<PAGE>
FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 33-36790
PROSPECTUS SUPPLEMENT
(To Prospectus dated March 28, 1995)
$192,161,000
AMERITECH CAPITAL FUNDING CORPORATION
7 1/2% DEBENTURES DUE APRIL 1, 2005
UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL
AND INTEREST BY
AMERITECH CORPORATION
----------------
Interest Payable April 1 and October 1
----------------
The Debentures may not be redeemed prior to maturity and do not provide for
any sinking fund.
The Debentures will be represented by one or more global securities
registered in the name of a nominee of the Depository. Beneficial interests in
the 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,
Debentures in definitive form will not be issued. See "Certain Terms of the
Debentures--Book-Entry Procedures." Settlement for the Debentures will be made
in immediately available funds. The Debentures will trade in the Depository's
Same-Day Funds Settlement System until maturity, and secondary market trading
activity for the Debentures 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 Debentures--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 OFFENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Public(1) Discount(2) Capital Funding(1)(3)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Debenture.... 99.915% .650% 99.265%
- -------------------------------------------------------------------------------
Total............ $191,997,663 $1,249,047 $190,748,616
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest from April 1, 1995 to date of delivery.
(2) Capital Funding and Ameritech have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities
Act of 1933, as amended.
(3) Before deducting estimated expenses of $220,000 payable by Capital
Funding.
----------------
The Debentures offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, withdrawal, cancellation or modification
of the offer without notice, to delivery to and acceptance by the Underwriters
and to certain further conditions. Delivery of the Debentures to the
Underwriters is expected to be made through the facilities of The Depository
Trust Company, New York, New York on or about April 4, 1995.
----------------
LEHMAN BROTHERS GOLDMAN, SACHS & CO.
March 28, 1995
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES
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.
USE OF PROCEEDS
Ameritech Capital Funding Corporation ("Capital Funding") intends to lend the
net proceeds from the sale of the 7 1/2% Debentures due April 1, 2005 (the
"Debentures") to Ameritech Corporation ("Ameritech") to repay certain
outstanding short-term indebtedness of Ameritech. The net proceeds from the
sale of the Debentures may also be used by Ameritech and its affiliates for
general corporate purposes.
CERTAIN TERMS OF THE DEBENTURES
The Debentures are to be issued under an Indenture, dated as of January 1,
1990 (the "Indenture"), among Ameritech, Capital Funding and Bank of America
Illinois (formerly known as Continental Bank, National Association), as
trustee. The following summaries of certain provisions of the Indenture and the
Debentures 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 Debentures. Capitalized terms used but not
defined herein or in the Prospectus shall have the meanings given to them in
the Indenture.
GENERAL
The Debentures 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 Debentures are
unconditionally guaranteed as to payment of principal and interest by
Ameritech, the sole stockholder of Capital Funding.
The Debentures will be limited to $192,161,000 aggregate principal amount and
will mature on April 1, 2005. The Debentures will bear interest at the rate per
annum shown on the cover page of this Prospectus Supplement from April 1, 1995,
and such interest will be payable semi-annually on each April 1 and October 1
of each year (each, an "Interest Payment Date") commencing October 1, 1995, to
the persons in whose names such Debentures were registered at the close of
business on the next preceding March 15 and September 15, respectively (each a
"Regular Record Date").
Until the Debentures 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 Bank of America Illinois, 231 South
LaSalle Street, Chicago, Illinois 60697, as the Paying Agent. Capital Funding
will notify the holders of the Debentures, in accordance with the Indenture, of
any change in the Paying Agent or its address. Bank of America Illinois also
serves as Trustee under the Indenture.
Any payment otherwise required to be made in respect of a Debenture on a date
that is not a Business Day for such Debenture need not be made on such date,
but may be made on the next
S-2
<PAGE>
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. 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 Debentures 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 Debentures protection in the event of a highly leveraged
transaction, change in credit or other similar occurrence.
BOOK-ENTRY PROCEDURES
The Debentures will be issued initially in the form of a fully registered
global security 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
Debentures will not be issuable in certificated form.
The Depository has advised Capital Funding and Lehman Brothers Inc. and
Goldman, Sachs & Co. (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.
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 Debentures 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
Debentures will trade in the Depository's Same-Day Funds Settlement System
until maturity, and secondary market trading activity in the Debentures 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 Debentures.
S-3
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
among Capital Funding, Ameritech and the Underwriters, Capital Funding has
agreed to sell to the Underwriters, and the Underwriters have agreed to
purchase, the following respective principal amounts of the Debentures:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITERS AMOUNT
------------ ------------
<S> <C>
Lehman Brothers Inc................................................ $ 96,161,000
Goldman, Sachs & Co................................................ $ 96,000,000
------------
Total.......................................................... $192,161,000
============
</TABLE>
The Underwriters have advised Capital Funding and Ameritech that they propose
initially to offer the Debentures to the public at the public offering price
set forth on the cover page of this Prospectus Supplement, and to certain
dealers at such price less a concession not in excess of .40% of the principal
amount of the Debentures. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of .25% of the principal amount of the
Debentures to certain other dealers. The Underwriters and any dealers that
participate with the Underwriters in the distribution of the Debentures may be
deemed to be underwriters, and any discounts or commissions received by them
and any profit on the resale of the Debentures by them may be deemed to be
underwriting compensation. After the Debentures are released for sale to the
public, the offering prices and other selling terms may from time to time be
varied by the Underwriters.
Capital Funding does not intend to list the Debentures on any exchange.
Capital Funding has been advised by the Underwriters that the Underwriters
intend to make a market in the Debentures, but that the Underwriters are not
obligated to do so and may discontinue making a market at any time without
notice. No assurance can be given to the liquidity of the trading market, if
any, for the Debentures.
The Underwriters and certain affiliates thereof engage or may in the future
engage in transactions with and perform services for Ameritech and its
affiliates, including Capital Funding, in the ordinary course of business.
Capital Funding and Ameritech have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act of
1933, as amended.
S-4
<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.
$192,161,000 (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 March 28, 1995.
<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
The following documents filed by Ameritech with the Commission (File No. 1-
8612) are incorporated herein by reference:
1. Ameritech's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.
2. Ameritech's Current Report on Form 8-K dated January 18, 1995.
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, a holding company incorporated in 1983 under the laws of the State
of Delaware, has its principal executive offices at 30 South Wacker Drive,
Chicago, Illinois 60606 (telephone number (312) 750-5000). Ameritech is a
leading global supplier of full-service communications services and advanced
information services.
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).
RATIO 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,
------------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
4.45 5.25 4.52 3.63 4.37
</TABLE>
For the purpose of calculating this ratio, earnings consist of income before
income and related taxes, fixed charges, extraordinary items and the cumulative
effect of change in accounting principles. Fixed charges are primarily
consolidated interest cost and the estimated interest component of rental
expense.
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.
3
<PAGE>
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 Bank of
America Illinois (formerly known as 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
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
4
<PAGE>
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 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
5
<PAGE>
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 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
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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 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
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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.
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
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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 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
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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 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
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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).
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
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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).
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
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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, 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
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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 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.
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CONCERNING THE TRUSTEE
Ameritech and Capital Funding maintain banking relationships in the ordinary
course of business with the Trustee. In addition, the Trustee serves as
authenticating agent or paying agent with respect to certain debt securities of
Capital Funding. Bank of America National Trust and Savings Association, an
affiliate of the Trustee, has a commitment under a revolving credit facility
available to 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 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,
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<PAGE>
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 schedule of
Ameritech and its subsidiaries included in Ameritech's Annual Report on Form
10-K for the year ended December 31, 1994 have been audited by Arthur Andersen
LLP, independent public accountants, as set forth in the reports of such firm.
The consolidated financial statements and financial statement schedule referred
to above are incorporated by reference herein in reliance upon the authority of
Arthur Andersen LLP 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 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.
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No dealer, salesman or any other person has been authorized to give any infor-
mation or to make any representations not contained in this Prospectus Supple-
ment or the accompanying Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by Capital
Funding or Ameritech or any agent or underwriter. This Prospectus Supplement
and the accompanying Prospectus do not constitute an offer to sell or a solici-
tation of an offer to buy any of the securities offered hereby in any jurisdic-
tion to any person to whom it is unlawful to make such an offer in such juris-
diction. Neither the delivery of this Prospectus Supplement and the Prospectus
nor any sale made hereunder and thereunder shall, under any circumstances, cre-
ate any implication that there has been no change in the affairs of Capital
Funding or Ameritech since the date hereof.
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TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
----
<S> <C>
Use of Proceeds............................................................ S-2
Certain Terms of the Debentures............................................ S-2
Underwriting............................................................... S-4
Prospectus
Available Information...................................................... 2
Incorporation of Certain Documents by
Reference................................................................. 2
Ameritech Corporation...................................................... 3
Ameritech Capital Funding Corporation...................................... 3
Ratio of Earnings to Fixed Charges of Ameritech............................ 3
Use of Proceeds............................................................ 3
Description of Debt Securities and Guarantees.............................. 4
Plan of Distribution....................................................... 15
Experts.................................................................... 16
Legal Opinions............................................................. 16
</TABLE>
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$192,161,000
AMERITECH CAPITAL FUNDING CORPORATION
7 1/2% DEBENTURES DUE
APRIL 1, 2005
UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL AND INTEREST BY
AMERITECH CORPORATION
LOGO
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PROSPECTUS SUPPLEMENT
March 28, 1995
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LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
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