PROSPECTUS SUPPLEMENT
(To Prospectus dated April 24, 1995)
$100,000,000
ILLINOIS CENTRAL RAILROAD COMPANY
Medium-Term Notes, Series A
Due from Nine Months to 30 Years
from Date of Issue
Illinois Central Railroad Company (the "Company") may offer from
time to time its Medium-Term Notes, Series A (the "Notes"), having an
aggregate initial offering price not to exceed $100,000,000 (or the equivalent
thereof in foreign currencies or currency units), subject to reduction under
certain circumstances as a result of the sale of other Securities of the
Company under the Prospectus to which this Prospectus Supplement relates. The
Notes will be offered in varying maturities from nine months to 30 years from
their date of issue and may be subject to redemption at the option of the
Company or repayment at the option of the Holder, in each case, in whole or in
part prior to the maturity date (as further defined below, the "Stated
Maturity") thereof as set forth in a Pricing Supplement to this Prospectus
Supplement (a "Pricing Supplement"). Each Note will be denominated in U.S.
dollars or in other currencies or currency units (the "Specified Currency") as
may be designated by the Company and set forth in the applicable Pricing
Supplement (the "Multi-Currency Notes"). See "Special Provisions Relating to
Multi-Currency Notes" and "Foreign Currency Risks." The Notes may be issued
as "Amortizing Notes," "Original Issue Discount Notes," "Reset Notes,"
"Currency Indexed Notes" or "Commodity Indexed Notes." See "Description of
Notes."
(Continued on next page)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT, ANY PRICING SUPPLEMENT HERETO OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Agents' Commission or
Price to Public(1) Discount(2) Proceeds to Company(2)(3)
_________________ ____________________ _________________________
Per Note..... 100% .125%-.750% 99.250%-99.875%
Total ....... $100,000,000 $125,000-$750,000 $99,250,000-$99,875,000
_____________
(1) Unless otherwise indicated in the applicable Pricing Supplement, Notes
will be sold at 100% of their principal amount.
(2) The Company will pay Lehman Brothers, Lehman Brothers Inc. (including
its affiliate, Lehman Government Securities Inc.), Salomon Brothers Inc
and Smith Barney Inc. (each an "Agent," and, collectively, the "Agents")
a commission ranging from .125% to .750% of the principal amount of any
Note, depending on its Stated Maturity, sold through such Agent. Any
Agent, acting as principal, may also purchase Notes at a discount for
resale to one or more investors or one or more broker-dealers (acting as
principal for purposes of resale) at varying prices related to
prevailing market prices at the time of resale, as determined by such
Agent, or, if so agreed, at a fixed public offering price. The Company
has agreed to reimburse the Agents for certain expenses. The Company
has agreed to indemnify the Agents against certain liabilities,
including liabilities under applicable federal and state securities laws.
(3) Before deducting offering expenses payable by the Company estimated at
U.S. $437,716.
_________________
The Notes are offered on a continuing basis by the Company through the
Agents, each of which has agreed to use its reasonable best efforts to solicit
offers to purchase the Notes. The Company has reserved the right to sell
Notes directly to investors on its own behalf, and on such sales no
commissions will be paid. The Notes will not be listed on any securities
exchange, and there can be no assurance that the Notes will be sold or that
there will be a secondary market for the Notes. The Company reserves the
right to withdraw, cancel or modify the offer made hereby without notice. The
Company or the Agent that solicits an offer to purchase may reject any such
offer to purchase Notes in whole or in part. See "Supplemental Plan of
Distribution."
Lehman Brothers
Salomon Brothers Inc
Smith Barney Inc.
May 1, 1995
(from preceding page)
May 1, 1995
(from preceding page)
Each Note will bear interest at a fixed rate (a "Fixed Rate Note"),
which may be zero in the case of certain Notes issued at a price
representing a discount from the principal amount payable at maturity (a
"Zero-Coupon Note"), or at a variable rate (a "Floating Rate Note")
determined by reference to the Commercial Paper Rate, CD Rate, Federal
Funds Rate, CMT Rate, 11th District Cost of Funds Rate, Kenny Rate, LIBOR,
Prime Rate or Treasury Rate or such other interest rate formula (the
"Interest Rate Basis") as may be indicated in the accompanying Pricing
Supplement, as adjusted by a Spread or Spread Multiplier, if any,
applicable to such Notes. See "Description of Notes." Unless otherwise
specified in the applicable Pricing Supplement, interest on Fixed Rate
Notes will be payable semi-annually on each January 15 and July 15 (each an
"Interest Payment Date" with respect to such Fixed Rate Notes) and at
Stated Maturity. Interest on Floating Rate Notes will be payable on such
dates indicated in the applicable Pricing Supplement (each an "Interest
Payment Date" with respect to such Floating Rate Notes).
Each Note will be represented by either a Global Security (a "Book-
Entry Note") registered in the name of a nominee of The Depository Trust
Company ("DTC") or other depositary (DTC or such other depositary as is
indicated in the applicable Pricing Supplement is referred to herein as the
"U.S. Depositary"), or a certificate issued in definitive form (a
"Certificated Note"), as indicated in the applicable Pricing Supplement.
Beneficial interests in Book-Entry Notes will be shown on, and transfers
thereof will be effected only through, records maintained by the U.S.
Depositary and its participants. Owners of beneficial interests in Book-
Entry Notes will be entitled to physical delivery of Certificated Notes
only under the limited circumstances described herein. See "Description of
Notes--Book-Entry System." Unless otherwise indicated in the applicable
Pricing Supplement, Notes denominated in U.S. dollars will be issued in
denominations of $100,000 and integral multiples of $1,000 in excess
thereof. If the Notes are to be issued in a foreign currency or units of a
foreign composite currency, the authorized denominations and currency
exchange rate information will be set forth in the applicable Pricing
Supplement.
IN CONNECTION WITH THIS OFFERING, THE AGENTS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
________________
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the three-month periods
ended March 31, 1995 and 1994 and each of the years in the five-year period
ended December 31, 1994 are as follows:
Three Months Ended
March 31, Years Ended December 31,
____________ _________________________________
1995 1994 1994 1993 1992 1991 1990
____ ____ ____ ____ ____ ____ ____
Ratio of earnings
to fixed charges 6.13 4.63 4.75 3.96 2.81 2.26 1.74
For purposes of these computations, earnings before fixed charges
consist of income before income taxes, extraordinary item and cumulative
effect of accounting changes plus fixed charges less capitalized interest.
Fixed charges consist of interest on indebtedness including the amortization
of debt issuance costs, capitalized interest and the portion of
non-capitalized lease expense representative of interest.
________________
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby supplements and, to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Securities (as defined
in the accompanying Prospectus) set forth under the heading "Description of the
Securities" in the accompanying Prospectus, to which description reference is
hereby made. The provisions of the Notes summarized herein will apply to each
Note unless otherwise indicated in the applicable Pricing Supplement.
Capitalized terms used but not defined herein have the meanings specified in
the Indenture and/or the Notes.
General
The Notes offered hereby will be issued under the Indenture referred to
in the accompanying Prospectus. The summary contained herein of certain
provisions of the Notes does not purport to be complete and is qualified in
its entirety by reference to the provisions of the Indenture and the forms of
Notes, each of which has been filed as an exhibit to the Registration
Statement (the "Registration Statement"), of which the accompanying Prospectus
is a part, to which exhibits reference is hereby made.
The Notes constitute a single series for purposes of the Indenture and
are limited to an aggregate initial offering price of U.S. $100,000,000 (or
the equivalent thereof in the Specified Currency, calculated on the applicable
trade date). Unless otherwise indicated in the applicable Pricing Supplement,
currency amounts in this Prospectus Supplement, the accompanying Prospectus
and any Pricing Supplement are stated in United States dollars ("$", "dollars"
or "U.S. $").
The Notes will constitute unsecured and unsubordinated indebtedness of
the Company and will rank on a parity with the Company's other unsecured and
unsubordinated indebtedness.
The Notes are offered on a continuing basis and will mature on a
Business Day (as defined below) from nine months to 30 years from their date
of issue, as selected by the initial purchaser and agreed to by the Company,
and may be subject to redemption at the option of the Company or repayment at
the option of the Holder prior to Maturity. See "Redemption and Repayment"
below. Floating Rate Notes will mature on an Interest Payment Date specified
in the Pricing Supplement applicable thereto.
Unless otherwise indicated in the applicable Pricing Supplement, the
Notes will be denominated in U.S. dollars, and payments of principal of,
premium, if any, and any interest on the Notes will be made in U.S. dollars.
If any of the Notes are to be denominated other than in U.S. dollars, or if
the principal of, or premium, if any, or any interest on any of the Notes is
to be payable at the option of the Holder or the Company in a currency or
composite currency unit other than that in which such Notes are denominated,
the applicable Pricing Supplement will provide additional information,
including authorized denominations and applicable exchange rate information
pertaining to the terms of such Notes and certain other matters of interest to
the Holders thereof. See "Special Provisions Relating to Multi-Currency
Notes."
Each note will be issued initially as either a Book-Entry Note or a
Certificated Note. Except as set forth under "Book-Entry System" below,
Book-Entry Notes will not be issuable in certificated form. Unless otherwise
specified in the applicable Pricing Supplement or as provided below with
respect to Multi-Currency Notes, Notes will be issued in denominations of
$100,000 and integral multiples of $1,000 in excess thereof.
Payments of interest and principal (and premium, if any) to Beneficial
Owners (as defined below) of Book-Entry Notes are expected to be made in
accordance with the U.S. Depositary's and its participants' procedures in
effect from time to time as described below under "Book-Entry System."
Unless otherwise specified in the applicable Pricing Supplement,
payments of interest and, in the case of Amortizing Notes, principal with
respect to any Certificated Note (other than interest and, in the case of
Amortizing Notes, principal payable at Stated Maturity) will be made by
mailing a check to the Holder at the address of such Holder appearing on the
Security Register for the Notes on the applicable Regular Record Date (as
defined below). Notwithstanding the foregoing, at the option of the Company,
all payments of interest and, in the case of Amortizing Notes, principal on
the Notes may be made by wire transfer of immediately available funds to an
account at a bank located within the United States as designated by each
Holder not less than 15 calendar days prior to the applicable Interest Payment
Date. A Holder of $10,000,000 or more in aggregate principal amount of Notes
of like tenor and terms with the same Interest Payment Date may demand payment
by wire transfer but only if appropriate payment instructions have been
received in writing by the Trustee, not less than 15 calendar days prior to
the applicable Interest Payment Date. In the event that payment is so made in
accordance with instructions of the Holder, such wire transfer shall be deemed
to constitute full and complete payment of such interest and principal on the
Notes. Payment of the principal of (and premium, if any) and interest due
with respect to any Certificated Note at Maturity will be made in immediately
available funds upon surrender of such Note at the principal office of the
Trustee in the Borough of Manhattan, The City of New York accompanied by wire
transfer instructions, provided that the Certificated Note is presented to the
Trustee in time for the Trustee to make such payments in such funds in
accordance with its normal procedures.
Notwithstanding anything in this Prospectus Supplement to the contrary,
unless otherwise specified in the applicable Pricing Supplement, if a Note is
an Original Issue Discount Note, the amount payable on such Note in the event
the principal thereof is declared to be due and payable immediately as
described in the accompanying Prospectus under "Description of the
Securities--Events of Default, Notice and Certain Rights on Default" or in the
event of the redemption or repayment thereof prior to its Stated Maturity
shall be the Amortized Face Amount of such Note as of the date of declaration,
redemption or repayment, as the case may be. The "Amortized Face Amount" of
an Original Issue Discount Note shall be the amount equal to (i) the principal
amount of such Note multiplied by the Issue Price set forth in the applicable
Pricing Supplement plus (ii) the portion of the difference between the dollar
amount determined pursuant to the preceding clause (i) and the principal
amount of such Note that has accreted at the yield to maturity set forth in
the Pricing Supplement (computed in accordance with generally accepted United
States bond yield computation principles) to such date of declaration,
redemption or repayment, but in no event shall the Amortized Face Amount of an
Original Issue Discount Note exceed its principal amount.
The Pricing Supplement relating to each Note will describe, among other
things, the following items: (i) the Specified Currency with respect to such
Note (and, if such Specified Currency is other than U.S. dollars, certain
other terms relating to such Note, including the authorized denominations);
(ii) the price (expressed as a percentage of the aggregate principal amount
thereof) at which such Note will be issued (the "Issue Price"); (iii) the date
on which such Note will be issued (the "Original Issue Date"); (iv) the date
on which such Note will mature (the "Stated Maturity") and whether the Stated
Maturity may be extended by the Company, and if so, the Extension Periods and
the Final Maturity Date (each as defined below); (v) whether such Note is a
Fixed Rate Note or a Floating Rate Note; (vi) if such Note is a Fixed Rate
Note, the rate per annum at which such Note will bear interest, if any, the
interest payment date or dates, if different from those set forth below under
"Fixed Rate Notes" and whether such rate may be changed by the Company prior
to Stated Maturity; (vii) if such Note is a Floating Rate Note, the Initial
Interest Rate, the Interest Rate Basis, the Interest Reset Dates, the Interest
Payment Dates, the Index Maturity, the maximum interest rate, if any, the
minimum interest rate, if any, the Spread, if any, the Spread Multiplier, if
any (all as defined herein), and any other terms relating to the particular
method of calculating the interest rate for such Note, and whether any such
Spread and/or Spread Multiplier may be changed by the Company prior to Stated
Maturity; (viii) whether such Note is an Original Issue Discount Note, and if
so, the yield to maturity; (ix) whether such Note is a Currency Indexed Note
or a Commodity Indexed Note and if so, the specific terms thereof; (x) whether
such Note is an Amortizing Note (as defined below), and if so, the basis or
formula for the amortization of principal and/or interest and the payment
dates for such periodic principal payments; (xi) the regular record date or
dates (a "Regular Record Date") if other than as set forth below; (xii)
whether such Note may be redeemed at the option of the Company, or repaid at
the option of the Holder, prior to Stated Maturity and, if so, the provisions
relating to such redemption or repayment; (xiii) whether such Note will be
issued initially as a Book-Entry Note or a Certificated Note; and (xiv) any
other terms of such Note not inconsistent with the provisions of the Indenture.
Certificated Notes may be presented for registration of transfer or
exchange at the Corporate Trust Office of the Trustee in the Borough of
Manhattan, The City of New York.
All percentages resulting from any calculation with respect to any Notes
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or
.0987655)), and all dollar amounts used in or resulting from such calculation
on any Notes will be rounded to the nearest cent with one half cent being
rounded upward.
As used herein, "Business Day" means, unless otherwise specified in the
applicable Pricing Supplement, any Monday, Tuesday, Wednesday, Thursday or
Friday that in The City of New York is not a day on which banking institutions
are authorized or required by law, regulation or executive order to close and,
with respect to Notes as to which LIBOR (as defined below) is an applicable
Base Rate (as defined below), is also a London Business Day, provided,
however, that with respect to Multi-Currency Notes, such day is also not a day
on which banking institutions are authorized or required by law, regulation or
executive order to close in the principal financial center of the country of
such Specified Currency (or, in the case of ECUs, is not a day designated as
an ECU Non-Settlement Day by the ECU Banking Association in Paris or otherwise
generally regarded in the ECU interbank market as a day on which payments on
ECUs shall not be made). As used herein, "London Business Day" means any day
(a) if the Designated LIBOR Currency is other than the ECU, on which dealings
in deposits in such Designated LIBOR Currency are transacted in the London
interbank market or (b) if the Designated LIBOR Currency is the ECU, that is
not designated as an ECU Non-Settlement Day by the ECU Banking Association in
Paris or otherwise generally regarded in the ECU interbank market as a day on
which payments on ECUs shall not be made.
The Notes are referred to in the accompanying Prospectus as the
"Securities." For a description of the rights attaching to different series
of Securities under the Indenture, see "Description of the Securities" in the
Prospectus. Unless otherwise indicated in the applicable Pricing Supplement,
the Notes will have the terms described below.
Interest and Interest Rates
Each Note (other than a Zero-Coupon Note) will bear interest from its
Original Issue Date or from and including the most recent Interest Payment
Date to which interest on such Note has been paid or duly provided for at a
fixed rate per annum or at a rate per annum determined pursuant to an Interest
Rate Basis, stated therein and in the applicable Pricing Supplement, that may
be adjusted by a Spread and/or Spread Multiplier, until the principal thereof
is paid or made available for payment. The Pricing Supplement relating to
each Note will indicate whether interest shall accrue on any overdue principal
and on any overdue installment of interest (to the extent that the payment of
such interest is legally enforceable) and at what rate any such interest will
accrue. Unless otherwise set forth in the applicable Pricing Supplement,
interest will be payable on each Interest Payment Date and at Maturity.
"Maturity" means the date on which the principal of a Note becomes due and
payable in full in accordance with its terms and the terms of the Indenture,
whether at Stated Maturity, upon acceleration, redemption, repayment or
otherwise. Interest (other than defaulted interest which may be paid on a
special record date) will be payable to the Holder at the close of business on
the Regular Record Date next preceding such Interest Payment Date; provided,
however, that the first payment of interest on any Note originally issued
between a Regular Record Date and the next Interest Payment Date will be made
on the Interest Payment Date following the next succeeding Regular Record Date
to the Holder on such next succeeding Regular Record Date.
Interest rates, interest rate formulae and other variable terms of the
Notes are subject to change by the Company from time to time, but no such
change will affect any Note already issued or as to which an offer to purchase
has been accepted by the Company. Unless otherwise indicated in the
applicable Pricing Supplement, the Interest Payment Dates and the Regular
Record Dates for Fixed Rate Notes shall be as described below under "Fixed
Rate Notes." The Interest Payment Dates for Floating Rate Notes shall be as
indicated in the applicable Pricing Supplement, and unless otherwise indicated
in the applicable Pricing Supplement, each Regular Record Date for a Floating
Rate Note will be the fifteenth day (whether or not a Business Day) preceding
each Interest Payment Date.
Each Note (other than a Zero-Coupon Note) will bear interest at either
(a) a fixed rate or (b) a floating rate determined by reference to an Interest
Rate Basis which may be adjusted by a Spread and/or Spread Multiplier. Any
Floating Rate Note may also have either or both of the following: (i) a
maximum numerical interest rate limitation, or ceiling, on the rate of
interest which may accrue during any interest period, and (ii) a minimum
numerical interest rate limitation, or floor, on the rate of interest which
may accrue during any interest period. The applicable Pricing Supplement
relating to each Note will designate either a fixed rate of interest per annum
on the applicable Fixed Rate Note or one or more of the following Interest
Rate Bases as applicable to the relevant Floating Rate Note: (a) the CD Rate,
in which case such Note will be a "CD Rate Note," (b) the Commercial Paper
Rate, in which case such Note will be a "Commercial Paper Rate Note," (c) the
Federal Funds Rate, in which case such Note will be a "Federal Funds Rate
Note," (d) LIBOR, in which case such Note will be a "LIBOR Note," (e) the
Treasury Rate, in which case such Note will be a "Treasury Rate Note," (f) the
Prime Rate, in which case such Note will be a "Prime Rate Note," (g) the CMT
Rate, in which case such Note will be a "CMT Rate Note," (h) the 11th District
Cost of Funds Rate, in which case such Note will be an "11th District Cost of
Funds Rate Note," (i) the Kenny Rate, in which case such Note will be a "Kenny
Rate Note," or (j) such other Interest Rate Basis as is set forth in such
Pricing Supplement.
Notwithstanding the determination of the interest rate as provided
below, the interest rate on the Notes for any interest period shall not be
greater than the maximum interest rate, if any, or less than the minimum
interest rate, if any, specified in the applicable Pricing Supplement. The
interest rate on the Notes will in no event be higher than the maximum rate
permitted by New York or other applicable law, as the same may be modified by
United States law of general application. Under present New York law, the
maximum rate of interest is 25% per annum on a simple interest basis. This
limit may not apply to Notes in which $2,500,000 or more has been invested.
Fixed Rate Notes
Each Fixed Rate Note (other than a Zero-Coupon Note) will bear interest
from its date of issue at the annual rate stated on the face thereof, as
specified in the applicable Pricing Supplement. Payments of interest on any
Fixed Rate Note with respect to any Interest Payment Date will include
interest accrued from and including the Original Issue Date, or from and
including the next preceding Interest Payment Date, to but excluding the
applicable Interest Payment Date or Maturity. Fixed Rate Notes may bear one
or more annual rates of interest during the periods or under the circumstances
specified therein and in the applicable Pricing Supplement. Interest on Fixed
Rate Notes will be computed and paid on the basis of a 360-day year of twelve
30-day months.
Unless otherwise specified in the applicable Pricing Supplement, the
Interest Payment Dates for Fixed Rate Notes (other than Amortizing Notes) will
be semi-annually on each January 15 and July 15 and the Regular Record Dates
will be each January 1 and July 1 (whether or not a Business Day). Unless
otherwise specified in the applicable Pricing Supplement, payments of
principal and interest on Fixed Rate Amortizing Notes will be made either
quarterly on each January 15, April 15, July 15 and October 15, or
semi-annually on each January 15 and July 15, as set forth in the applicable
Pricing Supplement, and at Maturity. Unless otherwise specified in the
applicable Pricing Supplement, Regular Record Dates with respect to Fixed Rate
Amortizing Notes will be the 15th day (whether or not a Business Day) next
preceding each Interest Payment Date. If the Interest Payment Date or
Maturity for any Fixed Rate Note is a day that is not a Business Day, all
payments to be made on such day will be made on the next succeeding Business
Day with the same force and effect as if made on the due date, and no
additional interest shall be payable as a result of such delayed payment.
Payments with respect to Fixed Rate Amortizing Notes will be applied
first to interest due and payable thereon and then to the reduction of the
unpaid principal amount thereof. A table setting forth repayment information
in respect of each Fixed Rate Amortizing Note will be provided to the original
purchaser thereof and will be available, upon request, to subsequent Holders.
Floating Rate Notes
The interest rate on each Floating Rate Note will be equal to either (i)
the interest rate calculated by reference to the specified Interest Rate Basis
plus or minus the Spread, if any, or (ii) the interest rate calculated by
reference to the specified Interest Rate Basis multiplied by the Spread
Multiplier, if any. The "Spread" is the number of basis points (one basis
point equals one-hundredth of a percentage point) specified in the applicable
Pricing Supplement as being applicable to such Note, and the "Spread
Multiplier" is the percentage specified in the applicable Pricing Supplement
as being applicable to such Note. The applicable Pricing Supplement will
specify the Interest Rate Basis and the Spread or Spread Multiplier, if any,
and the maximum or minimum interest rate limitation, if any, applicable to
each Floating Rate Note. In addition, such Pricing Supplement will contain
particulars as to the Calculation Agent (unless specified in the applicable
Pricing Supplement, The First National Bank of Boston (in such capacity, the
"Calculation Agent")), Index Maturity, Original Issue Date, the interest rate
in effect for the period from the Original Issue Date to the first Interest
Reset Date set forth in the applicable Pricing Supplement (the "Initial
Interest Rate"), Interest Determination Dates, Interest Payment Dates, Regular
Record Dates and Interest Reset Dates with respect to such Note.
Except as provided below or in the applicable Pricing Supplement,
interest on Floating Rate Notes, including Floating Rate Amortizing Notes,
will be payable, (i) in the case of Floating Rate Notes that reset daily,
weekly or monthly, on the third Wednesday of each month or on the third
Wednesday of March, June, September and December of each year, as specified on
the face thereof and in the applicable Pricing Supplement; (ii) in the case of
Floating Rate Notes, including Floating Rate Amortizing Notes, that reset
quarterly, on the third Wednesday of March, June, September and December of
each year; (iii) in the case of Floating Rate Notes, including Floating Rate
Amortizing Notes, that reset semiannually, on the third Wednesday of each of
two months of each year specified on the face thereof and in the applicable
Pricing Supplement; and (iv) in the case of Floating Rate Notes, including
Floating Rate Amortizing Notes, that reset annually, on the third Wednesday of
one month of each year specified on the face thereof and in the applicable
Pricing Supplement (each such day being an "Interest Payment Date") and, in
each case, at Maturity. If any Interest Payment Date, other than Maturity,
for any Floating Rate Note would otherwise be a day that is not a Business
Day, such Interest Payment Date shall be postponed to the next day that is a
Business Day, except that in the case of a LIBOR Note, if such Business Day is
in the next succeeding calendar month, such Interest Payment Date shall be the
immediately preceding London Business Day. If the Maturity for any Floating
Rate Note falls on a day that is not a Business Day, payment of principal,
premium, if any, and interest with respect to such Note will be made on the
next succeeding Business Day with the same force and effect as if made on the
due date, and no additional interest shall be payable as a result of such
delayed payment.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semiannually or annually (such period being the
"Reset Period" for such Note, and the first day of each Reset Period being an
"Interest Reset Date"), as specified in the applicable Pricing Supplement.
The Interest Reset Date will be, in the case of Floating Rate Notes which
reset daily, each Business Day; in the case of Floating Rate Notes (other than
Treasury Rate Notes) which reset weekly, the Wednesday of each week; in the
case of Treasury Rate Notes which reset weekly, the Tuesday of each week,
except as provided below; in the case of Floating Rate Notes which reset
monthly, the third Wednesday of each month (with the exception of monthly
reset 11th District Cost of Funds Rate Notes, which will reset on the first
calendar day of the month); in the case of Floating Rate Notes which reset
quarterly, the third Wednesday of each March, June, September and December; in
the case of Floating Rate Notes which reset semiannually, the third Wednesday
of the two months of each year specified in the applicable Pricing Supplement;
and in the case of Floating Rate Notes which reset annually, the third
Wednesday of one month of each year specified in the applicable Pricing
Supplement; provided, however, that the interest rate in effect from the date
of issue to the first Interest Reset Date with respect to a Floating Rate Note
will be the Initial Interest Rate (as set forth in the applicable Pricing
Supplement). If any Interest Reset Date for any Floating Rate Note would
otherwise be a day that is not a Business Day for such Floating Rate Note, the
Interest Reset Date for such Floating Rate Note shall be postponed to the next
day that is a Business Day for such Floating Rate Note, except that in the
case of a LIBOR Note, if such Business Day is in the next succeeding calendar
month, such Interest Reset Date shall be the immediately preceding Business
Day. Each adjusted rate shall be applicable on and after the Interest Reset
Date to which it relates, to, but not including, the next succeeding Interest
Reset Date or until Stated Maturity or the date of redemption, as the case may
be.
The interest rate for each Reset Period will be the rate determined by
the Calculation Agent on the Calculation Date (as defined below) pertaining to
the Interest Determination Date pertaining to the Interest Reset Date for such
Reset Period. Unless otherwise specified in the applicable Pricing
Supplement, the "Interest Determination Date" pertaining to an Interest Reset
Date for (a) a Commercial Paper Rate Note (the "Commercial Paper Interest
Determination Date"), (b) a Federal Funds Rate Note (the "Federal Funds
Interest Determination Date"), (c) a CD Rate Note (the "CD Interest
Determination Date"), (d) a Prime Rate Note (the "Prime Interest Determination
Date"), (e) a CMT Rate Note (the "CMT Interest Determination Date"), or (f) a
Kenny Rate Note (the "Kenny Rate Interest Determination Date") will be the
second Business Day prior to such Interest Reset Date. Unless otherwise
specified in the applicable Pricing Supplement, the Interest Determination
Date pertaining to an Interest Reset Date for an 11th District Cost of Funds
Rate Note (the "11th District Interest Determination Date") will be the last
Business Day of the month immediately preceding such Interest Reset Date on
which the Federal Home Loan Bank of San Francisco (the "FHLB of San
Francisco") publishes the Index (as defined below). Unless otherwise
specified in the applicable Pricing Supplement, the Interest Determination Date
pertaining to an Interest Reset Date for a LIBOR Note (the "LIBOR Interest
Determination Date") will be the second London Business Day immediately
preceding each Interest Reset Date. Unless otherwise specified in the
applicable Pricing Supplement, the Interest Determination Date pertaining to
an Interest Reset Date for a Treasury Rate Note (the "Treasury Interest
Determination Date") will be the day of the week in which such Interest Reset
Date falls on which Treasury bills would normally be auctioned. Treasury
bills are usually sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is usually held on the following
Tuesday, except that such auction may be held on the preceding Friday. If, as
a result of a legal holiday, an auction is so held on the preceding Friday,
such Friday will be the Treasury Interest Determination Date pertaining to the
Reset Period commencing in the next succeeding week. If an auction date shall
fall on any Interest Reset Date for a Treasury Rate Note, then such Interest
Reset Date shall instead be the first Business Day immediately following such
auction date. Unless otherwise specified in the applicable Pricing Supplement,
the "Calculation Date" pertaining to any Interest Determination Date shall be
the earlier of (i) the tenth calendar day after the Interest Determination
Date or, if such day is not a Business Day, the next succeeding Business Day,
or (ii) the Business Day preceding the applicable Interest Payment Date or
Maturity, as the case may be.
"Index Maturity" means, with respect to a Floating Rate Note, the period
to maturity of the instrument or obligation on which the interest rate formula
is based, as specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement,
payments with respect to Floating Rate Amortizing Notes will be applied first
to interest due and payable thereon and then to the reduction of the unpaid
principal amount thereof. A table setting forth repayment information in
respect of each Floating Rate Amortizing Note will be provided to the original
purchaser thereof and will be available, upon request, to subsequent Holders.
Unless otherwise indicated in the applicable Pricing Supplement,
interest on Floating Rate Notes will accrue from and including the date of
issue or from and including the immediately preceding Interest Payment Date in
respect of which interest has been paid or duly provided for, as the case may
be, to but excluding the Interest Payment Date or Maturity, as the case may
be. With respect to Floating Rate Notes, accrued interest is calculated by
multiplying the face amount of a Note by an accrued interest factor. This
accrued interest factor is computed by adding the interest factors calculated
for each day from the date of issue, or from the last date to which interest
has been paid, to the date for which accrued interest is being calculated.
The interest factor for each such day (unless otherwise specified) is computed
by dividing the interest rate applicable to such day by 360, in the case of
Commercial Paper Rate Notes, CD Rate Notes, 11th District Cost of Funds Rate
Notes, Federal Funds Rate Notes, LIBOR Notes and Prime Rate Notes or by the
actual number of days in the year, in the case of Treasury Rate Notes or CMT
Rate Notes, or by 365 days in the case of Kenny Rate Notes.
The Calculation Agent shall calculate the interest rate on the Floating
Rate Notes, as provided below. The Calculation Agent will, upon the request
of the Holder of any Floating Rate Note, provide the interest rate then in
effect and, if then determined, the interest rate which will become effective
as a result of a determination made with respect to the most recent Interest
Determination Date with respect to such Note. The Trustee shall act as the
initial Calculation Agent for the Notes. For purposes of calculating the rate
of interest payable on Floating Rate Notes, the Company will enter into an
agreement with the Calculation Agent. The Calculation Agent's determination
of any interest rate shall be final and binding in the absence of manifest
error.
Commercial Paper Rate Notes
Each Commercial Paper Rate Note will bear interest at the interest rate
(calculated with reference to the Commercial Paper Rate and the Spread and/or
Spread Multiplier, if any) specified in the Commercial Paper Rate Note and in
the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to any Commercial Paper Interest
Determination Date, the Money Market Yield (calculated as described below) of
the rate on such date for commercial paper having the Index Maturity specified
in the applicable Pricing Supplement as published by the Board of Governors of
the Federal Reserve System in "Statistical Release H.15(519), Selected
Interest Rates" or any successor publication of the Board of Governors
("H.15(519)") under the heading "Commercial Paper." In the event that such
rate is not published prior to 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Commercial Paper Interest Determination
Date, then the Commercial Paper Rate with respect to such Commercial Paper
Interest Determination Date shall be the Money Market Yield of the rate on
such Commercial Paper Interest Determination Date for commercial paper having
the Index Maturity specified in the applicable Pricing Supplement as published
by the Federal Reserve Bank of New York in its daily statistical release
"Composite 3:30 P.M. Quotations for U.S. Government Securities" or any
successor publication ("Composite Quotations") under the heading "Commercial
Paper." If by 3:00 P.M., New York City time, on such Calculation Date such
rate is not yet published in either H.15(519) or Composite Quotations, then
the Commercial Paper Rate for such Commercial Paper Interest Determination Date
shall be calculated by the Calculation Agent and shall be the Money Market
Yield of the arithmetic mean of the offered rates as of 11:00 A.M., New York
City time, on such Commercial Paper Interest Determination Date of three
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent for commercial paper having the Index Maturity designated in
the applicable Pricing Supplement placed for an industrial issuer whose bond
rating is "AA," or the equivalent, from a nationally recognized securities
rating agency;
provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate with respect to such Commercial Paper Interest
Determination Date will be the Commercial Paper Rate in effect immediately
prior to such Commercial Paper Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage
rounded, if necessary, to the nearest one hundred-thousandth of a percent)
calculated in accordance with the following formula:
Money Market Yield = D X 360 X 100
---------------
360 - (D X M)
where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the period for which accrued interest is being calculated.
CD Rate Notes
Each CD Rate Note will bear interest at the interest rate (calculated
with reference to the CD Rate and the Spread and/or Spread Multiplier, if any)
specified in the CD Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CD
Rate" means, with respect to any CD Interest Determination Date, the rate on
such date for negotiable certificates of deposit having the Index Maturity
specified in the applicable Pricing Supplement as published in H.15(519) under
the heading "CDs (Secondary Market)." In the event that such rate is not
published prior to 9:00 A.M., New York City time, on the Calculation Date
pertaining to such CD Interest Determination Date, then the CD Rate with
respect to such CD Interest Determination Date shall be the rate on such CD
Interest Determination Date for negotiable certificates of deposit having the
Index Maturity specified in the applicable Pricing Supplement as published in
Composite Quotations under the heading "Certificates of Deposit." If by 3:00
P.M., New York City time, on such Calculation Date such rate is not published
in either H.15(519) or Composite Quotations, then the CD Rate on such CD
Interest Determination Date shall be calculated by the Calculation Agent and
shall be the arithmetic mean of the secondary market offered rates as of 10:00
A.M., New York City time, on such CD Interest Determination Date of three
leading nonbank dealers in negotiable U.S. dollar certificates of deposit in
The City of New York selected by the Calculation Agent for negotiable
certificates of deposit of major United States money market banks (in the
market for negotiable certificates of deposit) with a remaining maturity
closest to the Index Maturity designated in the applicable Pricing Supplement
in a denomination of $5,000,000; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the CD Rate with respect to such CD Interest Determination Date
will be the CD Rate in effect immediately prior to such CD Interest
Determination Date.
CMT Rate Notes
Each CMT Rate Note will bear interest at the interest rate (calculated
with reference to the CMT Rate and the Spread and/or Spread Multiplier, if
any) specified in the CMT Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CMT
Rate" means, with respect to any CMT Interest Determination Date, the rate
displayed on the Designated CMT Telerate Page (as defined below) under the
caption ". . . Treasury Constant Maturities . . . Federal Reserve Board
Release H.15 . . . Mondays Approximately 3:45 P.M.," under the column for the
Designated CMT Maturity Index (as defined below) for (i) if the Designated CMT
Telerate Page is 7055, the rate on such CMT Interest Determination Date and
(ii) if the Designated CMT Telerate Page is 7052, the week, or the month, as
applicable, ended immediately preceding the week in which the applicable CMT
Interest Determination Date occurs. If such rate is no longer displayed on
the relevant page, or if not displayed by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such CMT Interest Determination Date, then
the CMT Rate for such CMT Interest Determination Date will be such treasury
constant maturity rate for the Designated CMT Maturity Index as published in
the relevant H.15(519). If such rate is no longer published, or if not
published by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such CMT Interest Determination Date, then the CMT Rate for such CMT
Interest Determination Date will be such treasury constant maturity rate for
the Designated CMT Maturity Index (or other United States Treasury rate for
the Designated CMT Maturity Index) for the CMT Interest Determination Date
with respect to such Interest Reset Date as may then be published by either
the Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519). If such information is not provided
by 3:00 P.M., New York City time, on the Calculation Date pertaining to such
CMT Interest Determination Date, then the CMT Rate for the CMT Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity, based on the arithmetic mean of the secondary market
closing offer side prices as of approximately 3:30 P.M., New York City time,
on the CMT Interest Determination Date reported, according to their written
records, by three leading primary United States government securities dealers
(each, a "Reference Dealer") in The City of New York selected by the
Calculation Agent (from five such Reference Dealers selected by the
Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for the most recently issued direct noncallable
fixed rate obligations of the United States ("Treasury Notes") with an
original maturity of approximately the Designated CMT Maturity Index and a
remaining term to maturity of not less than such Designated CMT Maturity Index
minus one year. If the Calculation Agent cannot obtain three such Treasury
Note quotations, the CMT Rate for such CMT Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity based on
the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 P.M., New York City time, on the CMT Interest Determination
Date of three Reference Dealers in The City of New York (from five such
Reference Dealers selected by the Calculation Agent and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest)), for
Treasury Notes with an original maturity of the number of years that is the
next highest to the Designated CMT Maturity Index and a remaining term to
maturity closest to the Designated CMT Maturity Index and in an amount of at
least $100,000,000. If three or four (and not five) of such Reference Dealers
are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offer prices obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided, however, that if fewer
than three Reference Dealers selected by the Calculation Agent are quoting as
described herein, the CMT Rate will be the CMT Rate in effect on such CMT
Interest Determination Date. If two Treasury Notes with an original maturity
as described in the third preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes for the
Treasury Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page specified in the applicable Pricing Supplement
(or any other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as published in H.15(519)), for the
purpose of displaying Treasury Constant Maturities as published in H.15(519).
If no such page is specified in the applicable Pricing Supplement, the
Designated CMT Telerate Page shall be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the Treasury Notes (either one, two, three, five, seven, ten, twenty or thirty
years) specified in the applicable Pricing Supplement with respect to which
the CMT Rate will be calculated. If no such maturity is specified in the
applicable Pricing Supplement, the Designated CMT Maturity Index shall be two
years.
Federal Funds Rate Notes
Each Federal Funds Rate Note will bear interest at the interest rate
(calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any) specified in the Federal Funds Rate Note and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Federal Funds Rate" means, with respect to any Federal Funds Rate Interest
Determination Date, the rate on such date for Federal Funds as published in
H.15(519) under the heading "Federal Funds (Effective)." In the event that
such rate is not published prior to 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Federal Funds Interest Determination Date,
then the Federal Funds Rate with respect to such Federal Funds Interest
Determination Date shall be the rate on such Federal Funds Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If by 3:00 P.M., New York City time, on such
Calculation Date such rate is not published in either H.15(519) or Composite
Quotations, then the Federal Funds Rate with respect to such Federal Funds
Interest Determination Date shall be calculated by the Calculation Agent and
shall be the arithmetic mean (each as rounded, if necessary, to the nearest one
hundred-thousandth of a percent) of the rates as of 9:00 A.M., New York City
time, on such Federal Funds Interest Determination Date for the last
transaction in overnight Federal Funds arranged by three leading brokers of
Federal Funds transactions in The City of New York selected by the Calculation
Agent; provided, however, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Federal
Funds Rate with respect to such Federal Funds Interest Determination Date will
be the Federal Funds Rate in effect immediately prior to such Federal Funds
Interest Determination Date.
11th District Cost of Funds Rate Notes
Each 11th District Cost of Funds Rate Note will bear interest at the
interest rate (calculated with reference to the 11th District Cost of Funds
Rate and the Spread and/or Spread Multiplier, if any) specified in the 11th
District Cost of Funds Rate Note and in the Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "11th
District Cost of Funds Rate" means, with respect to any 11th District Interest
Determination Date, the rate equal to the monthly weighted average cost of
funds for the calendar month preceding such 11th District Cost of Funds Rate
Interest Determination Date as set forth under the caption "11th District" on
Telerate Page 7058 as of 11:00 A.M., San Francisco time, on such 11th District
Interest Determination Date. If such rate does not appear on Telerate Page
7058 on any related 11th District Interest Determination Date, the 11th
District Cost of Funds Rate for such 11th District Interest Determination Date
shall be the monthly weighted average cost of funds paid by member
institutions of the Eleventh Federal Home Loan Bank District that was most
recently announced (the "Index") by the FHLB of San Francisco as such cost of
funds for the calendar month preceding the date of such announcement. If the
FHLB of San Francisco fails to announce such rate for the calendar month next
preceding such 11th District Interest Determination Date, then the 11th
District Cost of Funds Rate for such 11th District Interest Determination Date
will be the 11th District Cost of Funds Rate then in effect on such 11th
District Interest Determination Date.
Kenny Rate Notes
Each Kenny Rate Note will bear interest at the interest rate (calculated
with reference to the Kenny Rate and the Spread and/or Spread Multiplier, if
any) specified in the applicable Kenny Rate Note and in the Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Kenny
Rate" means, with respect to any Kenny Rate Interest Determination Date, the
high grade weekly index (the "Weekly Index") on such date made available by
Kenny Information Systems ("Kenny") to the Calculation Agent. The Weekly
Index is, and shall be, based upon 30 day yield evaluations at par of bonds,
the interest on which is exempt from Federal income taxation under the
Internal Revenue Code of 1986, as amended, of not less than five high grade
component issuers selected by Kenny which shall include, without limitation,
issuers of general obligation bonds. The specific issuers included among the
component issuers may be changed from time to time by Kenny in its discretion.
The bonds on which the Weekly Index is based shall not include any bonds on
which the interest is subject to a minimum tax or similar tax under the
Internal Revenue Code of 1986, as amended, unless all tax-exempt bonds are
subject to such tax. In the event Kenny ceases to make available such Weekly
Index, a successor indexing agent will be selected by the Calculation Agent,
such index to reflect the prevailing rate for bonds rated in the highest
short-term rating category by Moody's Investors Service, Inc. and Standard &
Poor's Corporation in respect of issuers most closely resembling the high
grade component issuers selected by Kenny for its Weekly Index, the interest
on which is (A) variable on a weekly basis, (B) exempt from Federal income
taxation under the Internal Revenue Code of 1986, as amended, and (C) not
subject to a minimum tax or similar tax under the Internal Revenue Code of
1986, as amended, unless all tax-exempt bonds are subject to such tax. If
such successor indexing agent is not available, the rate for any Kenny Rate
Interest Determination Date shall be 67% of the rate determined if the
Treasury Rate option had been originally selected.
LIBOR Notes
Each LIBOR Note will bear interest at the interest rate (calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any) specified
in the LIBOR Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "LIBOR"
means, with respect to any LIBOR Interest Determination Date, the rate
determined in accordance with the following provisions:
(i) With respect to any LIBOR Interest Determination Date, LIBOR
will be either: (a) if "LIBOR Reuters" is specified in the Note and the
applicable Pricing Supplement, the arithmetic mean of the offered rates
(unless the specified designated LIBOR Page (as defined below) by its
terms provides only for a single rate, in which case such single rate
shall be used) for deposits in the Designated LIBOR Currency (as defined
below) having the Index Maturity designated in the Note and the
applicable Pricing Supplement, commencing on the second London Business
Day immediately following the LIBOR Interest Determination Date, which
appear on the Designated LIBOR Page specified in the Note and the
applicable Pricing Supplement as of 11:00 A.M., London time, on that
LIBOR Interest Determination Date, if at least two such offered rates
appear (unless, as aforesaid, only a single rate is required) on such
Designated LIBOR Page, or (b) if "LIBOR Telerate" is specified in the
Note and the applicable Pricing Supplement, the rate for deposits in the
Designated LIBOR Currency (as defined below) having the Index Maturity
designated in the Note and the applicable Pricing Supplement, commencing
on the second London Business Day immediately following such LIBOR
Interest Determination Date, which appears on the Designated LIBOR Page
specified in the Note and the applicable Pricing Supplement as of 11:00
A.M. London time on that LIBOR Interest Determination Date.
Notwithstanding the foregoing, if fewer than two offered rates appear on
the Designated LIBOR Page with respect to LIBOR Reuters (unless the
specified Designated LIBOR Page with respect to LIBOR Reuters by its
terms provides only for a single rate, in which case such single rate
shall be used), or if no rate appears on the Designated LIBOR Page with
respect to LIBOR Telerate, whichever may be applicable, LIBOR in respect
of the related LIBOR Interest Determination Date will be determined as
if the parties had specified the rate described in clause (ii) below.
(ii) With respect to any LIBOR Interest Determination Date on
which fewer than two offered rates appear on the Designated LIBOR Page
with respect to LIBOR Reuters (unless the Designated LIBOR Page by its
terms provides only for a single rate, in which case such single rate
shall be used), or if no rate appears on the Designated LIBOR Page with
respect to LIBOR Telerate, as the case may be, the Calculation Agent
will request the principal London office of each of four major banks in
the London interbank market selected by the Calculation Agent to provide
the Calculation Agent with its offered rate quotation for deposits in
the Designated LIBOR Currency (as defined below) for the period of the
Index Maturity designated in the Note and the applicable Pricing
Supplement, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, to prime banks in the
London interbank market as of 11:00 A.M., London time, on such LIBOR
Interest Determination Date and in a principal amount that is
representative for a single transaction in such Designated LIBOR
Currency in such market at such time. If at least two such quotations
are provided, LIBOR determined on such LIBOR Interest Determination Date
will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR determined on such LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted as of
11:00 A.M. in the applicable Principal Financial Center (as defined
below), on such LIBOR Interest Determination Date by three major banks
in such Principal Financial Center selected by the Calculation Agent for
loans in the Designated LIBOR Currency to leading banks, having the
Index Maturity designated in the Note and the applicable Pricing
Supplement in a principal amount that is representative for a single
transaction in such Designated LIBOR Currency in such market at such
time; provided, however, that if the banks so selected by the
Calculation Agent are not quoting as mentioned in this sentence, LIBOR
determined on such LIBOR Interest Determination Date will be LIBOR in
effect on such LIBOR Interest Determination Date.
"Designated LIBOR Currency" means, as with respect to any LIBOR Note,
the currency (including a composite currency), if any, designated in the Note
and the applicable Pricing Supplement as the Designated LIBOR Currency. If no
such currency is designated in the Note and the applicable Pricing Supplement,
the Designated LIBOR Currency shall be U.S. dollars.
"Designated LIBOR Page" means either (a) the display on the Reuters
Monitor Money Rates Service for the purpose of displaying the London interbank
rates of major banks for the applicable Designated LIBOR Currency (if "LIBOR
Reuters" is designated in the Note and the applicable Pricing Supplement), or
(b) the display on the Dow Jones Telerate Service for the purpose of
displaying the London interbank rates of major banks for the applicable
designated LIBOR Currency (if "LIBOR Telerate" is designated in the Note and
the applicable Pricing Supplement). If neither LIBOR Reuters nor LIBOR
Telerate is specified in the Note and applicable Pricing Supplement, LIBOR for
the applicable Designated LIBOR Currency will be determined as if LIBOR
Telerate (and, if the U.S. dollar is the Designated LIBOR Currency, page 3750)
had been chosen.
"Principal Financial Center" means, with respect to any LIBOR Note,
unless otherwise specified in the Note and the applicable Pricing Supplement,
the capital city of the country that issues as its legal tender the Designated
LIBOR Currency of such Note, except that with respect to U.S. dollars and
ECUs, the Principal Financial Center shall be The City of New York and
Brussels, respectively.
Prime Rate Notes
Each Prime Rate Note will bear interest at the interest rate (calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any) specified in the Prime Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Prime Interest Determination Date, the rate
set forth on such date in H.15(519) under the heading "Bank Prime Loan." In
the event that such rate is not published prior to 9:00 A.M., New York City
time, on the Calculation Date pertaining to such Prime Interest Determination
Date, then the Prime Rate with respect to such Prime Interest Determination
Date shall be the arithmetic mean of the rates of interest publicly announced
by each bank that appears on the Reuters Screen NYMF Page as such bank's prime
rate or base lending rate as in effect for that Prime Interest Determination
Date. If fewer than four such rates appear on the Reuters Screen NYMF Page
for the Prime Interest Determination Date, the Prime Rate with respect to such
Prime Interest Determination Date shall be the arithmetic mean of the prime
rates quoted on the basis of the actual number of days in the year divided by
360 as of the close of business on such Prime Interest Determination Date by
at least two of the three major money center banks in The City of New York
selected by the Calculation Agent. If fewer than two quotations are provided,
the Prime Rate with respect to such Prime Interest Determination Date shall be
determined on the basis of the rates furnished in The City of New York by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any state thereof, having
total equity capital of at least U.S. $500 million and being subject to
supervision or examination by Federal or state authority, selected by the
Calculation Agent to provide such rate or rates; provided, however, that if
the bank or trust company selected as aforesaid is not quoting as mentioned in
this sentence, the Prime Rate with respect to such Prime Interest
Determination Date will be the Prime Rate in effect immediately prior to such
Prime Interest Determination Date. "Reuters Screen NYMF Page" means the
display designated as page "NYMF" on the Reuters Monitor Money Rate Service
(or such other page as may replace the NYMF page on the service for the
purpose of displaying the prime rate or base lending rate of major banks).
Treasury Rate Notes
Each Treasury Rate Note will bear interest at the interest rate
(calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any) specified in the Treasury Rate Note and in the applicable
Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Treasury Rate" means, with respect to any Treasury Interest Determination
Date, the rate for the most recent auction of direct obligations of the United
States ("Treasury bills") having the Index Maturity specified in the
applicable Pricing Supplement as published in H.15(519) under the heading,
"Treasury bills--auction average (investment)" or, if not so published by 3:00
P.M., New York City time, on the Calculation Date pertaining to such Treasury
Interest Determination Date, the average auction rate (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States
Department of the Treasury. In the event that such rate is not available by
3:00 P.M., New York City time, on such Treasury Interest Determination Date,
or if no such auction is held in a particular week, then the Treasury Rate
with respect to such Treasury Interest Determination Date shall be calculated
by the Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such Treasury
Interest Determination Date, of three leading primary U.S. government
securities dealers selected by the Calculation Agent for the issue of Treasury
bills with a remaining maturity closest to the Index Maturity designated in
the applicable Pricing Supplement; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Treasury Rate with respect to such Treasury Interest
Determination Date will be the Treasury Rate in effect immediately prior to
such Treasury Interest Determination Date.
Currency Indexed Notes
General
The Company may from time to time offer Notes, the principal amount
payable at Maturity and/or the interest rate of which is determined by a
formula which makes reference to the rate of exchange between one currency
("Currency I") and another currency ("Currency II"; together with Currency I,
the "Selected Currencies," both as specified in the applicable Pricing
Supplement), neither of which need be the Specified Currency of such Notes
(the "Currency Indexed Notes"). Unless otherwise specified in the applicable
Pricing Supplement, Holders of Currency Indexed Notes will be entitled to
receive (i) an amount in respect of principal equal to the principal amount of
the Currency Indexed Notes plus an adjustment, which may be negative or
positive, based on the change in the relationship between Selected Currencies
or (ii) an amount of interest calculated at the stated rate of interest on
their Currency Indexed Note plus an adjustment, which may be negative or
positive, based on the change in the relationship between the Selected
Currencies, in each case determined as described below under "Payment of
Principal and Interest." As specified in the Pricing Supplement, the exchange
rate designated as the base exchange rate (the "Base Exchange Rate") will be
the initial rate at which Currency I can be exchanged for Currency II and from
which the change in such exchange rate will be measured.
Payment of Principal and Interest
Unless otherwise specified in the applicable Pricing Supplement, the
payment of principal at Maturity and interest on each Interest Payment Date
(until the payment thereof is paid or made available for payment) will be
payable in the Specified Currency in amounts calculated in the manner
described below.
Unless otherwise specified in the applicable Pricing Supplement,
principal at Maturity, if indexed, will be payable in an amount equal to the
principal amount of the Currency Indexed Note, plus or minus an amount
determined by reference to the difference between the Base Exchange Rate
specified in the applicable Pricing Supplement and the rate at which Currency
I can be exchanged for Currency II on the second Business Day prior to the
Maturity (the "Determination Date") of such Currency Indexed Note, as
determined by the determination agent specified in the applicable Pricing
Supplement (the "Determination Agent"). Unless otherwise specified in the
applicable Pricing Supplement, the interest payable on any Interest Payment
Date, if indexed, will be payable in an amount equal to the stated interest
rate of the Currency Indexed Note, plus or minus a rate adjustment determined
by reference to the difference between the Base Exchange Rate specified in the
applicable Pricing Supplement and the rate at which Currency I can be
exchanged for Currency II on the second Business Day prior to the Interest
Payment Date (the "Indexed Interest Determination Date") of such Currency
Indexed Note, as determined by the Determination Agent, applied to the average
principal amount outstanding of such Note for the period being measured. For
the purpose of this section, such rate of exchange on the Determination Date
or the Indexed Interest Determination Date, as the case may be, will be the
average of quotations for settlement on the Maturity Date or the relevant
Interest Payment Date, as the case may be, obtained by the Determination Agent
from three Reference Dealers in The City of New York at approximately 11:00
A.M., New York City time, on either the Determination Date or the relevant
Indexed Interest Determination Date, as the case may be.
The formulas to be used by the Determination Agent to determine the
principal amount and/or the stated interest rate of a Currency Indexed Note
payable at Maturity or any Interest Payment Date will be specified in the
applicable Pricing Supplement by reference to the appropriate formula and will
be as follows:
Principal
A. If principal is to increase when the Spot Rate exceeds the Base
Exchange Rate, and if principal is to decrease when the Spot Rate is less than
the Base Exchange Rate, the formula to determine the principal amount of a
Currency Indexed Note payable at Maturity shall equal:
Principal Amount + (Principal Amount x F x [Spot Rate -- Base Exchange Rate])
------------------------------------
Spot Rate
To determine the "Spot Rate" for use in this formula, each Reference
Dealer's quotation will be the rate at which such Reference Dealer will sell
Currency I in exchange for a single unit of Currency II.
B. If principal is to increase when the Base Exchange Rate exceeds
the Spot Rate, and if principal is to decrease when the Base Exchange Rate is
less than the Spot Rate, the formula to determine the principal amount of a
Currency Indexed Note payable at Maturity shall equal:
Principal Amount + (Principal Amount x F x [Base Exchange Rate -- Spot Rate])
----------------------------------
Spot Rate
To determine the "Spot Rate" for use in this formula, each Reference
Dealer's quotation will be the rate at which such Reference Dealer will
purchase Currency I in exchange for a single unit of Currency II.
Interest
A. If interest is to increase when the Spot Rate exceeds the Base
Exchange Rate, and if interest is to decrease when the Spot Rate is less than
the Base Exchange Rate, the formula to determine the interest rate payable on
any Interest Payment Date on a Currency Indexed Note shall equal:
Stated Interest Rate + F x (Spot Rate -- Base Exchange Rate)
-----------------------------------
Spot Rate
To determine the "Spot Rate" for use in this formula, each Reference
Dealer's quotation will be the rate at which such Reference Dealer will sell
Currency I in exchange for a single unit of Currency II.
B. If interest is to increase when the Base Exchange Rate exceeds the
Spot Rate, and if interest is to decrease when the Base Exchange Rate is less
than the Spot Rate, the formula to determine the interest rate payable on any
Interest Payment Date on a Currency Indexed Note shall equal:
Stated Interest Rate + F x (Base Exchange Rate -- Spot Rate)
-----------------------------------
Spot Rate
To determine the "Spot Rate" for use in this formula, each Reference
Dealer's quotation will be the rate at which such Reference Dealer will
purchase Currency I in exchange for a single unit of Currency II.
In each of the above formulas "F" will be the leverage factor, if any,
used in such formula.
An investment in Notes indexed, as to principal or interest or both, to
one or more values of currency indices (including exchange rates between
currencies) entails significant risks that are not associated with similar
investments in a conventional fixed-rate debt security. If the interest rate
of such a Note is so indexed, it may result in an interest rate that is less
than that payable on a conventional fixed-rate debt security issued at the
same time, including the possibility that no interest will be paid, and, if
the principal amount of such a Note is so indexed, the principal amount
payable at Maturity may be less than the original purchase price of such Note
if allowed pursuant to the terms of such Note, including the possibility that
no principal will be paid. The secondary market for such Notes will be
affected by a number of factors, independent of the creditworthiness of the
Company and the value of the applicable currency index, including the
volatility of the applicable currency index, the time remaining to the
maturity of such Notes, the amount outstanding of such Notes and market
interest rates. The value of the applicable currency index depends on a
number of interrelated factors, including economic, financial and political
events, over which the Company has no control. Additionally, if the formula
used to determine the principal amount or interest payable with respect to
such Notes contains a multiple or leverage factor, the effect of any change in
the applicable currency index may be increased. The historical experience of
the relevant currencies indices should not be taken as an indication of future
performance of such currencies indices during the term of any Note.
Accordingly, prospective investors should consult their own financial and
legal advisors as to the risks entailed by an investment in such Notes and the
suitability of such Notes in light of their particular circumstances.
Commodity Indexed Notes
The Pricing Supplement relating to a Commodity Indexed Note will set
forth the method by which the amount of interest payable and the amount
payable at Stated Maturity in respect of such Commodity Indexed Note will be
determined, the tax consequences to holders of Commodity Indexed Notes, a
description of certain risks associated with investments in Commodity Indexed
Notes and other information relating to such Commodity Indexed Notes.
Original Issue Discount Notes
The Company may from time to time offer Original Issue Discount Notes.
The Pricing Supplement applicable to certain Original Issue Discount Notes may
provide that Holders of such Notes will not receive periodic payments of
interest. For purposes of determining whether Holders of the requisite
principal amount of Notes outstanding under the Indenture have made a demand
or given a notice or waiver or taken any other action, the outstanding
principal amount of Original Issue Discount Notes shall be deemed to be the
amount of the principal that would be due and payable upon declaration of
acceleration of the Stated Maturity thereof as of the date of such
determination. See "General."
"Original Issue Discount Note" means, (i) a Note that has a stated
redemption price at Maturity that exceeds its Issue Price (as defined for U.S.
Federal income tax purposes) by at least 0.25% of its stated redemption price
at maturity multiplied by the number of full years from the Original Issue
Date to the Stated Maturity for such Notes and (ii) any other Note designated
by the Company as issued with original issue discount for U.S. Federal income
tax purposes.
Amortizing Notes
The Company may from time to time offer Notes for which payments of
principal and interest are made in installments over the life of the Note
("Amortizing Notes"). Interest on each Amortizing Note will be computed as
set forth in a Pricing Supplement or in the Book-Entry Note representing such
Amortizing Note. Unless otherwise provided in such Pricing Supplement or in
such Book-Entry Note, payments with respect to Amortizing Notes will be
applied first to interest due and payable thereon and then to the reduction of
the unpaid principal amount thereof. A table setting forth repayment
information with respect to each Amortizing Note will be provided to the
original purchaser of such Note and will be available upon request to the
subsequent Holders thereof.
Reset Notes
The Pricing Supplement relating to each Note will indicate whether the
Company has the option with respect to such Note to reset the interest rate,
in the case of a Fixed Rate Note, or to reset the Spread and/or Spread
Multiplier, in the case of a Floating Rate Note (in each case, a "Reset
Note"), and, if so, (i) the date or dates on which such interest rate or such
Spread and/or Spread Multiplier, as the case may be, may be reset (each an
"Optional Interest Reset Date") and (ii) the basis or formula, if any, for
such resetting.
The Company may exercise such option with respect to a Note by notifying
the Trustee of such exercise at least 45 but not more than 60 calendar days
prior to an Optional Interest Reset Date for such Note. If the Company so
notifies the Trustee of such exercise, not later than 40 calendar days prior
to such Optional Interest Reset Date, the Trustee will send by telegram,
telex, facsimile transmission or letter (first class, postage prepaid) to the
Holder of such Note a notice (the "Reset Notice") indicating (i) that the
Company has elected to reset the interest rate, in the case of a Fixed Rate
Note, or the Spread and/or Spread Multiplier, in the case of a Floating Rate
Note, (ii) such new interest rate or such new Spread and/or Spread Multiplier,
as the case may be, and (iii) the provisions, if any, for redemption during
the period from such Optional Interest Reset Date to the next Optional
Interest Reset Date or, if there is no such next Optional Interest Reset Date,
to the Stated Maturity of such Note (each such period a "Subsequent Interest
Period"), including the date or dates on which or the period or periods during
which and the price or prices at which such redemption may occur during such
Subsequent Interest Period.
Notwithstanding the foregoing, not later than 20 calendar days prior to
an Optional Interest Reset Date for a Note, the Company may, at its option,
revoke the interest rate, in the case of a Fixed Rate Note, or the Spread
and/or Spread Multiplier, in the case of a Floating Rate Note, provided for in
the Reset Notice and establish a higher interest rate, in the case of a Fixed
Rate Note, or a higher Spread and/or Spread Multiplier, in the case of a
Floating Rate Note, for the Subsequent Interest Period commencing on such
Optional Interest Reset Date by causing the Trustee to send by telegram,
telex, facsimile transmission or letter (first class, postage prepaid) notice
of such higher interest rate or higher Spread and/or Spread Multiplier, as the
case may be, to the Holder of such Note. Such notice shall be irrevocable.
All Notes with respect to which the interest rate or Spread and/or Spread
Multiplier is reset on an Optional Interest Reset Date will bear such higher
interest rate, in the case of a Fixed Rate Note, or higher Spread and/or
Spread Multiplier, in the case of a Floating Rate Note, whether or not
tendered for repayment as provided in the next paragraph.
If the Company elects prior to an Optional Interest Reset Date to reset
the interest rate or the Spread and/or Spread Multiplier of a Note, the Holder
of such Note will have the option to elect repayment of such Note by the
Company on such Optional Interest Reset Date at a price equal to the principal
amount thereof plus any accrued interest to such Optional Interest Reset Date.
In order for a Note to be so repaid on an Optional Interest Reset Date, the
Holder thereof must follow the procedures set forth below under "Redemption
and Repayment" for optional repayment, except that the period for delivery of
such Note or notification to the Trustee shall be at least 25 but not more
than 35 calendar days prior to such Optional Interest Reset Date. A Holder
who has tendered a Note for repayment following receipt of a Reset Notice may
revoke such tender for repayment by written notice to the Trustee received
prior to 5:00 P.M., New York City time, on the tenth calendar day prior to
such Optional Interest Reset Date.
Extension of Maturity
The Pricing Supplement relating to each Note will indicate whether the
Company has the option to extend the Stated Maturity of such Note for one or
more periods of from one to five whole years (each an "Extension Period") up
to but not beyond the date (the "Final Maturity Date") set forth in such
Pricing Supplement.
The Company may exercise such option with respect to a Note by notifying
the Trustee of such exercise at least 45 but not more than 60 calendar days
prior to Stated Maturity of such Note in effect prior to the exercise of such
option (the "Original Stated Maturity Date"). If the Company so notifies the
Trustee of such exercise, not later than 40 calendar days prior to the
Original Stated Maturity Date, the Trustee will send by telegram, telex,
facsimile transmission or letter (first class, postage prepaid) to the Holder
of such Note a notice (the "Extension Notice") relating to such Extension
Period, indicating (i) that the Company has elected to extend the Stated
Maturity of such Note, (ii) the new Stated Maturity, (iii) in the case of a
Fixed Rate Note, the interest rate applicable to the Extension Period or, in
the case of a Floating Rate Note, the Spread and/or Spread Multiplier
applicable to the Extension Period, and (iv) the provisions, if any, for
redemption during the Extension Period, including the date or dates on which
or the period or periods during which and the price or prices at which such
redemption may occur during the Extension Period. Upon the sending by the
Trustee of an Extension Notice to the Holder of a Note, the Stated Maturity of
such Note shall be extended automatically, and, except as modified by the
Extension Notice and as described in the next two paragraphs, such Note will
have the same terms as prior to the sending of such Extension Notice.
Notwithstanding the foregoing, not later than 20 calendar days prior to
the Original Stated Maturity Date for a Note, the Company may, at its option,
revoke the interest rate, in the case of a Fixed Rate Note, or the Spread
and/or Spread Multiplier, in the case of a Floating Rate Note, provided for in
the Extension Notice and establish a higher interest rate, in the case of a
Fixed Rate Note, or a higher Spread and/or Spread Multiplier, in the case of a
Floating Rate Note, for the Extension Period by causing the Trustee to send by
telegram, telex, facsimile transmission or letter (first class, postage
prepaid) notice of such higher interest rate or higher Spread and/or Spread
Multiplier, as the case may be, to the Holder of such Note. Such notice shall
be irrevocable. All Notes with respect to which the Stated Maturity is
extended will bear such higher interest rate, in the case of a Fixed Rate
Note, or higher Spread and/or Spread Multiplier, in the case of a Floating
Rate Note, for the Extension Period, whether or not tendered for repayment as
provided in the next paragraph.
If the Company elects to extend the Stated Maturity of a Note, the
Holder of such Note will have the option to elect repayment of such Note by
the Company on the Original Stated Maturity Date at a price equal to the
principal amount thereof plus any accrued and unpaid interest to such date.
In order for a Note to be so repaid on the Original Stated Maturity Date, the
Holder thereof must follow the procedures set forth below under "Redemption
and Repayment" for optional repayment, except that the period for delivery of
such Note or notification to the Trustee shall be at least 25 but not more
than 35 calendar days prior to the Original Stated Maturity Date. A Holder
who has tendered a Note for repayment following receipt of an Extension Notice
may revoke such tender for repayment by written notice to the Trustee received
prior to the close of business on the tenth calendar day prior to the Original
Stated Maturity Date.
Renewable Notes
The applicable Pricing Supplement will indicate whether a Note (other
than an Amortizing Note) will mature at its Original Stated Maturity Date
unless the term of all or any portion of any such Note is renewed by the
Holder in accordance with the procedures described in such Supplement.
Combination of Provisions
If so specified in the applicable Pricing Supplement, any Note may be
subject to all of the provisions, or any combination of the provisions,
described above under "Reset Notes," "Extension of Maturity" and "Renewable
Notes."
Redemption and Repayment
Unless otherwise specified in the applicable Pricing Supplement, the
Notes will not be subject to any sinking fund. The Notes will be redeemable
at the option of the Company prior to the Stated Maturity only if an Initial
Redemption Date is specified in the applicable Pricing Supplement ("Initial
Redemption Date"). If so specified, the Notes will be subject to redemption
at the option of the Company on any date on and after the applicable Initial
Redemption Date in whole or from time to time in part in increments of $1,000
or the minimum denomination specified in such Pricing Supplement (provided
that any remaining principal amount thereof shall be at least $1,000 or such
minimum denomination), at the applicable Redemption Price (as defined below)
on notice given not more than 60 nor less than 30 days prior to the date of
redemption and in accordance with the provisions of the Indenture.
"Redemption Price," with respect to a Note, means an amount equal to the sum
of (i) the Initial Redemption Percentage specified in such Pricing Supplement
(as adjusted by the Annual Redemption Percentage Reduction, if applicable (as
specified in such Pricing Supplement)) multiplied by the unpaid principal
amount or the portion to be redeemed plus (ii) accrued interest to the date of
redemption. The Initial Redemption Percentage, if any, applicable to a Note
shall decline at each anniversary of the Initial Redemption Date by an amount
equal to the applicable Annual Redemption Percentage Reduction, if any, until
the Redemption Price is equal to 100% of the unpaid principal amount thereof
or the portion thereof to be redeemed.
The Pricing Supplement relating to each Note will indicate either that
such Note cannot be repaid prior to Stated Maturity or that such Note will be
repayable at the option of the Holder on a date or dates specified prior to
Stated Maturity at a price or prices set forth in the applicable Pricing
Supplement, together with accrued interest to the date of repayment.
In order for a Note that is repayable at the option of the Holder to be
repaid prior to Stated Maturity, the Paying Agent (initially, the Company has
appointed the Trustee as Paying Agent) must receive at least 30 but not more
than 45 calendar days prior to the repayment date (i) the Note with the form
entitled "Option to Elect Repayment" on the reverse of the Note duly completed
or (ii) a telegram, telex, facsimile transmission or letter (first class,
postage prepaid) from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States setting forth the name of the Holder of the Note,
the principal amount of the Note, the principal amount of the Note to be
repaid, the certificate number or a description of the tenor and terms of the
Note, a statement that the option to elect repayment is being exercised
thereby and a guarantee that the Note to be repaid with the form entitled
"Option to Elect Repayment" on the reverse of the Note duly completed will be
received by the Paying Agent not later than five Business Days after the date
of such telegram, telex, facsimile transmission or letter and such Note and
form duly completed are received by the Paying Agent by such fifth Business
Day. Exercise of the repayment option by the Holder of a Note shall be
irrevocable, except that a Holder who has tendered a Note for repayment may
revoke such tender for repayment by written notice to the Paying Agent
received prior to the close of business on the tenth calendar day prior to the
repayment date. The repayment option may be exercised by the Holder of a Note
for less than the entire principal amount of the Note provided that the
principal amount of the Note remaining outstanding after such repayment is an
authorized denomination.
While the Book-Entry Notes are represented by the Global Securities held
by or on behalf of the U.S. Depositary, and registered in the name of the U.S.
Depositary or the U.S. Depositary's nominee, the option for repayment may be
exercised by the applicable Participant (as defined herein) that has an
account with the U.S. Depositary, on behalf of the beneficial owners of the
Global Security or Securities representing such Book-Entry Notes, by
delivering a written notice substantially similar to the above mentioned form
to the Trustee at its Corporate Trust Office (or such other address of which
the Company shall from time to time notify the Holders), not more than 60 nor
less than 30 days prior to the date of repayment. Notices of elections from
Participants on behalf of beneficial owners of the Global Security or
Securities representing such Book-Entry Notes to exercise their option to have
such Book-Entry Notes repaid must be received by the Trustee by 5:00 P.M., New
York City time, on the last day for giving such notice. In order to ensure
that a notice is received by the Trustee on a particular day, the beneficial
owner of the Global Security or Securities representing such Book-Entry Notes
must so direct the applicable Participant before such Participant's deadline
for accepting instructions for that day. Different firms may have different
deadlines for accepting instructions from their customers. Accordingly,
beneficial owners of the Global Security or Securities representing Book-Entry
Notes should consult the Participants through which they own their interest
therein for the respective deadlines for such Participants. All notices shall
be executed by a duly authorized officer of such Participant (with signatures
guaranteed) and shall be irrevocable. In addition, beneficial owners of the
Global Security or Securities representing Book-Entry Notes shall effect
delivery at the time such notices of election are given to the U.S. Depositary
by causing the applicable Participant to transfer such beneficial owner's
interest in the Global Security or Securities representing such Book-Entry
Notes, on the U.S. Depositary's records, to the Trustee. See "Book-Entry
System."
If applicable, the Company will comply with the requirements of Rule
14e-1 under the Securities Exchange Act of 1934, as amended, and any other
securities laws or regulations in connection with any such repayment.
Repurchase
The Company may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Company may be held or
resold or, at the discretion of the Company, may be surrendered to the Trustee
for cancellation.
Other Provisions
Any provisions with respect to the determination of an interest rate
basis, the specifications of interest rate basis, calculation of the interest
rate applicable to, or the principal payable at Maturity on, any Note, its
Interest Payment Dates or any other matter relating thereto may be modified by
the terms as specified under "Other Provisions" on the face of such Note, or
in an addendum relating thereto if so specified on the face thereof, and in
the applicable Pricing Supplement.
Book-Entry System
DTC will act as securities depositary for the Book-Entry Notes. The
Book-Entry Notes will be issued as fully-registered securities registered in
the name of Cede & Co. (DTC's partnership nominee). One fully-registered
Global Security will be issued for each issue of the Notes, each in the
aggregate principal amount of such issue, and will be deposited with DTC. If,
however, the aggregate principal amount of any issue exceeds $150 million, one
Global Security will be issued with respect to each $150 million of principal
amount and an additional Global Security will be issued with respect to any
remaining principal amount of such issue.
DTC 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 Securities
Exchange Act of 1934, as amended. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants ("Direct Participants") include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations. DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc.
Access to DTC's system is also available to others such as securities brokers
and dealers, banks and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
Purchases of Book-Entry Notes under DTC's system must be made by or
through Direct Participants, which will receive a credit for the Book-Entry
Notes on DTC's records. The ownership interest of each actual purchaser of
each Book-Entry Note ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchase, but Beneficial Owners are
expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the
Direct or Indirect Participant through which the Beneficial Owner entered into
the transaction. Transfers of ownership interests in the Book-Entry Notes are
to be accomplished by entries made on the books of Participants acting on
behalf of the Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Book-Entry Notes,
except in the event that use of the book-entry system for one or more
Book-Entry Notes is discontinued.
To facilitate subsequent transfers, all Global Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Global Securities with DTC and their registration
in the name of Cede & Co. effect no change in beneficial ownership. DTC has
no knowledge of the actual Beneficial Owners of the Book-Entry Notes; DTC's
records reflect only the identity of the Direct Participants to whose accounts
such Book-Entry Notes are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Book-Entry Notes within an issue are being redeemed, DTC's current practice is
to determine by lot the amount of the interest of each Direct Participant in
such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to
Book-Entry Notes. Under its usual procedures, DTC will mail an "Omnibus
Proxy" to the Company as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Book-Entry Notes are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Book-Entry Notes will be made to
DTC. DTC's practice is to credit Direct Participants' accounts on the payable
date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payment on the
payable date. Payments by Participants to Beneficial Owners will be governed
by standing instructions and customary practices, as in the case of securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, or
the Company, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest to DTC is the
responsibility of the Company, disbursement of such payments to Direct
Participants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Book-Entry
Notes purchased or tendered, through its Participant, to the Paying Agent, and
shall effect delivery of such Book-Entry Notes by causing the Direct
Participant to transfer the Participant's interest in the Book-Entry Notes, on
DTC's records, to the Paying Agent. The requirement for physical delivery of
Book-Entry Notes in connection with a demand for purchase or a mandatory
purchase will be deemed satisfied when the ownership rights in the Book-Entry
Notes are transferred by a Direct Participant on DTC's records.
DTC may discontinue providing its services as securities depositary with
respect to the Book-Entry Notes at any time by giving reasonable notice to the
Company or the Agents. Under such circumstances, in the event that a
successor securities depositary is not obtained, Certificated Notes will be
printed and delivered in exchange for the Book-Entry Notes represented by the
Global Securities held by DTC.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event,
Certificated Notes will be printed and delivered in exchange for the
Book-Entry Notes represented by the Global Securities held by DTC.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
Neither the Company, the Trustee, any Paying Agent nor the registrar for
the Notes 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.
Defeasance
Unless otherwise specified in the applicable Pricing Supplement, the
Notes will be subject to defeasance and discharge as described under
"Description of the Securities-Defeasance and Covenant Defeasance" in the
Prospectus.
SPECIAL PROVISIONS RELATING TO MULTI-CURRENCY NOTES
General
Unless otherwise indicated in the applicable Pricing Supplement, the
Notes will be denominated in U.S. dollars and payments of principal of,
premium (if any) and interest on the Notes will be made in U.S. dollars. If
any of the Notes are to be denominated in a currency or currency unit other
than U.S. dollars, the following provisions shall apply, which are in addition
to, and to the extent inconsistent therewith replace, the description of
general terms and provisions of Notes set forth in the accompanying Prospectus
and elsewhere in this Prospectus Supplement.
Multi-Currency Notes are issuable in registered form only, without
coupons. The authorized denominations for Multi-Currency Notes will be
specified in the applicable Pricing Supplement. Unless otherwise specified in
the applicable Pricing Supplement, payment of the purchase price of
Multi-Currency Notes will be made in immediately available funds.
Currencies
Unless otherwise indicated in the applicable Pricing Supplement,
purchasers are to pay for Multi-Currency Notes in the Specified Currency in
immediately available funds. At the present time there are limited facilities
in the United States for converting U.S. dollars into the Specified Currencies
and vice versa, and banks do not offer non-U.S. dollar checking or savings
account facilities in the United States. However, if requested by a
prospective purchaser of a Multi-Currency Note on or prior to the fifth
Business Day preceding the date of delivery of the Multi-Currency Note, or by
such other day as determined by the Agent who presented such offer to purchase
the Multi-Currency Note to the Company, such Agent is prepared to arrange for
the conversion of U.S. dollars into the applicable Specified Currency to
enable such purchaser to pay for the Multi-Currency Notes. Each such
conversion will be made by the Agent on such terms and subject to such
conditions, limitations and charges as the Agent may from time to time
establish in accordance with their regular foreign exchange practices. All
costs of exchange will be borne by the purchasers of the Multi-Currency Notes.
Specific information about the foreign currency or currency unit in
which a particular Multi-Currency Note is denominated, including historical
exchange rates and a description of the currency and any exchange controls,
will be set forth in the applicable Pricing Supplement. See "Foreign Currency
Risks".
Payment of Principal and Interest
Unless otherwise specified in the applicable Pricing Supplement,
payments of interest and principal (and premium, if any) with respect to any
Multi-Currency Note will be made by wire transfer to such account with a bank
located in the country issuing the Specified Currency (or, with respect to
Multi-Currency Notes denominated in ECUS, Brussels) or other jurisdiction
acceptable to the Company and the Trustee as shall have been designated at
least 15 days prior to the Interest Payment Date or Maturity, as the case may
be, by the Holder of such Multi-Currency Note on the relevant Regular Record
Date or at Maturity, provided that, in the case of payment of principal of
(and premium, if any) and any interest due at Maturity, the Multi-Currency Note
is presented to the Paying Agent in time for the Paying Agent to make such
payments in such funds in accordance with its normal procedures. Such
designation shall be made by filing the appropriate information with the
Trustee at its Corporate Trust Office, and, unless revoked, any such
designation made with respect to any Multi-Currency Note by a Holder will
remain in effect with respect to any further payments with respect to such
Multi-Currency Note payable to such Holder. If a payment with respect to any
such Multi-Currency Note cannot be made by wire transfer because the required
designation has not been received by the Trustee on or before the requisite
date or for any other reason, a notice will be mailed to the Holder at its
registered address requesting a designation pursuant to which such wire
transfer can be made and, upon the Trustee's receipt of such a designation,
such payment will be made within 15 days of such receipt. The Company will
pay any administrative costs imposed by banks in connection with making
payments by wire transfer, but any tax, assessment or governmental charge
imposed upon payments will be borne by the Holders of the Multi-Currency Notes
in respect of which such payments are made.
If so specified in the applicable Pricing Supplement, except as provided
below, payments of interest and principal (and premium, if any) with respect
to any Multi-Currency Note will be made in U.S. dollars if the Holder of such
Multi-Currency Note on the relevant Regular Record Date or at Maturity, as the
case may be, has transmitted a written request for such payment in U.S.
dollars to the Paying Agent at its principal office on or prior to such
Regular Record Date or the date 15 days prior to Maturity, as the case may be.
Such request may be delivered by mail, by hand or by cable, telex or any other
form of facsimile transmission.
Any such request made with respect to any Multi-Currency Note by a
Holder will remain in effect with respect to any further payments of interest
and principal (and premium, if any) with respect to such Multi-Currency Note
payable to such Holder, unless such request is revoked by written notice
received by the Paying Agent on or prior to the relevant Regular Record Date
or the date 15 days prior to Maturity, as the case may be (but no such
revocation may be made with respect to payments made on any such
Multi-Currency Note if an Event of Default has occurred with respect thereto
or upon the giving of a notice of redemption). Holders of Multi-Currency
Notes whose Multi-Currency Notes are registered in the name of a broker or
nominee should contact such broker or nominee to determine whether and how an
election to receive payments in U.S. dollars may be made.
The U.S. dollar amount to be received by a Holder of a Multi-Currency
Note who elects to receive payments in U.S. dollars will be based on the
highest indicated bid quotation for the purchase of U.S. dollars in exchange
for the Specified Currency obtained by the Currency Determination Agent (as
defined below) at approximately 11:00 A.M., New York City time, on the second
Business Day next preceding the applicable payment date (the "Conversion
Date") from the bank composite or multicontributor pages of the Quoting Source
for three (or two if three are not available) major banks in The City of New
York. The first three (or two) such banks selected by the Currency
Determination Agent which are offering quotes on the Quoting Source will be
used. If fewer than two such bid quotations are available at 11:00 A.M., New
York City time, on the second Business Day next preceding the applicable
payment date, such payment will be based on the Market Exchange Rate as of the
second Business Day next preceding the applicable payment date. If the Market
Exchange Rate for such date is not then available, such payment will be made
in the Specified Currency. As used herein, the "Quoting Source" means Reuters
Monitor Foreign Exchange Service, or if the Currency Determination Agent
determines that such service is not available, Telerate Monitor Foreign
Exchange Service, or if the Currency Determination Agent determines that
neither service is available, such comparable display or other comparable
manner of obtaining quotations as shall be agreed between the Company and the
Currency Determination Agent. All currency exchange costs associated with any
payment in U.S. dollars on any such Multi-Currency Note will be borne by the
Holder thereof by deductions from such payment. The currency determination
agent (the "Currency Determination Agent") with respect to any Multi-Currency
Notes will be specified in the applicable Pricing Supplement for such
Multi-Currency Notes.
If payment in respect of a Multi-Currency Note is required to be made in
any currency unit (e.g. ECUs) and such currency unit is unavailable, in the
good faith judgment of the Company, due to the imposition of exchange controls
or other circumstances beyond the Company's control, then all payments in
respect of such Multi-Currency Note shall be made in U.S. dollars until such
currency unit is again available. The amount of each payment of U.S. dollars
shall be computed on the basis of the equivalent of the currency unit in U.S.
dollars, which shall be determined by the Currency Determination Agent on the
following basis. The component currencies of the currency unit for this
purpose (the "Component Currencies") shall be the currency amounts that were
components of the currency unit as of the Conversion Date. The equivalent of
the currency unit in U.S. dollars shall be calculated by aggregating the U.S.
dollar equivalents of the Component Currencies. The U.S. dollar equivalent of
each of the Component Currencies shall be determined by the Currency
Determination Agent on the basis of the Market Exchange Rate for each such
Component Currency as of the Conversion Date. "Market Exchange Rate" means
the noon buying rate in The City of New York for cable transfers of such
Specified Currency as certified for customs purposes by the Federal Reserve
Bank of New York.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of that currency as a
Component Currency shall be divided or multiplied in the same proportion. If
two or more Component Currencies are consolidated into a single currency, the
amounts of those currencies as Component Currencies shall be replaced by an
amount in such single currency equal to the sum of the amounts of the
consolidated Component Currencies expressed in such single currency. If any
Component Currency is divided into two or more currencies, the amount of the
original Component Currency shall be replaced by the amounts of such two or
more currencies, the sum of which shall be equal to the amount of the original
Component Currency.
All determinations referred to above made by the Currency Determination
Agent shall be at its sole discretion and shall, in the absence of manifest
error, be conclusive for all purposes and binding on Holders of Multi-Currency
Notes.
Outstanding Multi-Currency Notes
For purposes of calculating the principal amount of any Multi-Currency
Note payable in a Specified Currency for any purpose under the Indenture, the
principal amount of such Multi-Currency Note at any time outstanding shall be
deemed to be the U.S. dollar equivalent, at the Market Exchange Rate
determined as of the date of the original issuance of such Multi-Currency
Note, of the principal amount of such MultiCurrency Note.
FOREIGN CURRENCY RISKS
General
Exchange Rates and Exchange Controls
An investment in Multi-Currency Notes entails significant risks that are
not associated with a similar investment in a security denominated in U.S.
dollars. Such risks include, without limitation, the possibility of
significant changes in the rate of exchange between the U.S. dollar and the
Specified Currency and the possibility of the imposition or modification of
foreign exchange controls by either the United States or foreign governments.
Such risks generally depend on economic and political events over which the
Company has no control. In recent years, rates of exchange between the U.S.
dollar and certain foreign currencies have been highly volatile and such
volatility may be expected in the future. The exchange rate between the U.S.
dollar and a foreign currency or currency unit is at any moment a result of
the supply of and demand for such currencies, and changes in the rate result
over time from the interaction of many factors, among which are rates of
inflation, interest rate levels, balances of payments and the extent of
governmental surpluses or deficits in the countries of such currencies. These
factors are in turn sensitive to the monetary, fiscal and trade policies
pursued by such governments and those of other countries important to
international trade and finance. Fluctuations in any particular exchange rate
that have occurred in the past are not necessarily indicative, however, of
fluctuations in the rate that may occur during the term of any Multi-Currency
Note. Depreciation of the Specified Currency applicable to a Multi-Currency
Note against the U.S. dollar would result in a decrease in the U.S.
dollar-equivalent yield of such Note, in the U.S. dollar-equivalent value of
the principal repayable at Maturity of such Note and, generally, in the U.S.
dollar-equivalent market value of such Note.
Foreign exchange rates can either be fixed by sovereign governments or
float. Exchange rates of most economically developed noncommunist nations are
permitted to fluctuate in value relative to the U.S. dollar. Sovereign
governments, however, rarely voluntarily allow their currencies to float
freely in response to economic forces. In fact, such governments use a
variety of techniques, such as intervention by a country's central bank or
imposition of regulatory controls or taxes, to affect the exchange rate of
their currencies. Governments may also issue a new currency to replace an
existing currency or alter the exchange rate or relative exchange
characteristics by devaluation or revaluation of a currency. Thus, a special
risk in purchasing Notes that are denominated in a foreign currency or
currency unit is that their U.S. dollar-equivalent yields could be affected by
governmental actions which could change or interfere with a theretofore freely
determined currency valuation, by fluctuations in response to other market
forces and by the movement of currencies across borders. There will be no
adjustment or change in the terms of the Multi-Currency Notes in the event
that exchange rates should become fixed, or in the event of any devaluation or
revaluation or imposition of exchange or other regulatory controls or taxes,
or in the event of other developments, affecting the U.S. dollar or any
applicable currency or currency unit.
THE PROSPECTUS, INCLUDING THIS PROSPECTUS SUPPLEMENT, DOES NOT DESCRIBE
ALL RISKS OF AN INVESTMENT IN MULTI-CURRENCY NOTES THAT RESULT FROM SUCH NOTES
BEING DENOMINATED IN A FOREIGN CURRENCY OR CURRENCY UNIT EITHER AS SUCH RISKS
EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS SUCH RISKS MAY CHANGE
FROM TIME TO TIME. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL
AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN MULTI-CURRENCY
NOTES. MULTI-CURRENCY NOTES ARE NOT AN APPROPRIATE INVESTMENT FORINVESTORS
WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
Unless otherwise indicated in the applicable Pricing Supplement,
Multi-Currency Notes will not be sold in, or to residents of, the country of
the Specified Currency in which particular Multi-Currency Notes are
denominated. The information set forth in this Prospectus Supplement is
directed to prospective purchasers who are United States residents, and the
Company disclaims any responsibility to advise prospective purchasers who are
residents of countries other than the United States with respect to any
matters that may affect the purchase, holding or receipt of payments of
principal of, premium, if any, and interest on Multi-Currency Notes. Such
persons should contact their own legal advisors with regard to such matters.
Judgments
The Notes will be governed by and construed in accordance with the laws
of the State of New York. A judgment for money damages by courts in the
United States, including money damages based on an obligation expressed in a
foreign currency, will ordinarily be rendered only in U.S. dollars. New York
statutory law provides that in an action based on an obligation expressed in a
currency other than U.S. dollars a court shall render a judgment or decree in
the foreign currency of the underlying obligation and that the judgment or
decree shall be converted into U.S. dollars at the exchange rate prevailing on
the date of entry of the judgment or decree.
Exchange Controls, Etc.
Governments have imposed from time to time exchange controls and may in
the future impose or revise exchange controls at or prior to a Note's
Maturity. Even if there are no exchange controls, it is possible that the
Specified Currency for any particular Multi-Currency Note would not be
available at such Note's Maturity. In that event, the Company will pay in
U.S. dollars on the basis of the Market Exchange Rate on the second day prior
to such payment, or if such Market Exchange Rate is not then available, on the
basis of the most recently available Market Exchange Rate. See "Special
Provisions Relating to Multi-Currency Notes--Payment of Principal and
Interest."
An applicable Pricing Supplement with respect to the applicable
Specified Currency (which includes information with respect to applicable
current foreign exchange controls, if any) will be delivered and will become
part of this Prospectus and Prospectus Supplement. The information concerning
exchange rates is furnished as a matter of information only and should not be
regarded as indicative of the range of or trends in fluctuations in currency
exchange rates that may occur in the future.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes the principal United States federal
income tax consequences of the acquisition, ownership and disposition of the
Notes to initial holders purchasing Notes at the "issue price" (as defined
below). This summary is based on the Internal Revenue Code of 1986, as
amended to the date hereof (the "Code"), administrative pronouncements,
judicial decisions, and existing, proposed and temporary Treasury Regulations
(including final Treasury Regulations released by the Internal Revenue Service
on January 27, 1994 (the "OID Regulations"), which set forth rules applicable
to debt instruments issued with "original issue discount"), changes to any of
which subsequent to the date of this Prospectus Supplement may affect the tax
consequences described herein.
This summary discusses only the principal United States federal income
tax consequences to those 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 a holder in light of the holder's
particular circumstances or to holders subject to special rules, such as
certain financial institutions, insurance companies, dealers in securities or
foreign currencies, persons holding Notes as part of a "straddle" or
"conversion transaction" as these terms are defined in Sections 1092 and 1258
of the Code, respectively, persons holding Notes as a hedge against, or which
are hedged against, currency risks, or holders whose functional currency (as
defined in Section 985 of the Code) is not the United States dollar. Further,
this summary does not discuss Original Issue Discount Notes (as defined below)
which qualify as "applicable high-yield discount obligations" under Section
163(i) of the Code.
Persons considering the purchase of Notes should consult their tax
advisors with regard to the application of the United States federal income
tax laws to their particular situations as well as any tax consequences to
them arising under the laws of any state, local or foreign taxing jurisdiction.
Tax Consequences to United States Holders
As used herein, the term "United States Holder" means a beneficial owner
of a Note who or which is for United States federal income tax purposes either
(i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or of any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source. The term also includes certain former citizens of
the United States whose income and gain on the Notes will be subject to United
States taxation.
Payments of Interest
Interest paid on a Note, to the extent considered "qualified stated
interest" (as defined below), 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 United
States federal income tax purposes. Interest paid on a Note that is not
considered qualified stated interest will be taxed in the manner described
below under "Original Issue Discount Notes."
Definition of Qualified Stated Interest
Qualified stated interest generally includes stated interest that is
unconditionally payable in cash or in property (other than debt instruments of
the issuer), or that will be constructively received under Section 451 of the
Code, at least annually in an amount equal to the product of the outstanding
principal amount of the Note and a single fixed rate of interest (adjusted to
reflect differing lengths of time between payments, as appropriate), certain
variable rates of interest or certain combinations thereof.
Unless otherwise specified in the applicable Pricing Supplement, each
Floating Rate Note will qualify as a variable rate debt instrument, and all
stated interest on each Floating Rate Note will qualify as qualified stated
interest. Purchasers of Notes should carefully examine the Pricing Supplement
and should consult their tax advisors regarding the purchase, ownership and
disposition of Notes.
Original Issue Discount Notes
United States Holders of Original Issue Discount Notes will be required
to include original issue discount in income for federal income tax purposes
as it accrues, in accordance with a constant yield method based on a
compounding of interest, before the receipt of cash payments attributable to
such income. Under this method, United States Holders of Original Issue
Discount Notes generally will be required to include in income increasingly
greater amounts of original issue discount in successive accrual periods.
The amount of original issue discount on a Note is equal to the excess
of the "stated redemption price at maturity" of the Note over the "issue
price" of the Note. The "issue price" of a Note will equal the first price at
which a substantial amount of Notes of the same issue is sold for money
(excluding sales to bond houses, brokers or similar persons or organizations
acting in the capacity of underwriters, placement agents or wholesalers). The
"stated redemption price at maturity" of a Note will equal the sum of all
payments required under the Note other than certain contingent payments and
"qualified stated interest" payments.
If the difference between a Note's stated redemption price at maturity
and its issue price is less than a specified de minimis amount, equal to .0025
multiplied by the product of the stated redemption price at maturity and the
number of complete years to maturity (or, in the case of a Note providing for
payments prior to maturity of amounts included in its stated redemption price
at maturity, the weighted average maturity), then the Note will not be
considered to have original issue discount. United States Holders of Notes
with original issue discount less than such de minimis amount will generally
include such de minimis original issue discount in income as capital gain on a
pro rata basis as principal payments are made on the Notes.
The amount of original issue discount includible in income during a
taxable year by a United States Holder of an Original Issue Discount Note will
equal the sum of the daily portions of the original issue discount with
respect to the Original Issue Discount Note for each day during the taxable
year on which such Holder held the Original Issue Discount Note. The daily
portion of the original issue discount on any Original Issue Discount Note is
determined by allocating to each day in any "accrual period" a ratable portion
of the original issue discount allocable to such accrual period. A United
States Holder of a Note may use accrual periods that are of any length and
that vary in length over the term of the Note, provided that each accrual
period is not longer than one year and that each scheduled payment of
principal or interest occurs either on the final day of an accrual period or
on the first day of an accrual period. The Company will specify the accrual
period it intends to use in the applicable Pricing Supplement, but a United
States Holder is not required to use the same accrual period for purposes of
determining the amount of original issue discount includible in its income for
a taxable year. The original issue discount allocable to any accrual period
is an amount equal to the excess (if any) of (i) the product of the Original
Issue Discount Note's "adjusted issue price" at the beginning of such accrual
period and its yield to maturity (determined on the basis of compounding at
the close of each accrual period and adjusted for the length of the accrual
period) over (ii) the sum of all payments of qualified stated interest, if
any, payable on such Original Issue Discount Note and allocable to such
accrual period. The "adjusted issue price" of an Original Issue Discount Note
at the beginning of an accrual period is the Original Issue Discount Note's
issue price increased by the amount of accrued original issue discount with
respect to the Original Issue Discount Note for all prior accrual periods, and
decreased by the amount of payments previously made on such Note other than
payments of qualified stated interest.
Neither the OID Regulations nor any other currently effective Treasury
Regulations address the treatment of Notes that provide for contingent
payments and do not qualify as variable rate debt instruments ("contingent
payment debt instruments"). Although Proposed Treasury Regulations were
published on December 16, 1994 which provide rules for contingent payment debt
instruments, these regulations are applicable only to debt instruments issued
sixty days after such regulations are finalized. The applicable Pricing
Supplement will summarize the rules applicable to any Notes that are
contingent payment debt instruments.
In the case of an Original Issue Discount Note that has a fixed maturity
date one year or less from its date of issuance (a "Short-Term Original Issue
Discount Note"), a United States Holder of such a Note that uses the cash
method of accounting generally is not required to accrue original issue
discount for United States federal income tax purposes unless such Holder
elects to for all Short-Term Original Issue Discount Notes acquired on or
after the first day of the first tax year to which such election applies.
United States Holders who make such an election, United States Holders who
report income for federal income tax purposes on an accrual method and certain
other United States Holders, including banks and dealers in securities, are
required to include original issue discount in income on such Short-Term
Original Issue Discount Notes as it accrues on a straight-line basis, unless
an election is made with respect to a particular obligation to accrue the
original issue discount according to a constant yield method based on daily
compounding. In the case of such a taxpayer, original issue discount is
determined by including all payments due on the instrument, including payments
of qualified stated interest, in the stated redemption price at maturity.
In the case of a United States Holder who is not required, and does not
elect, to include the original issue discount (or, if elected, acquisition
discount) in income currently, stated interest generally will be taxable at
the time it is received and any gain realized on the sale, exchange or
retirement of the Short-Term Original Issue Discount Note will be ordinary
income to the extent of the original issue discount accrued on a straight-line
basis (or, if elected, according to a constant yield method based on daily
compounding) through the date of sale, exchange or retirement. In addition,
such Holders will be required to defer deductions for all or a portion of any
interest paid on indebtedness incurred or continued to purchase or carry
Short-Term Original Issue Discount Notes in an amount not exceeding the sum of
the accrued original issue discount not previously included in income and the
amount of any interest not included in original issue discount which accrues
during the tax year while the taxpayer held the obligation but which is not
included in the taxpayer's income by reason of the taxpayer's method of
accounting. A United States Holder may elect to apply the foregoing rules by
accruing "acquisition discount," (i.e., the excess of the stated redemption
price at maturity over the taxpayer's basis) rather than original issue
discount. Such an election applies for all Short-Term Original Issue Discount
Notes acquired on or after the first day of the first tax year to which such
election applies.
Certain of the Original Issue Discount Notes may be redeemed prior to
maturity. Original Issue Discount Notes containing such a feature may be
subject to rules that differ from the general rules discussed above.
Purchasers of Original Issue Discount Notes with such a feature should
carefully examine the applicable Pricing Supplement and should consult their
tax advisors with respect to such a feature since the tax consequences with
respect to original issue discount will depend, in part, on the particular
terms and the particular features of the purchased Note.
The OID Regulations contain certain language ("aggregation rules")
stating in general that, with some exceptions, if more than one type of Note
is issued in connection with the same transaction or related transactions,
such Notes may be treated together as a single debt instrument with a single
issue price, maturity date, yield to maturity and stated redemption price at
maturity for purposes of calculating and accruing an original issue discount.
Unless otherwise provided in the applicable Pricing Supplement, the Company
does not expect to treat different types of Notes as being subject to the
aggregation rules for purposes of computing original issue discount.
Special Rules for Accrual of Original Issue Discount and Qualified
Stated Interest on Variable Rate Debt Instruments
The amount of original issue discount on a variable rate debt instrument
that provides for stated interest at a single qualified floating rate or
objective rate that is unconditionally payable in cash or in property (other
than debt instruments of the issuer), or that will be constructively received
under section 451, at least annually, is determined under the rules applicable
to fixed rate debt instruments (described above) by assuming that the variable
rate is a fixed rate determined as follows. In the case of a qualified
floating rate or qualified inverse floating rate, the fixed rate is equal to
the value, as of the issue date of the debt instrument of the qualified
floating rate or qualified inverse floating rate. In the case of an objective
rate (other than a qualified inverse floating rate) the fixed rate is a rate
that reflects the yield that is reasonably expected for the debt instrument.
The Internal Revenue Service issued proposed regulations on December 16,
1994 that would extend the foregoing rules to the accrual of qualified stated
interest on a variable rate debt instrument. Under these proposed
regulations, which are proposed to be effective for debt instruments issued on
or after April 4, 1994, the amount of qualified stated interest that accrues
during an accrual period on a variable rate debt instrument described in the
foregoing paragraph is determined by assuming that the debt instrument bears
interest at a fixed rate determined in the manner described in the foregoing
paragraph. Qualified stated interest allocable to an accrual period is
increased (or decreased) if the interest actually paid during an accrual
period exceeds (or is less than) the interest assumed to be paid during the
accrual period.
Sale, Exchange or Retirement of the Notes
Upon the sale, exchange or retirement of a Note, a United States Holder
will recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement (not including any amount
attributable to accrued but unpaid interest) and such Holder's adjusted tax
basis in the Note. To the extent attributable to accrued but unpaid interest,
the amount realized by the United States Holder will be treated as a payment
of interest. See "Payments of Interest," above. A United States Holder's
adjusted tax basis in a Note will equal the cost of the Note to such Holder,
increased by any discount with respect to a Short-Term Original Issue Discount
Note or any original issue discount previously included in income by such
Holder with respect to such Note and reduced by any principal payments
received by such Holder and, in the case of an Original Issue Discount Note or
Short-Term Original Issue Discount Note, by the amount of any other payments
received that were included in the stated redemption price at maturity, as
described above.
Gain or loss realized on the sale, exchange or retirement of a Note that
is not a Foreign Currency Note will be capital gain or loss (except in the
case of a Short-Term Original Issue Discount Note, to the extent of any
original issue discount not previously included in a United States Holder's
taxable income) and will be long-term capital gain or loss if at the time of
sale, exchange or retirement the Note has been held for more than one year.
See "Original Issue Discount Notes" above. 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 taxpayers. The distinction between
capital gain or loss and ordinary income or loss is also relevant for purposes
of, among other things, limitations on the deductibility of capital losses.
Foreign Currency Notes And Multi-Currency Notes
The United States federal income tax consequences to a United States
Holder of the ownership and disposition of Notes that are denominated in, or
provide for payments determined by reference to, a currency or currency unit
other than the United States dollar ("Foreign Currency Notes" and
"Multi-Currency Notes") will be summarized in the applicable Pricing
Supplement.
Indexed Notes
The United States federal income tax consequences to a United States
Holder of the ownership and disposition of Commodity Indexed Notes and
Currency Indexed Notes will be summarized in the applicable Pricing Supplement.
Extendible Notes
If so specified in an applicable Pricing Supplement, the Company may
have the option to extend the maturity of a Note beyond its Original Stated
Maturity Date. See "Description of Notes--Extension of Maturity." A
description of the federal income tax consequences to a United States Holder
of the Company's option to extend the maturity of a Note will be contained in
the applicable Pricing Supplement.
Renewable Notes
A Note may be issued wherein the initial maturity of the Note may be
extended beyond its Original Stated Maturity Date at the Holder's option. See
"Description of Notes--Renewable Notes." A description of the federal income
tax consequences to a United States Holder of such Holder's option to renew a
Note will be contained in the applicable Pricing Supplement.
Reset Notes
Reset Notes may be subject to special rules for determining interest
income or gain or loss. The United States federal income tax consequences to
a United States Holder of the ownership and disposition of Reset Notes will be
summarized in the applicable Pricing Supplement.
Amortizing Notes
The United States federal income tax consequences to a United States
Holder of the ownership and disposition of Amortizing Notes will be summarized
in the applicable Pricing Supplement.
Tax Consequences to United States Alien Holders
Under present United States federal income and estate tax law, and
subject to the discussion below concerning backup withholding:
(a) payments of principal, interest (including original issue
discount, if any) and premium on the Notes by the Company or any paying
agent to a beneficial owner of a Note that is not a United States
Holder, as defined above (hereinafter, a "United States Alien Holder"),
will not be subject to United States federal withholding tax, provided
that, in the case of interest, (i) such Holder does not own, actually or
constructively, ten percent or more of the total combined voting power
of all classes of stock of the Company entitled to vote, (ii) such
Holder is not, for United States federal income tax purposes, a
controlled foreign corporation related, directly or indirectly, to the
Company through stock ownership, (iii) such Holder is not a bank
receiving interest described in Section 881(c)(3)(A) of the Code, (iv)
the certification requirements under Section 871(h) or Section 881(c) of
the Code and Treasury Regulations thereunder (summarized below) are met,
and (v) such interest is neither effectively connected with the conduct
of a trade or business in the United States nor described in Section
871(h)(4) of the Code (which in general is limited to certain types of
contingent interest, as summarized below);
(b) a United States Alien Holder of a Note will not be subject
to United States federal income tax on gain realized on the sale,
exchange or other disposition of such Note, unless (i) such Holder is an
individual who is present in the United States for 183 days or more in
the taxable year of disposition, and certain conditions are met or (ii)
such gain is effectively connected with the conduct by such Holder of a
trade or business in the United States; and
(c) a Note held by an individual who is not 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 (i) the individual does not own,
actually or constructively, ten percent or more of the total combined
voting power of all classes of stock of the Company entitled to vote,
(ii) the Note does not provide for interest described in Section
871(h)(4) of the Code (as summarized below), and (iii) at the time of
such individual's death, payments with respect to such Note would not
have been effectively connected with the conduct by such individual of a
trade or business in the United States.
Sections 871(h) and 881(c) of the Code and Treasury Regulations
thereunder require that, in order to obtain the exemption from withholding tax
described in paragraph (a) above, either (i) the beneficial owner of a Note
must certify, under penalties of perjury, to the Company or paying agent, as
the case may be, that such owner is a United States Alien Holder and must
provide such owner's name and address, and United States taxpayer
identification number, if any, or (ii) a securities clearing organization,
bank or other financial institution that holds customers' securities in the
ordinary course of its trade or business (a "Financial Institution") and holds
the Note on behalf of the beneficial owner thereof must certify, under
penalties of perjury, to the Company or paying agent, as the case may be, that
such certificate has been received from the beneficial owner by it or by a
Financial Institution between it and the beneficial owner and must furnish the
payor with a copy thereof. A certificate described in this paragraph is
effective only with respect to payments of interest (including original issue
discount) made to the certifying United States Alien Holder after issuance of
the certificate in the calendar year of its issuance and the two immediately
succeeding calendar years. Under temporary United States Treasury
Regulations, such requirement will be fulfilled if the beneficial owner of a
Note certifies on Internal Revenue Service Form W-8, under penalties of
perjury, that it is not a United States Holder and provides its name and
address, and either the beneficial owner furnishes the withholding agent with
a copy of such statement or any Financial Institution holding the Note on
behalf of the beneficial owner files a statement with the withholding agent to
the effect that it has received such a statement from the beneficial owner
(and furnishes the withholding agent with a copy thereof).
Interest described in Section 871(h)(4) of the Code will be subject to
United States withholding tax at a 30 percent rate (or such lower rate
provided by an applicable treaty). In general, interest described in Section
871(h)(4) of the Code includes (subject to certain exceptions) any interest
the amount of which is determined by reference to receipts, sales or other
cash flow of the Company or a related person, any income or profits of the
Company or a related person, any change in the value of any property of the
Company or a related person or any dividend, partnership distributions or
similar payments made by the Company or a related person. Interest described
in Section 871(h)(4) of the Code may include other types of contingent
interest identified by the Internal Revenue Service in future Treasury
Regulations. The Company does not currently expect to issue Notes the
interest on which is described in Section 871(h)(4) of the Code, and the
United States withholding tax consequences of any such Notes issued by the
Company will be described in the applicable Pricing Supplement.
If a United States Alien Holder of a Note is engaged in a trade or
business in the United States, and if interest (including any original issue
discount) on the Note, or gain realized on the sale, exchange or other
disposition of a Note, is effectively connected with the conduct of such trade
or business, the United States Alien Holder, although exempt from United
States withholding tax, will generally be subject to United States income tax
on such interest (including any original issue discount) or gain 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 second
preceding paragraph, such a holder will be required to provide to the Company
a properly executed Internal Revenue Service Form 4224 in order to claim an
exemption from withholding tax. In addition, if such United States Alien
Holder is a foreign corporation, it may be subject to a branch profits tax
equal to 30 percent (or such lower rate provided by an applicable treaty) of
its effectively connected earnings and profits for the taxable year, subject
to certain adjustments. For purposes of the branch profits tax, interest
(including any original issue discount) on, and any gain recognized on the
sale, exchange or other disposition of, a Note will be included in the
earnings and profits of such United States Alien Holder if such interest is
effectively connected with the conduct by the United States Alien Holder of a
trade or business in the United States.
Backup Withholding and Information Reporting
Under current United States federal income tax law, a 31 percent backup
withholding tax and information reporting requirements apply to certain
payments of principal, premium and interest (including original issue
discount) made to, and to the proceeds of sale before maturity by, certain
holders of the Notes.
In the case of a non-corporate United States Holder, backup withholding
will apply only if such Holder (i) fails to furnish its Taxpayer
Identification Number ("TIN") which, for an individual, would be his Social
Security number, (ii) furnishes an incorrect TIN, (iii) is notified by the
Internal Revenue Service that it has failed to properly report payments of
interest and dividends or (iv) under certain circumstances, fails to certify,
under penalties of perjury, that it has furnished a correct TIN and has not
been notified by the Internal Revenue Service that it is subject to backup
withholding for failure to report interest and dividend payments. United
States Holders should consult their tax advisors regarding their qualification
for exemption from backup withholding and the procedure for obtaining such an
exemption if applicable.
The amount of any backup withholding from a payment to a United States
Holder will be allowed as a credit against such Holder's United States federal
income tax liability and may entitle such Holder to a refund, provided that
the required information is furnished to the Internal Revenue Service.
In the case of a United States Alien Holder, under current Treasury
Regulations, backup withholding will not apply to payments of principal,
premium or interest made by the Company or any paying agent thereof on a Note
if such Holder has provided the required certification under penalties of
perjury that it is not a United States Holder (as defined above) and certain
other conditions have been met or has otherwise established an exemption,
provided in each case that the Company or such paying agent, as the case may
be, does not have actual knowledge that the payee is a United States Holder.
The Company will, when required, report to United States Alien Holders of the
Notes and the Internal Revenue Service the amount of any interest paid or
original issue discount accruing on the Notes in each calendar year and the
amounts of tax withheld, if any, with respect to such payments.
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. However, if such broker
is a United States person, a controlled foreign corporation for United States
tax purposes or a foreign person 50 percent or more of whose gross income is
effectively connected with a United States trade or business for a specified
three-year period, information reporting will be required unless the broker
has in its records documentary evidence that the beneficial owner is not a
United States Holder and certain other conditions are met or the beneficial
owner otherwise establishes an exemption. Under proposed Treasury
Regulations, backup withholding may apply to any payment which such broker is
required to report if such broker has actual knowledge that the payee is a
United States Holder. Payments to or through the United States office of a
broker will be subject to backup withholding and information reporting unless
the holder certifies, under penalties of perjury, that it is not a United
States Holder and that certain other conditions are met or otherwise
establishes an exemption.
United States Alien Holders of Notes should consult their tax advisors
regarding the application of information reporting and backup withholding in
their particular situations, the availability of an exemption therefrom, and
the procedure for obtaining such an exemption, if available. Any amounts
withheld from a payment to a United States Alien Holder under the backup
withholding rules will be allowed as a credit against such Holder's United
States federal income tax liability and may entitle such Holder to a refund,
provided that the required information is furnished to the Internal Revenue
Service.
SUPPLEMENTAL PLAN OF DISTRIBUTION
The Notes are offered on a continuing basis by the Company through the
Agents, each of which has agreed to use its reasonable efforts to solicit
purchases of the Notes. The Company will pay each Agent a commission of from
.125% to .750% of the principal amount of each Note, depending upon its Stated
Maturity, sold through such Agent. The Company will have the sole right to
accept offers to purchase Notes and may reject any such offer in whole or in
part. Each Agent will have the right, in its discretion reasonably exercised,
to reject in whole or in part any offer to purchase Notes received by such
Agent. The Company also may sell Notes to any Agent, acting as principal, at
a discount to be agreed upon at the time of sale, for resale to one or more
investors or to one or more broker-dealers (acting as principal for purposes
of resale) at varying prices related to prevailing market prices at the time
of resale, as determined by such Agent, or, if so agreed, at a fixed public
offering price. Unless otherwise indicated in the applicable Pricing
Supplement, if any Note is resold by an Agent to any broker-dealer at a
discount, such discount will not be in excess of the discount or commission
received by such Agent from the Company. In addition, unless otherwise
indicated in the applicable Pricing Supplement, any Note purchased by an Agent
as principal will be purchased at 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a Note
having an identical Stated Maturity. After the initial public offering of the
Notes, the public offering price (in the case of Notes to be resold on a fixed
public offering price basis), the concession and the discount may be changed.
The Company also reserves the right to sell the Notes directly to investors on
its own behalf in those jurisdictions where it is authorized to do so or as
otherwise provided in the applicable Pricing Supplement. In such
circumstances, the Company will have the sole right to accept offers to
purchase Notes and may reject any proposed purchase of Notes in whole or in
part. In the case of sales made directly by the Company, no commission will
be payable.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Act"). The Company has agreed to
indemnity each Agent against certain liabilities, including liabilities under
the Act, or to contribute to payments each Agent may be required to make in
respect thereof. The Company has agreed to reimburse the Agents for certain
of the Agents' expenses, including, but not limited to, the fees and expenses
of counsel to the Agents.
The Company has been advised by each Agent that it may from time to time
purchase and sell Notes in the secondary market, but that it is not obligated
to do so. There can be no assurance that there will be a secondary market for
the Notes or liquidity in the secondary market if one develops. From time to
time, each Agent may make a market in the Notes.
The Agents and their affiliates may engage in transactions with and
perform services for the Company in the ordinary course of business.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations, other than those contained or
incorporated by reference in this Prospectus Supplement (including the
accompanying Pricing Supplement) or the Prospectus in connection with the
offer made by this Prospectus Supplement and the Prospectus and, if given or
made, such information or representations must not be relied upon as having
been authorized by the Company or any Agent. Neither the delivery of this
Prospectus Supplement (including the Pricing Supplement) and the Prospectus
nor any sale made hereunder and thereunder shall under any circumstances
create an implication that there has been no change in the affairs of the
Company since the date hereof. This Prospectus Supplement (including the
Pricing Supplement) and the Prospectus do not constitute an offer or a
solicitation by anyone in any jurisdiction in which such offer or solicitation
is not authorized or in which the person making such offer or solicitation is
not qualified to do so or to any person to whom it is unlawful to make such
offer or solicitation.
TABLE OF CONTENTS
Prospectus Supplement
_____________________
Page
----
Ratio of Earnings to
Fixed Charges..................
Description of Notes........... S-3
Special Provisions Relating
to Multi-Currency Notes........ S-23
Foreign Currency Risks......... S-25
United States Federal Income
Tax Consequences.............. S-26
Supplemental Plan of
Distribution.................. S-33
Prospectus
__________
Available Information............ 2
Incorporation of Certain
Documents by Reference........... 2
Use of Proceeds.................. 3
Description of the Securities.... 3
Plan of Distribution............. 9
Legal Matters................... 10
Experts.......................... 10
$100,000,000
ILLINOIS CENTRAL
RAILROAD COMPANY
Medium-Term Notes, Series A
PROSPECTUS SUPPLEMENT
May 1, 1995
Lehman Brothers
Salomon Brothers Inc
Smith Barney Inc.
