PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 25, 1996)
$1,600,000,000
GENERAL MOTORS CORPORATION
$500,000,000 6 1/4% NOTES DUE MAY 1, 2005
$500,000,000 6 3/8% NOTES DUE MAY 1, 2008
$600,000,000 6 3/4% DEBENTURES DUE MAY 1, 2028
The 6 1/4% Notes due May 1, 2005 (the "Notes due 2005")will mature on
May 1, 2005. The 6 3/8% Notes due May 1, 2008 (the "Notes due 2008") will mature
on May 1, 2008. The 6 3/4% Debentures due May 1, 2028 (the "Debentures due
2028") will mature on May 1, 2028. The Notes due 2005, the Notes due 2008 and
the Debentures due 2028 (collectively, the "Offered Securities") will not be
redeemable prior to maturity unless certain events occur involving U.S.
taxation. See "Description of Offered Securities--Redemption for Tax Reasons."
Interest on the Offered Securities is payable semi-annually on May 1 and
November 1 of each year, beginning on November 1, 1998. The Offered Securities
are offered for sale in the United States, Europe and Asia.
The Offered Securities will be represented by one or more global
securities (the "Global Offered Securities") registered in the name of the
Depository's nominee. Beneficial interests in the Global Offered Securities will
be shown on, and transfers thereof will be effected only through, records
maintained by the Depository and, with respect to the beneficial owners'
interests, by the Depository's participants, including the U.S. depositaries for
Cedel Bank and Euroclear. Except as described in the Prospectus, Offered
Securities in definitive form will not be issued. See "Book-Entry, Delivery and
Form."
Application has been made to the Luxembourg Stock Exchange for
permission to deal in, and for listing of, the Offered Securities on such
Exchange.
----------
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 OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
- ------------------------------------------------------------------------------
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions Corporation (1)(2)
- ------------------------------------------------------------------------------
Per Note due 2005 99.714% 0.4% 99.314%
- ------------------------------------------------------------------------------
Total $498,570,000 $2,000,000 $496,570,000
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions Corporation (1)(2)
- ------------------------------------------------------------------------------
Per Note due 2008 99.518% 0.45% 99.068%
- ------------------------------------------------------------------------------
Total $497,590,000 $2,250,000 $495,340,000
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions Corporation (1)(2)
- ------------------------------------------------------------------------------
Per Debenture due 2028 98.909% 0.875% 98.034%
- ------------------------------------------------------------------------------
Total $593,454,000 $5,250,000 $588,204,000
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from April 29, 1998.
(2) Before deduction of expenses payable by the Corporation estimated at
$300,000.
----------
<PAGE>
The Offered Securities are offered by the several Underwriters, subject to
prior sale, when, as and if issued to and accepted by them, subject to approval
of certain legal matters by Davis Polk & Wardwell, counsel for the Underwriters,
and certain other conditions. The Underwriters reserve the right to withdraw,
cancel or modify such offer and to reject orders in whole or in part. It is
expected that delivery of the Global Offered Securities in book-entry form will
be made on or about April 29, 1998, through the facilities of the Depository,
Cedel Bank and Euroclear, against payment therefor in same-day funds.
----------
BEAR, STEARNS INTERNATIONAL LIMITED MERRILL LYNCH & CO.
Salomon Smith Barney
6 1/4% Notes due May 1, 2005
Chase Securities Inc. Muriel Siebert & Co., Inc. Paribas
6 3/8% Notes due May 1, 2008
ABN AMRO Morgan Stanley Dean Witter The Williams Capital Group, L.P.
6 3/4% Debentures due May 1, 2028
Blaylock & Partners, L.P. J.P. Morgan & Co. SBC Warburg Dillon Read
---------------
The date of this Prospectus Supplement is April 22, 1998
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
CORPORATION OR BY ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS SHALL NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER
THAN THE OFFERED SECURITIES. THE PROSPECTUS SUPPLEMENT IS PART OF AND MUST BE
READ IN CONJUNCTION WITH THE ACCOMPANYING PROSPECTUS DATED OCTOBER 25, 1996.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION
OR ITS SUBSIDIARIES SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THE DISTRIBUTION OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND
THE OFFERING OF THE OFFERED SECURITIES IN CERTAIN JURISDICTIONS MAY BE
RESTRICTED BY LAW. PERSONS INTO WHOSE POSSESSION THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS COME SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH
RESTRICTIONS. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE,
AND MAY NOT BE USED IN CONNECTION WITH, AN OFFER OR SOLICITATION 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. SEE
"UNDERWRITING."
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS INCLUDE
PARTICULARS GIVEN IN COMPLIANCE WITH THE RULES GOVERNING THE LISTING OF
SECURITIES ON THE LUXEMBOURG STOCK EXCHANGE FOR THE PURPOSE OF GIVING
INFORMATION WITH REGARD TO THE CORPORATION. THE CORPORATION ACCEPTS FULL
RESPONSIBILITY FOR THE ACCURACY OF THE INFORMATION CONTAINED IN THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AND CONFIRMS, HAVING MADE ALL
REASONABLE ENQUIRIES, THAT TO THE BEST OF ITS KNOWLEDGE AND BELIEF THERE ARE NO
OTHER FACTS THE OMISSION OF WHICH WOULD MAKE ANY STATEMENT HEREIN MISLEADING IN
ANY MATERIAL RESPECT.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING (AND IN THE UNITED
KINGDOM, MERRILL LYNCH INTERNATIONAL) MAY ENGAGE IN TRANSACTIONS THAT STABILIZE,
MAINTAIN OR OTHERWISE AFFECT THE MARKET PRICES OF THE OFFERED SECURITIES.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
MAY BID FOR, AND PURCHASE THE OFFERED SECURITIES IN THE OPEN MARKET AND MAY
IMPOSE PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
<PAGE>
In this Prospectus Supplement and accompanying Prospectus, unless
otherwise specified or the context otherwise requires, references to "dollars",
"$" and "U.S.$" are to United States dollars.
This Prospectus Supplement and accompanying Prospectus, together with
the documents incorporated by reference herein and the Corporation's financial
statements for the years ended December 31, 1997 and December 31, 1996, will be
available free of charge at the office of Banque Generale du Luxembourg S.A., 50
Avenue J. F. Kennedy, L-2951, Luxembourg.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT PAGE
----
Description of General Motors Corporation.....................................
Ratio of Earnings to Fixed Charges............................................
Consolidated Capitalization of the Corporation................................
Selected Consolidated Historical Financial Data...............................
Recent Developments...........................................................
Directors of the Corporation..................................................
Description of Offered........................................................
Securities....................................................................
United States Federal Taxation................................................
Underwriting..................................................................
Legal Opinions................................................................
General Information...........................................................
PROSPECTUS
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 Debt Warrants..................................................
Plan of Distribution..........................................................
Experts.......................................................................
Legal Opinions................................................................
DESCRIPTION OF GENERAL MOTORS CORPORATION
General Motors Corporation, incorporated in 1916 under the laws of the
State of Delaware, is hereinafter sometimes referred to as the "Corporation"
and, together with its subsidiaries, is hereinafter sometimes referred to as
"General Motors" or "GM."
While the major portion of GM's operations is derived from the
automotive industry, GM also has financing and insurance operations and produces
products and provides services in other industries. GM participates in the
automotive industry through the activities of its automotive business operating
<PAGE>
segments; GM-North American Operations (GM-NAO); Delphi Automotive Systems
(Delphi); and GM 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. GM's 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 and the design, manufacturing and
marketing of locomotives and heavy-duty transmissions.
The Corporation has its principal executive offices at 3044 West Grand
Boulevard, Detroit, Michigan 48202, United States, and 100 Renaissance Center,
Detroit, Michigan 48226, United States.
RATIO OF EARNINGS TO FIXED CHARGES
YEARS ENDED
DECEMBER 31,
------------
1997 1996
---- ----
2.21 2.10
The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes and fixed charges by the fixed charges.
See "Ratio of Earnings to Fixed Charges" in the accompanying Prospectus
for additional information.
<PAGE>
CONSOLIDATED CAPITALIZATION OF THE CORPORATION
The following table sets forth the capitalization of General Motors and
its consolidated subsidiaries at March 31, 1998, and as adjusted to reflect the
issuance of the Offered Securities.
(Unaudited)
MARCH 31, 1998
ACTUAL ADJUSTED
------ --------
(Dollars in Millions)
Notes and loans payable $98,262 $99,862
Minority interests 740 740
General Motors - obligated mandatorily
redeemable preferred securities of
subsidiary trust holding solely junior
subordinated debentures of
General Motors
Series D 79 79
Series G 143 143
STOCKHOLDERS' EQUITY
Preference stocks 1 1
Common stocks
$1-2/3 par value 1,116 1,116
Class H 10 10
Capital surplus (principally
paid-in capital) 13,786 13,786
Retained earnings 6,664 6,664
------- -------
Subtotal 21,577 21,577
Minimum pension liability adjustment (4,062) (4,062)
Accumulated foreign currency translation
adjustments (1,264) (1,264)
Net unrealized gains on securities 539 539
Total stockholders' equity 16,790 16,790
------- -------
Total capitalization $116,014 $117,614
======= =======
THERE HAS BEEN NO MATERIAL CHANGE IN THE CONSOLIDATED CAPITALIZATION OF THE
CORPORATION SINCE MARCH 31, 1998.
<PAGE>
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
The table below sets forth historical financial information about (1) General
Motors Corporation on a consolidated basis and (2) General Motors Corporation
with its financing and insurance operations on an equity basis.
<TABLE>
<CAPTION>
(Unaudited)
As of and for the As of and for the
Three Months Ended Years Ended
MARCH 31, DECEMBER 31,
------------------------- --------------------------
1998 1997 1997 1996
------- ------- -------- --------
(Dollars in Millions Except Per Share Amounts)
OPERATING RESULTS:
<S> <C> <C> <C> <C>
Total net sales and revenues $41,571 $42,241 $178,174 $164,013
------ ------ -------- -------
Total costs and expenses $39,149 $39,475 $170,460 $157,393
------ ------ -------- -------
Income from continuing operations $1,604 $1,796 $6,698 $4,953
----- ----- ------ -----
Net income $1,604 $1,796 $6,698 $4,963
----- ----- ------ -----
BASIC EARNINGS PER SHARE ATTRIBUTABLE TO
COMMON STOCKS:
Basic earnings attributable to $1-2/3 par value $2.31 $2.30 $8.70 $6.06
---- ---- ---- ----
Basic earnings attributable to Class E $ - $ - $ - $0.04
-- -- -- ----
Basic earnings attributable to Class H (1) $ - $0.59 $3.17 $2.88
-- ---- ---- ----
Basic earnings attributable to Class H (2) $0.13 $ - $0.02 $ -
---- -- ---- --
DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO
COMMON STOCKS:
Diluted earnings attributable to $1-2/3 par value $2.27 $2.28 $8.62 $6.02
---- ---- ---- ----
Diluted earnings attributable to Class E $ - $ - $ - $0.04
-- -- -- ----
Diluted earnings attributable to Class H (1) $ - $0.59 $3.17 $2.88
-- ---- ---- ----
Diluted earnings attributable to Class H (2) $0.13 $ - $0.02 $ -
---- -- ---- --
BALANCE SHEET DATA:
Total cash and marketable securities $21,714 $20,448 $22,984 $22,262
------ ------ ------ ------
Total assets $236,033 $226,059 $228,888 $222,142
------- ------- ------- -------
Notes and loans payable $98,262 $88,111 $93,027 $85,300
------ ------ ------ ------
Total stockholders' equity $16,790 $22,805 $17,506 $23,418
------ ------ ------ ------
CASH DIVIDENDS PER SHARE OF COMMON STOCKS:
$1-2/3 par value $0.50 $0.50 $2.00 $1.60
----- ---- ---- ----
Class E $ - $ - $ - $0.30
-- -- -- ----
Class H (1) $ - $0.25 $1.00 $0.96
-- ---- ---- ----
Class H (2) $ - $ - $ - $ -
-- -- -- --
GM OPERATIONS WITH FINANCING AND INSURANCE
OPERATIONS ON AN EQUITY BASIS (UNAUDITED):
OPERATING RESULTS:
Total net sales and revenues $36,427 $37,457 $153,781 $145,427
------ ------ ------- -------
Total costs and expenses $34,866 $35,867 $155,099 $142,211
------ ------ ------- -------
Income from continuing operations $1,604 $1,796 $6,698 $4,953
----- ----- ----- -----
Net income $1,604 $1,796 $6,698 $4,963
----- ----- ----- -----
<PAGE>
BALANCE SHEET DATA:
Total cash and marketable securities $13,572 $14,628 $14,511 $16,962
------ ------ ------ ------
Total assets $134,050 $136,012 $132,683 $135,262
------- ------- ------- -------
Long-term debt and capitalized leases $5,971 $5,507 $5,676 $5,390
----- ----- ----- -----
Total stockholders' equity $16,790 $22,805 $17,506 $23,418
------ ------ ------ ------
<FN>
(1) Represents information through December 17, 1997, the date on which GM
recapitalized the Class H common stock ("GM's Recapitalization Date").
(2) Represents information for a period subsequent to GM's Recapitalization
Date.
</FN>
</TABLE>
<PAGE>
RECENT DEVELOPMENTS
The Corporation reported 1998 first quarter consolidated net income of
$1.604 billion, down 10.69% from the $1.796 billion earned in the comparable
1997 quarter.
DIRECTORS OF THE CORPORATION
Percy N. Barnevik, Chairman, ABB Asea Brown Boveri Ltd.; John H. Bryan,
Chairman and Chief Executive Officer, Sara Lee Corporation; Thomas E. Everhart,
President Emeritus and Professor of Electrical Engineering and Applied Physics,
California Institute of Technology; Charles T. Fisher III, Retired Chairman and
President of NBD Bancorp, Inc. and its subsidiary NBD Bank, N.A.; George M.C.
Fisher, Chairman and Chief Executive Officer, Eastman Kodak Company; Karen
Katen, President of the Pfizer U.S. Pharmaceuticals Group, the principal
operating division of Pfizer, Inc.; J. Willard Marriott, Jr., Chairman and Chief
Executive Officer, Marriott International, Inc.; Ann D. McLaughlin, Chairman,
The Aspen Institute; Harry J. Pearce, Vice Chairman; Eckhard Pfeiffer, President
and Chief Executive Office, Compaq Computer Corporation; John G. Smale, Chairman
of the Executive Committee of General Motors Corporation; John F. Smith, Jr.,
Chairman and Chief Executive Officer and President; Louis W. Sullivan,
President, Morehouse School of Medicine; Dennis Weatherstone, Retired Chairman
of J.P. Morgan & Co., Incorporated and its subsidiary Morgan Guaranty Trust
Company of New York; and Thomas H. Wyman, Former Chairman, President and Chief
Executive Officer, CBS Inc.
The business address of each Director is 100 Renaissance Center, Detroit,
Michigan 48226, United States.
DESCRIPTION OF OFFERED SECURITIES
GENERAL
The following description of the particular terms of the Offered Securities
offered hereby supplements, and to the extent inconsistent therewith replaces,
the description of the general terms and provisions of Debt Securities set forth
in the Prospectus. The Offered Securities are part of the Debt Securities
registered by the Corporation in October 1996 to be issued on terms to be
determined at the time of sale.
Each of the Notes due 2005 and the Notes due 2008 offered hereby will be
issued in an aggregate principal amount of $500,000,000 and the Debentures due
2028 offered hereby will be issued in an aggregate principal amount of
$600,000,000, all pursuant to an Indenture dated as of December 7, 1995, as
amended, which is more fully described in the accompanying Prospectus, and the
Offered Securities have been authorized and approved by resolution of the
Borrowings Committee of the Board of Directors of the Corporation dated April
22, 1998.
The Indenture and the Offered Securities provide that they are governed by,
and construed in accordance with, the laws of the State of New York, United
States.
<PAGE>
The Offered Securities are not redeemable by the Corporation prior to
maturity unless certain events occur involving U.S. taxation. See "--Redemption
for Tax Reasons." The Offered Securities will bear interest, calculated on the
basis of a 360-day year consisting of twelve 30-day months, from April 29, 1998,
payable semiannually on each May 1 and November 1, beginning November 1, 1998,
to the persons in whose names the Offered Securities are registered at the close
of business on the fifteenth day of the calendar month next preceding such May
and November, at the respective annual interest rates shown on the cover page
hereof. The Offered Securities will not be subject to any sinking fund
provisions.
BOOK-ENTRY, DELIVERY AND FORM
The Offered Securities will be issued in the form of one or more fully
registered Global Offered Securities (the "Global Offered Securities") which
will be deposited with, or on behalf of, The Depository Trust Corporation, New
York, New York (the "Depository") and registered in the name of Cede & Co., the
Depository's nominee. Beneficial interests in the Global Offered Securities will
be represented through book-entry accounts of financial institutions acting on
behalf of beneficial owners as direct and indirect participants in the
Depository. Investors may elect to hold interests in the Global Offered
Securities through either the Depository or Cedel Bank, societe anonyme ("Cedel
Bank") or Morgan Guaranty Trust Corporation of New York, Brussels Office, as
operator of the Euroclear System ("Euroclear") if they are participants of such
systems, or indirectly through organizations which are participants in such
systems. Cedel Bank and Euroclear will hold interests on behalf of their
participants through customers' securities accounts in Cedel Bank's and
Euroclear's names on the books of their respective depositaries, which in turn
will hold such interests in customers' securities accounts in the depositaries'
names on the books of the Depository. Citibank, N.A. will act as depositary for
Cedel Bank and The Chase Manhattan Bank will act as depositary for Euroclear (in
such capacities, the "U.S. Depositaries"). Except as set forth below, the Global
Offered Securities may be transferred, in whole and not in part, only to another
nominee of the Depository or to a successor of the Depository or its nominee.
Cedel Bank advises that it is incorporated under the laws of Luxembourg
as a professional depositary. Cedel Bank holds securities for its participating
organizations ("Cedel Bank Participants") and facilitates the clearance and
settlement of securities transactions between Cedel Bank Participants through
electronic book-entry changes in accounts of Cedel Bank Participants, thereby
eliminating the need for physical movement of certificates. Cedel Bank provides
to Cedel Bank Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Cedel Bank interfaces with domestic
markets in several countries. As a professional depositary, Cedel Bank is
subject to regulation by the Luxembourg Monetary Institute. Cedel Bank
Participants are recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations and may include the Underwriters.
Indirect access to Cedel Bank is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Cedel Bank Participant, either directly or indirectly.
<PAGE>
Distributions with respect to the Offered Securities held beneficially
through Cedel Bank will be credited to cash accounts of Cedel Bank Participants
in accordance with its rules and procedures, to the extent received by the U.S.
Depositary for Cedel Bank.
Euroclear advises that it was created in 1968 to hold securities for
its participants ("Euroclear Participants") and to clear and settle transactions
between Euroclear Participants through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Euroclear provides various other services, including securities lending
and borrowing and interfaces with domestic markets in several countries.
Euroclear is operated by the Brussels, Belgium office of Morgan Guaranty Trust
Corporation of New York (the "Euroclear Operator"), under contract with
Euroclear Clearance Systems S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative establishes
policy for Euroclear on behalf of Euroclear Participants. Euroclear Participants
include banks (including central banks), securities brokers and dealers and
other professional financial intermediaries and may include the Underwriters.
Indirect access to Euroclear is also available to other firms that clear through
or maintain a custodial relationship with a Euroclear Participant, either
directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear and
the related Operating Procedures of the Euroclear System, and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
Distributions with respect to Offered Securities held beneficially
through Euroclear will be credited to the cash accounts of Euroclear
Participants in accordance with the Terms and Conditions, to the extent received
by the U.S. Depositary for Euroclear.
In the event definitive Offered Securities are issued, the Corporation
will appoint a paying agent and transfer agent in Luxembourg (the "Luxembourg
<PAGE>
Paying and Transfer Agent"). In the event definitive Offered Securities are
issued, the holders thereof will be able to receive payments thereon and effect
transfers thereof at the offices of the Luxembourg Paying and Transfer Agent.
INDIVIDUAL CERTIFICATES IN RESPECT OF OFFERED SECURITIES WILL NOT BE
ISSUED IN EXCHANGE FOR THE GLOBAL OFFERED SECURITIES, EXCEPT IN VERY LIMITED
CIRCUMSTANCES. IF EUROCLEAR, CEDEL BANK OR DTC NOTIFIES THE CORPORATION THAT IT
IS UNWILLING OR UNABLE TO CONTINUE AS A CLEARING SYSTEM IN CONNECTION WITH A
GLOBAL OFFERED SECURITY OR, IN THE CASE OF DTC ONLY, DTC CEASES TO BE A CLEARING
AGENCY REGISTERED UNDER THE EXCHANGE ACT, AND IN EACH CASE A SUCCESSOR CLEARING
SYSTEM IS NOT APPOINTED BY THE CORPORATION WITHIN 90 DAYS AFTER RECEIVING SUCH
NOTICE FROM EUROCLEAR, CEDEL BANK OR DTC OR ON BECOMING AWARE THAT DTC IS NO
LONGER SO REGISTERED, THE CORPORATION WILL ISSUE OR CAUSE TO BE ISSUED
INDIVIDUAL CERTIFICATES IN REGISTERED FORM ON REGISTRATION OF TRANSFER OF, OR IN
EXCHANGE FOR, BOOK-ENTRY INTERESTS IN THE OFFERED SECURITIES REPRESENTED BY SUCH
GLOBAL OFFERED SECURITY UPON DELIVERY OF SUCH GLOBAL OFFERED SECURITY FOR
CANCELLATION.
TITLE TO BOOK-ENTRY INTERESTS IN THE OFFERED SECURITIES WILL PASS BY
BOOK-ENTRY REGISTRATION OF THE TRANSFER WITHIN THE RECORDS OF EUROCLEAR, CEDEL
BANK OR DTC, AS THE CASE MAY BE, IN ACCORDANCE WITH THEIR RESPECTIVE PROCEDURES.
BOOK-ENTRY INTERESTS IN THE OFFERED SECURITIES MAY BE TRANSFERRED WITHIN
EUROCLEAR AND WITHIN CEDEL BANK AND BETWEEN EUROCLEAR AND CEDEL BANK IN
ACCORDANCE WITH PROCEDURES ESTABLISHED FOR THESE PURPOSES BY EUROCLEAR AND CEDEL
BANK. BOOK-ENTRY INTERESTS IN THE OFFERED SECURITIES MAY BE TRANSFERRED WITHIN
DTC IN ACCORDANCE WITH PROCEDURES ESTABLISHED FOR THIS PURPOSE BY DTC. TRANSFERS
OF BOOK-ENTRY INTERESTS IN THE OFFERED SECURITIES BETWEEN EUROCLEAR AND CEDEL
BANK AND DTC MAY BE EFFECTED IN ACCORDANCE WITH PROCEDURES ESTABLISHED FOR THIS
PURPOSE BY EUROCLEAR, CEDEL BANK AND DTC.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Initial settlement for the Offered Securities will be made in
immediately available funds. Secondary market trading between DTC Participants
will occur in the ordinary way in accordance with Depository rules and will be
settled in immediately available funds using the Depository's Same-Day Funds
Settlement System. Secondary market trading between Cedel Bank Participants
and/or Euroclear Participants will occur in the ordinary way in accordance with
the applicable rules and operating procedures of Cedel Bank and Euroclear and
will be settled using the procedures applicable to conventional Eurobonds in
immediately available funds.
Cross-market transfers between persons holding directly or indirectly
through the Depository on the one hand, and directly or indirectly through Cedel
Bank or Euroclear Participants, on the other, will be effected in the Depository
in accordance with the Depository rules on behalf of the relevant European
international clearing system by its U.S. Depositary; however, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its U.S.
<PAGE>
Depositary to take action to effect final settlement on its behalf by delivering
or receiving Offered Securities in the Depository, and making or receiving
payment in accordance with normal procedures for same-day funds settlement
applicable to the Depository. Cedel Bank Participants and Euroclear Participants
may not deliver instructions directly to their respective U.S. Depositaries.
Because of time-zone differences, credits of Offered Securities
received in Cedel Bank or Euroclear as a result of a transaction with a DTC
Participant will be made during subsequent securities settlement processing and
dated the business day following the Depository settlement date. Such credits or
any transactions in such Offered Securities settled during such processing will
be reported to the relevant Euroclear or Cedel Bank Participants on such
business day. Cash received in Cedel Bank or Euroclear as a result of sales of
Offered Securities by or through a Cedel Bank Participant or a Euroclear
Participant to a DTC Participant will be received with value on the Depository
settlement date but will be available in the relevant Cedel Bank or Euroclear
cash account only as of the business day following settlement in the Depository.
Although the Depository, Cedel Bank and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of Offered Securities
among participants of the Depository, Cedel Bank and Euroclear, they are under
no obligation to perform or continue to perform such procedures and such
procedures may be changed or discontinued at any time.
FURTHER ISSUES
The Corporation may from time to time, without notice to or the consent
of the registered holders of the Offered Securities, create and issue further
Offered Securities ranking PARI PASSU with the Offered Securities in all
respects (or in all respects except for the payment of interest accruing prior
to the issue date of such further Offered Securities or except for the first
payment of interest following the issue date of such further Offered Securities)
and so that such further Offered Securities may be consolidated and form a
single series with the Offered Securities and have the same term as to status,
redemption or otherwise as the Offered Securities.
PAYMENT OF ADDITIONAL AMOUNTS
The Corporation will pay to the holder of any Offered Security who is a
non-United States person (as defined below) such additional amounts as may be
necessary in order that every net payment in respect of the principal, premium,
if any, or interest, if any, on such Offered Security, after deduction or
withholding by the Corporation or any paying agent for or on account of any
present or future tax, assessment or governmental charge imposed upon or as a
result of such payment by the United States or any political subdivision or
taxing authority thereof or therein, will not be less than the amount provided
for in such Offered Security to be then due and payable before any such
deduction or withholding for or on account of any such tax, assessment or
governmental charge; provided, however, that the foregoing obligation to pay
such additional amounts shall not apply to:
<PAGE>
(a) any tax, assessment or other governmental charge which would not
have been so imposed but for (i) the existence of any present or former
connection between such holder (or a fiduciary, settlor, beneficiary, member or
shareholder of, or holder of a power over, such holder, if such holder is an
estate, trust, partnership or corporation) and the United States, including,
without limitation, such holder (or such fiduciary, settlor, beneficiary,
member, shareholder of, or holder of a power) being or having been a citizen or
resident or treated as a resident thereof or being or having been engaged in a
trade or business therein or being or having been present therein or having or
having had a permanent establishment therein, or (ii) such holder's present or
former status as a personal holding company or foreign personal holding company
or controlled foreign corporation for United States federal income tax purposes
or corporation which accumulates earnings to avoid United States federal income
tax;
(b) any tax, assessment or other governmental charge which would not
have been so imposed but for the presentation by the holder of such Offered
Security for payment on a date more than 10 days after the date on which such
payment became due and payable or the date on which payment thereof is duly
provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal property
or excise tax or any similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments in respect of principal of, premium,
if any, or interest, if any, on any Offered Security;
(e) any tax, assessment or other governmental charge imposed on
interest received by a holder or beneficial owner of a Offered Security who
actually or constructively owns 10% or more of the total combined voting power
of all classes of stock of the Corporation entitled to vote within the meaning
of Section 871(h)(3) of the United States Internal Revenue Code of 1986, as
amended;
(f) any tax, assessment or other governmental charge imposed as a
result of the failure to comply with (i) certification, information,
documentation, reporting or other similar requirements concerning the
nationality, residence, identity or connection with the United States of the
holder or beneficial owner of the Offered Security, if such compliance is
required by statute, or by regulation of the United States Treasury Department,
as a precondition to relief or exemption from such tax, assessment or other
governmental charge (including backup withholding) or (ii) any other
certification, information, documentation, reporting or other similar
requirements under United States income tax laws or regulations that would
establish entitlement to otherwise applicable relief or exemption from such tax,
assessment or other governmental charge;
(g) any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of the principal of, premium, if
any, or interest, if any, on any Offered Security, if such payment can be made
without such withholding by at least one other paying agent; or
<PAGE>
(h) any combination of items (a), (b), (c), (d), (e), (f) or (g);
nor will such additional amounts be paid to any holder who is a fiduciary or
partnership or other than the sole beneficial owner of the Offered Security to
the extent a settlor or beneficiary with respect to such fiduciary or a member
of such partnership or a beneficial owner of the Offered Security would not have
been entitled to payment of such additional amounts had such beneficiary,
settlor, member or beneficial owner been the holder of the Offered Security.
The Offered Securities are subject in all cases to any tax, fiscal or
other law or regulation or administrative or judicial interpretation applicable
thereto. Except as specifically provided under this heading "Payment of
Additional Amounts" and under the heading "Description of Offered
Securities--Redemption for Tax Reasons", the Corporation shall not be required
to make any payment with respect to any tax, assessment or governmental charge
imposed by any government or a political subdivision or taxing authority thereof
or therein.
As used under this heading "Payment of Additional Amounts" and under
the headings "Description of Offered Securities--Redemption for Tax Reasons" and
"United States Federal Taxation - Tax Consequences to United States Persons" the
term "United States" means the United States of America (including the States
and the District of Columbia) and its territories, its possessions and other
areas subject to its jurisdiction. "United States person" means any individual
who is a citizen or resident of the United States, a corporation, partnership
or other entity created or organized in or under the laws of the United States
or any political subdivision thereof or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source and
"non-United States person" has the meaning set forth in "United States
Federal Taxation - Tax Consequences to Non-United States Persons" below.
REDEMPTION FOR TAX REASONS
If, as a result of any change in or amendment to the laws (including
any regulations or rulings promulgated thereunder) of the United States or any
political subdivision thereof or therein affecting taxation, or any change in
the official application or interpretation of such laws, including any official
proposal for such a change, amendment or change in the application or
interpretation of such laws, which change, amendment, application or
interpretation is announced or becomes effective after the date of this
Prospectus Supplement or which proposal is made after such date, or as a result
of any action taken by any taxing authority of the United States which action is
taken or becomes generally known after such date, or any commencement of a
proceeding in a court of competent jurisdiction in the United States after such
date, whether or not such action was taken or such proceeding was brought with
respect to the Corporation, there is, in such case, in the written opinion of
independent legal counsel of recognized standing to the Corporation, a material
increase in the probability that the Corporation has or may become obligated to
pay Additional Amounts (as described above under "Payment of Additional
Amounts"), and the Corporation in its business judgment, determines that such
obligation cannot be avoided by the use of reasonable measures available to the
Corporation, not including assignment of the Offered Securities, the Offered
Securities may be redeemed, as a whole but not in part, at the option of the
Corporation at any time thereafter, upon notice to the Trustee and the holders
<PAGE>
of the Offered Securities in accordance with the provisions of the Indenture at
a redemption price equal to 100% of the principal amount of the Offered
Securities to be redeemed together with accrued interest thereon to the date
fixed for redemption.
NOTICES
Notices to holders of the Offered Securities will be published in
authorized daily newspapers in The City of New York, in London, and, so long as
the Offered Securities are listed on the Luxembourg Stock Exchange, in
Luxembourg. It is expected that publication will be made in The City of New York
in The Wall Street Journal, in London in the Financial Times, and in Luxembourg
in the Luxemburger Wort. Any such notice shall be deemed to have been given on
the date of such publication or, if published more than once, on the date of the
first such publication.
UNITED STATES FEDERAL TAXATION
The following summary describes the material United States federal
income and certain estate tax consequences of ownership and disposition of the
Offered Securities. This summary provides general information only and is
directed solely to original holders purchasing Offered Securities at the "issue
price", that is, the first price to the public at which a substantial amount of
the Offered Securities in an issue is sold (excluding sales to bond houses,
brokers or similar persons or organizations acting in the capacity of
underwriters, placement agents or wholesalers). This summary is based on the
Internal Revenue Code of 1986, as amended to the date hereof (the "Code"),
existing administrative pronouncements and judicial decisions, existing and
proposed Treasury Regulations currently in effect, and interpretations of the
foregoing, changes to any of which subsequent to the date of this Prospectus
Supplement may affect the tax consequences described herein, possibly with
retroactive effect. This summary discusses only Offered Securities held as
capital assets within the meaning of Section 1221 of the Code. This summary does
not discuss all of the tax consequences that may be relevant to a holder in
light of his particular circumstances or to holders subject to special rules,
such as certain financial institutions, insurance companies, dealers in
securities, persons holding Offered Securities in connection with a hedging
transaction, "straddle", conversion transaction or other integrated transaction
or persons who have ceased to be United States citizens or to be taxed as
resident aliens. Persons considering the purchase of Offered Securities should
consult their tax advisors with regard to the application of the United States
federal income and estate tax laws to their particular situations as well as any
tax consequences arising under the laws of any state, local or foreign taxing
jurisdiction.
TAX CONSEQUENCES TO UNITED STATES PERSONS
For purposes of the following discussion, "United States person" means a
beneficial owner of an Offered Security 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, or (iii) an estate or
<PAGE>
trust the income of which is subject to United States federal income taxation
regardless of its source.
PAYMENTS OF INTEREST
Interest on an Offered Security will generally be taxable to a United
States person as ordinary interest income at the time it is accrued or is
received in accordance with the United States person's method of accounting for
tax purposes.
SALE, EXCHANGE OR RETIREMENT OF THE OFFERED SECURITIES
Upon the sale, exchange or retirement of an Offered Security, a United
States person will recognize taxable gain or loss equal to the difference
between the amount realized on the sale, exchange or retirement and the United
States person's adjusted tax basis in the Offered Security. For these purposes,
the amount realized does not include any amount attributable to accrued interest
on the Offered Security. Amounts attributable to accrued interest are treated as
interest as described under "Payments of Interest" above. A United States
person's adjusted tax basis in an Offered Security generally will equal the cost
of the Offered Security to the United States person.
In general, gain or loss realized on the sale, exchange or redemption
of an Offered Security will be capital gain. Such gain will be long-term or
mid-term capital gain or loss if at the time of sale, exchange or retirement,
the Offered Security has been held for more than eighteen months or more than
twelve months, but less than eighteen months, respectively. Under current law,
the excess of net long-term and mid-term net capital gains over net short-term
capital losses is taxed at a lower rate than ordinary income for certain
non-corporate taxpayers. The distinction between capital gain or loss is also
relevant for purposes of, among other things, limitations on the deductibility
of capital losses.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding and information reporting requirements may apply to
certain payments of principal, premium and interest on an Offered Security, and
to payments of proceeds of the sale or redemption of an Offered Security, to
certain non-corporate United States persons. The Corporation, its agent, a
broker, 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 United States
person fails to furnish or certify his correct taxpayer identification number
(social security number or employer identification number)to the payor in the
manner required, fails to certify that such United States person is not subject
to backup withholding, or otherwise fails to comply with the applicable
requirements of the backup withholding rules. Any amounts withheld under the
backup withholding rules from a payment to a United States person may be
credited against such United States person's United States federal income tax
and may entitle such United States person a refund, provided that the required
information is furnished to the United States Internal Revenue Service.
<PAGE>
TAX CONSEQUENCES TO NON-UNITED STATES PERSONS
As used herein, the term "non-United States person" means an owner of
an Offered Security that is, for United States federal income tax purposes, (i)
a nonresident alien individual, (ii) a foreign corporation, (iii) a nonresident
alien fiduciary of a foreign estate or trust or (iv) a foreign partnership one
or more of the members of which is, for United States federal income tax
purposes, a nonresident alien individual, a foreign corporation or a nonresident
alien fiduciary of a foreign estate or trust.
INCOME AND WITHHOLDING TAX
Subject to the discussion of backup withholding below:
(a) payments of principal and interest on an Offered Security that is
beneficially owned by a non-United States person will not be subject to United
States federal withholding tax; provided, that in the case of interest, (1) (i)
the beneficial owner does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Corporation entitled
to vote, (ii) the beneficial owner is not a controlled foreign corporation that
is related, directly or indirectly, to the Corporation through stock ownership,
and (iii) either (A) the beneficial owner of the Offered Security certifies to
the person otherwise required to withhold United States federal income tax from
such interest, under penalties of perjury, that it is not a United States person
and provides its name and address or (B) a securities clearing organization,
bank or other financial institution that holds customers' securities in the
ordinary course of its trade or business (a "financial institution") and holds
the Offered Security certifies to the person otherwise required to withhold
United States federal income tax from such interest, under penalties of perjury,
that such statement has been received from the beneficial owner by it or by a
financial institution between it and the beneficial owner and furnishes the
payor with a copy thereof; (2) the beneficial owner is entitled to the benefits
of an income tax treaty under which the interest is exempt from United States
federal withholding tax and the beneficial owner of the Offered Security or such
owner's agent provides an IRS Form 1001 claiming the exemption; or (3) the
beneficial owner conducts a trade or business in the United States to which the
interest is effectively connected and the beneficial owner of the Offered
Security or such owner's agent provides an IRS Form 4224 (or, after December 31,
1999 and, in certain circumstances, after December 31, 1998, a Form W-8);
provided that in each such case, the relevant certification or IRS Form is
delivered pursuant to applicable procedures and is properly transmitted to the
person otherwise required to withhold United States federal income tax, and none
of the persons receiving the relevant certification or IRS Form has actual
knowledge that the certification or any statement on the IRS Form is false;
(b) a non-United States person will not be subject to United States
federal withholding tax on any gain realized on the sale, exchange or other
disposition of an Offered Security unless the gain is effectively connected with
the beneficial owner's trade or business in the United States or, in the case of
an individual, the holder is present in the United States for 183 days or more
in the taxable year in which the sale, exchange or other disposition occurs and
certain other conditions are met; and
<PAGE>
(c) an Offered Security owned by an individual who at the time of death
is not, for United States estate tax purposes, a citizen or resident of the
United States generally will not be subject to United States federal estate tax
as a result of such individual's death if the individual does not actually or
constructively own 10% or more of the total combined voting power or all classes
of stock of the Corporation entitled to vote and, at the time of such
individual's death the income on the Offered Security would not have been
effectively connected with a United States trade or business of the individual.
With respect to the certification requirement referred to in
subparagraph (a), for Offered Securities held by a foreign partnership, under
current law, the Form W-8 may be provided by the foreign partnership. However,
for interest and disposition proceeds paid with respect to an Offered Security
after December 31, 1999 and, in certain circumstances, after December 31, 1998,
unless the foreign partnership has entered into a withholding agreement with the
IRS, a foreign partnership will be required, in addition to providing an
intermediary Form W-8, to attach an appropriate certification by each partner.
Prospective investors, including foreign partnerships and their partners, should
consult their tax advisors regarding possible additional reporting requirements.
If a Non-United States person holding an Offered Security is engaged in
a trade or business in the United States, and if interest on the Offered
Security (or gain realized on its sale, exchange or other disposition) is
effectively connected with the conduct of such trade or business, such holder,
although exempt from the withholding tax discussed in the preceding paragraphs,
will generally be subject to regular United States income tax on such
effectively connected income in the same manner as if it were a United States
person. Under recently finalized United States Treasury Regulations, such a
holder may also need to provide a United States taxpayer identification number
on the forms referred to in paragraph (a) above in order to meet the
requirements set forth above. In addition, if such holder is a foreign
corporation, it may be subject to a 30% branch profits tax (unless reduced or
eliminated by an applicable treaty) of its effectively connected earnings and
profits for the taxable year, subject to certain adjustments. For purposes of
the branch profits tax, interest on, and any gain recognized on the sale,
exchange or other disposition of, an Offered Security will be included in the
effectively connected earnings and profits of such holder if such interest or
gain, as the case may be, is effectively connected with the conduct by such
holder of a trade or business in the United States.
EACH HOLDER OF AN OFFERED SECURITY SHOULD BE AWARE THAT IF IT DOES NOT
PROPERLY PROVIDE THE REQUIRED IRS FORM, OR IF THE IRS FORM (OR, IF PERMISSIBLE,
A COPY OF SUCH FORM) IS NOT PROPERLY TRANSMITTED TO AND RECEIVED BY THE UNITED
STATES PERSON OTHERWISE REQUIRED TO WITHHOLD UNITED STATES FEDERAL INCOME TAX,
INTEREST ON THE OFFERED SECURITY MAY BE SUBJECT TO UNITED STATES WITHHOLDING TAX
AT A 30% RATE AND THE HOLDER (INCLUDING THE BENEFICIAL OWNER) WILL NOT BE
ENTITLED TO ANY ADDITIONAL AMOUNTS FROM THE CORPORATION DESCRIBED UNDER THE
HEADING "DESCRIPTION OF OFFERED SECURITIES -- PAYMENT OF ADDITIONAL AMOUNTS"
WITH RESPECT TO SUCH TAX. SUCH TAX, HOWEVER, MAY IN CERTAIN CIRCUMSTANCES BE
ALLOWED AS A REFUND OR AS A CREDIT AGAINST SUCH HOLDER'S UNITED STATES FEDERAL
INCOME TAX. THE FOREGOING DOES NOT DEAL WITH ALL ASPECTS OF FEDERAL INCOME TAX
<PAGE>
WITHHOLDING THAT MAY BE RELEVANT TO FOREIGN HOLDERS OF THE OFFERED SECURITIES.
INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS FOR SPECIFIC ADVICE
CONCERNING THE OWNERSHIP AND DISPOSITION OF OFFERED SECURITIES.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under current Treasury Regulations, backup withholding (imposed at the
rate of 31%) will not apply to payments made by the Corporation or a paying
agent to a holder in respect of an Offered Security if the certifications
required by Sections 871(h) and 881(c) of the Code, which are described above,
are received, provided in each case that the Corporation or the paying agent, as
the case may be, does not have actual knowledge that the payee is a United
States person.
Under current Treasury Regulations, payments of the proceeds from the
sale, exchange or other disposition of an Offered Security made to or through a
foreign office of a broker (including a custodian, nominee or other agent acting
on behalf of the beneficial owner of an Offered Security) generally will not be
subject to information reporting or backup withholding. However, if such broker
is a United States person, a controlled foreign corporation for United States
federal tax purposes, a foreign person 50% or more of whose gross income is
effectively connected with a United States trade or business for a specified
three-year period, or in the case of payments made after December 31, 1999 and,
in certain circumstances, payments made after December 31, 1998, a foreign
partnership with certain connections with the United States, then information
reporting will be required unless the broker has in its records documentary
evidence that the beneficial owner is not a United States person and certain
other conditions are met or the beneficial owner otherwise establishes an
exemption. Backup withholding may apply to any payment that such broker is
required to report if such broker has actual knowledge that the payee is a
United States person. Payments to or through the United States office of a
broker are subject to information reporting and backup withholding unless the
holder or beneficial owner certifies, under penalties of perjury that it is a
non-United States person and that it satisfies certain other conditions or
otherwise establishes an exemption from information reporting and backup
withholding.
Non-United States persons holding Offered Securities should consult
their tax advisors regarding the application of information reporting and backup
withholding in their particular situations, the availability of an exemption
therefrom, and the procedure for obtaining such an exemption, if available.
Backup withholding is not a separate tax, but is allowed as a refund or credit
against the holder's United States federal income tax, provided the necessary
information is furnished to the Internal Revenue Service.
Interest on an Offered Security that is beneficially owned by a
non-United States person will be reported annually on IRS Form 1042S, which must
be filed with the Internal Revenue Service and furnished to such beneficial
owner.
<PAGE>
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 OFFERED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR
OTHER TAX LAWS.
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in an
Underwriting Agreement dated April 22, 1998, the Underwriters named below,
acting through their representatives, Bear, Stearns International Limited and
Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Representatives"), have
severally agreed to purchase and the Corporation has agreed to sell to them,
severally, the respective principal amounts of Offered Securities set forth
below.
PRINCIPAL
AMOUNT OF NOTES DUE 2005
------------------------
UNDERWRITERS
------------
Bear, Stearns International Limited............... $200,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................... 200,000,000
Salomon Brothers Inc.............................. 40,000,000
Banque Paribas.................................... 20,000,000
Chase Securities Inc.............................. 20,000,000
Muriel Siebert & Co., Inc......................... 20,000,000
Total................................. $500,000,000
===========
PRINCIPAL
AMOUNT OF NOTES DUE 2008
------------------------
UNDERWRITERS
------------
Bear, Stearns International Limited............... $200,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................... 200,000,000
Salomon Brothers Inc ............................ 40,000,000
ABN AMRO Bank NV ................................. 20,000,000
Morgan Stanley & Co. Incorporated ................ 20,000,000
The Williams Capital Group, L.P................... 20,000,000
Total................................ $500,000,000
===========
PRINCIPAL
AMOUNT OF DEBENTURES DUE 2028
-----------------------------
UNDERWRITERS
------------
Bear, Stearns International Limited............... $250,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................... 250,000,000
Salomon Brothers Inc ............................. 40,000,000
Blaylock & Partners, L.P.......................... 20,000,000
J.P. Morgan Securities Inc........................ 20,000,000
Swiss Bank Corporation............................ 20,000,000
Total................................ $600,000,000
===========
<PAGE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent.
The Corporation has agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended.
The Corporation has been advised by the Representatives that the
Underwriters propose to offer the Offered Securities to the public initially at
the offering price set forth on the cover page of this Prospectus Supplement and
to certain dealers at such price less a concession not in excess of .275% of the
principal amount in the case of the Notes due 2005, .300% of the principal
amount in the case of the Notes due 2008, and .500% of the principal amount in
the case of the Debentures due 2028. After the initial public offering, the
public offering price and concession may be changed by the Underwriters.
The Offered Securities are offered for sale in those jurisdictions in
the United States, Europe and Asia where it is legal to make such offers. Only
offers and sales of the Offered Securities in the United States, as part of the
initial distribution thereof or in connection with resales thereof under
circumstances where this Prospectus Supplement and the accompanying Prospectus
must be delivered, are made pursuant to the Registration Statement of which the
Prospectus, as supplemented by this Prospectus Supplement, is a part.
Each Underwriter has represented and agreed that it will comply with
all applicable laws and regulations in force in any jurisdiction in which it
purchases, offers, sells or delivers the Offered Securities or possesses or
distributes this Prospectus Supplement or the accompanying Prospectus and will
obtain any consent, approval or permission required by it for the purchase,
offer or sale by it of the Offered Securities under the laws and regulations in
force in any jurisdiction to which it is subject or in which it makes such
purchases, offers or sales and neither the Corporation nor any other Underwriter
shall have responsibility therefor.
Each Underwriter, severally and not jointly, represents and agrees
that:
(i) it has not offered or sold and will not offer or sell any Offered
Securities to persons in the United Kingdom prior to the expiry of the period of
six months from the issue date of the Offered Securities except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995;
(ii) it has only issued or passed on and will only issue or pass on in
the United Kingdom any document received by it in connection with the issue of
the Offered Securities to a person who is of a kind described in Article 11(3)
of the Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1996, as amended, or is a person to whom such document may otherwise
lawfully be issued or passed on; and
<PAGE>
(iii) it has complied and will comply with all applicable provisions of
the Financial Service Act 1986 with respect to anything done by it in relation
to any Offered Securities in, from or otherwise involving the United Kingdom.
Although application will be made to list the Offered Securities on the
Luxembourg Stock Exchange, the Offered Securities are a new issue of securities
with no established trading market. No assurance can be given as to the
liquidity of, or the trading markets for, the Offered Securities. The
Corporation has been advised by the Underwriters that they intend to make a
market in the Offered Securities, but they are not obligated to do so and may
discontinue such market-making at any time without notice.
Purchasers of the Offered Securities may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the issue price set forth on the cover page hereof.
In connection with the sale of the Offered Securities, the Underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Offered Securities. Specifically, the Underwriters may overallot
the offering, creating a short position. In addition, the Underwriters may bid
for, and purchase, the Offered Securities in the open market to cover short
positions or to stabilize the price of the Offered Securities, and in connection
therewith the Representatives may impose a penalty bid on certain Underwriters.
This means that if the Representatives purchase Offered Securities in the open
market to reduce any short position or to stabilize the price of the Offered
Securities, they may reclaim the amount of the selling concession from
the Underwriter or Underwriters who sold those Offered Securities as part of
the offering. Any of these activities may stabilize or maintain the market
price of the Offered Securities above independent market levels. The
Underwriters will not be required to engage in these activities, and may end
any of these activities at any time.
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, certain Underwriters and their affiliates have engaged, and will in
the future engage, in commercial banking and investment banking transactions
with the Corporation and certain of its affiliates.
It is expected that delivery of the Offered Securities will be made
against payment therefor on or about April 29, 1998.
Bear, Stearns International Limited and Merrill Lynch, Pierce, Fenner &
Smith Incorporated have agreed to reimburse the Corporation for certain of its
expenses in connection with the offering of the Offered Securities.
LEGAL OPINIONS
The validity of the Offered Securities offered hereby will be passed on
for the Corporation by Martin I. Darvick, Esq., Attorney, General Motors Legal
Staff, and for the Underwriters by Davis Polk & Wardwell. Mr. Darvick owns
shares, and has options to purchase shares, of General Motors Corporation common
stock, $1 2/3 par value.
The firm of Davis Polk & Wardwell acts as counsel to the Executive
Compensation Committee of the Board of Directors of General Motors Corporation
<PAGE>
and has acted as counsel for General Motors Acceptance Corporation and the
Corporation in various matters.
GENERAL INFORMATION
Application has been made to list the Offered Securities on the Luxembourg
Stock Exchange. In connection with the listing application, the Certificate of
Incorporation and the By-Laws of the Corporation and a legal notice relating to
the issuance of the Offered Securities have been deposited prior to listing with
the Greffier en Chef du Tribunal d'Arrondissement de et a Luxembourg, where
copies thereof may be obtained upon request. Copies of the above documents
together with this Prospectus Supplement, the accompanying Prospectus, the
Indenture and the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997, as well as all future Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, so long as any of the Offered Securities are
outstanding, will be made available for inspection at the main office of Banque
Generale du Luxembourg S.A. Banque Generale du Luxembourg S.A. will act as a
contact between the Luxembourg Stock Exchange and the Corporation or the holders
of the Offered Securities for as long as the Offered Securities are listed on
the Luxembourg Stock Exchange. In addition, copies of the Annual Reports and
Quarterly Reports of the Corporation may be obtained free of charge at such
office.
Except as may be disclosed herein, there has been no material change in the
financial or trading position of the Corporation since December 31, 1997.
The Corporation is not a party to any legal or arbitration proceedings
(including any that are pending or threatened) which may have or have had during
the previous 12 months a significant effect on the Corporation's consolidated
financial position.
The Notes due 2005 have been assigned Euroclear and Cedel Bank Common Code
No. 8683891, International Security Identification Number (ISIN) US-370442AX38
and CUSIP No. 370442 AX 3.
The Notes due 2008 have been assigned Euroclear and Cedel Bank Common Code
No. 8683948, International Security Identification Number (ISIN) US-370442AY11
and CUSIP No. 370442 AY 1.
The Debentures due 2028 have been assigned Euroclear and Cedel Bank Common
Code No. 8683972, International Security Identification Number (ISIN)
US-370442AZ85 and CUSIP No. 370442 AZ 8.
<PAGE>
REGISTERED OFFICES OF THE CORPORATION
3044 West Grand Boulevard
Detroit, Michigan 48202
United States
100 Renaissance Center
Detroit, Michigan 48226
United States
LEGAL AND TAX ADVISORS
TO THE CORPORATION
(AS TO UNITED STATES LAW) (AS TO UNITED STATES LAW)
MARTIN I. DARVICK, ESQ. PETER F. HILTZ, ESQ.
3031 West Grand Boulevard 3044 West Grand Boulevard
Detroit, Michigan 48202 Detroit, Michigan 48202
United States United States
AUDITORS
INDEPENDENT AUDITORS
OF THE CORPORATION
DELOITTE & TOUCHE LLP
600 Renaissance Center
Detroit, Michigan 48243-1274
United States
LEGAL ADVISORS TO THE UNDERWRITERS
(AS TO UNITED STATES LAW)
DAVIS POLK & WARDWELL
450 Lexington Avenue
New York, New York 10017
United States
LISTING AGENT
BANQUE GENERALE DU LUXEMBOURG S.A.
50 Avenue J. F. Kennedy
L-2951 Luxembourg
TRUSTEE
CITIBANK, N.A.
111 Wall Street
New York, New York 10043
United States
PAYING AND TRANSFER AGENT IN LUXEMBOURG
BANQUE GENERALE DU LUXEMBOURG S.A.
50 Avenue J. F. Kennedy
L-2951 Luxembourg
<PAGE>
GENERAL MOTORS CORPORATION
DEBT SECURITIES
WARRANTS TO PURCHASE DEBT SECURITIES
General Motors Corporation (the "Corporation" or "General Motors"),
directly, through agents designated from time to time, or through dealers or
underwriters also to be designated, may offer from time to time its debt
securities (the "Debt Securities") or its warrants to purchase any of the Debt
Securities (the "Debt Warrants"), for issuance and sale, at an aggregate initial
offering price not to exceed $1,300,000,000 or the equivalent thereof in other
currencies, including composite currencies such as the European Currency Unit
("ECU") (the "Specified Currency"), on terms to be determined at the time of
sale. The Debt Securities and the Debt Warrants are herein collectively called
the "Offered Securities." The Securities may be offered either together or
separately and in one or more series, in amounts, at prices and on terms to be
set forth in supplements to this Prospectus. The Securities may be sold for U.S.
dollars or the Specified Currency and the principal of and any premium and
interest on the Securities may likewise be payable in U.S. dollars or the
Specified Currency. The Specified Currency for which the Securities may be
purchased and the Specified Currency in which principal of and any premium and
interest on the Securities may be payable are set forth in the accompanying
Prospectus Supplement (the "Prospectus Supplement").
The Debt Securities will be issued in fully registered definitive form
("Certificated Securities") or in the form of global securities which may be
held and registered only in the name of a depositary institution ("Book-Entry
Securities").
The terms of the Debt Securities, including the specific designation,
aggregate principal amount, authorized denominations, purchase price, maturity,
interest rate (which may be fixed or variable) and time of payment of interest,
if any, any redemption or repayment terms, and the Specified Currency in which
the Debt Securities shall be payable (and similar information with respect to
the Debt Securities purchasable upon exercise of each Debt Warrant), are set
forth in the accompanying Prospectus Supplement (the "Prospectus Supplement").
Where Debt Warrants are to be offered, a Prospectus Supplement shall set forth
the offering price and terms of the Debt Warrants, including the purchase price,
exercise price or prices, detachability, expiration date or dates, exercise
period or periods, the Specified Currency in which such Debt Warrants are
exercisable, the price or prices, if any, at which the Debt Warrants may be
redeemed at the option of the holder or will be redeemed upon expiration, and
the Warrant Agent acting under the Warrant Agreement pursuant to which the Debt
Warrants are to be issued.
The Securities may be sold directly by the Corporation, through agents
of the Corporation designated from time to time, or through underwriters or
dealers, or through a combination of such methods. If any agents, underwriters
or dealers are involved in the sale of the Offered Securities, the names of such
agents, underwriters or dealers and any applicable commissions or discounts are
set forth in the accompanying Prospectus Supplement. Any Agents, underwriters or
<PAGE>
dealers participating in the offering may be deemed "underwriters" within the
meaning of the Securities Act of 1933, as amended. See "Plan of Distribution"
for possible indemnification arrangements for the agents, underwriters and
dealers. The Corporation reserves the sole right to accept and, together with
its agents from time to time, to reject in whole or in part any proposed
purchase of Securities to be made directly or through agents.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is October 25, 1996
<PAGE>
No dealer, salesman or any other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus, Prospectus Supplement, and Pricing Supplement, if
any, and, if given or made, such information or representation must not be
relied upon as having been authorized by the Corporation or by any agent,
underwriter or dealer. Neither the delivery of this Prospectus, Prospectus
Supplement and Pricing Supplement, if any, nor any sale made thereunder shall,
under any circumstances, create any implication that the information therein is
correct at any time subsequent to the date thereof. This Prospectus, Prospectus
Supplement and Pricing Supplement, if any, shall not constitute an offer to sell
or a solicitation of an offer to buy any of the Securities offered hereby by
anyone in any jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do
so or to any person to whom it is unlawful to make such offer or solicitation.
---------------------------------
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected, and copies may be obtained at
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates, as well as at the following
Regional Offices of the Commission: Citicorp Center, 500 Madison Street, Suite
1400, Chicago, Illinois 60661-2511 and Seven World Trade Center, Suite 1300, New
York, New York 10048. Such material may also be accessed electronically by means
of the Commission's home page on the Internet at http://www.sec.gov. The
Corporation's Common Stock, $1-2/3 Par Value, is listed on the New York,
Chicago, Pacific and Philadelphia Stock Exchanges. Reports, proxy statements and
other information concerning the Corporation can also be inspected at the
offices of the New York Stock Exchange, Inc., 11 Wall Street, New York, New York
10005, where the Corporation's Common Stock, $1-2/3 Par Value and Class H Common
Stock, $.10 par value, are listed and at the offices of the following other
stock exchanges where the Common Stock, $1-2/3 Par Value, is listed in the
United States: the Chicago Stock Exchange, Inc., One Financial Place, 440 South
LaSalle Street, Chicago, Illinois 60605, the Pacific Stock Exchange, Inc., 233
South Beaudry Avenue, Los Angeles, California 90012 and 301 Pine Street, San
Francisco, California 94104, and the Philadelphia Stock Exchange, Inc., 1900
Market Street, Philadelphia, Pennsylvania 19103.
The Prospectus constitutes a part of a Registration Statement filed by
the Corporation with the Commission under the Securities Act of 1933, as amended
(the "Securities Act of 1933"). This Prospectus omits certain of the information
contained in the Registration Statement in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and related exhibits for further information with respect to the
Corporation and the Offered Securities. Statements contained herein concerning
the provisions of any document are not necessarily complete and, in each
instance, reference is made to the copy of such document filed as an exhibit to
<PAGE>
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1995, as amended, Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996 and June 30, 1996 and Reports on Form 8-K dated January 29,
1996, February 26, 1996, March 12, 1996, April 19, 1996, May 29, 1996 and June
7, 1996, filed with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act are incorporated by reference in this Prospectus.
All documents filed by the Corporation with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the Securities
shall be deemed to be incorporated by reference in this Prospectus and to be a
part thereof from the date of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THE CORPORATION WILL PROVIDE WITHOUT CHARGE UPON WRITTEN OR ORAL
REQUEST, TO EACH PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, A COPY OF ANY OR
ALL OF THE DOCUMENTS DESCRIBED ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS. SUCH
REQUEST SHOULD BE DIRECTED TO:
GENERAL MOTORS CORPORATION
3044 WEST GRAND BOULEVARD, ROOM 11-243
DETROIT, MICHIGAN 48202-3091
(TELEPHONE NUMBER: (313) 556-2044)
-----------------------------------
GENERAL MOTORS CORPORATION
While the major portion of General Motors' operations is derived from
the automotive products industry segment, General Motors also has financing and
insurance operations and produces products and provides services in other
industry segments. The automotive products segment consists of the design,
manufacture, assembly and sale of automobiles, trucks and related parts and
accessories. General Motors financing and insurance operations assist in the
merchandising of General Motors' products as well as other products. General
Motors Acceptance Corporation ("GMAC") and its subsidiaries offer financial
services and certain types of insurance to dealers and customers. In addition,
GMAC and its subsidiaries are engaged in mortgage banking and investment
services. General Motors' other products segment consists of military vehicles,
radar and weapon control systems, guided missile systems and defense and
commercial satellites; the design, installation and operation of business
information and telecommunications systems; as well as the design, development
<PAGE>
and manufacture of locomotives. For additional information on General Motors,
see the General Motors Annual Report on Form 10-K for the year ended December
31, 1995, as amended, which is incorporated herein by reference, and the other
documents incorporated herein by reference.
General Motors principal executive offices are located at 3044 West
Grand Boulevard, Detroit, Michigan 48202-3091 (Telephone Number (313) 556-5000),
and 767 Fifth Avenue, New York, New York 10153-0075 (Telephone Number (212)
418-6100).
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, net
proceeds from the sale of the Securities will be used for general Corporate
purposes, including the repayment of existing indebtedness.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratio of earnings from
continuing operations to fixed charges for the Corporation for the periods
indicated.
Six Months
Ended
JUNE 30 YEARS ENDED DECEMBER 31
------------ --------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
2.46 3.06 2.39 2.35 1.26 * *
- --------------
*In the years 1992 and 1991, earnings from continuing operations were
inadequate to cover fixed charges by $4,063.7 million and $6,285.3 million,
respectively.
<PAGE>
For purposes of computing the ratio of earnings to fixed charges,
"earnings" consist of consolidated income (loss) before cumulative effect of
accounting change plus income taxes (credit) and fixed charges included in net
income (loss) after eliminating the amortization of capitalized interest and the
undistributed (earnings) losses of associates; "fixed charges" consist of
interest and related charges on debt, that portion of rentals deemed to be
interest, and interest capitalized in the period.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets
forth certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities in
respect of which this Prospectus is being delivered and the extent, if any, to
which such general provisions may not apply thereto will be described in the
Prospectus Supplement relating to such Debt Securities.
The Debt Securities offered hereby are to be issued under an Indenture
(the "Indenture"), dated as of December 7, 1995, between the Corporation and
Citibank, N.A., as Trustee (the "Trustee"), a copy of which is filed as an
exhibit to the Registration Statement. The following statements are subject to
the detailed provisions of the Indenture, a copy of which is filed as an exhibit
to the Registration Statement. Numerical references in parentheses below are to
sections in the Indenture. Wherever particular provisions of the Indenture are
referred to, such provisions are incorporated by reference as a part of the
statements made, and the statements are qualified in their entirety by such
reference. Capitalized terms used in this description but not defined herein
have the meanings provided in the Indenture.
GENERAL
The Indenture does not limit the amount of Debt Securities that can be
issued thereunder and provides that Debt Securities may be issued thereunder up
to the aggregate principal amount which may be authorized from time to time by
the Corporation.
Reference is made to the Prospectus Supplement relating to the
particular series of Debt Securities offered thereby for the following terms of
the Debt Securities (to the extent such terms are applicable to such Debt
Securities):
(i) the designation of such Debt Securities;
(ii) the authorized denominations and the aggregate principal amount of
such Debt Securities;
(iii) the percentage of their principal amount at which such Debt
Securities will be issued;
(iv) the date or dates on which such Debt Securities will mature (or the
manner of determining the same);
(v) the rate or rates per annum, if any, which may be fixed or variable,
at which such Debt Securities will bear interest, if any, and, if
the rate is variable, the manner of calculation thereof;
<PAGE>
(vi) the date or dates from which interest, if any, shall accrue or the
method by which such date or dates shall be determined and the date
or dates at which such interest, if any, will be payable and the
record dates therefor;
(vii) the period or periods within which, the terms and conditions upon
which, such Debt Securities may be redeemed and the redemption price
or prices;
(viii) any mandatory or optional sinking fund or analogous provisions;
(ix) the provisions, if any, for the defeasance of the Debt Securities;
(x) the form (registered or bearer) in which Debt Securities may be
issued, any restrictions applicable to the exchange of one form for
another and to the offer, sale and delivery of Debt Securities in
either form;
(xi) whether and under what circumstances the Corporation will pay
additional amounts (the "Additional Amounts") on Debt Securities
held by a person who is not a United States person (as defined in
the Prospectus Supplement) in respect of specified taxes,
assessments or other governmental charges withheld or deducted, and
if so, whether the Corporation has the option to redeem the affected
Debt Securities rather than pay such Additional Amounts;
(xii) the Specified Currency for which such Debt Securities may be
purchased and the Specified Currency in which the principal of, and
premium, if any, and interest, if any, on, such Debt Securities may
be payable;
(xiii) the exchanges, if any, on which such Debt Securities may be listed;
(xiv) whether such Debt Securities are to be issued in book-entry form
and, if so, the identify of the Depositary for such book-entry
Securities;
(xv) the place or places where the principal of, premium, if any, and
interest, if any, on the Debt Securities will be payable; and
(xvi) any other specific terms of the Debt Securities, including any
additional covenants applicable to such Debt Securities and any
terms which may be required or advisable under applicable laws or
regulations. (Sections 2.04 and 4.02 of the Indenture.)
The Securities will be unsecured and will rank equally and ratably with
all other unsecured and unsubordinated indebtedness of the Corporation (other
than obligations preferred by mandatory provisions of law).
Unless otherwise specified in a Prospectus Supplement, principal,
premium, if any, interest, if any, and Additional Amounts, if any, will be
payable, and, unless the Debt Securities are issued in book-entry form, the Debt
Securities offered hereby will be transferable, at the office of the Trustee,
111 Wall Street, New York, New York 10043, provided that payment of interest may
be made at the option of the Corporation by check mailed to the address of the
<PAGE>
person entitled thereto. Principal of and premium, if any, interest, if any, and
Additional Amounts, if any, on Debt Securities in bearer form, and coupons
appertaining thereto (the "Coupons"), if any, will be payable against surrender
of such Debt Securities or Coupons, as the case may be, subject to any
applicable laws and regulations, at such paying agencies outside the United
States as the Corporation may appoint from time to time at the places and
subject to the restrictions set forth in the Indenture, the Debt Securities and
the Prospectus Supplement. (Section 4.02 of the Indenture.) Debt Securities in
bearer form and the Coupons, if any, appertaining thereto will be transferable
by delivery. No service charge will be made for any transfer or exchange of such
Debt Securities, but the Corporation may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
(Section 2.05 of the Indenture.)
Debt Securities may be issued, from time to time, with the principal
amount payable on any principal payment date, or the amount of interest payable
on any interest payment date, to be determined by reference to one or more
currency exchange rates, commodity prices, equity indices or other factors.
Holders of such Debt Securities may receive a principal amount on any principal
payment date, or a payment of interest on any interest payment date, that is
greater than or less than the amount of principal or interest otherwise payable
on such dates, depending upon the value on such dates of the applicable
currencies, commodities, equity indices or other factors. Information as to the
methods for determining the amount of principal or interest payable on any date,
the currencies, commodities, equity indices or other factors to which the amount
payable on such date is linked and certain additional United States Federal
income tax considerations will be set forth in the Prospectus Supplement
relating thereto.
As used herein, the term Debt Securities shall include Debt Securities
denominated in United States dollars or, at the option of the Corporation if so
specified in the applicable Prospectus Supplement, in any other freely
transferable currency or units based on or relating to foreign currencies,
including European Currency Units.
If a Prospectus Supplement specifies that Debt Securities are
denominated in a currency or currency unit other than United States dollars,
such Prospectus Supplement shall also specify the denominations in which such
Debt Securities will be issued and the coin or currency in which the principal,
premium, if any, and interest, if any, on such Debt Securities, will be payable,
which may be United States dollars based upon the exchange rate for such other
currency existing on or about the time a payment is due.
Some of the Debt Securities may be issued as discounted Debt Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below their stated
principal amount. Special considerations applicable to the Debt Securities of
any series, including any special United States Federal income tax consequences
applicable to any discounted Debt Securities or to certain Debt Securities
issued at par which are treated as having been issued at discount or to Debt
Securities denominated or payable in foreign currencies or currency units, will
be described in the Prospectus Supplement relating thereto.
<PAGE>
If a Prospectus Supplement specifies that the Debt Securities will have
a redemption option, the "Option to Elect Repurchase" constitutes an issuer
tender offer under the Exchange Act. The Corporation will comply with all issuer
tender offer rules and regulations under the Exchange Act, including Rule 14e-1,
if such redemption option is elected, including making any required filings with
the Commission and the furnishing of certain information to the holders of the
Debt Securities.
BOOK-ENTRY SECURITIES - DELIVERY AND FORM
Unless otherwise indicated in the Prospectus Supplement, the Debt
Securities will be issued in the form of one or more fully registered global
securities (collectively, the "Registered Global Debt Securities") which will be
deposited with or on behalf of The Depository Trust Corporation ("DTC") or other
depositary (DTC or such other depositary as is specified in the applicable
Prospectus Supplement is herein referred to as the "Depositary") and registered
in the name of the Depositary or the Depositary's nominee. No single Registered
Global Security shall exceed U.S.$200,000,000. Except as set forth below, the
Registered Global Debt Securities may be transferred, in whole and not in part,
only to another nominee of the Depositary or to a successor of the Depositary or
its nominee.
DTC has advised the Corporation that it is a limited-purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered under the
Exchange Act. DTC was created to hold securities of its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. DTC's participants include securities brokers and
dealers (including the agents and/or underwriters named in any Prospectus
Supplement), banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own DTC. Access to
DTC's book-entry system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. Persons who are
not participants may beneficially own securities held by DTC only through
participants. The rules applicable to DTC and its participants are on file with
the Commission.
Upon the issuance by the Corporation of Securities represented by a
Registered Global Debt Security, the Depositary will credit, on its book-entry
registration and transfer system, the participants' accounts with, the
respective principal amounts of the Securities represented by such Registered
Global Debt Security beneficially owned by such participants. The accounts to be
credited shall be designated by the agents, underwriters or dealers
participating in the distribution of such Securities, or the Corporation, if
such Securities are offered and sold directly by the Corporation, as the case
may be. Ownership of beneficial interests in a Registered Global Debt Security
will be limited to participants or persons that hold interests through
participants. Ownership of beneficial interests in Securities represented by a
Registered Global Debt Security will be shown on, and the transfer of that
<PAGE>
ownership will be effected only through, records maintained by the Depositary
(with respect to interests of participants in the Depositary), or by
participants in the Depositary or persons that may hold interests through such
participants (with respect to persons other than participants in the
Depositary). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Registered Global Debt Security.
So long as the Depositary for a Registered Global Debt Security, or its
nominee, is the registered owner of the Registered Global Debt Security, the
Depositary or its nominee, as the case may be, will be considered the sole owner
or holder of the Book-Entry Securities represented by such Registered Global
Debt Security for all purposes under the Indenture. Except as provided below,
owners of beneficial interests in Book-Entry Securities represented by a
Registered Global Debt Security or Securities will not be entitled to have
Book-Entry Securities represented by such Registered Global Debt Securities
registered in their names, will not receive or be entitled to receive physical
delivery of Book-Entry Securities in definitive form and will not be considered
the owners or holders thereof under the Indenture.
Accordingly, each person owning a beneficial interest in a Registered
Global Debt Security must rely on the procedures of the Depositary and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interest, to exercise any rights of a holder under the
Indenture or a Registered Global Debt Security. The Corporation understands that
under existing policy of the Depositary and industry practices, in the event
that the Corporation requests any action of holders or that an owner of a
beneficial interest in such a Registered Global Debt Security desires to give
any notice or take any action which a holder is entitled to give or take under
the Indenture or a Registered Global Debt Security, the Depositary would
authorize the participants holding the relevant beneficial interests to give
such notice or take such action. Any beneficial owner that is not a participant
must rely on the contractual arrangements it has directly, or indirectly through
its financial intermediary, with a participant to give such notice or take such
action.
Payments of principal of, premium, if any, and interest, if any, on,
the Securities represented by a Registered Global Debt Security registered in
the name of the Depositary or its nominee will be made by the Corporation
through the Trustee to the Depositary or its nominee, as the case may be, as the
registered owner of a Registered Global Debt Security. None of the Corporation,
the Trustee, any paying agent or any other agent of the Corporation will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Registered
Global Debt Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests. The Corporation expects that
the Depositary, upon receipt of any payment of principal, premium, if any, or
interest, if any, in respect of a Registered Global Debt Security, will
immediately credit the accounts of the related participants with payment in
amounts proportionate to their respective holdings in principal amount of
beneficial interest in such Registered Global Debt Security as shown on the
records of the Depositary. The Corporation also expects that payments by
participants to owners of beneficial interests in a Registered Global Debt
<PAGE>
Security will be governed by standing customer instructions and customary
practices as is now the case with securities held for the accounts of customers
in bearer form or registered in "street name" and will be the responsibility of
such participants.
If the Depositary is at any time unwilling or unable to continue as
depositary or ceases to be a clearing agency under the Exchange Act and a
successor depositary registered as a clearing agency under the Exchange Act is
not appointed by the Corporation within 90 days, the Corporation will issue Debt
Securities in definitive form in exchange for all the Registered Global Debt
Securities. In addition, the Corporation may at any time, and in its sole
discretion, determine not to have the Debt Securities represented by the
Registered Global Debt Securities and, in such event, will issue Debt Securities
in definitive form in exchange for all the Registered Global Debt Securities. In
either instance, an owner of a beneficial interest in Registered Global Debt
Securities will be entitled to have Debt Securities equal in principal amount to
such beneficial interest registered in its name and will be entitled to physical
delivery of such Debt Securities in definitive form. Debt Securities so issued
in definitive form will be issued in denominations of $1,000 and integral
multiples thereof and will be issued in registered form only, without Coupons;
however, Medium-Term Notes issued pursuant to a Prospectus Supplement will be
issued in denominations of $100,000 or any amount in excess thereof which is an
integral multiple of $1,000 (or in such other denominations as shall be provided
in an applicable Pricing Supplement) and will be issued in registered form only,
without Coupons. No service charge will be made for any transfer or exchange of
such Debt Securities, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Section 2.05 of the Indenture.)
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Corporation believes to be
reliable, but the Corporation takes no responsibility for the accuracy thereof.
The Debt Securities of a series may also be issued in the form of one
or more bearer global securities (a "Bearer Global Debt Security") that will be
deposited with a common depositary for the Euroclear System and Cedel Bank,
societe anonyme or with a nominee for such depositary identified in the
Prospectus Supplement relating to such series. The specific terms and
procedures, including the specific terms of the depositary arrangement, with
respect to any portion of a series of Debt Securities to be represented by a
Bearer Global Debt Security will be described in the Prospectus Supplement
relating to such series.
CERTAIN COVENANTS
DEFINITIONS APPLICABLE TO COVENANTS. The following definitions shall be
applicable to the covenants specified below:
(i) "Attributable Debt" means, at the time of determination as
to any lease, the present value (discounted at the actual rate, if
stated, or, if no rate is stated, the implicit rate of interest of such
lease transaction as determined by the chairman, president, any vice
chairman, any vice president, the treasurer or any assistant treasurer
<PAGE>
of the Corporation), calculated using the interval of scheduled rental
payments under such lease, of the obligation of the lessee for net
rental payments during the remaining term of such lease (excluding any
subsequent renewal or other extension options held by the lessee). The
term "net rental payments" means, with respect to any lease for any
period, the sum of the rental and other payments required to be paid in
such period by the lessee thereunder, but not including, however, any
amounts required to be paid by such lessee (whether or not designated
as rental or additional rental) on account of maintenance and repairs,
insurance, taxes, assessments, water rates, indemnities or similar
charges required to be paid by such lessee thereunder or any amounts
required to be paid by such lessee thereunder contingent upon the
amount of sales, earnings or profits or of maintenance and repairs,
insurance, taxes, assessments, water rates, indemnities or similar
charges; provided, however, that, in the case of any lease which is
terminable by the lessee upon the payment of a penalty in an amount
which is less than the total discounted net rental payments required to
be paid from the later of the first date upon which such lease may be
so terminated and the date of the determination of net rental payments,
"net rental payments" shall include the then-current amount of such
penalty from the later of such two dates, and shall exclude the rental
payments relating to the remaining period of the lease commencing with
the later of such two dates.
(ii) "Debt" means notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed.
(iii) "Manufacturing Subsidiary" means any Subsidiary (A)
substantially all the property of which is located within the
continental United States of America, (B) which owns a Principal
Domestic Manufacturing Property and (C) in which the Corporation's
investment, direct or indirect and whether in the form of equity, debt,
advances or otherwise, is in excess of $2,500,000,000 as shown on the
books of the Corporation as of the end of the fiscal year immediately
preceding the date of determination; provided, however, that
"Manufacturing Subsidiary" shall not include Hughes Electronics
Corporation and its Subsidiaries, General Motors Acceptance Corporation
and its Subsidiaries (or any corporate successor of any of them) or any
other Subsidiary which is principally engaged in leasing or in
financing installment receivables or otherwise providing financial or
insurance services to the Corporation or others or which is principally
engaged in financing the Corporation's operations outside the
continental United States of America.
(iv) "Mortgage" means any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other
similar encumbrance.
(v) "Principal Domestic Manufacturing Property" means any
manufacturing plant or facility owned by the Corporation or any
Manufacturing Subsidiary which is located within the continental United
States of America and, in the opinion of the Board of Directors, is of
material importance to the total business conducted by the Corporation
and its consolidated affiliates as an entity.
<PAGE>
(vi) "Subsidiary" means any corporation of which at least a
majority of the outstanding stock having by the terms thereof ordinary
voting power to elect a majority of the board of directors of such
corporation (irrespective of whether or not at the time stock of any
other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the
time owned by the Corporation, or by one or more Subsidiaries, or by
the Corporation and one or more Subsidiaries. (Section 4.08 of the
Indenture.)
LIMITATION ON LIENS. For the benefit of the Debt Securities, the Corporation
will not, nor will it permit any Manufacturing Subsidiary to, issue or assume
any Debt secured by a Mortgage upon any Principal Domestic Manufacturing
Property of the Corporation or any Manufacturing Subsidiary or upon any shares
of stock or indebtedness of any Manufacturing Subsidiary (whether such Principal
Domestic Manufacturing Property, shares of stock or indebtedness are now owned
or hereafter acquired) without in any such case effectively providing
concurrently with the issuance or assumption of any such Debt that the Debt
Securities (together with, if the Corporation shall so determine, any other
indebtedness of the Corporation or such Manufacturing Subsidiary ranking equally
with the Debt Securities and then existing or thereafter created) shall be
secured equally and ratably with such Debt, unless the aggregate amount of Debt
issued or assumed and so secured by Mortgages, together with all other Debt of
the Corporation and its Manufacturing Subsidiaries which (if originally issued
or assumed at such time) would otherwise be subject to the foregoing
restrictions, but not including Debt permitted to be secured under clauses (i)
through (vi) of the immediately following paragraph, does not at the time exceed
20% of the stockholders' equity of the Corporation and its consolidated
subsidiaries, as determined in accordance with generally accepted accounting
principles and shown on the audited consolidated balance sheet contained in the
latest published annual report to the stockholders of the Corporation.
The above restrictions shall not apply to Debt secured by:
(i) Mortgages on property, shares of stock or indebtedness of
any corporation existing at the time such corporation becomes a
Manufacturing Subsidiary;
(ii) Mortgages on property existing at the time of acquisition
of such property by the Corporation or a Manufacturing Subsidiary, or
Mortgages to secure the payment of all or any part of the purchase
price of such property upon the acquisition of such property by the
Corporation or a Manufacturing Subsidiary or to secure any Debt
incurred prior to, at the time of, or within 180 days after, the later
of the date of acquisition of such property and the date such property
is placed in service, for the purpose of financing all or any part of
the purchase price thereof, or Mortgages to secure any Debt incurred
for the purpose of financing the cost to the Corporation or a
Manufacturing Subsidiary of improvements to such acquired property;
(iii) Mortgages securing Debt of a Manufacturing Subsidiary
owing to the Corporation or to another Subsidiary;
<PAGE>
(iv) Mortgages on property of a corporation existing at the
time such corporation is merged or consolidated with the Corporation or
a Manufacturing Subsidiary or at the time of a sale, lease or other
disposition of the properties of a corporation as an entirety or
substantially as an entirety to the Corporation or a Manufacturing
Subsidiary;
(v) Mortgages on property of the Corporation or a
Manufacturing Subsidiary in favor of the United States of America or
any State thereof, or any department, agency or instrumentality or
political subdivision of the United States of America or any State
thereof, or in favor of any other country, or any political subdivision
thereof, to secure partial, progress, advance or other payments
pursuant to any contract or statute or to secure any indebtedness
incurred for the purpose of financing all or any part of the purchase
price or the cost of construction of the property subject to such
Mortgages; or
(vi) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any
Mortgage referred to in the foregoing clauses (i) to (v); provided,
however, that the principal amount of Debt secured thereby shall not
exceed by more than 115% the principal amount of Debt so secured at the
time of such extension, renewal or replacement and that such extension,
renewal or replacement shall be limited to all or a part of the
property which secured the Mortgage so extended, renewed or replaced
(plus improvements on such property). (Section 4.06 of the Indenture.)
LIMITATION ON SALE AND LEASE-BACK. For the benefit of the Debt Securities, the
Corporation will not, nor will it permit any Manufacturing Subsidiary to, enter
into any arrangement with any person providing for the leasing by the
Corporation or any Manufacturing Subsidiary of any Principal Domestic
Manufacturing Property owned by the Corporation or any Manufacturing Subsidiary
on the date that the Debt Securities are originally issued (except for temporary
leases for a term of not more than five years and except for leases between the
Corporation and a Manufacturing Subsidiary or between Manufacturing
Subsidiaries), which property has been or is to be sold or transferred by the
Corporation or such Manufacturing Subsidiary to such person, unless either:
(i) the Corporation or such Manufacturing Subsidiary would be
entitled, pursuant to the provisions of the covenant on limitation on
liens described above, to issue, assume, extend, renew or replace Debt
secured by a Mortgage upon such property equal in amount to the
Attributable Debt in respect of such arrangement without equally and
ratably securing the Debt Securities; provided, however, that from and
after the date on which such arrangement becomes effective the
Attributable Debt in respect of such arrangement shall be deemed for
all purposes under the covenant on limitation on liens described above
and this covenant on limitation on sale and lease-back to be Debt
subject to the provisions of the covenant on limitation on liens
described above (which provisions include the exceptions set forth in
clauses (i) through (vi) of such covenant), or
(ii) the Corporation shall apply an amount in cash equal to
the Attributable Debt in respect of such arrangement to the retirement
<PAGE>
(other than any mandatory retirement or by way of payment at maturity),
within 180 days of the effective date of any such arrangement, of Debt
of the Corporation or any Manufacturing Subsidiary (other than Debt
owned by the Corporation or any Manufacturing Subsidiary) which by its
terms matures at or is extendible or renewable at the option of the
obligor to a date more than twelve months after the date of the
creation of such Debt. (Section 4.07 of the Indenture.)
DEFEASANCE
If the terms of a particular series of Debt Securities so provide, the
Corporation may, at its option, (a) discharge its indebtedness and its
obligations under the Indenture with respect to such series or (b) not comply
with certain covenants contained in the Indenture with respect to such series,
in each case by depositing funds or obligations issued or guaranteed by the
United States of America with the Trustee. The Prospectus Supplement will more
fully describe the provisions, if any, relating to such defeasance. (Section
12.02 of the Indenture.)
MODIFICATION OF THE INDENTURE
The Indenture provides that the Corporation and the Trustee may enter
into supplemental indentures without the consent of the holders of the Debt
Securities to (a) evidence the assumption by a successor corporation of the
obligations of the Corporation, (b) add covenants for the protection of the
holders of the Debt Securities, (c) add or change any of the provisions of the
Indenture to permit or facilitate the issuance of Debt Securities of any series
in bearer form, (d) cure any ambiguity or correct any inconsistency in such
Indenture, (e) establish the form or terms of Debt Securities of any series as
permitted by the terms of the Indenture and (f) evidence the acceptance of
appointment by a successor trustee. (Section 10.01 of the Indenture.)
The Indenture also contains provisions permitting the Corporation and
the Trustee to modify or amend the Indenture or any supplemental indenture or
the rights of the holders of the Debt Securities issued thereunder, with the
consent of the holders of not less than a majority in principal amount of the
Debt Securities of all series at the time outstanding under such Indenture which
are affected by such modification or amendment (voting as one class), provided
that no such modification shall (i) extend the fixed maturity of any Debt
Securities, or reduce the principal amount thereof, or premium, if any, or
reduce the rate or extend the time of payment of interest or Additional Amounts
thereon, or reduce the amount due and payable upon acceleration of the maturity
thereof or the amount provable in bankruptcy, or make the principal of, or
interest, premium or Additional Amounts on, any Debt Security payable in any
coin or currency other than that provided in such Debt Security, (ii) impair the
right to initiate suit for the enforcement of any such payment on or after the
stated maturity thereof, or (iii) reduce the aforesaid percentage of Debt
Securities, the consent of the holders of which is required for any such
modification, or the percentage required for the consent of the holders to waive
defaults, without the consent of the holder of each Debt Security so affected.
(Section 10.02 of the Indenture.)
<PAGE>
EVENTS OF DEFAULT
An Event of Default with respect to any series of Debt Securities is
defined in the Indenture as being: (a) default in payment of any principal or
premium, if any, on such series; (b) default for 30 days in payment of any
interest or Additional Amounts on such series; (c) default for 90 days after
notice in performance of any other covenant applicable to the Debt Securities;
or (d) certain events of bankruptcy, insolvency or reorganization. (Section 6.01
of the Indenture.)
No Event of Default with respect to a particular series of Debt
Securities issued under the Indenture necessarily constitutes an Event of
Default with respect to any other series of Debt Securities issued thereunder.
In case an Event of Default under clause (a), (b) or (c) shall occur and be
continuing with respect to any series, the Trustee or the holders of not less
than 25% in aggregate principal amount of Debt Securities of each such series
then outstanding may declare the principal (or, in the case of discounted Debt
Securities, the amount specified in the terms thereof) of such series to be due
and payable. In case an Event of Default under clause (d) shall occur and be
continuing, the Trustee or the holders of not less than 25% in aggregate
principal amount of all the Debt Securities then outstanding (voting as one
class) may declare the principal (or, in the case of discounted Debt Securities,
the amount specified in the terms thereof) of all outstanding Debt Securities to
be due and payable. Any Event of Default with respect to a particular series of
Debt Securities may be waived by the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of such series (or of all
the outstanding Debt Securities, as the case may be), except in a case of
failure to pay principal or premium, if any, or interest or Additional Amounts
in respect of such Debt Security for which payment had not been subsequently
made. (Section 6.01 of the Indenture.) The Indenture provides that the Trustee
may withhold notice to the securityholders of any default (except in payment of
principal, premium, if any, or interest or Additional Amounts) if it considers
it in the interests of the securityholders to do so.
(Section 6.07 of the Indenture.)
Subject to the provisions of the Indenture relating to the duties of
the Trustee in case an Event of Default shall occur and be continuing, the
Trustee shall be under no obligation to exercise any of its rights or powers
under the Indenture at the request, order or direction of any of the
securityholders, unless such securityholders shall have offered to the Trustee
reasonable indemnity. (Sections 7.01 and 7.02 of the Indenture.) Subject to such
provisions for the indemnification of the Trustee and to certain other
limitations, the holders of a majority in aggregate principal amount of the Debt
Securities of all series affected (voting as one class) at the time outstanding
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee.
(Section 6.06 of the Indenture.)
CONCERNING THE TRUSTEE
Citibank, N.A. is the Trustee under the Indenture. Citibank, N.A.
acts as depositary for funds of, makes loans to, acts as trustee and performs
certain other services for, the Corporation and certain of its subsidiaries and
affiliates in the normal course of its business.
<PAGE>
DESCRIPTION OF DEBT WARRANTS
GENERAL
The Corporation may issue, together with Debt Securities or separately,
Debt Warrants for the purchase of Debt Securities. If the Debt Warrants are
issued together with any Debt Securities, they may be attached to or traded
separately from such Debt Securities. The Debt Warrants are to be issued under
one or more separate Warrant Agreements (each a "Debt Warrant Agreement")
between the Corporation and a banking institution organized under the laws of
the United States or one of the States thereof (each a "Warrant Agent").
The following statements with respect to the Debt Warrants are
summaries of the Debt Warrant Agreement, a form of which is filed as an exhibit
to the Registration Statement. Such summaries of certain provisions of the Debt
Warrant Agreement and the Debt Warrants do not purport to be complete and such
summaries are subject to the detailed provisions of the Debt Warrant Agreement
to which reference is hereby made for a full description of such provisions,
including the definition of certain terms used herein, and for other information
regarding the Debt Warrants. Wherever particular provisions of the Debt Warrant
Agreement or terms defined therein are referred to, such provisions or
definitions are incorporated by reference as a part of the statements made, and
the statements are qualified in their entirety by such reference.
The Debt Warrants will be evidenced by Debt Warrant Certificates (the
"Debt Warrant Certificates") and, except as otherwise specified in the
Prospectus Supplement accompanying this Prospectus, may be traded separately
from any Debt Securities with which they may be issued. Debt Warrant
Certificates may be exchanged for new Debt Warrant Certificates of different
denominations at the office of the Warrant Agent. The holder of a Debt Warrant
does not have any of the rights of a holder of a Debt Security in respect of,
and is not entitled to any payments on, any Debt Securities issuable (but not
yet issued) upon exercise of the Debt Warrants. The Debt Warrants may be issued
in one or more series, and reference is made to the Prospectus Supplement
accompanying this Prospectus relating to the particular series of Debt Warrants
offered thereby for the terms of, and other information with respect to, such
Debt Warrants, including:
(i) the title and the aggregate number of Debt Warrants;
(ii) the designation, aggregate principal amount, currency
or currencies and terms of the Debt Securities that
may be purchased upon exercise of the Debt Warrants;
(iii) the price or prices at which such Debt Warrants are
exercisable;
(iv) the currency or currencies in which such Debt
Warrants are exercisable;
(v) the places at which such Debt Warrants are
exercisable and the date on which the right to
exercise the Debt Warrants shall commence and the
date on which such right shall expire (the "Debt
<PAGE>
Warrant Expiration Date") or, if the Debt
Warrants are not continuously exercisable throughout
such period, the specific date or dates on which
they will be exercisable (each, a "Debt Warrant
Exercise Date", which term shall also mean, with
respect to Debt Warrants continuously exercisable
for a period of time, every date during such period);
(vi) the terms of any mandatory or optional call
provisions;
(vii) the price or prices, if any, at which the Debt
Warrants may be redeemed at the option of the holder
or will be redeemed upon expiration;
(viii) the identity of the Debt Warrant Agent;
(ix) the exchanges, if any, on which such Debt Warrants
may be listed;
(x) whether such Debt Warrants shall be issued in
book-entry form;
(xi) if applicable, the designation and terms of the Debt
Securities with which the Debt Warrants are issued
and the number of Debt Warrants issued with each of
such Debt Securities;
(xii) if applicable, the date on and after which the Debt
Warrants and the related Debt Securities will be
separately transferable;
(xiii) whether the Debt Warrant Certificates will be in
registered form or bearer form or both;
(xiv) any applicable United States Federal income tax
consequences;
(xv) the price at which the Debt Warrants will be issued;
and
(xvi) any other terms of the Debt Warrants.
EXERCISE OF DEBT WARRANTS
Debt Warrants in registered form may be exercised by payment to the
Warrant Agent of the exercise price, in each case in such currency or currencies
as are specified in the Debt Warrant, and by communicating to the Warrant Agent
the identity of the Debt Warrantholder and the number of Debt Warrants to be
exercised. Upon receipt of payment and the Debt Warrant Certificate properly
completed and duly executed, at the office of the Warrant Agent, the Warrant
Agent will, as soon as practicable, arrange for the issuance of the applicable
Debt Securities, the form of which shall be set forth in the Prospectus
Supplement. If less than all of the Debt Warrants evidenced by a Debt Warrant
Certificate are exercised, a new Debt Warrant Certificate will be issued for the
remaining amounts of Debt Warrants. A more complete summary for the exercise of
<PAGE>
Debt Warrants in registered form and for exercises of Debt Warrants in bearer
form is contained in the Prospectus Supplement accompanying this Prospectus.
PLAN OF DISTRIBUTION
The Corporation may sell the Securities being offered hereby in any of
four ways: (i) directly to purchasers, (ii) through agents, (iii) through
underwriters, and (iv) through dealers.
Offers to purchase Securities may be solicited directly by the
Corporation or by agents designated by the Corporation from time to time. Any
such agent, who may be deemed to be an underwriter as that term is defined in
the Securities Act of 1933, involved in the offer or sale of the Securities in
respect of which this Prospectus is delivered will be named, and any commissions
payable by the Corporation to such agent set forth, in the Prospectus
Supplement. Unless otherwise indicated in the Prospectus Supplement, any such
agent will be acting on a reasonable best efforts basis for the period of its
appointment (ordinarily five business days or less). Agents may be entitled
under agreements which may be entered into with the Corporation to
indemnification by the Corporation against certain civil liabilities, including
liabilities under the Securities Act of 1933, and may be customers of, engage in
transactions with, or perform services for, the Corporation and its subsidiaries
in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale, the
Corporation will enter into an underwriting agreement with such underwriters at
the time of sale to them and the names of the underwriters and the terms of the
transaction will be set forth in the Prospectus Supplement, which will be used
by the underwriters to make resales of the Securities in respect of which this
Prospectus is delivered to the public. The underwriters may be entitled, under
the relevant underwriting agreement, to indemnification by the Corporation
against certain liabilities, including liabilities under the Securities Act of
1933.
Among others, one or more of the following firms may act as managing
underwriter(s) with respect to the offering of the Securities: Bear, Stearns &
Co. Inc., Lehman Brothers, Lehman Brothers Inc., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith, J.P. Morgan Securities Inc., Morgan Stanley & Co.
Incorporated and Salomon Brothers Inc.
If a dealer is utilized in the sale of the Securities in respect of
which this Prospectus is delivered, the Corporation will sell such Securities to
the dealer as principal. The dealer may then resell such Securities to the
public at varying prices to be determined by such dealer at the time of resale.
Dealers may be entitled to indemnification by the Corporation against certain
liabilities, including liabilities under the Securities Act of 1933.
If so indicated in the applicable Prospectus Supplement, the
Corporation will authorize agents and underwriters to solicit offers by certain
institutions to purchase Securities from the Corporation at the public offering
price set forth in the Prospectus Supplement pursuant to Delayed Delivery
Contracts ("Contracts") providing for payment and delivery on the date stated in
the Prospectus Supplement. Each Contract will be for an amount not less than,
and unless the Corporation otherwise agrees the aggregate principal amount of
<PAGE>
Securities sold pursuant to Contracts shall be not less nor more than, the
respective amounts stated in the Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions but shall in all cases be
subject to the approval of the Corporation. Contracts will not be subject to any
conditions except that the purchase by an institution of the Securities covered
by its Contract shall not at the time of delivery be prohibited under the laws
of any jurisdiction in the United States to which such institution is subject. A
commission indicated in the applicable Prospectus Supplement will be paid to
underwriters and agents soliciting purchases of Securities pursuant to Contracts
accepted by the Corporation.
The place and time of delivery for the Securities in respect of which
this Prospectus is delivered are set forth in the accompanying Prospectus
Supplement.
-------------------
Dennis Weatherstone, a director of J. P. Morgan & Co. Incorporated,
of which J. P. Morgan Securities Inc. is an indirect wholly-owned subsidiary, is
a director of the Corporation. In the ordinary course of their respective
businesses, affiliates of the Agents have engaged, and will in the future engage
in commercial banking and investment banking transactions with General Motors
and certain of its affiliates.
EXPERTS
The consolidated financial statements and the financial statement
schedule included in the Corporation's 1995 Annual Report on Form 10-K, as
amended, incorporated by reference herein, have been audited by Deloitte &
Touche LLP (as to financial statements and the financial statement schedule of
General Motors and as to financial statements of Hughes Electronics Corporation)
and KPMG Peat Marwick LLP (as to financial statements of Electronic Data Systems
Corporation), independent auditors, as stated in their respective reports
appearing therein, and have been so incorporated by reference in reliance upon
such reports given upon the authority of such firms as experts in accounting and
auditing.
LEGAL OPINIONS
Unless otherwise indicated in the Prospectus Supplement relating to the
Securities, the legality of the Securities will be passed upon for the
Corporation by Martin I. Darvick, Attorney, Legal Staff, of the Corporation. Mr.
Darvick owns shares, and has options to purchase shares, of the Corporation's
Common Stock, $1-2/3 Par Value.
Unless otherwise indicated in the Prospectus Supplement relating to the
Securities, certain legal matters relating to the Securities will be passed upon
for the Underwriters by Davis Polk & Wardwell. Davis Polk & Wardwell acts as
counsel to the Executive Compensation Committee of the Board of Directors of the
Corporation and has acted as counsel for the Corporation and its subsidiaries in
various matters.
<PAGE>
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