<PAGE>1
United States
Securities and Exchange Commission
Washington, D.C. 20549
___________________
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: May 16, 1995
___________________
MCDONNELL DOUGLAS FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-2564584 0-10795
(State or other (I.R.S. Employer (Commission File No.)
jurisdiction of Identification No.)
incorporation)
4060 Lakewood Boulevard, 6th Floor - Long Beach, California 90808-1700
(Address of principal executive offices)
310-627-3000
(Registrant's telephone number, including area code)
<PAGE>
<PAGE>2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Listed below is the exhibit filed as part of this report:
4(d) - Form of Federal Funds Medium Term Note.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
McDonnell Douglas Finance Corporation
Dated: May 16, 1995 /s/ Robert W. Owsley
_________________________________
Robert W. Owsley
Vice President - Treasurer
/s/ Thomas J. Lawlor, Jr.
__________________________________
Thomas J. Lawlor, Jr.
Senior Vice President and Chief Financial
Officer (Principal Financial Officer) and
Registrant's Authorized Officer
<PAGE>
<PAGE>3
Exhibit Index
A. Exhibit
4(d) - Form of Federal Funds Medium Term Note.
<PAGE>1 EXHIBIT 4(d)
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICAT-
ED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
CUSIP: 58017DDK3
REGISTERED PRINCIPAL AMOUNT:
No. IX-SR- $20,000,000.00
McDONNELL DOUGLAS FINANCE CORPORATION
SERIES IX SENIOR MEDIUM-TERM NOTE
___ Fixed Rate - Interest Rate: _____%
_X_ Floating Rate - Initial Interest Rate: _____%
BASE RATE(S): Federal Funds Rate ORIGINAL ISSUE DATE: May 15, 1995
STATED MATURITY: May 15, 1997 INITIAL INTEREST May 16, 1995
RESET DATE:
INDEX MATURITY: N/A MAXIMUM INTEREST N/A
RATE:
SPREAD: Plus 40 basis MINIMUM INTEREST N/A
points RATE:
SPREAD MULTIPLIER: N/A REDEMPTION DATE(S): N/A
ALTERNATE RATE
EVENT SPREAD: N/A REDEMPTION PRICE(S): N/A
INTEREST RATE RESET
PERIOD: Daily INTEREST PAYMENT Quarterly
PERIOD:
INTEREST RESET Each Business Day INTEREST PAYMENT The 15th day
DATE(S): commencing May 16, DATE(S): of February,
1995 May, August
and November,
commencing
August 15,
1995
CALCULATION AGENT: Bankers Trust Com- YIELD TO MATURITY: N/A
pany
May 16, 1995<PAGE>
<PAGE>2
McDONNELL DOUGLAS FINANCE CORPORATION, a Delaware corporation (hereinafter
called the "Company" which term includes any successor corporation under
the Indenture hereinafter referred to), for value received, hereby promises
to pay to CEDE & CO., or registered assigns, the Principal sum of Twenty
Million and no/100 DOLLARS on the Stated Maturity shown above, and to pay
interest thereon, at a rate per annum specified above and upon the terms
provided under either the heading "Fixed Rated Note" or "Floating Rate Note".
FIXED RATE NOTE:
If the "Fixed Rate" box above is checked, the Company will pay interest
on March 15 and September 15 of each year (each an "Interest Payment Date")
and on the Stated Maturity or upon earlier redemption to the person to whom
principal is payable. Interest shall accrue from the Original Issue Date or
if later, the Interest Payment Date next preceding the date hereof to which
interest has been paid or duly provided for, unless the date hereof is an
Interest Payment Date to which interest has been paid or duly provided for on
this Note (or any Predecessor Note) in which case from the date hereof.
FLOATING RATE NOTE:
If the "Floating Rate" box above is checked, the Company will pay
interest on the Interest Payment Dates shown above at the Initial Interest
Rate shown above until the Initial Interest Reset Date shown above following
the Original Issue Date shown above and thereafter at a rate determined in
accordance with the provisions hereof under the heading, "Determination of
Commercial Paper Rate", "Determination of Federal Funds Rate", "Determination
of 11th District Cost of Funds Rate", "Determination of LIBOR", "Determina-
tion of Prime Rate" or "Determination of Treasury Rate", depending upon
whether the Base Rate is the Commercial Paper Rate, 11th District Cost of
Funds Rate, LIBOR, Prime Rate, Treasury Rate or the lowest of any two or more
of such rates, as indicated above, in each case (i) plus or minus the Spread
or Alternate Rate Event Spread, if any, or (ii) multiplied by the Spread
Multiplier, if any, shown above, until the principal hereof is paid or duly
made available for payment.
An interest payment shall be the amount of interest accrued from and
including the Original Issue Date, or if later, from and including the last
Interest Payment Date to which interest has been paid to, but excluding the
next following Interest Payment Date (an "Interest Period"). If the "Maximum
Interest Rate" box above is checked, this Note is subject to a maximum
limitation on the rate of interest which may accrue during any Interest
Period. If the "Minimum Interest Rate" box above is checked, this Note is
subject to a minimum limitation on the rate of interest which may accrue
during any Interest Period.
PROVISIONS FOR BOTH FIXED AND FLOATING RATE NOTES:
If the "Floating Rate Note" box above is checked, the Company will pay
interest monthly, quarterly, semiannually or annually as shown above as the
Interest Payment Period, on each Interest Payment Date shown above, commenc-
ing with the first Interest Payment Date shown above next succeeding the
Original Issue Date shown above, and at Maturity; PROVIDED, HOWEVER, that for
both Floating Rate and Fixed Rate Notes if the Original Issue Date is between
a Regular Record Date and on or before the immediately following Interest
Payment Date, interest payments will commence on the Interest Payment Date
<PAGE>
<PAGE>3
following the next succeeding Regular Record Date; and PROVIDED, FURTHER,
that if an Interest Payment Date would fall on any day that is not a Business
Day (as defined herein), such Interest Payment Date shall be the following
day that is a Business Day, except that in the case of a Floating Rate Note
on which the Interest Rate Base is LIBOR, if such next Business Day falls
in the next calendar month, such Interest Payment Date will be the preceding
day that is a Business Day. As used herein, "Business Day" is any day that
is not a Saturday or Sunday and that is neither a legal holiday nor a day
on which banking institutions are authorized or required by law or regulation
to close in New York, New York or Los Angeles, California (or, if the
Interest Rate Base specified above is LIBOR, the City of London). If the
Maturity Date (or any Redemption Date) will fall on a day that is not a
Business Day, the payment of interest and principal will be made on
the next succeeding Business Day with the same force and effect as if made
on the date such payment was due, and no interest on such payment shall
accrue for the period from and after the Maturity Date (or any Redemption
Date) to the date of such payment on the next succeeding Business Day.
Except as provided above, interest payments will be made on the Interest
Payment Dates shown above. The "Regular Record Date" shall be the date 15
calendar days (whether or not a Business Day) prior to the applicable
Interest Payment Date. Interest on this Note will accrue from and including
the most recent Interest Payment Date to which interest has been paid or
duly provided for or, or, if no interest has been paid on this Note, from
the Original Issue Date, until the principal hereof has been paid or duly
made available for payment. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, subject to
certain exceptions provided below, be paid only to the Person in whose name
this Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such Interest Payment Date;
PROVIDED, HOWEVER, that interest payable at Maturity will be payable to
the person to whom the principal hereof shall be payable.
Any such interest which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date, shall forthwith cease to be
payable to the registered Holder hereof on such Regular Record Date, and
shall be paid to the Person in whose name this Note (or one or more Predeces-
sor Notes) is registered at the close of business on a Special Record Date
for the payment of such overdue interest to be fixed by the Trustee (as
defined herein), notice of which shall be given to the Holder hereof not less
than ten days prior to such Special Record Date, or may be paid at any time
in any other lawful manner all as more fully provided in the Indenture (as
defined herein).
Payments of principal, premium, if any, and interest shall be made in
such coin or currency of the United States as at the time of payment is legal
tender for the payment of public and private debts. Payments of interest,
other than interest payable at Maturity, will be made by check mailed to the
registered Holder hereof at the address shown in the register (the "Security
Register") maintained by the Company at the office of Bankers Trust Company
in its capacity as Paying Agent or any successor thereto (the "Paying Agent")
maintained for such purpose or, at the option of the registered Holder
hereof, to such other place in the United States as the registered Holder
hereof shall designate to the Paying Agent in writing or, at the option of a
Holder who owns U.S. $10,000,000 or more in aggregate principal amount of
Notes which pay interest on the same Interest Payment Date, upon written
instructions from such Holder received by the Paying Agent not later than the
<PAGE>
<PAGE>4
Regular Record Date or Special Record Date to which such payment of interest
relates, by wire transfer of immediately available funds to an account
maintained by such Holder at a depository institution, provided such deposi-
tory institution shall have appropriate facilities therefor.
The principal amount hereof, premium, if any, and interest due at
Maturity will be paid upon Maturity in immediately available funds by wire
transfer to a U.S. Dollar account maintained by the payee at a depository
institution in the United States, provided such depository shall have
appropriate facilities therefor, except for the payment to a Holder for which
appropriate instruc-tions for payment as provided above have not been
received by the Paying Agent not later than the close of business at least 10
Business Days prior to the related date of payment, in which case such
payment shall be made by check mailed to the Person entitled thereto at such
Person's address appearing in the Security Register. Payment of principal of,
premium, if any, and interest due at Maturity on any Note shall only be made
against presentation and surrender of this Note at the office or agency of the
Company maintained for that purpose in New York, New York or at such other
office or agency of the Company as the Company shall designate.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.<PAGE>
<PAGE>5
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and a facsimile of its corporate seal to
be imprinted hereon.
Dated: McDONNELL DOUGLAS FINANCE CORPORATION
____________________
[MCDONNELL DOUGLAS
FINANCE CORPORATE
CORPORATE SEAL
APPEARS HERE] By: ________________________________
Title: President
Attest
By: ________________________________
Title: Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By: ______________________
Authorized Officer<PAGE>
<PAGE>6
[REVERSE OF SENIOR MEDIUM-TERM NOTE]
McDONNELL DOUGLAS FINANCE CORPORATION
Series IX Senior Medium-Term Note
This Note is one of a duly authorized series of Securities of the
Company (hereinafter called the "Securities"), unlimited as to principal
amount, issued and to be issued under an Indenture dated as of April 15, 1987
(hereinafter called the "Indenture"), between the Company and Bankers Trust
Company, as trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respec-
tive rights thereunder of the Company, the Trustee and the Holders of the
Securities and the terms upon which the Securities are, and are to be,
authenticated and delivered. This Note is one of the series of Securities
designated as "Series IX Senior Medium-Term Notes" (the "Notes"). Capital-
ized terms used herein which are not otherwise defined shall have the
meanings ascribed thereto in the Indenture.
The Notes may bear different Original Issue Dates, mature at different
times and bear interest at different fixed or variable rates and differ in
such other respects as may be provided pursuant to the terms of the Inden-
ture.
This Note may not be redeemed prior to the Redemption Date set forth on
the face hereof. If no Redemption Date is set forth on the face hereof, this
Note is not redeemable prior to the Stated Maturity set forth on the face
hereof. On and after the Redemption Date, this Note is redeemable in whole
or in part in increments of $1,000 (provided that any remaining principal
amount of this Note shall be at least $100,000) at the option of the Company
at the Redemption Price specified on the face hereof for such Redemption
Date, together with interest thereon payable to such Redemption Date, on
notice given to the Holder hereof not more than 60 nor less than 30 days
prior to such Redemption Date (or, if either such day is not a Business Day,
the next succeeding Business Day). In the event of redemption of this Note
in part only, a new Note for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the surrender hereof. The Notes will not
have a sinking fund.
PROVISIONS RELATING TO FLOATING RATE NOTES ONLY:
If the "Floating Rate" box on the face hereof is checked, the following
additional provisions shall apply to this Note. Commencing with the first
Interest Reset Date specified on the face hereof following the Original
Issue Date specified on the face hereof, the rate at which interest on this
Note is payable (the "Interest Rate") shall be adjusted daily, weekly,
monthly, quarterly, semiannually or annually as shown on the face hereof
under "Interest Rate Reset Period". Each such adjusted rate shall be
applicable on and after the Interest Reset Date to which it relates to but
not including the next succeeding Interest Reset Date or until Maturity, as
the case may be.
If any Interest Reset Date would be a day that is not a Business Day,
such Interest Reset Date shall be postponed to the next succeeding day that
is a Business Day, except that in the case of a LIBOR Note or a Note for
which the interest rate is determined with reference to LIBOR, if such
Business Day is in the next succeeding calendar month, such Interest Reset
<PAGE>7
Date shall be the next preceding day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market (a "London Business
Day").
All percentages resulting from any calculation of the applicable BaseRate or
Rates on this Note will be rounded, if necessary, to the nearest onehundred-
thousandth of a percent, with five one-millionths of a percent
rounded upward, for example, 9.876545% (or .09876545) will be rounded upward
to 9.87655% (or .0987655), and all dollar amounts used in or resulting from
such calculation on this Note will be rounded to the nearest cent (with
one-half cent being rounded upward).
Subject to applicable provisions of law and except as specified herein,
on each Interest Reset Date, the Interest Rate on this Note shall be the
rate, or the lowest of any two or more of the rates, specified herein as the
applicable Base Rate or Rates, determined in accordance with the provisions
of the applicable heading or headings below.
DETERMINATION OF COMMERCIAL PAPER RATE. If the Base Rate is the
Commercial Paper Rate, as indicated on the face hereof, the Commercial Paper
Rate shall equal the Money Market Yield (as hereinafter defined) on the
second Business Day next preceding the Interest Reset Date specified on the
face hereof (the "Commercial Paper Rate Interest Determination Date") for
commercial paper having the Index Maturity specified on the face hereof, as
such rate shall be published in the "Federal Reserve Statistical Release
H.15(519), Selected Interest Rates" or any successor publication
("H.15(519)") under the heading "Commercial Paper". In the event that such
rate is not published prior to 9:00 a.m., New York City time, on the
Calculation Date pertaining to such Commercial Paper Rate Interest Determina-
tion Date, then the Commercial Paper Rate shall be the Money Market Yield on
such Commercial Paper Rate Interest Determination Date of the rate for
commercial paper of the Index Maturity specified on the face hereof as
published by the Federal Reserve Bank of New York in its daily statistical
release "Composite 3:30 p.m. Quotations for U.S. Government Securities" or
any successor publication ("Composite Quotations") under the heading "Commer-
cial Paper". If by 3:00 p.m., New York City time, on such Calculation Date,
such rate is not yet available in either H.15(519) or Composite Quotations
then the Commercial Paper Rate shall be calculated by the "Calculation Agent"
specified on the face hereof (after consultation with the Company) and will
be the Money Market Yield of the arithmetic mean of the offered rates, as of
11:00 a.m., New York City time, on such Commercial Paper Rate Interest
Determination Date, of three leading dealers of commercial paper in New York,
New York selected by the Calculation Agent (after consultation with the
Company) for commercial paper of the Index Maturity specified on the face
hereof, placed for an industrial issuer whose bond rating is "AA", or the
equivalent, from a nationally recognized rating agency; PROVIDED, HOWEVER,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting offered rates as mentioned in this sentence, the Commercial Paper
Rate determined on such Commercial Paper Rate Interest Determination Date
will be the rate determined on the immediately preceding Commercial Paper
Rate Interest Determination Date or, in the case of the first Commercial
Paper Rate Interest Determination Date, the Initial Interest Rate specified
on the face hereof.<PAGE>
<PAGE>8
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
Money Market Yield = D x 360
_____________ x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal and "M" refers to the
actual number of days in the Index Maturity.
DETERMINATION OF FEDERAL FUNDS RATE. If the Base Rate is the Federal
Funds Rate as indicated on the face hereof, the Federal Funds Rate shall
equal the rate on the Business Day immediately preceding the applicable
Interest Reset Date (the "Federal Funds Interest Determination Date") for
United States dollar federal funds as published in H.15(519) under the
heading "Federal Funds (Effective)" or, if not published by 3:00 p.m., New
York City time, on the related Calculation Date, the rate on such Federal
Funds Interest Determination Date as published in Composite Quotations under
the heading "Federal Funds/Effective Rate." If such rate is not published in
either H.15(519) or Composite Quotations by 3:00 p.m., New York City time, on
the related Calculation Date, then the Federal Funds Rate on such Federal
Funds Interest Determination Date will be calculated by the Calculation Agent
and will be the arithmetic mean of the rates for the last transaction in
overnight United States dollar federal funds arranged by three leading
brokers of federal funds transactions in The City of New York selected by
the Calculation Agent prior to 9:00 a.m., New York City time, on such Federal
Funds Interest Determination Date; provided, however that if the brokers so
selected by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Rate determined as of such Federal Funds Interest
Determination Date will be the Federal Funds Rate in effect on such Federal
Funds Interest Determination Date.
DETERMINATION OF 11TH DISTRICT COST OF FUNDS RATE. If the Base Rate is
the 11th District Cost of Funds Rate as indicated on the face hereof, the
11th District Cost of Funds shall equal the rate equal to the monthly 11th
District Cost of Funds Index (the "Index") published by the Federal Home Loan
Bank of San Francisco (the "FHLB of San Francisco") during the month
immediately preceding the Interest Reset Date to which such 11th District
Cost of Funds Interest Determination Date applies. The "Eleventh District
Cost of Funds Interest Determination Date" with respect to an Interest Reset
Date will be the last day on which the FHLB of San Francisco is open for
business in the month next preceding such Interest Reset Date in which the
FHLB of San Francisco publishes the Index.
The Index is normally published by the FHLB of San Francisco on the last
day on which the FHLB of San Francisco is open for business in each month and
represents the monthly weighted average cost of funds for savings institu-
tions in the 11th District of the Federal Home Loan Bank System for the month
preceding the month in which the Index is published. Currently, the Index is
computed by the FHLB of San Francisco for each month by dividing the cost of
funds (interest paid during the month by 11th District savings institutions
on savings, advances and other borrowings) by the average of the total amount
of those funds outstanding at the end of that month and the prior month and
annualizing and adjusting the result to reflect the actual number of days in
the particular month. If necessary, before these calculations are made, the
component figures are adjusted by the FHLB of San Francisco to neutralize the
effect of events such as member institutions leaving the 11th District or
acquiring institutions outside the 11th District.<PAGE>
<PAGE>9
If the FHLB of San Francisco shall fail in any month to publish the
Index (each such failure being referred to herein as an "Alternate Rate
Event"), then the 11th District Cost of Funds Rate for the first 11th
District Cost of Funds Interest Determination Date after the Alternate Rate
Event shall be calculated on the basis of the Index most recently published
prior to such 11th District Cost of Funds Interest Determination Date. If
any Alternate Rate Eventoccurs in the month immediately following a month in
which a prior AlternateRate Event occurred, then the 11th District Cost of
Funds Rate for the 11th District Cost of Funds Interest Determination Date
immediately following such second Alternate Rate Event shall be calculated
on the basis of the Index most recently published prior to such 11th
District Cost of Funds Interest Determination Date and, thereafter, the
11th District Cost of Funds Rate for each succeeding 11th District Cost of
Funds Interest Determination Date until Maturity of such 11th District
Cost of Funds Rate Notes shall be LIBOR, determined as if the Base Rate
for this Note was LIBOR, and the Spread shall be plus or minus the number
of basis points specified on the face hereof as the "Alternate Rate Event
Spread", if any.
In determining that the FHLB of San Francisco has failed in any month to
publish the Index, the Calculation Agent may rely conclusively on any
written advice from the FHLB of San Francisco to such effect.
DETERMINATION OF LIBOR. If the Base Rate is LIBOR, as indicated on the
face hereof, LIBOR will be determined by the Calculation Agent in accordance
with the following provisions:
(a) With respect to the second London Business Day preceding the
Interest Reset Date specified on the face hereof (a "LIBOR Interest Determi-
nation Date"), the Calculation Agent will determine the arithmetic mean of
all available offered rates for deposits in United States dollars for the
period of the Index Maturity specified on the face hereof commencing on the
second London Business Day immediately following such LIBOR Interest Determi-
nation Date, which appear on the Reuters Screen LIBO Page as of approximately
11:00 a.m., London time, on such LIBOR Interest Determination Date. "Reuters
Screen LIBO Page" means the display designated as page "LIBO" on the Reuters
Monitor Money Rate Service (or such other page as may replace the LIBO page
on the Service for the purpose of displaying London interbank offered rates
of major banks).
(b) If fewer than two offered rates appear on the Reuters Screen
LIBO Page, the Calculation Agent will request the principal London offices of
each of four major banks in the London interbank market, as selected by the
Calculation Agent (after consultation with the Company), to provide the
Calculation Agent with its offered quotations for deposits in United States
dollars for the period of the Index Maturity specified on the face hereof to
prime banks in the London interbank market as of approximately 11:00 a.m.,
London time, on such LIBOR Interest Determination Date and in a principal
amount equal to an amount not less than U.S. $1 million that is representa-
tive of a single transaction in such market at such time. If at least two
such quotations are provided, LIBOR for such LIBOR Interest Determination
Date will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR for such LIBOR Interest Determination Date
will be the arithmetic mean of the rates quoted by three major banks in New
York, New York selected by the Calculation Agent (after consultation with the
Company) as of approximately 11:00 a.m., New York City time, on such LIBOR
Interest Determination Date for loans in U.S. dollars to leading European
banks, for the period of the Index Maturity specified on the face hereof and
<PAGE>
<PAGE>10
in a principal amount equal to an amount of not less than U.S. $1 million
that is representative of a single transaction in such market at such time;
PROVIDED, HOWEVER, that if fewer than three banks selected as aforesaid by
the Calculation Agent (after consultation with the Company) are quoting rates
as mentioned in this sentence, LIBOR determined on such LIBOR Interest
Determination Date will be LIBOR determined on the immediately preceding
LIBOR Interest Determination Date, or in the case of the first LIBOR Interest
Determination Date, the Initial Interest Rate specified on the face hereof.
DETERMINATION OF PRIME RATE. If the Base Rate is Prime Rate, as
indicated on the face hereof, the Prime Rate shall equal, unless otherwise
specified on the face hereof, the rate set forth in H.15(519) for such date
opposite the caption "Bank Prime Loan" on the second Business Day next
preceding the Interest Reset Date specified on the face hereof (the "Prime
Rate Interest Determination Date"). If such rate is not yet published by
9:00 a.m., New York City time, on the Calculation Date, the Prime Rate for
such Prime Rate Interest Determination Date will be the arithmetic mean of
the rates of interest publicly announced by each bank named on the Reuters
Screen NYMF Page as such bank's prime rate or base lending rate as in effect
for such Prime Rate Interest Determination Date as quoted on the Reuters
Screen NYMF Page on such Prime Rate Interest Determination Date "Reuters
Screen NYMF Page" means the display designated as page "NYMF" on the Reuters
Monitor Money Rate Service (or such other page as may replace the NYMF page
on the service for the purpose of displaying the prime rate or base lending
rate of major banks). If fewer than four such rates appear on the Reuters
Screen NYMF Page for such Prime Rate Interest Determination Date, the rate
shall be the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by 360 as of the close of business
on such Prime Rate Interest Determination Date by at least two of the three
major money center banks in New York, New York selected by the Calculation
Agent (after consultation with the Company) from which quotations are
requested. If fewer than two quotations are provided, the Prime Rate shall
be calculated by the Calculation Agent and shall be determined as the
arithmetic mean on the basis of the prime rates in New York, New York by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any State thereof, in each
case having total equity capital of at least U.S. $500 million and being
subject to supervision or examination by federal or state authority, selected
by the Calculation Agent (after consultation with the Company) to quote such
rate or rates.
If in any month the Prime Rate is not published in H.15(519) and the
banks or trust companies selected as aforesaid are not quoting as mentioned
in the preceding paragraph, the Prime Rate determined on such Prime Rate
Interest Determination Date will be the Prime Rate determined on the immedi-
ately preceding Prime Rate Interest Determination Date, or in the case of the
first Prime Rate Interest Date, the Initial Interest Rate specified on the
face hereof.
DETERMINATION OF TREASURY RATE. If the Base Rate is the Treasury Rate,
as indicated on the face hereof, the Treasury Rate will equal the rate for
the auction of direct obligations of the United States ("Treasury Bills")
having the Index Maturity specified on the face hereof) as published in
H.15(519) under the heading "Treasury Bills -- auction average (investment)"
on the day of the week in which the Interest Reset Date specified on the face
hereof falls on which Treasury Bills actually are auctioned (the "Treasury
<PAGE>
<PAGE>11
Rate Interest Determination Date") or, if not so published by 9:00 a.m., New
York City time, on the Calculation Date pertaining to such Treasury Rate
Interest Determination Date, the auction average rate on such Treasury Rate
Interest Determination Date (expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) as
otherwise announced by the United States Department of the Treasury. In the
event that the results of the auction of Treasury Bills having the Index
Maturity shown on the face hereof are not published or reported as provided
above by 3:00 p.m., New York Citytime, on such Calculation Date, or if no
such auction is held on suchTreasury Rate Interest Determination Date,
then the Treasury Rate shall be calculated by the Calculation Agent and
shall be a yield to maturity (expressed as a bond equivalent on the basis
of a year of 365 or 366 days, as applicable, and applied on a daily basis)
of the arithmetic mean of the secondary market bid rates, as of approxi-
mately 3:30 p.m., New York City time, on such Treasury Rate Interest
Determination Date, of three leading primary United States government
securities dealers selected by the Calculation Agent (after consultation with
the Company), for the issue of Treasury Bills with a remaining maturity
closest to the Index Maturity shown on the face hereof; PROVIDED, HOWEVER,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting bid rates as mentioned in this sentence, the Treasury Rate with
respect to such Treasury Rate Interest Determination Date will be the Treasury
Rate determined on the immediately preceding Treasury Rate Interest Deter-
mination Date or, in the case of the first Treasury Rate Interest Deter-
mination Date, the Initial Interest Rate specified on the face hereof.
Notwithstanding the foregoing, the Interest Rate hereon shall not be
greater than the Maximum Interest Rate, if any, shown on the face hereof or
less than the Minimum Interest Rate, if any, shown on the face hereof. The
Calculation Agent shall calculate the Interest Rate hereon in accordance with
the foregoing on or before each Calculation Date. The interest rate on this
Note 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 of general application.
The Calculation Date, if applicable, pertaining to the Interest Determi-
nation Date will be the earlier of (i) the tenth calendar day after such
Interest Determination Date, or if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or the Maturity, as the case may be.
Interest payments hereon made on any Interest Payment Date or at
Maturity will include interest accrued to but not including such Interest
Payment Date or Maturity, as the case may be (or from and including the
Original Issue Date if no interest has been paid on this Note). Accrued
interest hereon from the Original Issue Date or from the last date to which
interest hereon has been paid, as the case may be, shall be an amount
calculated by multiplying the face amount hereof by an accrued interest
factor. Such accrued interest factor shall be computed by adding the
interest factors calculated for each day in the period commencing on the
Original Issue Date or the last date to which interest shall have been paid,
as the case may be, and ending on the date to which accrued interest is being
calculated. The interest factor for each such day shall be computed by
dividing the interest rate applicable to such day by 360, if the applicable
Base Rate or Rates is the Commercial Paper Rate, Federal Funds Rate, 11th
District Cost of Funds Rate, LIBOR or the Prime Rate as indicated on the face
hereof, or by the actual number of days in the year if the applicable Base<PAGE>
<PAGE>12
Rate is the Treasury Rate as indicated on the face hereof. The interest
rate for Notes for which the interest rate is calculated with reference to
the lowest of two or more Base Rates will be calculated in each period in the
same manner as if only the lowest of the applicable Base Rates apply.
PROVISIONS APPLICABLE TO FIXED AND FLOATING RATE NOTES:
If an Event of Default shall occur and be continuing, the principal of
all the Notes may be declared due and payable in the manner and with all the
effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of not less than 66-2/3% in aggregate principal
amount of the Outstanding Securities, of each series affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequenc-
es. Any such consent or waiver by the Holder of this Note shall be conclu-
sive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof whether or not notation for such consent
or waiver is made upon this Note.
As provided in the Indenture, and subject to certain limitations therein
set forth, the transfer of this Note is registrable by the Holder hereof in
the Security Register upon due presentment of this Note for registration of
transfer at the office or agency of the Company in any place where the
principal of and interest on this Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes, of
the same series in authorized denominations and for the same aggregate
principal amount, having the identical Original Issue Date, Stated Maturity
and provisions with respect to payment of interest and redemption prior to
Stated Maturity, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
minimum denominations of $100,000 and integral multiples of $1,000 in excess
thereof. As provided in the Indenture, and subject to certain limitations
therein set forth, the Notes are exchangeable for a like aggregate principal
amount, having the identical Original Issue Date,
Stated Maturity and provisions with respect to payment of interest and
redemption prior to Stated Maturity, as requested by the Holder surrendering
the same.
No service charge will be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee, the Security Registrar and any agent of the Company or
the Trustee may treat the Person in whose name this Note is registered as the
<PAGE>
<PAGE>13
absolute owner hereof for all purposes whether or not this Note be overdue,
and neither the Company, the Trustee, the Security Registrar nor any such
agent shall be affected by notice to the contrary.
The Holder of this Note shall not have recourse for the payment of
principal of or interest on this Note or for any claim based on this Note or
the Indenture, against any director, officer or stockholder, past, present or
future, of the Company. By acceptance of this Note, the Holder waives any
such claim against any such Person.
The Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements
made and to be performed in such State.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM--as tenants in common
UNIF GIFT MIN ACT--____________ Custodian ______________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
_________________________________
(State)
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the
above list.<PAGE>
<PAGE>14 _____________________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or Other
Identifying Number of Assignee:
______________________________
___________________________________________________________________
PLEASE PRINT OR TYPE THE NAME AND ADDRESS
INCLUDING ZIP CODE OF ASSIGNEE:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
the within Note of McDONNELL DOUGLAS FINANCE CORPORATION and all rights
thereunder, hereby irrevocably constituting and appointing attorney to
transfer said Note on the books of the Company, with full power of substitu-
tion in the premises.
Dated: _________________ ______________________________________________
Notice: The signature to this assignment must
correspond with the name as written upon the
face of the Note in every particular without
alteration or enlargement or any change whatever.
