<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration No. 33-36790
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL 25, 1994
$225,000,000
AMERITECH CAPITAL FUNDING CORPORATION
FLOATING RATE NOTES DUE MAY 2, 1997
UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL
AND INTEREST BY
AMERITECH CORPORATION
----------------
Interest on the Notes is payable quarterly on February 2, May 2, August 2
and November 2 of each year, commencing August 2, 1994. The interest rate for
each Interest Period (as herein defined) will be the London Interbank Offered
Rate ("LIBOR") for three-month U.S. dollar deposits as determined two London
Business Days (as herein defined) before the beginning of each Interest
Period. See "Certain Terms of the Notes--General." The Notes will not be
redeemable prior to maturity.
The Notes will be represented by global securities registered in the name of
a nominee of the Depository. Beneficial interests in global securities will be
shown on, and transfers thereof will be effected only through, records
maintained by the Depository (with respect to participants' interests) and its
participants. Except as described herein, Notes in definitive form will not be
issued. See "Certain Terms of the Notes--Book-Entry Procedures." Settlement
for the Notes will be made in immediately available funds. The Notes will
trade in the Depository's Same-Day Funds Settlement System until maturity, and
secondary market trading activity for the Notes will therefore settle in
immediately available funds. All payments of principal and interest will be
made in immediately available funds. See "Certain Terms of the Notes--Same-Day
Settlement and Payment."
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OF-
FENSE.
----------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) CAPITAL FUNDING(1)(3)
----------------- ------------ ---------------------
<S> <C> <C> <C>
Per Note................... 100.000% .350% 99.650%
Total...................... $225,000,000 $787,500 $224,212,500
</TABLE>
- --------
(1) Plus accrued interest, if any, from May 2, 1994.
(2) Capital Funding and Ameritech have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities
Act of 1933.
(3) Before deducting estimated expenses of $258,000 payable by Capital
Funding.
----------------
The Notes are offered severally by the Underwriters, as specified herein,
subject to receipt and acceptance by them and subject to their right to reject
any order in whole or in part. It is expected that the Notes will be
distributed through the facilities of The Depository Trust Company, New York,
New York, on or about May 2, 1994.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
----------------
The date of this Prospectus Supplement is April 25, 1994.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
RECENT DEVELOPMENTS
On April 18, 1994, Ameritech Corporation ("Ameritech") announced that for the
quarter ended March 31, 1994, its revenues were approximately $3.0 billion and
its net income was $43.8 million, including a one-time after-tax charge of
$332.8 million for workforce restructuring. The charge relates to a previously
announced plan by Ameritech to reduce its nonmanagement workforce by 6,000
employees by the end of 1995.
On April 20, 1994, Richard C. Notebaert, Ameritech's President and Chief
Executive Officer, succeeded William L. Weiss as Chairman of the Board of
Directors of Ameritech. Mr. Weiss will retain the title of Chairman Emeritus of
Ameritech.
USE OF PROCEEDS
Ameritech Capital Funding Corporation ("Capital Funding") intends to lend the
net proceeds from the sale of the Floating Rate Notes due May 2, 1997 (the
"Notes") to Ameritech to finance a portion of Ameritech's approximately $472
million investment, expected to be made on May 2, 1994, in a new company to be
formed by General Electric Company to hold the assets of General Electric
Information Services. Net proceeds from the sale of the Notes may also be used
for the general corporate purposes of Ameritech and its subsidiaries.
CERTAIN TERMS OF THE NOTES
The Notes are to be issued under an Indenture, dated as of January 1, 1990
(the "Indenture"), among Ameritech, Capital Funding and Continental Bank,
National Association, as trustee. The following summaries of certain provisions
of the Indenture and the Notes offered hereby (referred to in the Prospectus as
"Debt Securities" and "Offered Debt Securities") supplement, and to the extent
inconsistent therewith replace, the description of the general terms and
provisions of the Debt Securities set forth in the Prospectus, to which
description reference is hereby made. The following summaries do not purport to
be complete and are subject to, and are qualified in their entirety by
reference to, all the provisions of the Indenture and the Notes. Capitalized
terms used but not defined herein or in the Prospectus shall have the meanings
given to them in the Indenture.
GENERAL
The Notes will represent unsecured and unsubordinated obligations of Capital
Funding and will rank on a parity with all other unsecured and unsubordinated
indebtedness of Capital Funding. The Notes are unconditionally guaranteed as to
payment of principal and interest by Ameritech, the sole stockholder of Capital
Funding.
The Notes will be limited to $225,000,000 aggregate principal amount and will
mature on May 2, 1997. The Notes will bear interest from the date of issue, and
such interest will be payable quarterly on each February 2, May 2, August 2 and
November 2 (each, an "Interest Payment Date") commencing
S-2
<PAGE>
August 2, 1994, to the persons in whose names such Notes were registered at the
close of business on the next preceding January 15, April 15, July 15 and
October 15, respectively (each a "Regular Record Date"). The period beginning
on and including the date of issue of the Notes and ending on but excluding the
first Interest Payment Date and each successive period beginning on and
including an Interest Payment Date and ending on but excluding the next
succeeding Interest Payment Date or the date of maturity is referred to herein
as an "Interest Period." A "Business Day" means any day that is not a Saturday
or Sunday and that, in New York, New York or Chicago, Illinois, is not a day on
which banking institutions generally are authorized or required by law or
executive order to close.
The Notes will bear interest for each Interest Period at a rate per annum
equal to LIBOR (as determined below). LIBOR will be determined by the Trustee
or such other financial institution as may be appointed by Capital Funding, as
calculation agent (the "Calculation Agent"), in accordance with the following
provisions:
(i) For each Interest Period, on the applicable Interest Determination
Date (as defined below) the Calculation Agent will determine LIBOR for such
Interest Period. LIBOR will be the offered rate (expressed as an interest
rate per annum) for three-month deposits in U.S. dollars in the London
interbank market which appears on Telerate Screen Page 3750 (to five
decimal places), as of 11:00 a.m., London time, on such Interest
Determination Date. "Telerate Screen Page 3750" means the display
designated as Page "3750" on the Dow Jones Telerate Service (or such other
page as may replace Page 3750 on that service or such other service or
services as may be nominated by the British Bankers' Association for the
purpose of displaying London interbank offered rates of major banks for
U.S. dollar deposits).
(ii) If, on any Interest Determination Date, LIBOR cannot be determined
pursuant to (i) above, LIBOR will be determined on the basis of the rates
at which deposits in U.S. dollars having a maturity of three months,
commencing on the second London Business Day (as defined below) immediately
following such Interest Determination Date and in a principal amount of not
less than U.S. $1,000,000 that is representative for a single transaction
in such market at such time, are offered by four major banks in the London
interbank market selected by the Calculation Agent at approximately 11:00
a.m., London time, on such Interest Determination Date to prime banks in
the London interbank market. The Calculation Agent will request the
principal London office of each of such banks to provide a quotation of its
rate. If at least two such quotations are provided, LIBOR in respect of
such Interest Determination Date will be the arithmetic mean (rounded to
the nearest one-thousandth of a percent, with five ten-thousandths of a
percent rounded upwards) of such quotations. If fewer than two quotations
are provided, LIBOR in respect of such Interest Determination Date will be
the arithmetic mean (rounded to the nearest one-thousandth of a percent,
with five ten-thousandths of a percent rounded upwards) of the rates quoted
by three major banks in New York City selected by the Calculation Agent at
approximately 11:00 a.m., New York City time, on such Interest
Determination Date for loans in U.S. dollars to leading European banks
having a maturity of three months commencing on the second London Business
Day immediately following such Interest Determination Date and in a
principal amount of not less than U.S. $1,000,000 that is representative
for a single transaction in such market at such time; provided, however,
that if fewer than three banks selected as aforesaid by the Calculation
Agent are quoting as mentioned in this sentence, LIBOR will be LIBOR in
effect on such Interest Determination Date.
For purposes of calculating LIBOR, (i) "Interest Determination Date" for any
Interest Period means the second London Business Day preceding the Interest
Payment Date commencing such Interest Period or, in the case of the first
Interest Period, the second London Business Day preceding the original date of
issue of the Notes, and (ii) a "London Business Day" means any Business Day on
which dealings in deposits in U.S. dollars are transacted in the London
interbank market.
S-3
<PAGE>
Each interest payment on a Note will include interest accrued to but
excluding the applicable Interest Payment Date. Accrued interest from the date
of issue or from the last date to which interest has been paid will be
calculated by multiplying the face amount of a Note by an accrued interest
factor computed by multiplying the per annum rate of interest for the
applicable Interest Period by a fraction the numerator of which is the actual
number of days elapsed in such Interest Period and the denominator of which is
360. The accrued interest factor will be expressed as a decimal rounded to the
nearest ten-thousandth, with five hundred-thousandths rounded upwards.
Until the Notes are paid or payment thereof is duly provided for, Capital
Funding will, at all times, maintain a paying agent (the "Paying Agent") in The
City of New York, New York or Chicago, Illinois capable of performing the
duties described herein to be performed by the Paying Agent. Capital Funding
has initially appointed Continental Bank, National Association, 231 South
LaSalle Street, Chicago, Illinois 60697, as the Paying Agent. Capital Funding
will notify the holders of the Notes, in accordance with the Indenture, of any
change in the Paying Agent or its address. Continental Bank, National
Association, also serves as Trustee under the Indenture.
Any payment otherwise required to be made in respect of a Note on a date that
is not a Business Day for such Note need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on such date, and no additional interest shall accrue as a result of such
delayed payment.
The Notes are not subject to redemption prior to maturity and are not
entitled to any sinking fund.
The Indenture does not contain covenants or other provisions designed to
afford holders of the Notes protection in the event of a highly leveraged
transaction, change in credit or other similar occurrence.
BOOK-ENTRY PROCEDURES
The Notes will be issued initially in the form of fully registered global
securities which will be deposited with, or on behalf of, The Depository Trust
Company, New York, New York (the "Depository"), and registered in the name of
the Depository's nominee. Except as set forth in the Prospectus under
"Description of Debt Securities and Guarantees--Global Securities," the Notes
will not be issuable in certificated form.
The Depository has advised Capital Funding and Goldman, Sachs & Co., Lehman
Brothers Inc. and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (collectively, the "Underwriters"), as follows: The Depository is
a limited-purpose trust company organized under the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. The Depository holds securities that its participants
("Participants") deposit into the Depository. The Depository also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. The Depository's direct Participants
include securities brokers and dealers (including the Underwriters), banks,
trust companies, clearing corporations and certain other organizations. The
Depository is owned by a number of its direct Participants and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to the Depository's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a direct
Participant, either directly or indirectly. The Rules applicable to the
Depository and its Participants are on file with the Securities and Exchange
Commission.
S-4
<PAGE>
A further description of the Depository's procedures with respect to global
securities is set forth in the Prospectus under "Description of Debt Securities
and Guarantees--Global Securities." The Depository has confirmed to Capital
Funding, the Underwriters and the Trustee that it intends to follow such
procedures.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by Capital
Funding in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the Notes
will trade in the Depository's Same-Day Funds Settlement System until maturity,
and secondary market trading activity in the Notes will therefore be required
by the Depository to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
Capital Funding has agreed to sell to each of the Underwriters named below, and
each of the Underwriters, for whom Goldman, Sachs & Co. are acting as
representatives, has severally agreed to purchase, the principal amount of
Notes set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER NOTES
----------- ------------
<S> <C>
Goldman, Sachs & Co............................................... $ 75,000,000
Lehman Brothers Inc............................................... 75,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................. 75,000,000
------------
Total......................................................... $225,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters have committed to take and pay for all of the Notes, if any are
taken.
Capital Funding has been advised by the Underwriters that they propose to
offer the Notes in part directly to retail purchasers at the respective initial
public offering prices set forth on the cover page of this Prospectus
Supplement and in part to certain securities dealers at such prices less a
concession of .200% of the principal amount of the Notes. The Underwriters may
allow, and such dealers may reallow, a concession not to exceed .125% of the
principal amount of the Notes to certain brokers and dealers. After the Notes
are released for sale to the public, the offering prices and other selling
terms may from time to time be varied by the representatives.
No Note will have an established trading market when issued. The Notes will
not be listed on any securities exchange. Each Underwriter may make a market in
the Notes, but such Underwriter is not obligated to do so and may discontinue
any market-making at any time without notice. There can be no assurance that
the Notes offered hereby will be sold or that there will be a secondary market
for any of the Notes.
Goldman, Sachs & Co., Lehman Brothers Inc. and Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and certain affiliates thereof
engage or may in the future engage in transactions with and perform services
for each of Capital Funding and Ameritech in the ordinary course of business.
Capital Funding and Ameritech have agreed to indemnify each Underwriter
against certain civil liabilities, including liabilities under the Securities
Act of 1933, or to contribute to payments such Underwriter may be required to
make in respect thereof.
S-5
<PAGE>
PROSPECTUS
AMERITECH CAPITAL FUNDING CORPORATION
DEBT SECURITIES
UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST BY
AMERITECH CORPORATION
Ameritech Capital Funding Corporation ("Capital Funding") from time to time
may offer its unsecured notes, debentures, or other debt securities (the "Debt
Securities"), in one or more series, in an aggregate principal amount
sufficient to result in net proceeds to Capital Funding of up to U.S.
$642,161,000 (or its equivalent in foreign denominated currencies or European
Currency Units or other composite currencies). Debt Securities may be issued in
registered form without coupons ("Registered Securities"), bearer form with or
without coupons attached ("Bearer Securities") or in the form of one or more
global securities (each a "Global Security"). All Debt Securities will be
unconditionally guaranteed as to payment of principal, premium, if any, and
interest (the "Guarantees") by Ameritech Corporation (formerly, American
Information Technologies Corporation) ("Ameritech").
When a particular series of Debt Securities is offered, a supplement to this
Prospectus will be delivered (the "Prospectus Supplement") together with this
Prospectus setting forth the terms of such Debt Securities, including, where
applicable, the specific designation, aggregate principal amount, currency or
currencies in which the principal, premium, if any, and interest are payable,
denominations, maturity, rate (which may be fixed or variable) and time of
payment of interest, any terms for redemption, any terms for repayment at the
option of the holder, any terms for sinking fund payments, the initial public
offering price, the names of, and the principal amounts to be purchased by or
sold through, underwriters, agents or dealers and the compensation of such
underwriters, agents or dealers, any listing of the Debt Securities on a
securities exchange and the other terms in connection with the offering and
sale of such Debt Securities.
Capital Funding may sell the Debt Securities to or through dealers or
underwriters, directly to other purchasers or through agents. If an agent of
Capital Funding or a dealer or an underwriter is involved in the sale of the
Debt Securities in respect of which this Prospectus is being delivered, the
agent's commission or dealer's or underwriter's discount will be set forth in,
or may be calculated from, the Prospectus Supplement. The net proceeds to
Capital Funding from such sale, which will be set forth in the Prospectus
Supplement, will be the purchase price of such Debt Securities less such
commission in the case of an agent, the purchase price of such Debt Securities
in the case of a dealer or the public offering price less such discount in the
case of an underwriter, and less, in each case, the other attributable issuance
expenses. See "Plan of Distribution" for possible indemnification arrangements
for any agents, dealers or underwriters.
This Prospectus may not be used to consummate sales of Debt Securities unless
accompanied by the Prospectus Supplement applicable to the Debt Securities
being sold.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is April 25, 1994.
<PAGE>
IN CONNECTION WITH ANY OFFERING OF DEBT SECURITIES, UNDERWRITERS OR AGENTS
MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICES OF THE DEBT SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
Ameritech is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by Ameritech may be inspected and copied
at the public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
Commission's Regional Offices located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and at Seven World Trade
Center, Suite 1300, New York, New York 10048. Copies of such materials can be
obtained by mail from the Public Reference Branch of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such material
may also be inspected and copied at the offices of the New York, Boston,
Midwest, Philadelphia and Pacific Stock Exchanges, on each of which exchanges
certain of Ameritech's securities are listed.
Ameritech and Capital Funding have filed with the Commission a registration
statement on Form S-3 (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"). This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is hereby made to the Registration Statement.
The Commission's Office of Chief Counsel, Division of Corporate Finance, has
indicated to Capital Funding that, in connection with the issuance of the Debt
Securities, it will not raise any objection if Capital Funding does not file
periodic reports pursuant to Sections 13(a) and 15(d) of the Exchange Act.
Accordingly, Capital Funding will not file such periodic reports.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Ameritech's Annual Report on Form 10-K for the fiscal year ended December 31,
1993, filed by Ameritech with the Commission (File No. 1-8612), is incorporated
herein by reference.
All documents filed by Ameritech pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Ameritech and Capital Funding will provide without charge to each person,
including any beneficial owner, to whom a Prospectus is delivered, upon written
or oral request of such person, a copy of any
2
<PAGE>
or all of the documents which are incorporated by reference herein, other than
exhibits to such documents which are not specifically incorporated by reference
therein. Requests should be directed to the Director of Investor Relations,
Ameritech, 30 South Wacker Drive, Chicago, Illinois 60606 (Telephone (312) 750-
5000).
AMERITECH CORPORATION
Ameritech is a leading supplier of full service telecommunications products
and services and advanced information services, primarily to twelve million
customers in the Midwest. It also has investments in New Zealand, Hungary,
Norway, Poland and other international areas. Ameritech is the parent of
Illinois Bell Telephone Company; Indiana Bell Telephone Company, Incorporated;
Michigan Bell Telephone Company; The Ohio Bell Telephone Company; and Wisconsin
Bell, Inc. (collectively the "Bell Companies"). In 1993, Ameritech restructured
its five geographically based telephone operating companies and two other
related businesses into customer-specific business units which provide services
to the following customer categories: residential, business (small, medium and
large) network and information industry service providers, long distance
providers, local exchange carriers and pay phone customers. Other business
units provide wireless communications services, advertising services and
leasing services. The business units are supported by a single, regionally
coordinated network unit. The Bell Companies continue to function as legal
entities, owning Bell Company assets in each state, and continue to be
regulated by the individual state public utility commissions.
Ameritech was incorporated in 1983 under the laws of the State of Delaware
and has its principal executive offices at 30 South Wacker Drive, Chicago,
Illinois 60606 (telephone number (312) 750-5000).
AMERITECH CAPITAL FUNDING CORPORATION
Capital Funding was established to provide financing to Ameritech and to the
direct and indirect subsidiaries of Ameritech. Capital Funding may raise funds
through the offering of Debt Securities in the United States, Europe, and other
overseas markets and will lend the net proceeds to Ameritech and/or one or more
subsidiaries of Ameritech. Capital Funding does not and will not engage in any
separate business activities. All of the Debt Securities will be
unconditionally guaranteed as to payment of principal, premium, if any, and
interest by Ameritech.
Capital Funding was incorporated under the laws of the State of Delaware in
May, 1989 and is a wholly owned subsidiary of Ameritech. Capital Funding became
a close corporation under Delaware law effective January 1, 1990. The principal
executive offices of Capital Funding are located at 30 South Wacker Drive,
Chicago, Illinois 60606 (telephone number (312) 750-5000).
RATIOS OF EARNINGS TO FIXED CHARGES OF AMERITECH
The following table sets forth the ratio of earnings to fixed charges of
Ameritech for the periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
5.25 4.52 3.63 4.37 4.94
</TABLE>
For the purpose of calculating this ratio, earnings consist of income before
income and related taxes, fixed charges and the cumulative effect of change in
accounting principles. Fixed charges consist of consolidated interest expense
and the estimated interest component of rental expense.
3
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities will be used to provide
funds for Ameritech and subsidiaries of Ameritech.
Capital Funding will remit to Ameritech or one or more of the subsidiaries of
Ameritech the cash raised by Capital Funding as soon as practicable after
receipt thereof, but in no event later than six months after Capital Funding
receives such cash. In the interim, Capital Funding will invest any funds held
by it only in securities permitted by Rule 3a-5(a)(6) of the Commission under
the Investment Company Act of 1940, as amended.
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
The following description sets forth certain general terms and provisions of
the Debt Securities and Guarantees to which any Prospectus Supplement may
relate. The particular terms and provisions of the series of Debt Securities
offered by a Prospectus Supplement (the "Offered Debt Securities") and the
extent to which such general terms and provisions described below may apply
thereto, will be described in the Prospectus Supplement relating to such
Offered Debt Securities.
The Debt Securities are to be issued under an Indenture (the "Indenture"),
dated as of January 1, 1990, among Ameritech, Capital Funding and Continental
Bank, National Association, as trustee (the "Trustee"), a copy of which is
filed as an exhibit to the Registration Statement of which this Prospectus is a
part.
The following summaries of certain provisions of the Debt Securities, the
Guarantees and 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 Debt
Securities, the Guarantees and the Indenture, including the definitions therein
of capitalized terms which are used but are not defined herein. All Section
references used herein are to Sections in the Indenture.
GENERAL
The Indenture does not limit the amount of Debt Securities that may be issued
thereunder and provides that Debt Securities may be issued thereunder from time
to time in one or more series. (Section 301). The Indenture does not limit the
amount of other indebtedness or securities which may be issued by Capital
Funding.
Each series of Debt Securities will constitute unsecured and unsubordinated
indebtedness of Capital Funding, will rank on a parity with Capital Funding's
other unsecured and unsubordinated indebtedness and will have the benefit of
the Guarantees described below.
The Indenture does not contain covenants or other provisions designed to
afford Holders (as defined in the Indenture) of the Debt Securities protection
in the event of a highly leveraged transaction, change in credit rating or
other similar occurrence.
Reference is made to the Prospectus Supplement relating to the particular
Offered Debt Securities offered thereby for the following terms of the Offered
Debt Securities: (i) the title of the Offered Debt Securities or the particular
series thereof; (ii) any limit on the aggregate principal amount of the Offered
Debt Securities; (iii) whether the Offered Debt Securities are to be issuable
as Registered Securities or Bearer Securities or both, whether any of the
Offered Debt Securities are to be issuable initially in temporary global form
and whether any of the Offered Debt Securities are to be issuable in permanent
4
<PAGE>
global form; (iv) the price or prices (generally expressed as a percentage of
the aggregate principal amount thereof) at which the Offered Debt Securities
will be issued; (v) the date or dates on which the Offered Debt Securities will
mature; (vi) the rate or rates per annum, or the formula by which such rate or
rates shall be determined, at which the Offered Debt Securities will bear
interest, if any, and the dates from which any such interest will accrue; (vii)
the Interest Payment Dates on which any such interest on the Offered Debt
Securities will be payable, the Regular Record Date for any interest payable on
any Offered Debt Securities that are Registered Securities on any Interest
Payment Date and the extent to which, or the manner in which, any interest
payable on a Global Security on an Interest Payment Date will be paid if other
than in the manner described below under "Global Securities"; (viii) any
mandatory or optional sinking fund or analogous provisions; (ix) each office or
agency where, subject to the terms of the Indenture as described below under
"Payments and Paying Agents", the principal of and any premium and interest on
the Offered Debt Securities will be payable and each office or agency where,
subject to the terms of the Indenture as described below under "Denominations,
Registration and Transfer", the Offered Debt Securities may be presented for
registration of transfer or exchange; (x) the date, if any, after which and the
price or prices at which the Offered Debt Securities may, pursuant to any
optional or mandatory redemption provisions, be redeemed, in whole or in part,
and the other detailed terms and provisions of any such optional or mandatory
redemption provisions; (xi) the date, if any, after which and the price or
prices at which the Offered Debt Securities will be repayable at the option of
the holder thereof prior to maturity; (xii) the denominations in which any
Offered Debt Securities which are Registered Securities will be issuable, if
other than denominations of U.S. $1,000 and any integral multiple thereof, and
the denominations in which any Offered Debt Securities which are Bearer
Securities will be issuable, if other than denominations of U.S. $5,000; (xiii)
the currency or currencies of payment of principal of and any premium and
interest on the Offered Debt Securities; (xiv) any index used to determine the
amount of payments of principal of and any premium and interest on the Offered
Debt Securities; (xv) any additional covenants applicable to the Offered Debt
Securities; and (xvi) any other terms and provisions of the Offered Debt
Securities not inconsistent with the terms and provisions of the Indenture. Any
such Prospectus Supplement will also describe any special provisions for the
payment of additional amounts with respect to the Offered Debt Securities.
(Section 301).
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities is
payable in a foreign currency or currencies or foreign currency unit or units,
the restrictions, elections, general tax considerations, specific terms and
other information with respect to such issue of Debt Securities and such
foreign currency or currencies or foreign currency unit or units will be set
forth in the applicable Prospectus Supplement.
Some of the Debt Securities may be issued as original issue discount
securities (bearing no interest or interest at a rate which at the time of
issuance is below market rates) to be sold at a substantial discount below
their stated principal amount. Federal income tax considerations and other
special considerations applicable to original issue discount securities will be
set forth in the applicable Prospectus Supplement.
GUARANTEES
Ameritech will unconditionally guarantee the due and punctual payment of the
principal, premium, if any, and interest on the Debt Securities when and as the
same shall become due and payable, whether at maturity, upon redemption, or
otherwise. (Sections 311 and 312). The Guarantees will rank equally with all
other unsecured and unsubordinated obligations of Ameritech. Since Ameritech is
a holding company, the right of Ameritech and, hence, the right of creditors of
Ameritech (including the holders of the Debt Securities) to participate in any
distribution of the assets of any subsidiary of
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Ameritech, whether upon liquidation, reorganization, or otherwise, is subject
to prior claims of creditors of each such subsidiary, except to the extent that
claims of Ameritech itself as a creditor of a subsidiary may be allowed. The
right of creditors of Ameritech (including the holders of the Debt Securities)
to participate in the distribution of the stock owned by Ameritech in the
Ameritech Bell Companies would also be subject to approval by the regulatory
commissions having jurisdiction over such subsidiaries (including the Federal
Communications Commission).
DENOMINATIONS, REGISTRATION AND TRANSFER
The Debt Securities will be issuable as Registered Securities, Bearer
Securities or both. Debt Securities may be issuable in the form of one or more
Global Securities, as described below under "Global Securities". Unless
otherwise provided in the applicable Prospectus Supplement, Registered
Securities denominated in U.S. dollars will be issued only in denominations of
$1,000 or any integral multiple thereof and Bearer Securities denominated in
U.S. dollars will be issued only in denominations of $5,000 with coupons
attached. A Global Security will be issued in a denomination equal to the
aggregate principal amount of outstanding Debt Securities represented by such
Global Security. The Prospectus Supplement relating to Debt Securities
denominated in a foreign or composite currency will specify the denominations
thereof. (Sections 201, 203, 301 and 302).
In connection with its original issuance, no Bearer Security shall be mailed
or otherwise delivered to any location in the United States (as defined below
under "Limitations on Issuance of Bearer Securities") and a Bearer Security may
be delivered in connection with its original issuance only if the person
entitled to receive such Bearer Security furnishes written certification, in
the form required by the Indenture, to the effect that such Bearer Security is
not being acquired by or on behalf of a United States person (as defined below
under "Limitations on Issuance of Bearer Securities"), or, if a beneficial
interest in such Bearer Security is being acquired by or on behalf of a United
States person, that such United States person is a financial institution which
agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the United States Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations thereunder. (Sections 303 and 304). See "Global Securities" and
"Limitations on Issuance of Bearer Securities" below.
Registered Securities of any series will be exchangeable for other Registered
Securities of the same series and of a like aggregate principal amount and
tenor of different authorized denominations. In addition, if Debt Securities of
any series are issuable as both Registered Securities and as Bearer Securities,
at the option of the holder upon request confirmed in writing, and subject to
the terms of the Indenture, Bearer Securities (with all unmatured coupons,
except as provided below, and all matured coupons in default attached) of such
series will be exchangeable for Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor.
Unless otherwise indicated in an applicable Prospectus Supplement, any Bearer
Security surrendered in exchange for a Registered Security between a Regular
Record Date or a Special Record Date and the relevant date for payment of
interest shall be surrendered without the coupon relating to such date for
payment of interest attached and interest will not be payable in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the holder of such coupon when due in accordance with the terms
of the Indenture. Except as provided in an applicable Prospectus Supplement,
Bearer Securities will not be issued in exchange for Registered Securities.
(Section 305).
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer duly executed), at the
office of the Security Registrar designated by Capital Funding or at the office
of any transfer agent designated by Capital Funding for such purpose with
respect to any series of Debt
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Securities and referred to in an applicable Prospectus Supplement, without
service charge and upon payment of any taxes and other governmental charges as
described in the Indenture. Such transfer or exchange will be effected upon the
Security Registrar or such transfer agent, as the case may be, being satisfied
with the documents of title and identity of the person making the request.
Capital Funding has initially appointed the Trustee as the Security Registrar
under the Indenture. (Section 305). If a Prospectus Supplement refers to any
transfer agent (in addition to the Security Registrar) initially designated by
Capital Funding with respect to any series of Debt Securities, Capital Funding
may at any time rescind the designation of any such transfer agent or approve a
change in the location through which any such transfer agent acts, except that,
if Debt Securities of a series are issuable only as Registered Securities,
Capital Funding will be required to maintain a transfer agent in each Place of
Payment for such series and, if Debt Securities of a series are issuable as
Bearer Securities, Capital Funding will be required to maintain (in addition to
the Security Registrar) a transfer agent in a Place of Payment for such series
located outside the United States. Capital Funding may at any time designate
additional transfer agents with respect to any series of Debt Securities.
(Section 1002).
In the event of any redemption in part, Capital Funding shall not be required
to (i) issue, register the transfer of or exchange Debt Securities of any
series during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Debt Securities of that series
selected to be redeemed and ending at the close of business on (a) if Debt
Securities of the series are issuable only as Registered Securities, the day of
mailing of the relevant notice of redemption and (b) if Debt Securities of the
series are issuable only as Bearer Securities, the day of the first publication
of the relevant notice of redemption or, if Debt Securities of that series are
also issuable as Registered Securities and there is no publication, the mailing
of the relevant notice of redemption; (ii) register the transfer of or exchange
any Registered Security, or portion thereof, called for redemption, except the
unredeemed portion of any Registered Security being redeemed in part; or (iii)
exchange any Bearer Security called for redemption, except to exchange such
Bearer Security for a Registered Security of that series and like tenor which
is immediately surrendered for redemption. (Section 305).
PAYMENTS AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and any premium and interest on Registered Securities (other than
a Global Security) will be made at the office of such Paying Agent or Paying
Agents as Capital Funding may designate from time to time, except that, at the
option of Capital Funding, payment of any interest may be made (i) by check
mailed to the address of the payee entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by such payee as specified in the Security Register. (Sections 305,
307 and 1002). Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on Registered Securities
will be made to the person in whose name such Registered Security is registered
at the close of business on the Regular Record Date for such interest payment.
(Section 307).
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and any premium and interest on Bearer Securities will be payable
(subject to applicable laws and regulations) at the offices of such Paying
Agent or Paying Agents outside the United States as Capital Funding may
designate from time to time, except that, at the option of Capital Funding,
payment of any interest may be made by check or by wire transfer to an account
maintained by the payee outside the United States. (Sections 307 and 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
interest on Bearer Securities on any Interest Payment Date will be made only
against surrender of the coupon relating to such Interest Payment Date.
(Section 1001). No payment with respect to any Bearer Security will be made at
any office or agency of Capital Funding in the United States or by check mailed
to any address in the United States or by transfer to an account maintained
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in the United States. Payments will not be made in respect of Bearer Securities
or coupons appertaining thereto pursuant to presentation to Capital Funding or
its Paying Agents within the United States or any other demand for payment to
Capital Funding or its Paying Agents within the United States. Notwithstanding
the foregoing, payment of principal of and any premium and interest on Bearer
Securities denominated and payable in U.S. dollars will be made at the office
of Capital Funding's Paying Agent in the United States if, and only if, payment
of the full amount thereof in U.S. dollars at all offices or agencies outside
the United States is illegal or effectively precluded by exchange controls or
other similar restrictions and Capital Funding has delivered to the Trustee an
opinion of counsel to that effect. (Section 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in Chicago, Illinois will be designated as
Capital Funding's Paying Agent office for payments with respect to Debt
Securities which are issuable solely as Registered Securities. Any Paying Agent
outside the United States and any other Paying Agent in the United States
initially designated by Capital Funding for the Debt Securities will be named
in the applicable Prospectus Supplement. Capital Funding may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts,
except that, if Debt Securities of a series are issuable only as Registered
Securities, Capital Funding will be required to maintain a Paying Agent in each
Place of Payment for such series and, if Debt Securities of a series are
issuable as Bearer Securities, Capital Funding will be required to maintain (i)
a Paying Agent in each Place of Payment for such series in the United States
for payments with respect to any Registered Securities of such series (and for
payments with respect to Bearer Securities of such series in the circumstances
described above, but not otherwise), (ii) a Paying Agent in each Place of
Payment located outside the United States where Debt Securities of such series
and any coupons appertaining thereto may be presented and surrendered for
payment; provided that if the Debt Securities of such series are listed on The
International Stock Exchange, London or the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, Capital Funding will maintain a Paying Agent in London or
Luxembourg City or any other required city located outside the United States,
as the case may be, for Debt Securities of such series, and (iii) a Paying
Agent in each Place of Payment located outside the United States where (subject
to applicable laws and regulations) Registered Securities of such series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon Capital Funding may be served. (Section 1002).
All moneys paid by Capital Funding to a Paying Agent for the payment of
principal of and any premium and interest on any Debt Security that remains
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to Capital Funding and
thereafter the holder of such Debt Security or any coupon appertaining thereto
will look only to Capital Funding for payment thereof. (Section 1003).
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the form
of one or more Global Securities that will be deposited with, or on behalf of,
a depositary identified in the applicable Prospectus Supplement (the
"Depository"). Global Securities may be issued in either registered or bearer
form and in either temporary or permanent form. (Section 305). Unless and until
it is exchanged for Debt Securities in definitive form, a temporary Global
Security in registered form may not be transferred except as a whole by the
Depository for such Global Security to a nominee of such Depository or by a
nominee of such Depository to such Depository or another nominee of such
Depository or by such Depository or any such nominee to a successor of such
Depository or a nominee of such successor. (Section 304).
The specific terms of the depositary arrangement with respect to a series of
Debt Securities or any part thereof will be described in the applicable
Prospectus Supplement. Capital Funding anticipates that the following
provisions will apply to all depositary arrangements relating to Global
Securities.
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Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit the accounts of persons holding a
beneficial interest in such Global Security with the respective principal
amounts of the Debt Securities represented by such Global Security. Such
accounts shall be designated by the underwriters or agents with respect to such
Debt Securities or by Capital Funding if such Debt Securities are offered and
sold directly by Capital Funding. Ownership of beneficial interests in a Global
Security will be limited to persons that have accounts with the Depository for
such Global Security or its nominee ("participants") or persons that may hold
interests through participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the Depository or its nominee
(with respect to interests of participants) for such Global Security and on the
records of participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limitation and such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. (Section 308). Except as provided below, owners of beneficial
interests in a Global Security will not be entitled to have Debt Securities
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of such Debt Securities in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
Payment of principal of and any premium and interest on Debt Securities
registered in the name of a Depository or its nominee will be made to the
Depository or its nominee, as the case may be, as the registered owner of the
Global Security representing such Debt Securities. Neither Capital Funding,
Ameritech, the Trustee, any Paying Agent nor the Security Registrar for such
Debt Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security for such Debt Securities or for maintaining,
supervising or receiving any records relating to such beneficial ownership
interests.
Subject to the restrictions discussed under "Limitations on Issuance of
Bearer Securities" below, Capital Funding expects that the Depository or its
nominee, as the case may be, upon receipt of any payment of principal, premium
or interest, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of the Global Security for such Debt Securities as shown on the records
of such Depository or its nominee. Capital Funding also expects that payments
by participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name", and will be the
responsibility of such participants. Receipt by owners of beneficial interests
in a temporary Global Security of payments in respect of such temporary Global
Security will be subject to restrictions discussed under "Limitations on
Issuance of Bearer Securities" below.
If the Depository is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by Capital Funding
within 90 days, Capital Funding will issue Debt Securities of such series in
definitive form in exchange for the Global Security representing such series of
Debt Securities. In addition, Capital Funding may at any time and in its sole
discretion determine not to have the Registered Securities of a series
represented by a Global Security and, in such event, Capital Funding will issue
Registered Securities of such series in definitive form in exchange for the
Global Security representing such series of Registered Securities. Further, if
Capital Funding so specifies with respect to the Debt Securities of a series,
an owner of a beneficial interest in a Global Security
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representing Debt Securities of such series may, on terms acceptable to Capital
Funding and the Depositary, receive Debt Securities of such series in
definitive form. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to physical delivery in definitive form of
Debt Securities of the series represented by such Global Security equal in
principal amount to such beneficial interest and to have such Debt Securities
registered in its name (if the Debt Securities of such series are issuable as
Registered Securities). Debt Securities of such series so issued in definitive
form will be issued (i) as Registered Securities in denominations, unless
otherwise specified by Capital Funding, of U.S. $1,000 and integral multiples
thereof if the Debt Securities of such series are issuable as Registered
Securities, (ii) as Bearer Securities in denominations, unless otherwise
specified by Capital Funding, of U.S. $5,000 with coupons attached if the Debt
Securities of such series are issuable as Bearer Securities, or (iii) as either
Registered or Bearer Securities, if the Debt Securities of such series are
issuable in either form. (Section 305). See, however, "Certain Limitations on
Issuance of Bearer Securities" below for a description of certain restrictions
on the issuance of a Bearer Security in definitive form in exchange for an
interest in a Global Security.
CERTAIN LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered, sold, resold or delivered in connection with
their original issue in the United States or to United States persons (each as
defined in the Code and the regulations thereunder) other than to offices
located outside of the United States of United States financial institutions
which agree to comply with the requirements of Section 165(j)(3)(A), (B) or (C)
of the Code and the regulations thereunder, and any underwriters, agents and
dealers participating in the offering of Debt Securities must agree that they
will not offer any Bearer Securities for sale or resale in the United States or
to United States persons (other than the financial institutions described
above) nor deliver Bearer Securities within the United States. In addition, any
such underwriters, agents and dealers must agree to send confirmations to each
purchaser of a Bearer Security confirming that such purchaser represents that
it is not a United States person or is a financial institution described above
and, if such person is a dealer, that it will send similar confirmations to
purchasers from it.
Bearer Securities and any coupons appertaining thereto will bear a legend
substantially to the following effect: "Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code". Under Sections 165(j) and 1287(a) of the Code, holders
that are United States persons, with certain exceptions, will not be entitled
to deduct any loss on Bearer Securities and must treat as ordinary income any
gain realized on the sale or other disposition (including the receipt of
principal) of Bearer Securities.
Other restrictions and additional tax considerations may apply to the
issuance and holding of Bearer Securities. A description of such restrictions
and tax consequences will be set forth in the applicable Prospectus Supplement.
LIENS ON ASSETS
If at any time, Capital Funding mortgages, pledges, or otherwise subjects to
any lien the whole or any part of any property or assets now owned or hereafter
acquired by it, except as hereinafter provided, Capital Funding will secure the
outstanding Debt Securities, and any other obligations of Capital Funding which
may be then outstanding and entitled to the benefit of a covenant similar in
effect to this covenant, equally and ratably with the indebtedness or
obligations secured by such mortgage, pledge, or lien, for as long as any such
indebtedness or obligation is so secured. The foregoing covenant does not apply
to the creation, extension, renewal or refunding of purchase-money mortgages or
liens, or
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other liens to which any property or asset acquired by Capital Funding is
subject as of the date of its acquisition by Capital Funding or to the making
of any deposit or pledge to secure public or statutory obligations or with any
governmental agency at any time required by law in order to qualify Capital
Funding to conduct its business or any part thereof or in order to entitle it
to maintain self-insurance or to obtain the benefits of any law relating to
workers' compensation, unemployment insurance, old age pensions or other social
security, or with any court, board, commission, or governmental agency as
security incident to the proper conduct of any proceeding before it. Nothing
contained in the Indenture prevents any Person other than Capital Funding from
mortgaging, pledging, or subjecting to any lien any of its property or assets,
whether or not acquired by such Person from Capital Funding or Ameritech.
(Section 1006).
RESTRICTIONS ON MERGERS AND SALES OF ASSETS
Neither Capital Funding nor Ameritech may consolidate with or merge into any
other corporation, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and neither Capital Funding nor
Ameritech shall permit any Person to consolidate with or merge into Capital
Funding or Ameritech or convey, transfer or lease its properties and assets
substantially as an entirety to Capital Funding or Ameritech unless (i) the
corporation formed by such consolidation or into which Capital Funding or
Ameritech is merged or the Person to which the properties and assets of Capital
Funding or Ameritech are transferred substantially as an entirety shall be a
corporation organized and existing under the laws of the United States, any
State thereof or the District of Columbia and shall expressly assume the
payment of the principal of, premium, if any, and interest, if any, on the Debt
Securities and the performance of the other covenants of Capital Funding or
Ameritech, as the case may be, under the Indenture, (ii) after giving effect to
such transaction, no Event of Default (as defined below), or event which after
notice or lapse of time or both would become an Event of Default, shall have
occurred and be continuing and (iii) if, as a result of such transaction,
properties or assets of Capital Funding would become subject to a Mortgage not
permitted by Section 1006 of the Indenture without equally and ratably securing
the Debt Securities as provided therein (see "Liens on Assets" above), steps
shall have been taken to secure the Debt Securities equally and ratably with
(or prior to) all indebtedness secured thereby pursuant to Section 1006 of the
Indenture. (Section 801).
MODIFICATION AND WAIVER
Certain modifications and amendments of the Indenture, including the rights
of Holders of a series of Outstanding Debt Securities, may be made by Capital
Funding and the Trustee only with the consent of the Holders of 66 2/3% in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by the modification or amendment, provided that no such modification
or amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby: (i) change the stated maturity date of the principal
of, or any installment of principal or interest on, any such Debt Security;
(ii) reduce the principal amount of, premium, if any, or interest, if any, on
any such Debt Security (including in the case of an Original Issue Discount
Security the amount payable upon acceleration of the Maturity thereof); (iii)
change the Place of Payment where, or the coin or currency in which, any
principal of, premium, if any, or interest, if any, on any such Debt Security
is payable; (iv) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (v) reduce the above-
stated percentage of Outstanding Debt Securities of any series the consent of
the Holders of which is necessary to modify or amend the Indenture; (vi) modify
the foregoing requirements or reduce the percentage of aggregate principal
amount of Outstanding Debt Securities of any series necessary for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults; or (vii) change the substantive provisions of the Guarantees.
(Section 902).
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The Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of any series may, on behalf of the Holders of all Debt
Securities of such series, waive, insofar as such series is concerned,
compliance by Capital Funding with certain restrictive provisions of the
Indenture. (Section 1007). The Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of any series may on behalf of the
Holders of all Debt Securities of such series waive any past default under the
Indenture with respect to such series, except a default in the payment of the
principal of, premium, if any, or interest, if any, on any Debt Security of
such series or in respect of a provision under which the Indenture cannot be
modified or amended without consent of the Holder of each Outstanding Debt
Security of such series affected. (Section 513).
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to any series of Debt
Securities as being any one of the following events: (i) default for 90 days in
any payment of interest on such series; (ii) default in any payment of
principal of, and premium, if any, on such series when due; (iii) default in
the payment of any sinking fund installment with respect to such series when
due; (iv) default for 90 days after appropriate notice by the Holders of at
least 25% in aggregate principal amount of the Outstanding Debt Securities in
performance of any other covenant or warranty in the Indenture (other than a
covenant or warranty included in the Indenture solely for the benefit of series
of Debt Securities other than such series); or (v) certain events in
bankruptcy, insolvency or reorganization with respect to either of Capital
Funding or Ameritech. In case an Event of Default shall occur and be continuing
with respect to any series of Debt Securities, the Trustee or the Holders of
not less than 25 percent in aggregate principal amount of the Outstanding Debt
Securities of such series may declare the principal of such series (or, if the
Debt Securities of such series are Original Issue Discount Securities, such
portion of the principal as may be specified in the terms of such series) to be
due and payable. Any Event of Default with respect to a particular series of
Debt Securities may be waived by the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of such series, except in
each case a failure to pay the principal of, premium, if any, or interest, if
any, on such Debt Security. (Sections 501, 502 and 513).
Each of Capital Funding and Ameritech is required by law to furnish the
Trustee, not less often than annually, with a certificate as to its respective
compliance with the conditions and covenants under the Indenture.
Reference is made to the Prospectus Supplement relating to each series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an Event of Default and the continuation thereof.
The Indenture provides that the Trustee may withhold notice to the Holders of
the Debt Securities of any default (except in payment of principal of, premium,
if any, or interest, if any, or any sinking fund installment) if it considers
it in the interest of the Holders of the Debt Securities to do so. (Section
602).
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the
Indenture provides that the Trustee shall be under no obligation to exercise
any of its rights or powers under the Indenture at the request, order or
direction of the Holders of the Debt Securities unless such Holders shall have
offered to the Trustee reasonable indemnity. (Sections 601 and 603). Subject to
such provisions for indemnification and certain other rights of the Trustee,
the Indenture provides that the Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of any series affected shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Debt Securities of such series. (Sections 512
and 603).
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No Holder of any Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless (i) such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default with respect to Debt Securities of such
series, (ii) the Holders of at least 25 percent in aggregate principal amount
of the Outstanding Debt Securities of such series shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee, and (iii) the Trustee shall not have received from the
Holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of such series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. (Section 507).
However, the Holder of any Debt Security will have an absolute right to receive
payment of the principal of, premium, if any, and interest, if any, on such
Debt Security on or after the due dates expressed in such Debt Security and to
institute suit for the enforcement of any such payment. (Section 508).
DEFEASANCE
Defeasance and Discharge. If the terms of a series of Debt Securities so
provide and Capital Funding deposits or causes to be deposited with the Trustee
as trust funds in trust for that purpose money and/or U.S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay and discharge (i) the principal of, and premium, if any, and
each installment of principal and premium, if any, and interest, if any, on the
Outstanding Debt Securities of such series on the Stated Maturity of such
principal or installment of principal or interest (or on the Redemption Date of
the Outstanding Debt Securities of such series if Capital Funding has elected
to redeem such Outstanding Debt Securities in accordance with Section 1102 of
the Indenture), and (ii) any mandatory (or, if applicable, optional) sinking
fund payments applicable to the Outstanding Debt Securities of such series on
the day on which such payments are due and payable, then the Indenture will
cease to be of further effect with respect to such series (except for certain
obligations to compensate, reimburse and indemnify the Trustee, to register the
transfer or exchange of Debt Securities, to replace stolen, lost or mutilated
Debt Securities, to maintain paying agencies and to hold monies for payment in
trust and to pay any tax indemnity), and Capital Funding will be deemed to have
satisfied and discharged the Indenture with respect to such series. (Section
403). In the event of any such defeasance, holders of Debt Securities of such
series would be able to look only to such trust fund for payment of principal
of, premium, if any, and interest, if any, on their Debt Securities.
Under current United States federal income tax law, such defeasance will be
treated as a taxable exchange of the related Debt Securities for an interest in
the trust. As a consequence, each holder of such Debt Securities will recognize
gain or loss equal to the difference between the holder's cost or other tax
basis for the Debt Securities and the value of the holder's interest in the
trust, and thereafter will be required to include in income a share of the
income, gain and loss of the trust, including gain or loss recognized in
connection with any substitution of collateral, as described below under
Substitution of Collateral. Prospective investors are urged to consult their
own tax advisors as to the specific consequences of such a defeasance.
Defeasance of Certain Covenants and Certain Events of Default. If the terms
of the Debt Securities of any series so provide, Capital Funding may omit to
comply with certain restrictive covenants in Section 801 (Consolidation,
Merger, Conveyance, Transfer or Lease) and Sections 1005 (Purchase of
Securities by Company or Subsidiary) and 1006 (Lien on Assets) and Sections
501(d), 501(e) and 501(f) of the Indenture, as described in clauses (iv) and
(v) under "Events of Default" above, shall not be deemed to be Events of
Default under the Indenture with respect to such series, upon the deposit with
the Trustee, in trust, of money and/or U.S. Government Obligations which
through the payment of interest and principal in respect thereof in accordance
with their terms will provide money in an amount sufficient to pay and
discharge (i) the principal (and premium, if any) and each installment of
principal,
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and premium, if any, and interest on the Outstanding Debt Securities of such
series on the Stated Maturity of such principal or installment of principal or
interest (or on the Redemption Date of the Outstanding Debt Securities of such
series if Capital Funding has elected to redeem such Outstanding Debt
Securities in accordance with Section 1102 of the Indenture) and (ii) any
mandatory (or, if applicable, optional) sinking fund payments applicable to the
Outstanding Debt Securities of such series on the day on which such payments
are due and payable. The obligations of Capital Funding under the Indenture and
the Debt Securities other than with respect to the covenants referred to above
and the Events of Default other than the Events of Default referred to above
shall remain in full force and effect. (Section 1008).
In the event Capital Funding exercises its option to omit compliance with
certain covenants of the Indenture with respect to the Debt Securities of any
series as described above and the Debt Securities of such series are declared
due and payable because of the occurrence of any Event of Default other than
Events of Default described in clauses (iv) and (v) under "Events of Default"
above, the amount of money and/or U.S. Government Obligations on deposit with
the Trustee will be sufficient to pay amounts due on the Debt Securities of
such series on their Stated Maturity or Redemption Date, but may not be
sufficient to pay amounts due on such Debt Securities at the time of the
acceleration resulting from such Event of Default. However, Capital Funding
shall remain liable for such payments. (Section 1008).
Limitation on Defeasance. To exercise either option referred to above under
Defeasance and Discharge and Defeasance of Certain Covenants and Certain Events
of Default, Capital Funding is required to deliver to the Trustee an opinion of
outside counsel (which opinion, in the case of the option referred to under
Defeasance and Discharge above, is based on there having been, since the date
of the Indenture, a change in the applicable United States federal income tax
law (including a change in official interpretation thereof)), or a ruling from
or published by the Internal Revenue Service, to the effect that the exercise
of such option will not cause holders of Debt Securities to recognize income,
gain or loss for United States federal income tax purposes, and that such
holders of Debt Securities will be subject to United States federal income tax
on the same amount and in the same manner and at the same time as would have
been the case if such option had not been exercised.
Substitution of Collateral. If the terms of a series a Debt Securities so
provide, Capital Funding will be permitted at any time to withdraw any money or
U.S. Government Obligations deposited pursuant to the foregoing defeasance
provisions, provided that Capital Funding in substitution therefor
simultaneously deposits money and/or U.S. Government Obligations which would
then be sufficient to satisfy Capital Funding's payment obligations in respect
of the Debt Securities in the manner contemplated by such defeasance
provisions.
NOTICES
Except as may otherwise be set forth in an applicable Prospectus Supplement,
notices to holders of Bearer Securities will be given by publication in a daily
newspaper in the English language of general circulation in The City of New
York and in London, and so long as such Bearer Securities are listed on the
Luxembourg Stock Exchange and the Luxembourg Stock Exchange shall so require,
in a daily newspaper of general circulation in Luxembourg City or, if not
practical, elsewhere in Western Europe. Such publication is expected to be made
in The Wall Street Journal, the Financial Times and the Luxemburger Wort.
Notices to holders of Registered Securities will be given by mail to the
addresses of such holders as they appear in the Security Register. (Sections
101 and 106).
TITLE
Title to any temporary global Debt Security, any permanent global Debt
Security, any Bearer Securities and any coupons appertaining thereto will pass
by delivery. Capital Funding, Ameritech, the
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Trustee and any agent of Capital Funding, Ameritech or the Trustee may treat
the bearer of any Bearer Security, the bearer of any coupon and the registered
owner of any Registered Security as the absolute owner thereof (whether or not
such Debt Security or coupon shall be overdue and notwithstanding any notice to
the contrary) for the purpose of making payment and for all other purposes.
(Section 308).
REPLACEMENT OF SECURITIES AND COUPONS
Any mutilated Security or a Security with a mutilated coupon appertaining
thereto will be replaced by Capital Funding at the expense of the Holder upon
surrender of such Security to the Trustee. Securities or coupons that become
destroyed, stolen or lost will be replaced by Capital Funding at the expense of
the Holder upon delivery to the Trustee of the Security and coupons or evidence
of the destruction, loss or theft thereof satisfactory to Capital Funding and
the Trustee; in the case of any coupon which becomes destroyed, stolen or lost,
such coupon will be replaced by issuance of a new Security in exchange for the
Security to which such coupon appertains. In the case of a destroyed, lost or
stolen Security or coupon, an indemnity satisfactory to the Trustee and Capital
Funding may be required at the expense of the Holder of such Security or coupon
before a replacement Security will be issued. (Section 306).
GOVERNING LAW
The Indenture, the Debt Securities and the Guarantees are governed by and
construed in accordance with the laws of the State of Illinois. The interest
rate on the Debt Securities will in no event be higher than the maximum rate
permitted by Illinois law as the same may be modified by United States law of
general application. Under present Illinois law, no maximum rate of interest
would apply to the Debt Securities.
CONCERNING THE TRUSTEE
Ameritech and certain of its affiliates, including Capital Funding, maintain
banking relationships in the ordinary course of business, including uncommitted
lines of credit, with the Trustee. In addition, the Trustee and certain of its
affiliates serve as authenticating agent or paying agent with respect to
certain debt securities of certain affiliates of Ameritech.
Under the Indenture, the Trustee is required to transmit annual reports to
all Holders regarding its eligibility and qualifications as Trustee under the
Indenture and certain related matters. (Section 703).
PLAN OF DISTRIBUTION
GENERAL
Capital Funding may sell the Debt Securities being offered hereby: (i)
directly to purchasers, (ii) through agents, (iii) through underwriters, (iv)
through dealers or (v) through a combination of any such methods of sale.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions either (i) at a fixed price or prices, which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
Offers to purchase Debt Securities may be solicited directly by Capital
Funding or by agents designated by Capital Funding from time to time. Any such
agent, which may be deemed to be an underwriter, as that term is defined in the
Securities Act, involved in the offer or sale of the Debt Securities in respect
of which this Prospectus is delivered will be named, and any commissions
payable by Capital Funding to such agent will be set forth, in the Prospectus
Supplement or in a pricing supplement thereto (the "Pricing Supplement").
Unless otherwise indicated in the Prospectus
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<PAGE>
Supplement or Pricing Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
If an underwriter or underwriters are utilized in the sale, Capital Funding
and Ameritech will execute an underwriting agreement with such underwriters at
the time of sale to them and the names of the underwriters and the terms of the
transaction will be set forth in the Prospectus Supplement or Pricing
Supplement, which will be used by the underwriters to make resales of the Debt
Securities.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, Capital Funding will sell such Debt
Securities to the dealer, as principal. The dealer may then resell such Debt
Securities to the public at varying prices to be determined by such dealer at
the time of resale.
Underwriters, dealers, agents, and other persons may be entitled, under
agreements which may be entered into with Capital Funding and Ameritech, to
indemnification against, or contribution with respect to, certain civil
liabilities, including liabilities under the Securities Act. Underwriters,
dealers and agents may be customers of, engage in transactions with, or perform
services for, Capital Funding and/or Ameritech in the ordinary course of
business.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, Capital Funding will authorize
dealers or other persons acting as Capital Funding's agents to solicit offers
by certain institutions to purchase Debt Securities from Capital Funding
pursuant to contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions, and others, but in all cases, such
institutions must be approved by Capital Funding. The obligations of any
purchaser under any such contract will not be subject to any conditions except
that (a) the purchase of the Debt Securities shall not at the time of delivery
be prohibited under the laws of the jurisdiction to which such purchaser is
subject; and (b) if the Debt Securities are also being sold to underwriters,
Capital Funding shall have sold to such underwriters the Debt Securities not
sold for delayed delivery. The dealers and such other persons will not have any
responsibility in respect of the validity or performance of such contracts.
EXPERTS
The consolidated financial statements and financial statement schedules of
Ameritech and its subsidiaries as of December 31, 1993 and for the year then
ended, included in Ameritech's Annual Report on Form 10-K for the year ended
December 31, 1993, have been audited by Arthur Andersen & Co., independent
public accountants, as set forth in the report of such firm. The consolidated
financial statements and financial statement schedules referred to above are
incorporated by reference herein in reliance upon the authority of Arthur
Andersen & Co. as experts in giving said reports.
LEGAL OPINIONS
Certain matters relating to the legality of the Debt Securities and the
Guarantees to be offered hereby will be passed upon for Capital Funding and
Ameritech by Bruce B. Howat, Esq., Counsel & Secretary of Ameritech, and by
Winston & Strawn, 35 West Wacker Drive, Chicago, Illinois 60601, and for the
agents or underwriters, if any, by Mayer, Brown & Platt, 190 South LaSalle
Street, Chicago, Illinois 60603. The opinions of Mr. Howat, Winston & Strawn
and Mayer, Brown & Platt with respect to the Debt Securities and the Guarantees
may be conditioned upon, and subject to certain assumptions regarding, future
action to be taken by Capital Funding, Ameritech and the Trustee in connection
with
16
<PAGE>
the issuance and sale of particular Debt Securities, the specific terms of Debt
Securities and other matters that may affect the validity of Debt Securities
but that cannot be ascertained on the date of such opinions. Mayer, Brown &
Platt from time to time acts as counsel in certain matters for Ameritech and
certain of its subsidiaries. As of the date of this Prospectus, Mr. Howat owned
beneficially and had options to acquire shares of the Common Stock of Ameritech
which in the aggregate constituted less than .01% of the total issued and
outstanding shares of the Common Stock of Ameritech.
17
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTA-
TIONS, OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PRO-
SPECTUS SUPPLEMENT AND THE PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED
HEREIN, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY CAPITAL FUNDING, AMERITECH OR
THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF CAPITAL FUND-
ING OR AMERITECH SINCE THE DATE AS OF WHICH INFORMATION IS GIVEN IN THIS PRO-
SPECTUS SUPPLEMENT AND THE PROSPECTUS. THIS PROSPECTUS SUPPLEMENT AND THE PRO-
SPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANY PERSON IN ANY JURIS-
DICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY-
ONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Recent Developments........................................................ S-2
Use of Proceeds............................................................ S-2
Certain Terms of the Notes................................................. S-2
Underwriting............................................................... S-5
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Ameritech Corporation...................................................... 3
Ameritech Capital Funding Corporation...................................... 3
Ratios of Earnings to Fixed Charges of Ameritech........................... 3
Use of Proceeds............................................................ 4
Description of Debt Securities and Guarantees.............................. 4
Plan of Distribution....................................................... 15
Experts.................................................................... 16
Legal Opinions............................................................. 16
</TABLE>
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$225,000,000
AMERITECH CAPITAL
FUNDING CORPORATION
FLOATING RATE NOTES
DUE MAY 2, 1997
UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL AND INTEREST BY
AMERITECH CORPORATION
LOGO
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
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