the Pricing Supplement
(computed in accordance with generally accepted United States bond yield
computation principles) at the date as of which the Amortized Face Amount is
calculated, but in no event shall the Amortized Face Amount of such Original
Issue Discount Note exceed its stated principal amount. See also "United States
Federal Taxation ---Tax Consequences to U.S. Holders---Original Issue Discount
Notes."
Unless otherwise specified herein, the Pricing Supplement relating to
each Note or Notes will describe the following terms, as applicable: (1) the
Specified Currency with respect to such Note (and, if such Specified Currency is
other than U.S. dollars, certain other terms relating to such Note); (2) whether
such Note is a Fixed Rate Note, a Floating Rate Note, an Amortizing Note or a
Zero-Coupon Note or other Original Issue Discount Note; (3) whether such Note is
a Currency Indexed Note or other Indexed Note, and if so the 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
<PAGE>
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, 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 form 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;
<PAGE>
"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 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 Securities---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
"Risk Factors---Risks Associated With Exchange Rates and Exchange Controls") 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
<PAGE>
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 Dow Jones
Markets Limited (or successor) Monitor Foreign Exchange Service. If such
quotations are unavailable from either such foreign exchange service, such
election shall (unless otherwise specified in the applicable Pricing Supplement)
be made from the quotations received by the Exchange Rate Agent from three
recognized foreign exchange dealers in The City of New York selected by the
Exchange Rate Agent and approved by the 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
<PAGE>
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.
<PAGE>
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 succeeding
Regular Record Date.
<PAGE>
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 Securities---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
<PAGE>
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 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 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.
<PAGE>
FLOATING RATE NOTES
Except for the period from the Issue Date to the first Interest Reset
Date (as defined below) set forth in the applicable Pricing Supplement, each
Floating Rate Note will bear interest at a rate determined by reference to
either (i) an interest rate base (the "Base Rate"), which may be adjusted by a
Spread and/or a Spread Multiplier (each as defined below) or (ii) an interest
rate which may be by reference to two or more Base Rates, as adjusted by the
corresponding Spread and/or a Spread Multiplier for such related Base Rate or
Rates (as will be specified in the applicable Pricing Supplement). The "Spread"
is the number of basis points (one basis point equals one hundredth of a
percentage point) to be added to or subtracted from the related Base Rate
applicable to the interest rate for such Floating Rate Note, and the "Spread
Multiplier" is the percentage of the related Base Rate applicable to such Base
Rate Note by which said Base Rate is to be multiplied to determine the
applicable interest rate on such Floating Rate Note. Each Floating Rate Note and
the applicable Pricing Supplement will specify the Index Maturity and the Spread
and/or Spread Multiplier, if any, applicable to each such Floating Rate Note.
The "Index Maturity" for any Floating Rate Note is the period of maturity of the
instrument or obligation from which the Base Rate is calculated and will be
specified in the applicable Pricing Supplement. The Spread, Spread Multiplier,
Index Maturity and other variable terms of the Floating Rate Notes are subject
to change by the 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.
<PAGE>
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 Interest Reset
Date, on the third Wednesday of the month specified in the applicable Pricing
Supplement, and, in each case, at Maturity. Subject to the next succeeding
sentence, unless otherwise specified in the applicable Pricing Supplement, if an
Interest Payment Date (other than at Maturity) with respect to any Floating Rate
Note would fall on a day that is not a Business Day, such Interest Payment Date
shall be postponed to the next succeeding Business Day, except that, in the case
of LIBOR Notes, if such Business Day would fall in the next succeeding calendar
month, such Interest Payment Date will be the immediately preceding Business
Day. Any payment of principal, and premium, if any, and interest required to be
made on a Floating Rate Note on a Maturity Date that is not a Business Day will
be made on the next succeeding Business Day, with the same force and effect as
if made on such Maturity Date and no additional interest shall accrue as a
result of any such delayed payment.
<PAGE>
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
<PAGE>
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 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
<PAGE>
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
the Spread Multiplier, if any, and subject to the Minimum Interest Rate and the
Maximum Interest Rate, if any) specified in the Commercial Paper Rate Notes and
in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Commercial Paper Rate" means, with respect to any Interest Determination Date,
the Money Market Yield (as defined below) on such date of the rate for
commercial paper having the Index Maturity specified in the applicable Pricing
Supplement, as such rate shall be published in H.l5(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-Nonfinancial." 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
<PAGE>
dealers selected as aforesaid by the Calculation Agent are not quoting offered
rates as mentioned in this sentence, the rate of interest in effect for the
applicable period will be the rate of interest in effect on such Interest
Determination Date.
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
Money Market Yield = D X 360 x 100
------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the Interest Period for which interest is being calculated.
FEDERAL FUNDS RATE NOTES
Federal Funds Rate Notes will bear interest at the interest rates
(calculated with reference to the Federal Funds Rate and the Spread and/or the
Spread Multiplier, if any, and subject to the Minimum Interest Rate and the
Maximum Interest Rate, if any) specified in the Federal Funds Rate Notes and in
the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Federal Funds Rate" means, with respect to any Interest Determination Date, the
rate on such date for Federal Funds as published in H.15(519) under the heading
"Federal Funds (Effective)" or, if not so published by 9:00 a.m., New York City
time, on the Calculation Date pertaining to such Interest Determination Date,
the Federal Funds Rate will be the rate on such Interest Determination Date as
published in the Composite Quotations under the heading "Federal Funds/Effective
Rate." If such rate is not yet published in either H.15(519) or the Composite
Quotations by 3:00 p.m., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, then the Federal Funds Rate for such
Interest Determination Date will be calculated by the Calculation Agent and will
be the arithmetic mean of the rates for the last transaction in overnight
Federal Funds arranged by three leading brokers of Federal Funds transactions in
The City of New York selected by the Calculation Agent, after consultation with
the 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 the Spread Multiplier, if any, and
subject to the Minimum Interest Rate and the Maximum Interest Rate, if any)
specified in the LIBOR Notes and in the applicable Pricing Supplement.
<PAGE>
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 banks 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
<PAGE>
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 Dow
Jones Markets Limited (or successor service) for the purpose of displaying the
London interbank rates of major banks for the applicable Index Currency. If
neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable Pricing
Supplement, LIBOR for the applicable Index Currency will be determined as if
LIBOR Telerate (and, if the U.S. dollar is the Index Currency, page 3750) had
been specified.
PRIME RATE NOTES
Prime Rate Notes will bear interest at the interest rate (calculated
with reference to the Prime Rate and the Spread and/or the Spread Multiplier, if
any, and subject to the Minimum Interest Rate and the Maximum Interest Rate, if
any) specified in the Prime Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Prime Rate" means, with respect to any Interest Determination Date, the rate on
such date as published in H.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
<PAGE>
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, however, that if the banks or trust companies selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the rate of interest in effect for the applicable period will be the
rate of interest in effect on such Interest Determination Date.
TREASURY RATE NOTES
Treasury Rate Notes will bear interest at the interest rates
(calculated with reference to the Treasury Rate and the Spread and/or the Spread
Multiplier, if any, and subject to the Minimum Interest Rate and the Maximum
Interest Rate, if any) specified in the Treasury Rate Notes and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Treasury Rate" means, with respect to any Interest Determination Date, the rate
for the auction held on such Interest Determination Date of direct obligations
of the United States ("Treasury Bills") having the Index Maturity designated in
the applicable Pricing Supplement, as published in H.l5(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 Index Maturity designated in the applicable Pricing Supplement; provided,
however, that if the dealers selected as aforesaid by the Calculation Agent are
not quoting bid rates as mentioned in this sentence, the interest rate for the
applicable period will be the interest rate in effect on such Interest
Determination Date.
CMT RATE NOTES
Unless otherwise specified in the applicable Pricing Supplement, "CMT
Rate" means, with respect to any Interest Determination Date relating to a
<PAGE>
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
<PAGE>
Interest Determination Date will be the CMT Rate in effect on such CMT Rate
Interest Determination Date. If two Treasury Notes with an original maturity as
described in the second preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the Calculation Agent will
obtain from five Reference Dealers quotations for the Treasury Note with the
shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on the Dow Jones
Markets Limited (or successor page or successor service) page specified in the
applicable Pricing Supplement (or any other page as may replace such page on
that service for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519)) for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519). If no such page is specified in the
applicable Pricing Supplement, the designated CMT Telerate Page shall be 7052
for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity
of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable Pricing Supplement with respect to which the CMT
Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.
ORIGINAL ISSUE DISCOUNT NOTES
Notes may be issued at a price less than their stated redemption price
at maturity, other than by an amount which is less than a DE MINIMIS amount
(0.25% of the stated redemption price at maturity multiplied by the number of
complete years to maturity) resulting in such Notes being treated as if they
were issued with original issue discount for United 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.
<PAGE>
Unless otherwise specified in the applicable Pricing Supplement, (a)
holders of Currency Indexed Notes will be entitled to receive a principal amount
in respect of such Currency Indexed Notes exceeding the amount designated as the
face amount of such Currency Indexed Notes in the applicable Pricing Supplement
(the "Face Amount") if, at Maturity, the rate at which the Denominated Currency
can be exchanged for the Indexed Currency is greater than the rate of such
exchange designated as the Base Exchange Rate, expressed in units of the Indexed
Currency per one unit of the Denominated Currency, in the applicable Pricing
Supplement (the "Base Exchange Rate") and (b) holders of Currency Indexed Notes
will be entitled to receive a principal amount in respect of such Currency
Indexed Notes less than the Face Amount of such Currency Indexed Notes if, at
Maturity, the rate at which the Denominated Currency can be exchanged for the
Indexed Currency is less than such Base Exchange Rate, in each case determined
as described below under "Currency Indexed Notes---Payment of Principal and
Interest." Information as to the relative historical value (which information is
not necessarily indicative of relative future value) of the applicable
Denominated Currency against the applicable Indexed Currency, any exchange
controls applicable to such Denominated Currency or Indexed Currency and certain
tax consequences to holders will be set forth in the applicable Pricing
Supplement. See "Risk Factors-Risks Associated With Exchange Rates and Exchange
Controls" and "Risk Factors-Risks Associated With Indexed Notes."
PAYMENT OF PRINCIPAL AND INTEREST
Unless otherwise specified in the applicable Pricing Supplement,
interest will be payable by the 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
<PAGE>
quotations from the Reference Dealers are not available on the Determination
Date due to circumstances beyond the control of the Corporation or the Exchange
Rate Agent, the Spot Rate will be determined on the basis of the most recently
available quotations from the Reference Dealers. As used herein, the term
"Reference Dealers" shall mean the three banks or firms specified as such in the
applicable Pricing Supplement or, if any of them shall be unwilling or unable to
provide the requested quotations, such other major money center bank or banks in
The City of New York selected by the Exchange Rate Agent, in consultation with
the 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 thereon
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 methods or formulae ("Indexed
Notes"). Holders of Indexed Notes may receive a principal amount at Maturity
that is greater than or less than the face amount of such Notes depending upon
the fluctuation of the relative value, rate or price of the specified index. The
Pricing Supplement relating to such an Indexed Note will describe, as
applicable, the method by which the amount of interest payable and the amount of
principal payable at the Maturity Date in respect of such Indexed Note will be
determined, certain special tax consequences of the purchase, ownership or
disposition to holders of such Notes, certain risks associated with an
investment in such Notes and other information relating to such Notes. See "Risk
Factors-Risks Associated With Indexed Notes."
PROSPECTIVE INVESTORS SHOULD CONSULT WITH THEIR OWN FINANCIAL AND LEGAL
ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN CURRENCY INDEXED NOTES OR
OTHER INDEXED NOTES. SUCH AN INVESTMENT ENTAILS SIGNIFICANT RISKS THAT ARE NOT
ASSOCIATED WITH A SIMILAR INVESTMENT IN A SECURITY THE PRINCIPAL AMOUNT OF WHICH
PAYABLE AT MATURITY IS NOT DETERMINED BY CURRENCY EXCHANGE RATES OR SECURITIES
OR COMMODITIES EXCHANGE INDICES OR OTHER INDICES AND IS NOT AN APPROPRIATE
INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO SUCH
TRANSACTIONS.
<PAGE>
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
<PAGE>
Notice and establish an interest rate, in the case of a Fixed Rate Note, or a
Spread and/or Spread Multiplier, in the case of a Floating Rate Note, that is
higher than the interest rate, Spread and/or Spread Multiplier, as the case may
be, provided for in the Reset Notice, for the Subsequent Interest Period
commencing on such Optional Reset Date by causing the Trustee to transmit notice
of such higher interest rate or higher Spread and/or Spread Multiplier, as the
case may be, to the holder of such Note. Such notice shall be irrevocable. All
Notes with respect to which the interest rate or Spread and/or Spread Multiplier
is reset on an Optional Reset Date and with respect to which the holders of such
Notes have not tendered such Notes for repayment (or have validly revoked any
such tender) pursuant to the next succeeding paragraph will bear such higher
interest rate, in the case of a Fixed Rate Note, or higher Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, for the Subsequent Interest
Period.
If the 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 periods of one or more whole years (each
an "Extension Period") up to but not beyond the date (the "Final Maturity Date")
set forth in such Pricing Supplement. If the 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
<PAGE>
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
<PAGE>
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 global Note with the form entitled "Option to Elect
Repayment" duly completed. Exercise of the repayment option by the holder of a
Note shall be irrevocable, except as otherwise provided under "Description of
Notes---Subsequent Interest Periods" and "Description of Notes---Extension of
Maturity." 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---Delivery and Form." In order to ensure that the Depositary's nominee
will timely exercise a right to repayment with respect to a particular
beneficial interest in a 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.
<PAGE>
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.
OTHER/ADDITIONAL PROVISIONS; ADDENDUM
Any provision with respect to the Notes, including the specification
and determination of one or more Interest Rate Bases, the calculation of the
interest rate applicable to a Floating Rate Note, the Interest Payment Dates,
the Maturity Date or any other term relating thereto, may be modified and/or
supplemented as specified under "Other/Additional Provisions" on the face
thereof or in an Addendum relating thereto, if so specified on the face thereof.
Such provisions will be described in the applicable Pricing Supplement.
IMPORTANT CURRENCY EXCHANGE INFORMATION
Unless otherwise set forth in the applicable Pricing Supplement, each
Purchaser of a Note is required to pay for such Note in the Specified Currency
thereof in immediately available funds, and payments of principal of, premium,
if any, and interest, if any, on, such Note will be made in the Specified
Currency. Currently, there are limited facilities in the United States for
conversion of U.S. dollars into foreign currencies or currency units and vice
versa and few banks offer non-U.S. dollar checking or savings account facilities
in the United States. Accordingly, unless otherwise specified in a Pricing
Supplement or unless alternative arrangements are made, payments of principal
of, premium, if any, and interest, if any, on, Notes in a Specified Currency
other than U.S. dollars will be made to an account at a bank outside the United
States. See "Risk Factors-Risks Associated With Exchange Rates and Exchange
Controls" and "Risk Factors-Judgments." However, if requested by a prospective
purchaser of Notes denominated in a Specified Currency other than U.S. dollars,
the Agent soliciting the offer to purchase will use reasonable efforts to
arrange for the conversion of U.S. dollars into such Specified Currency to
enable the purchaser to pay for such Notes. Such request must be made on or
before the third Business Day preceding the date of delivery of the Notes, or by
such other date as is determined by such Agent. Each such conversion will be
made by the relevant Agent on such terms and subject to such conditions,
limitations and charges as such Agent may from time to time establish in
accordance with its regular foreign exchange practice. All costs of any such
exchange will be borne by the purchasers of the Notes.
UNITED STATES FEDERAL TAXATION
GENERAL
In the opinion of the Corporation's tax counsel, the following general
summary describes the principal United States Federal income tax consequences of
the ownership and disposition of the Notes. This summary provides general
<PAGE>
information only and is directed solely to original holders purchasing Notes at
the "issue price" (as defined below) and who hold the Notes as capital assets
within the meaning of Section 1221 of the Internal Revenue Code of 1986, as
amended (the "Code"), and does not purport to discuss all United States Federal
income tax consequences that may be applicable to particular categories of
investors that may be subject to special rules, such as banks, insurance
companies, dealers in securities, persons holding Notes as part of a "straddle",
conversion transaction, hedging or other integrated transaction or persons who
have ceased to be United States citizens or to be taxed as resident aliens. In
addition, the United States Federal income tax consequences of holding a
particular Note will depend, in part, on the particular terms of such Note as
set forth in the applicable Pricing Supplement. Holders are advised to consult
their own tax advisors with regard to the application of the United States
Federal income tax laws to their particular situations as well as any tax
consequences arising under the laws of any state, local or foreign tax
jurisdiction.
This summary is based on the Code, United States Treasury Regulations
(including proposed regulations and temporary regulations) promulgated
thereunder, rulings, official pronouncements and judicial decisions as of the
date of this Prospectus 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 for United States Federal income tax purposes
(i) a citizen or resident of the United States, (ii) a corporation, partnership
or other entity created or organized in or under the laws of the United States
or of any political subdivision thereof, (iii) an estate the income of which is
subject to United States Federal income taxation regardless of its source, or
(iv) a trust if (a) a court within the United States is able to exercise primary
supervision over the administration of the trust and (b) one or more United
States persons have the authority to control all substantial decisions of the
trust.
TAX CONSEQUENCES TO U.S. HOLDERS
PAYMENTS OF INTEREST
Interest on a Note (whether denominated in U.S. dollars or in other
than U.S. dollars) that is not an Original Issue Discount Note will generally be
taxable to a U.S. Holder as ordinary interest income at the time it is accrued
or is received in accordance with the U.S. Holder's method of accounting for tax
purposes.
All payments of interest on a Note that matures one year or less from
its date of issuance will be included in the stated redemption price at the
maturity of the Note and will be taxed in the manner described below under
"Original Issue Discount Notes".
<PAGE>
Special rules govern the treatment of interest paid with respect to
Original Issue Discount Notes, including certain Floating Rate Notes, Foreign
Currency Notes, Currency Indexed Notes and other Indexed Notes, as described
under "Original Issue Discount Notes", "Foreign Currency Notes" and "Indexed
Notes, Currency Indexed Notes and Other Notes Subject to Contingencies" below.
ORIGINAL ISSUE DISCOUNT NOTES
The following summary is generally based upon the Treasury Regulations
concerning the treatment of debt instruments issued with original issue discount
(the "OID Regulations"). Under the OID Regulations, a Note that is issued for an
amount less than its stated redemption price at maturity will generally be
considered to have been issued at an original issue discount. The "issue price"
of a Note is equal to the first price to the public (not including bond houses,
brokers or similar persons or organizations acting in the capacity of
underwriters, placement agents or wholesalers) at which a substantial amount of
the Notes is sold for money. The stated redemption price at maturity of a Note
is generally equal to the sum of all payments to be made on such Note other than
"qualified stated interest" payments. With respect to a Note, "qualified stated
interest" is stated interest unconditionally payable as a series of payments in
cash or property (other than debt instruments of the Corporation) 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.
In addition, stated interest on Floating Rate Notes providing for one
or more qualified floating rates of interest, a single fixed rate and one or
more qualified floating rates, a single objective rate, or a single fixed rate
and a single objective rate that is a qualified inverse floating rate will
generally constitute qualified stated interest if such stated interest is
unconditionally payable at least annually during the term of the Note at a rate
that is considered to be a single qualified floating rate or a single objective
rate as described below.
Subject to certain exceptions, a variable rate of interest is a
"qualified floating rate" if variations in the value of the rate can reasonably
be expected to measure contemporaneous fluctuations in the cost of newly
borrowed funds in the currency in which the Note is denominated. A variable rate
will be considered a qualified floating rate if the variable rate equals (i) the
product of an otherwise qualified floating rate and a fixed multiple (i.e., a
Spread Multiplier) that is greater than .65 but not more than 1.35 or (ii) an
otherwise qualified floating rate (or the product described in clause (i)) plus
or minus a fixed rate (i.e., a Spread). If the variable rate equals the product
of an otherwise qualified floating rate and a single fixed multiplier greater
than 1.35, however, such rate generally constitutes an "objective rate,"
described more fully below. A variable rate may not be considered a qualified
floating rate if the variable rate is subject to a Maximum Interest Rate,
Minimum Interest Rate or similar restriction that is reasonably expected as of
the issue date to cause the yield on the Note to be significantly more or less
than the expected yield determined without the restriction (unless the
restriction is fixed throughout the term of the Note).
<PAGE>
Subject to certain exceptions, an "objective rate" is defined as a rate
(other than a qualified floating rate) that is determined using a single fixed
formula and that is based on objective financial or economic information. An
objective rate does not include a rate based on information that is within the
control of the Corporation (or a related party) or that is unique to the
circumstances of the Corporation (or a related party), such as dividends,
profits, or the value of the Corporation's stock. In addition, a variable rate
of interest on a Note will not be considered an objective rate if it is
reasonably expected that the average value of the rate during the first half of
the Note's term will be either significantly less than or significantly greater
than the average value of the rate during the final half of the Note's term.
If interest on a Note is stated at a fixed rate for an initial period
of one year or less (e.g., an Initial Interest Rate) followed by a variable rate
that is either a qualified floating rate or an objective rate for a subsequent
period, and the value of the variable rate on the issue date is intended to
approximate the fixed rate, the fixed rate and the variable rate together
constitute a single qualified floating rate or objective rate. If a Floating
Rate Note provides for two or more qualified floating rates that can reasonably
be expected to have approximately the same values throughout the term of the
Note, the qualified floating rates together constitute a single qualified
floating rate. Two or more rates will be conclusively presumed to meet the
requirements of the preceding sentences if the values of the applicable rates on
the issue date are within 1/4 of 1 percent of each other. In addition, in order
to be treated as qualified stated interest (rather than contingent payments, as
discussed below), the qualified floating rate or objective rate in effect at a
given time for a Note must be set at a value of that rate on any day that is no
earlier than three months prior to the first day on which that value is in
effect and no later than one year following that first day.
Special tax considerations (including possible original issue discount)
may arise with respect to Floating Rate Notes providing for (i) one Base Rate
followed by one or more Base Rates, (ii) a single fixed rate followed by a
qualified floating rate or (iii) a Spread Multiplier. Prospective U.S. Holders
of Floating Rate Notes with any of such features should carefully examine the
applicable Pricing Supplement and should consult their tax advisors with respect
to such a feature since the tax consequences will depend, in part, on the
particular terms of the Note.
Notwithstanding the general definition of original issue discount
above, a Note will not be considered to have been issued with an original issue
discount if the amount of such original issue discount is less than a DE MINIMIS
amount equal to 0.25% of the stated redemption price at maturity multiplied by
the number of complete years to maturity (or, in the case of a Note providing
for payments prior to maturity of amounts other than qualified stated interest,
the weighted average maturity). Holders of Notes with a DE MINIMIS amount of
original issue discount will include such original issue discount in income, as
capital gain, on a pro rata basis as principal payments are made on the Note.
A U.S. Holder of an Original Issue Discount Note (other than certain
U.S. Holders of Short-Term Original Issue Discount Notes, as defined below) will
be required to include qualified stated interest in income at the time it is
received or accrued in accordance with such U.S. Holder's method of accounting.
<PAGE>
A U.S. Holder of an Original Issue Discount Note that matures more than
one year from its date of issuance will be required to include original issue
discount in income as it accrues, in accordance with a constant yield method
based on a compounding of interest, before the receipt of cash payments
attributable to such income. The amount of original issue discount includable in
income is equal to the sum of the "daily portions" of the original issue
discount for each day during the taxable year on which the U.S. Holder held such
Note. The "daily portion" is the original issue discount for the "accrual
period" that is allocated ratably to each day in the accrual period. Generally,
the original issue discount for an accrual period is equal to the excess, if
any, of (a) the product of the "adjusted issue price" of an Original Issue
Discount Note at the beginning of such accrual period and its "yield to
maturity" over (b) the amount of any qualified stated interest allocable to the
accrual period. The "accrual period" is the interval (not to exceed one year)
that ends no later than the date of any scheduled payment of principal or
interest.
The 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. Holders
generally will have to include in income increasingly greater amounts of
original issue discount in successive accrual periods.
Under the OID Regulations, a U.S. Holder may make an election (the
"Constant Yield Election") to include in gross income all interest that accrues
on a Note in accordance with a constant yield method based on the compounding of
interest. Special rules apply to such elections and U.S. Holders considering
such an election should consult their own tax advisor.
The OID Regulations contain aggregation rules stating that, in certain
circumstances, if more than one type of Note is issued as part of the same
issuance of securities to a single holder, some or all of such Notes may be
treated together as a single debt instrument with a single issue price, maturity
date, yield to maturity and stated redemption price at maturity for purposes of
calculating and accruing any original issue discount. Unless otherwise provided
in the applicable Pricing Supplement, the Company does not expect to treat any
of the Notes as being subject to the aggregation rules for purposes of computing
original issue discount.
In general, a cash method U.S. Holder of an Original Issue Discount
Note that matures one year or less from its date of issuance (a "Short-Term
Original Issue Discount Note") is not required to accrue original issue discount
on such Note for United States Federal income tax purposes unless it elects to
<PAGE>
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.
BOND PREMIUM
If a U.S. Holder purchases a Note for an amount that is greater than
the amount payable at maturity, such Holder will be considered to have purchased
such Note with "amortizable bond premium" equal in amount to such excess, and
generally will not be required to include any original issue discount in income.
A U.S. Holder may elect (in accordance with applicable Code provisions) to
amortize such premium over the remaining term of the Note, based on the U.S.
Holder's yield to maturity with respect to the Note. A U.S. Holder may generally
use the amortizable bond premium allocable to an accrual period to offset
qualified stated interest required to be included in the U.S. Holder's income
with respect to the Note in that accrual period. Under recently promulgated
regulations, if the amortizable bond premium allocable to an accrual period
exceeds the amount of qualified stated interest allocable to such accrual
period, such excess would be allowed as a deduction for such accrual period, but
only to the extent of the U.S. Holder's prior interest inclusions on the Note.
Any excess is generally carried forward and allocable to the next accrual
period. A U.S. Holder who elects to amortize bond premium must reduce his tax
basis in the Note as described below under "Sale, Exchange or Redemption of the
Notes." An election to amortize bond premium applies to all taxable debt
obligations held by the U.S. Holder at the beginning of the first taxable year
to which the election applies or thereafter acquired by the U.S. Holder and may
be revoked only with the consent of the Internal Revenue Service. If a Holder
makes a Constant Yield Election for a Note with amortizable bond premium, such
election will result in a deemed election to amortize bond premium for all of
the Holder's debt instruments with amortizable bond premium and may be revoked
only with the permission of the Internal Revenue Service.
<PAGE>
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the sale, exchange or redemption of a Note, a U.S. Holder will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or redemption (excluding any amounts attributable
to unpaid qualified stated interest accrued between interest payment dates,
which will be includable in income as interest in accordance with the U.S.
Holder's method of accounting) and the U.S. Holder's adjusted tax basis in the
Note. A U.S. Holder's adjusted tax basis in a Note will generally be the cost of
the Note to such U.S. Holder, increased by the amount of any original issue
discount previously includable in income by the U.S. Holder with respect to such
Note and reduced by any principal payments received by the U.S. Holder, any
amortizable bond premium used to offset qualified stated interest and certain
bond premium allowed as a deduction and, in the case of an Original Issue
Discount Note, by the amounts of any other payments that do not constitute
qualified stated interest.
In general, gain or loss realized on the sale, exchange or redemption
of a Note that is not an Indexed Note, a Currency Indexed Note or a Floating
Rate Note that provides for contingent payments will be capital gain or loss
(except in the case of a Short-Term Original Issue Discount Note, to the extent
of any original issue discount not previously included in such U.S. Holder's
taxable income). Prospective investors should consult their tax advisors
regarding the treatment of capital gains (which may be taxed at lower rates than
ordinary income for taxpayers who are individuals, trusts or estates) and losses
(the deductibility of which is subject to limitations).
SUBSEQUENT INTEREST PERIODS AND EXTENSIONS OF MATURITY
If so specified in the applicable Pricing Supplement relating to a
Note, the Company may have the option (a) to reset the interest rate, in the
case of a Fixed Rate Note, or to reset the Spread and/or the Spread Multiplier,
in the case of a Floating Rate Note and/or (b) to extend the Maturity of such
Note. See "Description of Notes---Subsequent Interest Periods" and "Description
of Notes--- Extension of Maturity." These type of Notes may be subject to
special rules for determining interest income or gain or loss. A description of
the United States Federal income tax consequences to a U.S. Holder of these
Notes will be contained in the applicable Pricing Supplement.
FOREIGN CURRENCY NOTES
The United States Federal income tax consequences to a U.S. Holder of
the ownership and disposition of Notes that are denominated in, or provide for
payments determined by reference to, a currency or currency unit other than the
United States dollar ("Foreign Currency Notes") will be summarized in the
applicable Pricing Supplement.
INDEXED NOTES, CURRENCY INDEXED NOTES AND OTHER NOTES SUBJECT TO CONTINGENCIES
The United States Federal income tax consequences to a U.S. Holder of
the ownership and disposition of Indexed Notes or other Notes that provide for
one or more contingent payments will vary depending on the exact terms of the
<PAGE>
Notes and related factors, and the proper treatment of principal of and interest
on Currency Indexed Notes is uncertain at this time. Such Notes may be subject
to rules that differ from the general rules discussed above. U.S. Holders
intending to purchase such Notes should refer to the discussion relating to
taxation in the applicable Pricing Supplement.
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 to the payor in the manner required, fails to certify that
such U.S. Holder is not subject to backup withholding, or otherwise fails to
comply with applicable backup withholding rules. Any amounts withheld under the
backup withholding rules from a payment to a holder may be credited against such
holder's United States Federal income tax and may entitle such holder to a
refund, provided that the required information is furnished to the United States
Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS
WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF
THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER
TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
PLAN OF DISTRIBUTION
Under the terms of Selling Agent Agreements, each dated as of August
__, 1998, the Notes are offered from time to time by the Corporation through
Bear, Stearns & Co. Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, J. P. Morgan Securities Inc., Morgan Stanley & Co.
Incorporated 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 .75%
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
<PAGE>
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, whether placed directly with the
Corporation or through an Agent. Each Agent will have the right, in its
discretion reasonably exercised, to reject any proposed purchase of Notes in
whole or in part. The 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. The Corporation has agreed to indemnify the Agents against
certain liabilities, including liabilities under the Securities Act.
No Note will have an established trading market when issued. The
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.
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