<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 18, 1997
[AMERICAN EXPRESS LOGO] U.S.$500,000,000
AMERICAN EXPRESS COMPANY
6 7/8% Notes due November 1, 2005
--------------
We will pay interest on the notes semiannually on May 1 and November 1 of
each year. The first interest payment will be made on May 1, 2001. The notes
will mature on November 1, 2005. We may not redeem them prior to maturity unless
certain events occur involving United States taxation. We describe these events
under the heading 'Description of Notes - Redemption Upon a Tax Event' on page
S-15 of this prospectus supplement.
We will only issue the notes in book entry form registered in the name of
the nominee of The Depository Trust Company. Beneficial interests in the notes
will be shown on, and transfers of such interests will be made only through,
records maintained by The Depository Trust Company and its participants,
including Clearstream Banking, societe anonyme and the Euroclear System. Except
as described in this prospectus supplement, we will not issue notes in
definitive form.
The underwriters are offering the notes for sale both inside and outside the
United States. We have applied to list the notes on the Luxembourg Stock
Exchange.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO
PUBLIC(1) AND COMMISSIONS THE COMPANY(1)
----------------------- ----------------------- -----------------------
<S> <C> <C> <C>
Per Note...................... 99.513% .35% 99.163%
Total......................... U.S.$497,565,000 U.S.$1,750,000 U.S.$495,815,000
</TABLE>
(1) Plus accrued interest, if any from November 1, 2000.
Delivery of the notes in book-entry form only, will be made on or about
November 1, 2000.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
ABN AMRO CREDIT SUISSE FIRST BOSTON
BLAYLOCK & PARTNERS, L.P.
BNP PARIBAS
DRESDNER KLEINWORT BENSON
TOKYO-MITSUBISHI INTERNATIONAL, PLC
UTENDAHL CAPITAL PARTNERS, L.P.
The date of this prospectus supplement is October 25, 2000.
<PAGE>
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
SUMMARY OF THE OFFERING............... S-3
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE........................ S-5
CONSOLIDATED CAPITALIZATION OF
AMERICAN EXPRESS COMPANY AND
SUBSIDIARIES........................ S-6
AMERICAN EXPRESS COMPANY AND
CONSOLIDATED SUBSIDIARIES --
SELECTED FINANCIAL DATA............. S-7
RATIO OF EARNINGS TO FIXED CHARGES.... S-8
DIRECTORS AND PRINCIPAL EXECUTIVE
OFFICERS OF AMERICAN EXPRESS
COMPANY............................. S-9
USE OF PROCEEDS....................... S-10
DESCRIPTION OF NOTES.................. S-11
UNITED STATES TAX CONSIDERATIONS...... S-17
UNDERWRITING.......................... S-20
NOTICE TO CANADIAN RESIDENTS.......... S-22
LEGAL MATTERS......................... S-23
GENERAL INFORMATION................... S-23
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS
AVAILABLE INFORMATION................. 2
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE........................ 2
THE COMPANY........................... 3
USE OF PROCEEDS....................... 4
DESCRIPTION OF DEBT SECURITIES........ 4
DESCRIPTION OF PREFERRED SHARES....... 12
DESCRIPTION OF DEPOSITARY SHARES...... 13
DESCRIPTION OF COMMON SHARES.......... 16
DESCRIPTION OF SECURITIES WARRANTS.... 16
DESCRIPTION OF CURRENCY WARRANTS...... 17
DESCRIPTION OF OTHER WARRANTS......... 17
PLAN OF DISTRIBUTION.................. 18
LEGAL MATTERS......................... 19
EXPERTS............................... 19
</TABLE>
--------------
THE LUXEMBOURG STOCK EXCHANGE TAKES NO RESPONSIBILITY FOR THE CONTENTS OF
THIS DOCUMENT, MAKES NO REPRESENTATION AS TO ITS ACCURACY OR COMPLETENESS AND
EXPRESSLY DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM
OR IN RELIANCE UPON THE WHOLE OR ANY PART OF THE CONTENTS OF THIS DOCUMENT AND
THE ACCOMPANYING PROSPECTUS.
OFFERS AND SALES OF THE NOTES ARE SUBJECT TO RESTRICTIONS IN RELATION TO THE
UNITED KINGDOM, DETAILS OF WHICH ARE SET OUT IN 'UNDERWRITING' BELOW. THE
DISTRIBUTION OF THIS PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS AND THE
OFFERING OF THE NOTES IN CERTAIN OTHER JURISDICTIONS MAY ALSO BE RESTRICTED BY
LAW. WE ARE NOT, AND THE UNDERWRITERS ARE NOT, MAKING AN OFFER TO SELL THESE
NOTES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
THE COMPANY ACCEPTS RESPONSIBILITY FOR THE INFORMATION CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE COMMISSIONER PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS.
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.
S-2
<PAGE>
SUMMARY OF THE OFFERING
The following summary highlights information contained elsewhere in this
prospectus supplement. You should read this summary in conjunction with the more
detailed information appearing elsewhere in this prospectus supplement and
accompanying prospectus.
<TABLE>
<S> <C>
Issuer....................................... American Express Company (the 'Company').
Securities Offered........................... U.S.$500,000,000 principal amount of 6 7/8% notes due
November 1, 2005.
Use of Proceeds.............................. We will use the money raised from the sale of the
notes for general corporate purposes. Net proceeds to
be paid to us will be approximately U.S.$495,815,000.
Maturity Date................................ November 1, 2005.
Interest Payment Dates....................... May 1 and November 1 of each year, beginning May 1,
2001.
Interest Rate................................ 6 7/8% per annum.
Redemption................................... We may not redeem the notes prior to maturity unless
certain events occur involving United States
taxation. See 'Description of Notes -- Redemption
Upon a Tax Event'.
Markets...................................... The notes are offered for sale in those jurisdictions
both inside and outside the United States where it is
legal to make such offers. See 'Underwriting'.
Listing...................................... We have applied to list the notes on the Luxembourg
Stock Exchange.
Form and Settlement.......................... We will issue the notes in the form of one or more
fully registered global certificates (the 'Global
Notes'), which we will deposit on or about
November 1, 2000 with, or on behalf of, The
Depository Trust Company, New York, New York (the
'Depository') and register in the name of Cede & Co.,
the Depository's nominee, for the accounts of the
participants in the Depository, including Morgan
Guaranty Trust Company of New York, as operator of
the Euroclear System ('Euroclear') and Clearstream
Banking, societe anonyme ('Clearstream, Luxembourg').
Except as described in this prospectus supplement,
beneficial interests in the Global Notes will be
represented through book-entry accounts of financial
institutions acting on behalf of beneficial owners as
direct and indirect participants in the Depository.
You may choose to hold interests in the Global Notes
through the Depository or through Euroclear or
Clearstream, Luxembourg if they are participants in
such systems, or indirectly through organizations
that are participants in such systems. Euroclear and
Clearstream, Luxembourg will hold interests on behalf
of their participants through their respective
depositaries, Morgan Guaranty Trust Company of New
York and Citibank, N.A., which in turn will hold such
interests in accounts as participants of the
Depository. See 'Description of Notes -- Book-Entry,
Delivery and Form'. Initial settlement for
</TABLE>
S-3
<PAGE>
<TABLE>
<S> <C>
the notes will be made in immediately available funds
in U.S. dollars. Secondary market trading between
Depository participants of beneficial interests in
the Global Notes will be settled in immediately
available funds using the Depository's Same-Day Funds
Settlement System. Secondary market trading of
beneficial interests in the Global Notes between
Clearstream, Luxembourg participants and/or Euroclear
participants will settle in immediately available
funds.
Withholding Tax.............................. We will pay principal of and interest on the notes
beneficially owned by a United States Alien Holder
without withholding or deduction for United States
withholding taxes subject to the requirements and
limitations set forth in this prospectus supplement
under the heading 'United States Tax Considerations'.
</TABLE>
S-4
<PAGE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
We file annual, quarterly and current reports and other information with the
Securities and Exchange Commission (the 'SEC'). You may read and copy any
document we file at the SEC's public reference rooms in Washington, D.C., New
York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. The Company's SEC filings are
also available to the public from the SEC's web site at http://www.sec.gov.
The SEC allows us to 'incorporate by reference' the information we file with
it, which means that we can disclose important information to you by referring
you to those documents that are considered part of this prospectus supplement.
Later information that we file with the SEC will automatically update and
supersede this information. The Company incorporates by reference the documents
listed below and any future filings made with the SEC under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the 'Exchange Act')
until the offering of these notes has been completed.
Annual Report on Form 10-K for the year ended December 31, 1999 (the '1999
10-K Report')
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000 and
June 30, 2000.
Current Reports on Form 8-K dated January 26, 2000, February 3, 2000,
April 26, 2000, April 27, 2000, May 3, 2000, June 27, 2000, July 25, 2000,
as amended on Form 8-K/A on July 31, 2000, August 2, 2000, October 10, 2000
and October 23, 2000.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address or number:
American Express Company
200 Vesey Street
New York, New York 10285
Attention: Secretary
(212) 640-2000
The financial statements which we have incorporated in this prospectus
supplement by reference to the 1999 10-K Report have been audited by Ernst &
Young LLP, 787 Seventh Avenue, New York, New York 10019, independent certified
public accountants, to the extent indicated in their report included in the 1999
10-K Report. We have incorporated by reference the financial statements in this
prospectus supplement in reliance upon the report of that firm, given on their
authority as experts in accounting and auditing.
Ernst & Young has given and not withdrawn their written consent to the
incorporation by reference of their report dated February 3, 2000 from the 1999
10-K Report on the Company's audited financial statements for the financial year
ended December 31, 1999.
S-5
<PAGE>
CONSOLIDATED CAPITALIZATION OF AMERICAN EXPRESS COMPANY
AND SUBSIDIARIES
The table below shows the capitalization of American Express Company and its
subsidiaries as of June 30, 2000. The 'As Adjusted' column reflects our issuance
of the notes in this offering. You should read this table along with our
consolidated financial statements, which are included in the documents
incorporated by reference into this prospectus supplement and the accompanying
prospectus.
<TABLE>
<CAPTION>
JUNE 30, 2000
------------------------------
AS
ACTUAL ADJUSTED
------ --------
(IN MILLIONS OF U.S. DOLLARS)
(UNAUDITED)
<S> <C> <C>
Long-Term Debt.............................................. $ 4,836 $ 5,336
Guaranteed preferred beneficial interests in the Company's
junior subordinated deferrable interest debentures........ 500 500
Shareholders' Equity:
Common shares, $.20 par value, authorized 3.6 billion
shares; issued and outstanding 1,333 million shares... 267 267
Capital surplus......................................... 5,309 5,309
Retained earnings....................................... 5,535 5,535
Other comprehensive income, net of tax:
Net unrealized securities losses.................... (504) (504)
Foreign currency translation adjustments............ (98) (98)
------- -------
Accumulated other comprehensive loss.................... (602) (602)
------- -------
Total shareholders' equity...................... 10,509 10,509
------- -------
Total Capitalization........................................ $15,845 $16,345
------- -------
------- -------
</TABLE>
Other than as described in this prospectus supplement and the accompanying
prospectus, there has been no material change in the consolidated capitalization
of American Express Company and its subsidiaries since June 30, 2000.
S-6
<PAGE>
AMERICAN EXPRESS COMPANY AND CONSOLIDATED SUBSIDIARIES
SELECTED FINANCIAL DATA
(IN MILLIONS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
------------------- ----------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS
Net revenues.......... $ 11,627 $ 10,269 $ 21,278 $ 19,132 $ 17,760 $ 16,380 $ 15,921
Expenses.............. 9,661 8,582 17,840 16,207 15,010 13,716 13,738
Net income............ 1,396 1,221 2,475 2,141 1,991 1,901 1,564
Adjusted income*...... 1,396 1,221 2,475 2,201 1,991 1,739 1,564
Return on average
shareholders'
equity**............ 25.5% 25.3% 25.3% 24.0% 23.5% 22.8% 22.0%
BALANCE SHEET
Cash and cash
equivalents......... $ 6,841 $ 6,096 $ 7,471 $ 4,092 $ 4,179 $ 2,677 $ 3,200
Accounts receivable
and accrued
interest, net....... 26,995 22,944 26,467 22,224 21,774 20,491 19,914
Investments........... 42,838 42,247 43,052 41,299 39,648 38,339 42,561
Loans, net............ 23,312 19,889 23,582 21,054 20,109 18,518 16,091
Total assets.......... 148,553 132,452 148,517 126,933 120,003 108,512 107,405
Customers' deposits... 13,533 9,062 12,197 10,398 9,444 9,555 9,889
Travelers Cheques
outstanding......... 6,900 6,325 6,213 5,823 5,634 5,838 5,697
Insurance and annuity
reserves............ 24,503 25,303 25,011 25,433 26,165 25,674 25,157
Short-term debt....... 26,170 24,785 30,627 22,605 20,570 18,402 17,654
Long-term debt........ 4,836 6,505 5,995 7,019 7,873 6,552 7,570
Shareholders'
equity.............. 10,509 9,762 10,095 9,698 9,574 8,528 8,220
</TABLE>
---------
* Adjusted income for 1998 is adjusted to exclude the following items: $138
million credit loss provision at American Express Bank relating to its
Asia/Pacific portfolio, as well as income of $78 million representing gains
on the sale of First Data Corporation shares and a preferred dividend based
on Lehman Brothers Holdings Inc.'s earnings. Adjusted income for 1996 is
adjusted to exclude a $300 million gain on the exchange of the Company's Debt
Exchangeable for Common Stock and a $138 million restructuring charge.
** Return on average shareholders' equity is based on adjusted income from
continuing operations in 1996 and excludes the effect of Statement of
Financial Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities.
S-7
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our historical ratios of earnings to fixed
charges for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------
2000 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges...... 2.32 2.48 2.24 2.22 2.17 1.86
</TABLE>
In computing the ratio of earnings to fixed charges, 'earnings' consist of
pretax income from continuing operations, interest expense and other
adjustments. Interest expense includes interest expense related to the
international banking operations of the Company and cardmember lending
activities of American Express Travel Related Services Company, Inc., which is
netted against interest and dividends and cardmember lending net finance charge
revenue, respectively, in our Consolidated Statement of Income.
For purposes of computing 'earnings', other adjustments included adding the
amortization of capitalized interest, the net loss of affiliates accounted for
under the equity method whose debt is not guaranteed by us, the minority
interest in the earnings of majority-owned subsidiaries with fixed charges, and
the interest component of rental expense and subtracting undistributed net
income of affiliates accounted for at equity.
'Fixed charges' consist of interest and other adjustments, including
capitalized interest costs and the interest component of rental expense.
In the fourth quarter of 1995, our investment in First Data Corporation
('FDC') was reduced to approximately 10 percent as a result of shares issued by
FDC in connection with a merger transaction. Accordingly, as of December 31,
1995, our investment in FDC is accounted for as 'Investments -- Available for
Sale.'
S-8
<PAGE>
DIRECTORS AND PRINCIPAL EXECUTIVE OFFICERS OF
AMERICAN EXPRESS COMPANY
Our Directors and Executive Officers are as follows:
DIRECTORS
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
---- --------------------
<S> <C>
Daniel F. Akerson.................... Chairman and Chief Executive Officer, XO Communications,
Inc.
Edwin L. Artzt....................... Former Chairman of the Board and Chief Executive Officer,
The Procter & Gamble Company
William G. Bowen..................... President, The Andrew W. Mellon Foundation
Kenneth I. Chenault.................. President and Chief Operating Officer of the Company
Robert L. Crandall................... Former Chairman and Chief Executive Officer, AMR Corp. and
American Airlines, Inc.
Harvey Golub......................... Chairman and Chief Executive Officer of the Company
Beverly Sills Greenough.............. Chairman, Lincoln Center for the Performing Arts
F. Ross Johnson...................... Chairman and Chief Executive Officer, RJM Group
Vernon E. Jordan, Jr................. Senior Managing Director, Lazard Freres & Co.
Jan Leschly.......................... Chairman and Chief Executive Officer, Care Capital LLC
Drew Lewis........................... Former Chairman and Chief Executive Officer, Union Pacific
Corporation
Richard McGinn....................... Former Chairman and Chief Executive Officer, Lucent
Technologies, Inc.
Frank P. Popoff...................... Chairman of the Board, The Dow Chemical Company
</TABLE>
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME OFFICE
---- ------
<S> <C>
Harvey Golub......................... Chairman and Chief Executive Officer of the Company;
Chairman, American Express Travel Related Services Company,
Inc. ('TRS')
Kenneth I. Chenault.................. President and Chief Operating Officer of the Company;
President and Chief Executive Officer, TRS
Jonathan S. Linen.................... Vice Chairman of the Company
Anne M. Busquet...................... President, Interactive and Information Services, TRS
James Cracchiolo..................... Group President, Global Financial Services and Chief
Executive Officer, American Express Financial Corporation
Gary Crittenden...................... Executive Vice President and Chief Financial Officer of the
Company
Ursula F. Fairbairn.................. Executive Vice President, Human Resources and Quality of the
Company
Edward P. Gilligan................... Group President, Global Corporate Services, TRS
John D. Hayes........................ Executive Vice President, Global Advertising of the Company
</TABLE>
(table continued on next page)
S-9
<PAGE>
(table continued from previous page)
<TABLE>
<CAPTION>
NAME OFFICE
---- ------
<S> <C>
David C. House....................... Group President, Global Establishment Services and Travelers
Cheque Group, TRS
David R. Hubers...................... Chairman, American Express Financial Corporation
Alfred Kelly, Jr..................... Group President, U.S. Consumer and Small Business Services
Group, TRS
Louise M. Parent..................... Executive Vice President and General Counsel of the Company
Glen Salow........................... Executive Vice President and Chief Information Officer of
the Company
Thomas Schick........................ Executive Vice President, Corporate Affairs and
Communications of the Company
</TABLE>
USE OF PROCEEDS
We will use the net proceeds from the sale of the notes for general
corporate purposes. Net proceeds to be paid to us will be approximately
U.S.$495,815,000.
S-10
<PAGE>
DESCRIPTION OF NOTES
This description of the terms of the notes adds information to the
description of the general terms and provisions of Debt Securities in the
accompanying prospectus. If this description differs in any way from the
description in the accompanying prospectus, you should rely on this description.
GENERAL
The notes are initially being offered in the principal amount of
U.S.$500,000,000. We may, without consent of the holders, increase such
principal amount in the future, on the same terms and conditions and with the
same CUSIP number as the notes being offered hereby, as more fully described in
' -- Further Issues' below. The notes will be our unsecured obligations and will
mature on November 1, 2005. The notes will rank prior to all subordinated
indebtedness of the Company and on an equal basis with all other senior
unsecured indebtedness of the Company.
We will pay interest on the notes from November 1, 2000 at the rate per
annum set forth on the cover page of this prospectus supplement, on May 1 and
November 1 of each year, beginning May 1, 2001, to the persons who are
registered as the owners of the notes at the close of business on the 15th day
preceding the applicable interest payment date, subject to certain exceptions.
Interest on the notes will be paid on the basis of a 360-day year comprised of
twelve 30-day months. We will not redeem the notes prior to maturity unless
certain events occur involving United States taxation. In such event, we will
redeem the notes at a redemption price of 100% of their principal amount plus
accrued and unpaid interest to the date of redemption. See ' -- Redemption Upon
a Tax Event'. If any day on which a payment is due is not a Business Day (as
defined below), then the holder of the note shall not be entitled to payment of
the amount due until the next Business Day and shall not be entitled to any
additional principal, interest or other payment as a result of such delay except
as otherwise provided under ' -- Payment of Additional Amounts'. 'Business Day'
means any day which is not a Saturday or Sunday or any other day on which banks
in New York City and, if definitive notes are issued, in Luxembourg, are
authorized or obligated by law or regulation to close.
BOOK-ENTRY, DELIVERY AND FORM
We will issue the notes in the form of one or more fully registered global
notes (the 'Global Notes') in denominations of U.S.$1,000 or integral multiples
of U.S.$1,000. We will deposit the notes with, or on behalf of, The Depository
Trust Company, New York, New York (the 'Depository') and will register the notes
in the name of Cede & Co., the Depository's nominee. Your beneficial interests
in the Global Notes will be represented through book-entry accounts of financial
institutions acting on your behalf as direct and indirect participants in the
Depository ('DTC Participants'). You may elect to hold interests in the Global
Notes either through the Depository (in the United States) or through
Clearstream Banking, societe anonyme ('Clearstream, Luxembourg') or Morgan
Guaranty Trust Company of New York, Brussels Office, as operator of the
Euroclear System ('Euroclear') (outside of the United States) if they are
participants in such systems, or indirectly through organizations which are
participants in such systems. Clearstream, Luxembourg and Euroclear will hold
interests on behalf of their participants through customers' securities accounts
in Clearstream, Luxembourg'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 Clearstream, Luxembourg, and Morgan
Guaranty Trust Company of New York will act as depositary for Euroclear (in such
capacities, the 'U.S. Depositaries'). Except as set forth below, the Global
Notes 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.
As long as the notes are represented by the Global Notes, we will pay
principal of and interest on the notes to or as directed by the Depository as
the registered holder of the Global Notes. Payments to the Depository will be in
immediately available funds by wire transfer. The
S-11
<PAGE>
Depository, Euroclear or Clearstream, Luxembourg, as applicable, will credit the
relevant accounts of their participants on the applicable date.
We have been advised by the Depository, Clearstream, Luxembourg and
Euroclear, respectively, as follows:
As to the Depository: The Depository has advised us that it is a
limited-purpose trust company organized under the New York Banking Law, a
'banking organization' within the meaning of the New York Banking Law, 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 pursuant to the provisions of Section 17A of the Exchange Act.
The Depository was created to hold securities of its participants and to
facilitate the clearance and settlement of securities transactions, such as
transfers and pledges, among its participants in such securities through
electronic computerized book-entry changes in accounts of the participants,
thereby eliminating the need for physical movement of securities
certificates. The Depository's participants include securities brokers and
dealers (including the underwriters), banks, trust companies, clearing
corporations and certain other organizations, some of whom (and/or their
representatives) own the Depository. Access to the Depository'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.
As to Clearstream, Luxembourg: Clearstream, Luxembourg has advised us that
it is incorporated under the laws of Luxembourg as a professional
depositary. Clearstream, Luxembourg holds securities for its participating
organizations ('Clearstream, Luxembourg Participants') and facilitates the
clearance and settlement of securities transactions between Clearstream,
Luxembourg Participants through electronic book-entry changes in accounts
of Clearstream, Luxembourg Participants, thereby eliminating the need for
physical movement of certificates. Clearstream, Luxembourg provides to
Clearstream, Luxembourg Participants, among other things, services for
safekeeping, administration, clearance and settlement of internationally
traded securities and securities lending and borrowing. Clearstream,
Luxembourg interfaces with domestic markets in several countries. As a
bank, Clearstream, Luxembourg is subject to regulation by the Luxembourg
Commission for the Supervision of the Financial Sector. Clearstream,
Luxembourg 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 of this offering. Indirect access to Clearstream,
Luxembourg is also available to others, such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship
with a Clearstream, Luxembourg Participant either directly or indirectly.
Payments on notes held beneficially through Clearstream, Luxembourg will be
credited to cash accounts of Clearstream, Luxembourg Participants in
accordance with its rules and procedures, to the extent received by the
U.S. Depositary for Clearstream, Luxembourg.
As to Euroclear: Euroclear has advised us that it was created in 1968 to
hold securities for participants of Euroclear ('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
includes 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 Company
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
S-12
<PAGE>
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 Bank 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.
Payments on notes 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 notes are issued, we will appoint a
paying agent and transfer agent in Luxembourg.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Investors will make initial payment for the notes 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 Clearstream, Luxembourg Participants
and/or Euroclear Participants will occur in the ordinary way in accordance with
the applicable rules and operating procedures of Clearstream, Luxembourg 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
Clearstream, Luxembourg 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. 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
(based on European time). The relevant European international clearing system
will, if the transaction meets its settlement requirements, deliver instructions
to its U.S. Depositary to take action to effect final settlement on its behalf
by delivering or receiving notes in the Depository, and making or receiving
payment in accordance with normal procedures for same-day funds settlement
applicable to the Depository. Clearstream, Luxembourg Participants and Euroclear
Participants may not deliver instructions directly to their respective U.S.
Depositaries.
Because of time-zone differences, credits of notes received in Clearstream,
Luxembourg 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 notes settled during such processing will be reported to
the relevant Euroclear or Clearstream, Luxembourg Participants on such business
day. Cash received in Clearstream, Luxembourg or Euroclear as a result of sales
of notes by or through a Clearstream, Luxembourg 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
S-13
<PAGE>
Clearstream, Luxembourg or Euroclear cash account only as of the business day
following settlement in the Depository.
Although the Depository, Clearstream, Luxembourg and Euroclear have agreed
to the foregoing procedures in order to facilitate transfers of notes among
participants of the Depository, Clearstream, Luxembourg and Euroclear, they are
under no obligation to perform or continue to perform such procedures and such
procedures may be discontinued at any time.
DEFINITIVE NOTES
We will issue notes in definitive form in exchange for the Global Notes in
the following instances. If the Depository notifies us that it is unwilling or
unable to continue as depository for the Global Notes or if the Depository
ceases to be a clearing agency registered under the Exchange Act and we do not
appoint a successor depository within 90 days, we will issue notes in definitive
form. We will also issue definitive notes in exchange for the Global Notes if an
event of default with respect to the notes occurs and is continuing as described
under 'Description of Debt Securities -- Events of Default, Notice and Waiver'
in the accompanying prospectus. If we issue definitive notes, the notes may be
presented for registration of transfer and exchange at the office of the Trustee
in New York, New York and the Paying Agent in Luxembourg. In such circumstances,
we will pay principal of, and interest on, the notes at the office of the
Trustee in New York, New York and at the office of the Paying Agent in
Luxembourg. We will make payments of principal on the notes only against
surrender of such notes. Payment of interest on any interest payment date on any
notes will be made to the person in whose name such note is registered on the
April 15 or October 15, as the case may be, immediately preceding such interest
payment date, except that interest payable at maturity will be payable to the
person to whom the principal of the note is paid. All payments of principal and
interest will be made by U.S. dollar check drawn on a bank in the City of New
York and mailed to the person in whose name such notes are registered at such
person's address as provided in the register. For holders of at least
U.S.$1,000,000 in aggregate principal amount of notes, we will make payment by
wire transfer to a U.S. dollar account maintained by the payee with a bank in
the City of New York or in Europe, provided that the Trustee receives a written
request from such holder to such effect designating such account no later than
the April 15 or October 15, as the case may be, immediately preceding such
interest payment date.
PAYMENT OF ADDITIONAL AMOUNTS
We will, subject to the exceptions and limitations set forth below, pay as
additional interest on the notes, such additional amounts as are necessary in
order that the net payment by us or a paying agent of the principal of and
interest on the notes to a holder who is a United States Alien Holder (as
defined below), after deduction for any present or future tax, assessment or
governmental charge of the United States or a political subdivision or taxing
authority thereof or therein, imposed by withholding with respect to the
payment, will not be less than the amount that would have been payable had no
withholding or deduction been required.
However, our obligation to pay additional amounts shall not apply:
(1) to a tax, assessment or governmental charge that is imposed or
withheld solely by reason of the holder, or a fiduciary, settlor,
beneficiary, member or shareholder of the holder if the holder is an estate,
trust, partnership or corporation, or a person holding a power over an
estate or trust administered by a fiduciary holder, being considered as:
(a) being or having been present or engaged in a trade or business in
the United States or having or having had a permanent establishment in
the United States:
(b) having a current or former relationship with the United States,
including a relationship as a citizen or resident thereof;
(c) being or having been a foreign or domestic personal holding
company, a passive foreign investment company or a controlled foreign
corporation with respect to the United
S-14
<PAGE>
States, a corporation that has accumulated earnings to avoid United
States federal income tax or a private foundation or other tax-exempt
organization; or
(d) being or having been a '10-percent shareholder' of the Company as
defined in section 871(h)(3) of the United States Internal Revenue Code
of 1986, as amended (the 'Code') or any successor provision or being or
having been a bank whose receipt of interest on a note is described in
section 881(c)(3)(A) of the Code or any successor provision;
(2) to any holder that is not the sole beneficial owner of the note, or
a portion thereof, or that is a fiduciary or partnership, but only to the
extent that the beneficial owner, a beneficiary or settlor with respect to
the fiduciary, or a member of the partnership would not have been entitled
to the payment of an additional amount had the beneficial owner,
beneficiary, settlor or member received directly its beneficial or
distributive share of the payment;
(3) to a tax, assessment or governmental charge that is imposed or
withheld solely by reason of the failure of the holder or any other person
to comply with certification, identification or information reporting
requirements concerning the nationality, residence, identity or connection
with the United States of the holder or beneficial owner of such note, if
compliance is required by statute or by regulation of the United States
Treasury Department, without regard to any tax treaty, or by an applicable
income tax treaty to which the United States is a party as a precondition to
exemption from such tax, assessment or other governmental charge;
(4) to a tax, assessment or governmental charge that is imposed
otherwise than by withholding by the Company or a paying agent from the
payment;
(5) to a tax, assessment or governmental charge that is imposed or
withheld solely by reason of a change in law, regulation, or administrative
or judicial interpretation that becomes effective more than 15 days after
the payment becomes due or is duly provided for, whichever occurs later;
(6) to an estate, inheritance, gift, sales, excise, transfer, wealth or
personal property tax or a similar tax, assessment or governmental charge;
(7) to any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of or interest on
any note, if such payment can be made without such withholding by any other
paying agent; or
(8) in the case of any combination of items (1), (2), (3), (4), (5), (6)
and (7).
The notes 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 ' -- Redemption Upon a Tax Event', we 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.
REDEMPTION UPON A TAX EVENT
If (a) we become or will become obligated to pay additional amounts as
described herein under the heading ' -- Payment of Additional Amounts' as a
result of any change in, or amendment to, the laws (or any regulations or
rulings promulgated thereunder) of the United States (or any political
subdivision or taxing authority thereof or therein), or any change in, or
amendment to, any official position regarding the application or interpretation
of such laws, regulations or rulings, which change or amendment is announced or
becomes effective on or after the date of this prospectus supplement, or (b) a
taxing authority of the United States takes an action on or after the date of
this prospectus supplement, whether or not such action is taken with respect to
us or any of our affiliates, that results in a substantial probability that we
will or may be required to pay such additional amounts, then we may in either
case, at our option, redeem, as
S-15
<PAGE>
a whole, but not in part, the notes on at least 30 days' and no more than 60
days' prior written notice, at a redemption price equal to 100% of their
principal amount, together with interest accrued thereon to the date fixed for
redemption. In order to exercise this right, we must determine, in our business
judgment, that the obligation to pay such additional amounts cannot be avoided
by the use of reasonable measures available to us, not including substitution of
the obligor under the notes. We may not redeem the notes based on the reason in
clause (b) of the first sentence of this paragraph unless we have received an
opinion of independent counsel to the effect that an action taken by a taxing
authority of the United States results in a substantial probability that we will
or may be required to pay the additional amounts described above under the
heading ' -- Payment of Additional Amounts' and we have delivered to the Trustee
a certificate, signed by a duly authorized officer, stating that based on such
opinion we are entitled to redeem the notes pursuant to their terms.
FURTHER ISSUES
We may from time to time, without notice to or the consent of the registered
holders of the notes, create and issue further notes ranking on an equal basis
with the notes in all respects (or in all respects except for the payment of
interest accruing prior to the issue date of such further notes or except for
the first payment of interest following the issue date of such further notes).
Such further notes shall be consolidated and form a single series with the notes
and shall have the same terms as to status, redemption or otherwise as the
notes.
TRUSTEE
The Trustee for the notes is First Union National Bank, pursuant to the
First Supplemental Indenture dated as of October 25, 2000 to the indenture dated
as of May 1, 1997 between the Company and PNC Bank, National Association, as
trustee (the 'Indenture'). The Trustee provides banking and corporate trust
services to us and many of our subsidiaries worldwide. The Trustee is a
depositary of funds for us and holds our common shares for customers of the
Trustee, including customers over whose accounts the Trustee has discretionary
authority. The principal corporate trust office of the Trustee is First Union
National Bank, One World Trade Center, 47th Floor, New York, New York 10048.
NOTICES
Notices to holders of the notes will be published in a leading daily
newspaper in The City of New York, in London, and, so long as the notes 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 considered given on the date of publication or, if
published more than once, on the first date of publication.
APPLICABLE LAW
The notes, the Indenture and the First Supplemental Indenture will be
governed by and construed in accordance with the laws of the State of New York.
S-16
<PAGE>
UNITED STATES TAX CONSIDERATIONS
In the opinion of Bruce A. Cogan, Vice President-General Tax Counsel of the
Company, the following discussion summarizes the material United States federal
income tax consequences of the ownership and disposition of notes to initial
holders of the notes purchasing the notes at the public offering price set forth
on the cover page of this prospectus supplement. The discussion below is based
on the Code, administrative pronouncements, judicial decisions and existing and
proposed Treasury Regulations, 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. The discussion addresses only the tax
consequences to initial holders holding notes as capital assets within the
meaning of section 1221 of the Code. It does not discuss all of the tax
consequences that may be relevant to holders in light of their particular
circumstances or to holders subject to special rules, such as certain financial
institutions, insurance companies, dealers in securities or foreign currencies,
United States Holders (as defined below) whose functional currency (as defined
in Code section 985) is not the U.S. dollar, persons holding notes in connection
with a hedging transaction, 'straddle', conversion transaction or other
integrated transaction, traders in securities that elect to mark to market,
holders liable for alternative minimum tax or persons who have ceased to be
United States citizens or to be taxed as resident aliens. Persons considering
the purchase of the notes should consult their tax advisors concerning the
application of United States federal income and other tax laws, as well as the
laws of any state, local or foreign taxing jurisdictions, to their particular
situations.
As used under this heading 'United States Tax Considerations' and under the
headings 'Description of Notes -- Payment of Additional Amounts' and
'Description of Notes -- Redemption Upon a Tax Event,' the following definitions
will apply:
'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 Holder' means a beneficial owner of a note that is, for
United States federal income tax purposes: (a) a citizen or resident of the
United States, (b) 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 (c) an estate or trust the income of which is
subject to United States federal income taxation regardless of it source.
'United States Alien Holder' means a beneficial owner of a note that is,
for United States federal income tax purposes: (a) a nonresident alien
individual, (b) a foreign corporation, (c) a nonresident alien fiduciary of
a foreign estate or trust or (d) a foreign partnership one or more of the
members of which is a nonresident alien individual, a foreign corporation
or a nonresident alien fiduciary of a foreign estate or trust.
TAX CONSEQUENCES TO UNITED STATES HOLDERS
Payments of Interest
Interest on a note will generally be taxable to a United States Holder as
ordinary interest income at the time it accrues or is received in accordance
with the United States Holder's method of accounting for federal income tax
purposes.
Sales, Exchange or Retirement
Upon the sale, exchange or retirement of a note, a United States Holder will
recognize gain or loss equal to the difference between the amount realized on
the sale, exchange or retirement of the note and the holder's adjusted tax basis
in the note. A United States Holder's adjusted tax basis in a note will
generally equal the cost of the note to such Holder. The amount realized
excludes any interest accrued between interest payment dates and not previously
included in income, which will be includible in income as interest in accordance
with the United States Holder's method of accounting. Such gain or loss will be
capital gain or loss and will be long-term capital gain or loss if at the time
of the sale, exchange or retirement the note has been held for more than one
year. Under current law, the excess of net long-term capital gains over net
short-term capital losses is taxed at a lower rate than ordinary income for
certain non-corporate
S-17
<PAGE>
taxpayers. The distinction between gain or loss and ordinary income or loss is
also relevant for purposes of, among other things, the limitations on the
deductibility of capital losses.
TAX CONSEQUENCES TO UNITED STATES ALIEN HOLDERS
Under present United States federal tax law, and subject to the discussion
below concerning backup withholding:
(a) payments of principal and interest on a note to a United States
Alien Holder will not be subject to the 30% United States federal
withholding tax; provided that (i) the holder does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote, (ii) the holder is not a
controlled foreign corporation for United States tax purposes that is
related to the Company through stock ownership and is not a bank whose
receipt of interest on a note is described in section 881(c)(3)(A) of the
Code, and (iii) the statement requirement set forth in section 871(h) or
section 881(c) of the Code has been fulfilled with respect to the beneficial
owner, as described below.
(b) a United States Alien Holder of a note will not be subject to United
States federal income tax on any gain realized on the sale, exchange or
retirement of the note unless the gain is effectively connected with the
holder'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 retirement occurs and
certain other conditions are met; and
(c) a note owned by an individual who is not, for United States estate
tax purposes, a citizen or resident of the United States at the time of his
death will not be subject to United States federal estate tax as a result of
such individual's death, provided that the individual does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote and, at the time of the
individual's death, payments with respect to the note would not have been
effectively connected to the conduct by the individual of a trade or
business in the United States.
The statement requirement referred to in subparagraph (a) will be fulfilled
if the beneficial owner of a note certifies on Internal Revenue Service ('IRS')
Form W-8BEN, or other successor form, under penalties of perjury, that it is not
a United States person and provides its name and address, and (i) the beneficial
owner files such form with the withholding agent or (ii) in the case of a note
held on behalf of the beneficial owners by a securities clearing organization,
bank or other financial institution holding customers' securities in the
ordinary course of its trade or business, the financial institution files with
the withholding agent a statement that it has received such form from the holder
and furnishes the withholding agent with a copy thereof. With respect to notes
held by a foreign partnership, unless a foreign partnership has entered into a
qualifying withholding agreement with the IRS, for interest and disposition
proceeds paid with respect to a note after December 31, 2000, the foreign
partnership will generally be required (and may be permitted earlier), in
addition to providing an intermediary IRS Form W-8IMY or other successor form,
to attach an appropriate certification by each partner. Prospective investors,
including foreign partnerships and their partners, should consult their tax
advisers regarding possible additional reporting requirements.
If a United States Alien Holder of a note is engaged in a trade or business
in the United States, and if interest on the note (or gain realized on its sale,
exchange or other disposition) is effectively connected with the conduct of such
trade or business, the United States Alien Holder, although it may be exempt
from the withholding tax discussed in the preceding paragraphs, will be subject
to regular United States income tax on such effectively connected income,
generally in the same manner as if it were a United States Holder. See 'Tax
Consequences to United States Holders' above. In lieu of the certificate
described in the preceding paragraph, such a Holder will be required to provide
to the withholding agent a properly executed IRS Form W-8ECI, or other successor
form, to claim an exemption from withholding tax. In addition, if the United
States Alien Holder is a foreign corporation, it may be subject to a 30% branch
profits tax (unless
S-18
<PAGE>
reduced or eliminated by an applicable treaty) on its earnings and profits for
the taxable year attributable to its effectively connected income, subject to
certain adjustments.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under current United States federal income tax law, information reporting
requirements apply to certain payments of principal, premium and interest made
to, and to the proceeds of sales before maturity by, non-corporate United States
Holders. In addition, a 31% backup withholding tax will apply if the
non-corporate United States Holder (i) fails to furnish its Taxpayer
Identification Number ('TIN') which, for an individual, is his or her Social
Security Number, (ii) furnishes an incorrect TIN, (iii) is notified by the IRS
that it has failed to properly report payments of interest and dividends, or
(iv) under certain circumstances, fails to certify, under penalty of perjury,
that it has furnished a correct TIN and has not been notified by the IRS that it
is subject to backup withholding for failure to report interest and dividend
payments. Holders should consult their tax advisers regarding their
qualification for exemption from backup withholding and the procedure for
obtaining such an exemption if applicable.
Backup withholding will not apply to payments made on a note to United
States Alien Holders if the certifications required by sections 871(h) and
881(c) as described above are received, provided that the Company or its 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 on the sale, exchange or other
disposition of a note made to or through a foreign office of a broker generally
will not be subject to backup withholding or information reporting. However, if
the broker is (i) a United States person, (ii) a controlled foreign corporation
for United States federal income tax purposes, (iii) 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 (iv) in the case of payments
made after December 31, 2000, a foreign partnership with certain connections to
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 the broker is required to report if the broker has actual knowledge
that the payee is a United States person. Payments to or through the United
States office of a broker will be subject to backup withholding and information
reporting unless the beneficial owner certifies, under penalties of perjury,
that it is not a United States person or otherwise establishes an exemption.
Treasury regulations issued by the IRS, which are generally effective for
payments after December 31, 2000, make certain modifications to the
certification procedures applicable to a United States Alien Holder.
Any amounts withheld from a payment to a United States Alien Holder under
the backup withholding rules may be allowed as a credit against the holder's
United States federal income tax liability and may entitle the holder to a
refund, provided that the required information is furnished to the IRS.
Each holder of a note 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, payments on the
note may be subject to United States withholding at a 30% rate (or a 31% backup
withholding tax) and the holder will not be entitled to any additional amounts
from the Company described under the heading 'Description of Notes -- Payment of
Additional Amounts' with respect to such tax. Each holder should accordingly
consult its tax advisor as to how to fulfill the statement requirement described
above to avoid the 30% withholding tax and regarding the application of backup
withholding (and information reporting) in its particular situation, the
availability of an exemption therefrom, and the procedure for obtaining an
exemption, if available, including which IRS forms to use for these purposes.
S-19
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in a terms agreement
dated October 25, 2000 incorporating by reference an underwriting agreement
dated October 1, 1991, we have agreed to sell to the underwriters named below,
for whom ABN AMRO Bank N.V. and Credit Suisse First Boston Corporation are
acting as representatives, the following respective principal amounts of the
notes.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
----------- --------
<S> <C>
ABN AMRO Bank N.V.......................................... U.S.$215,000,000
Credit Suisse First Boston Corporation..................... 215,000,000
BNP Paribas Securities Corp................................ 20,000,000
Dresdner Bank AG London Branch............................. 20,000,000
Tokyo-Mitsubishi International, plc........................ 20,000,000
Blaylock & Partners, L.P................................... 5,000,000
Utendahl Capital Partners, L.P............................. 5,000,000
----------------
Total.................................................. U.S.$500,000,000
----------------
----------------
</TABLE>
The terms agreement provides that the underwriters are obligated to purchase
all of the notes if any are purchased. The terms agreement also provides that if
an underwriter defaults the purchase commitments of non-defaulting underwriters
may be increased or the offering of notes may be terminated.
The underwriters propose to offer the notes initially at the public offering
price on the cover page of this prospectus supplement, and to selling group
members at that price less a selling concession of 0.200% of the principal
amount per note. The underwriters and selling group members may allow a discount
of 0.125% of the principal amount per note on sales to other broker/dealers.
After the initial public offering, the representatives may change the public
offering price and concession and discount to broker/dealers.
The notes are offered for sale both inside and outside the United States.
We estimate that our out of pocket expenses for this offering will be
approximately U.S.$450,000. The underwriters have agreed to reimburse us for
certain of these expenses.
In connection with the offering, the underwriters, may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions and
penalty bids.
Stabilizing transactions permit bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum.
Over-allotment involves sales by the underwriters of notes in excess of the
principal amount of notes the underwriters are obligated to purchase, which
creates a syndicate short position. The underwriters will close out any
short position by purchasing notes in the open market.
Syndicate covering transactions involve purchases of notes in the open
market after the distribution has been completed in order to cover
syndicate short positions. A short position is likely to be created if the
underwriters are concerned that there may be downward pressure on the price
of the notes in the open market after pricing that could adversely affect
investors who purchase in the offering.
Penalty bids permit the representatives to reclaim a selling concession
from a syndicate member when the notes originally sold by such syndicate
member are purchased in a stabilizing transaction or a syndicate covering
transaction to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty bids
may have the effect of raising or maintaining the market price of the notes or
preventing or retarding a decline in the market price of the notes. As a result
the price of the notes may be higher than the price that might otherwise exist
in the open market. These transactions may be effected on the Luxembourg Stock
Exchange or otherwise and, if commenced, may be discontinued at any time.
The notes are a new issue of securities with no established trading market.
We have been advised by the underwriters that one or more of them intend to make
a market in the notes but
S-20
<PAGE>
are not obligated to do so and may discontinue market making at any time without
notice. No assurance can be given as to the liquidity of, or the existence of
trading markets for, the notes.
Each of the underwriters has agreed that it will only offer or sell the
notes in compliance with the laws and regulations in any jurisdiction applicable
to such offer or sale and it has not taken and will not take any action in any
jurisdiction, other than the United States, that would permit a public offering
of the notes, or possession or distribution of any prospectus or any amendment
or supplement thereto or any offering or publicity material relating to the
notes, in any country or jurisdiction where action for that purpose is required.
Each underwriter has represented and agreed that
(a) it has not offered or sold, and, prior to the expiration of the
period of six months from the closing date for the issue of the notes, will
not offer or sell any notes to persons in the United Kingdom, except to
those persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purpose
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,
(b) it has complied and will comply with all applicable provisions of
the Financial Services Act 1986, with respect to anything done by it in
relation to the notes in, from or otherwise involving the United Kingdom,
and
(c) 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 notes 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 the document may otherwise lawfully
be issued or passed on.
You 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 of this prospectus supplement.
We have agreed to indemnify the underwriters against liabilities under the
Securities Act of 1933, as amended, or contribute to payments which the
underwriters may be requested to make in that respect.
In the ordinary course of their respective businesses, the underwriters or
their affiliates engage in general financing and banking transactions with the
Company.
We expect that delivery of the notes will be made against payment therefor
on or about the closing date specified on the cover page of this prospectus
supplement, which is the fifth business day following the date hereof (this
settlement cycle being referred to as 'T+5'). Under Rule 15c6-1 of the SEC under
the Exchange Act, trades in the secondary market generally are required to
settle in three business days, unless the parties to any such trade expressly
agree otherwise. Accordingly, U.S. purchasers who wish to trade notes on the
date hereof or the next five succeeding business days will be required, by
virtue of the fact that the notes initially will settle in T+5, to specify an
alternate settlement cycle at the time of any such trade to prevent a failed
settlement. Purchasers of notes in other countries who may be affected by the
T+5 settlement should consult their own advisor.
S-21
<PAGE>
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the notes in Canada is being made only on a private
placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of notes are made. Any resale of the notes in Canada must be made under
applicable securities laws which will vary depending on the relevant
jurisdiction, and which may require resales to be made under available statutory
exemptions or under a discretionary exemption granted by the applicable Canadian
securities regulatory authority. Purchasers are advised to seek legal advice
prior to any resale of the notes.
REPRESENTATIONS OF PURCHASERS
By purchasing the notes in Canada and accepting a purchase confirmation, a
purchaser is representing to us and the dealer from whom the purchase
confirmation is received that
the purchaser is entitled under applicable provincial securities laws to
purchase the notes without the benefit of a prospectus qualified under
those securities laws,
where required by law, that the purchaser is purchasing as principal and
not as agent, and
the purchaser has reviewed the text above under 'Resale Restrictions'.
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of notes to whom the Securities Act (British Columbia) applies
is advised that the purchaser is required to file with the British Columbia
Securities Commission a report within ten days of the sale of any notes acquired
by the purchaser pursuant to this offering. The report must be in the form
attached to British Columbia Securities Commission Blanket Order BOR#95/17, a
copy of which may be obtained from us. Only one report must be filed for notes
acquired on the same date and under the same prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of notes should consult their own legal and tax advisors
with respect to the tax consequences of an investment in the notes in their
particular circumstances and about the eligibility of the notes for investment
by the purchaser under relevant Canadian legislation.
S-22
<PAGE>
LEGAL MATTERS
The validity of the securities will be passed upon for us by Louise M.
Parent, Esq., Executive Vice President and General Counsel of American Express
Company. Certain legal matters will be passed upon for the underwriters by
Cleary, Gottlieb, Steen & Hamilton, New York, New York. From time to time,
Cleary, Gottlieb, Steen & Hamilton provides legal services to American Express
Company and its subsidiaries.
GENERAL INFORMATION
1. Application has been made to list the notes on the Luxembourg Stock
Exchange. In connection with the listing application, the Certificate of
Incorporation and the By-Laws of the Company and a legal notice relating to the
issuance of the notes have been deposited prior to listing with 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, the
Supplemental Indenture and the documents incorporated by reference as well as
the future year end accounts, so long as any of the notes are outstanding, will
be available free of charge at the main office of Deutsche Bank Luxembourg SA in
Luxembourg. Deutsche Bank Luxembourg SA will act as intermediary between the
Luxembourg Stock Exchange and the Company and the holders of the notes.
2. Other than as disclosed or contemplated herein or in the documents
incorporated by reference herein, there has been no material adverse change in
the financial position of the Company since June 30, 2000.
3. The Independent Auditors of the Company are Ernst & Young LLP, New York.
4. Neither the Company nor any of its subsidiaries is involved in
litigation, arbitration or administrative proceedings relating to claims or
amounts that are material in the context of the issue of the notes and the
Company is not aware of any such litigation, arbitration or administrative
proceedings pending or threatened.
5. Resolutions relating to the issue and sale of the notes were adopted by
the Board of Directors of the Company on July 22, 1991 and July 26, 1993.
6. The notes have been assigned Euroclear and Clearstream, Luxembourg Common
Code No. 11992757, International Security Identification Number (ISIN)
US025816AM13 and CUSIP No. 025816 AM 1.
S-23
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
PROSPECTUS
[AMERICAN EXPRESS LOGO] AMERICAN EXPRESS COMPANY
DEBT SECURITIES
PREFERRED SHARES
COMMON SHARES
WARRANTS
-------------------
American Express Company (the 'Company') may offer from time to time in one
or more series (i) unsecured debt securities, which may be either senior (the
'Senior Securities') or subordinated (the 'Subordinated Securities';
collectively, with the Senior Securities, the 'Debt Securities'),
(ii) preferred shares, par value $1.66 2/3 per share ('Preferred Shares'),
(iii) common shares, par value $0.60 per share ('Common Shares'), (iv) warrants
to purchase Debt Securities, Preferred Shares, Common Shares or equity
securities issued by an affiliated or unaffiliated corporation or other entity
(collectively, 'Securities Warrants'), (v) currency warrants entitling the
holder to receive the cash value in U.S. dollars of the right to purchase or the
right to sell foreign currencies or composite currencies, including European
Currency Units ('ECU') ('Currency Warrants') or (vi) warrants relating to other
items or indices ('Other Warrants'; collectively with the Securities Warrants
and the Currency Warrants, 'Warrants') (the Debt Securities, Preferred Shares,
Common Shares and Warrants are collectively referred to as 'Securities'), or any
combination of the foregoing, at an aggregate initial offering price not to
exceed $1,050,000,000, at prices and on terms to be determined at or prior to
the time of sale.
The Senior Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Company. The Subordinated Securities will be
subordinate to all existing and future Senior Indebtedness, each as defined
herein. Unless otherwise indicated in the applicable Prospectus Supplement
('Prospectus Supplement'), the maturity of the Subordinated Securities will be
subject to acceleration only in the event of certain events of bankruptcy or
reorganization of the Company. See 'Description of Debt Securities'.
Specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in an accompanying Prospectus Supplement,
together with the terms of the offering of the Securities and the initial
offering price and the net proceeds to the Company from the sale thereof. The
Prospectus Supplement will set forth with regard to the particular Securities,
without limitation, the following: (i) in the case of Debt Securities, the terms
of the Debt Securities being offered, including the specific designation,
aggregate principal amount, ranking as senior debt or subordinated debt,
authorized denomination, maturity, rate or method of calculation of principal,
premium (if any) and interest and dates for payment thereof (or the method of
calculation thereof), any exchangeability, conversion, redemption, prepayment or
sinking fund provisions and the currency or currencies or currency unit or
currency units in which principal, premium, if any, or interest, if any, is
payable, (ii) in the case of Preferred Shares, the designation, number of
shares, liquidation preference per share, initial public offering price,
dividend rate (or method of calculation thereof), dates on which dividends shall
be payable (or the method of calculation thereof) and dates from which dividends
shall accrue, any redemption or sinking fund provisions, any conversion or
exchange rights, and whether the Company has elected to offer the Preferred
Shares in the form of depositary shares, (iii) in the case of Common Shares, the
number of Common Shares and the terms of the offering and sale thereof, (iv) in
the case of Securities Warrants, the number and terms thereof, the designation
and the number of securities issuable upon their exercise, the exercise price,
the terms of the offering and sale thereof and, where applicable, the duration
and detachability thereof, (v) in the case of Currency Warrants, whether the
Currency Warrants are call warrants or put warrants, the currency to which U.S.
dollars will be compared, the method of determining the cash value payable upon
exercise of such Currency Warrants, the aggregate amount, offering price and
exercise period of such Currency Warrants, (vi) in the case of Other Warrants,
the terms and procedures relating to exercise, expiration date and other terms,
and (vii) in the case of all Securities, whether such Security will be offered
separately or as a unit with other securities. The Prospectus Supplement will
also contain information, where applicable, about certain United States Federal
income tax considerations relating to, and any listing on a securities exchange
of, the Securities covered by the Prospectus Supplement.
The Company may sell Securities through underwriters or dealers, and also
may sell Securities directly to purchasers or through agents. The names of any
underwriters or agents involved in the sale of the Securities in respect of
which this Prospectus is being delivered and their compensation are set forth in
the accompanying Prospectus Supplement.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is June 18, 1997.
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY AGENT OR UNDERWRITER. THIS PROSPECTUS AND THE ACCOMPANYING
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF.
-------------------
AVAILABLE INFORMATION
American Express Company (the 'Company') is subject to the informational
requirements of the Securities Exchange Act of 1934 (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 filed by the Company with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549;
New York Regional Office, Seven World Trade Center, 13th Floor, New York, New
York 10048; and Chicago Regional Office, Northwest Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
can be obtained from the Public Reference Section of the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such
reports, proxy statements and other information concerning the Company can also
be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005, at the offices of the Pacific Stock Exchange,
Inc., 301 Pine Street, San Francisco, California 94104, at the offices of the
Chicago Stock Exchange, Inc., 440 South LaSalle Street, Chicago, Illinois 60605,
and at the offices of the Boston Stock Exchange, Inc., One Boston Place, Boston,
Massachusetts 02108. This Prospectus does not contain all information set forth
in the Registration Statement and the exhibits thereto which the Company has
filed with the Commission under the Securities Act of 1933, and to which
reference is hereby made.
The Company was founded in 1850 as a joint stock association and was
incorporated under the laws of the State of New York in 1965. Its principal
executive offices are located at American Express Tower, World Financial Center,
New York, New York 10285 (telephone (212) 640-2000).
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
There are hereby incorporated by reference herein (i) the Company's Annual
Report on Form 10-K for its fiscal year ended December 31, 1996, (ii) the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1997, and (iii) the Company's Current Reports on Form 8-K dated January 27, 1997
and April 25, 1997, as amended by the Company's Form 8-K/A dated April 28, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date hereof and prior to the
termination of the offering made hereunder shall be deemed to be incorporated by
reference herein and to be a part hereof 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 incorporated or deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO
WHOM THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS
PROSPECTUS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE INTO THE DOCUMENTS THAT THIS PROSPECTUS
INCORPORATES). WRITTEN OR ORAL REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO
MR. STEPHEN P. NORMAN, SECRETARY, AMERICAN EXPRESS COMPANY, AMERICAN EXPRESS
TOWER, WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10285, (212) 640-2000.
2
<PAGE>
THE COMPANY
Through its subsidiaries the Company is primarily engaged in the business of
providing travel related services, financial advisory services and international
banking services throughout the world.
Travel related services are offered principally through American Express
Travel Related Services Company, Inc. and its subsidiaries ('TRS') and include a
variety of products and services, including the American Express'r' Card, the
Optima'r' Card and other consumer lending products, the American Express'r'
Travelers Cheque (the 'Travelers Cheque') and other stored value products,
business expense management products and services, corporate and consumer travel
products and services, magazine publishing, database marketing and management
and merchant transaction processing, point of sale and back office products and
services. At December 31, 1996, there were 41.5 million Cards in force
worldwide, and worldwide Card billed business for the year ended December 31,
1996 was $184.3 billion. U.S. consumer lending operations are conducted by
American Express Centurion Bank, a wholly-owned subsidiary of TRS whose deposits
are insured by the Federal Deposit Insurance Corporation. Travelers Cheque sales
for the year ended December 31, 1996 were $26 billion.
American Express Financial Corporation ('AEFC') and its subsidiaries are
engaged in providing a variety of financial products and services to help
individuals, businesses and institutions establish and achieve their financial
goals. AEFC's products and services include financial planning and advice,
insurance and annuities, a variety of investment products, including investment
certificates, mutual funds and limited partnerships, investment advisory
services, trust and employee plan administration services, tax preparation and
bookkeeping services, personal auto and homeowner's insurance and retail
securities brokerage services. At December 31, 1996, American Express Financial
Advisors Inc., AEFC's principal marketing subsidiary, maintained a nationwide
financial planning field force of 8,340 persons. At December 31, 1996, AEFC's
assets owned and/or managed totaled approximately $149.4 billion.
American Express Bank Ltd., together with its subsidiaries ('AEBL'), offers
products that meet the financial service needs of three client groups:
corporations, financial institutions and affluent individuals. AEBL's five
business lines are commercial, correspondent, and private banking, personal
financial services and global trading. AEBL does not do business in the United
States except as an incident to its activities outside the United States.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of the Company for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, --------------------------------
1997 1996 1995 1994 1993 1992
------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges........ 2.26 2.17 1.86 1.90 2.20 1.40
</TABLE>
In computing the ratio of earnings to fixed charges, 'earnings' consist of
pretax income from continuing operations, interest expense and other
adjustments. Interest expense includes interest expense related to the
international banking operations of the Company and TRS's Cardmember lending
activities, which is netted against interest and dividends and Cardmember
lending net finance charge revenue, respectively, in the Company's Consolidated
Statement of Income.
For purposes of computing 'earnings', other adjustments included adding the
amortization of capitalized interest, the net loss of affiliates accounted for
under the equity method whose debt is not guaranteed by the Company, the
minority interest in the earnings of majority-owned subsidiaries with fixed
charges, and the interest component of rental expense and subtracting
undistributed net income of affiliates accounted for under the equity method.
'Fixed charges' consist of interest and other adjustments, including
capitalized interest costs and the interest component of rental expense.
3
<PAGE>
On May 31, 1994, the Company completed the spin-off of Lehman Brothers
Holdings Inc. ('Lehman Brothers') through a dividend to American Express common
shareholders. Accordingly, Lehman Brothers' results are reported as a
discontinued operation and are excluded from the above computation for all
periods presented. In March 1993, the Company reduced its ownership in First
Data Corporation ('FDC') to approximately 22 percent through a public offering.
As a result, beginning in 1993, FDC was reported as an equity investment in the
above computation. In the fourth quarter of 1995, the Company's ownership was
further reduced to approximately 10 percent as a result of shares issued by FDC
in connection with a merger transaction. Accordingly, as of December 31, 1995,
the Company's investment in FDC is accounted for as Investments -- Available for
sale.
USE OF PROCEEDS
Except as may be otherwise set forth in the Prospectus Supplement
accompanying this Prospectus, the net proceeds to be received by the Company
from sales of the Securities will be used for general corporate purposes.
DESCRIPTION OF DEBT SECURITIES
The following description 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 being offered and the extent to which
such general provisions may apply will be described in a Prospectus Supplement
relating to such Debt Securities.
The Senior Securities are to be issued under an indenture dated as of
May 1, 1997, between the Company and PNC Bank, National Association, as trustee
(the 'Senior Securities Trustee') (the 'Senior Securities Indenture'). The
Subordinated Securities are to be issued under an Indenture dated as of May 1,
1997 (the 'Subordinated Securities Indenture') between the Company and PNC Bank,
National Association, as Trustee (the 'Subordinated Securities Trustee'). The
Senior Securities Indenture and the Subordinated Securities Indenture are
referred to herein individually as the 'Indenture' and collectively as the
'Indentures,' and the Senior Securities Trustee and the Subordinated Securities
Trustee are referred to herein individually as the 'Trustee' and collectively as
the 'Trustees.' The following summaries of certain provisions of the Indentures
do not purport to be complete and are qualified in their entirety by reference
to the Indentures, a copy of each of which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part. Where no distinction
is made between the Senior Securities and the Subordinated Securities or between
the Senior Securities Indenture and the Subordinated Securities Indenture, such
summaries refer to any Debt Securities and either Indenture. All article and
section references appearing herein are to articles and sections of the
Indenture, and all capitalized terms have the meanings specified in the
Indenture.
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES
General
Neither Indenture limits the amount of Debt Securities which may be issued
thereunder and Debt Securities may be issued under either of the Indentures from
time to time in one or more series up to the aggregate principal amount which
may be authorized from time to time by the Company. Each Indenture permits the
appointment of a different trustee for each series of Debt Securities.
('SS' 8.09) If there is at any time more than one trustee under the Indenture,
the term 'Trustee' as used in this Prospectus will mean each such trustee and
will apply to each such trustee only with respect to those series of Debt
Securities with respect to which it is serving as trustee.
Reference is made to the Prospectus Supplement that accompanies this
Prospectus for the following terms and other information with respect to the
Debt Securities being offered thereby: (i) the designation, aggregate principal
amount and authorized denominations of such Debt Securities; (ii) the percentage
of their principal amount at which such Debt Securities will be issued;
(iii) the date (or the manner of determining or extending the date or dates) on
which the principal of such Debt Securities will be payable; (iv) the terms for
conversion or exchange, if any, of the Debt Securities; (v) the
4
<PAGE>
classification as Senior Securities or Subordinated Securities; (vi) whether
such Debt Securities will be issued in fully registered form or in bearer form
or any combination thereof; (vii) whether such Debt Securities will be issued in
the form of one or more global securities and whether such global securities are
to be issuable in a temporary global form or permanent global form; (viii) if
other than U.S. dollars, the currency or currencies or currency unit or units
for which Debt Securities may be denominated and purchased and the currency or
currencies or currency unit or units in which principal, premium (if any) and
any interest may be payable; (ix) if the currency for which Debt Securities may
be purchased or in which principal, premium (if any) and any interest may be
payable is at the election of the Company or the purchaser, the manner in which
such an election may be made and the terms of such election; (x) the rate per
annum at which such Debt Securities will bear interest, if any, or the method of
determination of such rate; (xi) the dates on which such interest, if any, will
be payable, or the method of determining such dates; (xii) any mandatory or
optional sinking fund, redemption or other similar terms; (xiii) any index or
other method used to determine the amount of payments of principal, premium (if
any) and interest, if any, on such Debt Securities; (xiv) if a Trustee other
than PNC Bank, National Association is named for such Debt Securities, the name
of such Trustee; and (xv) any other specific terms of the Debt Securities. All
Debt Securities of any one series need not be issued at the same time and all
the Debt Securities of any one series need not bear interest at the same rate or
mature on the same date.
If any of the Debt Securities are sold for foreign currencies or foreign
currency units or if the principal of or interest, if any, on any series of Debt
Securities is payable in foreign currencies or foreign currency units, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such issue of Debt Securities and such currencies or currency
units will be set forth in an applicable Prospectus Supplement relating thereto.
The Debt Securities may be issued in one or more series with the same or
various maturities. ('SS' 3.02) Debt Securities may be issued solely in fully
registered form without coupons ('Registered Securities'), solely in bearer form
with or without coupons ('Bearer Securities'), or both as Registered Securities
and Bearer Securities. ('SS' 11.01) Registered Securities may be exchangeable
for other Debt Securities of the same series, registered in the same name, for a
like aggregate principal amount in authorized denominations and will be
transferable at any time or from time to time at the aforementioned office. No
service charge will be made to the Holder for any such exchange or transfer
except for any tax or governmental charge incidental thereto. ('SS' 3.05) If
Debt Securities of any series are issued as Bearer Securities, the Prospectus
Supplement will contain any restrictions applicable to the offer, sale or
delivery of Bearer Securities and the terms upon which Bearer Securities of the
series may be exchanged for Registered Securities of the series and, if
permitted by applicable laws and regulations, the terms upon which Registered
Securities of the series may be exchanged for Bearer Securities of the series,
whether such Debt Securities are to be issuable in permanent global form with or
without coupons and, if so, whether beneficial owners of interests in any such
permanent global security may exchange such interests for Debt Securities of
such series and the circumstances under which any such exchanges may occur.
Unless otherwise specified in the applicable Prospectus Supplement,
principal and interest, if any, on the Debt Securities offered thereby are to be
payable at the office or agency of the Company maintained for such purposes in
the city where the principal corporate trust office of the Trustee is located,
and will initially be the principal corporate trust office of the Trustee,
provided that payment of interest, if any, may be made (subject to collection)
at the option of the Company by check mailed to the persons in whose names the
Debt Securities are registered at the close of business on the day specified in
the Prospectus Supplement accompanying this Prospectus. ('SS' 12.02) The
principal corporate trust office of the Trustee at the date hereof is PNC Bank,
National Association, One Oliver Plaza, 210 Sixth Avenue, Pittsburgh,
Pennsylvania 15222.
The Debt Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. Federal income tax consequences and special
considerations applicable to any such series will be described in the Prospectus
Supplement relating thereto.
5
<PAGE>
Global Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with or on behalf
of a depositary (a 'Depositary') identified in the Prospectus Supplement
relating to such series. Global Securities will be issued in registered form and
may be in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will apply
to all depositary arrangements.
Unless otherwise specified in an applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Depositary will be registered in the name of such depositary
or its nominee. Upon the issuance of a Global Security, the Depositary for such
Global Security will credit the respective principal amounts of the Debt
Securities represented by such Global Security to the accounts of institutions
that have accounts with such depositary or its nominee ('participants'). The
accounts to be credited shall be designated by the underwriters or agents of
such Debt Securities or by the Company, if such Debt Securities are offered and
sold directly by the Company. Ownership of beneficial interests in such Global
Securities will be limited to participants or persons that may hold interests
through participants. Ownership of beneficial interests by participants in such
Global Securities will be shown on, and the transfer of those ownership
interests will be effected only through, records maintained by the Depositary or
its nominee for such Global Security. Ownership of beneficial interests in
Global Securities by persons that hold through participants will be shown on,
and the transfer of that ownership interest within such participant will be
effected only through, records maintained by such participant. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as set forth below, owners of
beneficial interests in such Global Securities will not be entitled to have Debt
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture.
Payment of principal of, premium, if any, and any interest on Debt
Securities registered in the name of or held by a Depositary or its nominee will
be made to the Depositary or its nominee, as the case may be, as the registered
owner or the holder of the Global Security. None of the Company, the Trustee,
any Paying Agent or the Securities Registrar for such Debt Securities will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests. ('SS' 3.09)
The Company expects that the Depositary for a permanent Global Security,
upon receipt of any payment of principal, premium or interest in respect of a
permanent Global Security, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Security as shown on the records of such
Depositary. The Company also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing 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.
A Global Security may not be transferred except as a whole by the Depositary
for such Global Security to a nominee or a successor of such depositary. If a
Depositary for a permanent Global Security is at any time unwilling or unable to
continue as depositary and a successor depositary is not appointed by the
Company within ninety days, the Company will issue Debt Securities in definitive
registered form in exchange for the Global Security representing such Debt
Securities. In addition, the
6
<PAGE>
Company may at any time and in its sole discretion determine not to have any
Debt Securities represented by one or more Global Securities and, in such event,
will issue Debt Securities in definitive form in exchange for all of the Global
Securities representing such Debt Securities. ('SS' 3.05) Further, if the
Company so specifies with respect to the Debt Securities of a series, an owner
of a beneficial interest in a Global Security representing Debt Securities of
such series may, on terms acceptable to the Company and the Depositary for such
Global Security, receive Debt Securities of such series in definitive form. In
any such instance, an owner of a beneficial interest in a Global Security will
be entitled to physical delivery in definitive form of Debt Securities of the
series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name.
Consolidation, Merger and Sale of Assets
The Company, without the consent of the Holders of any of the Outstanding
Debt Securities under either Indenture, may consolidate with or merge into, or
convey or transfer its properties and assets substantially as an entirety to,
any corporation organized under the laws of the United States of America or any
State thereof or the District of Columbia, provided, that the successor
corporation assumes the Company's obligations on all the Debt Securities and
under the Indentures, that after giving effect to the transaction no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have occurred and be continuing, and that
certain other conditions are met. Neither Indenture restricts a merger or
consolidation in which the Company is the surviving corporation. ('SS' 10.01)
Modification of the Indenture
Modifications and amendments of each Indenture with respect to one or more
series of Debt Securities may be made by supplemental indenture without the
consent of the Holders of such Debt Securities for certain enumerated purposes
(including the naming, by supplemental indenture, of a Trustee other than PNC
Bank, National Association for a series of Debt Securities) and otherwise with
the consent of the Holders of a majority in aggregate principal amount of the
Debt Securities at the time Outstanding of each series affected thereby,
provided that no such modification or amendment may, without the consent of the
Holder of each Debt Security affected thereby: (i) modify the terms of payment
of principal or interest; (ii) reduce the stated percentage of Holders of Debt
Securities necessary to modify or amend the Indentures or waive compliance by
the Company with certain provisions of the Indentures and certain defaults
thereunder; or (iii) subordinate the indebtedness evidenced by the Debt
Securities to any other indebtedness of the Company. ('SS'SS' 11.01 and 11.02)
Events of Default, Notice and Waiver
Except as otherwise set forth in the Prospectus Supplement relating to any
series of the Debt Securities, Events of Default with respect to any series of
Debt Securities under each Indenture will include: (1) default in the payment of
the principal of (or premium, if any, on) any Debt Securities of such series at
its Maturity; (2) default in making a sinking fund payment, if any, when and as
the same shall be due and payable by the terms of the Debt Securities of such
series; (3) default for 30 days in the payment of any installment of interest on
any Debt Security of such series; (4) default for 90 days after written notice
in the performance of any other covenant in respect of the Debt Securities of
such series; (5) certain events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee of the Company or its
property; (6) an Event of Default with respect to any other series of Debt
Securities outstanding under the applicable Indenture or an event of default
under any other indebtedness of the Company for borrowed money in excess of
$50,000,000 which results in an aggregate principal amount of at least
$50,000,000 of such other series of Debt Securities or such other indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise become due and payable and such acceleration has not been rescinded or
annulled within 10 days after notice of default is given; and (7) any other
Event of Default provided in or pursuant to the applicable resolution of the
Board of Directors or supplemental indenture under which such series of Debt
Securities is issued. ('SS' 7.01) The Trustee may withhold notice to the Holders
of any series of Debt
7
<PAGE>
Securities of any default with respect to such series (except in the payment of
principal, premium or interest) if it considers such withholding in the interest
of such Holders. ('SS' 8.02).
If an Event of Default with respect to any series of Debt Securities shall
have occurred and be continuing, the Trustee or the Holders of 25% in aggregate
principal amount of the Debt Securities of such series may declare the
principal, or in the case of discounted Debt Securities, such portion thereof as
may be described in the Prospectus Supplement accompanying this Prospectus, of
all the Debt Securities of such series to be due and payable immediately.
('SS' 7.02)
Each Indenture contains a provision entitling the Trustee to be indemnified
by the Holders before proceeding to exercise any right or power under the
Indenture at the request of any of the Holders. ('SS' 8.03) Each Indenture
provides that the Holders of a majority in principal amount of the Outstanding
Debt Securities of any series may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred upon the Trustee, with respect to the Debt
Securities of such series. ('SS' 7.12) The right of a Holder to institute a
proceeding with respect to the applicable Indenture is subject to certain
conditions precedent including notice and indemnity to the Trustee, but the
Holder has an absolute right to receipt of principal of (and premium, if any)
and interest, if any, on the Debt Securities of any series on the respective
Stated Maturities expressed therein and to institute suit for the enforcement
thereof. ('SS'SS' 7.07 and 7.08)
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series under the applicable Indenture may on
behalf of the Holders of all the Debt Securities of such series waive any past
defaults except (a) a default in payment of the principal of (or premium, if
any) or interest, if any, on any Debt Security of such series or in the payment
of any sinking fund installment or analogous obligation with respect to the Debt
Securities of such series and (b) a default in respect of a covenant or
provision of the applicable Indenture which cannot be amended or modified
without the consent of the Holder of each Outstanding Debt Security affected.
('SS' 7.13)
Each Indenture requires the Company to furnish to the Trustee annual
statements as to the fulfillment by the Company of its obligations under such
Indenture. ('SS'SS' 9.04 and 12.05).
Concerning the Trustee
The Trustee provides banking and corporate trust services to the Company and
extends credit to the Company and many of its subsidiaries worldwide. The
Trustee is a depository of the funds of the Company and holds common shares of
the Company for various of its customers, including customers over whose
accounts it has discretionary authority. If a bank or trust company other than
PNC Bank, National Association is to act as trustee for a series of Debt
Securities, information concerning such other trustee may be set forth in the
Prospectus Supplement relating to such Debt Securities.
Defeasance of the Indenture and Debt Securities
Except as otherwise set forth in the applicable Prospectus Supplement
relating to any series of the Debt Securities, the Company will be deemed to
have paid and discharged the entire indebtedness on the Debt Securities of any
series, and the Company's obligations under each Indenture with respect to the
Debt Securities of such series (other than certain specified obligations of the
Company such as the obligations to maintain a security register pertaining to
transfer of the Debt Securities, to maintain a paying agency office, and to
replace stolen, lost or destroyed Debt Securities) will cease to be in effect,
from and after the ninety-first day following the deposit with the Trustee, in
trust, of (i) money in an amount in the currency in which the Debt Securities of
such series are denominated or (ii) U.S. Government Obligations in the case of
Debt Securities denominated in Dollars or obligations issued or guaranteed by
the government which issued the currency in which the Debt Securities of such
series are denominated in the case of Debt Securities denominated in Foreign
Currencies, which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount in the
currency in which the Debt Securities of such series are denominated, or (iii) a
combination thereof, sufficient to pay and discharge the principal (and premium,
if any) and interest, if any, to the date of maturity on, such series of Debt
Securities. ('SS' 6.02) In the event of any such
8
<PAGE>
defeasance, Holders of such Debt Securities would be able to look only to such
trust fund for payment of principal and premium, if any, and interest, if any,
on their Debt Securities thereafter.
Such defeasance may be treated as a taxable exchange of the related Debt
Securities for an issue of obligations of the trust or a direct interest in the
money, U.S. Government Obligations or other obligations held in the trust. In
that case Holders of such Debt Securities would recognize gain or loss as if the
trust obligations or the money, U.S. Government Obligations or other obligations
deposited, as the case may be, had actually been received by them in exchange
for their Debt Securities. Such Holders thereafter might be required to include
in income a different amount than would be includable in the absence of
defeasance. Prospective investors are urged to consult their own tax advisors as
to the specific consequences of defeasance.
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED SECURITIES
General
Subordinated Securities will be issued under the Subordinated Indenture and
will rank pari passu with certain other subordinated debt of the Company that
may be outstanding from time to time and will rank junior to all Senior
Indebtedness of the Company (including any Senior Securities) that may be
outstanding from time to time.
Subordination
The payment of the principal of (and premium, if any) and interest on the
Subordinated Securities is expressly subordinated, to the extent and in the
manner set forth in the Subordinated Indenture, in right of payment to the prior
payment in full of all Senior Indebtedness of the Company. ('SS' 13.01)
(a) Upon (i) any acceleration of the principal amount due on the Subordinated
Securities or (ii) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any dissolution or winding-up or total or partial liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all principal and premium, if any, and
interest due upon all Senior Indebtedness shall first be paid in full, or
payment thereof provided for in money or money's worth in accordance with its
terms, before any payment is made on account of the principal of, premium, if
any, or interest on the indebtedness evidenced by the Subordinated Securities,
and upon any such dissolution or winding-up or liquidation or reorganization any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders of the
Subordinated Securities would be entitled, except for the provisions of the
Subordinated Indenture, shall (subject to the power of a court of competent
jurisdiction to make other equitable provision reflecting the rights conferred
by the provisions of the Subordinated Securities upon the Senior Indebtedness
and the holders thereof with respect to the Subordinated Securities and the
Holders thereof by a lawful plan of reorganization under applicable bankruptcy
law), be paid by the Company or any receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution, or by the
Holders of the Subordinated Securities if received by them, directly to the
holders of Senior Indebtedness (pro rata to each such holder on the basis of the
respective amounts of Senior Indebtedness held by such holder) or their
representatives, to the extent necessary to pay all Senior Indebtedness
(including interest thereon) in full, in money or money's worth, after giving
effect to any concurrent payments or distribution to or for the holders of
Senior Indebtedness, before any payment or distribution is made to the Holders
of the indebtedness evidenced by the Subordinated Securities. The consolidation
of the Company with or the merger of the Company into another Person or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
Person upon the terms and conditions provided in the Subordinated Indenture
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
these purposes.
(b) In the event that any payment or distribution of assets of the Company
of any kind or character not permitted by the foregoing provisions, whether in
cash, property or securities, shall be received by the Holders of Subordinated
Securities before all Senior Indebtedness is paid in full, or provision made
9
<PAGE>
for such payment, in accordance with its terms, such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of such Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the payment
of all Senior Indebtedness remaining unpaid to the extent necessary to pay all
such Senior Indebtedness in full in accordance with its terms, after giving
effect to any concurrent payment or distribution to the holders of such Senior
Indebtedness.
(c) No payment on account of principal of, premium, if any, sinking funds or
interest on the Subordinated Securities shall be made unless full payment of
amounts then due for principal, premium, if any, sinking funds and interest on
any Senior Indebtedness has been made or duly provided for in money or money's
worth in accordance with the terms of such Senior Indebtedness. No payment on
account of principal, premium, if any, sinking funds or interest on the
Subordinated Securities shall be made if, at the time of such payment or
immediately after giving effect thereto, (i) there shall exist a default in the
payment of principal, premium, if any, sinking fund or interest with respect to
any Senior Indebtedness, or (ii) there shall have occurred an event or default
(other than a default in the payment of principal, premium, if any, sinking
funds or interest) with respect to any Senior Indebtedness, as defined therein
or in the instrument under which the same is outstanding, permitting the holders
thereof to accelerate the maturity thereof, and such event of default shall not
have been cured or waived or shall not have ceased to exist; provided however,
that if the holders of the Senior Indebtedness to which the default relates have
not declared such Senior Indebtedness to be immediately due and payable within
180 days after the occurrence of such default (or have declared such Senior
Indebtedness to be immediately due and payable and within such period have
rescinded such declaration of acceleration), then the Company shall resume
making any and all required payments in respect of the Securities (including any
missed payments). Only one payment blockage period under the immediately
preceding sentence may be commenced within any consecutive 365-day period with
respect to the Securities of any series. No event of default which existed or
was continuing on the date of the commencement of any 180-day payment blockage
period with respect to the Senior Indebtedness initiating such payment blockage
period shall be, or be made, the basis for the commencement of a second payment
blockage period by a Holder or representative of such Senior Indebtedness
whether or not within a period of 365 consecutive days unless such event of
default shall have been cured or waived for a period of not less than 90
consecutive days (and, in the case of any such waiver, no payment shall be made
by the Company to the holders of Senior Indebtedness in connection with such
waiver other than amounts due pursuant to the terms of the Senior Indebtedness
as in effect at the time of such default).
Subrogation
From and after the payment in full of all Senior Indebtedness, the Holders
of the Subordinated Securities (together with the holders of any other
indebtedness of the Company which is subordinate in right of payment to the
payment in full of all Senior Indebtedness, which is not subordinate in right of
payment to the Subordinated Securities and which by its terms grants such right
of subrogation to the holder thereof) shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of assets or
securities of the Company applicable to the Senior Indebtedness until the
Subordinated Securities shall be paid in full, and, for the purposes of such
subrogation, no such payments or distributions to the holders of Senior
Indebtedness of assets or securities, which otherwise would have been payable or
distributable to Holders of the Subordinated Securities, shall, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders of the Subordinated Securities, be deemed to be a payment by the Company
to or on account of the Senior Indebtedness, it being understood that these
provisions of the Indenture are and are intended solely for the purpose of
defining the relative rights of the Holders of the Subordinated Securities, on
the one hand, and the holders of the Senior Indebtedness, on the other hand, and
nothing contained in the Subordinated Indenture is intended to or shall impair
as between the Company, its creditors other than the holders of Senior
Indebtedness, and the holders of the Subordinated Securities, the obligation of
the Company, which is unconditional and absolute, to pay to the Holders of the
Subordinated Securities the principal of and interest on the Subordinated
Securities as and when the same shall become due and payable in accordance with
their terms, or to affect the relative rights of the Holders of the
10
<PAGE>
Subordinated Securities and creditors of the Company other than the holders of
the Senior Indebtedness, nor shall anything therein prevent the Holder of any
Subordinated Security from exercising all remedies otherwise permitted by
applicable law upon default under such Security subject to the rights of the
holders of Senior Indebtedness to receive cash, property or securities of the
Company otherwise payable or deliverable to the Holders of the Subordinated
Securities or to a representative of such Holders, on their behalf.
The term 'Senior Indebtedness' is defined in the Subordinated Indenture as
indebtedness incurred by the Company for money borrowed whether outstanding on
the date hereof or incurred in the future, all deferrals, renewals or extensions
of any such indebtedness and all evidences of indebtedness issued in exchange
for any such indebtedness and guarantees by the Company of the foregoing items
of indebtedness for money borrowed by persons other than the Company, unless, in
any such case, such indebtedness or guarantee provides by its terms that it
shall not constitute Senior Indebtedness.
If Subordinated Securities are issued under the Subordinated Indenture, the
aggregate principal amount of Senior Indebtedness outstanding as of a recent
date will be set forth in the Prospectus Supplement. The Subordinated Indenture
does not restrict the amount of Senior Indebtedness that the Company may incur.
PROVISIONS APPLICABLE SOLELY TO SENIOR SECURITIES
Restrictions as to Liens
Each Indenture contains a covenant providing that the Company will not at
any time directly or indirectly create, assume, incur, or suffer to be created,
assumed, or incurred or to exist any mortgage, pledge, encumbrance or lien of
any kind (except for any bona fide option or agreement to sell) (a 'Lien') upon
(1) any shares of capital stock owned by the Company of any of American Express
Travel Related Services Company, Inc., American Express Bank Ltd. or American
Express Financial Corporation, so long as they continue to be Subsidiaries of
the Company (the 'Principal Subsidiaries') (other than directors' qualifying
shares) or (2) any shares of capital stock owned by the Company of a Subsidiary
of the Company that owns, directly or indirectly, capital stock of any of the
Principal Subsidiaries (other than directors' qualifying shares) without making
effective provision whereby the Securities (and any other indebtedness of the
Company or such Subsidiary entitled to the benefit of a covenant similar to this
covenant, subject to applicable priorities of payment) will be secured by such
Lien equally and ratably with any and all other obligations thereby secured, so
long as any of such other obligations and indebtedness shall be so secured.
However, the Company may incur or suffer to be incurred or to exist upon such
capital stock (a) Liens for taxes, assessments or other governmental charges or
levies which are not yet due or are payable without penalty or of which the
amount, applicability or validity is being contested by the Company in good
faith by appropriate proceedings, or (b) the Liens of any judgment, if such
judgment shall not have remained undischarged, or unstayed on appeal or
otherwise, for more than 60 days. ('SS' 12.07(a))
The foregoing covenant will cease to be binding on the Company with respect
to any series of the Debt Securities to which such covenant applies from and
after the ninety-first day following the deposit with the Trustee, in trust, of
(i) money in an amount in the currency in which the Debt Securities of such
series are denominated or (ii) U.S. Government Obligations in the case of Debt
Securities denominated in Dollars or obligations issued or guaranteed by the
government which issued the currency in which the Debt Securities of such series
are denominated in the case of Debt Securities denominated in Foreign
Currencies, which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount in the
currency in which the Debt Securities of such series are denominated, or
(iii) a combination thereof, sufficient to pay and discharge the principal (and
premium, if any) and interest, if any, to the date of maturity on, such series
of Debt Securities. ('SS' 12.07(b))
11
<PAGE>
DESCRIPTION OF PREFERRED SHARES
General
Under the Company's Restated Certificate of Incorporation, the Company is
authorized to issue 20,000,000 Preferred Shares, par value $1.66 2/3 per share
(the 'Preferred Shares'), all of which shares are available for issuance at the
date of this Prospectus. The Company's Preferred Shares may be issued from time
to time in one or more series with such designations, voting powers, dividend
rates, rights of redemption, conversion rights or other special rights,
preferences and limitations as may be stated in the resolutions providing for
the issue of such Preferred Shares adopted by the Board of Directors.
The Preferred Shares shall have the dividend, liquidation and voting rights
set forth below unless otherwise provided in the Prospectus Supplement relating
to a particular series of the Preferred Shares. Reference is made to the
Prospectus Supplement relating to the particular series of the Preferred Shares
offered thereby for specific terms, including: (i) the title and liquidation
preference per share of such Preferred Shares and the number of shares offered;
(ii) the price at which such Preferred Shares will be issued; (iii) the dividend
rate (or method of calculation), the dates on which and the conditions under
which dividends shall be payable (or method of calculation), whether such
dividends shall be cumulative or noncumulative and, if cumulative, the dates
from which dividends shall commence to accumulate, and the status of such
dividends as participating or nonparticipating; (iv) any redemption, sinking
fund or analogous provisions of such Preferred Shares; (v) any conversion or
exchange provisions of such Preferred Shares; (vi) whether the Company has
elected to offer Depositary Shares with respect to such Preferred Shares as
described below under 'Depositary Shares'; (vii) whether such Preferred Shares
shall have voting rights, in addition to the voting rights described below, and,
if so, the terms of such voting rights; (viii) the procedures for any auction
and remarketing of the Preferred Shares; and (ix) any additional dividend,
liquidation, redemption, sinking fund and other rights, preferences, privileges,
limitations and restrictions of such Preferred Shares.
The Preferred Shares will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the Prospectus Supplement relating to a particular
series of the Preferred Shares, each series of the Preferred Shares will rank on
a parity as to dividends and distributions in the event of a liquidation with
the outstanding Preferred Shares of the Company and each other series of the
Preferred Shares. See 'Outstanding Preferred Shares' below.
Dividend Rights
All Preferred Shares shall be of equal rank with each other regardless of
series. In case the stated dividends and the amounts payable on liquidation are
not paid in full, the Preferred Shares of all series shall share ratably in the
payment of dividends including accumulations, if any, in accordance with the
sums which would be payable on such shares if all dividends were declared and
paid in full, and in any distribution of assets other than by way of dividends
in accordance with the sums which would be payable in such distribution if all
sums payable were discharged in full.
Rights Upon Liquidation
Upon any liquidation, dissolution or winding up of the affairs of the
Company (which shall not be deemed to include a consolidation or merger of the
Company, or the sale of all or substantially all of the assets of the Company,
into, with or to any other corporation or corporations), whether voluntary or
involuntary, the holders of the Preferred Shares are to be paid in full the
amounts, if any, to which they are respectively entitled or provision for such
payment shall have been made before any distribution is made to the holders of
the Common Shares.
Voting Rights
Except as described below, the holders of Preferred Shares have no voting
rights, other than as may be required by law. Whenever dividends payable on the
Preferred Shares of any series shall be in arrears in an aggregate amount at
least equal to six full quarterly dividends (which need not be consecutive) on
such series, the holders of the outstanding Preferred Shares of all series shall
have the
12
<PAGE>
special right, voting separately as a single class, to elect two directors of
the Company at the next succeeding annual meeting of shareholders (and at each
succeeding annual meeting of shareholders thereafter until such right shall
terminate as hereinafter provided), and subject to the terms of any outstanding
series of Preferred Shares, the holders of the Common Shares and the holders of
one or more series of Preferred Shares then entitled to vote shall have the
right, voting as a single class, to elect the remaining authorized number of
directors. At each meeting of shareholders at which the holders of the Preferred
Shares of all series shall have the special right, voting separately as a single
class, to elect directors as provided above, the presence in person or by proxy
of the holders of record of one-third of the total number of the Preferred
Shares of all series then issued and outstanding shall be necessary and
sufficient to constitute a quorum of such class for such election by such
shareholders. Each director elected by the holders of the Preferred Shares of
all series shall hold office until the annual meeting of shareholders next
succeeding his election and until his successor, if any, is elected by such
holders and qualified or until his death, resignation or removal in the manner
provided in the By-laws of the Company; provided, however, that notwithstanding
any provision in the By-laws, a director elected by the holders of the Preferred
Shares of all series may be removed only by such holders if such removal is
without cause. In case any vacancy shall occur among the directors elected by
the holders of the Preferred Shares of all series such vacancy may be filled for
the unexpired portion of the term by vote of the single remaining director
theretofore elected by such shareholders, or his successor in office, or, if
such vacancy shall occur more than 90 days prior to the first anniversary of the
next preceding annual meeting of shareholders, by the vote of such shareholders
given at a special meeting of such shareholders called for the purpose. Whenever
all arrears of dividends on the Preferred Shares of all series shall have been
paid and dividends thereon for the current quarterly period shall have been paid
or declared and provided for, the right of the holders of the Preferred Shares
of all series to elect two directors as provided in this paragraph shall
terminate at the next succeeding annual meeting of shareholders, but subject
always to the same provisions for the vesting of such special right, voting
separately as a single class, to elect two directors in the case of any future
arrearages of the kind and amount described above.
The consent of the holders of at least two-thirds of the outstanding
Preferred Shares, given in person or by proxy, at a special or annual meeting of
shareholders called for the purpose, at which the holders of the Preferred
Shares of all series shall vote separately as a single class, shall be necessary
for effecting the authorization of any class of shares ranking prior to the
Preferred Shares as to dividends or upon liquidation, dissolution or winding up,
or an increase in the authorized amount of any class of shares so ranking prior
to the Preferred Shares, or the authorization of any amendment of the Restated
Certificate of Incorporation or the By-laws of the Company as to affect
adversely the relative rights, preferences or limitations of the Preferred
Shares; provided, however, that, if any such amendment shall affect adversely
the relative rights, preferences or limitations of one or more, but not all, of
the series of Preferred Shares then outstanding, the consent of the holders of
at least two-thirds of the outstanding Preferred Shares of the several series so
affected shall be required in lieu of the consent of the holders of at least
two-thirds of the outstanding Preferred Shares of all series.
In any case in which the holders of the Preferred Shares shall be entitled
to vote separately as a single class, each holder of Preferred Shares of any
series shall be entitled to one vote for each such share held.
Outstanding Preferred Shares
The Company has no Preferred Shares issued and outstanding at the date of
this Prospectus.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares (as defined below) and Depositary Receipts (as defined below) does not
purport to be complete and is subject to and qualified in its entirety by
reference to the forms of Deposit Agreement and Depositary Receipts relating to
each series of Preferred Shares which have been or will be filed with the
Commission in connection with the offering of such series of Preferred Shares.
13
<PAGE>
General
The Company may, at its option, elect to offer fractional interests in
Preferred Shares, rather than Preferred Shares. In the event such option is
exercised, the Company will provide for the issuance by a Depositary to the
public of receipts for depositary shares ('Depositary Shares'), each of which
will represent fractional interests of a particular series of Preferred Shares
(which will be set forth in the Prospectus Supplement relating to a particular
series of Preferred Shares).
The shares of any series of Preferred Shares underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the 'Deposit
Agreement') between the Company and a bank or trust company selected by the
Company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000 (the 'Depositary'). The Prospectus
Supplement relating to a series of Depositary Shares will set forth the name and
address of the Depositary. Subject to the terms of the Deposit Agreement, each
owner of Depositary Shares will be entitled, in proportion to the applicable
fractional interests in Preferred Shares underlying such Depositary Shares, to
all the rights and preferences of the Preferred Shares underlying such
Depositary Shares (including dividend, voting, redemption, conversion and
liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the 'Depositary Receipts'). Depositary
Receipts will be distributed to those persons purchasing the fractional
interests in shares of the related series of Preferred Shares in accordance with
the terms of the offering described in the related Prospectus Supplement.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received in respect of Preferred Shares to the record holders of
Depositary Shares relating to such Preferred Shares in proportion to the numbers
of such Depositary Shares owned by such holders on the relevant record date. The
Depositary shall distribute only such amount, however, as can be distributed
without attributing to any holder of Depositary Shares a fraction of one cent,
and any balance not so distributed shall be added to and treated as part of the
next sum received by the Depositary for distribution to record holders of
Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
The Deposit Agreement will also contain provisions relating to the manner in
which any subscription or similar rights offered by the Company to holders of
the Preferred Shares shall be made available to the holders of Depositary
Shares.
Redemption of Depositary Shares
If a series of the Preferred Shares underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Shares held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Shares. Whenever the Company redeems Preferred Shares held by
the Depositary, the Depositary will redeem as of the same redemption date the
number of Depositary Shares relating to shares of Preferred Shares so redeemed.
If less than all of the Depositary Shares are to be redeemed, the Depositary
Shares to be redeemed will be selected by lot or pro rata as may be determined
by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the
14
<PAGE>
right to receive the moneys, securities or other property payable upon such
redemption and any money, securities, or other property to which the holders of
such Depositary Shares were entitled upon such redemption upon surrender to the
Depositary of the Depositary Receipts evidencing such Depositary Shares.
Voting the Preferred Shares
Upon the receipt of notice of any meeting at which the holders of the
Preferred Shares are entitled to vote, the Depositary will mail the information
contained in such notice of meeting to the record holders of the Depositary
Shares relating to such Preferred Shares. Each record holder of such Depositary
Shares on the record date (which will be the same date as the record date for
the Preferred Shares) will be entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the number of shares of Preferred
Shares underlying such Depositary Shares in accordance with such instructions,
and the Company will agree to take all action which may be deemed necessary by
the Depositary in order to enable the Depositary to do so.
Amendment and Termination of Depositary Agreement
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which materially
and adversely alters the rights of the existing holders of Depositary Shares
will not be effective unless such amendment has been approved by the record
holders of at least a majority of the Depositary Shares then outstanding. A
Deposit Agreement may be terminated by the Company or the Depositary only if (i)
all outstanding Depositary Shares relating thereto have been redeemed or (ii)
there has been a final distribution in respect of the Preferred Shares of the
relevant series in connection with any liquidation, dissolution or winding up of
the Company and such distribution has been distributed to the holders of the
related Depositary Shares.
Charges of Depositary
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Shares and any redemption of the Preferred Shares. Holders of the
Depositary Shares will pay transfer and other taxes and governmental charges and
such other charges as are expressly provided in the Deposit Agreement to be for
their accounts.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
Miscellaneous
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of the Preferred Shares.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Shares unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Preferred Shares for deposit, holders of Depositary Shares or other persons
believed to be competent and on documents believed to be genuine.
15
<PAGE>
DESCRIPTION OF COMMON SHARES
The following summary does not purport to be complete and is subject in all
respects to the applicable provisions of the New York Business Corporation Law,
the Company's Restated Certificate of Incorporation and By-Laws.
General
The Company is authorized to issue up 1,200,000,000 common shares, par value
$.60 each (the 'Common Shares'). At April 30, 1997, the Company had outstanding
470,989,424 Common Shares. As of December 31, 1996, approximately 81,600,000
Common Shares were reserved for issuance with respect to various employee stock
plans, employee benefit plans, convertible preferred shares and debentures, and
the dividend reinvestment plan.
Subject to the prior dividend rights of the holders of any Preferred Shares,
holders of Common Shares are entitled to receive dividends when, as and if
declared by the Board of Directors out of funds legally available therefor.
Each Common Share is entitled to one vote on all matters submitted to a vote
of shareholders. Holders of the Common Shares do not have cumulative voting
rights. After the satisfaction in full of the liquidation preferences of holders
of any Preferred Shares, holders of Common Shares are entitled to ratable
distribution of the remaining assets available for distribution to shareholders
in the event of any liquidation, dissolution or winding up of the Company. The
Common Shares are not subject to redemption by operation of a sinking fund or
otherwise. Holders of Common Shares are not entitled to pre-emptive rights. The
issued and outstanding Common Shares are fully paid and nonassessable.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities, Preferred Shares, Depositary Shares, Common Shares or equity
securities issued by an affiliated or unaffiliated corporation or other entity.
Securities Warrants may be issued independently or together with any Securities
offered by any Prospectus Supplement and may be attached to or separate from
such Securities. Each series of Securities Warrants will be issued under a
separate warrant agreement (each a 'Securities Warrant Agreement') to be entered
into between the Company and a warrant agent ('Warrant Agent'). The Warrant
Agent will act solely as an agent of the Company in connection with the
Securities Warrants of such series and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial owners of
Securities Warrants. The following sets forth certain general terms and
provisions of the Securities Warrants offered hereby. Further terms of the
Securities Warrants and the applicable Securities Warrant Agreement will be set
forth in the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the following terms,
where applicable, of the Securities Warrants in respect of which this Prospectus
is being delivered: (1) the title of such Securities Warrants; (2) the aggregate
number of such Securities Warrants; (3) the price or prices at which such
Securities Warrants will be issued; (4) the currencies in which the price of
such Securities Warrants may be payable; (5) the designation, aggregate
principal amount and terms of the securities purchasable upon exercise of such
Securities Warrants; (6) the designation and terms of the Securities with which
such Securities Warrants are issued and the number of such Securities Warrants
issued with each such security; (7) the currency or currencies, including
composite currencies, in which the principal of or any premium or interest on
the securities purchasable upon exercise of such Securities Warrant will be
payable; (8) if applicable, the date on and after which such Securities Warrants
and the related securities will be separately transferable; (9) the price at
which and currency or currencies, including composite currencies, in which the
securities purchasable upon exercise of such Securities Warrants may be
purchased; (10) the date on which the right to exercise such Securities Warrants
shall commence and the date on which such right shall expire; (11) the minimum
or maximum amount of such Securities Warrants which may be exercised at any one
time; (12) information with respect to book-entry procedures, if any; (13) a
discussion of certain Federal income tax considerations; and (14) any other
terms of such Securities Warrants, including terms, procedures and limitations
relating to the exchange and exercise of such Securities Warrants.
16
<PAGE>
DESCRIPTION OF CURRENCY WARRANTS
The following description of the terms of the Currency Warrants sets forth
certain general terms and provisions of the Currency Warrants to which any
Prospectus Supplement may relate. The particular terms of the Currency Warrants
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may not apply to the Currency Warrants so offered will be
described in the Prospectus Supplement relating to such Currency Warrants.
Each issue of Currency Warrants will be issued under a warrant agreement (a
'Currency Warrant Agreement') to be entered into between the Company and a
warrant agent (the 'Currency Warrant Agent'). The Currency Warrant Agent will
act solely as the agent of the Company under the applicable Currency Warrant
Agreement and will not assume any obligation or relationship of agency or trust
for or with any holders of such Currency Warrants.
The applicable Prospectus Supplement will describe the following terms,
where applicable, of the Currency Warrants in respect of which this Prospectus
is being delivered: (i) the aggregate amount and number of such Currency
Warrants; (ii) the offering price of such Currency Warrants; (iii) the
designated currency, which currency may be foreign currency or a composite
currency, including ECU, and information regarding such currency or composite
currency; (iv) the date on which the right to exercise such Currency Warrants
commences and the date on which such right expires; (v) the manner in which such
Currency Warrants may be exercised; (vi) the circumstances which will cause the
Currency Warrants to be deemed automatically exercised; (vii) the minimum
number, if any, of such Currency Warrants exercisable at any one time and any
other restrictions on exercise; (viii) the method of determining the amount
payable in connection with the exercise of such Currency Warrants, including the
strike price or range of strike prices of such Currency Warrants, the method of
determining the spot exchange rate and the U.S. Dollar Constant for such
Currency Warrants; (ix) the national securities exchange on which such currency
warrants will be listed; (x) whether such Currency Warrants will, from the
perspective of holders, be represented by certificates or issued in book-entry
form; (xi) the place or places at which payment of the cash settlement value of
such Currency Warrants is to be made by the Corporation, if applicable;
(xii) information with respect to book-entry procedures, if any; (xiii) the plan
of distribution of the Currency Warrants, and (xiv) any other terms of such
Currency Warrants.
Prospective purchasers of Currency Warrants should be aware of special
Federal income tax considerations applicable to instruments such as the Currency
Warrants. The Prospectus Supplement relating to each issue of Currency Warrants
will describe such tax considerations.
DESCRIPTION OF OTHER WARRANTS
The Company may issue Other Warrants to buy or sell debt securities of or
guaranteed by the United States, to buy or sell currencies, to buy or sell units
of a stock index or stock basket, to buy or sell a commodity or a unit of a
commodity index or to buy or sell some other item or unit of an index
(collectively, 'Exercise Items'). Other Warrants will be settled either through
physical delivery or through payment of a cash settlement value as set forth in
the applicable Prospectus Supplement. Other Warrants will be issued under a
warrant agreement (an 'Other Warrant Agreement') to be entered into between the
Company and a warrant agent (the 'Other Warrant Agent'). The Other Warrant Agent
will act solely as the agent of the Company under the applicable Other Warrant
Agreement and will not assume any obligation or relationship of agency or trust
for or with any holders of such Other Warrants.
The applicable Prospectus Supplement will describe the following terms,
where applicable, of the Other Warrants in respect of which this Prospectus is
being delivered: (i) the title and aggregate number of such Other Warrants;
(ii) the offering price of such Other Warrants; (iii) the material risk factors
relating to such Other Warrants; (iv) the Exercise Items that such Other
Warrants represent the right to buy or sell; (v) the procedures and conditions
relating to the exercise of such Other Warrants; (vi) the date on which the
right to exercise such Other Warrants shall commence and the date on which such
right shall expire; (vii) the identity of the Other Warrant Agent for such Other
Warrants; (viii) whether the certificates evidencing such Other Warrants will be
issuable in definitive registered form or global form or both; (ix) a discussion
of federal income tax considerations applicable to such Other Warrants;
17
<PAGE>
and (x) any other terms of such Other Warrants, including any terms that may be
required or advisable under applicable law.
The Other Warrants may entail significant risks, including, without
limitation, the possibility of significant fluctuations in the market for the
applicable Exercise Item, potential illiquidity in the secondary market and the
risk that they will expire worthless. These risks will vary depending on the
particular terms of the Other Warrants and will be more fully described in the
applicable Prospectus Supplement.
PLAN OF DISTRIBUTION
The Company may sell the Securities (i) through underwriters or dealers;
(ii) directly to one or more purchasers; (iii) through agents; or (iv) through a
combination of any of such methods of sale. The Prospectus Supplement with
respect to the Securities being offered thereby sets forth the terms of the
offering of such Securities, including the name or names of any agents or
underwriters, the purchase price of such Securities and the proceeds to the
Company from such sale, any underwriting discounts and other items constituting
underwriters' or agents' compensation, any initial public offering price, any
discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which such Securities may be listed. Only agents or
underwriters so named in the Prospectus Supplement are deemed to be agents or
underwriters in connection with the Securities offered thereby.
If underwriters are used in the sale, the Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The obligations of
the underwriters to purchase such Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all the
Securities of the series offered by the Prospectus Supplement relating to such
series if any of such Securities are purchased. Any initial public offering
price and any discounts or concessions allowed or realIowed or paid to dealers
may be changed from time to time.
Securities may also be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offering
and sale of the Securities of the series in respect of which this Prospectus is
delivered is named and any commissions payable by the Company to such agent are
set forth in the Prospectus Supplement relating to such series. Unless otherwise
indicated in such Prospectus Supplement, any such agent is acting on a best
efforts basis for the period of its appointment.
If so indicated in a Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain institutional
investors to purchase Securities of the series to which such Prospectus
Supplement relates providing for payment and delivery on a future date specified
in such Prospectus Supplement. There may be limitations on the minimum amount
which may be purchased by any such institutional investor or on the portion of
the aggregate principal amount of the particular Securities which may be sold
pursuant to such arrangements. Institutional investors to which such offers may
be made, when authorized, include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and such other institutions as may be approved by the Company. The
obligations of any such purchasers pursuant to such delayed delivery and payment
arrangements will not be subject to any conditions except that (i) the purchase
by an institution of the particular Securities 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, and (ii) if the particular Securities are being
sold to underwriters, the Company shall have sold to such underwriters the total
principal amount of such Securities or number of Warrants less the principal
amount or number thereof, as the case may be, covered by such arrangements.
Underwriters will not have any responsibility in respect of the validity of such
arrangements or the performance of the Company or such institutional investors
thereunder.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act of 1933, as amended, or to
contribution with respect to payments which the agents or underwriters
18
<PAGE>
may be required to make in respect thereof. Agents and underwriters may be
customers of, may engage in transactions with, or perform services for, the
Company in the ordinary course of business.
LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by Louise
M. Parent, Esq., Executive Vice President and General Counsel of the Company.
Unless provided otherwise in the applicable Prospectus Supplement, certain legal
matters will be passed upon for any underwriters or agents by Simpson Thacher &
Bartlett (a partnership which includes professional corporations),
425 Lexington Avenue, New York, New York.
EXPERTS
The consolidated financial statements and schedules to financial statements
of the Company included or incorporated by reference in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996 have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report included
therein and incorporated herein by reference. Such consolidated financial
statements and schedules to financial statements have been incorporated herein
by reference in reliance upon such report given upon the authority of such firm
as experts in auditing and accounting.
With respect to the unaudited consolidated interim financial information for
the three month periods ended March 31, 1997 and 1996, incorporated by reference
in the Prospectus and Registration Statement, Ernst & Young LLP have reported
that they have applied limited procedures in accordance with professional
standards for a review of such information. However, their separate report,
included in the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997, and incorporated herein by reference, states that they did not
audit and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their report on such information should
be restricted considering the limited nature of the review procedures applied.
The independent auditors are not subject to the liability provisions of Section
11 of the Securities Act of 1933 for their report on the unaudited interim
financial information because that report is not a 'report' or a 'part' of the
Registration Statement prepared or certified by the auditors within the meaning
of Sections 7 and 11 of the Securities Act of 1933.
19
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
PRINCIPAL OFFICES OF
AMERICAN EXPRESS COMPANY
200 Vesey Street
World Financial Center
New York, New York 10285
TRUSTEE
FIRST UNION NATIONAL BANK
One World Trade Center, 47th Floor
New York, New York 10048
LUXEMBOURG STOCK EXCHANGE LISTING AND PAYING AGENT
DEUTSCHE BANK LUXEMBOURG SA
2 Boulevard Konrad Adenauer
L1115 Luxembourg
LEGAL ADVISERS
<TABLE>
<S> <C>
To American Express Company as to To American Express Company as to
Certain Matters of United States Law Certain Matters of United States Tax Law
LOUISE M. PARENT BRUCE A. COGAN
Executive Vice President and General Counsel Vice President-General Tax Counsel
American Express Company American Express Company
200 Vesey Street 90 Hudson Street
World Financial Center Jersey City, New Jersey 07302
New York, New York 10285
</TABLE>
To the Underwriters
as to United States Law
CLEARY, GOTTLIEB, STEEN & HAMILTON
One Liberty Plaza
New York, New York 10006
INDEPENDENT AUDITORS TO
AMERICAN EXPRESS COMPANY
ERNST & YOUNG LLP
787 Seventh Avenue
New York, New York 10019
<PAGE>
[AMERICAN EXPRESS LOGO]
STATEMENT OF DIFFERENCES
------------------------
The registered trademark symbol shall be expressed as................. 'r'
The section symbol shall be expressed as.............................. 'SS'
