<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 22, 2000.
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MCCORMICK & COMPANY, INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 52-0408290
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
18 LOVETON CIRCLE
SPARKS, MARYLAND 21152
(410) 771-7301
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
ROBERT W. SKELTON
MCCORMICK & COMPANY, INCORPORATED
18 LOVETON CIRCLE
SPARKS, MARYLAND 21152
(410) 771-7301
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
--------------
COPY TO:
ALAN L. DYE, ESQ. STEPHAN J. FEDER, ESQ.
HOGAN & HARTSON L.L.P. SIMPSON THACHER & BARTLETT
555 THIRTEENTH STREET, N.W. 425 LEXINGTON AVENUE
WASHINGTON, D.C. 20004 NEW YORK, NEW YORK 10017
(202) 637-5600 (212) 455-2000
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
--------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE REGISTRATION FEE
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities $375,000,000 100% $375,000,000 (1) $99,000
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</TABLE>
(1) Or, if any such securities are issued at original issue discount, such
greater principal amount as shall result in an aggregate initial offering
price of $375,000,000. Securities may be denominated in U.S. Dollars or in
one or more foreign currencies or units of two or more foreign currencies
or composite currencies.
-----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE>
SUBJECT TO COMPLETION, DATED SEPTEMBER 22, 2000
Prospectus Supplement to Prospectus dated September , 2000.
$375,000,000
MCCORMICK & COMPANY, INCORPORATED
Medium-Term Notes
----------------
TERMS OF SALE
The following terms may apply to the Notes which McCormick & Company,
Incorporated may sell at one or more times. The final terms for each Note will
be included in a pricing supplement. McCormick will receive between $374,531,250
and $371,625,000 of the proceeds from the sale of the Notes, after paying the
agents commissions of between $468,750 and $3,375,000.
<TABLE>
<S><C>
- Mature 9 months to 40 years - Certificated or book-entry form
- Fixed or floating interest rate or indexed Notes or - Subject to redemption and repurchase at option of
zero-coupon or other original issue discount Notes. McCormick or the holder
The floating interest rate may be based on: - Interest paid on Fixed Rate Notes semi-annually
- Commercial Paper Rate - Interest paid on Floating Rate Notes monthly,
- Prime Rate quarterly, semi-annually or annually
- CD Rate - Minimum denominations of $1,000 increased in
- Federal Funds Rate multiples of $1,000
- LIBOR - May be foreign currency or composite currency
- Treasury Rate denominated
- CMT Rate - Same day settlement and payment in immediately
- Any other rate specified by us in the available funds
pricing supplement
- Any combination of rates specified in a
pricing supplement
</TABLE>
The aggregate initial offering price of the Notes that McCormick offers
will be limited to $375,000,000 or its equivalent in one or more foreign
currencies or composite currencies, but this limit will decrease if McCormick
sells other securities that are described in the attached prospectus.
SEE "RISK FACTORS" ON PAGE S-2 TO READ ABOUT CERTAIN RISK FACTORS YOU
SHOULD CONSIDER BEFORE BUYING ANY NOTES.
------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------
McCormick may sell the Notes directly or through one or more agents or
dealers, including the agent listed below. The agents are not required to sell
any specific number or amount of the Notes. They will use their reasonable
efforts to sell the Notes offered.
GOLDMAN, SACHS & CO.
Prospectus Supplement dated September , 2000.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE OR JURISDICTION WHERE THE OFFER OR SALE IS NOT
PERMITTED.
<PAGE>
RISK FACTORS
YOUR INVESTMENT IN THE NOTES IS SUBJECT TO CERTAIN RISKS, ESPECIALLY IF
THE NOTES INVOLVE IN SOME WAY A FOREIGN CURRENCY. THIS PROSPECTUS SUPPLEMENT
DOES NOT DESCRIBE ALL OF THE RISKS OF AN INVESTMENT IN THE NOTES, WHETHER
ARISING BECAUSE THE NOTES ARE DENOMINATED IN A CURRENCY OTHER THAN U.S. DOLLARS
OR BECAUSE THE RETURN ON THE NOTES IS LINKED TO ONE OR MORE INTEREST RATES OR
CURRENCY INDICES OR FORMULAE. YOU SHOULD CONSULT YOUR OWN FINANCIAL AND LEGAL
ADVISORS ABOUT THE RISKS ENTAILED BY AN INVESTMENT IN THE NOTES AND THE
SUITABILITY OF YOUR INVESTMENT IN THE NOTES IN LIGHT OF YOUR PARTICULAR
CIRCUMSTANCES. THE NOTES MAY NOT BE AN APPROPRIATE INVESTMENT FOR INVESTORS WHO
ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS OR
TRANSACTIONS INVOLVING THE TYPE OF INDEX OR FORMULA USED TO DETERMINE AMOUNTS
PAYABLE. BEFORE INVESTING IN THE NOTES, YOU SHOULD CONSIDER CAREFULLY, AMONG
OTHER FACTORS, THE MATTERS DESCRIBED BELOW.
NOTES DENOMINATED IN FOREIGN CURRENCIES ARE SUBJECT TO SIGNIFICANT RISKS
ASSOCIATED WITH EXCHANGE RATE FLUCTUATION, FOREIGN EXCHANGE CONTROLS AND OTHER
FACTORS OVER WHICH WE HAVE NO CONTROL.
If you invest in Foreign Currency Notes and currency Indexed Notes,
your investment will be subject to significant risks not associated with
investments in debt instruments denominated in U.S. dollars or U.S. dollar-based
indices. Such risks include the possibility of significant changes in the rate
of exchange between the U.S. dollar and your payment currency and the imposition
or modification of foreign exchange controls by either the United States or the
applicable foreign governments. We have no control over the factors that
generally affect these risks, such as economic, financial and political events
and the supply and demand for the applicable currencies. In recent years, rates
of exchange between the U.S. dollar and certain foreign currencies have been
volatile, and such volatility may continue in the future. Past fluctuations in
any particular exchange rate are not necessarily indicative, however, of
fluctuations that may occur in the future. Fluctuations in exchange rates
against the U.S. dollar could result in a decrease in the U.S. dollar-equivalent
yield of your Foreign Currency Notes or currency Indexed Notes, in the U.S.
dollar-equivalent value of the principal and premium, if any, payable at
maturity of your Notes and, generally, in the U.S. dollar-equivalent market
value of your Notes. We may further describe the currency risks with respect to
your Foreign Currency Notes or currency Indexed Notes in the applicable pricing
supplement.
Foreign exchange rates can either float or be fixed by sovereign
governments. Governments, however, often do not voluntarily allow their
currencies to float freely in response to economic forces. Instead, governments
use a variety of techniques, such as intervention by that country's central bank
or the 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 the devaluation or revaluation of a currency. Thus, an
important risk in purchasing Foreign Currency Notes or currency Indexed Notes
for U.S. dollar-based investors is that the U.S. dollar-equivalent yield of the
Notes could be affected by, among other things, governmental actions that could
change or interfere with a currency valuation that was previously freely
determined, fluctuations in response to other market forces, and the movement of
currencies across borders. We will make no adjustments or changes in the terms
of the Foreign Currency Notes or currency Indexed Notes if exchange rates become
fixed, if any devaluation or revaluation or imposition of exchange or other
regulatory controls or taxes occur, or if other developments affecting the U.S.
dollar or any applicable currency occur.
The calculation agent, the paying agent and the exchange rate agent
will make calculations relating to your Foreign Currency Notes or currency
Indexed Notes. All such determinations will, in the absence of clear error, be
binding on beneficial owners of the Notes.
On January 1, 1999, Austria, Belgium, Finland, France, Germany,
Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain (the
"Participating States") commenced a new stage of economic and monetary union and
introduced a single currency (the "euro"), which will be legal tender in the
Participating States in substitution for the national currencies of those
countries. The current currencies of the Participating States will remain legal
tender in those countries as the physical currency denominating and representing
the euro until December 31, 2001, but all financial records and accounts will
thereafter be stated in the euro. The conversion rates between the current
currencies of each Participating State and the euro were fixed irrevocably by
the Council of the European Union effective January 1, 1999. The Council of the
European Union has adopted regulations providing specific rules for the
introduction of the euro.
S-2
<PAGE>
For Notes with a specified currency other than U.S. dollars, we will
include in the applicable pricing supplement information concerning historical
exchange rates for that currency against the U.S. dollar and a brief description
of any relevant exchange controls.
EXCHANGE RATES MAY AFFECT THE VALUE OF A JUDGMENT OF A U.S. COURT INVOLVING
FOREIGN CURRENCY NOTES.
The Indenture and the Notes, except to the extent that we specify
otherwise in a pricing supplement, will be governed by, and construed in
accordance with, the laws of the State of New York. As a holder of Notes, you
may bring an action based upon an obligation payable in a currency other than
U.S. dollars in courts in the United States. However, courts in the United
States have not customarily rendered judgments for money damages denominated in
any currency other than U.S. dollars. In addition, it is not clear whether, in
granting such judgment, a court would determine the rate of conversion with
reference to the date of default, the date judgment is rendered or any other
date. The Judiciary Law of the State of New York provides, however, that an
action based upon an obligation payable in a currency other than U.S. dollars
will be rendered in the currency of the underlying obligation and converted into
U.S. dollars at a rate of exchange prevailing on the date the judgment or decree
is entered. In these cases, holders of Foreign Currency Notes would bear the
risk of exchange rate fluctuations between the time the dollar amount of the
judgment is calculated and the time U.S. dollars were paid to the holders.
NOTES INDEXED TO INTEREST RATE, CURRENCY OR OTHER INDICES OR FORMULAS ARE MORE
VOLATILE THAN CONVENTIONAL DEBT SECURITIES.
If you invest in Indexed Notes, your investment will be subject to
significant risks that are not associated with an investment in a conventional
debt security. Indexation of the interest rate of a Note may result in lower
interest compared to a conventional fixed rate debt security issued at the same
time, or no interest. Indexation of the principal and premium, if any, on a Note
may result in the payment of a lower amount of principal and/or premium (or no
principal and/or premium) compared to the original purchase price of the Note.
The value of an index can fluctuate based on a number of interrelated factors,
including economic, financial and political events over which we have no
control. Additionally, if any formula that we specify to determine the amount of
principal, premium and/or interest payable with respect to Indexed Notes
contains a multiple or leverage factor, that feature will magnify the effect of
any change in the index. You should not take the historical experience of an
index as an indication of its future performance.
THERE MAY NOT BE ANY TRADING MARKET FOR YOUR NOTES; MANY FACTORS AFFECT THE
TRADING AND MARKET VALUE OF YOUR NOTES.
Upon issuance, your Notes will not have an established trading market.
We cannot assure you a trading market for your Notes will ever develop or be
maintained if developed. In addition to our creditworthiness, many factors
affect the trading market for, and trading value of, your Notes. These factors
include:
- the complexity and volatility of the index or formula
applicable to your Notes,
- the method of calculating the principal, premium and interest
in respect of your Notes,
- the time remaining to the maturity of your Notes,
- the outstanding amount of Notes related to your Notes,
- any redemption features of your Notes,
- the amount of other debt securities linked to the index or
formula applicable to your Notes, and
- the level, direction and volatility of market interest rates
generally.
There may be a limited number of buyers when you decide to sell your
Notes. This may affect the price you receive for your Notes or your ability to
sell your Notes at all. In addition, Notes that are designed for specific
investment
S-3
<PAGE>
objectives or strategies often experience a more limited trading market and
more price volatility than those not so designed. You should not purchase
Notes unless you understand and know you can bear all of the investment risks
involving your Notes.
OUR CREDIT RATINGS MAY NOT REFLECT ALL RISKS OF AN INVESTMENT IN THE NOTES.
The credit ratings on the Notes may not reflect the potential impact of
all risks related to structure and other factors on the value of the Notes. In
addition, real or anticipated changes in our credit ratings will generally
affect the market value of the Notes.
ABOUT THIS PROSPECTUS SUPPLEMENT AND THE PRICING SUPPLEMENTS
We intend to use this prospectus supplement, the attached prospectus
and a related pricing supplement to offer our Notes from time to time.
This prospectus supplement provides you with certain terms of the Notes
and supplements the description of the Debt Securities contained in the attached
prospectus. If information in this prospectus supplement is inconsistent with
the prospectus, this prospectus supplement will replace the inconsistent
information in the prospectus.
Each time we issue Notes, we will prepare a pricing supplement that
will contain additional terms of the offering and the specific description of
the Notes offered. The pricing supplement may also add, update or change
information in this prospectus supplement or the attached prospectus, including
provisions describing the calculation of interest and the method of making
payments under the terms of a Note. The flexibility available to us to set or
negotiate individualized terms for Notes means that there may be transactions,
particularly with Indexed Notes, that are quite complex. Frequently, the terms
of the Notes may differ from the terms that we describe in this prospectus
supplement. Any information in a pricing supplement that is inconsistent with
this prospectus supplement will replace the inconsistent information in this
prospectus supplement.
DESCRIPTION OF NOTES
THE FOLLOWING SUMMARY OF CERTAIN TERMS OF THE NOTES IS NOT COMPLETE.
FOR ADDITIONAL TERMS OF THE NOTES, YOU SHOULD ALSO READ THE INDENTURE UNDER
WHICH THE NOTES WILL BE ISSUED, WHICH IS AN EXHIBIT TO OUR SHELF REGISTRATION
STATEMENT. THE FOLLOWING DESCRIPTION OF THE NOTES SUPPLEMENTS, AND, TO THE
EXTENT THE DESCRIPTIONS ARE INCONSISTENT, REPLACES THE DESCRIPTION OF THE
GENERAL TERMS AND PROVISIONS OF THE DEBT SECURITIES THAT IS FOUND UNDER THE
HEADING "DESCRIPTION OF DEBT SECURITIES" IN THE ATTACHED PROSPECTUS. THE
FOLLOWING DESCRIPTIONS WILL APPLY TO EACH NOTE UNLESS WE SPECIFY OTHERWISE IN
THE PRICING SUPPLEMENT.
WHEN WE REFER TO YOU, WE MEAN THOSE WHO INVEST IN THE NOTES BEING
OFFERED BY THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS, WHETHER THEY
ARE THE HOLDERS OR ONLY INDIRECT HOLDERS OF THOSE DEBT SECURITIES. WHEN WE REFER
TO YOUR NOTES, WE MEAN THE NOTES IN WHICH YOU HOLD A DIRECT OR INDIRECT
INTEREST.
GENERAL
We will offer Notes on a continuous basis. The aggregate initial public
offering price of the Notes that we offer will be limited to $375,000,000 or its
equivalent in one or more foreign currencies or composite currencies, but this
limit will decrease if we sell other securities that are described in the
attached prospectus.
The Notes are our unsecured obligations and rank equally with all of
our other unsecured and unsubordinated debt.
S-4
<PAGE>
The Notes offered by this prospectus supplement will form a part of the
medium-term notes due from 9 months to 40 years from date of issue issued under
the Indenture. At May 31, 2000, we and our consolidated subsidiaries had total
consolidated long-term indebtedness of approximately $235 million (in addition
to approximately $6 million in the current portion of our long-term
indebtedness) and we had no subordinated indebtedness outstanding.
The Indenture does not limit the amount of our Notes or other debt
obligations that we may issue thereunder.
The covenant defeasance provisions of the Indenture described under
"Description of Debt Securities-Covenant Defeasance" in the attached prospectus
will apply to the Notes.
Unless we specify otherwise in the applicable pricing supplement, we
will denominate the Notes in U.S. dollars and will make all payments on the
Notes in U.S. dollars. For further information regarding Foreign Currency Notes,
see "Risk Factors" and "Special Provisions Relating to Foreign Currency Notes".
You must pay the purchase price of the Notes in immediately available
funds.
As used in this prospectus supplement, "Business Day" means any day,
other than a Saturday or Sunday, that is neither a legal holiday nor a day on
which commercial banks are authorized or required by law, regulation or
executive order to close in The City of New York; PROVIDED, HOWEVER, that with
respect to Foreign Currency Notes, such day is also not a day on which
commercial banks are authorized or required by law, regulation or executive
order to close in the Principal Financial Center (as defined below) of the
country issuing the specified currency (or, if the specified currency is the
euro, such day is also a day on which the Trans-European Automated Real-Time
Gross Settlement Express Transfer System is open); PROVIDED, FURTHER, that with
respect to Notes as to which LIBOR is an applicable interest rate basis, such
day is also a London Business Day.
"London Business Day" means a day on which commercial banks are open
for business (including dealings in the designated LIBOR Currency) in London.
"Principal Financial Center" means:
- the capital city of the country issuing the specified
currency; or
- the capital city of the country to which the designated LIBOR
Currency relates, as applicable,
except that, with respect to U.S. dollars, Australian dollars, Canadian dollars,
Deutsche marks, Dutch guilders, Portuguese escudos, South African rand and Swiss
francs, the "Principal Financial Center" will be The City of New York, Sydney
and (solely in the case of the specified currency) Melbourne, Toronto,
Frankfurt, Amsterdam, London (solely in the case of the designated LIBOR
Currency), Johannesburg and Zurich, respectively.
The authorized denominations of Notes denominated in U.S. dollars will
be integral multiples of $1,000. We will designate the authorized denominations
of Foreign Currency Notes in the applicable pricing supplement.
BOOK-ENTRY SECURITIES
Except under certain circumstances, we will issue Notes in book-entry
form only. This means that we will not issue actual Notes or certificates to
you. Instead, we will issue a Global Security representing Notes with similar
terms, and such Global Security will be held by The Depository Trust Company
("DTC") or its nominee. In order to own a beneficial interest in a Note, you
must be an institution that has an account with DTC or have an account with an
institution, such as a brokerage firm, that has an account with DTC. For a more
complete description of Book-Entry Securities, see "Description of Debt
Securities-Book-Entry Securities" in the prospectus.
Payments of principal and premium, if any, and interest on Notes
represented by a Global Security will be made in same-day funds to DTC in
accordance with arrangements then in effect between the Trustee and DTC.
S-5
<PAGE>
INTEREST AND INTEREST RATES
GENERAL
Each Note will begin to accrue interest, if any, from the date it is
originally issued. In the related pricing supplement, we will designate each
Note as a Fixed Rate Note, an OID Note, a Floating Rate Note, an Amortizing
Note or an Indexed Note and describe the method of determining the interest
rate, including any spread and/or spread multiplier. For an Indexed Note, we
will describe in the related pricing supplement the method for the
calculation and payment of principal and interest. We also may specify a
maximum and a minimum interest rate in the pricing supplement for a Floating
Rate Note or Indexed Note.
We may also issue a Note that combines fixed and floating rate terms.
Interest rates that we offer with respect to Notes may differ depending
upon, among other things, the aggregate principal amount of Notes purchased in
any single transaction. We may offer Notes with similar variable terms but
different interest rates, as well as Notes with different variable terms,
concurrently to different investors. We may, from time to time, change the
interest rates or formulae and other terms of Notes, but no such change will
affect any Note that we already have issued or as to which we already have
accepted an offer to purchase.
FIXED RATE NOTES
In the pricing supplement for Fixed Rate Notes, we will specify a
fixed interest rate payable semiannually in arrears on each and
(each an "Interest Payment Date"), or such other dates specified in the
applicable pricing supplement, to holders of record on the corresponding
Regular Record Date. If a Fixed Rate Note is issued between a Regular Record
Date and the corresponding date which would otherwise be the initial Interest
Payment Date, we will make our first payment of interest, if any, on the
Interest Payment Date following the next Regular Record Date. The "Regular
Record Date", as referred to in this paragraph, is the close of business on
the fifteenth day (whether or not a Business Day), prior to an Interest
Payment Date. We will compute interest on Fixed Rate Notes on the basis of a
360-day year of twelve 30-day months. If the maturity date or an Interest
Payment Date for any Fixed Rate Note is not a Business Day, we will pay
principal of and premium, if any, and interest for that Note, as applicable,
on the next Business Day, and no interest will accrue from and after the
maturity date or Interest Payment Date.
ORIGINAL ISSUE DISCOUNT NOTES
We may issue original issue discount Notes (including zero coupon
Notes) ("OID Notes"), which are Notes issued at a discount from the principal
amount payable at the maturity date. An OID Note might not have periodic
interest payments. For these Notes, interest normally accrues during the life of
the Note, and you receive it at the maturity date or upon earlier redemption.
Upon a redemption, repayment or acceleration of the maturity of an OID Note, we
will determine the amount payable to you as set forth under "-Optional
Redemption, Repayment and Repurchase". Normally, this amount is less than the
amount that we would otherwise pay at the maturity date.
AMORTIZING NOTES
We may issue amortizing Notes, which are Fixed Rate Notes for which
combined principal and interest payments are made in installments over the life
of each Note ("Amortizing Notes"). We apply payments on Amortizing Notes first
to pay interest due and then to reduce the unpaid principal amount. We will
include a table setting forth repayment information in the related pricing
supplement for an Amortizing Note.
FLOATING RATE NOTES
Each Floating Rate Note will have an interest rate basis or formula. We
may base that formula on:
- the CD Rate;
- the Commercial Paper Rate;
S-6
<PAGE>
- LIBOR;
- the Federal Funds Rate;
- the Prime Rate;
- the Treasury Rate;
- the CMT Rate; or
- any other rate, or combination of rates, specified in the
pricing supplement.
In the pricing supplement, we also will indicate any spread and/or
spread multiplier, which would be applied to the interest rate formula to
determine the interest rate. Any Floating Rate Note may have a maximum or
minimum interest rate limitation. In addition to any maximum interest rate
limitation, the interest rate on the Floating Rate Notes will in no event be
higher than the maximum rate permitted by New York law, as the same may be
modified by United States law for general application.
We will appoint a calculation agent to calculate interest rates on the
Floating Rate Notes. Unless we identify a different party in the pricing
supplement, the paying agent will be the calculation agent for each Note. In
most cases, a Floating Rate Note will have a specified "Interest Reset Date",
"Interest Determination Date" and "Calculation Date" associated with it. An
Interest Reset Date is the date on which the interest rate on the Note changes.
An Interest Determination Date is the date as of which the new interest rate is
determined for a particular Interest Reset Date, based on the interest rate
basis or formula as of that Interest Determination Date. The Calculation Date is
the date by which the calculation agent will determine the new interest rate
that became effective on a particular Interest Reset Date, based on the interest
rate basis or formula as of the applicable Interest Determination Date.
CHANGE OF INTEREST RATE
We may set the interest rate on each Floating Rate Note daily, weekly,
monthly, quarterly, semiannually, annually or on some other basis that we
specify (each, an "Interest Reset Date"). Unless otherwise stated in the pricing
supplement, the Interest Reset Date will be:
- for Notes with interest that resets daily, each Business Day;
- for Notes (other than Treasury Rate Notes) with interest that
resets weekly, Wednesday of each week;
- for Treasury Rate Notes with interest that resets weekly,
Tuesday of each week;
- for Notes with interest that resets monthly, the third
Wednesday of each month;
- for Notes with interest that resets quarterly, the third
Wednesday of each of the four months of each year indicated in
the applicable pricing supplement;
- for Notes with interest that resets semiannually, the third
Wednesday of each of the two months of each year indicated in
the applicable pricing supplement;
- for Notes with interest that resets annually, the third
Wednesday of the month of each year indicated in the
applicable pricing supplement; and
- for Notes which reset at intervals other than those described
above, the days specified in the applicable pricing
supplement.
The related pricing supplement will describe the initial interest rate
or interest rate formula on each Note. That rate is effective until the
following Interest Reset Date. Thereafter, the interest rate will be the rate
determined on each Interest Determination Date. Each time a new interest rate is
determined, it becomes effective on the subsequent Interest Reset Date. If any
Interest Reset Date is not a Business Day, then the Interest Reset Date is
postponed to the next
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Business Day, except, in the case of a LIBOR Note, if the next Business Day
is in the next calendar month, the Interest Reset Date is the immediately
preceding Business Day.
DATE INTEREST RATE IS DETERMINED
The Interest Determination Date for all Floating Rate Notes (except
LIBOR Notes and Treasury Rate Notes) will be the second Business Day before the
Interest Reset Date. The Interest Determination Date in the case of LIBOR Notes
will be the second London Business Day immediately preceding the applicable
Interest Reset Date.
The Interest Determination Date for Treasury Rate Notes will be the day
of the week in which the Interest Reset Date falls on which Treasury bills of
the same Index Maturity are normally auctioned. Treasury bills usually are sold
at auction on Monday of each week, unless that day is a legal holiday, in which
case the auction usually is held on Tuesday. Sometimes, the auction is held on
the preceding Friday. If an auction is held on the preceding Friday, that day
will be the Interest Determination Date relating to the Interest Reset Date
occurring in the next week. If an auction date falls on a day which would
otherwise be an Interest Reset Date, then the Interest Reset Date will instead
be the first Business Day immediately following the auction date.
CALCULATION DATE
Unless we specify a different date in a pricing supplement, the
"Calculation Date", if applicable, relating to an Interest Determination Date
will be the earlier of:
- the tenth calendar day after such Interest Determination Date
or, if that day is not a Business Day, the next succeeding
Business Day; or
- the Business Day immediately preceding the relevant Interest
Payment Date or the maturity date, as the case may be.
Upon the request of the beneficial holder of any Floating Rate Note,
the calculation agent will provide the interest rate then in effect and, if
different, the interest rate that will become effective on the next Interest
Reset Date for the Floating Rate Note.
PAYMENT OF INTEREST
Unless otherwise stated in the pricing supplement, we will pay
installments of interest on Floating Rate Notes as follows:
- for Notes with interest payable monthly, on the third
Wednesday of each month;
- for Notes with interest payable quarterly, on the third
Wednesday of each of the four months of each year indicated in
the applicable pricing supplement;
- for Notes with interest payable semiannually, on the third
Wednesday of each of the two months specified in the
applicable pricing supplement;
- for Notes with interest payable annually, on the third
Wednesday of the month specified in the applicable pricing
supplement (each of the above an "Interest Payment Date"); and
- at maturity, redemption or repurchase.
Each interest payment on a Floating Rate Note will include interest
accrued from, and including, the issue date or the last Interest Payment Date,
as the case may be, to, but excluding, the following Interest Payment Date or
the maturity or redemption date, as the case may be.
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We will pay installments of interest on Floating Rate Notes beginning
on the first Interest Payment Date after its issue date to the holders of record
on the corresponding Regular Record Date. If a Floating Rate Note is issued
between a Regular Record Date and the corresponding date which would otherwise
be the initial Interest Payment Date, we will make our first payment of
interest, if any, on the Interest Payment Date following the next Regular Record
Date. The "Regular Record Date", as referred to in this paragraph, is the close
of business on the fifteenth day (whether or not a Business Day), prior to an
Interest Payment Date. If an Interest Payment Date (but not the maturity date)
is not a Business Day, the Interest Payment Date will be deferred until the next
Business Day; however, in the case of LIBOR Notes, the Interest Payment Date
will be the preceding Business Day if the next Business Day is in the next
calendar month. If the maturity date of any Floating Rate Note is not a Business
Day, we will pay principal of and premium, if any, and interest for that Note on
the next Business Day, and no interest will accrue from and after the maturity
date.
We and the calculation agent will calculate accrued interest on a
Floating Rate Note by multiplying the principal amount of a Note by an accrued
interest factor. The accrued interest factor is the sum of the interest factors
calculated for each day in the period for which accrued interest is being
calculated. The interest factor for each day is computed by dividing the
interest rate in effect on that day by:
- 360, in the case of CD Rate Notes, Commercial Paper Rate
Notes, LIBOR Notes (except where a 360 day convention is not
customary, E.G., for LIBOR Notes denominated in pounds
sterling), Federal Funds Rate Notes and Prime Rate Notes;
- 365, in the case of other LIBOR Notes (E.G., LIBOR Notes
denominated in pounds sterling); or
- the actual number of days in the year, in the case of Treasury
Rate Notes and CMT Rate Notes.
All percentages resulting from any calculation will be rounded to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
or more of a percentage point rounded upward. For example, 9.876545% (or
.09876545) will be rounded to 9.87655% (or .0987655). Dollar amounts used in the
calculation will be rounded to the nearest cent (with one-half cent being
rounded upward).
CALCULATION OF INTEREST
In this section, we will explain how we and the calculation agent will
calculate the interest rate on different Floating Rate Notes.
CD RATE NOTES
The "CD Rate" for any Interest Determination Date is the rate on that
date for negotiable certificates of deposit having the Index Maturity described
in the related pricing supplement, as published in H.15 (519) prior to 3:00
P.M., New York City time, on the Calculation Date, for that Interest
Determination Date under the heading "CDs (secondary market)". The "Index
Maturity" is the period to maturity of the instrument or obligation with respect
to which the related interest rate basis or formulae will be calculated.
We and the calculation agent will observe the following procedures if
the CD Rate cannot be determined as described above:
- If the above rate is not published in H.15 (519) by 3:00 P.M.,
New York City time, on the Calculation Date, the CD Rate will
be the rate on that Interest Determination Date for negotiable
certificates of deposit of the Index Maturity described in the
pricing supplement as published in H.15 Daily Update, or such
other recognized electronic source used for the purpose of
displaying such rate, under the caption "CDs (secondary
market)".
- If that rate is not published in H.15 (519), H.15 Daily Update
or another recognized electronic source by 3:00 P.M., New York
City time, on the Calculation Date, then the calculation agent
will determine the CD Rate to be the average of the secondary
market offered rates as of 10:00 A.M., New York City time, on
that
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Interest Determination Date, quoted by three leading
non-bank dealers of negotiable U.S. dollar certificates of
deposit of major United States money market banks in The City
of New York of the highest credit standing (in the market for
negotiable certificates of deposit) for negotiable
certificates of deposit in a denomination of $5,000,000 with a
remaining maturity closest to the Index Maturity described in
the pricing supplement. The calculation agent, after
consultation with us, will select the three dealers referred
to above.
- If fewer than three dealers are quoting as mentioned above,
the CD Rate will remain the CD Rate then in effect on that
Interest Determination Date.
"H.15 (519)" means the weekly statistical release designated as such,
or any successor publication, published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15 (519), available
through the world-wide web site of the Board of Governors of the Federal Reserve
System at http://www.bog.frb.fed.us/releases/h15/update, or any successor site
or publication.
COMMERCIAL PAPER RATE NOTES
The "Commercial Paper Rate" for any Interest Determination Date is the
Money Market Yield of the rate on that date for commercial paper having the
Index Maturity described in the related pricing supplement, as published in H.15
(519) prior to 3:00 P.M., New York City time, on the Calculation Date for that
Interest Determination Date under the heading "Commercial Paper--Nonfinancial".
We and the calculation agent will observe the following procedures if the
Commercial Paper Rate cannot be determined as described above:
- If the above rate is not published in H.15 (519) by 3:00 P.M.,
New York City time, on the Calculation Date, the Commercial
Paper Rate will be the Money Market Yield of the rate on that
Interest Determination Date for commercial paper having the
Index Maturity described in the pricing supplement, as
published in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying such
rate, under the caption "Commercial Paper--Nonfinancial".
- If that rate is not published in H.15 (519), H.15 Daily Update
or another recognized electronic source by 3:00 P.M., New York
City time, on the Calculation Date, then the calculation agent
will determine the Commercial Paper Rate to be the Money
Market Yield of the average of the offered rates of three
leading dealers of U.S. dollar commercial paper in The City of
New York as of 11:00 A.M., New York City time, on that
Interest Determination Date for commercial paper having the
Index Maturity described in the pricing supplement placed for
an industrial issuer whose bond rating is "Aa", or the
equivalent, from a nationally recognized securities rating
organization. The calculation agent, after consultation with
us, will select the three dealers referred to above.
- If fewer than three dealers selected by the calculation agent
are quoting as mentioned above, the Commercial Paper Rate will
remain the Commercial Paper Rate then in effect on that
Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = D X 360 X 100
----------------
360 - (D X M)
Where "D" refers to the applicable per annum rate for commercial paper
quoted on a bank discount basis and expressed as a decimal, and "M" refers to
the actual number of days in the interest period for which interest is being
calculated.
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LIBOR NOTES
On each Interest Determination Date, the calculation agent will determine LIBOR
as follows:
- If the pricing supplement specifies "LIBOR Telerate", LIBOR on
any Interest Determination Date will be the rate for deposits
in the LIBOR Currency having the Index Maturity described in
the related pricing supplement on the applicable Interest
Reset Date, as such rate appears on the Designated LIBOR Page
as of 11:00 A.M., London time, on that Interest Determination
Date.
- If the pricing supplement specifies "LIBOR Reuters", LIBOR on
any Interest Determination Date will be the average of the
offered rates for deposits in the LIBOR Currency having the
Index Maturity described in the related pricing supplement on
the applicable Interest Reset Date, as such rates appear on
the Designated LIBOR Page as of 11:00 A.M., London time, on
that Interest Determination Date, if at least two such offered
rates appear on the Designated LIBOR Page.
If the pricing supplement does not specify "LIBOR Telerate" or "LIBOR
Reuters", the LIBOR Rate will be LIBOR Telerate. In addition, if the Designated
LIBOR Page by its terms provides only for a single rate, that single rate will
be used regardless of the foregoing provisions requiring more than one rate.
On any Interest Determination Date on which fewer than the required
number of applicable rates appear or no rate appears on the applicable
Designated LIBOR Page, the calculation agent will determine LIBOR as follows:
- The calculation agent will determine LIBOR on the basis of the
offered rates at which deposits in the LIBOR Currency having
the Index Maturity described in the related pricing supplement
on the Interest Determination Date and in a principal amount
that is representative of a single transaction in that market
at that time are offered by four major banks in the London
interbank market at approximately 11:00 A.M., London time, for
the period commencing on the Interest Reset Date to prime
banks in the London interbank market. The calculation agent
will select the four banks and request the principal London
office of each of those banks to provide a quotation of its
rate for deposits in the LIBOR Currency. If the banks provide
at least two quotations, LIBOR for that Interest Determination
Date will be the average of those quotations.
- If the banks provide fewer than two quotations as mentioned
above, LIBOR will be the average of the rates quoted by three
major banks in the Principal Financial Center selected by the
calculation agent at approximately 11:00 A.M. in the Principal
Financial Center, on the Interest Determination Date for loans
to leading European banks in the LIBOR Currency having the
Index Maturity designated in the pricing supplement for the
period commencing on the Interest Reset Date and in a
principal amount that is representative of a single
transaction in the LIBOR Currency in that market at that time.
The calculation agent will select the three banks referred to
above.
- If fewer than three banks selected by the calculation agent
are quoting as mentioned above, LIBOR will remain LIBOR then
in effect on that Interest Determination Date.
"LIBOR Currency" means the currency specified in the applicable pricing
supplement as to which LIBOR will be calculated or, if no such currency is
specified in the applicable pricing supplement, U.S. dollars.
"Designated LIBOR Page" means:
- if the pricing supplement specifies "LIBOR Reuters", the
display on the Reuters Monitor Money Rates Service (or any
successor service) on the page specified in such pricing
supplement (or any other page as may replace such page on such
service) for the purpose of displaying the London interbank
rates of major banks for the LIBOR Currency; or
- if the pricing supplement specifies "LIBOR Telerate" or it
specifies neither "LIBOR Reuters" nor "LIBOR Telerate" as the
method of calculating LIBOR, the display on Bridge Telerate,
Inc. or any successor service ("Telerate") on the page
specified in such pricing supplement (or any other page as may
replace such page on such service) for the purpose of
displaying the London interbank rates of major banks for the
LIBOR
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Currency.
FEDERAL FUNDS RATE NOTES
The "Federal Funds Rate" for any Interest Determination Date is the
rate on that date for Federal Funds, as published in H.15 (519) prior to 3:00
P.M., New York City time, on the Calculation Date for that Interest
Determination Date under the heading "Federal Funds (Effective)", as such rate
is displayed on Telerate on page 120 (or any other page as may replace such
page) ("Telerate Page 120").
We and the calculation agent will observe the following procedures if
the Federal Funds Rate cannot be determined as described above:
- If the above rate does not appear on Telerate Page 120 or is
not published in H.15 (519) by 3:00 P.M., New York City time,
on the Calculation Date, the Federal Funds Rate will be the
rate on that Interest Determination Date, as published in H.15
Daily Update, or such other recognized electronic source used
for the purpose of displaying such rate, under the caption
"Federal Funds (Effective)".
- If the above rate does not appear on Telerate Page 120 or is
not published in H.15 (519) or H.15 Daily Update or such other
recognized electronic source as described above by 3:00 P.M.,
New York City time, on the Calculation Date, then the
calculation agent will determine the Federal Funds Rate to be
the average of the rates for the last transaction in overnight
Federal Funds arranged by three leading dealers of Federal
Funds transactions in The City of New York as of 9:00 A.M.,
New York City time, on that Interest Determination Date. The
calculation agent, after consultation with us, will select the
three dealers referred to above.
- If fewer than three brokers selected by the calculation agent
are quoting as mentioned above, the Federal Funds Rate will be
the Federal Funds Rate then in effect on that Interest
Determination Date.
PRIME RATE NOTES
The "Prime Rate" for any Interest Determination Date is the prime rate
or base lending rate on that date, as published in H.15 (519) by 3:00 P.M., New
York City time, on the Calculation Date for that Interest Determination Date
under the heading "Bank Prime Loan" or, if not published by 3:00 P.M., New York
City time, on the related Calculation Date, the rate on such Interest
Determination Date as published in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying such rate, under the
caption "Bank Prime Loan".
We and the calculation agent will observe the following procedures if
the Prime Rate cannot be determined as described above:
- If the rate is not published in H.15 (519), H.15 Daily Update
or another recognized electronic source by 3:00 P.M., New York
City time, on the Calculation Date, then the calculation agent
will determine the Prime Rate to be the average of the rates
of interest publicly announced by each bank that appears on
the Reuters screen designated as "USPRIME1" as that bank's
prime rate or base lending rate as in effect for that Interest
Determination Date.
- If at least one rate but fewer than four rates appear on the
Reuters screen USPRIME1 on the Interest Determination Date,
then the Prime Rate will be the average of the prime rates or
base lending rates quoted (on the basis of the actual number
of days in the year divided by a 360-day year) as of the close
of business on the Interest Determination Date by three major
money center banks in The City of New York selected by the
calculation agent.
- If the banks selected by the calculation agent are not quoting
as mentioned above, the Prime Rate will remain the Prime Rate
then in effect on the Interest Determination Date.
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TREASURY RATE NOTES
The "Treasury Rate" for any Interest Determination Date is the rate set
at the auction of direct obligations of the United States ("Treasury bills")
having the Index Maturity described in the related pricing supplement under the
caption "INVESTMENT RATE" on the display on Telerate on page 56 (or any other
page as may replace such page) ("Telerate Page 56") or page 57 (or any other
page as may replace such page) ("Telerate Page 57") by 3:00 P.M., New York City
time, on the Calculation Date for that Interest Determination Date.
We and the calculation agent will observe the following procedures if
the Treasury Rate cannot be determined as described above:
- If the rate is not published by 3:00 P.M., New York City time,
on the Calculation Date, the Treasury Rate will be the auction
rate of such Treasury bills (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 published in H.15 Daily Update,
or such recognized electronic source used for the purpose of
displaying such rate, under the caption "U.S. Government
securities Treasury bills/Auction high".
- If the rate is not published by 3:00 P.M., New York City time,
on the Calculation Date and cannot be determined as described
in the immediately preceding paragraph, the Treasury Rate will
be the average auction rate of such Treasury bills (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 on the Calculation Date.
- If the results of the most recent auction of Treasury bills
having the Index Maturity described in the pricing supplement
are not published or announced as described above by 3:00
P.M., New York City time, on the Calculation Date, or if no
auction is held on the Interest Determination Date, then the
Treasury Rate will be the 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) on such Interest Determination Date
of Treasury bills having the Index Maturity specified in the
applicable pricing supplement as published in H.15 (519) under
the caption "U.S. Government securities/Treasury bills/
Secondary market" or, if not published by 3:00 P.M., New York
City time, on the related Calculation Date, the rate on such
Interest Determination Date of such Treasury bills as
published in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying such
rate, under the caption "U.S. Government securities/Treasury
bills/Secondary market".
- If such rate is not yet published in H.15 (519), H.15 Daily
Update or another recognized electronic source by 3:00 P.M.,
New York City time, on the related Calculation Date, then the
calculation agent will determine the Treasury Rate to be the
Bond Equivalent Yield of the average of the secondary market
bid rates, as of approximately 3:30 P.M., New York City time,
on the Interest Determination Date of three leading primary
U.S. government securities dealers (which may include the
Agent or its affiliates) for the issue of Treasury bills with
a remaining maturity closest to the Index Maturity described
in the related pricing supplement. The calculation agent will
select the three dealers referred to above.
- If fewer than three dealers selected by the calculation agent
are quoting as mentioned above, the Treasury Rate will remain
the Treasury Rate then in effect on that Interest
Determination Date.
"Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
Bond Equivalent Yield = D X N X 100
------------
360 - (D X M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis. "N" refers to 365 or 366 days, as applicable, and "M"
refers to the actual number of days in the applicable Interest Reset Period.
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<PAGE>
CMT RATE NOTES
The "CMT Rate" for any Interest Determination Date is the rate
displayed on the Designated CMT Telerate Page by 3:00 P.M., New York City time,
on the Calculation Date for that Interest Determination Date 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
described in the related pricing supplement for:
- if the Designated CMT Telerate Page is 7051 or any successor
page, the rate on such Interest Determination Date; or
- if the Designated CMT Telerate Page is 7052 or any successor
page, the weekly or monthly average for the week or the month,
as specified in the related pricing supplement, ended
immediately preceding the week or the month in which the
related Interest Determination Date occurs.
The following procedures will be used if the CMT Rate cannot be
determined as described above:
- If the relevant page does not display the rate by 3:00 P.M.,
New York City time, on the Calculation Date, then the CMT Rate
will be the Treasury constant maturity rate for the Designated
CMT Maturity Index, as published in H.15 (519).
- If that rate is not published in H.15 (519) by 3:00 P.M., New
York City time, on the Calculation Date, then the CMT Rate
will be the Treasury constant maturity rate (or other United
States Treasury rate) for the Designated CMT Maturity Index
for the Interest Determination 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 (with our concurrence) to be
comparable to the rate formerly displayed on the Designated
CMT Telerate Page and published in H.15 (519).
- If that information is not provided by 3:00 P.M., New York
City time, on the Calculation Date, then the calculation agent
will determine the CMT Rate to be a yield to maturity based on
the arithmetic average of the secondary market closing offered
rates, as of approximately 3:30 P.M., New York City time, on
the 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. The calculation agent will select five
Reference Dealers and will eliminate the highest quotation
(or, in the event of equality, one of the highest quotations)
and the lowest quotation (or, in the event of equality, one of
the lowest quotations), for the most recently issued, direct,
noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity approximately
equivalent to that of the Designated CMT Maturity Index, and a
remaining term to maturity not less than that of the
Designated CMT Maturity Index minus one year.
- If the calculation agent cannot obtain three Treasury Note
quotations, the calculation agent will determine the CMT Rate
to be a yield to maturity based on the arithmetic average of
the secondary market offered rates as of approximately 3:30
P.M., New York City time, on the Interest Determination Date
of three Reference Dealers in The City of New York (selected
using the same method described above) for Treasury Notes with
an original maturity of the number of years that is the next
highest to that of the Designated CMT Maturity Index, and with
a remaining term to maturity closest to that of the Designated
CMT Maturity Index, which has an outstanding balance of at
least $100,000,000. If two such Treasury Notes with an
original maturity have remaining terms to maturity equally
close to that of the Designated CMT Maturity Index, the
calculation agent will obtain quotations for the Treasury Note
with the shorter remaining term to maturity.
- If three or four (but not five) Reference Dealers are quoting
as mentioned above, then the CMT Rate will be based on the
arithmetic average of the offered rates obtained, and neither
the highest nor the lowest of those quotations will be
eliminated.
- If fewer than three Reference Dealers selected by the
calculation agent are quoting as mentioned above, the CMT Rate
will remain the CMT Rate then in effect on the Interest
Determination Date.
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"Designated CMT Telerate Page" means the display on Telerate, on the
page specified in the applicable pricing supplement (or any other page as may
replace such page) for the purpose of displaying Treasury Constant Maturities as
reported in H.15 (519) or, if no such page is specified in the applicable
pricing supplement, page 7052 (or any other page as may replace such page).
"Designated CMT Maturity Index" means the original period to maturity
of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable pricing supplement with respect to which the CMT
Rate will be calculated or, if no such maturity is specified in the applicable
pricing supplement, two years.
INDEXED NOTES
We may issue Notes for which the amount of interest or principal that
you will receive will not be known on your date of purchase. We will specify the
formula for computation of principal and premium, if any, and interest payments
for these types of Notes, which we call "Indexed Notes", by reference to
securities, financial or non-financial indices, currencies, commodities,
interest rates, or composites or baskets of any or all of the above. Examples of
indexed items that we may use include a published stock index, the common stock
price of a publicly traded company, the value of the U.S. dollar versus the
Japanese yen, or the price in a particular market of a particular commodity.
If you purchase an Indexed Note, you may receive a principal amount at
maturity that is greater than or less than the Note's face amount, and an
interest rate that is greater than or less than the interest rate that you would
have earned if you had instead purchased a conventional debt security issued by
us at the same time with the same maturity. The amount of principal and premium,
if any, and interest that you will receive will depend on the structure of the
Indexed Note and the level of the specified indexed item throughout the term of
the Indexed Note and at maturity. Specific information pertaining to the method
of determining the interest payments, principal amounts and/or premium amounts,
as well as additional risk factors unique to the Indexed Note, certain
historical information for the specified indexed item and certain additional
United States federal tax considerations, will be described in the pricing
supplement.
RENEWABLE NOTES
We may issue renewable Notes ("Renewable Notes"), which are Notes that
will automatically renew at their maturity date unless the holder of the
Renewable Note elects to terminate the automatic extension feature by giving
notice in the manner described in the related pricing supplement.
The holder of the Renewable Note must give notice of termination at
least 15, but not more than 30 days, prior to the Renewal Date. The holder of a
Renewable Note may terminate the automatic extension for less than all of their
Renewable Notes only if the terms of the Note specifically permit partial
termination. An election to terminate the automatic extension of any portion of
the Renewable Note is irrevocable and will be binding on the holder of the Note.
If the holder elects to terminate the automatic extension of the maturity of the
Note, the holder will become entitled to the principal and interest accrued up
to the Renewal Date. The related pricing supplement will identify a final
maturity date beyond which the maturity date cannot be renewed.
If a Note is represented by a Global Security, DTC or its nominee will
be the holder of the Note and, therefore, will be the only entity that can
exercise a right to terminate the automatic extension of a Note. In order to
ensure that DTC or its nominee will exercise a right to terminate the automatic
extension provisions of a particular Note, the beneficial owner of the Note must
instruct the broker or other DTC participant through which it holds an interest
in the Note to notify DTC of its desire to terminate the automatic extension of
the Note. Different firms have different cutoff times for accepting instructions
from their customers, and accordingly, each beneficial owner should consult the
broker or other participant through which it holds an interest in a Renewable
Note to ascertain the cutoff time by which an instruction must be given for
delivery of timely notice to DTC or its nominee.
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EXTENDIBLE NOTES
We may issue Notes whose stated maturity date may be extended at our
option (an "Extendible Note") for one or more whole year periods (each an
"Extension Period"), up to but not beyond a final maturity date described in the
related pricing supplement (but not to exceed 30 years from the date of issue).
We may exercise our option to extend the Extendible Note by notifying
the Trustee (or any duly appointed paying agent) at least 50 but not more than
60 days prior to the then effective maturity date. If we elect to extend the
Extendible Note, the Trustee (or paying agent) will mail, at least 40 days prior
to the maturity date, to the registered holder of the Extendible Note a notice
(an "Extension Notice") informing the holder of our election, the new maturity
date and any updated terms. Upon the mailing of the Extension Notice, the
maturity of such Note will be extended automatically as set forth in the
Extension Notice.
However, we may, not later than 20 days prior to the maturity date of
an Extendible Note (or, if such date is not a Business Day, on the immediately
succeeding Business Day), at our option, 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 mailing or causing
the Trustee (or paying agent) to mail notice of such higher interest rate or
higher spread and/or spread multiplier to the holder of the Extendible Note. The
notice will be irrevocable.
If we elect to extend the maturity of an Extendible Note, the holder of
the Note will have the option to instead elect repayment of the Note by us on
the then effective maturity date. In order for an Extendible Note to be so
repaid on the maturity date, we must receive, at least 15 days but not more than
30 days prior to the maturity date:
- the Note with the form "Option to Elect Repayment" on the
reverse of the Note duly completed; or
- a facsimile transmission, telex or letter 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, together with the
duly completed form entitled "Option to Elect Repayment" on
the reverse of the Note, will be received by the Trustee (or
paying agent) not later than the fifth Business Day after the
date of the facsimile transmission, telex or letter; PROVIDED,
HOWEVER, that the facsimile transmission, telex or letter will
only be effective if the Trustee or paying agent receives the
Note and form duly completed by that fifth Business Day.
A holder of an Extendible Note may exercise this option for less than the
aggregate principal amount of the Note then outstanding if the principal amount
of the Note remaining outstanding after repayment is an authorized denomination.
If a Note is represented by a Global Security, DTC or its nominee will
be the holder of that Note and, therefore, will be the only entity that can
exercise a right to repayment. To ensure that DTC or its nominee timely
exercises a right to repayment with respect to a particular Note, the beneficial
owner of that Note must instruct the broker or other participant through which
it holds an interest in the Note to notify DTC of its desire to exercise a right
of repayment. Different firms have different cutoff times for accepting
instructions from their customers and, accordingly, each beneficial owner should
consult the broker or other participant through which it holds an interest in a
Note to determine the cutoff time by which an instruction must be given for
timely notice to be delivered to DTC or its nominee.
OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE
We will indicate in the pricing supplement for a Note whether we will
have the option to redeem the Note before the stated maturity and the price or
prices at which, and date or dates on which, redemption may occur. If we are
allowed to redeem a Note, we may exercise the option by notifying the Trustee at
least 60 days prior to the redemption date. At least 30 but not more than 60
days before the redemption date, the Trustee will mail notice or cause the
paying agent to
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mail notice of redemption to the holders. If we redeem a Note in part, we
will issue a new Note or Notes for the unredeemed portion.
We also will indicate in the pricing supplement for a Note whether you
will have the option to elect repayment by us prior to the stated maturity and
the price or prices at which, and the date or dates on which, repayment may
occur.
For a Note to be repaid at your option, the paying agent must receive,
at least 30 but not more than 60 days prior to an optional repayment date, such
Note with the form entitled "Option to Elect Repayment" on the reverse of the
Note duly completed. If you present a Note for repayment, such act will be
irrevocable. You may exercise the repayment option for less than the entire
principal of the Note, provided the remaining principal outstanding is an
authorized denomination. If you elect partial repayment, your Note will be
canceled, and we will issue a new Note or Notes for the remaining amount.
DTC or its nominee will be the holder of each Global Security and will
be the only party that can exercise a right of repayment. If you are a
beneficial owner of a Global Security and you want to exercise your right of
repayment, you must instruct your broker or indirect participant through which
you hold an interest in the Note to notify DTC. You should consult your broker
or such indirect participant to discuss the appropriate cutoff times and any
other requirements for giving this instruction. The giving of any such
instruction will be irrevocable.
If a Note is an OID Note (other than an Indexed Note), the amount
payable in the event of redemption or repayment prior to its stated maturity
will be the amortized face amount on the redemption or repayment date, as the
case may be. The amortized face amount of an OID Note will be equal to:
- the issue price, plus
- that portion of the difference between the issue price and the
principal amount of the Note that has accrued at the yield to
maturity described in the pricing supplement (computed in
accordance with generally accepted U.S. bond yield computation
principles) by the redemption or repayment date.
However, in no case will the amortized face amount of an OID Note exceed its
principal amount.
We may purchase Notes at any time and at any price, in the open market
or otherwise. We may hold, resell or surrender for cancellation any Notes that
we purchase.
SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
GENERAL
Unless we indicate otherwise in the applicable pricing supplement, we
will denominate the Notes in U.S. dollars, we will pay the principal of and
premium, if any, and interest on the Notes in U.S. dollars, and you must pay the
purchase price of the Notes in immediately available U.S. dollar funds. If any
of the Notes ("Foreign Currency Notes") are to be denominated or payable in a
currency other than U.S. dollars, the following provisions will apply in
addition to, and, to the extent inconsistent therewith, will replace, the
description of general terms and provisions of Notes set forth in the attached
prospectus and elsewhere in this prospectus supplement.
A pricing supplement with respect to any Foreign Currency Note (which
may include information with respect to applicable current foreign exchange
controls) is a part of this prospectus and prospectus supplement. If we furnish
you any information concerning exchange rates, we do so as a matter of
information only, and you should not regard it as indicative of the range of or
trends in fluctuations in currency exchange rates that may occur in the future.
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CURRENCIES
We may offer Foreign Currency Notes denominated and/or payable in a
specified currency or specified currencies. Unless we indicate otherwise in the
applicable pricing supplement, you are required to pay for Foreign Currency
Notes in the specified currency. At the present time, there are limited
facilities in the United States for conversion of U.S. dollars into specified
currencies and vice versa, and banks may elect not to offer non-U.S. dollar
checking or savings account facilities in the United States. However, at your
request, on or prior to the third Business Day preceding the date of delivery of
the Foreign Currency Notes, or by such other day as determined by the Agent who
presents such offer to purchase Foreign Currency Notes to us, such Agent may be
prepared to arrange for the conversion of U.S. dollars into the applicable
specified currency set forth in the applicable pricing supplement to enable the
purchasers to pay for the Foreign Currency Notes. Each such conversion will be
made by the Agent or Agents on terms and subject to conditions, limitations and
charges as the Agents may from time to time establish in accordance with their
regular foreign exchange practices. If you purchase Foreign Currency Notes, you
will bear all costs of exchange which are related to your purchase.
The applicable pricing supplement will set forth information about the
specified currency in which a particular Foreign Currency Note is denominated
and/or payable, including historical exchange rates and a description of the
currency and any exchange controls and, in the case of a currency unit, will
include a description thereof and a description of provisions for payment in the
event the currency unit is no longer used for the purposes for which it was
established.
PAYMENT OF PRINCIPAL AND INTEREST
If you are a holder of Foreign Currency Notes, we will pay you in U.S.
dollars converted from the specified currency unless you elect to be paid in the
specified currency or unless the applicable pricing supplement provides
otherwise. Currently, banks do not generally offer non-U.S. dollar denominated
account facilities in their offices in the United States, although they are
permitted to do so for most foreign currencies.
If you hold Foreign Currency Notes, we will base any U.S. dollar amount
that you receive on the highest bid quotation in The City of New York received
by the exchange rate agent that we have specified in the applicable pricing
supplement at approximately 11:00 A.M., New York City time, on the second
Business Day preceding the applicable payment date from three recognized foreign
exchange dealers (one of whom may be the exchange rate agent) for the purchase
by the quoting dealer of the specified currency for U.S. dollars for settlement
on such payment date in the aggregate amount of the specified currency payable
to all holders of Foreign Currency Notes scheduled to receive U.S. dollar
payments and at which the applicable dealer commits to execute a contract. The
exchange rate agent will select, and we may approve, the recognized foreign
dealers who provide the bid quotations. If three bid quotations are not
available, we will make payments in the specified currency. All currency
exchange costs relating to the payment will be borne by the holders of the
Foreign Currency Note by deductions from such payments.
Unless we indicate otherwise in the applicable pricing supplement, as a
holder of Foreign Currency Notes, you may elect to receive payment of the
principal of and premium, if any, and interest on the Foreign Currency Notes in
the specified currency by transmitting a written request for such payment to the
corporate trust office of the Trustee in The City of New York on or prior to the
Regular Record Date or at least 15 calendar days prior to maturity, as the case
may be. You may make this request in writing (mailed or hand delivered) or by
facsimile transmission or telex. As a holder of a Foreign Currency Note, you may
elect to receive payment in the specified currency for all principal and
interest payments and need not file a separate election for each payment. Your
election will remain in effect until revoked by written notice to the Trustee,
but written notice of any such revocation must be received by the Trustee on or
prior to the Regular Record Date or at least 15 calendar days prior to the
maturity date, as the case may be.
If a Note is represented by a Global Security, DTC or its nominee will
be the holder of the Note and will be entitled to all payments on the Note.
Although DTC can hold Notes denominated in foreign currencies, DTC currently
will only accept payments in U.S. dollars. As a result, if the specified
currency of a Note is other than U.S. dollars, a beneficial owner of the related
Global Security who elects to receive payments in the specified currency must
notify the participant through which it owns its interest on or prior to the
applicable Record Date or at least 15 calendar days prior to the maturity date,
as the case may be, of such beneficial owner's election. The participant must
notify DTC of such election on or prior to the third Business Day after such
Record Date or at least 12 calendar days prior to the maturity
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date, as the case may be, and DTC will notify the Trustee of such election on
or prior to the fifth Business Day after such Record Date or at least ten
calendar days prior to the maturity date, as the case may be. If the
participant receives complete instructions from the beneficial owner that are
forwarded by the participant to DTC, and by DTC to the Trustee, on or prior
to such dates, then the beneficial owner will receive payments in the
specified currency. See "Description of Debt Securities-Book-Entry
Securities".
We will pay principal and premium, if any, and interest on Foreign
Currency Notes to be paid in U.S. dollars in the manner specified in the
attached prospectus and this prospectus supplement with respect to Notes
denominated in U.S. dollars. See "Description of Notes-General". We will pay
interest on Foreign Currency Notes to be paid in the specified currency by wire
transfer to a bank account maintained by the holder in the country of the
specified currency or, in the case of euros, a bank account maintained by the
holder in any of the Participating States, or, if appropriate wire transfer
instructions are not received by the Trustee on or prior to the applicable
Regular Record Date, by check mailed on the relevant Interest Payment Date, made
payable to the persons entitled thereto, to the address of such holders as they
appear in the Security Register. The principal of Foreign Currency Notes,
together with interest accrued and unpaid thereon, due at the maturity date will
be paid in immediately available funds upon surrender of such Notes at the
corporate trust office of the Trustee in The City of New York, or, at our
option, by wire transfer to such bank account.
PAYMENT CURRENCY
If a specified currency is not available for the payment of principal
and premium, if any, or interest with respect to a Foreign Currency Note due to
the imposition of exchange controls or other circumstances beyond our control,
we will be entitled to satisfy our obligations to holders of Foreign Currency
Notes by making such payment in U.S. dollars on the basis of the noon buying
rate in The City of New York for cable transfers of the specified currency as
certified for customs purposes (or, if not so certified, as otherwise
determined) by the Federal Reserve Bank of New York (the "Market Exchange Rate")
as computed by the exchange rate agent on the second Business Day prior to such
payment or, if not then available, on the basis of the most recently available
Market Exchange Rate or as otherwise indicated in an applicable pricing
supplement. Any payment made under such circumstances in U.S. dollars where the
required payment is in a specified currency will not constitute a default under
the Indenture with respect to the Notes.
All determinations referred to above which are made by the exchange
rate agent will be at its sole discretion and will, in the absence of clear
error, be conclusive for all purposes and binding on the holders of the Foreign
Currency Notes.
AS INDICATED ABOVE, IF YOU INVEST IN FOREIGN CURRENCY NOTES OR CURRENCY
INDEXED NOTES, YOUR INVESTMENT WILL BE SUBJECT TO SUBSTANTIAL RISKS, THE EXTENT
AND NATURE OF WHICH CHANGE CONTINUOUSLY. AS WITH ANY INVESTMENT THAT YOU MAKE IN
A SECURITY, YOU SHOULD CONSULT YOUR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE
RISKS ENTAILED IN AN INVESTMENT IN FOREIGN CURRENCY NOTES OR CURRENCY INDEXED
NOTES. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR YOU IF YOU ARE
UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY MATTERS.
UNITED STATES TAXATION
The following is a summary of the material U.S. federal income tax
consequences of the purchase, ownership, and disposition of a Note, subject to
the limitations stated below. Such opinion is based on the Internal Revenue Code
of 1986, as amended (the "Code"), Treasury Regulations (including proposed
Regulations and temporary Regulations) promulgated thereunder, rulings, official
pronouncements and judicial decisions, all as in effect on the date of this
prospectus supplement and all of which are subject to change, possibly with
retroactive effect, or to different interpretations. This summary provides
general information only and does not address all of the federal income tax
consequences that may be applicable to a holder of a Note. It does not address
all of the tax consequences that may be relevant to certain types of holders
subject to special treatment under the federal income tax law, such as
individual retirement and other tax-deferred accounts, dealers in securities or
currencies, life insurance companies, tax-exempt organizations, persons holding
Notes as a hedge or hedged against currency risk, as a position in a straddle
for tax purposes, as part of a "synthetic security" or other integrated
investment comprised of a Note and one or more other investments, United States
persons (as defined below) whose functional currency is other than the U.S.
dollar or to certain
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U.S. expatriates. It also does not discuss the tax consequences to subsequent
purchasers of Notes and is limited to investors who hold Notes as a capital
asset. The federal income tax consequences of purchasing, holding or
disposing of a particular Note will depend, in part, on the particular terms
of such Note as set forth in the applicable pricing supplement. The federal
income tax consequences of purchasing, holding or disposing of certain
Floating Rate Notes, Foreign Currency Notes (other than Single Foreign
Currency Notes, as defined below), Amortizing Notes, Floating Rate/Fixed Rate
Notes, Indexed Notes, Renewable Notes and exchangeable or convertible Debt
Securities will be set out in the applicable pricing supplement. Persons
considering the purchase of Notes and making any election under the Code or
the Treasury Regulations with respect to such Notes should consult their own
tax advisors concerning the application of the U.S. federal income tax law to
their particular situations as well as any tax consequences arising under the
law of any state, local or foreign tax jurisdiction, subject to the
limitations stated below.
"Single Foreign Currency Note" means a Note on which all payments a
holder is entitled to receive are denominated in or determined by reference to
the value of a single Foreign Currency. "Foreign Currency" means a currency,
other than a hyperinflationary currency, as defined in the Code, or the U.S.
dollar.
UNITED STATES PERSONS
For purposes of the following discussion, "United States person" means
an individual who is a citizen or resident of the United States, an estate
subject to U.S. federal income taxation without regard to the source of its
income, a corporation, partnership or other business entity created or organized
in or under the laws of the United States, any state thereof or the District of
Columbia, or a trust if both:
- a court within the United States is able to exercise primary
supervision over the administration of the trust; and
- one or more United States persons have the authority to
control all substantial decisions of the trust.
The following discussion pertains only to a holder of a Note who is a beneficial
owner of such Note and who is a United States person.
PAYMENTS OF INTEREST ON NOTES THAT ARE NOT OID NOTES
Except as discussed below under "OID Notes" and "Short-Term Notes",
payments of interest on a Note will be taxable to a holder as ordinary interest
income at the time it is accrued or received in accordance with the holder's
method of tax accounting. If the payment is denominated in or determined with
reference to a single Foreign Currency, the amount required to be included in
income by a cash basis holder will be the U.S. dollar value of the amount paid
(determined on the basis of the "spot rate" on the date such payment is
received) regardless of whether the payment is in fact converted into U.S.
dollars. No exchange gain or loss will be recognized with respect to the receipt
of such payment.
Except in the case of a Spot Rate Convention Election (as defined
below), a holder of a Single Foreign Currency Note who uses the accrual method
of accounting or is otherwise required to accrue interest income prior to
receipt will be required to include in income for each taxable year the U.S.
dollar value of the interest that has accrued during such year, determined by
translating such interest at the average rate of exchange for the period or
periods during which such interest has accrued. The average rate of exchange for
an interest accrual period (or partial period) is the simple average of the spot
exchange rates for each Business Day of such period (or such other average that
is reasonably derived and consistently applied by the holder). Upon receipt of
an interest payment, such holder will recognize ordinary gain or loss in an
amount equal to the difference between the U.S. dollar value of the Foreign
Currency received (determined on the basis of the "spot rate" on the date such
payment is received) or, in the case of interest received in U.S. dollars rather
than in Foreign Currency, the amount so received and the U.S. dollar value of
the interest income that such holder has previously included in income with
respect to such payment. Any such gain or loss generally will not be treated as
interest income or expense, except to the extent provided by administrative
pronouncements of the Internal Revenue Service (the "Service").
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A holder may elect (a "Spot Rate Convention Election") to translate
accrued interest into U.S. dollars at the "spot rate" on the last day of an
accrual period for the interest, or, in the case of an accrual period that spans
two taxable years, at the "spot rate" on the last day of the taxable year.
Additionally, if a payment of interest is received within five Business Days of
the last day of the accrual period, an electing holder may instead translate
such accrued interest into U.S. dollars at the "spot rate" on the day of
receipt. Any such election will apply to all debt instruments held by the United
States person at the beginning of the first taxable year to which the election
applies or thereafter acquired by the United States person and cannot be revoked
without the consent of the Service.
For purposes of this discussion, the "spot rate" generally means a rate
that reflects a fair market rate of exchange available to the public for
currency under a "spot contract" in a free market and involving representative
amounts. A "spot contract" is a contract to buy or sell a currency on or before
two Business Days following the date of the execution of the contract. If such a
spot rate cannot be demonstrated, the Service has the authority to determine the
spot rate.
PURCHASE, SALE, EXCHANGE OR RETIREMENT OF NOTES
A holder's tax basis in a Note generally will be the U.S. dollar cost
of the Note to such holder (which, in the case of a Note purchased with Foreign
Currency, will be determined by translating the purchase price at the spot rate
on the date of purchase or, in the case of a Note that is traded on an
established securities market, on the settlement date if the holder is a cash
basis taxpayer or an accrual basis taxpayer that so elects), increased by any
original issue discount, market discount or acquisition discount (all as defined
below) previously included in the holder's gross income (as described below),and
reduced by any amortized premium (as described below) and any principal payments
and payments of stated interest that are not payments of qualified stated
interest (as defined below).
Upon the sale, exchange or retirement of a Note, a holder generally
will recognize gain or loss equal to the difference between the amount realized
on the sale, exchange or retirement (or the U.S. dollar value of the amount
realized in a Foreign Currency at the spot rate on the date of the sale,
exchange or retirement or, in the case of a Note that is traded on an
established securities market, on the settlement date if the holder is a cash
basis taxpayer or an accrual basis taxpayer that so elects), except to the
extent such amount is attributable to accrued interest, and the holder's tax
basis in the Note. Except with respect to:
- gains or losses attributable to changes in exchange rates (as
described in the next paragraph);
- gains attributable to market discount (as described below);
and
- gain on the disposition of a Short-Term Note (as described
below);
gain or loss so recognized will be capital gain or loss and will be long-term
capital gain or loss, if, at the time of the sale, exchange or retirement, the
Note was held for more than one year. Under current law, long-term capital gains
of individuals are, under certain circumstances, taxed at lower rates than items
of ordinary income. The deductibility of capital losses is subject to certain
limitations.
Gain or loss recognized by a holder on the sale, exchange or retirement
of a Single Foreign Currency Note that is attributable to changes in exchange
rates will be treated as ordinary income or loss and generally will not be
treated as interest income or expense except to the extent provided by
administrative pronouncements of the Service. Gain or loss attributable to
changes in exchange rates is recognized on the sale, exchange or retirement of a
Single Foreign Currency Note only to the extent of the total gain or loss
recognized on such sale, exchange or retirement.
EXCHANGE OF FOREIGN CURRENCY
A holder's tax basis in Foreign Currency purchased by the holder
generally will be the U.S. dollar value thereof at the spot rate on the date
such Foreign Currency is purchased. A holder's tax basis in Foreign Currency
received as interest on, or on the sale, exchange or retirement of, a Single
Foreign Currency Note will be the U.S. dollar value thereof at the spot rate at
the time such Foreign Currency is received. The amount of gain or loss
recognized by a holder on a sale, exchange or other disposition of Foreign
Currency will be equal to the difference between:
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- the amount of U.S. dollars, the U.S. dollar value at the spot
rate of the Foreign Currency, or the fair market value in U.S.
dollars of the property received by the holder in the sale,
exchange or other disposition; and
- the holder's tax basis in the Foreign Currency.
Accordingly, a holder that purchases a Note with Foreign Currency will
recognize gain or loss in an amount equal to the difference, if any, between
such holder's tax basis in the Foreign Currency and the U.S. dollar value at the
spot rate of the Foreign Currency on the date of purchase. Generally, any such
gain or loss will be ordinary income or loss and will not be treated as interest
income or expense, except to the extent provided by administrative
pronouncements of the Service.
SUBSEQUENT INTEREST PERIODS AND EXTENSION OF MATURITY
If so specified in the pricing supplement relating to a Note, we may
have the option:
- to reset the interest rate, in the case of a Fixed Rate Note,
or to reset the spread, the spread multiplier or other
formulae by which the interest rate basis is adjusted, in the
case of a Floating Rate Note; and/or
- to extend the maturity of such Note.
See "Description of Notes - Interest and Interest Rates" and "Description of
Notes - Extendible Notes". The treatment of a holder of Notes with respect to
which such an option has been exercised who does not elect to have us repay such
Notes will depend on the terms established for such Notes by us pursuant to the
exercise of such option (the "revised terms"). Depending on the particular
circumstances, such holder may be treated as having surrendered such Notes for
new Notes with the revised terms in either a taxable exchange or a
recapitalization qualifying for nonrecognition of gain or loss.
OID NOTES
The following summary is a general description of U.S. federal income
tax consequences to holders of Notes issued with original issue discount ("OID
Notes") and is based on the provisions of the Code as in effect on the date
hereof and on certain Treasury Regulations promulgated thereunder relating to
original issue discount (the "OID Regulations").
For U.S. federal income tax purposes, original issue discount is the
excess of the stated redemption price at maturity of each OID Note over its
issue price, if such excess is greater than or equal to a de minimis amount
(generally 1/4 of 1% of the OID Note's stated redemption price at maturity
multiplied by the number of complete years to maturity from the issue date). The
issue price of an issue of OID Notes that are issued for cash will be equal to
the first price at which a substantial amount of such Notes are sold for money.
For this purpose, sales to bond houses, brokers or similar persons or
organizations acting in the capacity of underwriters, placement agents or
wholesalers are ignored. The stated redemption price at maturity of an OID Note
is the sum of all payments provided by the OID Note other than payments of
qualified stated interest. Under the OID Regulations, "qualified stated
interest" includes stated interest that is unconditionally payable in cash or
property (other than debt instruments of the issuer) at least annually at a
single fixed rate (with certain exceptions for lower rates paid during some
periods) or certain variable rates as described below. Interest is payable at a
single fixed rate only if the rate appropriately takes into account the length
of the interval between payments. Except as described below with respect to
Short-Term Notes, a holder of an OID Note will be required to include original
issue discount in taxable income as it accrues before the receipt of cash
attributable to such income, regardless of such holder's method of accounting
for tax purposes. Special rules for Variable Rate Notes are described below
under "- Variable Rate Notes".
The amount of original issue discount includible in taxable income by
the initial holder of an OID Note is the sum of the daily portions of original
issue discount with respect to such Note for each day during the taxable year on
which such holder held such Note ("accrued original issue discount"). Generally,
the daily portion of the original issue discount is determined by allocating to
each day in any accrual period a ratable portion of the original issue discount
allocable to such accrual period. Under the OID Regulations, the "accrual
periods" for an OID Note may be selected by
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each holder, may be of any length, and may vary in length over the term of an
OID Note, provided that each accrual period is no longer than one year and
each scheduled payment of principal or interest occurs either on the first
day or final day of an accrual period. The amount of original issue discount
allocable to each accrual period is equal to the excess, if any, of:
- the product of an OID 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 such accrual
period) over
- the amount of qualified stated interest, if any, payable on
such OID Note and allocable to such accrual period.
The "adjusted issue price" of an OID Note at the beginning of any accrual period
generally is the sum of the issue price of an OID Note plus the accrued original
issue discount allocable for all prior accrual periods, reduced by any prior
payment on the OID Note other than a payment of qualified stated interest. The
OID Regulations generally allow any reasonable method to be used in determining
the amount of original issue discount allocable to a short initial accrual
period (if all other accrual periods are of equal length other than a short
final accrual period) and require that the amount of original issue discount
allocable to the final accrual period equal the excess of the amount payable at
the maturity of the OID Note (other than any payment of qualified stated
interest) over the OID Note's adjusted issue price as of the beginning of the
final accrual period. Under these rules, a holder of an OID Note generally will
have to include in taxable income increasingly greater amounts of original issue
discount in successive accrual periods.
Certain of the Notes (i) may be redeemable at the option of McCormick
prior to their stated maturity (a "call option") and/or (ii) may be repayable at
the option of the holder prior to their stated maturity (a "put option"). For
purposes of accruing original issue discount, a call option will be presumed to
be exercised if, by utilizing any date on which the Note may be redeemed or
repaid as its maturity date and the amount payable on that date in accordance
with the terms of the Note (the "redemption price") as its stated redemption
price at maturity, the yield on the Note is (i) in the case of a call option
exercisable by McCormick, lower than its yield to maturity, or, (ii) in the case
of a put option exercisable by a holder, is greater than its yield to maturity.
If such option is not in fact exercised when presumed to be, solely for the
purposes of accruing original issue discount, the Note will be treated as if it
were redeemed, and a new Note issued, on the presumed exercise date for an
amount equal to its adjusted issue price on that date. Investors intending to
purchase Notes with such features should consult their own tax advisors, since
the original issue discount consequences will depend, in part, on the particular
terms and features of the purchased Notes.
Original issue discount on an OID Note that is also a Single Foreign
Currency Note will be determined for any accrual period in the applicable
Foreign Currency and then translated into U.S. dollars in the same manner as
interest income accrued by a holder on the accrual basis, including the
application of a Spot Rate Convention Election. See "- Payments of Interest on
Notes that Are not OID Notes". Likewise, upon receipt of payment attributable to
original issue discount (whether in connection with a payment of interest or the
sale, exchange or retirement of an OID Note), a holder will recognize exchange
gain or loss to the extent of the difference between such holder's basis in the
accrued original issue discount (determined in the same manner as for accrued
interest) and the U.S. dollar value of such payment (determined by translating
any Foreign Currency received at the spot rate on the date of payment).
Generally, any such exchange gain or loss will be ordinary income or loss and
will not be treated as interest income or expense, except to the extent provided
in administrative pronouncements of the Service. For this purpose, all payments
on a Note will be viewed first as the payment of qualified stated interest
(determined under the original issue discount rules), second as the payment of
previously accrued original issue discount (to the extent thereof), with
payments considered made for the earliest accrual periods first, and thereafter
as the payment of principal.
If a holder's tax basis in an OID Note immediately after purchase
exceeds the adjusted issue price of the OID Note (the amount of such excess is
considered "acquisition premium") but is not greater than the stated redemption
price at maturity of such OID Note, the amount includible in income in each
taxable year as original issue discount is reduced (but not below zero) by that
portion of the excess properly allocable to such year.
If a holder purchases an OID Note for an amount in excess of the stated
redemption price at maturity, the holder does not include any original issue
discount in income and generally may be subject to the "bond premium" rules
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discussed below. See "- Amortizable Bond Premium". If a holder has a tax basis
in an OID Note that is less than the adjusted issue price of such OID Note, the
difference may be subject to the market discount provisions discussed below. See
"- Market Discount".
Under the OID Regulations, a holder of a Note may elect to include in
gross income all interest that accrues on such Note using the constant yield
method. For this purpose, interest includes stated interest, acquisition
discount, original issue discount, de minimis original issue discount, market
discount, de minimis market discount and unstated interest, as adjusted by any
amortizable bond premium or acquisition premium. Special rules apply to
elections made with respect to Notes issued with amortizable bond premium or
market discount. This election applies only to the Note for which it is made and
cannot be revoked without the consent of the Service. A holder considering an
election under these rules should consult a tax advisor.
MARKET DISCOUNT
If a holder purchases a Note (other than an OID Note) for an amount
that is less than its stated redemption price at maturity, or purchases an OID
Note for less than its "revised issue price" (as defined under the Code) as of
the purchase date, the amount of the difference will be treated as "market
discount" unless such difference is less than a specified de minimis amount.
Under the market discount rules of the Code, a holder will be required to treat
any partial principal payment (or, in the case of an OID Note, any payment that
does not constitute qualified stated interest) on, or any gain realized on the
sale, exchange or retirement of, a Note as ordinary income to the extent of the
market discount which has not previously been included in income and is treated
as having accrued on such Note at the time of such payment or disposition.
Further, a disposition of a Note by gift (and in certain other circumstances)
could result in the recognition of market discount income, computed as if such
Note had been sold at its then fair market value. In addition, a holder who
purchases a Note with market discount may be required to defer the deduction of
all, or a portion, of the interest paid or accrued on any indebtedness incurred
or maintained to purchase or carry such Note until the maturity of the Note, or
its earlier disposition in a taxable transaction.
Market discount is considered to accrue ratably during the period from
the date of acquisition to the maturity date of a Note, unless the holder elects
to accrue market discount under the rules applicable to original issue discount.
A holder may elect to include market discount in income currently as it accrues,
in which case the rules described above regarding the deferral of interest
deductions will not apply.
With respect to a Single Foreign Currency Note, market discount is
determined in the applicable Foreign Currency. In the case of a holder who does
not elect current inclusion, accrued market discount is translated into U.S.
dollars at the spot rate on the date of disposition. No part of such accrued
market discount is treated as exchange gain or loss. In the case of a holder who
elects current inclusion, the amount currently includible in income for a
taxable year is the U.S. dollar value of the market discount that has accrued
during such year, determined by translating such market discount at the average
rate of exchange for the period or periods during which it accrued. Such an
electing holder will recognize exchange gain or loss with respect to accrued
market discount under the same rules as apply to accrued interest on a Single
Foreign Currency Note received by a holder on the accrual basis. See "- Payments
of Interest on Notes that Are not OID Notes".
AMORTIZABLE BOND PREMIUM
Generally, if a holder's tax basis in a Note held as a capital asset
exceeds the stated redemption price at maturity of such Note, such excess may
constitute amortizable bond premium that the holder may elect to amortize under
the constant interest rate method over the period from the holder's acquisition
date to the Note's maturity date. Under certain circumstances, amortizable bond
premium may be determined by reference to an early call date. Special rules
apply with respect to Single Foreign Currency Notes.
VARIABLE RATE NOTES
A "Variable Rate Note" is a Note that:
(1) has an issue price that does not exceed the total noncontingent
principal payments by more than the lesser of:
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(a) the product of:
- the total noncontingent principal payments;
- the number of complete years to maturity from the issue
date; and
- .015; or
(b) 15 percent of the total noncontingent principal payments; and
(2) does not provide for stated interest other than stated interest
compounded or paid at least annually at:
(a) one or more qualified floating rates;
(b) a single fixed rate and one or more qualified floating rates;
(c) a single objective rate; or
(d) a single fixed rate and a single objective rate that is a
qualified inverse floating rate.
A qualified floating rate or objective rate in effect at any time
during the term of the instrument must be set at a current value of that rate. A
"current value" of a rate is the value of the rate on any day that is no earlier
than three months prior to the first day on which that value is in effect and no
later than one year following that first day.
A variable rate is a "qualified floating rate" if:
(1) variations in the value of the rate can reasonably be expected to
measure contemporaneous variations in the cost of newly borrowed
funds in the currency in which the Note is denominated; or
(2) it is equal to the product of such a rate and either:
(a) a fixed multiple that is greater than .65 but not more
than 1.35; or
(b) a fixed multiple greater than .65 but not more than 1.35,
increased or decreased by a fixed rate.
If a Note provides for two or more qualified floating rates that:
- are within 0.25 percent of each other on the issue date; or
- can reasonably be expected to have approximately the same
values throughout the term of the Note,
the qualified floating rates together constitute a single qualified floating
rate. A rate is not a qualified floating rate, however, if the rate is subject
to certain restrictions (including caps, floors, governors or other similar
restrictions) unless such restrictions are fixed throughout the term of the Note
or are not reasonably expected to significantly affect the yield on the Note.
An "objective rate" is a rate, other than a qualified floating rate,
that is determined using a single, fixed formula and that is based on objective
financial or economic information. A rate will not qualify as an objective rate
if it is based on information that is within the control of the issuer (or a
related party) or that is unique to the circumstances of the issuer (or a
related party), such as dividends, profits or the value of the issuer's stock
(although a rate does not fail to be an objective rate merely because it is
based on the credit quality of the issuer). A variable rate is not an objective
rate, however, if it is reasonably expected that the average value of the rate
during the first half of the Note's term will be either significantly less than
or significantly greater than the average value of the rate during the final
half of the Note's term. An objective rate is a "qualified inverse floating
rate" if:
- the rate is equal to a fixed rate minus a qualified floating
rate; and
- the variations in the rate can reasonably be expected to
inversely reflect contemporaneous variations in the qualified
floating rate.
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If interest on a Note is stated at a fixed rate for an initial period
of one year or less followed by either a qualified floating rate or an objective
rate for a subsequent period, and
- the fixed rate and the qualified floating rate or objective
rate have values on the issue date of the Note that do not
differ by more than 0.25 percent; or
- the value of the qualified floating rate or objective rate is
intended to approximate the fixed rate,
then the fixed rate and the qualified floating rate or the objective rate
constitute a single qualified floating rate or objective rate.
Under these rules, CD Rate Notes, Commercial Paper Rate Notes, LIBOR
Notes, Federal Funds Rate Notes, Prime Rate Notes, Treasury Rate Notes, and CMT
Rate Notes generally will be treated as Variable Rate Notes.
In general, if a Variable Rate Note provides for stated interest at a
single qualified floating rate or objective rate and the interest is
unconditionally payable in cash at least annually, all stated interest on the
Note is qualified stated interest, and the amount of original issue discount, if
any, is determined by using, in the case of a qualified floating rate or
qualified inverse floating rate, the value as of the issue date of the qualified
floating rate or qualified inverse floating rate, or, in the case of any other
objective rate, a fixed rate that reflects the yield reasonably expected for the
Note.
If a Variable Rate Note does not provide for stated interest at a
single qualified floating rate or a single objective rate, or at a single fixed
rate (other than at a single fixed rate for an initial period), the amount of
interest and original issue discount accruals on the Note are generally
determined by:
- determining a fixed rate substitute for each variable rate
provided under the Variable Rate Note (generally, the value of
each variable rate as of the issue date or, in the case of an
objective rate that is not a qualified inverse floating rate,
a rate that reflects the reasonably expected yield on the
Note);
- constructing the equivalent fixed rate debt instrument (using
the fixed rate substitute described above);
- determining the amount of qualified stated interest and
original issue discount with respect to the equivalent fixed
rate debt instrument; and
- making the appropriate adjustments for actual variable rates
during the applicable accrual period.
If a Variable Rate Note provides for stated interest, either at one or
more qualified floating rates or at a qualified inverse floating rate, and in
addition provides for stated interest at a single fixed rate (other than at a
single fixed rate for an initial period), the amount of interest and original
issue discount accruals are determined as in the immediately preceding paragraph
with the modification that the Variable Rate Note is treated, for purposes of
the first three steps of the determination, as if it provided for a qualified
floating rate (or a qualified inverse floating rate, as the case may be) rather
than the fixed rate. The qualified floating rate (or qualified inverse floating
rate) replacing the fixed rate must be such that the fair market value of the
Variable Rate Note, as of the issue date, would be approximately the same as the
fair market value of an otherwise identical debt instrument that provides for
the qualified floating rate, (or qualified inverse floating rate) rather than
the fixed rate.
SHORT-TERM NOTES
In general, an individual or other cash method holder of a Note that
matures one year or less from the date of its issuance (a "Short-Term Note") is
not required to accrue original issue discount on such Note unless it has
elected to do so. Holders who report income for federal income tax purposes
under the accrual method, however, and certain other holders, including banks,
dealers in securities and electing holders, are required to accrue original
issue discount (unless the holder elects to accrue "acquisition discount" in
lieu of original issue discount) on such Note. "Acquisition discount" is the
excess of the remaining stated redemption price at maturity of the Short-Term
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Note over the holder's tax basis in the Short-Term Note at the time of the
acquisition. In the case of a holder who is not required, and does not elect, to
accrue original issue discount on a Short-Term Note, any gain realized on the
sale, exchange or retirement of such Short-Term Note will be ordinary income to
the extent of the original issue discount accrued through the date of such sale,
exchange or retirement. Such a holder will be required to defer, until such
Short-Term Note is sold or otherwise disposed of, the deduction of a portion of
the interest expense on any indebtedness incurred or continued to purchase or
carry such Short-Term Note. Original issue discount or acquisition discount on a
Short-Term Note accrues on a straight-line basis unless an election is made to
use the constant yield method (based on daily compounding).
In the case of a Short-Term Note that is also a Single Foreign Currency
Note, the amount of original issue discount or acquisition discount subject to
current accrual and the amount of any exchange gain or loss on a sale, exchange
or retirement are determined under the same rules that apply to accrued interest
on a Single Foreign Currency Note held by a holder on the accrual basis. See "-
Payments of Interest on Notes that Are not OID Notes".
The market discount rules will not apply to a Short-Term Note having
market discount.
NON-UNITED STATES PERSONS
Subject to the discussion of backup withholding below, payments of
principal and premium, if any, and interest (including original issue discount)
by us or our agent (in its capacity as such) to any holder who is a beneficial
owner of a Note but is not a United States person will not be subject to United
States federal withholding tax, provided, in the case of premium, if any, and
interest (including original issue discount) that:
(1) such holder does not actually or constructively own 10% or more
of the total combined voting power of all classes of our stock
entitled to vote;
(2) such holder is not a controlled foreign corporation for United
States tax purposes that is related to us through stock ownership;
and
(3) either
(a) the beneficial owner of the Note certifies to us or our agent,
under penalties of perjury, that such owner is not a United
States person and provides its name and address (which
certification can be made on IRS Form W-8 or Form W-8BEN); or
(b) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary
course of its trade or business (a "financial institution")
certifies to us or our agent, under penalties of perjury, that
the certification described in clause (3)(a) above has been
received from the beneficial owner by it or by another
financial institution acting for the beneficial owner.
Recently finalized Treasury Regulations provide alternative methods for
satisfying the certification requirement described in clauses (3)(a) and (3)(b)
above. These Regulations generally will be effective for payments made after
December 31, 2000, subject to certain transition rules.
These Regulations also would require, in the case of Notes held by a
foreign partnership, that:
- the certification described in clause (3)(a) above be provided
by the partners rather than by the foreign partnership; and
- the partnership provide certain information, including a
United States taxpayer identification number.
A look-through rule would apply in the case of tiered partnerships.
If a holder of a Note who is not a United States person cannot satisfy
the requirements of the "portfolio interest" exception described above, payments
of interest (including original issue discount) made to such holder generally
will be subject to a 30% withholding tax (or such lower rate as may be provided
by an applicable income tax treaty between the United States and a foreign
country) unless the beneficial owner of the Note provides us or our paying
agent, as the case may be, with a properly executed:
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- IRS Form 1001 or Form W-8BEN claiming an exemption from
withholding under the benefit of a tax treaty; or
- IRS Form 4224 or Form W-8ECI stating that interest paid on the
Note is not subject to withholding tax because it is
effectively connected with the beneficial owner's conduct of a
trade or business in the United States.
Under the recently finalized Treasury Regulations, holders who are not
United States persons will generally be required to provide the appropriate IRS
Form W-8 in lieu of the IRS Form 1001 and IRS Form 4224, although alternative
documentation may be applicable in certain situations.
If a holder of a Note who is not a United States person is engaged in a
trade or business in the United States and premium, if any, or interest
(including original issue discount) on the Note is effectively connected with
the conduct of such trade or business, such holder, although exempt from United
States withholding tax as discussed above (by reason of the delivery of a
properly completed IRS Form 4224 or Form W-8ECI), will be subject to United
States federal income tax on such premium, if any, and interest (including
original issue discount) in the same manner as if it were a United States
person. In addition, if such holder is a foreign corporation, it may be subject
to a branch profits tax equal to 30% of its effectively connected earnings and
profits for the taxable year, subject to adjustments.
Subject to the discussion of "backup" withholding below, any capital
gain realized upon the sale, exchange or retirement of a Note by a holder who is
not a United States person will not be subject to United States federal income
or withholding taxes unless:
- such gain is effectively connected with a United States trade
or business of the holder; or
- in the case of an individual, such holder is present in the
United States for 183 days or more in the taxable year of the
retirement or disposition and certain other conditions are
met.
Notes held by an individual, who at the time of death is neither a
citizen nor a resident of the United States for United States tax purposes, will
not be subject to United States federal estate tax, provided that the income
from the Notes was not or would not have been effectively connected with a
United States trade or business of such individual and that such individual
qualified for the exemption from United States federal withholding tax (without
regard to the certification requirements) that is described above.
BACKUP WITHHOLDING AND INFORMATION REPORTING
The "backup" withholding and information reporting requirements may
apply to certain payments of principal of and premium, if any, and interest
(including original issue discount) on a Note and to certain payments of
proceeds of the sale or retirement of a Note. We, our agent, a broker, the
Trustee or any paying agent, as the case may be, will be required to withhold
tax from any payment that is subject to backup withholding at a rate of 31% of
such payment if the holder fails to furnish his taxpayer identification number
(social security number or employer identification number), to certify that such
holder is not subject to backup withholding, or to otherwise comply with the
applicable requirements of the backup withholding rules. Certain holders
(including, among others, corporations) are not subject to the backup
withholding and reporting requirements.
Under current Treasury Regulations, backup withholding and information
reporting will not apply to payments made by our company or any agent thereof
(in its capacity as such) to a holder of a Note who has provided the required
certification under penalties of perjury that such holder is not a United States
person as set forth in clause (3) under "Non-United States Persons" or has
otherwise established an exemption (provided that neither we nor such agent has
actual knowledge that the holder is a United States person or that the
conditions of any other exemption are not in fact satisfied). Recently finalized
Treasury Regulations would modify the application of the information reporting
requirements and backup withholding tax to holders who are not United States
persons for payments made after December 31, 2000. Among other things, these
regulations may require such holders to furnish new certifications of their
non-U.S. status.
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Any amounts withheld under the backup withholding rules from a payment
to a holder may be claimed as a credit against such holder's U.S. federal income
tax liability, provided required information is furnished to the Service.
WE HAVE INCLUDED THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE FOR
YOUR GENERAL INFORMATION ONLY. IT MAY NOT BE APPLICABLE DEPENDING UPON YOUR
PARTICULAR SITUATION. YOU SHOULD CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE
TAX CONSEQUENCES TO YOU OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES,
INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS
AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
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<PAGE>
SUPPLEMENTAL PLAN OF DISTRIBUTION
McCormick and Goldman, Sachs & Co. (the "Agent") have entered into a
distribution agreement with respect to the Notes. We also may appoint additional
firms to serve as Agents from time to time. Subject to certain conditions, the
Agent has agreed to use its reasonable efforts to solicit purchases of the
Notes. McCormick has the right to accept offers to purchase Notes and may reject
any proposed purchase of the Notes. The Agent may also reject any offer to
purchase Notes. McCormick will pay the Agent a commission on any Notes sold
through the Agent. Unless otherwise specified in the applicable pricing
supplement, the commission will range from 0.125% to 0.900% of the principal
amount of the Notes, depending on the maturity of the Notes.
McCormick may also sell Notes to the Agent who will purchase the Notes
as principal for its own account. Any such sale will be made at a discount
within the range set forth on the cover page hereof if no other discount is
agreed. Any Notes the Agent purchases as principal may be resold at the market
price or at other prices determined by the Agent at the time of resale.
The Agent may resell any Notes it purchases to other brokers or dealers
at a discount which may include all or part of the discount the Agent received
from McCormick. The Agent will purchase the Notes at a price equal to 100% of
the principal amount less a discount. Unless otherwise stated the discount will
equal the applicable commission on an agency sale of Notes of the same maturity.
If all the Notes are not sold at the initial offering price, the Agent may
change the offering price and the other selling terms. McCormick may also sell
Notes directly on its own behalf. No commissions will be paid on Notes sold
directly by McCormick.
In connection with the offering, the Agent may purchase and sell Notes
in the open market. These transactions may include short sales, stabilizing
transactions and purchases to cover positions created by short sales. Short
sales involve the sale by the Agent of a greater number of Notes than it is
required to purchase in the offering. Stabilizing transactions consist of
certain bids or purchases made for the purpose of preventing or retarding a
decline in the market price of the Notes while the offering is in progress.
The Agent also may impose a penalty bid on other Agents, if any. This
occurs when a particular Agent repays to the other Agents a portion of the
underwriting discount received by it because the Agents have repurchased Notes
sold by or for the account of such Agent in stabilizing or short covering
transactions.
These activities by the Agents may stabilize, maintain or otherwise
affect the market price of the Notes. As a result, the price of the Notes may be
higher than the price that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by the Agents at any time.
These transactions may be effected in the over-the-counter market or otherwise.
The Agent, whether acting as agent or principal, may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933 (the "Act").
McCormick has agreed to indemnify the Agent against certain liabilities,
including liabilities under the Act.
The Agent may sell to dealers who may resell to investors and the Agent
may pay all or part of the discount or commission it receives from McCormick to
the dealers. Such dealers may be deemed to be "underwriters" within the meaning
of the Act.
The Notes are a new issue of securities with no established trading
market and will not be listed on a securities exchange. No assurance can be
given as to the liquidity of the trading market for the Notes.
McCormick estimates that its share of the total expenses of the
offering, excluding underwriting discounts and commissions, will be
approximately $450,000.
Unless otherwise indicated in the applicable pricing supplement, the
purchase price of the Notes will be required to be paid in immediately available
funds in New York, New York.
The Agent may be a customer of, engage in transactions with and perform
services for McCormick in the ordinary course of business.
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EXPERTS
The consolidated financial statements of McCormick & Company,
Incorporated and subsidiaries incorporated by reference in McCormick & Company,
Incorporated and subsidiaries' Annual Report on Form 10-K for the year ended
November 30, 1999 have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
LEGAL MATTERS
The validity of the Notes will be passed upon for us by Hogan & Hartson
L.L.P., Columbia Square, 555 Thirteenth Street, N.W., Washington, D.C. 20004,
and for any underwriters, dealers or agents by Simpson Thacher & Bartlett, 425
Lexington Avenue, New York, New York 10017.
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$375,000,000
MCCORMICK & COMPANY, INCORPORATED
Debt Securities
----------------
We may from time to time issue up to $375,000,000 aggregate initial
offering price of Debt Securities. This prospectus may not be used to sell
securities unless accompanied by a prospectus supplement. The accompanying
prospectus supplement will specify the terms of the securities.
We may sell these securities through agents designated from time to
time, through underwriters or dealers or we may sell them directly ourselves.
Goldman, Sachs & Co. may be one of such underwriters. The names of the
underwriters or agents will be set forth in the accompanying prospectus
supplement.
----------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
GOLDMAN, SACHS & CO.
----------------
Prospectus dated September , 2000.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any document we file with the SEC at the SEC's public reference rooms at
450 Fifth Street, N.W., Washington D.C. 20549, and in New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from the SEC's web site at http://www.sec.gov. Our non-voting common shares are
listed on the New York Stock Exchange and information about us also is available
there.
This prospectus is part of a registration statement that we have filed
with the SEC. The SEC allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you by
referring you to other documents that we identify as part of this prospectus.
Our subsequent filings of similar documents with the SEC will automatically
update and supersede this information. We incorporate by reference the documents
listed below and any future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (1) after the date of
the filing of this registration statement and before its effectiveness and (2)
until our offering of securities has been completed:
- Annual Report on Form 10-K for the year ended November 31,
1999, filed on February 24, 2000.
- Quarterly Report on Form 10-Q for the quarters ended February
29, 2000 and May 31, 2000.
- Current Report on Form 8-K filed on September 15, 2000.
- Definitive proxy statement dated February 15, 2000 concerning
our Annual Meeting of Shareholders on March 15, 2000.
You may obtain a copy of these filings at no cost, by writing to or
telephoning us at the following address:
McCormick & Company, Incorporated
Attn: Office of the Treasurer
18 Loveton Circle
Sparks, Maryland 21152
(telephone: 410-771-7301)
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. This prospectus is an offer to
sell or buy only the securities described in this document, but only under
circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus is current only as of the date of this prospectus.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated by reference in it
include "forward-looking statements" within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act. We intend the
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements in these sections. All statements regarding our
expected financial position and operating results, our business strategy, our
financing plans, our future capital requirements, forecasted demographic and
economic trends relating to our industry, our ability to complete acquisitions,
to realize anticipated cost savings and other benefits from acquisitions and to
recover acquisition-related costs, and similar matters are forward-looking
statements. These statements are subject to known and unknown risks,
uncertainties and other factors that could cause our actual results to differ
materially from the statements. The forward-looking information is based on
various factors and was derived using numerous assumptions. In some cases, you
can identify these statements by our use of forward-looking words such as "may,"
"will," "should," "anticipate," "estimate," "expect," "plan," "believe,"
"predict," "potential" or "intend." You should be aware that these statements
only reflect our predictions. Actual events or results may differ substantially.
Important factors that could cause our actual results to be materially different
from our expectations include actions of competitors, customer relationships,
market acceptance of new products, actual amounts and timing of special charge
items, removal and disposal costs and final negotiations of third-party
contracts, the impact of stock market conditions on our share repurchase
program, fluctuations in the cost and availability of supply-chain resources and
global economic conditions, including interest and currency rate
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<PAGE>
fluctuations and inflation rates, as well as other factors discussed in this
prospectus under the caption "Risk Factors." We undertake no obligation to
update or revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise.
2
<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS
BEFORE INVESTING IN ANY OF THE SECURITIES OFFERED HEREBY.
FLUCTUATIONS IN THE FOREIGN CURRENCY MARKETS MAY NEGATIVELY IMPACT US.
We are exposed to fluctuations in foreign currency cash flows primarily
related to raw material purchases. We are also exposed to fluctuations in the
value of foreign currency investments in subsidiaries and unconsolidated
affiliates and cash flows related to repatriation of these investments.
Additionally, we are exposed to volatility in the translation of foreign
currency earnings to U.S. dollars. Primary exposures include the U.S. dollar
versus the functional currencies of our major markets (British pounds, Euros,
Canadian dollars, Australian dollars, Mexican pesos, Chinese RMB and Japanese
yen). On occasion, we may enter into forward and option contracts to manage
these foreign currency risks. However, these contracts may not effectively limit
or eliminate our exposure to a decline in operating results due to foreign
currency translation. Therefore, we cannot assure you that future exchange rate
fluctuations will not have a negative impact on our business, financial position
or operating results.
INCREASES IN INTEREST RATES MAY NEGATIVELY IMPACT US.
We had total outstanding short-term borrowings of approximately $196
million at an average interest rate of approximately 6.95% on May 31, 2000. Our
policy is to manage our interest costs using a mix of fixed and variable debt.
We use interest swaps to achieve a desired proportion. We utilize derivative
financial instruments to enhance our ability to manage risk, including foreign
exchange and interest rate exposures that exist as part of our ongoing business
operations. We do not enter into contracts for trading purposes, nor are we a
party to any leveraged derivative instrument. Our use of derivative financial
instruments is monitored through regular communication with senior management
and the utilization of written guidelines. However, our use of these instruments
may not effectively limit or eliminate our exposure to a decline in operating
results due to changes in interest rates. Therefore, we cannot assure you that
future interest rate increases will not have a negative impact on our business,
financial position or operating results.
PRICE FLUCTUATIONS IN THE COMMODITY MARKETS MAY NEGATIVELY IMPACT US.
We purchase certain raw materials that are subject to price volatility
caused by weather and other unpredictable factors. Key raw materials include
pepper, vanilla, garlic, almonds, cinnamon, flour, cheese and other dairy
products, soy oil and tomato powder. While future movements of raw material
costs are uncertain, a variety of programs, including periodic raw material
purchases and customer price adjustments, help us address this risk. We also
identify and develop additional sources for certain raw materials that are not
widely available. Past examples of this secondary sourcing include vanilla beans
sourced in Uganda. Generally, we do not use derivatives to manage the volatility
related to this risk. Even if we did use such instruments, however, their use
might not effectively limit or eliminate our exposure to a decline in operating
results due to changes in commodity prices. Therefore, we cannot assure you that
future commodity price fluctuations will not have a negative impact on our
business, financial position or operating results.
OUR COMPANY
McCormick & Company, Incorporated is the largest spice company in the
world. Founded in 1889, we are the market leader in the manufacture, marketing
and distribution of spices, seasonings, flavors and other food products to the
food industry, including the retail, foodservice and food processor segments. In
addition, our packaging group manufactures and markets plastic bottles and tubes
for food, personal care, and other products.
Our products are processed at facilities strategically located around
the world and distributed in more than 100 countries. A major competitive
advantage that we enjoy is the global relationships we have built between
ourselves and growers within the source countries. With McCormick providing
expertise, technology and support to growers in the field, quality is "built in"
from the start.
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Our consumer business manufactures and sells spices, herbs, extracts,
proprietary seasoning blends, sauces and marinades to grocery, mass merchandise,
drug and other retail outlets throughout the world.
Our industrial business supplies products worldwide to a significant
majority of the top 100 food processors and to restaurant chains, distributors,
warehouse clubs and institutional operations, such as schools and hospitals.
These products include spices, seasonings, condiments, coatings and compound
flavors. While the McCormick name may not always be on the food package, our
flavor is in a wide range of snack foods, savory side dishes, desserts,
beverages, confectionery items, cereals, baked goods and more.
We have consolidated operations in the U.S., Canada, El Salvador,
United Kingdom, France, Switzerland, Finland, Australia, Singapore and China. We
also have consumer joint ventures located in the U.S., Europe, Mexico,
Philippines and Japan.
Our technical support, operating out of centers around the world,
provides research and development, quality assurance, and sensory evaluation so
the flavor systems we create meet customer specifications and are of the highest
quality. We believe that our laboratories and kitchens have a well-earned
reputation for craftsmanship combined with modern, proprietary technology.
We have a worldwide workforce of approximately 8,400 employees and our
principal executive offices are located at 18 Loveton Circle, Sparks, Maryland
21152 (telephone: 410-771-7301).
RECENT DEVELOPMENTS
On August 31, 2000, we acquired, through our subsidiary, McCormick
France, S.A.S., one hundred percent (100%) of the share capital of Ducros, S.A.
("Ducros") and Sodis, S.A.S. ("Sodis") from Eridania Beghin-Say, S.A. Ducros is
a manufacturer and marketer of consumer spices and herbs and dessert aid
products in France and other European countries; Sodis manages the racking and
merchandising of the Ducros products in supermarkets and hypermarkets, and
manages a warehouse located in Gennevilliers, France. The purchase price for the
stock of Ducros and Sodis was 2.75 billion French Francs (equivalent to
approximately Euro 419 million or $379 million).
The Ducros business was founded in 1963 and is headquartered in France.
Ducros is the world's second largest manufacturer of consumer spices and herbs.
Ducros also is a leading manufacturer and distributor of dessert aid products.
Ducros sells its products primarily under the Ducros-Registered Trademark-,
Vahine-Registered Trademark-, Malile-Registered Trademark- and Margao-Registered
Trademark- brand names in France and/or other European countries.
In France, Ducros has facilities for the manufacture, packaging and
storage of spices, herbs and dessert aid products, as well as headquarters,
sales and marketing, and research and development facilities. Ducros also has
sales and marketing facilities in Belgium, Italy, Portugal, Poland and Spain and
has smaller production facilities in Portugal, Spain and Albania. We intend to
continue to use virtually all of these facilities.
We financed approximately $370 million of the purchase price through
our issuance on August 29, 2000 of commercial paper notes. These notes bear
interest at a rate of 6.72% and have maturities ranging from 27 to 31 days. We
funded the balance of the purchase price (approximately $9 million) from
internally generated funds. We intend to use a portion of the net proceeds from
the sale of the Debt Securities under this prospectus to repay the commercial
paper notes issued in connection with these acquisitions. See "Use of Proceeds."
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
SIX MONTHS --------------------------------------
ENDED MAY 31, 2000 1999 1998 1997 1996 1995
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges................... 5.02 5.47 5.27 4.90 2.69 4.15
</TABLE>
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For the purpose of this ratio, "earnings" consist of consolidated net
income from continuing operations plus taxes on income, plus fixed charges
exclusive of capitalized interest and less undistributed income of
unconsolidated affiliates accounted for on the equity basis. "Fixed charges"
consist of interest, whether expensed or capitalized (including amortization of
debt discount), and that portion of rental expense that is representative of
interest. The historical ratio of earnings to fixed charges presented above does
not reflect the impact of the issuance of approximately $370,000,000 of
commercial paper on August 29, 2000, the proceeds of which were used to fund the
acquisition of the Ducros and Sodis businesses.
USE OF PROCEEDS
Except as may be described otherwise in a prospectus supplement, we
will use the net proceeds from the sale of the Debt Securities under this
prospectus to repay the indebtedness incurred in connection with our purchase of
the Ducros and Sodis businesses from Eridania Beghin-Say, S.A., and in
connection with other corporate purposes. At September 1, 2000, this
indebtedness totaled approximately $370,000,000, had maturities ranging from 27
to 31 days and bore interest at an average annual rate of approximately 6.72%.
PROSPECTUS
This prospectus is part of a registration statement that we filed with
the SEC utilizing a "shelf" registration process. Under this shelf process, we
may sell any combination of Debt Securities in one or more offerings up to a
total dollar amount of $375,000,000 or the equivalent if any of the securities
are denominated in a currency, currency unit or composite currency other than
the U.S. dollar.
PROSPECTUS SUPPLEMENT
This prospectus provides you with a general description of the Debt
Securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add to or change information
contained in this prospectus. If so, the prospectus supplement should be read as
superseding this prospectus. You should read both this prospectus and any
prospectus supplement together with additional information described under the
heading "Where You Can Find More Information."
The prospectus supplement to be attached to the front of this
prospectus will describe:
- the terms of the Debt Securities that we offer;
- any initial public offering price, the purchase price and net
proceeds to McCormick and the other specific terms related to
our offering of such Debt Securities.
For more details on the terms of the Debt Securities, you should read
"Description of Debt Securities" and the exhibits filed with our registration
statements.
DESCRIPTION OF DEBT SECURITIES
THE FOLLOWING DESCRIPTION OF THE TERMS OF THE DEBT SECURITIES SETS
FORTH CERTAIN GENERAL TERMS AND PROVISIONS OF THE DEBT SECURITIES TO WHICH ANY
PROSPECTUS SUPPLEMENT MAY RELATE. THE DEBT SECURITIES ARE TO BE ISSUED UNDER AN
INDENTURE, DATED AS OF SEPTEMBER , 2000 (THE "INDENTURE"), BETWEEN MCCORMICK AND
SUNTRUST BANK, A NATIONAL BANKING ASSOCIATION ORGANIZED UNDER THE LAWS OF THE
STATE OF GEORGIA , AS TRUSTEE (THE "TRUSTEE"), A COPY OF WHICH HAS BEEN FILED
WITH THE SEC AS AN EXHIBIT TO THE REGISTRATION STATEMENT AND IS INCORPORATED BY
REFERENCE HEREIN. THE FOLLOWING SUMMARIES OF CERTAIN PROVISIONS OF THE INDENTURE
DO NOT PURPORT TO BE COMPLETE AND ARE SUBJECT TO, AND ARE QUALIFIED IN THEIR
ENTIRETY BY REFERENCE TO, ALL PROVISIONS OF THE INDENTURE. CAPITALIZED TERMS ARE
DEFINED IN THE INDENTURE UNLESS
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OTHERWISE DEFINED HEREIN. WHEREVER PARTICULAR PROVISIONS OR DEFINED TERMS OF
THE INDENTURE ARE REFERRED TO, SUCH PROVISIONS OR DEFINED TERMS ARE
INCORPORATED HEREIN BY REFERENCE.
GENERAL
The Indenture does not limit the amount of Debt Securities which can be
issued thereunder and provides that Debt Securities may be issued thereunder up
to the aggregate principal amount which may be authorized from time to time by
us. The Debt Securities will be unsecured and will rank on a parity with all
other unsecured and unsubordinated indebtedness of McCormick.
Reference is hereby made to the prospectus supplement relating to the
applicable series of Debt Securities for the terms of such Debt Securities,
including where applicable:
(i) the title of the securities of the series;
(ii) any limit upon the aggregate principal amount of the
securities of the series which may be authenticated and
delivered under the Indenture;
(iii) the date or dates on which the principal of the securities is
payable;
(iv) the rate or rates at which the securities of the series shall
bear interest, if any, the date or dates from which such
interest shall accrue, the interest payment dates on which
such interest shall be payable and the regular record date for
the interest payable on any interest payment date;
(v) the place or places where the principal of (and premium, if
any) and interest on securities of the series shall be
payable, any securities of that series may be surrendered for
exchange and notices and demands to or upon McCormick in
respect of the securities of that series and the Indenture may
be served;
(vi) the period or periods within which, the price or prices at
which, the currency or currency unit in which, and the terms
and conditions upon which securities of the series may be
redeemed, in whole or in part, at the option of McCormick;
(vii) the obligation, if any, of McCormick to redeem or purchase
securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a holder thereof and
the period or periods within which, the price or prices at
which, the currency or currency unit in which, and the terms
and conditions upon which securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;
(viii) the denominations in which securities of the series shall be
issuable;
(ix) the portion of the principal amount of securities of the
series which shall be payable upon declaration of acceleration
of the maturity thereof pursuant to the Indenture;
(x) any Events of Default and covenants of McCormick with respect
to the securities of that series, whether or not such Events
of Default or covenants are consistent with the Events of
Default or covenants set forth in the Indenture;
(xi) if other than the currency of the United States of America,
the currency or currency unit in which payment of the
principal of (and premium, if any) or interest, if any, on the
securities of that series shall be made or in which securities
of that series shall be denominated and the particular
provisions applicable thereto;
(xii) if the principal of (and premium, if any) and interest, if
any, on the securities of that series are to be payable, at
the election of McCormick or a holder thereof, in a currency
or currency unit other than that in which such securities are
denominated or stated to be payable, the period or periods
within which, and the terms and conditions upon which, such
election may be made, and the time and manner of determining
the exchange rate between the currency or currency unit in
which such securities are denominated or stated to be payable
and the currency or currency unit in which such securities are
to be so payable;
(xiii) if the amount of payments or principal of (and premium, if
any) or interest, if any, on the securities of the series may
be determined with reference to an index based on a currency
or currency unit other than that in which securities are
denominated or stated to be payable or any other index, the
manner in which such amounts shall be determined; and
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(xiv) any other terms of the series (which terms shall not be
inconsistent with the provisions of the Indenture).
The Debt Securities may be issued in one or more series with the same
or various maturities and will be issued only in full registered form without
coupons.
The terms of the Debt Securities do not afford holders of the Debt
Securities protection in the event of a highly leveraged transaction involving
McCormick that may adversely affect holders of the Debt Securities.
TRANSFER AND EXCHANGE
The Debt Securities of a series may be issued in either registered form
("Registered Securities") or global form. See "Book-Entry Securities."
Registered Securities may be separated into smaller denominations or combined
into larger denominations, as long as the total principal amount is not changed.
(Section 3.5 of the Indenture). This is called an "exchange."
You may transfer Registered Securities of a series and you may exchange
Debt Securities of a series at the office of the Trustee. The Trustee will act
as our agent for registering Registered Securities in the names of holders and
transferring Debt Securities. We may designate someone else to perform this
function. Whoever maintains the list of registered holders is called the
"Security Registrar." The Security Registrar also will perform transfers.
(Section 3.5 of the Indenture)
You will not be required to pay a service charge to transfer or
exchange Debt Securities, but you may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. The transfer or
exchange will be made only if the Security Registrar is satisfied with your
proof of ownership. (Section 3.5 of the Indenture)
If we designate additional transfer agents, we will name them in the
accompanying prospectus supplement. We may cancel the designation of any
particular transfer agent. We may also approve a change in the office through
which any transfer agent acts.
If we redeem less than all of the Debt Securities of a redeemable
series, we may block the transfer or exchange of Registered Securities during
the period beginning 15 days before the day of the selection for redemption of
such Registered Securities and ending on the day of the mailing of the relevant
notice of redemption in order to freeze the list of holders to prepare the
mailing. We may also decline to register transfers or exchanges of Debt
Securities selected for redemption, except that we will continue to permit
transfers and exchanges of the unredeemed portion of any Debt Security being
partially redeemed. (Section 3.5 of the Indenture)
If the offered Debt Securities are redeemable, we will describe the
procedures for redemption in the accompanying prospectus supplement.
IN THIS "TRANSFER AND EXCHANGE" SECTION OF THIS PROSPECTUS, "YOU" MEANS
DIRECT HOLDERS AND NOT INDIRECT HOLDERS OF DEBT SECURITIES.
BOOK-ENTRY SECURITIES
The Debt Securities of a series may be issued in whole or in part in
the form of one or more global securities (the "Global Securities") which will
be deposited with, or on behalf of, The Depository Trust Company, New York, New
York (the "Depositary") and registered in the name of the Depositary's nominee.
Except as set forth below, the Global Securities may be transferred, in whole
and not in part, only to another nominee of the Depositary or to a successor of
the Depositary or its nominee.
The Depositary has advised us that it is a limited-purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. The Depositary was created to
hold securities for its participants and to facilitate the clearance and
settlement of securities transactions among its participants in such securities
through electronic book-entry changes in accounts of the
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participants, thereby eliminating the need for physical movement of
securities certificates. The Depositary's participants include securities
brokers and dealers, banks, trust companies, clearing corporations and
certain other organizations, some of which (and/or their representatives) own
the Depositary. Access to the Depositary's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly. Persons who are not participants may beneficially own
securities held by the Depositary only through participants.
Upon the issuance of Debt Securities by us represented by the Global
Securities, the Depositary will credit, on its book-entry registration and
transfer system, the respective principal amounts of the Debt Securities
represented by such Global Securities to the accounts of participants. The
accounts credited shall be initially designated by the underwriters or agents.
If the Depositary is at any time unwilling or unable to continue as
depositary, or if at any time there shall have occurred and be continuing an
Event of Default under the Indenture with respect to the Debt Securities, we
will issue Debt Securities in certificated form in exchange for the Global
Securities. In addition, we may at any time determine not to have Debt
Securities represented by the Global Securities, and, in such event will issue
Debt Securities in certificated form in exchange for the Global Securities
representing such Debt Securities. In any such instance, an owner of a
beneficial interest in the Global Securities will be entitled to physical
delivery in certificated form of Debt Securities equal in principal amount to
such beneficial interest and to have such Debt Securities registered in its
name.
DEFINITIONS
"Attributable Debt" with respect to any sale leaseback transaction that
is subject to the restrictions described under "Certain of our Covenants
Limitation On Sale and Leaseback" means the lesser of:
- the total net amount of rent required to be paid during the
remaining base term of the related lease or until the earliest
date on which the lessee may terminate such lease upon payment
of a penalty or a lump-sum termination payment (in which case
the total net rent shall include such penalty or termination
payment), discounted at the weighted average interest rate
borne by the Outstanding Securities (as defined in the
Indenture) under the Indenture, compounded semi-annually, or
- the sale price of the property so leased multiplied by a
fraction, the numerator of which is the remaining base term of
the related lease and the denominator of which is the base
term of such lease.
"Consolidated Net Tangible Assets" means the total assets of McCormick
and its consolidated subsidiaries, including the investment in (at equity) and
the net amount of advances to and accounts receivable from corporations which
are not consolidated subsidiaries less the following:
- current liabilities of McCormick and its consolidated
subsidiaries, including an amount equal to indebtedness
required to be redeemed by reason of any sinking fund payment
due in 12 months or less from the date as of which current
liabilities are to be determined;
- all other liabilities of McCormick and its consolidated
subsidiaries other than Funded Debt, deferred income taxes and
liabilities for employee post-retirement health plans other
than pensions recognized in accordance with Statement of
Financial Accounting Standards No. 106;
- all depreciation and valuation reserves and all other reserves
(except for reserves for contingencies which have not been
allocated to any particular purpose) of McCormick and its
consolidated subsidiaries;
- the book amount of all segregated intangible assets of
McCormick and its consolidated subsidiaries, including, but
without limitation, such items as goodwill, trademarks, trade
names, patents and unamortized debt discount and expense less
unamortized debt premium; and
- appropriate adjustments on account of minority interests of
other persons holding stock in subsidiaries.
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Consolidated Net Tangible Assets shall be determined on a consolidated basis in
accordance with generally accepted accounting principles.
"Principal Property" means any manufacturing or processing plant or
warehouse, together with the land upon which it is erected and any fixtures and
equipment comprising a part thereof, owned by McCormick or any Restricted
Subsidiary and located in the United States, the book value (net of
depreciation) of which on the date as of which the determination is being made
is an amount which exceeds 1% of Consolidated Net Tangible Assets, other than
any such manufacturing or processing plant or warehouse or any portion thereof
or any such fixture or equipment (together with the land upon which it is
erected and any fixtures and equipment comprising a part thereof) (i) which is
financed by Industrial Development Bonds or (ii) which, in the opinion of our
board of directors, is not of material importance to the total business
conducted by us and our Subsidiaries, taken as a whole.
"Restricted Subsidiary" means any Subsidiary that owns, operates or
leases one or more Principal Properties.
"Subsidiary" means each corporation of which we, or we and one or more
Subsidiaries, or any one or more Subsidiaries, directly or indirectly own
securities entitling the holders thereof to elect a majority of the directors,
either at all times or so long as there is no default or contingency that
permits the holders of any other class or classes of securities to vote for the
election of one or more directors.
CERTAIN OF OUR COVENANTS
LIMITATIONS ON LIENS
Except as described below under "-- Exempted Indebtedness", we covenant
that we will not, nor will we permit any Restricted Subsidiary to, create,
assume or suffer to exist any mortgage, security interest, pledge or lien
("Lien") of or upon any Principal Property or any shares of capital stock or
evidences of indebtedness for borrowed money issued by any Restricted Subsidiary
and owned by us or any Restricted Subsidiary, without providing that the Notes
shall be secured equally and ratably by such Lien with any and all other
indebtedness or obligations thereby secured, so long as such indebtedness or
obligations shall be so secured.
This restriction does not apply to:
- Liens that exist on the date of the Indenture;
- Liens on property of any corporation existing at the time such
corporation becomes a Subsidiary;
- Liens in favor of us or any Subsidiary;
- Liens in favor of governmental bodies to secure progress,
advance or other payments pursuant to contract or statute or
indebtedness incurred to finance all or a part of construction
of or improvements to property subject to such Liens;
- Liens on property existing at the time of acquisition thereof
(including acquisition through merger or consolidation), and
construction and improvement liens that are entered into
within 180 days from the date of such construction or
improvement, provided that in the case of construction or
improvement the Lien shall not apply to any property
theretofore owned by us or any Restricted Subsidiary except
substantially unimproved real property on which the property
so constructed or the improvement is located;
- mechanics' and similar Liens arising in the ordinary course of
business in respect of obligations not due or being contested
in good faith;
- Liens for taxes, assessments, or governmental charges or
levies that are not delinquent or are being contested in good
faith;
- Liens arising from any legal proceedings that are being
contested in good faith;
- any Liens that (a) are incidental to the ordinary conduct of
our business or the ownership of our properties and assets,
(b) were not incurred in connection with the borrowing of
money or the obtaining of advances or
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credit and (c) do not in the aggregate materially detract
from the value of our property or the property of any
Subsidiary or materially impair the use thereof in the
operation of our business;
- Liens securing industrial development or pollution control
bonds; and
- Liens for the sole purpose of extending, renewing or replacing
(or successively extending, renewing or replacing) in whole or
in part any of the foregoing. (Section 10.7 of the Indenture).
LIMITATION ON SALE AND LEASEBACK
Except as described below under "Exempted Indebtedness," sale and
leaseback transactions by us or any Restricted Subsidiary (except for
transactions involving temporary leases for a term of three years or less) of
any Principal Property are prohibited unless either:
- we or such Restricted Subsidiary would be entitled, pursuant
to the fifth and the eleventh clauses of the covenant
described under Limitations on Liens above, to incur a Lien on
the Principal Property to be leased without equally and
ratably securing the Debt Securities, or
- the net proceeds of such sale are at least equal to the fair
value of the Principal Property sold and we will apply an
amount equal to the net proceeds of such sale to the
retirement of our or a Restricted Subsidiary's Securities or
Funded Debt (as defined in the Indenture) ranking prior to or
on a parity with the Debt Securities. (Section 10.8 of the
Indenture).
EXEMPTED INDEBTEDNESS
Notwithstanding the limitations on Liens and sale and leaseback
transactions outlined above, we or any Restricted Subsidiary may create, assume
or suffer to exist Liens or enter into sale and leaseback transactions not
otherwise permitted as described above provided that at the time of such event,
and after giving effect thereto, the sum of outstanding indebtedness for
borrowed money incurred after the date of the Indenture and secured by such
Liens plus the Attributable Debt in respect of such sale and leaseback
transactions entered into after the date of the Indenture does not exceed 15% of
Consolidated Net Tangible Assets properly appearing on a consolidated balance
sheet of McCormick. (Sections 1.1, 10.7(b) and 10.8(b) of the Indenture).
MERGER AND CONSOLIDATION
We covenant that we will not merge, consolidate or convey, transfer or
lease our properties and assets substantially as an entirety and we will not
permit any Person (as defined in the Indenture) to consolidate with or merge
into us or convey, transfer or lease its properties and assets substantially as
an entirety to us unless, among other things:
- the successor Person is McCormick or another corporation
organized and existing under the laws of the United States,
any state thereof or the District of Columbia that assumes our
obligations on the Debt Securities and under the Indenture,
- immediately after giving effect to such transaction, McCormick
or the successor Person would not be in default under the
Indenture, and
- if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, any Principal Property of
McCormick would become subject to a Lien that would not be
permitted by the Indenture, we or such successor Person takes
such steps as are necessary effectively to secure the Debt
Securities equally and ratably with (or, at our option, prior
to) all indebtedness secured thereby. (Section 8.1 of the
Indenture).
EVENTS OF DEFAULT
An Event of Default with respect to the Debt Securities is defined in
the Indenture as being:
(i) default for 30 days in the payment of any installment of interest
on the Debt Securities;
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(ii) default in the payment of any principal of the Debt Securities;
(iii) default by McCormick in the performance of any other covenants or
agreements in the Indenture contained therein for the benefit of the Debt
Securities which shall not have been remedied for a period of 90 days after
written notice of such default to McCormick by the Trustee or to McCormick and
the Trustee by the holders of at least 25% in aggregate principal amount of the
Debt Securities;
(iv) certain events of bankruptcy, insolvency or reorganization of
McCormick; or
(v) any other Event of Default specified for a series in the applicable
prospectus supplement. (Section 5.1 of the Indenture).
The Indenture provides that if an Event of Default under clause (i),
(ii) or (iii) above shall have occurred and be continuing, either the Trustee or
the holders of not less than 25% in principal amount of the Debt Securities may
declare the principal of all the Debt Securities, together with any accrued
interest, to be due and payable immediately. (Sections 5.2 and 5.13 of the
Indenture).
If an Event of Default under clause (iv) above shall have occurred and
be continuing, then the principal of all the Debt Securities, together with any
accrued interest, will be due and payable immediately without any declaration or
other act on the part of the Trustee or any holder of a Debt Security. Upon
certain conditions such declaration (including a declaration caused by a default
in the payment of principal or interest, the payment for which has subsequently
been provided) may be annulled by the holders of a majority in principal amount
of the Debt Securities. (Sections 5.2 and 5.13 of the Indenture).
In addition, prior to the declaration of the acceleration of the
maturity of the Debt Securities, past defaults may be waived by the holders
of a majority in principal amount of the Debt Securities, except a default in
the payment of principal of or interest on any Debt Security or in respect of
a covenant or provision of the Indenture which cannot be modified or amended
without the approval of the holder of each Debt Security. (Sections 5.2 and
5.13 of the Indenture).
The Indenture contains a provision entitling the Trustee, subject to
the duty of the Trustee during default to act with the required standard of
care, to be indemnified by the holders of Debt Securities issued thereunder
before proceeding to exercise any right or power under the Indenture at the
request of the holders of such Debt Securities. (Section 6.3 of the Indenture).
The Indenture also provides that the holders of a majority in principal
amount of the Outstanding Securities of a particular series issued thereunder
and affected (each series voting as a separate class) may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Debt Securities of such series. (Section 5.12 of the Indenture).
The Indenture contains a covenant that McCormick will file annually
with the Trustee a certificate as to the absence of any default or specifying
any default that exists. (Section 10.9 of the Indenture).
SATISFACTION AND DISCHARGE
The Indenture will cease to be of further effect (except as to
surviving rights of registration of transfer or exchange of Debt Securities, as
expressly provided for in the Indenture) as to all Debt Securities when:
- either:
- all Debt Securities theretofore authenticated and
delivered (except lost, stolen or destroyed Debt
Securities that have been replaced or paid) have been
delivered to the Trustee for cancellation or
- with respect to all Debt Securities not theretofore
delivered to the Trustee for cancellation, McCormick
has deposited or caused to be deposited with the
Trustee funds or Government Obligations (as defined
in the Indenture), or any combination thereof, in an
amount sufficient to pay and discharge the entire
indebtedness on the Debt Securities not theretofore
delivered to the Trustee for cancellation, for unpaid
principal and interest to maturity;
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- McCormick has paid all other sums payable by it under
the Indenture;
- McCormick has delivered to the Trustee an officers'
certificate and an opinion of counsel each stating
that all conditions precedent under the Indenture to
the satisfaction and discharge of the Indenture have
been complied with; and
- if the Debt Securities are not due and payable within
one year of the date of such deposit, McCormick has
delivered to the Trustee an opinion of counsel to the
effect that the holders of the Debt Securities will
not recognize income, gain or loss for federal income
tax purposes as a result of such deposit, defeasance
and discharge and will be subject to federal income
tax on the same amount and in the same manner and at
the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred.
(Article IV of the Indenture).
COVENANT DEFEASANCE
The terms of the Debt Securities provide that McCormick need not comply
with certain restrictive covenants of the Indenture (including those described
under "-- Certain of our Covenants" above) if:
- McCormick deposits in trust with the Trustee money or
Government Obligations, which through the payment of interest
thereon and principal thereof in accordance with their terms
will provide money, in an amount sufficient to pay all the
principal of and interest on the Debt Securities when due; and
- McCormick delivers to the Trustee an opinion of counsel to the
effect that the holders of Debt Securities will not recognize
income, gain or loss for federal income tax purposes as a
result of such deposit and defeasance and will be subject to
federal income tax on the same amount and in the same manner
and at the same times, as would have been the case if such
deposit and defeasance had not occurred. (Section 10.11 of the
Indenture).
MODIFICATION AND WAIVER
Without the consent of any holder of the Debt Securities, McCormick and
the Trustee may modify or amend the Indenture to clarify or to make certain
other changes that would not adversely affect the legal rights of any holder.
(Section 9.1 of the Indenture)
With the consent of the holders of not less than a majority in
aggregate principal amount of the outstanding Debt Securities of the
particular series affected, McCormick and the Trustee may modify or amend the
Indenture; PROVIDED, HOWEVER, that no such modification or amendment may,
without the consent of the holder of each Debt Security:
- change the stated maturity of the principal of, or any
installment of interest on, any Debt Security or reduce the
principal amount thereof or the rate of interest thereon, or
change the coin or currency in which any Debt Security or the
interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment after the stated
maturity thereof;
- reduce the percentage in principal amount of outstanding Debt
Securities necessary to waive compliance with certain
provisions of the Indenture or to waive certain defaults; or
- modify any of the provisions relating to supplemental
indentures requiring the consent of holders or relating to the
waiver of past defaults or relating to the waiver of certain
covenants, except to increase the percentage of outstanding
Debt Securities required for such actions or to provide that
certain other provisions of the Indenture cannot be modified
or waived without the consent of the holder of each Debt
Security. (Section 9.2 of the Indenture).
12
<PAGE>
PLAN OF DISTRIBUTION
We may sell Debt Securities to or through underwriters and also may
sell Debt Securities directly to other purchasers or through agents. Goldman,
Sachs & Co. may be one of the underwriters or may be one of the firms
representing a group of underwriters. Goldman, Sachs & Co. may also act as
agent.
The distribution of the Debt Securities offered under the prospectus
may occur from time to time in one or more transactions at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices.
In connection with the sale of Debt Securities, underwriters may
receive compensation from us or from purchasers of Debt Securities for whom they
may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Debt Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agents. Underwriters, dealers and agents that participate in the
distribution of Debt Securities offered under the prospectus may be
"underwriters" as defined in the Securities Act. Any underwriters or agents will
be identified and their compensation (including underwriting discount) will be
described in the applicable prospectus supplement. The prospectus supplement
will also describe the other terms of the offering, including any discounts or
concessions allowed or reallowed or paid to dealers and any securities exchanges
on which the offered securities may be listed.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain liabilities, including liabilities under the
Securities Act, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make as a result of those
certain liabilities.
If the applicable prospectus supplement indicates, we may authorize
dealers or agents to solicit offers by certain institutions to purchase Debt
Securities from us pursuant to contracts that provide for payment and delivery
on a future date. We must approve all institutions, but they may include, among
others:
- commercial and savings banks;
- insurance companies;
- pension funds;
- investment companies; and
- educational and charitable institutions.
The institutional purchaser's obligation under the contract is subject
to the condition that the purchase of the offered Debt Securities at the time of
delivery is allowed by the laws that govern the purchaser. The dealers and the
agents will not be responsible for the validity or performance of the contracts.
EXPERTS
The consolidated financial statements of McCormick & Company,
Incorporated and subsidiaries incorporated by reference in McCormick & Company,
Incorporated and subsidiaries' Annual Report on Form 10-K for the year ended
November 30, 1999 have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters in connection with the Debt Securities will be
passed upon for McCormick by Hogan & Hartson L.L.P., Columbia Square, 555
Thirteenth Street, N.W., Washington, D.C. 20004, and for the underwriters,
dealers and agents by Simpson Thacher & Bartlett, 425 Lexington Avenue, New
York, New York 10017.
13
<PAGE>
================================================================================
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the Notes offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.
----------------------------
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
----
<S> <C>
Risk Factors..............................................................S-
About this Prospectus and the Pricing Supplement..........................S-
Description of Notes......................................................S-
Special Provisions Relating to Foreign
Currency Notes...................................................S-
United States Taxation....................................................S-
Supplemental Plan of Distribution ........................................S-
Experts...................................................................S-
Legal Matters.............................................................S-
Prospectus
Page
----
Where You Can Find More Information ...................................
Our Company ...........................................................
Recent Developments....................................................
Ratio of Earnings to Fixed Charges ....................................
Use of Proceeds .......................................................
Prospectus.............................................................
Prospectus Supplement..................................................
Description of Debt Securities ........................................
Plan of Distribution ..................................................
Experts ...............................................................
Legal Matters .........................................................
</TABLE>
================================================================================
$375,000,000
MCCORMICK & COMPANY,
INCORPORATED
Medium-Term Notes
----------------------------
PROSPECTUS SUPPLEMENT
----------------------------
GOLDMAN, SACHS & CO.
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table is an estimate, subject to future contingencies, of
the expenses to be incurred by the registrant in connection with the issuance
and distribution of securities being registered.
<TABLE>
<S> <C>
SEC Registration Fee........................... $ 99,000
Legal Fees and Expenses........................ 200,000
Blue Sky Fees and Expenses..................... 5,000
Accounting Fees and Expenses................... 60,000
Printing and Engraving Expenses................ 50,000
Trustee's Fees................................. 10,000
Rating Agency Fees............................. 15,000
Miscellaneous.................................. 11,000
----------
Total..................................... $450,000
</TABLE>
--------------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the registrant's by-laws and the Maryland General Corporation
Law, the directors and officers of the registrant may be entitled to
indemnification in respect of threatened, pending or completed actions, suits or
proceedings, whether civil, criminal, administrative or investigative
("proceedings"), to which they are made a party by reason of their position as a
director or officer of the registrant. In the case of conduct in their official
capacity with the registrant, directors and officers will be entitled to
indemnification unless the act or omission of the director or officer was
material to the matter giving rise to the proceeding and was committed in bad
faith or was the result of active and deliberate dishonesty or the director or
officer actually received an improper personal benefit in money, property or
services. In the case of criminal proceedings the director or the officer also
must have had no reasonable cause to believe that the conduct was unlawful.
If the director or officer is successful on the merits or otherwise in
the defense of any proceeding, the director or officer will be entitled to
indemnification against reasonable expenses incurred in connection with the
proceedings regardless of whether the foregoing standards are met. In addition,
a court of competent jurisdiction may order indemnification if it determines
that the director or officer has met the foregoing standards, or if it
determines that the director or officer is entitled to indemnification in view
of all the relevant circumstances.
Any indemnification required or permitted by the registrant's by-laws
and the Maryland General Corporation Law may be against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by the director or
officer in connection with the proceeding. However, if the proceeding is by or
in the right of the registrant, indemnification may be made only against
expenses and may not be made in respect of any proceeding in which the director
or officer is adjudged to be liable to the registrant.
Under the registrant's charter, the monetary liability of directors and
officers to the registrant of its stockholders is eliminated except for, and to
the extent of, actual receipt of any improper benefit in money, property or
services, or in respect of an adjudication based upon a finding of active and
deliberate dishonesty material to the cause of action adjudicated.
The registrant also maintains for the benefit of its directors and
officers insurance covering certain liabilities asserted against or incurred by
such persons in their capacity as, or as a result of their position as, director
or officer of the registrant. This insurance may afford protection for
liabilities not subject to indemnification under the registrant's by-laws and
the Maryland General Corporation Law.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following exhibits are filed as part of this Registration
Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
-------- -------------------
<S> <C>
1 Form of Distribution Agreement.
4.1 Form of Indenture between McCormick & Company, Incorporated and
Sun Trust Bank, as trustee.
4.2 Form of Medium-Term Note (Fixed Rate).
4.3 Form of Medium-Term Note (Floating Rate).
4.4 Form of Medium-Term Note (Single Indexed Note - Fixed Rate).
4.5 Form of Medium-Term Note (Single Indexed Note - Floating Rate).
5 Opinion of Hogan & Hartson L.L.P.
12 Computation of ratio of earnings to fixed charges.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Hogan & Hartson L.L.P. (included in Exhibit 5).
24 Powers of attorney.
25 Statement on Form T-1 of eligibility of trustee.
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement
II-2
<PAGE>
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of each issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1993, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sparks, State of Maryland on September 22, 2000.
MCCORMICK & COMPANY, INCORPORATED
BY: /s/ Robert J. Lawless
------------------------------
ROBERT J. LAWLESS
CHAIRMAN, PRESIDENT & CHIEF
EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons, in the capacities
indicated below, on this 22nd day of September, 2000.
PRINCIPAL EXECUTIVE OFFICER
/s/ Robert J. Lawless
------------------------------------------------ September 22, 2000
Robert J. Lawless
Chairman, President & Chief Executive Officer
PRINCIPAL FINANCIAL OFFICER
/s/ Francis A. Contino
------------------------------------------------ September 22, 2000
Francis A. Contino
Executive Vice President & Chief
Financial Officer
PRINCIPAL ACCOUNTING OFFICER
/s/ Kenneth A. Kelly, Jr.
------------------------------------------------ September 22, 2000
Kenneth A. Kelly, Jr.
Vice President and Controller
THE BOARD OF DIRECTORS: *
Barry H. Beracha, James T. Brady, Francis A
Contino, Robert G. Davey, Edwards S. Dunn,
Jr., Freeman A. Hrabowski, III, Robert J.
Lawless, John C. Molan, Carroll D. Nordhoff,
Robert W. Schroeder, William E. Stevens, Karen
D. Weatherholtz
*By: /s/ Robert J. Lawless
------------------------------------------
Robert J. Lawless
Attorney-in-Fact
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
-------- -------------------
<S> <C>
1 Form of Distribution Agreement.
4.1 Form of Indenture between McCormick & Company, Incorporated and
Sun Trust Bank, as trustee.
4.2 Form of Medium-Term Note (Fixed Rate).
4.3 Form of Medium-Term Note (Floating Rate).
4.4 Form of Medium-Term Note (Single Indexed Note - Fixed Rate).
4.5 Form of Medium-Term Note (Single Indexed Note - Floating Rate).
5 Opinion of Hogan & Hartson L.L.P.
12 Computation of ratio of earnings to fixed charges.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Hogan & Hartson L.L.P. (included in Exhibit 5).
24 Powers of attorney.
25 Statement on Form T-1 of eligibility of trustee.
</TABLE>
1
