<PAGE>
Rule No. 424(b)(3)
Registration No. 33-51675
- -------------------------------------------------------------------------------
PROSPECTUS SUPPLEMENT
(To Prospectus Dated January 10, 1994)
- -------------------------------------------------------------------------------
U.S. $400,000,000
Hoechst Celanese Corporation
Medium-Term Notes, Series B
Due from Nine Months to 30 Years from Date of Issue
-----------
Hoechst Celanese Corporation (the "Company") may offer from time to time its
Medium-Term Notes, Series B (the "Notes") in an aggregate principal amount not
to exceed $400,000,000 (or, if any Notes are to be Original Issue Discount
Notes, Foreign Currency Notes or Indexed Notes (as each such term is defined
under "Description of Notes"), such principal amount as shall result in an
initial aggregate offering price equivalent to no more than $400,000,000),
subject to reduction as a result of the sale of other Securities under the
Registration Statement of which this Prospectus Supplement and the
accompanying Prospectus form a part; provided, however, that the Company may
increase the foregoing maximum principal amount if in the future it determines
that it may wish to sell additional Notes. See "Description of Notes" and
"Plan of Distribution of Notes". Unless otherwise specified in the
applicable Pricing Supplement, each Note will mature from nine months to 30
years from its date of original issuance ("Issue Date"), as selected by
the initial purchaser and agreed to by the Company (the "Stated
Maturity"), which maturity date may be subject to extension at the option of
the Company. The Notes may be subject to optional redemption, or obligate the
Company to redeem or purchase the Notes pursuant to sinking fund or
analogous provisions or at the option of the Holder thereof, in each case as
indicated in the applicable Pricing Supplement. Unless otherwise indicated
in the applicable Pricing Supplement, the Notes will be issued in fully
registered form in denominations of $100,000 and integral multiples of $1,000
in excess thereof or, in the case of Foreign Currency Notes, in such
minimum denominations not less than the equivalent of $100,000 and such
other denomination or denominations in excess thereof as shall be set forth
in the applicable Pricing Supplement. See "Special Provisions Relating to
Foreign Currency Notes".
The interest rate or interest rate formula, if any, currency or currency
unit, issue price, Stated Maturity, redemption provisions, if any, and
other terms for each Note will be established by the Company at the date of
issuance of such Note and will be indicated in a Pricing Supplement. Each
interest-bearing Note will bear interest at either (a) a fixed rate (a
"Fixed Rate Note") or (b) a variable rate determined by reference to an
interest rate formula (a "Floating Rate Note"), which may be adjusted by
adding or subtracting the Spread or multiplying by the Spread Multiplier,
unless otherwise indicated in the applicable Pricing Supplement. Unless
otherwise indicated in the applicable Pricing Supplement, the interest rate
formula will be the Commercial Paper Rate, the Prime Rate, the CD Rate, the
Federal Funds Rate, LIBOR or the Treasury Rate. A Fixed Rate Note may pay a
level amount in respect of both principal and interest amortized over the
life of such Note (an "Amortizing Note"). Interest rates, or interest rate
formulas, are subject to change by the Company from time to time, but no
such change will affect any Note already issued or as to which an offer to
purchase has been accepted by the Company.
Notes may be represented either by a certificate issued in definitive form
("Certificated Note") or by a permanent global Note or Notes, registered in the
name of The Depository Trust Company, as Depositary, or a nominee of the
Depositary (a "Book-Entry Note"), as specified in the applicable Pricing
Supplement. Beneficial interests in Book-Entry Notes will only be evidenced by,
and transfers thereof will only be effected through, records maintained by the
Depositary and its participants. Except as described under "Description of
Notes--Book Entry Notes", owners of beneficial interests in a Book-Entry Note
will not be entitled to receive physical delivery of Notes in definitive form
and will not be considered the Holders thereof.
Unless otherwise indicated in the applicable Pricing Supplement, a
Foreign Currency Note will not be sold in, or to a resident of, the
country of the Specified Currency in which such Note is denominated. See
"Special Provisions Relating to Foreign Currency Notes".
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT,
ANY PRICING SUPPLEMENT HERETO OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Distributors'
Price to Commissions or Proceeds to
Public(1) Discounts(2) Company(2)(3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share 100% .125%-.750% 99.250%-99.875%
- -----------------------------------------------------------------------------------------------------
Total (4) $400,000,000 $500,000-$3,000,000 $397,000,000-$399,500,000
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Unless otherwise indicated in the applicable Pricing Supplement, each Note
will be issued at 100% of its principal amount. If so indicated in the
applicable Pricing Supplement, Notes may be resold by the Distributors,
acting as principals at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices.
(2) Unless otherwise specified in the applicable Pricing Supplement, the
Company will pay a commission (or grant a discount) to CS First Boston
Corporation and Goldman, Sachs & Co. (the "Distributors") of .125% to
.750% of the principal amount of any Note, depending on its Stated
Maturity, sold through such Distributor, acting as agent (or sold to the
Distributor as principal in circumstances in which no other discount is
agreed).
(3) Before deducting other expenses payable by the Company estimated at U.S.
$150,000.
(4) Or the equivalent thereof in other currencies or currency units.
-----------
The Notes are being offered on a continuing basis by the Company through the
Distributors, each of which has agreed to use reasonable efforts to solicit
offers to purchase the Notes. The Company also may sell Notes to any
Distributor on its own behalf at negotiated discounts. The Company reserves
the right to sell Notes directly on its own behalf or to additional
distributors and to appoint additional agents for the purpose of soliciting
offers to purchase Notes. The Company also reserves the right to withdraw,
cancel or modify the offer made hereby without notice. The Company or any
Distributor may reject any offer to purchase Notes, in whole or in part. The
Notes will not be listed on any securities exchange, unless otherwise
indicated in the applicable Pricing Supplement, and there can be no assurance
that the Notes offered by this Prospectus Supplement will be sold or that
there will be a secondary market for the Notes. See "Plan of Distribution of
Notes."
CS First Boston Goldman, Sachs & Co.
- -------------------------------------------------------------------------------
The date of this Prospectus Supplement is February 22, 1994.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE DISTRIBUTORS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 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.
----------------
IMPORTANT CURRENCY EXCHANGE INFORMATION
Unless otherwise indicated in the applicable Pricing Supplement, purchasers
are required to pay for Foreign Currency Notes in the currency or currency unit
specified in the applicable Pricing Supplement (the "Specified Currency"). At
the present time there are limited facilities in the United States for the
conversion of U.S. dollars into foreign currencies or currency units and vice
versa, and banks do not generally offer non-U.S. dollar checking or savings
account facilities in the United States. If requested on or prior to the fifth
Market Day preceding the date of delivery of the Notes, or by such other day as
determined by the Distributor who presented such offer to purchase Notes to the
Company, such Distributor is prepared to arrange for the conversion of U.S.
dollars into the Specified Currency to enable the purchasers to pay for the
Notes. Each such conversion will be made by such Distributor on such terms and
subject to such conditions, limitations and charges as such Distributor may
from time to time establish in accordance with its regular foreign exchange
practices. All costs of exchange will be borne by the purchasers of the Foreign
Currency Notes.
References herein to "U.S. dollars" or "U.S. $" or "$" are to the currency of
the United States of America.
S-2
<PAGE>
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered hereby
supplements, and to the extent inconsistent therewith, replaces, the
description of the general terms and conditions of Securities set forth under
the heading "Description of Securities" in the Prospectus, to which description
reference is hereby made. Capitalized terms not defined under this heading or
in the Glossary contained in this Prospectus Supplement have the meanings
assigned to them in the Prospectus or the Indenture.
GENERAL
The Notes offered hereby will be issued under the Indenture referred to in
the accompanying Prospectus between the Company and Chemical Bank, as Trustee
(the "Trustee"). The Notes constitute a single series for purposes of the
Indenture, limited to an aggregate principal amount not to exceed $400,000,000
(or, if any Notes are to be Original Issue Discount Notes or are to be
denominated in one or more foreign currencies or currency units ("Foreign
Currency Notes") or with amounts payable in respect of principal of or any
premium or interest on the Notes to be determined by reference to the value,
rate or price of one or more specified indices ("Indexed Notes"), such
principal amount as shall result in an aggregate initial offering price
equivalent to no more than $400,000,000). The foregoing limit may be increased
by the Company if in the future it determines that it may wish to sell
additional Notes. The Notes offered hereby may be reduced by an amount equal to
the aggregate initial offering price of any other Securities (as defined in the
accompanying Prospectus) sold by the Company (including any other series of
medium-term notes). See "Plan of Distribution of Notes". For a description of
the rights attaching to different series of Securities (including the Notes)
under the Indenture, see "Description of Securities" in the Prospectus.
Unless otherwise specified in the applicable Pricing Supplement, each Note
will mature from nine months to 30 years from its Issue Date, as selected by
the initial purchaser and agreed to by the Company (the "Stated Maturity"),
which maturity date may be subject to extension at the option of the Company.
The Notes will be issuable only in fully registered form and, unless
otherwise indicated in the applicable Pricing Supplement, only in denominations
of $100,000 and integral multiples of $1,000 in excess thereof, or, in the case
of Foreign Currency Notes, in such minimum denomination not less than the
equivalent of $100,000 and such other denomination or denominations in excess
thereof as shall be set forth in the applicable Pricing Supplement. See
"Special Provisions Relating to Foreign Currency Notes".
Notes will initially be represented either by a Certificated Note or by a
Book-Entry Note, as indicated in the applicable Pricing Supplement. See
"Description of Notes--Book-Entry Notes" below.
The Notes will not be guaranteed by Hoechst AG or any other member of the
Hoechst Group.
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will be denominated in U.S. dollars and payments of principal of and any
premium and interest on the Notes will be made in U.S. dollars in the manner
indicated in the accompanying Prospectus and this Prospectus Supplement. If any
of the Notes are to be denominated in one or more currencies or currency units
other than U.S. dollars, additional information pertaining to the terms of such
Notes and other matters relevant to the Holders thereof will be described in
the applicable Pricing Supplement. See "Payment Currency" below and "Foreign
Currency Risks" in the accompanying Prospectus.
In addition, notes may be issued as Original Issue Discount Notes, as Indexed
Notes or as Amortizing Notes. See "Original Issue Discount Notes", "Indexed
Notes" and "Amortizing Notes" below.
The applicable Pricing Supplement will indicate either that a Note cannot be
redeemed prior to its Stated Maturity or that a Note will be redeemable at the
option of the Company on or after a specified date prior to its Stated Maturity
at a specified price or prices (which may include a premium), together with
accrued interest to the date of redemption or repayment. In addition, the
applicable Pricing Supplement will indicate either that the Company will not be
obligated to redeem a Note pursuant to any sinking fund or analogous
S-3
<PAGE>
provisions or at the option of the Holder thereof or that the Company will be
so obligated. If the Company will be so obligated, the applicable Pricing
Supplement will indicate the period or periods within which and the price or
prices at which the applicable Notes will be redeemed, in whole or in part,
pursuant to such obligation and the other detailed terms and provisions of such
obligation. The applicable Pricing Supplement will also indicate whether a Note
is subject to an optional extension beyond its Stated Maturity as described
under "Extension of Maturity".
Payments of principal of, and any premium and interest on, Book-Entry Notes
will be made to the Depositary, or its nominee, as Holder thereof, in
accordance with arrangements then in effect between the Trustee and the
Depositary. Unless otherwise indicated in an applicable Pricing Supplement,
payments of principal of, and any premium and interest due at Maturity on
Certificated Notes denominated and payable in U.S. dollars will be made in
immediately available funds at the Corporate Trust Office of Chemical Bank in
the Borough of Manhattan, The City of New York provided that the Note is
presented to the Paying Agent in time for the Paying Agent to make such
payments in such funds in accordance with its normal procedures. At the option
of the Company payment of interest on such Certificated Notes, other than
interest at Maturity, may be made by check mailed to the address of the person
entitled thereto as such address shall appear in the Security Register or by
wire transfer to an account maintained by such Holder with a bank located in
the United States, provided such Holder shall have provided in writing to the
Trustee, on or prior to the relevant Regular Record Date, appropriate payment
instructions. Notwithstanding the foregoing, a Holder of $5,000,000 or more in
aggregate principal amount of Certificated Notes denominated and payable in
U.S. dollars and having the same Interest Payment Date shall be entitled to
receive such interest payments by wire transfer of immediately payable funds to
an account maintained by such Holder with a bank located in the United States;
provided that the Holder shall have provided in writing to the Trustee, at
least 15 days prior to the relevant Regular Record Date, appropriate payment
instructions. With respect to payments on Foreign Currency Notes, see "Payment
Currency".
Certificated Notes may be presented for registration of transfer or exchange
at the Corporate Trust Office of Chemical Bank in the Borough of Manhattan, The
City of New York. No service charge will be made for any registration of
transfer or exchange of Certificated Notes, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. With respect to registration of transfer and
exchange of Book-Entry Notes see "Description of Notes--Book-Entry Notes" below
and "Description of Securities--Global Securities" in the accompanying
Prospectus.
Interest rates, interest rate bases and various other variable terms of the
Notes described herein are subject to change by the Company from time to time,
but no such change will affect any Note already issued or as to which an offer
to purchase has been accepted by the Company.
Unless otherwise indicated in the applicable Pricing Supplement, Fixed Rate
Notes denominated and payable in U.S. dollars will be subject to the provisions
of the Indenture described in the Prospectus under "Description of Securities--
Defeasance and Covenant Defeasance".
PAYMENT CURRENCY
The Company is obligated to make payments of principal of and any premium and
interest on Foreign Currency Notes in the Specified Currency (or, if such
Specified Currency is not at the time of such payment legal tender for the
payment of public and private debts, in such other coin or currency of the
country which issued such Specified Currency as at the time of such payment is
legal tender for the payment of such debts). Any such amounts paid by the
Company will, unless otherwise specified in the applicable Pricing Supplement,
be converted by the Exchange Rate Agent to U.S. dollars for payment to Holders.
Principal of, and any premium and interest on, a Foreign Currency Note paid in
U.S. dollars will be paid in the manner specified in the accompanying
Prospectus and this Prospectus Supplement for interest on Notes denominated and
payable in U.S. dollars.
Unless otherwise specified in the applicable Pricing Supplement, any U.S.
dollar amount to be received by a Holder of a Foreign Currency Note will be
based on the highest bid quotation in The City of New York
S-4
<PAGE>
received by the Exchange Rate Agent at approximately 11:00 a.m., New York City
time, on the second Market Day preceding the applicable payment date from three
recognized foreign exchange dealers (one of which may be the Exchange Rate
Agent) selected by the Exchange Rate Agent and approved by the Company for the
purchase by the quoting dealer of the Specified Currency for U.S. dollars for
settlement on such payment date in the aggregate amount of the Specified
Currency payable to all Holders of Foreign Currency Notes scheduled to receive
U.S. dollar payments and at which the applicable dealer commits to execute a
contract. If three such bid quotations are not available, payments will be made
in the Specified Currency. All currency exchange costs will be borne by the
Holder of the Foreign Currency Note by deductions from such payments.
Notwithstanding the foregoing, unless otherwise specified in the applicable
Pricing Supplement, a Holder of a Foreign Currency Note may elect to receive
payment of the principal of and any premium and interest on such Note in the
Specified Currency by transmitting a written request for such payment to the
Trustee at its Corporate Trust Office in the Borough of Manhattan, The City of
New York on or prior to the Regular Record Date in the case of an interest
payment or at least 15 days prior to Maturity in the case of a principal or
premium payment. Such request may be in writing (mailed or hand delivered) or
by cable, telex or other form of facsimile transmission. A Holder of a Foreign
Currency Note may elect to receive payment in the Specified Currency for all
principal and any premium and interest payments and need not file a separate
election for each payment. Such election will remain in effect until revoked by
written notice to the Trustee, but written notice of any such revocation must
be received by the Trustee on or prior to the relevant Regular Record Date or
at least 15 days prior to Maturity, as the case may be. Holders of Foreign
Currency Notes whose Notes are to be held in the name of a broker or nominee
should contact such broker or nominee to determine whether and how an election
to receive payments in the Specified Currency may be made.
Unless otherwise specified in the applicable Pricing Supplement, a beneficial
owner of Book-Entry Notes denominated in a Specified Currency electing to
receive payments of principal or any premium or interest in the Specified
Currency must notify the participant through which its interest is held on or
prior to the applicable Regular Record Date, in the case of a payment of
interest, and on or prior to the fifteenth day prior to Maturity, in the case
of a payment of principal or premium, of such beneficial owner's election to
receive all or a portion of such payment in a Specified Currency. Such
participant must notify the Depository of such election on or prior to the
third Business Day after such Regular Record Date. The Depository will notify
the Paying Agent of such election on or prior to the fifth Market Day after
such Regular Record Date. If complete instructions are received by the
participant and forwarded by the participant to the Depository, and by the
Depository to the Paying Agent, on or prior to such dates, the beneficial owner
will receive payments in the Specified Currency.
Interest on a Foreign Currency Note paid in the Specified Currency will be
paid by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register. All checks in a Specified
Currency will be drawn on a bank located outside the United States. Payments at
Maturity of principal of and any premium and interest on Foreign Currency Notes
in the Specified Currency will be made with a bank located in the country of
the Specified Currency (or, in the case of European Currency Units ("ECUs"),
Brussels), as shall have been designated at least 15 days prior to Maturity by
the Holder; provided that the Note is presented at the Corporate Trust Office
of the Trustee in the Borough of Manhattan, The City of New York in time for
such Paying Agent to make such payments in such funds in accordance with its
normal procedures.
If a Specified Currency is not available for the payment of principal or any
premium or interest with respect to a Foreign Currency Note due to the
imposition of exchange controls or other circumstances beyond the control of
the Company, the Company will be entitled to satisfy its obligations to Holders
of Foreign Currency Notes by making such payment in U.S. dollars on the basis
of the Market Exchange Rate on the second Market Day prior to such payment, or,
if such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate or as otherwise specified in the
applicable Pricing Supplement. See "Foreign Currency Risks--Exchange Rates and
Exchange Controls" in the accompanying
S-5
<PAGE>
Prospectus. Any payment made under such circumstances in U.S. dollars where the
required payment is in other than U.S. dollars will not constitute an Event of
Default under the Indenture.
If payment in respect of a Note is required to be made in any currency unit
(e.g., ECU), and such currency unit is unavailable due to the imposition of
exchange controls or other circumstances beyond the Company's control, then the
Company will be entitled, but not required, to make any payments in respect of
such Note in U.S. dollars until such currency unit is again available. The
amount of each payment in U.S. dollars shall be computed on the basis of the
equivalent of the currency unit in U.S. dollars, which shall be determined by
the Company or its agent on the following basis. The component currencies of
the currency unit for the purpose (the "Component Currencies" or, individually,
a "Component Currency") shall be the currency amounts that were components of
the currency unit as of the last day on which the currency unit was used. The
equivalent of the currency unit in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of the Component Currencies. The U.S.
dollar equivalent of each of the Component Currencies shall be determined by
the Company or such agent on the basis of the most recently available Market
Exchange Rate for each such Component Currency, or as otherwise indicated in
the applicable Pricing Supplement.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
All determinations referred to above made by the Company or its agent
(including the Exchange Rate Agent) shall be at its sole discretion and shall,
in the absence of manifest error, be conclusive for all purposes and binding on
the Holders of Notes.
INTEREST
Each interest-bearing Note will bear interest from and including its Issue
Date or from and including the most recent Interest Payment Date with respect
to which interest on such Note (or any predecessor Note) has been paid or duly
provided for to but excluding, the relevant Interest Payment Date at the fixed
rate per annum, or at the rate per annum determined pursuant to the interest
rate formula, stated therein and in the applicable Pricing Supplement until the
principal thereof is paid or made available for payment. Interest payments, if
any, will be in the amount of interest accrued from and including the next
preceding Interest Payment Date in respect of which interest has been paid or
duly provided for (or from and including the date of issue, if no interest has
been paid with respect to such Note) to, but excluding, the applicable Interest
Payment Date. However, unless otherwise specified in the applicable Pricing
Supplement, in the case of Floating Rate Notes on which the interest rate is
reset daily or weekly, the interest payments (other than interest payments on
any date on which principal is payable) will include interest accrued from, but
excluding, the second preceding Regular Record Date (or from and including the
date of issue, if no interest has been paid with respect to such Note),
through, and including, the Regular Record Date next preceding the applicable
Interest Payment Date, except that interest paid at Maturity will include
interest accrued to, but excluding, such date.
Interest, if any, will be payable on each Interest Payment Date and at
Maturity; see "Description of Notes--General". Interest will be payable
generally to the person (which, in the case of a Book-Entry Note, shall be the
Depositary) in whose name a Note (or any predecessor Note) is registered at the
close of business on the Regular Record Date next preceding each Interest
Payment Date; provided, however, that interest payable at Maturity will be
payable to the person (which, in the case of a Book-Entry Note, shall be the
S-6
<PAGE>
Depositary) to whom principal shall be payable. Unless otherwise indicated in
the applicable Pricing Supplement, the first payment of interest on any Note
originally issued between a Regular Record Date and an Interest Payment Date
will be made on the second Interest Payment Date following the Issue date of
issue of such Note to the registered owner on the Regular Record Date
immediately preceding such Interest Payment Date. With respect to payments of
interest on Book-Entry Notes, see "Description of Notes--Book-Entry Notes".
FIXED RATE NOTES
The applicable Pricing Supplement relating to a Fixed Rate Note will
designate a fixed rate of interest per annum payable on such Note. Unless
otherwise indicated in the applicable Pricing Supplement, the Interest Payment
Date with respect to Fixed Rate Notes other than Amortizing Notes shall be June
15 and December 15 of each year and at Maturity and the Regular Record Dates
for such Notes shall be the June 1 and December 1 next preceding the relevant
Interest Payment Dates. Unless otherwise indicated in the applicable Pricing
Supplement, interest on Fixed Rate Notes will be computed on the basis of a
360-day year of twelve 30-day months.
If any Interest Payment Date or the Maturity of a Fixed Rate Note falls on a
day that is not a Market Day, the related payment of principal, premium, if
any, or interest will be made on the next succeeding Market Day as if made on
the date such payment was due, and no additional interest will accrue as a
result of such delayed payment.
FLOATING RATE NOTES
The applicable Pricing Supplement relating to a Floating Rate Note will
designate an interest rate basis for such Floating Rate Note. Such basis may
be: (a) the Commercial Paper Rate, in which case such Note will be a Commercial
Paper Rate Note, (b) the Prime Rate, in which case such Note will be a Prime
Rate Note, (c) the CD Rate, in which case such Note will be a CD Rate Note, (d)
the Federal Funds Rate, in which case such Note will be a Federal Funds Rate
Note, (e) LIBOR, in which case such Note will be a LIBOR Note, (f) the Treasury
Rate, in which case such Note will be a Treasury Rate Note, or (g) such other
interest rate basis or formula as may be agreed to between the Company and the
purchaser and set forth in the applicable Pricing Supplement. In addition, a
Floating Rate Note may bear interest at the lowest or highest or average of two
or more interest rate formulae. The applicable Pricing Supplement for a
Floating Rate Note also will specify the Spread or Spread Multiplier, if any,
and the maximum or minimum interest rate limitation, if any, applicable to each
Note. In addition, such Pricing Supplement will define or particularize for
each Floating Rate Note the following terms, if applicable: Calculation Agent,
Calculation Dates, Initial Interest Rate, Interest Payment Dates, Regular
Record Dates, Index Maturity, Interest Determination Dates and Interest Reset
Dates with respect to such Note. See "Glossary" for definitions of certain
terms used in this Prospectus Supplement.
The rate of interest on a Floating Rate Note in effect on any date will be
(a) if such day is an Interest Reset Date with respect to such Floating Rate
Note, the interest rate on such Floating Rate Note determined as of the
Interest Determination Date pertaining to such Interest Reset Date, or (b) if
such day is not an Interest Reset Date with respect to such Floating Rate Note,
the interest rate on such Floating Rate Note determined as of the Interest
Determination Date pertaining to the immediately preceding Interest Reset Date
with respect to such Floating Rate Note; provided, however, that (i) the
interest rate in effect from the Issue Date of a Floating Rate Note (or that of
a predecessor Note) to but excluding the first Interest Reset Date with respect
to such Floating Rate Note will be the Initial Interest Rate (as set forth in
the applicable Pricing Supplement), and (ii) the interest rate in effect for
the 10 days immediately prior to Maturity of a Floating Rate Note will be that
in effect on the tenth day preceding such Maturity. Subject to applicable
provisions of law and except as described herein, the rate of interest on a
Floating Rate Note on any Interest Reset Date
S-7
<PAGE>
with respect thereto will be the rate of interest determined with respect to
the Interest Determination Date pertaining to such Interest Reset Date as
determined in accordance with the applicable provisions described below.
The rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (each an "Interest Reset Date"),
as specified in the applicable Pricing Supplement. Unless otherwise specified
in the applicable Pricing Supplement, the Interest Reset Date will be, in the
case of Floating Rate Notes which reset daily, each Market Day; in the case of
Floating Rate Notes (other than Treasury Rate Notes) which reset weekly, the
Wednesday of each week; in the case of Treasury Rate Notes which reset weekly,
except as provided in the following paragraph, the Tuesday of each week; in the
case of Floating Rate Notes which reset monthly, the third Wednesday of each
month; in the case of Floating Rate Notes which reset quarterly, the third
Wednesday of March, June, September and December; in the case of Floating Rate
Notes which reset semiannually, the third Wednesday of two months of each year,
as indicated in the applicable Pricing Supplement; and in the case of Floating
Rate Notes which reset annually, the third Wednesday of one month of each year,
as indicated in the applicable Pricing Supplement. If any Interest Reset Date
for any Floating Rate Note would otherwise be a day that is not a Market Day
with respect to such Note, such Interest Reset Date shall be the next
succeeding Market Date with respect to such Note, except that if such Note is a
LIBOR Note and the next succeeding Market Day falls in the next succeeding
calendar month, such Interest Reset Date shall be the immediately preceding
Market Day.
The Interest Determination Date pertaining to an Interest Reset Date for a
Commercial Paper Rate Note (the "Commercial Paper Interest Determination
Date"), a Prime Rate Note (the "Prime Rate Interest Determination Date"), a CD
Rate Note (the "CD Rate Interest Determination Date") or a Federal Funds Rate
Note (the "Federal Funds Interest Determination Date") will be the second
Market Day preceding the Interest Reset Date with respect to such Note. The
Interest Determination Date pertaining to an Interest Reset Date for a LIBOR
Note (the "LIBOR Interest Determination Date") will be the second London Market
Day preceding such Interest Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date for a Treasury Rate Note (the "Treasury
Interest Determination Date") will be the day on which Treasury bills are
auctioned for the week in which such Interest Reset Date falls, or if no
auction is held for such week, the Monday of such week (or if Monday is a legal
holiday, the next succeeding Market Day) and the Interest Reset Date will be
the Market Day immediately following such Treasury Interest Determination Date.
Treasury bills are usually sold at auction on Monday of each week, unless that
day is a legal holiday, in which case the auction is usually held on the
following Tuesday, except that such auction may be held on the preceding
Friday. If an auction for such week is held on Monday or the preceding Friday,
such Monday or preceding Friday shall be the Treasury Interest Determination
Date for such week, and the Interest Reset Date for such week shall be the
Tuesday of such week (or, if such Tuesday is not a Market Day, the next
succeeding Market Day). If the auction for such week is held on any day of such
week other than Monday, then such day shall be the Treasury Interest
Determination Date and the Interest Reset Date for such week shall be the next
succeeding Market Day.
A Floating Rate Note may have either or both of the following: (a) a maximum
numerical interest rate limitation, or ceiling, on the rate of interest which
may accrue during any interest period; and (b) a minimum numerical interest
rate limitation, or floor, on the rate of interest which may accrue during any
interest period. In addition to any maximum interest rate which may be
applicable to any Floating Rate Note, the interest rate on such Floating Rate
Note will in no event be higher than the maximum rate permitted by New York
law, as the same may be modified by United States law of general application.
Under present New York law the maximum rate of interest, with certain
exceptions, is 25% per annum on a simple interest basis. The limit may not
apply to Notes in which $2,500,000 or more has been invested.
Unless otherwise indicated in the applicable Pricing Supplement and except as
provided below, the Interest Payment Date will be, in the case of Floating Rate
Notes which reset daily, weekly or monthly, the third Wednesday of each month
or the third Wednesday of March, June, September and December of each year (as
indicated in the applicable Pricing Supplement); in the case of Floating Rate
Notes which reset
S-8
<PAGE>
quarterly, the third Wednesday of March, June, September and December of each
year; in the case of Floating Rate Notes which reset semiannually, the third
Wednesday of the two months of each year specified in the applicable Pricing
Supplement; and in the case of Floating Rate Notes which reset annually, the
third Wednesday of the month specified in the applicable Pricing Supplement.
If, pursuant to the preceding sentence, an Interest Payment Date with respect
to any Floating Rate Note (other than an Interest Payment Date at Maturity)
would otherwise be a day that is not a Market Day with respect to such Note,
such Interest Payment Date shall be the next succeeding Market Day with respect
to such Note, except that if such Note is a LIBOR Note and the next succeeding
Market Day falls in the next succeeding calendar month, such Interest Payment
Date shall be the immediately preceding Market Day. If the Maturity of a
Floating Rate Note falls on a day that is not a Market Day, the payment of
principal, premium, if any, and interest will be made on the next succeeding
Market Day, and no interest on such payment shall accrue from and after such
Maturity. Unless otherwise indicated in the applicable Pricing Supplement, the
Regular Record Date with respect to Floating Rate Notes shall be the date 15
calendar days prior to each Interest Payment Date, whether or not such date
shall be a Market Day.
Unless otherwise specified in the applicable Pricing Supplement, the interest
accrued from and including the date of issue, or from and including the last
date to which interest has been paid or duly provided for, is calculated by
multiplying the face amount of such Floating Rate Note by an accrued interest
factor. Such accrued interest factor is computed by adding the interest factor
calculated for each day in such period from and including the date of issue, or
from and including the last date to which interest has been paid or duly
provided for, to but excluding the date for which accrued interest is being
calculated. Unless otherwise specified in the Note and the applicable Pricing
Supplement, the interest factor (expressed as a decimal rounded upwards, if
necessary, as described below) for each such day is computed by dividing the
interest rate (expressed as a decimal rounded upwards, if necessary, as
described below) applicable to such date by 360, (or, in the case of Treasury
Rate Notes, by the actual number of days in the year). The interest factor for
Notes for which two or more interest rate formulae are applicable will be
calculated in each period in the same manner as if only the lowest, highest or
average of, as the case may be, such interest rate formulae applied.
Unless otherwise specified in a Pricing Supplement, all percentages resulting
from any calculation on Floating Rate Notes will be rounded, upwards if
necessary, to the nearest one-hundred thousandth of a percentage point, with
five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or
.09876545) being rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544)
being rounded to 9.87654% (or .0987654)), and all dollar amounts used in or
resulting from such calculation on Floating Rate Notes will be rounded to the
nearest cent or, in the case of Foreign Currency Notes, the nearest unit (with
one-half cent or five one-thousandths of a unit being rounded upwards).
Upon the request of the Holder of any Floating Rate Note, the Calculation
Agent will provide the interest rate then in effect, and, if determined, the
interest rate which will become effective as a result of a determination made
on the most recent Interest Determination Date with respect to such Floating
Rate Note.
Commercial Paper Rate Notes. Each Commercial Paper Rate Note will bear
interest at the interest rate (calculated with reference to the Commercial
Paper Rate and the Spread or Spread Multiplier, if any) specified on the face
of such Commercial Paper Rate Note and in the applicable Pricing supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Commercial Paper Interest Determination
Date, the Money Market Yield (calculated as described below) or the rate on
such date for commercial paper having the Index Maturity specified in the
applicable Pricing Supplement as published in H.15(519) under the heading
"Commercial Paper". In the event that such rate is not published prior to 3:00
p.m. New York City time, on the Calculation Date pertaining to such Commercial
Paper Interest Determination Date, then the Commercial Paper Rate shall be the
Money Market Yield of the rate on such Commercial Paper Interest Determination
Date for commercial paper having the Index Maturity specified in the applicable
Pricing Supplement as published in Composite Quotations under the heading
"Commercial Paper". If by 3:00 p.m., New York City time, on
S-9
<PAGE>
such Calculation Date such rate is not yet published in either H.15(519) or
Composite Quotations, the Commercial Paper Rate for that Commercial Paper
Interest Determination Date shall be the Money Market Yield of the arithmetic
mean, as calculated by the Calculation Agent on such Calculation Date, of the
offered rates, as of 11:00 a.m., New York City time, on that Commercial Paper
Interest Determination Date, of three leading dealers of commercial paper in
The City of New York selected by the Calculation Agent (which may include any
Distributor or its affiliates) for commercial paper having the Index Maturity
specified in the applicable Pricing Supplement placed for an industrial issuer
whose bond rating is "AA", or the equivalent, from a nationally recognized
rating agency; provided, however, that if fewer than three dealers selected as
aforesaid by the Calculation Agent are quoting as mentioned in this sentence,
the Commercial Paper Rate will be the Commercial Paper Rate in effect on such
Commercial Paper Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded
upwards, if necessary, to the next higher one-hundred thousandth of a
percentage point) calculated in accordance with the following formula:
D X 360
Money Market Yield = -------------- X 100
360 -- (D X M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
Prime Rate Notes. Each Prime Rate Note will bear interest at the interest
rate (calculated with reference to the Prime Rate and the Spread or Spread
Multiplier, if any) specified on the face of such Prime Rate Note and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Prime Rate"
means, with respect to any Prime Rate Interest Determination Date, the
arithmetic mean of the announced prime rates quoted on the basis of the actual
number of days in the year divided by 360 as of the close of business on such
Prime Rate Interest Determination Date by three major money center banks in The
City of New York selected by the Calculation Agent. If fewer than three such
quotations are provided, the Prime Rate shall be determined on the basis of the
announced prime rates quoted on the basis of the actual number of days in the
year divided by 360 in The City of New York by three substitute banks or trust
companies organized and doing business under the laws of the United States, or
any state thereof, having total equity capital of at least $500 million and
being subject to supervision or examination by Federal or state authority,
selected by the Calculation Agent to provide such rate or rates; provided,
however, that if the banks or trust companies selected as aforesaid are not
quoting as mentioned in this sentence, the Prime Rate will be the Prime Rate
then in effect on such Prime Rate Interest Determination Date.
CD Rate Notes. Each CD Rate Note will bear interest at the interest rate
(calculated with reference to the CD Rate and the Spread or Spread Multiplier,
if any) specified on the face of such CD Rate Note and in the applicable
Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CD Rate"
means, with respect to any CD Rate Interest Determination Date, the rate on
such date for negotiable certificates of deposit having the Index Maturity
specified in the applicable Pricing Supplement as published in H.15(519) under
the heading "CDs (Secondary Market)". In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such CD Rate Interest Determination Date, then the CD Rate shall
be the rate on such CD Rate Interest Determination Date for negotiable
certificates of deposit having the Index Maturity specified in the applicable
Pricing Supplement as published in Composite Quotations under the heading
"Certificates of Deposit". If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or
Composite Quotations, the CD Rate for that CD Interest Determination Date shall
be calculated by the Calculation Agent and shall be the arithmetic mean
(rounded
S-10
<PAGE>
upwards, if necessary, to the next higher one-hundred thousandth of a
percentage point) of the secondary market offered rates, as of 10:00 a.m., New
York City time, on that CD Rate Interest Determination Date, of three leading
nonbank dealers of negotiable U.S. dollar certificates of deposit in The City
of New York selected by the Calculation Agent (which may include any
Distributor or its affiliates) for negotiable certificates of deposit of major
United States money market banks with a remaining maturity closest to the Index
Maturity specified in the applicable Pricing Supplement in a denomination of
$5,000,000; provided, however, that if fewer than three dealers selected as
aforesaid by the Calculation Agent are quoting as mentioned in this sentence,
the CD Rate will be the CD Rate in effect on such CD Rate Interest
Determination Date.
Federal Funds Rate Notes. Each Federal Funds Rate Note will bear interest at
the interest rate (calculated with reference to the Federal Funds Rate and the
Spread or Spread Multiplier, if any) specified on the face of such Federal
Funds Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Federal Funds Interest Determination
Date, the rate on such date for Federal Funds having the Index Maturity
specified in the applicable Pricing Supplement as published in H.15(519) under
the heading "Federal Funds (Effective)". In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Federal Funds Interest Determination Date, then the Federal
Funds Rate will be the rate on such Federal Funds Interest Determination Date
as published in Composite Quotations under the heading "Federal Funds/Effective
Rate". If by 3:00 p.m., New York City time, on such Calculation Date such rate
is not yet published in either H.15(519) or Composite Quotations, the Federal
Funds Rate for that Federal Funds Interest Determination Date shall be the
arithmetic mean, as calculated by the Calculation Agent on such Calculation
Date, of the rates, prior to 9:00 a.m., New York City time, on that Federal
Funds Interest Determination Date, for the last transaction in overnight
Federal Funds arranged by three leading brokers of Federal Funds transactions
in The City of New York (which may include any Distributor or its affiliates)
selected by the Calculation Agent; provided, however, that if fewer than three
brokers selected as aforesaid by the Calculation Agent are quoting as mentioned
in this sentence, the Federal Funds Rate will be the Federal Funds Rate in
effect on such Federal Funds Interest Determination Date.
LIBOR Notes. Each LIBOR Note will bear interest at the interest rate
(calculated with reference to LIBOR and the Spread or Spread Multiplier, if
any) specified on the face of such LIBOR Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR will
be determined by the Calculation Agent in accordance with the following
provisions: On each LIBOR Interest Determination Date, LIBOR will be determined
on the basis of the offered rate for deposits in U.S. dollars having the Index
Maturity specified in the applicable Pricing Supplement, commencing on the
second London Market Day immediately following such LIBOR Interest
Determination Date, which appears on the Telerate Page 3750 as of 11:00 a.m.,
London time, on that LIBOR Interest Determination Date. If such rate does not
so appear on the Telerate Page 3750, the rate in respect of such LIBOR Interest
Determination Date will be determined on the basis of the rates at which
deposits in U.S. dollars 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 the LIBOR Interest Determination Date next preceding the
relevant Interest Reset Date to prime banks in the London interbank market for
a period of the Index Maturity commencing on that Interest Reset Date and in a
principal amount equal to an amount not less than $1,000,000 that is
representative for a single transaction in such market at such time. In such
case, the Calculation Agent will request the principal London office of each of
the aforesaid major banks to provide a quotation of such rate. If at least two
such quotations are provided in respect of such LIBOR Interest Determination
Date, the rate for that Interest Reset Date will be the arithmetic mean of the
quotations, and, if fewer than two quotations are provided as requested in
respect of such LIBOR Interest Determination Date, the rate for that Interest
Reset Date will be the arithmetic mean of the rates quoted by three major banks
in The City of New York, selected by the Calculation Agent (which
S-11
<PAGE>
may include any Distributor or its affiliates), at approximately 11:00 a.m.,
New York City time, on that LIBOR Interest Determination Date for loans in U.S.
dollars to leading European banks for a period of the Index Maturity commencing
on that Interest Reset Date and in a principal amount equal to an amount not
less than $1,000,000 that is representative for a single transaction in such
market at such time; provided, however, if the aforesaid rate cannot be
determined by the Calculation Agent, LIBOR in respect of such LIBOR Interest
Determination Date will be LIBOR then in effect on such LIBOR Interest
Determination Date.
Treasury Rate Notes. Each Treasury Rate Note will bear interest at the
interest rate (calculated with reference to the Treasury Rate and the Spread or
Spread Multiplier, if any) specified on the face of such Treasury Rate Note and
in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury Interest Determination Date, the rate
for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified in the applicable
Pricing Supplement as published in H.15(519) under the heading, "U.S.
Government Securities/Treasury Bills--Auction Average (Investment)" or, if not
so published by 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Treasury Interest Determination Date, the auction average
rate (expressed as a bond equivalent on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis) for such auction as otherwise
announced by the United States Department of the Treasury. In the event that
the results of the auction of Treasury bills having the Index Maturity
specified in the applicable Pricing Supplement are not published or reported as
provided above by 3:00 p.m., New York City time, on such date, or if no such
auction is held in a particular week, then the Treasury Rate shall be the rate
as published in H.15(519) under the heading "U.S. Government
Securities/Treasury Bills/Secondary Market". In the event that such rate is not
so published by 3:00 p.m., New York City time, on its Calculation Date, then
the Treasury Rate shall be calculated by the Calculation Agent and shall be a
yield to maturity (expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis) of the arithmetic
mean, as calculated by the Calculation Agent on such Calculation Date, of the
secondary market bid rates as of approximately 3:30 p.m., New York City time,
on such Treasury Interest Determination Date, of three leading primary United
States government securities dealers in The City of New York selected by the
Calculation Agent (which may include any Distributor or its affiliates), for
the issue of Treasury bills with a remaining maturity closest to the specified
Index Maturity; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Treasury Rate will be the Treasury Rate in effect on such Treasury Interest
Determination Date.
ORIGINAL ISSUE DISCOUNT NOTES
Notes may be issued as Original Issue Discount Notes. An Original Issue
Discount Note is a Note which is issued at a price lower than the principal
amount thereof and which provides that upon redemption or acceleration of the
Maturity thereof an amount less than the principal thereof shall become due and
payable. In the event of redemption or acceleration of the Maturity of an
Original Issue Discount Note, the amount payable to the Holder of such Note
upon such redemption or acceleration will be determined in accordance with the
terms of the Note, but will be an amount less than the amount payable at the
Stated Maturity of such Note. In addition, a Note issued at a discount may, for
United States Federal income tax purposes, be considered an original issue
discount note, regardless of the amount payable upon redemption or acceleration
of Maturity of such Note. See "United States Taxation--Original Issue
Discount".
INDEXED NOTES
Notes may be issued as Indexed Notes, of which the principal amount payable
at Maturity and/or on which the amount of interest payable on an Interest
Payment Date will be determined by reference to currencies, currency units,
commodity prices, financial or non-financial indices or other factors as
indicated in the applicable Pricing Supplement. Holders of Indexed Notes may
receive a principal amount at Maturity
S-12
<PAGE>
that is greater than or less than the face amount of such Notes depending upon
the fluctuation of the relative value, rate or price of the specified index.
Specific information pertaining to the method for determining the principal
amount payable at Maturity, a historical comparison of the relative value, rate
or price of the specified index and the face amount of the Indexed Note and
certain additional tax considerations will be described in the applicable
Pricing Supplement.
AMORTIZING NOTES
The Company may from time to time offer Amortizing Notes. Unless otherwise
specified in the applicable Pricing Supplement, interest on each Amortizing
Note will be computed on the basis of a 360-day year of twelve 30-day months.
Payments of principal and interest on Amortizing Notes, which are securities
for which payments of principal and interest are made in equal installments
over the life of the security, will be made either quarterly on each March 15,
June 15, September 15 and December 15 or semiannually on each June 15 and
December 15, and on the Stated Maturity, unless otherwise specified in an
applicable Pricing Supplement. Payments with respect to Amortizing Notes will
be applied first to interest due and payable thereon and then to the reduction
of the unpaid principal amount thereof. Further information concerning
additional terms and conditions of any issue of Amortizing Notes will be
provided in the applicable Pricing Supplement. A table setting forth repayment
information in respect of each Amortizing Note will be included in the
applicable Pricing Supplement and set forth in such Notes.
EXTENSION OF MATURITY
The Pricing Supplement relating to each Note will indicate whether the
Company has the option to extend the Stated Maturity of such Note for one or
more periods of whole years (each an "Extension Period") up to but not beyond
the date (the "Final Maturity") set forth in such Pricing Supplement.
The Company may exercise such option with respect to a Note by notifying the
Trustee for such Note at least 45 but not more than 60 days prior to the old
Stated Maturity of such Note. Not later than 40 days prior to the old Stated
Maturity of such Note, the Trustee for such Note will mail to the Holder of
such Note a notice (the "Extension Notice"), first class, postage prepaid. The
Extension Notice will set forth (i) the election of the Company to extend the
Stated Maturity of such Note; (ii) the new Stated Maturity; (iii) in the case
of a Fixed Rate Note, the interest rate applicable to the Extension Period or,
in the case of a Floating Rate Note, the Spread or Spread Multiplier applicable
to the Extension Period; and (iv) the provisions, if any, for redemption during
the Extension Period, including the date or dates on which or the period or
periods during which and the price or prices at which such redemption may occur
during the Extension Period. Upon the mailing by such Trustee of an Extension
Notice to the Holder of a Note, the Stated Maturity of such Note shall be
extended automatically, and, except as modified by the Extension Notice and as
described in the next paragraph, such Registered Note will have the same terms
as prior to the mailing of such Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the old Stated
Maturity of such Note, the Company may, at its option, revoke the interest rate
(in the case of a Fixed Rate Note) or the Spread or Spread Multiplier (in the
case of a Floating Rate Note) provided for in the Extension Notice for such
Note and establish a higher interest rate (in the case of a Fixed Rate Note) or
a higher Spread or Spread Multiplier (in the case of a Floating Rate Note) for
the Extension Period, by causing the Trustee for such Note to mail notice of
such higher interest rate or higher Spread or higher Spread Multiplier, as the
case may be, first class, postage prepaid, to the Holder of such Note. Such
notice shall be irrevocable. All Notes with respect to which the Stated
Maturity is extended will bear such higher interest rate (in the case of Fixed
Rate Notes) or higher Spread or Spread Multiplier (in the case of Floating Rate
Notes) for the Extension Period, whether or not tendered for repayment.
If the Company extends the Stated Maturity of a Note, the Holder of such Note
will have the option to elect repayment of such Note by the Company on the old
Stated Maturity at a price equal to the principal amount thereof, plus interest
accrued to such date. In order for a Note to be repaid on the old Stated
Maturity once the Company has extended the Stated Maturity thereof, the Holder
thereof must follow the procedures
S-13
<PAGE>
set forth below under "Redemption--Redemption (Option of Holder)" for optional
repayment, except that the period for delivery of such Note or notification to
the Trustee for such Note shall be at least 25 but not more than 35 days prior
to the old Stated Maturity and except that a Holder who has tendered a Note for
repayment pursuant to an Extension Notice may, by written notice to the Trustee
for such Note, revoke any such tender for repayment until 5:00 p.m., New York
City time on the tenth day before the old Stated Maturity.
REDEMPTION
Redemption (Option of Company). If one or more Redemption Dates (or range of
Redemption Dates) is specified in the applicable Pricing Supplement, the Notes
described therein will be subject to redemption, in whole or in part, as
specified in such Pricing Supplement, on any such date (or during any such
range of dates) at the option of the Company upon not less than 30 days' or
more than 60 days' notice, at the Redemption Price or Prices specified in the
applicable Pricing Supplement, together with interest accrued to the Redemption
Date; provided, however, that interest installments due prior to the date fixed
for redemption will be payable to the Holder of record at the close of business
on the Regular Record Date. If less than the entire principal amount of a Note
is redeemed, the principal amount of such Note that remains outstanding after
such redemption shall be an authorized denomination (which shall not be less
than the minimum authorized denomination) for the Notes. If less than all Notes
of like tenor are to be redeemed, the Notes to be redeemed shall be selected by
the Trustee by such method as the Trustee shall deem fair and appropriate.
Redemption (Option of Holder). If one or more Redemption Dates (Option of
Holder) (or range of such dates) is specified in the applicable Pricing
Supplement, the Notes described therein will be subject to redemption, in
whole, or from time to time in part, as specified in such Pricing Supplement,
on any such date (or during any such range) or, if such date is not a Market
Day, on the first Market Day following such date, at the election of Holder at
the Redemption Price determined as set forth in the applicable Pricing
Supplement, together with interest accrued to the Redemption Date; provided,
however, that interest installments due on or prior to the date fixed for
redemption will be payable to the Holder of record at the close of business on
the Regular Record Date.
Unless otherwise specified in the applicable Pricing Supplement, in order to
exercise such an election, a Holder must, unless a different notice period is
specified in the applicable Pricing Supplement, give to the Trustee not less
than 30 days' nor more than 60 days' notice. Unless otherwise specified in the
applicable Pricing Supplement, any such notice shall consist of either (i) the
Note with the form entitled "Option to Elect Redemption" duly completed, or
(ii) a telegram, facsimile transmission or a letter from a member of a national
securities exchange, or of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company in the United States, setting forth
the name of the Holder, the principal amount of the Note, the principal amount
of the Note to be redeemed, the certificate number or a description of the
tenor and terms of the Note, a statement that the option to elect redemption is
being exercised thereby and a guarantee that such Note, together with the duly
completed form entitled "Option to Elect Redemption", will be received by the
Trustee not later than the fifth Business Day after the date of such telegram,
facsimile transmission or letter; provided, however, that such telegram,
facsimile transmission or letter shall only be effective if such Note and such
form, duly completed, are received by the Trustee by such fifth Business Day.
Unless otherwise specified in the applicable Pricing Supplement, exercise of
a redemption option by a Holder will be irrevocable (except pursuant to an
Extension Notice). Such option may be exercised with respect to less than the
entire principal amount of a Note; provided that the portion remaining
Outstanding after such redemption is an authorized denomination.
If a Note is represented by a Book-Entry Note the Depositary's nominee will
be the Holder thereof entitled to exercise a right to redemption. In order to
ensure that the Depositary's nominee will timely exercise
S-14
<PAGE>
a right to repayment with respect to a particular Note, the beneficial owner of
an interest in such Note must instruct the broker or other direct or indirect
participant through which it holds an interest in such Note to notify the
Depositary of its desire to exercise a right to repayment. Different firms have
different cut-off times for accepting instructions from their customers and,
accordingly, each such beneficial owner should consult the broker or other
direct or indirect participant through which it holds an interest in a Book-
Entry Note in order to ascertain the cut-off time by which such an instruction
must be given in order for timely notice to be delivered to the Depositary.
REPURCHASE
The Company may at any time purchase Notes at any price in the open market or
otherwise. Notes so purchased by the Company may, at its discretion, be held,
resold or surrendered to the Trustee for cancellation.
BOOK-ENTRY NOTES
Upon issuance, all Book-Entry Notes of like tenor and having the same Issue
Date will be represented by one or more fully registered securities in
permanent global form (each a "Global Note"). See "Description of Securities--
Global Securities" in the Prospectus. Each Global Note representing Book-Entry
Notes will be deposited with, or on behalf of, The Depository Trust Company, as
Depositary (the "Depositary"), located in the Borough of Manhattan, The City of
New York, and will be registered in the name of the Depositary or a nominee of
the Depositary. Unless otherwise indicated in the applicable Pricing
Supplement, the Depositary will only accept the deposit of a Global Note
denominated in U.S. dollars.
Ownership of beneficial interests in a Global Note representing Book-Entry
Notes will be limited to institutions that have accounts with the Depositary or
its nominee ("participants") or person that may hold interests through
participants. The Company has been advised by the Depositary that upon the
issuance of a Global Note representing Book-Entry Notes, and the deposit of
such Global Note with the Depositary, the Depositary will immediately credit,
on its book-entry registration and transfer system, the respective principal
amounts of the Book-Entry Notes represented by such Global Note to the accounts
of participants. The accounts to be credited shall be designated by the
soliciting Distributor or, to the extent that the Book-Entry Notes are offered
and sold directly, by the Company.
The Company has been advised by the Depositary that upon receipt of any
payment of principal of or any premium or interest in respect of a Global Note,
the Depositary will immediately credit, on its book-entry registration and
transfer system, accounts of participants with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Note as shown on the records of the Depositary. Payments by
participants to owners of beneficial interests in a Global Note 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 registered in "street name", and will be the sole responsibility of
such participants.
The Depositary has advised the Company as follows: the Depositary is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934, as amended. The Depositary was created to hold securities of its
participants and to facilitate the clearance and settlement of securities
transactions, such as transfers and pledges, among its participants in such
securities through electronic computerized book-entry changes in accounts of
the participants, thereby eliminating the need for physical movement of
securities certificates. The Depositary's participants include securities
brokers and dealers (including the Distributors), banks, trust companies,
clearing corporations, and certain other organizations, some of whom (and/or
their representatives) own the Depositary. Access to the Depositary's book-
entry system is also available to others, such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
S-15
<PAGE>
SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
GENERAL
The following provisions, which apply to Foreign Currency Notes, supplement
the description of general terms and conditions of (a) Securities set forth
under the heading "Description of Securities" in the accompanying Prospectus
and (b) Notes set forth above under the heading "Description of Notes" in this
Prospectus Supplement. For a description of certain risks associated with
Foreign Currency Notes, see "Foreign Currency Risks" in the accompanying
Prospectus.
THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND ANY PRICING
SUPPLEMENT DO NOT DESCRIBE ALL RISKS OF AN INVESTMENT IN FOREIGN CURRENCY NOTES
THAT RESULT FROM SUCH NOTES BEING DENOMINATED IN A FOREIGN CURRENCY OR CURRENCY
UNIT EITHER AS SUCH RISKS EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS
SUCH RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE PURCHASERS SHOULD CONSULT
THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED IN AN
INVESTMENT IN FOREIGN CURRENCY NOTES AND AS TO ANY MATTERS THAT MAY AFFECT THE
PURCHASE OR HOLDING OF A FOREIGN CURRENCY NOTE OR THE RECEIPT OF PAYMENTS OF
PRINCIPAL OF AND ANY PREMIUM AND INTEREST ON A FOREIGN CURRENCY NOTE IN A
SPECIFIED CURRENCY. FOREIGN CURRENCY NOTES ARE NOT AN APPROPRIATE INVESTMENT
FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY
TRANSACTIONS.
Unless otherwise indicated in the applicable Pricing Supplement, a Foreign
Currency Note will not be sold in, or to a resident of, the country of the
Specified Currency in which such Note is denominated.
The authorized denominations of Foreign Currency Notes will be indicated in
the applicable Pricing Supplement.
Specific information pertaining to the foreign currency or currency unit in
which a particular Foreign Currency Note is denominated, including historical
exchange rates and a description of the currency and any exchange controls,
will be described in the applicable Pricing Supplement. Such information
contained therein shall be furnished as a matter of information only and should
not be regarded as indicative of the range of or trends in fluctuations in
currency exchange rates that may occur in the future. See "Foreign Currency
Risks--Exchange Rates and Exchange Controls" in the accompanying Prospectus.
The information set forth in this Prospectus Supplement is directed to
prospective purchasers of Notes who are United States residents, and the
Company disclaims any responsibility to advise prospective purchasers who are
residents of countries other than the United States with respect to any matters
that may affect the purchase or holding of, or receipt of payments of
principal, premium or interest in respect of, Notes. Such persons should
consult their own advisors with regard to such matters.
UNITED STATES TAXATION
The following is a summary of the principal United States Federal tax
consequences resulting from the beneficial ownership of Notes by certain
persons. This summary does not purport to consider all the possible tax
consequences of the purchase, ownership or disposition of the Notes and is not
intended to reflect the individual tax position of any beneficial owner. It
deals only with Notes and currencies or composite currencies other than U.S.
dollars ("Foreign Currency") held as capital assets. Moreover, except as
expressly indicated, it deals only with initial purchasers, and it does not
deal with beneficial owners with a special tax status or special tax
situations, such as dealers in securities or currencies, Notes (or Foreign
Currency) held as a hedge against currency risks or as part of a straddle with
other investments or as part of a "synthetic
S-16
<PAGE>
security" or other integrated investment (including a "conversion transaction")
comprised of a Note and one or more other investments, or situations in which
the functional currency of the beneficial owner is not the U.S. dollar. Except
to the extent discussed below under "Non-United States Persons", this summary
may not be applicable to non-United States persons not subject to United States
Federal income tax on their worldwide income. The summary is based upon the
United States Federal tax laws and regulations as now in effect and as
currently interpreted and does not take into account possible changes in such
tax laws or such interpretations, which may be applied retroactively. It does
not include any description of the tax laws of any state, local or foreign
governments that may be applicable to the Notes or holders thereof. Persons
considering the purchase of Notes should consult their own tax advisors
concerning the application of the United States Federal tax laws to their
particular situations as well as any consequences to them under the laws of any
other taxing jurisdiction.
U.S. HOLDERS
Payments of Interest
In general, interest on a Note, whether payable in U.S. dollars or a Foreign
Currency (other than certain payments on a Discount Note, as defined and
described below under "Original Issue Discount"), will be taxable to a
beneficial owner who or which is (i) a citizen or resident of the United
States, (ii) a corporation created or organized under the laws of the United
States or any State thereof (including the District of Columbia) or (iii) a
person otherwise subject to United States Federal income taxation on its
worldwide income (a "U.S. Holder") as ordinary income at the time it is
received or accrued, depending on the holder's method of accounting for tax
purposes. If an interest payment is denominated in or determined by reference
to a Foreign Currency, then special rules, described below under "Foreign
Currency Notes", apply.
Original Issue Discount
The following discussion summarizes the United States Federal income tax
consequences to holders of Notes issued with original issue discount ("OID").
The basic rules for reporting OID are contained in the Internal Revenue Code of
1986, as amended (the "Code"). On February 4, 1994, the Treasury Department
issued final regulations (the "OID Regulations"), which expand and illustrate
the rules provided by the Code. The OID Regulations are effective for debt
instruments issued on or after April 4, 1994, and the preamble to the OID
Regulations provides that a taxpayer generally may rely upon the OID
Regulations for debt instruments issued after December 21, 1992.
Special rules apply to OID on a Discount Note that is denominated in Foreign
Currency. See "Foreign Currency Notes--Foreign Currency Discount Notes".
General. A Note will be treated as issued with OID (a "Discount Note") if the
excess of the Note's "stated redemption price at maturity" over its issue price
is greater than a de minimis amount (set forth in the Code and the OID
Regulations). Generally, the issue price of a Note (or any Note that is part of
an issue of Notes) will be the first price at which a substantial amount of
Notes that are part of such issue of Notes are sold. Under the OID Regulations,
the "stated redemption price at maturity" of a Note is the sum of all payments
provided by the Note that are not payments of "qualified stated interest". A
"qualified stated interest" payment includes any stated interest payment on a
Note that is unconditionally payable at least annually at a single fixed rate
(or at certain floating rates) that appropriately takes into account the length
of the interval between stated interest payments. The Pricing Supplement will
state whether a particular issue of Notes will constitute Discount Notes.
In general, if the excess of a Note's stated redemption price at maturity
over its issue price is de minimis, then such excess constitutes "de minimis
OID". Under the OID Regulations, unless the election described below under
"Election to Treat All Interest as Original Issue Discount" is made, such a
Note will not be
S-17
<PAGE>
treated as issued with OID (in which case the following paragraphs under
"Original Issue Discount" will not apply), and a U.S. Holder of such a Note
will recognize capital gain with respect to such de minimis OID as stated
principal payments on the Note are made. The amount of such gain with respect
to each such payment will equal the product of the total amount of the Note's
de minimis OID and a fraction, the numerator of which is the amount of the
principal payment made and the denominator of which is the stated principal
amount of the Note.
In certain cases, Notes that bear stated interest and are issued at par may
be deemed to bear OID for Federal income tax purposes, with the result that the
inclusion of interest in income for Federal income tax purposes may vary from
the actual cash payments of interest made on such Notes, generally accelerating
income for cash method taxpayers. Under the OID Regulations, a Note may be a
Discount Note where (i) a Floating Rate Note provides for a maximum interest
rate or a minimum interest rate that is reasonably expected as of the issue
date to cause the yield on the debt instrument to be significantly less, in the
case of a maximum rate, or more, in the case of a minimum rate, than the
expected yield determined without the maximum or minimum rate, as the case may
be; (ii) a Floating Rate Note provides for significant front-loading or back-
loading of interest; or (iii) a Note bears interest at a floating rate in
combination with one or more floating or fixed rates. Notice will be given in
the applicable Pricing Supplement if the Company determines that a particular
Note will be a Discount Note. Unless specified in the applicable Pricing
Supplement, Floating Rate Notes will not be Discount Notes.
The Code and the OID Regulations provide rules that require a U.S. Holder of
a Discount Note having a maturity of more than one year from its date of issue
to include OID in gross income before the receipt of cash attributable to such
income, without regard to the Holder's method of accounting for tax purposes.
The amount of OID includible in gross income by a U.S. Holder of a Discount
Note is the sum of the "daily portions" of OID with respect to the Discount
Note for each day during the taxable year or portion of the taxable year in
which the U.S. Holder holds such Discount Note ("accrued OID"). The daily
portion is determined by allocating to each day in any "accrual period" a pro
rata portion of the OID allocable to that accrual period. Under the OID
Regulations, accrual periods with respect to a Note may be any set of periods
(which may be of varying lengths) selected by the U.S. Holder as long as (i) no
accrual period is longer than one year and (ii) each scheduled payment of
interest or principal on the Note occurs on the first day or final day of an
accrual period.
The amount of OID allocable to an accrual period equals the excess of (a) the
product of the Discount Note's adjusted issue price at the beginning of the
accrual period and the Discount Note's yield to maturity (determined on the
basis of compounding at the close of each accrual period and properly adjusted
for the length of the accrual period) over (b) the sum of any payments of
qualified stated interest on the Discount Note allocable to the accrual period.
The "adjusted issue price" of a Discount Note at the beginning of the first
accrual period is the issue price and at the beginning of any accrual period
thereafter is (x) the sum of the issue price of such Discount Note, the accrued
OID for each prior accrual period (determined without regard to the
amortization of any acquisition premium or bond premium, which are discussed
below), and the amount of any qualified stated interest on the Note that has
accrued prior to the beginning of the accrual period but is not payable until a
later date, less (y) any prior payments on the Discount Note that were not
qualified stated interest payments. If a payment (other than a payment of
qualified stated interest) is made on the first day of an accrual period, then
the adjusted issue price at the beginning of such accrual period is reduced by
the amount of the payment. If a portion of the initial purchase price of a Note
is attributable to interest that accrued prior to the Note's issue date, the
first stated interest payment on the Note is to be made within one year of the
Note's issue date and such payment will equal or exceed the amount of pre-
issuance accrued interest, then the U.S. Holder may elect to decrease the issue
price of the Note by the amount of pre-issuance accrued interest, in which case
a portion of the first stated interest payment will be treated as a return of
the excluded pre-issuance accrued interest and not as an amount payable on the
Note.
The OID Regulations contain certain special rules that generally allow any
reasonable method to be used in determining the amount of OID allocable to a
short initial accrual period (if all other accrual periods
S-18
<PAGE>
are of equal length) and require that the amount of OID allocable to the final
accrual period equal the excess of the amount payable at the maturity of the
Note (other than any payment of qualified stated interest) over the Note's
adjusted issue price as of the beginning of such final accrual period. In
addition, if an interval between payments of qualified stated interest on a
Note contains more than one accrual period, then the amount of qualified stated
interest payable at the end of such interval is allocated pro rata (on the
basis of their relative lengths) between the accrual periods contained in the
interval.
A U.S. Holder of a Discount Note generally will have to include in income
increasingly greater amounts of OID over the life of the Note.
Acquisition Premium. A U.S. Holder that purchases a Note at its original
issuance for an amount in excess of its issue price but less than its stated
redemption price at maturity (any such excess being "acquisition premium"), and
that does not make the election described below under "Original Issue
Discount--Election To Treat All Interest as Original Issue Discount", is
permitted to reduce the daily portions of OID by a fraction, the numerator of
which is the excess of the U.S. Holder's purchase price for the Note over the
Note's adjusted issue price, and the denominator of which is the excess of the
sum of all amounts payable on the Note after the purchase date, other than
payments of qualified stated interest, over the Note's issue price.
Alternatively, a U.S. Holder may elect to compute OID accruals as described
under "Original Issue Discount--General" above, treating the U.S. Holder's
purchase price as the issue price.
Optional Redemption. If the Company has an option to redeem a Note, or the
Holder has an option to cause a Note to be repurchased, prior to the Note's
stated maturity, such option will be presumed to be exercised if, by utilizing
any date on which such Note may be redeemed or repurchased as the maturity date
and the amount payable on such date in accordance with the terms of such Note
(the "redemption price") as the stated redemption price at maturity, the yield
on the Note would be (i) in the case of an option of the Company, lower than
its yield to stated maturity, or (ii) in the case of an option of the Holder,
higher than its yield to stated maturity. If such option is not in fact
exercised when presumed to be exercised, the Note would be treated solely for
OID purposes as if it were redeemed or repurchased, and a new Note were issued,
on the presumed exercise date for an amount equal to the Note's adjusted issue
price on that date.
Short-Term Notes. Under the Code, special rules apply with respect to OID on
Notes that mature one year or less from the date of issuance ("Short-Term
Notes"). In general, an individual or other cash basis U.S. Holder of a Short-
Term Note is not required to accrue OID for United States Federal income tax
purposes unless such Holder elects to do so. Accrual basis U.S. Holders and
certain other U.S. Holders, including banks, regulated investment companies,
dealers in securities and cash basis U.S. Holders who so elect, are required to
accrue original issue discount on Short-Term Notes on either a straight-line
basis or under the constant yield method (based on daily compounding), at the
election of the U.S. Holder. In the case of a U.S. Holder not required and not
electing to include OID in income currently, any gain realized on the sale or
retirement of the Short-Term Note will be ordinary income to the extent of the
OID accrued on a straight-line basis (unless an election is made to accrue the
original issue discount under the constant yield method) through the date of
sale or retirement. U.S. Holders who are not required and do not elect to
accrue OID on Short-Term Notes will be required to defer deductions for
interest on borrowings allocable to Short-Term Notes in an amount not exceeding
the deferred income until the deferred income is realized.
Any U.S. Holder of a Short-Term Note can elect to apply the rules in the
preceding paragraph taking into account the amount of "acquisition discount",
if any, with respect to the Note (rather than the OID with respect to such
Note). Acquisition discount is the excess of the stated redemption price at
maturity of the Short-Term Note over the U.S. Holder's purchase price.
Acquisition discount will be treated as accruing on a ratable basis or, at the
election of the Holder, on a constant-yield basis.
For purposes of determining the amount of OID subject to these rules, the OID
Regulations provide that no interest payments on a Short-Term Note are
qualified stated interest, but instead such interest payments are included in
the Short-Term Note's stated redemption price at maturity.
S-19
<PAGE>
Notes Purchased at a Premium
Under the Code, a U.S. Holder that purchases a Note for an amount in excess
of its principal amount will not be subject to the OID rules and may elect to
treat such excess as "amortizable bond premium", in which case the amount of
qualified stated interest required to be included in the U.S. Holder's income
each year with respect to interest on the Note will be reduced by the amount of
amortizable bond premium allocable (based on the Note's yield to maturity) to
such year. Any election to amortize bond premium shall apply to all bonds
(other than bonds the interest on which is excludible from gross income) held
by the U.S. Holder at the beginning of the first taxable year to which the
election applies or thereafter acquired by the U.S. Holder, and is irrevocable
without the consent of the Internal Revenue Service (the "IRS"). See also
"Original Issue Discount--Election to Treat All Interest as Original Issue
Discount".
Notes Purchased at a Market Discount
A Note, other than a Short-Term Note, will be treated as issued at a market
discount (a "Market Discount Note") if the amount for which a U.S. Holder
purchased the Note is less than the Note's issue price , subject to a de
minimis rule similar to the rule relating to de minimis OID described under
"Original Issue Discount--General".
In general, any gain recognized on the maturity or disposition of a Market
Discount Note will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on such Note. Alternatively, a U.S.
Holder of a Market Discount Note may elect to include market discount in income
currently over the life of the Note. Such an election applies to all debt
instruments with market discount acquired by the electing U.S. Holder on or
after the first day of the first taxable year to which the election applies and
may not be revoked without the consent of the IRS.
Market discount accrues on a straight-line basis unless the U.S. Holder
elects to accrue such market discount on a constant yield to maturity basis.
Such an election shall apply only to the Note with respect to which it is made
and may not be revoked without the consent of the IRS. A U.S. Holder of a
Market Discount Note who does not elect to include market discount in income
currently generally will be required to defer deductions for interest on
borrowings allocable to such Note in an amount not exceeding the accrued market
discount on such Note until the maturity or disposition of such Note.
The market discount rules do not apply to a Short-Term Note.
Election To Treat All Interest as Original Issue Discount
Any U.S. Holder that holds a Note issued after April 4, 1994, may elect to
include in gross income all interest that accrues on a Note using the constant
yield method described above under the heading "Original Issue Discount--
General," with the modifications described below. For purposes of this
election, interest includes stated interest, OID, de minimis OID, market
discount (described below under "Notes Purchased at a Market Discount"),
acquisition discount, de minimis market discount and unstated interest, as
adjusted by any amortizable bond premium (described below under "Notes
Purchased at a Premium") or acquisition premium.
In applying the constant yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing
U.S. Holder's adjusted basis in the Note immediately after its acquisition, the
issue date of the Note will be the date of its acquisition by the electing U.S.
Holder, and no payments on the Note will be treated as payments of qualified
stated interest. This election will generally apply only to the Note with
respect to which it is made and may not be revoked without the consent of the
IRS. If this election is made with respect to a Note with amortizable bond
premium, then the electing U.S. Holder will be deemed to have elected to apply
amortizable bond premium against interest with respect to all debt instruments
with amortizable bond premium (other than debt instruments the interest on
which is excludible from gross income) held by such electing U.S. Holder as of
the beginning of the taxable year in which the Note with respect to which the
election is made is acquired or thereafter acquired. The deemed election with
respect to amortizable bond premium may not be revoked without the consent of
the IRS.
S-20
<PAGE>
If the election described above to apply the constant-yield method to all
interest on a Note is made with respect to a Market Discount Note, as defined
below, then the electing U.S. Holder will be treated as having made the
election discussed below under "Notes Purchased at a Market Discount" to
include market discount in income currently over the life of all debt
instruments held or thereafter acquired by such U.S. Holder.
Purchase, Sale and Retirement of the Notes
General. A U.S. Holder's tax basis in a Note will generally be its U.S.
dollar cost (which, in the case of a Note purchased with a Foreign Currency,
will be the U.S. dollar value of the purchase price on the date of purchase),
increased by the amount of any OID or market discount (or acquisition discount,
in the case of a Short-Term Note) included in the U.S. Holder's income with
respect to the Note and the amount, if any, of income attributable to de
minimis OID included in the U.S. Holder's income with respect to the Note, and
reduced by the sum of (i) the amount of any payments that are not qualified
stated interest payments, and (ii) the amount of any amortizable bond premium
applied to reduce interest on the Note. A U.S. Holder generally will recognize
gain or loss on the sale or retirement of a Note equal to the difference
between the amount realized on the sale or retirement and the tax basis of the
Note. The amount realized on a sale or retirement for an amount in Foreign
Currency will be the U.S. dollar value of such amount on the date of sale or
retirement. Except to the extent described above under "Original Issue
Discount--Short Term Notes" or "Market Discount" or in the next succeeding
paragraph, and except to the extent attributable to accrued but unpaid
interest, gain or loss recognized on the sale or retirement of a Note will be
capital gain or loss and will be long-term capital gain or loss if the Note was
held for more than one year.
Foreign Currency Notes
Interest Payments. If an interest payment is denominated in or determined by
reference to a Foreign Currency, the amount of income recognized by a cash
basis U.S. Holder will be the U.S. dollar value of the interest payment, based
on the exchange rate in effect on the date of receipt, regardless of whether
the payment is in fact converted into U.S. dollars. Accrual basis U.S. Holders
may determine the amount of income recognized with respect to such interest
payments in accordance with either of two methods. Under the first method, the
amount of income recognized will be based on the average exchange rate in
effect during the interest accrual period (or, with respect to an accrual
period that spans two taxable years, the partial period within the taxable
year). Upon receipt of an interest payment (including a payment attributable to
accrued but unpaid interest upon the sale or retirement of a Note) determined
by reference to a Foreign Currency, an accrual basis U.S. Holder will recognize
ordinary income or loss measured by the difference between such average
exchange rate and the exchange rate in effect on the date of receipt,
regardless of whether the payment is in fact converted into U.S. dollars. Under
the second method, an accrual basis U.S. Holder may elect to translate interest
income into U.S. dollars at the spot exchange rate in effect on the last day of
the accrual period or, in the case of an accrual period that spans two taxable
years, at the exchange rate in effect on the last day of the partial period
within the taxable year. Additionally, if a payment of interest is actually
received within 5 business days of the last day of the accrual period or
taxable year, an accrual basis U.S. Holder applying the second method may
instead translate such accrued interest into U.S. dollars at the spot exchange
rate in effect on the day of actual receipt (in which case no exchange gain or
loss will result). Any election to apply the second method will apply to all
debt instruments held by the U.S. Holder at the beginning of the first taxable
year to which the election applies or thereafter acquired by the U.S. Holder,
and will be irrevocable without the consent of the IRS.
Exchange of Amounts in Other than U.S. Dollars. Foreign Currency received as
interest on a Note or on the sale or retirement of a Note will have a tax basis
equal to its U.S. dollar value at the time such interest is received or at the
time of such sale or retirement, as the case may be. Foreign Currency that is
purchased will generally have a tax basis equal to the U.S. dollar value of the
Foreign Currency on the date of purchase. Any gain or loss recognized on a sale
or other disposition of a Foreign Currency (including its use to purchase Notes
or upon exchange for U.S. dollars) will be ordinary income or loss.
S-21
<PAGE>
Foreign Currency Discount Notes. OID for any accrual period on a Discount
Note that is denominated in a Foreign Currency will be determined in the
Foreign Currency and then translated into U.S. dollars in the same manner as
stated interest accrued by an accrual basis U.S. Holder. Upon receipt of an
amount attributable to original issue discount (whether in connection with a
payment of interest or the sale or retirement of a Note), a U.S. Holder may
recognize ordinary income or loss.
Amortizable Bond Premium. In the case of a Note that is denominated in a
Foreign Currency, bond premium will be computed in units of Foreign Currency,
and amortizable bond premium will reduce interest income in units of the
Foreign Currency. At the time amortized bond premium offsets interest income, a
U.S. Holder may realize ordinary income or loss, measured by the difference
between exchange rates at that time and at the time of the acquisition of the
Notes.
Exchange Gain or Loss. Gain or loss recognized by a U.S. Holder on the sale
or retirement of a Note that is attributable to changes in exchange rates will
be treated as ordinary income or loss. However, exchange gain or loss is taken
into account only to the extent of total gain or loss realized on the
transaction.
Indexed Notes
The applicable Pricing Supplement will contain a discussion of any special
United States Federal income tax rules with respect to currency indexed Notes
or other indexed Notes.
NON-U.S. HOLDERS
Subject to the discussion of backup withholding below, (a) payment of
principal and interest by the Company or any paying agent to a beneficial owner
of a Note that is not a U.S. Holder and that has no other connection (including
the conduct of a U.S. trade or business) to the United States subjecting it to
United States taxation (a "Non-U.S. Holder") will not be subject to United
States Federal income and withholding tax, (b) gain realized by a Non-U.S.
Person on the sale or redemption of the Notes is not subject to United States
Federal income tax or withholding tax and (c) the Notes are not subject to
United States Federal estate tax, if held by an individual who was a Non-U.S.
Holder at the time of his or her death.
Purchasers of Notes who are Non-U.S. Holders should consult their own tax
advisors with respect to the possible applicability of United States
withholding and other taxes upon income realized in respect of the Notes.
INFORMATION REPORTING AND BACKUP WITHHOLDING
For each calendar year in which the Notes are outstanding, each DTC
participant or indirect participant holding an interest in a Note on behalf of
a beneficial owner of a Note and each paying agent making payments in respect
of a Note will generally be required to provide the IRS with certain
information, including such beneficial owner's name, address and taxpayer
identification number (either such beneficial owner's Social Security number or
its employer identification number, as the case may be), and the aggregate
amount of interest and principal paid to such beneficial owner during the
calendar year. These reporting requirements, however, do not apply with respect
to certain beneficial owners, including corporations, securities broker-
dealers, other financial institutions, tax-exempt organizations, qualified
pension and profit sharing trusts, individual retirement accounts and Non-U.S.
persons that hold either (i) Notes directly and receive payments thereon
outside the United States or (ii) Notes indirectly through Euroclear or Cedel,
as the case may be.
In the event that a beneficial owner of a Note fails to establish its
exemption from such information reporting requirements or is subject to the
reporting requirements described above and fails to supply its correct taxpayer
identification number in the manner required by applicable law, or underreports
its tax liability, as the case may be, the DTC participant or indirect
participant holding such interest on behalf of such beneficial owner or paying
agent making payments in respect of a Note may be required to "backup" withhold
a tax equal to 31% of each payment of interest and principal with respect to
Notes. This backup withholding tax is not an additional tax and may be credited
against the beneficial owner's United States Federal income tax liability if
the required information is furnished to the IRS.
S-22
<PAGE>
PLAN OF DISTRIBUTION OF NOTES
Under the terms of a Distribution Agreement, dated February 22, 1994 (the
"Distribution Agreement"), the Notes are offered on a continuing basis by the
Company through the Distributors, each of which has agreed to use reasonable
efforts to solicit purchases of the Notes. Unless otherwise disclosed in the
applicable Pricing Supplement, the Company will pay a commission, or grant a
discount, to the Distributors. The Company will pay each Distributor a
commission of from .125% to .750% of the principal amount of each Note,
depending on its Stated Maturity, sold through such Distributor, as agent. The
Company will have the sole right to accept offers to purchase Notes and may
reject any such offer, in whole or in part. Each Distributor shall have the
right, in its discretion reasonably exercised, without notice to the Company,
to reject any offer to purchase Notes received by it, in whole or in part.
The Company also may sell Notes to any Distributor, acting as principal, at a
discount to be agreed upon at the time of sale. Such Notes may be resold at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or at negotiated prices, as determined by such
Distributor. Such Notes may also be resold to certain securities dealers who
may resell to investors at the public offering price set forth on the cover
page of the applicable Pricing Supplement. Such dealers also may receive
compensation in the form of discounts, concessions or commissions from the
Distributors and/or commissions from the purchasers for whom they may act as
agents. Unless otherwise specified in the applicable Pricing Supplement, any
concession allowed by any Distributor to any such dealer shall not be in excess
of the commission or discount received by such Distributor from the Company.
The offering price and other selling terms for such resales may from time to
time be varied by such Distributor.
The Distributors, whether acting as agents or as principals for their own
accounts, may also receive commissions from purchasers of Notes for whom they
may act as agent.
The Company has reserved the right to sell Notes directly on its own behalf
and to accept (but not solicit) offers to purchase Notes through additional
distributors on substantially the same terms and conditions (including
commission rates) as would apply to purchases of Notes pursuant to the
Distribution Agreement. In addition, the Company has reserved the right to
appoint additional agents for the purpose of soliciting offers to purchase
Notes. Such additional distributors or agents, as the case may be, will be
named in the applicable Pricing Supplement. No commission will be payable on
any Notes sold directly by the Company.
The Distributors and any dealers to whom the Distributors may sell Notes may
be deemed to be "underwriters" within the meaning of the Securities Act of 1933
(the "Act"). The Company has agreed to indemnify the Distributors against
certain liabilities, including civil liabilities under the Securities Act of
1933, or contribute to payments which the Distributors may be required to make
in respect thereof. The Company has agreed to reimburse the Distributors for
certain expenses.
Unless otherwise indicated in the applicable Pricing Supplement, payment of
the purchase price of Notes, other than Foreign Currency Notes, will be
required to be made in funds immediately available in The City of New York.
With respect to payment of the purchase price of Foreign Currency Notes, see
"Important Currency Exchange Information" herein.
CS First Boston Corporation and Goldman, Sachs & Co. engage in transactions
with and perform services for the Company in the ordinary course of business.
VALIDITY OF NOTES
The validity of the Notes will be passed upon for the Company by David A.
Jenkins, Vice President and General Counsel of the Company, and for the
Distributors by Cravath, Swaine & Moore, New York, New York.
S-23
<PAGE>
GLOSSARY
Set forth below are definitions, or the locations elsewhere of definitions,
of some of the terms used in this Prospectus Supplement.
"Calculation Agent" means the agent appointed by the Company to calculate
interest rates for Floating Rate Notes. Unless otherwise provided in a Pricing
Supplement, the Calculation Agent will be Chemical Bank.
"Calculation Date" means the date on which the Calculation Agent is to
calculate an interest rate for a Floating Rate Note, which is the applicable
date set forth below, unless otherwise indicated in the applicable Pricing
Supplement:
Prime Rate--The Prime Rate Interest Determination Date.
CD Rate--The earlier of (i) the tenth day after the related CD Rate
Interest Determination Date or, if such day is not a Market Day, the next
succeeding Market Day; and (ii) the Market Day next preceding the relevant
Interest Payment Date or date of Stated Maturity, as the case may be.
Commercial Paper Rate--The earlier of (i) the tenth day after the related
Commercial Paper Interest Determination Date or, if such day is not a
Market Day, the next succeeding Market Day; and (ii) the Market Day next
preceding the relevant Interest Payment Date or date of Stated Maturity, as
the case may be.
Federal Funds Rate--The earlier of (i) the tenth day after the related
Federal Funds Interest Determination Date or, if such day is not a Market
Day, the next succeeding Market Day; and (ii) the Market Day next preceding
the relevant Interest Payment Date or date of Stated Maturity, as the case
may be.
LIBOR--The Libor Interest Determination Date.
Treasury Rate--The earlier of (i) the tenth day after the related
Treasury Interest Determination Date or, if such day is not a Market Day,
the next succeeding Market Day; and (ii) the Market Day next preceding the
relevant Interest Payment Date or date of Stated Maturity, as the case may
be.
"CD Rate" means the rate calculated as set forth under the heading
"Description of Notes--Floating Rate Notes--CD Rate Notes", unless otherwise
indicated in the applicable Pricing Supplement.
"Commercial Paper Rate" means the rate calculated as set forth under the
heading "Description of Notes--Floating Rate Notes--Commercial Paper Rate
Notes", unless otherwise indicated in the applicable Pricing Supplement.
"Composite Quotations" means the daily statistical release entitled
"Composite 3:30 p.m. Quotations for U.S. Government Securities", or any
successor publications, published by the Federal Reserve Bank of New York.
"Exchange Rate Agent" means the agent appointed by the Company to convert
principal and any premium and interest payments in respect of Foreign Currency
Notes into U.S. dollars. Unless otherwise provided in a Pricing Supplement, the
Exchange Rate Agent will be Chemical Bank.
S-24
<PAGE>
"Federal Funds Rate" means the rate calculated as set forth under the heading
"Description of Notes--Floating Rate Notes--Federal Funds Rate Notes", unless
otherwise indicated in the applicable Pricing Supplement.
"Fixed Rate Note" shall have the meaning set forth under the heading
"Description of Notes--Interest".
"H.15(519)" means the weekly statistical release entitled "Statistical
Release H.15(519), Selected Interest Rates", or any successor publication,
published by the Board of Governors of the Federal Reserve System.
"Index Maturity" means, with respect to a Floating Rate Note, the period to
maturity of the instrument or obligation on which the interest rate formula is
based, as indicated in the applicable Pricing Supplement.
"Initial Interest Rate" means the rate at which a Floating Rate Note will
bear interest from its Issue Date (or that of a predecessor Note) to the first
Reset Date, as indicated in the applicable Pricing Supplement.
"Interest Determination Date" means the date as of which the interest rate
for a Floating Rate Note is to be calculated, to be effective as of the
following Reset Date and calculated on the related Calculation Date (except in
the case of Prime Rate and LIBOR, which are calculated on the related Prime
Rate Interest Determination Date and LIBOR Interest Determination Date,
respectively). See the fourth paragraph under the heading "Description of
Notes--Floating Rate Notes" for the Interest Determination Dates for Floating
Rate Notes. The Interest Determination Dates for any Floating Rate Note will
also be indicated in the applicable Pricing Supplement.
"Interest Reset Date" means the date on which a Floating Rate Note will begin
to bear interest at the variable interest rate determined as of any Interest
Determination Date. See the third Paragraph under the heading "Floating Rate
Notes" for the applicable Reset Date for such Notes. The Reset Dates with
respect to any Floating Rate Note will also be set forth in the applicable
Pricing Supplement and in such Note.
"LIBOR" means the rate calculated as set forth under the heading "Description
of Notes--Floating Rate Notes--LIBOR Notes", unless otherwise indicated in the
applicable Pricing Supplement.
"London Market Day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
"Market Day" means (a) with respect to any Note (unless otherwise provided in
this definition), any day that is a Business Day in The City of New York, (b)
with respect to LIBOR Notes only, any Business Day in The City of New York that
is also a London Market Day, (c) with respect to Foreign Currency Notes (other
than Foreign Currency Notes denominated in European Currency Units ("ECUs"))
only, any day that is a Business Day both in The City of New York and in the
principal financial center of the country of the Specified Currency and (d)
with respect to Foreign Currency Notes denominated in ECU, any Business Day in
The City of New York that is also designated as an ECU settlement day by the
ECU Banking Association in Paris or otherwise generally regarded in the ECU
interbank market as a day in which payments in ECU are made.
"Market Exchange Rate" for any Specified Currency means the noon buying rate
in The City of New York for cable transfer for such Specified Currency as
certified for customs purposes by (or if not so certified as otherwise
determined by) the Federal Reserve Bank of New York.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an instalment of principal becomes due and
payable as provided therein or as provided in the Indenture, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Prime Rate" means the rate calculated as set forth under the heading
"Description of Notes--Floating Rate Notes--Prime Rate Notes", unless otherwise
indicated in the applicable Pricing Supplement.
S-25
<PAGE>
"Specified Currency" shall have the meaning set forth under the heading
"Important Currency Exchange Information".
"Spread" means the number of basis points specified in the Note and the
applicable Pricing Supplement as being applicable to the interest rate for a
particular Floating Rate Note.
"Spread Multiplier" means the percentage specified in the Note and the
applicable Pricing Supplement as being applicable to the interest rate for a
particular Floating Rate Note.
"Stated Maturity", when used with respect to any Security or any instalment
of principal thereof or interest thereon, means the date specified in such
Security as the fixed date on which the principal of such Security or such
instalment of principal or interest is due and payable.
"Telerate Page 3750" means the display page so designated on the Dow Jones
Telerate Service (or such other page as may replace that page on that service
or such other service as may be nominated as the information vendor, for the
purpose of displaying rates or pricing relating to LIBOR).
"Treasury Rate" means the interest rate calculated as set forth under the
heading "Description of Notes--Floating Rate Notes--Treasury Rate Notes",
unless otherwise indicated in the applicable Pricing Supplement.
S-26
<PAGE>
- -------------------------------------------------------------------------------
PROSPECTUS
- -------------------------------------------------------------------------------
$650,000,000
Hoechst Celanese Corporation
Debt Securities and Medium-Term Notes
------------
Hoechst Celanese Corporation (the "Company") may offer from time to time its
unsecured debt securities ("Debt Securities") consisting of notes, debentures
or other evidences of indebtedness, and Medium-Term Notes (the "Medium-Term
Notes", and together with the Debt Securities, the "Securities") at an
aggregate initial public offering price of not more than $650,000,000 or,
if applicable, the equivalent thereof in one or more foreign currencies
or currency units. The Securities may be offered as separate series in
amounts, at prices and on terms to be determined in light of market
conditions at the time of sale and set forth in a Prospectus
Supplement or Prospectus Supplements. The aggregate initial public
offering price of the Medium-Term Notes will constitute not less
than $383,850,000 of such $650,000,000 total (or, in each case, the
respective equivalents thereof in one or more foreign currencies or
currency units). The Medium-Term Notes will be offered in one or
more series, designated Series B or such other series as set
forth in the applicable Prospectus Supplement.
The terms of each series of Securities, including, where applicable, the
specific designation, aggregate principal amount, authorized denominations,
maturity, rate or rates and time or times of payment of any interest, any
terms for optional or mandatory redemption or payment of additional amounts
or any sinking fund provisions, any initial public offering price, the
proceeds to the Company, special provisions relating to Securities in
bearer form and any other specific terms in connection with the offering
and sale of such series will be set forth in a Prospectus Supplement or
Prospectus Supplements. Securities may be issued with amounts payable
in respect of principal of or any premium or interest on the
Securities determined by reference to the value, rate or price of
one or more specified indices.
The Securities may be sold directly by the Company, through agents designated
from time to time, through underwriting syndicates led by one or more
managing underwriters or through one or more underwriters. See "Plan of
Distribution". If any agents or underwriters are involved in any offering
of Securities, the names of such agents or underwriters will be set forth
in the applicable Prospectus Supplement. If an underwriter, agent or
dealer is involved in any offering of Securities, the underwriter's
discount, agent's commission or dealer's purchase price will be set
forth in, or may be calculated from the information set forth in, the
applicable Prospectus Supplement, and the net proceeds to the Company
from such offering will be the public offering price of such
Securities less such discount in the case of any offering through
an underwriter, or the purchase price of such Securities less such
commission in the case of an offering through an agent, and less,
in each case, the other expenses of the Company associated with
the issuance and distribution of such Securities.
------------
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.
------------
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
------------
The date of this Prospectus is January 10, 1994.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER OR AGENT. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY AND THEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER AND
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR
RESPECTIVE DATES.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the United States
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). Reports and other information filed
by the Company can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and 13th Floor, 7
World Trade Center, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission, Washington, D.C.
20549, at prescribed rates. This Prospectus does not contain all information
set forth in the Registration Statement and Exhibits thereto which the Company
has filed with the Commission under the United States Securities Act of 1933,
as amended (the "Act"), and to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company (File No.
33-13326) are incorporated in this Prospectus by reference: (1) The Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1992; and (2)
the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1993, June 30, 1993, and September 30, 1993.
All documents filed by the Company 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 Securities shall be deemed to be
incorporated by reference in this Prospectus. Any statement contained herein or
in a document all or a portion of which is 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.
The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the written or oral request of any such person, a
copy of any and all of the foregoing documents incorporated by reference
herein, other than the exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents). Requests should be
directed to: Hoechst Celanese Corporation, 1041 Route 202-206, Bridgewater, New
Jersey 08807, Attention: Corporate Secretary (telephone: 908-231-2000).
----------------
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$", "dollars",
"U.S. dollars" or "U.S.$").
2
<PAGE>
THE COMPANY
The Company was formed in 1918 and was renamed Hoechst Celanese Corporation
in February 1987. The Company manufactures and sells, principally to
industrial customers, a diversified line of products including textile and
technical fibers; acetate cigarette filter tow; specialty and bulk chemicals;
prescription drugs; crop protection products; veterinary pharmaceutical and
animal-feed additives; engineering plastics; presensitized offset printing
plates; dyes and pigments; and polyester film. The Company's operations are
currently segmented as follows: Fibers and Film; Chemicals; Specialties and
Advanced Materials (comprised of the Advanced Materials Group, Specialty
Chemicals Group and Advanced Technology Group); and Life Sciences.
The Company is wholly owned by Hoechst Corporation, which in turn is wholly
owned by Hoechst Aktiengesellschaft ("Hoechst AG"), a large chemical company
headquartered in Frankfurt, Federal Republic of Germany. Hoechst AG and its
consolidated entities (the "Hoechst Group") consist of approximately 280
companies. The Hoechst Group operates in more than 120 countries. The Hoechst
Group's sales in 1992 were approximately $29.4 billion. The Hoechst Group is
one of the largest manufacturers of prescription drugs and one of the four
largest producers and marketers of chemicals and chemical-related products in
the world.
The Company's principal executive offices are located at 1041 Route 202-206,
Bridgewater, New Jersey 08807; its mailing address is Route 202-206, Post
Office Box 2500, Somerville, New Jersey 08876-1258; and its telephone number
is (908) 231-2000.
USE OF PROCEEDS
Unless otherwise indicated in any supplement to this Prospectus, the net
proceeds from the sale of Securities will be used for general corporate
purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for the periods indicated.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
NINE MONTHS ENDED ------------------------
SEPTEMBER 30, 1993 1992 1991 1990 1989 1988
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(a)........................ 2.9 4.0 4.3 4.7 5.0 5.8
</TABLE>
- --------
(a) For the purpose of calculating the ratio of earnings to fixed charges,
earnings consist of earnings from operations before fixed charges, minority
interests, income taxes, cumulative effects of accounting changes and
extraordinary charges. Fixed charges consist of interest and debt expense,
capitalized interest, interest on obligations under capital leases, the
estimated interest portion of rents under operating leases and the majority-
owned preferred stock dividend requirement. Effective January 1, 1991, the
Company consolidated Celanese Mexicana, S.A. ("Celmex") in its financial
statements. Prior to 1991, the Company accounted for Celmex under the equity
method and included Celmex with "Investment in affiliates".
3
<PAGE>
DESCRIPTION OF SECURITIES
The Securities are to be issued under an Indenture, dated as of January 26,
1994 (as amended from time to time, the "Indenture"), between the Company and
Chemical Bank, 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
Securities may be issued from time to time in one or more series. The
particular terms of each series, or of Securities forming a part of a series,
which are offered by a Prospectus Supplement will be described in such
Prospectus Supplement.
The Securities will not be guaranteed by Hoechst AG or any other member of
the Hoechst Group.
The following summaries of certain provisions of the Indenture do not purport
to be complete and are subject, and are qualified in their entirety by
reference, to all the provisions of the Indenture, including the definitions
therein of certain terms, and, with respect to any particular Securities, to
the description of the terms thereof included in the Prospectus Supplement
relating thereto. Wherever particular Sections or defined terms of the
Indenture are referred to herein or in a Prospectus Supplement, such Sections
or defined terms are incorporated by reference herein or therein, as the case
may be.
GENERAL
The Indenture provides that Securities in separate series may be issued
thereunder from time to time without limitation as to aggregate principal
amount. The Company may specify a maximum aggregate principal amount for the
Securities of any series. (Section 301) The Securities are to have such terms
and provisions which are not inconsistent with the Indenture, including as to
maturity, principal and interest, as the Company may determine. The Securities
will be unsecured obligations of the Company and will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company.
The applicable Prospectus Supplement will set forth the price or prices at
which the Securities to be offered will be issued and will describe the
following terms of such Securities: (1) the title of such Securities; (2) any
limit on the aggregate principal amount of such Securities or the series of
which they are a part; (3) the Person to whom any interest on a Registered
Security shall be payable, if other than the Person in whose name that
Registered Security is registered at the close of business on the Regular
Record Date for such interest; (4) the date or dates on which the principal of
any such Securities will be payable; (5) the rate or rates at which any of such
Securities will bear interest, if any, the date or dates from which any such
interest will accrue, the Interest Payment Dates on which any such interest
will be payable and the Regular Record Date for any such interest payable on
any Interest Payment Date; (6) the place or places where the principal of and
any premium and interest on any of such Securities will be payable; (7) the
period or periods within which, the price or prices at which and the terms and
conditions on which any of such Securities may be redeemed, in whole or in
part, at the option of the Company or the Holder thereof; (8) the obligation,
if any, of the Company to redeem or purchase any of such Securities pursuant to
any sinking fund or analogous provision or at the option of the Holder thereof,
and the period or periods within which, the price or prices at which and the
terms and conditions on which any of such Securities will be redeemed or
purchased, in whole or in part, pursuant to any such obligation; (9) the
denominations in which any of such Securities will be issuable, if other than
denominations of $1,000 and any integral multiple thereof; (10) if other than
the currency of the United States of America, the currency, currencies or
currency units in which principal of or any premium or interest on any of such
Securities will be payable (and the manner in which the equivalent of the
principal amount thereof in the currency of the United States of America is to
be determined for any purpose, including for the purpose of determining the
principal deemed to be Outstanding at any time); (11) if the amount of
principal of or any premium or interest on any of such Securities may be
determined with reference to an index or pursuant to a formula, the manner in
which such amounts will be determined; (12) if other than the entire principal
amount thereof, the portion of the principal amount of any of such Securities
which will be payable upon declaration of acceleration of the Maturity thereof;
(13) whether the Securities shall be issued in whole or in part in the form of
one or more Global Securities and, in such case, the
4
<PAGE>
Depositary or Depositaries for such Global Security or Securities; (14) the
currency or currencies of denomination of the Securities, which may be in
Dollars, any foreign currency or any composite currency, including but not
limited to the ECU, and, if any such currency of denomination is a composite
currency other than the ECU, the agency or organization, if any, responsible
for overseeing such composite currency; (15) if the payments of principal of
(and premium, if any) or the interest on the Securities are to be made in a
foreign currency other than the foreign currency in which such Securities are
denominated, the manner in which such amounts shall be determined; (16) whether
or not Section 312 of the Indenture (which provides that if, for the purpose of
satisfying a judgment in any court with respect to any obligation of the
Company under the Indenture or under any Security, it becomes necessary to
convert into any other currency or currency unit any amount in the currency or
currency unit due under the Indenture or under such Security, that such
conversion shall be made at the Conversion Rate) is applicable to the
Securities; (17) if applicable, that the Securities, in whole or any specified
part, shall be defeasible pursuant to the provisions of the Indenture described
under "Defeasance and Covenant Defeasance"; (18) whether any of the Securities
will be issued in bearer form and, if so, any limitations on issuance of such
bearer Securities (including exchange for registered Securities of the same
series); (19) any addition to or change in the Events of Default applicable to
any of such Securities and any change in the right of the Trustee or the
Holders to declare the principal amount of any of such Securities due and
payable; (20) any addition to or change in the covenants in the Indenture
described under "Certain Restrictive Covenants" applicable to any of such
Securities; and (21) any other terms of such Securities not inconsistent with
the provisions of the Indenture. (Section 301)
Securities, including Original Issue Discount Securities, may be sold at a
substantial discount below their principal amount. Certain special United
States federal income tax considerations (if any) applicable to Securities sold
at an original issue discount may be described in the applicable Prospectus
Supplement. In addition, certain special United States federal tax or other
considerations (if any) applicable to any Securities which are denominated in a
currency or currency unit other than United States dollars may be described in
the applicable Prospectus Supplement.
FORM, EXCHANGE AND TRANSFER
Unless otherwise indicated in the applicable Prospectus Supplement, the
Securities of each series will be issuable only in fully registered form,
without coupons, and only in denominations of $1,000 and integral multiples
thereof. The Indenture, however, provides that the Company may also issue
Securities in bearer form only, or in both registered and bearer form.
Securities in bearer form shall not be offered, sold, resold or delivered in
connection with their original issuance in the United States or to any United
States person (as defined below) other than offices located outside the United
States of certain United States financial institutions. As used above, "United
States person" means any citizen or resident of the United States, any
corporation, partnership or other entity created or organized in or under the
laws of the United States, or any estate or trust, the income of which is
subject to United States Federal income taxation regardless of its source, and
"United States" means the United States of America (including the States and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction. Purchasers of Securities in bearer form will be
subject to certification procedures and may be affected by certain limitations
under United States tax laws. Such procedures and limitations will be described
in the Prospectus Supplement relating to the offering of the Securities in
bearer form. Unless otherwise indicated in the applicable Prospectus
Supplement, Securities issued in bearer form will be issued in denominations of
$1,000 and integral multiples thereof. (Section 302)
At the option of the Holder, subject to the terms of the Indenture and the
limitations applicable to Global Securities, Securities of each series will be
exchangeable for other Securities of the same series of any authorized
denomination and of a like tenor and aggregate principal amount. Registered
Securities will not be exchangeable for Securities in bearer form. (Section
305)
Subject to the terms of the Indenture and the limitations applicable to
Global Securities, Securities may be presented for exchange as provided above
or for registration of transfer (duly endorsed or with the form
5
<PAGE>
of transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose. No service charge will be made for any registration of transfer
or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. 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. The Company
has appointed the Trustee as Security Registrar. Any transfer agent (in
addition to the Security Registrar) initially designated by the Company for any
Securities will be named in the applicable Prospectus Supplement. (Section 305)
The Company may at any time designate additional transfer agents or rescind the
designation of any transfer agent or approve a change in the office through
which any transfer agent acts, except that the Company will be required to
maintain a transfer agent in each Place of Payment for the Securities of each
series. (Section 1002) Securities in bearer form and the coupons, if any,
appertaining thereto will be transferable by delivery.
If the Securities of any series (or of any series and specified terms) are to
be redeemed in part, the Company will not be required to (i) issue, register
the transfer of or exchange any Security of that series (or of that series and
specified terms, as the case may be) during a period beginning at the opening
of business 15 days before the day of mailing of a notice of redemption of any
such Security that may be selected for redemption and ending at the close of
business on the date of such mailing or (ii) register the transfer of or
exchange any Security so selected for redemption, in whole or in part, except
the unredeemed portion of any such Security being redeemed in part. (Section
305)
GLOBAL SECURITIES
Some or all of the Securities of any series may be represented, in whole or
in part, by one or more Global Securities which will have an aggregate
principal amount equal to that of the Securities represented thereby. Each
Global Security will be registered in the name of a Depositary or a nominee
thereof identified in the applicable Prospectus Supplement, will be deposited
with such Depositary or nominee or a custodian therefor and will bear a legend
regarding the restrictions on exchanges and registration of transfer thereof
referred to below and any such other matters as may be provided for pursuant to
the Indenture.
If at any time the Depositary for the Securities of a series notifies the
Company that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for the Securities
of such series shall no longer be eligible under the Indenture, the Company
shall appoint a successor Depositary with respect to the Securities of such
series. If a successor Depositary for the Securities of such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver, Securities
of such series in definitive form in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such series
in exchange for such Global Security or Securities. (Section 305)
The Company may at any time and in its sole discretion determine that the
Securities of any series issued in the form of one or more Global Securities
shall no longer be represented by such Global Security or Securities. In such
event the Company will execute, and the Trustee, upon receipt of a Company
Order for the authentication and delivery of definitive Securities of such
series, will authenticate and deliver, Securities of such series in definitive
form and in an aggregate principal amount equal to the principal amount of the
Global Security or Securities representing such series in exchange for such
Global Security or Securities.
If specified by the Company with respect to a series of Securities, the
Depositary for such series of Securities may surrender a Global Security for
such series of Securities in exchange in whole or in part for
6
<PAGE>
Securities of such series in definitive form on such terms as are acceptable to
the Company and such Depositary. Thereupon, the Company shall execute, and the
Trustee shall authenticate and deliver, without service charge:
(i) to each Person specified by such Depositary a new Security or
Securities of the same series, of any authorized denomination as requested
by such Person in aggregate principal amount equal to and in exchange for
such Person's beneficial interest in the Global Security; and
(ii) to such Depositary a new Global Security in denomination equal to
the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of Securities delivered
to Holders thereof.
As long as the Depositary, or its nominee, is the registered Holder of a
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner and Holder of such Global Security and the Securities
represented thereby for all purposes under the Securities and the Indenture.
Except in the limited circumstances referred to above, owners of beneficial
interests in a Global Security will not be entitled to have such Global
Security or any Securities represented thereby registered in their names, will
not receive or be entitled to receive physical delivery of certificated
Securities in exchange therefor and will not be considered to be the owners or
Holders of such Global Security or any Securities represented thereby for any
purpose under the Securities or the Indenture. All payments of principal of and
any premium and interest on a Global Security will be made to the Depositary or
its nominee, as the case may be, as the Holder thereof. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. These laws may impair the
ability to transfer beneficial interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited to
institutions that have accounts with the Depositary or its nominee
("participants") and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Security, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of Securities represented by the Global Security
to the accounts of its participants. Ownership of beneficial interests in a
Global Security will be shown only on, and the transfer of those ownership
interests will be effected only through, records maintained by the Depositary
(with respect to participants' interests) or any such participant (with respect
to interests of persons held by such participants on their behalf). Payments,
transfers, exchanges and other matters relating to beneficial interests in a
Global Security may be subject to various policies and procedures adopted by
the Depositary from time to time. None of the Company, the Trustee or any agent
of the Company or the Trustee will have any responsibility or liability for any
aspect of the Depositary's or any participant's records relating to, or for
payments made on account of, beneficial interests in a Global Security, or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
Secondary trading in notes and debentures of corporate issuers is generally
settled in clearing-house or next-day funds. In contrast, beneficial interests
in a Global Security, in some cases, may trade in the Depositary's same-day
funds settlement system, in which secondary market trading activity in those
beneficial interests would be required by the Depositary to settle in
immediately available funds. There is no assurance as to the effect, if any,
that settlement in immediately available funds would have on trading activity
in such beneficial interests. Also, settlement for purchases of beneficial
interests in a Global Security upon the original issuance thereof may be
required to be made in immediately available funds.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of interest on a Registered Security on any Interest Payment Date will be made
to the Person in whose name such Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest. (Section 307)
7
<PAGE>
Unless otherwise indicated in the applicable Prospectus Supplement, principal
of and premium and interest on the Securities of a particular series will be
payable at the office of such Paying Agent or Paying Agents as the Company may
designate for such purpose from time to time, except that at the option of the
Company payment of any interest to Holders of Registered Securities may be made
by check mailed to the address of the Person entitled thereto as such address
appears in the Security Register. Payments in respect of Unregistered
Securities or of any Coupon will be made only against surrender of such
Security or Coupon at the offices of such Paying Agents outside the United
States and its possessions as the Company may from time to time appoint. Unless
otherwise indicated in the applicable Prospectus Supplement, the corporate
trust office of Chemical Bank in the Borough of Manhattan, The City of New York
will be designated as the Company's sole Paying Agent for payments with respect
to Securities of each series. Any other Paying Agents initially designated by
the Company for the Securities of a particular series will be named in the
applicable Prospectus Supplement. The Company 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
the Company will be required to maintain a Paying Agent in each Place of
Payment for the Securities of a particular series. (Section 1002)
Unless otherwise indicated in the applicable Prospectus Supplement, payments
of principal of and premium if any, and interest, if any, payable at the Stated
Maturity or at any Redemption Date on a Security will be made in immediately
available funds at the corporate trust office of the Paying Agent, provided
that the Security is presented to the Paying Agent in time for the Paying Agent
to make such payments in such funds in accordance with its normal procedures.
For interest payments of Securities of five million U.S. dollars or more in
principal amount, the purchaser may elect to have payment made in immediately
available funds. Interest payments on Securities of less than five million U.S.
dollars in principal amount will be made in immediately available funds only if
agreed to on a case-by-case basis by the Company and otherwise will be made by
check mailed on the Interest Payment Date to the registered Holder thereof
(which, in the case of Book-Entry Securities, will be a nominee of the
Depositary), except that interest payments made at any Redemption Date or at
the Stated Maturity will be made as described above. Interest payments will not
be made in immediately available funds unless written instructions have been
presented to the Trustee at least 15 days prior to the Regular Record Date from
and after which a holder has elected to receive payments in immediately
available funds. The Company will provide the Trustee with funds available for
immediate use for such purpose.
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or any premium or interest on any Security which remain unclaimed
at the end of two years after such principal, premium or interest has become
due and payable will be repaid to the Company, and the Holder of such Security
thereafter may look only to the Company for payment thereof. (Section 1003)
CERTAIN COVENANTS
The Indenture contains the covenants set forth below, which description
should be read in conjunction with the definitions set forth under the heading
"Certain Definitions" which follows:
Limitation on Secured Debt. (a) The Company will not, and will not permit any
Subsidiary of the Company to, create, incur, assume or permit to exist any
Mortgage upon any shares of Capital Stock or Debt of any Domestic Subsidiary,
whether owned on the date of the Indenture or thereafter acquired, to secure
any Debt of the Company or any other Person, unless contemporaneously therewith
effective provision is made to secure the Notes equally and ratably with all
other Debt secured by such Mortgage.
There will be excluded from this restriction (i) Mortgages existing on shares
of Capital Stock or Debt of a corporation at the time such corporation becomes
a Domestic Subsidiary, (ii) Mortgages existing on Capital Stock or Debt of a
Domestic Subsidiary at the time such Capital Stock or Debt is acquired and
(iii) Mortgages securing Debt that constitutes an extension, renewal or
refunding (or any successive extension, renewal or refunding) in whole or in
part of Debt secured by any Mortgages referred to in clause (i) or (ii) above,
if
8
<PAGE>
limited to the same shares of Capital Stock and Debt subject to, and securing
no more Debt than the amount secured by, the Mortgage referred to in clause (i)
or (ii). (Section 1004(a))
(b) The Company will not, and will not permit any Restricted Subsidiary to,
create, incur, assume or permit to exist any Mortgage on any Principal Property
of the Company or any Restricted Subsidiary, whether owned or leased on the
date of the Indenture or thereafter acquired, or on any income or profits
therefrom, to secure any Debt of the Company or any other Person, unless
contemporaneously therewith effective provision is made to secure the Notes
equally and ratably with all other Debt secured by such Mortgage.
There will be excluded from this restriction (i) Mortgages existing on
property owned by a corporation at the time such corporation becomes a
Restricted Subsidiary and Mortgages on property of a corporation existing at
the time such corporation is merged or consolidated with the Company or a
Restricted Subsidiary or at the time of sale or other disposition of the
properties of such corporation as an entirety or substantially as an entirety
to the Company or a Restricted Subsidiary; provided, however, that no such
Mortgage shall extend to or cover any property or asset of the Company or a
Restricted Subsidiary other than the property subject thereto at the time such
corporation becomes a Restricted Subsidiary or is merged or consolidated or
such properties are sold or otherwise disposed of; (ii) Mortgages on property
acquired after the date of the Indenture by the Company or a Restricted
Subsidiary existing at the time of acquisition thereof or to secure the payment
of all or any part of the purchase price or construction cost thereof or to
secure any Debt incurred prior to, at the time of or within six months after,
the acquisition of such property or completion of such construction for the
purpose of financing all or part of the purchase price or the construction cost
thereof; provided, however, that no such Mortgage shall extend to or cover any
property or asset of the Company or a Restricted Subsidiary other than the
property so acquired or constructed and fixed improvements thereon; (iii)
Mortgages in favor of the Company or any Restricted Subsidiary; (iv) Mortgages
existing on the date of the Indenture; (v) Mortgages securing Debt that
constitutes an extension, renewal or refunding (or any successive extension,
renewal or refunding) in whole or in part of Debt secured by any Mortgage
referred to in clauses (i), (ii), (iii) or (iv) above (a "Prior Mortgage"), if
limited to the same property (plus additions, extensions, improvements,
repairs, replacements and rebuildings) subject to, and securing no more Debt
than the amount secured by, the Prior Mortgage; and (vi) Mortgages not of a
character referred to in clauses (i) through (v) above if at the time of, and
after giving effect to, the creation or assumption of such Mortgage, the
aggregate of all Debt of the Company and the Restricted Subsidiaries secured by
all such Mortgages of a character not referred to in clauses (i) through (v)
above, plus all Attributable Debt of the Company and the Restricted
Subsidiaries with respect to sale and lease-back transactions to which the next
paragraph hereof is applicable, does not exceed 10% of Consolidated Net
Tangible Assets, as of the date of the most recent audited annual consolidated
balance sheet of the Company and its consolidated Subsidiaries. (Section
1004(b))
Limitation on Sale and Lease-Back Transactions. The Company will not, and
will not permit any Restricted Subsidiary to, enter into any arrangement with
any Person providing for the leasing by the Company or any Restricted
Subsidiary of any real or tangible personal property (except for leases for a
term of not more than three years or between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries), which property has been or is
to be sold or transferred by the Company or such Restricted Subsidiary to such
Person in contemplation of such leasing, unless (i) the Company or such
Restricted Subsidiary would be entitled to create a Mortgage on such property
securing Debt in an amount equal to the Attributable Debt with respect to such
arrangement without equally and ratably securing the Notes as described above
under "Limitation on Secured Debt" or (ii) the net proceeds of such sale are at
least equal to the fair value (as determined by the Board of Directors) of such
property and the Company or such Restricted Subsidiary applies or causes to be
applied in an amount in cash equal to the net proceeds of such sale to the
retirement, within 120 days of the effective date of any such arrangement, of
Senior Debt of the Company or such Restricted Subsidiary (other than Senior
Debt owed to the Company or a Subsidiary or an Affiliate of the Company).
(Section 1005)
9
<PAGE>
CERTAIN DEFINITIONS
For purposes of the covenants described above and other provisions of the
Indenture:
"Affiliate" of a Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
"Attributable Debt" in respect of a sale and lease-back arrangement means, as
at the time of determination, the greater of (a) the fair value of the property
subject to such arrangement (as determined by the Board of Directors) or (b)
the present value (discounted at the rate of interest per annum implicit in the
terms of such lease, as determined in good faith by the Company, compounded
annually) of the total obligations of the lessee for rental payments during the
remaining term of the lease included in such arrangement (including any period
for which such lease has been extended).
"Board of Directors" means the board of directors of the Company or any duly
authorized committee thereof.
"Capital Stock" means any and all shares, interests, rights to purchase,
participations or other equivalents of or interests in (however designated)
corporate stock.
"Debt" means, with respect to any Person, without duplication, (i)
indebtedness of such Person for money borrowed (including indebtedness
evidenced by notes, debentures, bonds or other instruments of indebtedness for
the payment of which such Person is responsible or liable, by guarantees or
otherwise), (ii) obligations of such Person under any agreement to lease, or
any lease of, any real or personal property which, in accordance with generally
accepted accounting principles, is classified upon such Person's consolidated
balance sheet as a liability, (iii) indebtedness for money borrowed secured by
any Mortgage existing on property owned by such Person, whether or not the
indebtedness secured thereby shall have been assumed, (iv) all obligations
created or arising under any conditional sale or other similar title retention
agreement with respect to property acquired by such Person, whether or not the
rights and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property and (v)
guarantees, endorsements and other contingent obligations in respect of, or
agreements to purchase or otherwise acquire, indebtedness for money borrowed by
other Persons, except guarantees, endorsements or contingent obligations in
connection with the sale or discount of accounts receivable, trade acceptances
and other paper arising in the ordinary course of business.
"Domestic Subsidiary" means any Subsidiary of the Company which is not a
Foreign Subsidiary.
"Finance Subsidiary" means any Subsidiary of the Company which is principally
engaged in (a) leasing property or equipment, (b) financing of accounts
receivable or (c) financing of the operations of the Company and its
Subsidiaries.
"Foreign Subsidiary" means any Subsidiary of the Company (i) not organized
under the laws of the United States of America or any State thereof or the
District of Columbia or (ii) substantially all of whose assets are located,
substantially all of whose business is conducted, outside the United States of
America.
"Mortgage" means any mortgage, pledge, security interest, conditional sale or
other title retention agreement or similar lien.
"Principal Property" means any manufacturing or processing plant or warehouse
owned by the Company or Restricted Subsidiary which is located within the
United States of America and the gross book value of which (without deduction
of any depreciation reserves) on the date as of which the determination is
being
10
<PAGE>
made exceeds 2% of Consolidated Net Tangible Assets, other than properties
which in the opinion of the Board of Directors are not of material importance
to the Company's business as an entirety.
"Restricted Subsidiary" means any Subsidiary of the Company (a) substantially
all of whose property is located or substantially all of whose business is
conducted, in the United States of America and (b) which owns a Principal
Property; provided, however, that (i) the term "Restricted Subsidiary" shall
not include a Finance Subsidiary and (ii) the Board of Directors may, by an
irrevocable written notice delivered to the Trustee, designate as a Restricted
Subsidiary any Subsidiary of the Company which does not satisfy the
requirements of clause (a) or (b) above unless at the time of notice, the
Company is in violation of the provisions described above under "Certain
Covenants" with respect to such Subsidiary.
"Senior Debt" of a Person means any indebtedness of such Person for money
borrowed (including indebtedness evidenced by notes, debentures, bonds or other
instruments of indebtedness for the payment of which such Person is responsible
or liable, by guarantees or otherwise) and which is not subordinated in any
manner to the securities issued under the Indenture, including the Notes.
"Subsidiary" of a Person means a corporation of which a majority of the
Capital Stock having voting power under ordinary circumstances to elect a
majority of the board of directors of such corporation is owned by (i) such
Person, (ii) such Person and one or more of its Subsidiaries or (iii) one or
more of the Subsidiaries of such Person.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into, or convey or transfer or
lease all or substantially all of its assets to, another Person, unless:
(1) the resulting, surviving or transferee Person is a Person organized
and existing under the laws of the United States of America or any State
thereof or the District of Columbia and such Person assumes all the
obligations of the Company under the Securities and the Indenture;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing, provided
that such transaction shall be deemed to be in violation of this clause (2)
only as to Securities of any series as to which such Event of Default or
such event shall have happened and be continuing;
(3) if, as a result of such consolidation, merger, conveyance, transfer
or lease, any shares of Capital Stock or Debt of a Domestic Subsidiary or
any Principal Property of the Company or a Restricted Subsidiary would
become subject to a Mortgage which would not be permitted by the Indenture,
the Company or such resulting, surviving or transferee Person, as the case
may be, shall take any steps necessary to secure the Securities equally and
ratably with all Debt secured thereby; and
(4) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and such supplemental indenture comply with
the Indenture. (Section 801)
EVENTS OF DEFAULT
Each of the following will constitute an Event under the Indenture with
respect to Securities of any series: (a) failure to pay principal of or any
premium on any Security of that series when due; (b) failure to pay any
interest on any Securities of that series when due, continued for 30 days; (c)
failure to pay principal of or any premium on any Security of that series when
the same becomes due and payable pursuant to a
11
<PAGE>
redemption, as provided in the Indenture; (d) failure to perform any other
agreement of the Company in the Indenture (other than a covenant included in
the Indenture solely for the benefit of a series other than that series),
continued for 90 days after written notice has been given by the Trustee, or
the Holders of at least 25% in principal amount of the Outstanding Securities
of that series, as provided in the Indenture; (e) failure to pay when due
(subject to any applicable grace period) the principal of, or acceleration of,
any indebtedness for money borrowed by the Company having an aggregate
principal amount outstanding of at least $10,000,000, if, in the case of any
such failure, such indebtedness has not been discharged or, in the case of any
such acceleration, such acceleration has not been rescinded or annulled, in
each case within 10 days after written notice has been given by the Trustee, or
the Holders of at least 25% in principal amount of the Outstanding Securities
of that series, as provided in the Indenture; (f) certain events in bankruptcy,
insolvency or reorganization; (g) Hoechst AG and its Wholly Owned Subsidiaries
cease to own, in the aggregate, a majority of the Capital Stock of the Company
having voting power under ordinary circumstances sufficient to elect a majority
of the Board of Directors; and (h) any other Event of Default provided with
respect to Securities of that series. (Section 501)
If an Event of Default (other than an Event of Default described in clause
(f) above) with respect to the Securities of any series at the time Outstanding
shall occur and be continuing, either the Trustee or the Holders of at least
25% in aggregate principal amount of the Outstanding Securities of that series
by notice as provided in the Indenture may declare the principal amount of the
Securities of that series (or, in the case of any Security that is an Original
Issue Discount Security or the principal amount of which is not then
determinable, such portion of the principal amount of such Security, or such
other amount in lieu of such principal amount, as may be specified in the terms
of such Security) to be due and payable immediately. If an Event of Default
described in clause (f) above with respect to the Securities of any series at
the time Outstanding shall occur, the principal amount of all the Securities of
that series (or, in the case of any such Original Issue Discount Security or
other Security, such specified amount) will automatically, and without any
action by the Trustee or any Holder, become immediately due and payable. After
any such acceleration, but before a judgment or decree based on acceleration,
the Holders of a majority in aggregate principal amount of the Outstanding
Securities of that series may, under certain circumstances, rescind and annul
such acceleration if all Events of Default, other than the nonpayment of
accelerated principal (or other specified amount), have been cured or waived as
provided in the Indenture. (Section 502) For information as to waiver of
defaults, see "Modification and Waiver".
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 Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable indemnity. (Section 603)
Subject to such provisions for the indemnification of the Trustee, the Holders
of a majority in aggregate principal amount of the Outstanding Securities of
any series will 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 Securities of
that series. (Section 512)
No Holder of a Security of any series will have any right to institute any
proceeding with respect to the Indenture, or for the appointment of a receiver
or a trustee, or for any other remedy thereunder, unless (i) such Holder has
previously given to the Trustee written notice of a continuing Event of Default
with respect to the Securities of that series, (ii) the Holders of at least 25%
in aggregate principal amount of the Outstanding Securities of that series have
made written request, and such Holder or Holders have offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee and (iii) the
Trustee has failed to institute such proceeding, and has not received from the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of that series a direction inconsistent with such request, within 60
days after such notice, request and offer. (Section 507) However, such
limitations do not apply to a suit instituted by a Holder of a Security for the
enforcement of payment of the principal of or any premium or interest on such
Security on or after the applicable due date specified in such Security.
(Section 508)
12
<PAGE>
The Company will be required to furnish to the Trustee annually a statement
by certain of its officers as to whether or not the Company, to their
knowledge, is in default in the performance or observance of any of the terms,
provisions and conditions of the Indenture and, if so, specifying all such
known defaults. (Section 1006)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of each series affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Security
affected thereby, (a) change the Stated Maturity of the principal of, or any
instalment of principal of or interest on, any Security, (b) reduce the
principal amount of, or any premium or interest on, any Security, (c) reduce
the amount of principal of an Original Issue Discount Security or any other
Security payable upon acceleration of the Maturity thereof, (d) change the
place or currency of payment of principal of, or any premium or interest on,
any Security, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Security, (f) reduce the percentage in
principal amount of Outstanding Securities of any series, the consent of whose
Holders is required for modification or amendment of the Indenture, (g) reduce
the percentage in principal amount of Outstanding Securities of any series
necessary for waiver of compliance with certain provisions of the Indenture or
for waiver of certain defaults or (h) modify such provisions with respect to
modification and waiver. (Section 902)
A supplemental indenture which changes or eliminates any covenant or other
provision of the Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
The Holders of a majority in principal amount of the Outstanding Securities
of any series may waive compliance by the Company with certain restrictive
provisions of the Indenture. (Section 1007) The Holders of a majority in
principal amount of the Outstanding Securities of any series may waive any past
default under the Indenture, except a default in the payment of principal,
premium or interest and certain covenants and provisions of the Indenture which
cannot be amended without the consent of the Holder of each Outstanding
Security of such series affected. (Section 513)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given or taken
any direction, notice, consent, waiver or other action under the Indenture as
of any date, (i) the principal amount of an Original Issue Discount Security
that will be deemed to be Outstanding will be the amount of the principal
thereof that would be due and payable as of such date upon acceleration of the
Maturity thereof to such date, (ii) if, as of such date, the principal amount
payable at the Stated Maturity of a Security is not determinable (for example,
because it is based on an index), the principal amount of such Security deemed
to be Outstanding as of such date will be an amount determined in the manner
prescribed for such Security and (iii) the principal amount of a Security
denominated in one or more foreign currencies or currency units that will be
deemed to be Outstanding will be the U.S. dollar equivalent, determined as of
such date in the manner prescribed for such Security, of the principal amount
of such Security (or, in the case of a Security described in clause (i) or (ii)
above, of the amount described in such clause). Certain Securities, including
those for whose payment or redemption money has been deposited or set aside in
trust for the Holders and those that have been fully defeased pursuant to
Section 1302, will not be deemed to be Outstanding. (Section 101)
Except in certain limited circumstances, the Company will be entitled to set
any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give or take any direction,
notice, consent, waiver or other action under the Indenture, in the manner and
subject to the limitations provided in the Indenture. If a record date is set
for any action to be taken by Holders of a particular series, such action may
be taken only by persons who are Holders of Outstanding Securities of that
series on the record date. (Section 104)
13
<PAGE>
DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise specified in the applicable Pricing Supplement, the Company
at any time may defease and be discharged from any and all of its obligations
under the Securities and the Indenture ("Defeasance"), except for certain
obligations, including those respecting the Defeasance Trust and obligations to
register the transfer or exchange of the Securities, to replace mutilated,
destroyed, lost or stolen Securities and to maintain agencies in respect of the
Securities. The Company at any time may terminate its obligations under the
covenants described under "Certain Covenants" and the operation of certain
Events of Defaults described in clauses (e), (f) and (g) under "Events of
Default", above ("Covenant Defeasance").
The Company may exercise its Defeasance option notwithstanding its prior
exercise of its Covenant Defeasance option. If the Company exercises its
Defeasance option, payment of the Securities may not be accelerated because of
an Event of Default with respect thereto. If the Company exercises its Covenant
Defeasance option, payment of the Securities may not be accelerated by
reference to the covenants described under "Certain Covenants" or because of
the above-referenced clauses under "Events of Default".
In order to exercise either option, the Company must deposit in trust (the
"Defeasance Trust") with the Trustee money or U.S. Government Obligations or a
combination thereof for the payment of principal and any premium and interest
on the Securities to redemption or maturity and must comply with certain other
conditions. "U.S. Government Obligations" are securities backed by the full
faith and credit of the United States of America or depository receipts
representing an ownership interest in such obligations. (Article Thirteen)
Under current United States Federal income tax law, the Defeasance of the
Securities will be a taxable exchange of the Securities for interests in the
Defeasance Trust. As a consequence, a Holder will recognize gain or loss equal
to the difference between the Holder's cost or other tax basis for the
Securities and the value of the Holder's interest in the Defeasance Trust, and
therefore will be required to include in income a share of the income, gain and
loss of the Defeasance Trust. Under current United States Federal income tax
law, Covenant Defeasance will not be treated as a taxable exchange of the
Securities. Purchasers of the Securities should consult their own advisors with
respect to the more detailed tax consequences to them of such Defeasance and
Covenant Defeasance, including the applicability and effect of tax laws other
than the United States Federal income tax law.
NOTICES
Notices to Holders of Securities will be given by mail to the addresses of
such Holders as they may appear in the Security Register. (Sections 101 and
106)
TITLE
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name a Registered Security is registered as the
absolute owner thereof (whether or not such Registered Security may be overdue)
for the purpose of making payment and for all other purposes, and may treat the
Holder of any Unregistered Security and the Holder of any Coupon as the
absolute owner of such Unregistered Security or Coupon (whether or not such
Unregistered Security or Coupon shall be overdue) for the purpose of making
payment and for all other purposes. (Section 308)
GOVERNING LAW
The Indenture and the Securities will be governed by, and construed in
accordance with, the law of the State of New York. (Section 112)
14
<PAGE>
REGARDING THE TRUSTEE
Chemical Bank is the Trustee under the Indenture and is also the Trustee
under an indenture dated August 15, 1988, between the Company and Chemical
Bank, as supplemented by the First Supplemental Indenture dated April 22, 1991,
between the Company and Chemical Bank (together, the "1988 Indenture") under
which securities having a principal amount of approximately $25,000,000 are
outstanding. The Company maintains deposit accounts and banking relations with
the Trustee.
Upon the occurrence of an Event of Default, or any event of default under the
1988 Indenture, the Trustee may be deemed to have a conflicting interest with
respect to the Securities for purposes of the Trust Indenture Act of 1939 and,
accordingly, may be required to resign as Trustee under the Indenture.
FOREIGN CURRENCY RISKS
GENERAL
Securities of a series may be denominated in such foreign currencies or
currency units as may be designated by the Company at the time of offering (the
"Foreign Currency Securities").
THIS PROSPECTUS DOES NOT, AND NO PROSPECTUS SUPPLEMENT WILL, DESCRIBE ALL
RISKS OF AN INVESTMENT IN FOREIGN CURRENCY SECURITIES THAT RESULT FROM SUCH
SECURITIES BEING DENOMINATED IN A FOREIGN CURRENCY OR CURRENCY UNIT EITHER AS
SUCH RISKS EXIST AT THE DATE OF THIS PROSPECTUS OR ANY SUCH PROSPECTUS
SUPPLEMENT OR AS SUCH RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE
PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE
RISKS ENTAILED BY AN INVESTMENT IN FOREIGN CURRENCY SECURITIES. FOREIGN
CURRENCY SECURITIES ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE
UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
Unless otherwise indicated in an applicable Prospectus Supplement, a Foreign
Currency Security will not be sold in, or to a resident of, the country of the
Specified Currency (as defined below) in which such Security is denominated.
The information set forth below is by necessity incomplete and prospective
purchasers of Foreign Currency Securities should consult their own financial
and legal advisors with respect to any matters that may affect the purchase or
holding of a Foreign Currency Security or the receipt of payments of principal
of and any premium and interest on a Foreign Currency Security in a Specified
Currency.
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Foreign Currency Securities entails significant risks that
are not associated with a similar investment in a security denominated in U.S.
dollars. Such risks include, without limitation, the possibility of significant
changes in the rate of exchange between the U.S. dollar and the currency or
currency unit designated by the Company at the time of offering (the "Specified
Currency") and the possibility of the imposition or modification of foreign
exchange controls by either the United States or foreign governments. Such
risks generally depend on economic and political events and the supply of and
demand for the relevant currencies over which the Company has no control. In
recent years, rates of exchange between the U.S. dollar and certain foreign
currencies have been highly volatile and such volatility may be expected in the
future. Fluctuations in any particular exchange rate that have occurred in the
past are not necessarily indicative, however, of fluctuations in the rate that
may occur during the term of any Foreign Currency Security. Depreciation of the
Specified Currency applicable to a Foreign Currency Security against the U.S.
dollar would result in a decrease in the U.S. dollar-equivalent yield of such
Security, in the U.S. dollar-equivalent
15
<PAGE>
value of the principal repayable at Maturity of such Security and, generally,
in the U.S. dollar-equivalent market value of such Security.
Governments have imposed from time to time exchange controls and may in the
future impose or revise exchange controls at or prior to a Foreign Currency
Security's Maturity. Even if there are not exchange controls, it is possible
that the Specified Currency for any particular Foreign Currency Security would
not be available to the Company at an Interest Payment Date for, or at Maturity
of, such Security due to other circumstances beyond the control of the Company.
GOVERNING LAW AND JUDGMENTS
The Notes will be governed by and construed in accordance with the law of the
State of New York. In the event an action based on Foreign Currency Securities
were commenced in a court of the United States, it is likely that such court
would grant judgment relating to such Securities only in U.S. dollars. It is
not clear, however, whether, in granting such judgment, the rate of conversion
into U.S. dollars would be determined with reference to the date of default,
the date judgment is rendered or some other date. Holders of Foreign Currency
Securities would bear the risk of exchange rate fluctuations between the time
the amount of the judgment is calculated and the time the Trustee converts U.S.
dollars to the Specified Currency for payment of the judgment.
PLAN OF DISTRIBUTION
The Company may sell Securities in any of three ways: (i) through
underwriters or dealers; (ii) directly to one or more purchasers; or (iii)
through agents. The applicable Prospectus Supplement will set forth the terms
of the offering of any Securities, including the names of any underwriters, the
purchase price of such Securities and the proceeds to the Company from such
sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price, any discounts or concessions
allowed or reallowed or paid to dealers, any securities exchanges on which such
Securities may be listed and any restrictions on the sale and delivery of
Securities in bearer form.
If underwriters are used in the sale, Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. Such
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Unless otherwise set forth in the applicable Prospectus Supplement, the
obligations of the underwriters to purchase such Securities will be subject to
certain conditions precedent, and the underwriters will be obligated to
purchase all of such Securities if any of such Securities are purchased. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
Securities may also be offered and sold, if so indicated in the Prospectus
Supplement, in connection with a remarketing upon their purchase, in accordance
with a redemption or repayment pursuant to their terms, by one or more firms
("remarketing firms") acting as principals for their own accounts or as agents
for the Company. Any remarketing firm will be identified and the terms of its
agreement, if any, with the Company and its compensation will be described in
the Prospectus Supplement. Remarketing firms may be deemed to be underwriters
in connection with the Securities remarketed thereby.
Securities may also be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of Securities will be named, and any commissions payable by the Company to
such agent will be set forth, in the applicable Prospectus Supplement. Unless
otherwise indicated in the applicable Prospectus Supplement, any such agent
will act on a best efforts basis for the period of its appointment.
16
<PAGE>
If so indicated in the applicable Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers by certain
specified institutions to purchase Securities at the public offering price set
forth in such Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a future date specified in such
Prospectus Supplement. Such contracts will be subject only to those conditions
set forth in the applicable Prospectus Supplement and such Prospectus
Supplement will set forth the commissions payable for solicitation of such
contracts.
Any underwriters, dealers or agents participating in the distribution of
Securities may be deemed to be underwriters and any discounts or commissions
received by them on the sale or resale of Securities may be deemed to be
underwriting discounts and commissions under the Securities Act. Agents and
underwriters may be entitled under agreements entered into with the Company to
indemnification by the Company against certain civil liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments that the agents or underwriters may be required to make in respect
thereof. Agents and underwriters may be customers of, engage in transactions
with, or perform services for, the Company or its affiliates in the ordinary
course of business.
Unless otherwise indicated in a Prospectus Supplement, all Securities offered
will be a new issue of securities with no established trading market. Any
underwriters to whom Securities are sold by the Company for public offering and
sale may make a market in such Securities, but such underwriters will not be
obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of or the trading markets
for any Securities.
VALIDITY OF SECURITIES
The validity of the Securities will be passed upon for the Company by David
A. Jenkins, Vice President and General Counsel of the Company, and for any
underwriters or agents by Cravath, Swaine & Moore, 825 Eighth Avenue, New York,
NY 10019.
EXPERTS
The consolidated financial statements and schedules of Hoechst Celanese
Corporation as of December 31, 1992 and 1991, and for each of the years in the
three-year period ended December 31, 1992 in the Annual Report on Form 10-K of
the Company incorporated by reference herein and elsewhere in the registration
statement have been incorporated by reference herein and in the registration
statement in reliance upon the report of KPMG Peat Marwick, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The report of KPMG Peat Marwick covering the December 31, 1992 consolidated
financial statements refers to the adoption of Financial Accounting Standard
No. 106 "Employers' Accounting for Postretirement Benefits Other Than Pensions"
in 1992.
17
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, AGENT, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, PROSPECTUS SUPPLEMENT AND ANY PRICING SUPPLEMENT IN
CONNECTION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY ANY DISTRIBUTOR. THIS PROSPECTUS, PROSPECTUS
SUPPLEMENT AND ANY PRICING SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN
ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS, PROSPECTUS SUPPLEMENT OR ANY PRICING SUPPLEMENT
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE DATES.
-----------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Important Currency Exchange Information.................................... S-2
Description of Notes....................................................... S-3
Special Provisions Relating to Foreign Currency Notes...................... S-16
United States Taxation..................................................... S-16
Plan of Distribution of Notes.............................................. S-23
Validity of Notes.......................................................... S-23
Glossary................................................................... S-24
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by
Reference................................................................. 2
The Company................................................................ 3
Use of Proceeds............................................................ 3
Ratio of Earnings to Fixed Charges......................................... 3
Description of Securities.................................................. 4
Foreign Currency Risks..................................................... 15
Plan of Distribution....................................................... 16
Validity of Securities..................................................... 17
Experts.................................................................... 17
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
U.S. $400,000,000
Hoechst Celanese Corporation
Medium-Term Notes, Series B
- -------------------------------------------------------------------------------
PROSPECTUS SUPPLEMENT
- -------------------------------------------------------------------------------
CS First Boston
Goldman, Sachs & Co.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
