PROSPECTUS SUPPLEMENT
(To Prospectus Dated April 20, 1995) [RYDER LOGO]
$200,000,000
RYDER SYSTEM, INC.
MEDIUM-TERM NOTES, SERIES 14
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
Ryder System, Inc. (the "Company") from time to time may offer up to
$200,000,000 in aggregate initial offering price of its Medium-Term Notes,
Series 14 (the "Notes"), subject to reduction from time to time after the
date hereof at the option of the Company including reduction as a result of
the sale of other debt securities of the Company under the Prospectus to
which this Prospectus Supplement relates. Each Note will mature on a day (as
defined below) nine months or more from the date of issue, as selected by the
purchaser and agreed to by the Company.
Each Note will bear interest at either a fixed rate (a "Fixed Rate Note"),
which may be zero in the case of certain Notes issued at a price representing
a discount from the principal amount payable at maturity, or a floating rate
(a "Floating Rate Note"), as set forth in a pricing supplement (the "Pricing
Supplement") to this Prospectus Supplement. Unless otherwise specified in the
applicable Pricing Supplement, interest on each Fixed Rate Note will accrue
from its date of issue and will be payable semiannually on each May 1 and
November 1 and at maturity. Interest on each Floating Rate Note will accrue
from its date of issue and will be payable monthly, quarterly, semiannually
or annually, as specified in the applicable Pricing Supplement, and at
maturity. Unless otherwise specified in the applicable Pricing Supplement,
the Notes may not be redeemable at the option of the Company or repayable at
the option of the holder prior to the maturity thereof. See "Terms of the
Notes."
Each Note will be represented either by a single global certificate (a
"Global Security") in registered form registered in the name of a nominee of
The Depository Trust Company, as depositary (a "Book-Entry Note"), or by a
certificate issued in temporary or definitive registered form (a
"Certificated Note"), as set forth in the applicable Pricing Supplement.
Beneficial interests in Global Securities representing Book-Entry Notes will
be shown on, and transfers thereof will be effected only through, records
maintained by said depositary (the "Depositary") and its direct and indirect
participants. Book-Entry Notes will not be issuable as Certificated Notes
except under the circumstances described herein. See "Terms of the 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, THE PROSPECTUS OR ANY
SUPPLEMENT HERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1) COMMISSION(2) COMPANY(2)(3)
<S> <C> <C> <C>
Per Note .. 100.000% .125%-.750% 99.875%-99.250%
Total ...... $200,000,000 $250,000-$1,500,000 $199,750,000-$198,500,000
- ------------ ------------ ------------------- -------------------------
<FN>
(1) Unless otherwise specified in the applicable Pricing Supplement, the
price to public will be 100% of the principal amount.
(2) The Company will pay a commission to Salomon Brothers Inc, Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan
Securities Inc. or Morgan Stanley & Co. Incorporated, as agents (each an
"Agent" and collectively the "Agents"), depending upon maturity, ranging
from .125% to .750% of the principal amount of any Note sold through such
Agent. The Company has agreed to indemnify the Agents against certain
liabilities under the Securities Act of 1933.
(3) Before deducting other expenses payable by the Company estimated to be
approximately $250,000, including reimbursement of the Agents' expenses.
</FN>
</TABLE>
The Notes are being offered on a continuing basis by the Company through the
Agents, who have agreed to use their best efforts to solicit purchases of
such Notes. The Company may also sell Notes at a discount to the Agents for
resale to one or more investors and other purchasers at varying prices
related to prevailing market prices at the time of resale, or, if set forth
in the applicable Pricing Supplement, at a fixed public offering price, as
determined by such Agents. In addition, the Agents may offer Notes purchased
by them as principal to other dealers. Unless otherwise specified in the
applicable Pricing Supplement, any Note purchased by an Agent as principal
will be purchased at 100% of the principal amount thereof less a percentage
equal to the commission applicable to an agency sale of a Note of identical
maturity. The Company may sell the Notes directly to investors on its own
behalf in those jurisdictions where it is authorized to do so. The Notes are
not expected to be listed on any securities exchange, 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. The Company reserves
any right to withdraw, cancel or modify the offer made hereby without notice.
The Company or any Agent, if it solicits the offer, may reject any offer in
whole or in part. See "Plan of Distribution."
Salomon Brothers Inc
Merrill Lynch & Co.
J.P. Morgan Securities Inc.
Morgan Stanley & Co.
Incorporated
The Date of this Prospectus Supplement is May 24, 1996.
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company and its subsidiaries, whether or not consolidated, for each of
the periods indicated. For purposes of computing the ratio of earnings to
fixed charges, fixed charges consist of interest expense plus interest
capitalized and that portion (one third) of rental expense considered to
represent interest. Earnings are computed by adding fixed charges, except
interest capitalized, to earnings from continuing operations before income
taxes. On December 7, 1993, the Company completed the spin-off of its
aviation services businesses through a distribution of common shares of
Aviall, Inc. to holders of the Company's common stock. Prior period ratios
have been restated to exclude discontinued operations, such as those aviation
services businesses.
THREE MONTHS
ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
--------------- ------------------------------------
1996 1995 1995 1994 1993 1992 1991
------ ------ ---- ---- ---- ---- ----
1.25 1.75 2.01 2.36 2.23 1.90 1.29
TERMS OF THE NOTES
GENERAL
The following description (unless otherwise specified in a Pricing
Supplement) of the particular terms of the Notes offered hereby supplements,
and to the extent inconsistent therewith replaces, the description of the
general terms of the Notes set forth in the Prospectus, to which description
reference is hereby made.
The Notes are a series of the Debt Securities described in the
accompanying Prospectus and will be limited to $200,000,000 in aggregate
initial offering price. See "Description of Debt Securities" on pages three
to eleven of the accompanying Prospectus for additional information
concerning the Notes and the Indenture (as defined in the accompanying
Prospectus) under which they are to be issued.
The Notes are to mature on any day nine months or more from the date of
issue (the "Issue Date") as selected by the purchaser and agreed to by the
Company.
Each Note will bear interest at either (i) a fixed rate, which may be zero
in the case of certain Notes issued at an Issue Price (as defined below)
representing a discount from the principal amount payable at maturity (a
"Zero Coupon Note"), or (ii) a floating rate determined by reference to the
interest rate basis or combination of interest rate bases (the "Base Rate")
or interest rate formulas specified in the applicable Pricing Supplement,
which may be adjusted by a Spread or Spread Multiplier (each as defined
below). Interest rates offered by the Company with respect to the Notes may
differ depending upon, among other things, the aggregate principal amount of
the Notes purchased in any single transaction.
Each Note will be issued initially as either a Book-Entry Note or a
Certificated Note. Except as set forth in the accompanying Prospectus under
"Description of Debt Securities--Global Securities," Book-Entry Notes will
not initially be issuable as Certificated Notes. The Notes are issuable in
denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000. Unless otherwise specified in the applicable Pricing
Supplement attached hereto, the Notes will be issued at 100% of their
principal amount.
Principal and interest initially will be payable, and Certificated Notes
initially will be transferable and exchangeable, at the office of The Chase
Manhattan Bank (National Association), as Trustee, at 4 Chase MetroTech
Center, Brooklyn, New York 11245, provided that payment of interest on
Certificated Notes may be made at the option of the Company by check mailed
to the registered Holders of such Notes and provided further that the holder
of $10 million or more of Certificated Notes with similar tenor or terms will
be entitled to receive payment by wire transfer in U.S. dollars,
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but only if appropriate payment instructions have been received in writing
not later than 15 calendar days prior to the applicable Interest Payment
Date.
As used herein:
(i) "Business Day" with respect to any Note means, unless otherwise
specified in the applicable Pricing Supplement, any day, other than a
Saturday or Sunday, that meets each of the following applicable
requirements: the day is (a) neither a legal holiday nor a day on which
banking institutions are authorized or required by law or regulation to be
closed in The City of New York; and (b) if such Note is a LIBOR Note, a
London Banking Day. "London Banking Day" means any day on which dealings
in deposits in U.S. dollars are transacted in the London interbank market;
(ii) "Discount Note" means (a) a Note which provides for an amount less
than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to the
Indenture and (b) any other Note that for United States Federal income tax
purposes would be considered an original issue discount note;
(iii) "Interest Payment Date" with respect to any Note means a date
(other than the Maturity Date) on which, under the terms of such Note,
regularly scheduled interest shall be payable;
(iv) "Maturity Date" with respect to any Note means the date on which
such Note will mature, as specified thereon; and
(v) "Record Date" with respect to any Interest Payment Date for any
Note shall be the date (whether or not a Business Day) 15 calendar days
(unless otherwise specified in the applicable Pricing Supplement)
immediately preceding such Interest Payment Date.
References herein to "U.S. dollars" or "U.S.$" or "$" are to the currency
of the United States of America.
All percentages resulting from any calculations will be rounded, if
necessary, to the nearest one millionth of a percentage point (with five
ten-millionths of a percentage point being rounded upward) and all amounts in
U.S. dollars rounded to the nearest cent (with one-half cent being rounded
upward).
The Pricing Supplement relating to each Note will describe the following
terms, as applicable: (1) whether such Note is a Fixed Rate Note, a Floating
Rate Note, a Discount Note or a Zero-Coupon Note; (2) the price (expressed as
a percentage of the aggregate principal amount thereof) at which such Note
will be issued (the "Issue Price"); (3) the Issue Date; (4) the Maturity Date
of such Note; (5) if such Note is a Fixed Rate Note, the rate per annum at
which such Note will bear interest, if any (the "Interest Rate"); (6) if such
Note is a Floating Rate Note, the Base Rate, the Initial Interest Rate, the
Interest Reset Period, the Interest Reset Date, the Interest Payment Dates,
the Index Maturity, the Maximum Interest Rate and the Minimum Interest Rate,
if any, and the Spread or Spread Multiplier, if any (all as defined herein),
and any other terms relating to the particular method of calculating the
Interest Rate for such Note; (7) whether such Note may be redeemed at the
option of the Company or repaid at the option of the holders thereof prior to
its Maturity Date, and if so, the provisions relating to such redemption or
repayment; (8) whether such Note will be represented by a Global Note or a
certificate issued in definitive form; (9) certain special tax consequences
of the purchase, ownership and disposition of certain Notes, if any; and (10)
any other terms of such Note not inconsistent with the provisions of the
Indenture.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Issue Date or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, as the case may be, at the annual rate stated on the face
thereof and interest will be payable semiannually on May 1 and November 1
until the principal amount thereof is paid or made available for payment or
upon earlier
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redemption or repayment. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. Interest will be paid to the person in whose
name the Fixed Rate Note is registered at the close of business on the Record
Date next preceding the May 1 and November 1 interest payment date (each an
"Interest Payment Date"). Notwithstanding the foregoing, periodic payments of
interest will not be made with respect to any Zero-Coupon Note. However,
interest payable on the Maturity Date will be payable to the person in whose
name the Fixed Rate Note is registered on the Maturity Date and to whom
principal shall be payable, and the first payment of interest on any Fixed
Rate Note issued between a Record Date and an Interest Payment Date will be
made on the next succeeding Interest Payment Date to the registered owner at
the close of business on the Record Date next preceding the date of such
payment. Interest rates are subject to change by the Company from time to
time but no such change will affect any Fixed Rate Notes theretofore issued
or as to which an offer has been accepted by the Company. Each payment of
interest shall include interest accrued through the day preceding the
Interest Payment Date or Maturity Date or date of redemption or repayment. If
any Interest Payment Date or the Maturity Date (or date of redemption or
repayment) of a Fixed Rate Note falls on a day that is not a Business Day,
the payment will be made on the next Business Day as if it were made on the
date such payment was due, and no interest will accrue on the amount so
payable for the period from and after such Interest Payment Date or the
Maturity Date (or the date of redemption or repayment), as the case may be.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from its Issue Date at a rate
per annum equal to the Initial Interest Rate set forth on the applicable
Pricing Supplement until the first Interest Reset Date and thereafter at
rates determined by reference to the Base Rate plus or minus the Spread, if
any, or multiplied by the Spread Multiplier, if any (each as specified in the
applicable Pricing Supplement), until the principal thereof is paid or
payment thereof is duly provided for. The "Spread" is the number of basis
points (one basis point equals one-hundredth of a percentage point) specified
in the applicable Pricing Supplement as being applicable to such Note, and
the "Spread Multiplier" is the percentage specified in the applicable Pricing
Supplement as being applicable to such Note. Any Floating Rate Note may also
have either or both of the following: (i) a maximum numerical interest rate
limitation, or ceiling, on the rate of interest that may accrue during any
interest period (the "Maximum Interest Rate") and (ii) a minimum numerical
interest rate limitation, or floor, on the rate of interest that may accrue
during any interest period (the "Minimum Interest Rate"). The applicable
Pricing Supplement will designate one or more of the following Base Rates as
applicable to each Floating Rate Note: (a) the Commercial Paper Rate (a
"Commercial Paper Rate Note"), (b) LIBOR (a "LIBOR Note"), (c) the Treasury
Rate (a "Treasury Rate Note"), (d) the Federal Funds Rate (a "Federal Funds
Rate Note"), (e) the Prime Rate (a "Prime Rate Note"), (f) the CMT Rate (a
"CMT Rate Note") or (g) such other Base Rate or interest rate formula as is
specified in the applicable Pricing Supplement. The Spread, Spread
Multiplier, Index Maturity (as defined below) and other variable terms of the
Floating Rate Notes are subject to change by the Company from time to time,
but no such change will affect any Floating Rate Note theretofore issued or
as to which an offer has been accepted by the Company.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semiannually, annually or otherwise (such period
being the "Interest Reset Period" for such Note, and the first day of each
Interest Reset Period being 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 that reset daily, each Business Day; in the case of Floating Rate
Notes (other than Treasury Rate Notes) that reset weekly, Wednesday of each
week; in the case of Treasury Rate Notes that reset weekly, Tuesday of each
week (except as hereinafter provided); in the case of Floating Rate Notes
that reset monthly, the third Wednesday of each month; in the case of
Floating Rate Notes that reset quarterly, the third Wednesday of March, June,
September and December; in the case of Floating Rate Notes that reset
semiannually, the third Wednesday of each of two months specified in the
applicable Pricing Supplement; and in the case of Floating Rate Notes that
reset annually, the third Wednesday of the
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month specified in the applicable Pricing Supplement. If any Interest Reset
Date for any Floating Rate Note would otherwise be a day that is not a
Business Day, such Interest Reset Date shall be postponed to the next day
that is a Business Day, except, in the case of a LIBOR Note, if such Business
Day is in the next succeeding calendar month, such Interest Reset Date shall
be the immediately preceding Business Day.
Interest on each Floating Rate Note will be payable monthly, quarterly,
semiannually, annually or as otherwise specified in the applicable Pricing
Supplement (the "Interest Payment Period"). Except as provided below or in
the applicable Pricing Supplement, interest will be payable (in the case of
Floating Rate Notes which reset daily, weekly or monthly) on the third
Wednesday of each month or on the third Wednesday of March, June, September
and December; in the case of Floating Rate Notes which reset quarterly, on
the third Wednesday of March, June, September and December; in the case of
Floating Rate Notes which reset semiannually, on the third Wednesday of each
of the two months specified in the applicable Pricing Supplement; and in the
case of Floating Rate Notes which reset annually, on the third Wednesday of
the month specified in the applicable Pricing Supplement and, in each case,
on the Maturity Date thereof. If any Interest Payment Date for any Floating
Rate Note would otherwise be a day that is not a Business Day, such Interest
Payment Date shall be postponed to the next day that is a Business Day
except, in the case of a LIBOR Note, if such Business Day is in the next
succeeding calendar month, such Interest Payment Date shall be the
immediately preceding Business Day and no interest will accrue for the period
from and after such Interest Payment Date. If the Maturity Date (or date of
redemption or repayment) of any Floating Rate Note would fall on a day that
is not a Business Day, the payment of interest and premium, if any, and
principal may be made on the next succeeding Business Day, and no interest on
such payment will accrue for the period from and after the Maturity Date (or
the date of redemption or repayment).
Interest will be paid to the person in whose name a Floating Rate Note is
registered at the close of business on the Record Date immediately preceding
an Interest Payment Date; provided, however, that interest payable on the
Maturity Date (or the date of redemption or repayment) will be payable to the
person in whose name a Floating Rate Note is registered on such date and to
whom principal shall be payable; provided, further, that the first payment of
interest on any Floating Rate Note issued after a Record Date and before the
next succeeding Interest Payment Date shall be made on the second succeeding
Interest Payment Date to the registered owner at the close of business on the
Record Date next preceding the date of such payment.
Interest payments on each Interest Payment Date or on the Maturity Date
(or the date of redemption or repayment) for Floating Rate Notes will include
accrued interest from and including the Issue Date or from and including the
last date in respect of which interest has been paid or duly provided for, as
the case may be, to, but excluding, such Interest Payment Date or Maturity
Date (or the date of redemption or repayment).
Accrued interest will be calculated by multiplying the principal amount of
a Floating Rate Note by an accrued interest factor. Such accrued interest
factor will be computed by adding the interest factors calculated for each
day in the period for which accrued interest is being calculated. The
interest factor (expressed as a decimal) for each such day will be computed
by dividing the interest rate applicable to such day by 360, in the case of
Commercial Paper Rate Notes, LIBOR Notes, Federal Funds Rate Notes and Prime
Rate Notes, or by the actual number of days in the year in the case of
Treasury Rate Notes or CMT Rate Notes. The interest rate in effect on each
day will be (i) if such day is an Interest Reset Date, the interest rate with
respect to the Interest Determination Date (as defined below) pertaining to
such Interest Reset Date, or (ii) if such day is not an Interest Reset Date,
the interest rate with respect to the Interest Determination Date pertaining
to the next preceding Interest Reset Date, subject in either case to any
Maximum Interest Rate or Minimum Interest Rate limitation referred to above
and to any adjustment by a Spread or Spread Multiplier referred to above;
provided, however, that the interest rate in effect for the period from the
Issue Date to the first Interest Reset Date set forth in the applicable
Pricing Supplement will be the "Initial Interest Rate" specified in the
applicable Pricing Supplement.
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The "Interest Determination Date" pertaining to an Interest Reset Date for
Commercial Paper Rate Notes, Prime Rate Notes, Federal Funds Rate Notes or
CMT Rate Notes will be the second Business Day next preceding such Interest
Reset Date. The Interest Determination Date pertaining to an Interest Reset
Date for a LIBOR Note will be the second London Banking Day next preceding
such Interest Reset Date. The Interest Determination Date pertaining to an
Interest Reset Date for a Treasury Rate Note will be the day of the week in
which such Interest Reset Date falls on which Treasury bills of the Index
Maturity (as defined below) specified on the face of such Note are auctioned,
but in no event shall such Interest Determination Date be after the related
Interest Payment Date. Treasury bills are normally sold at auction on Monday
of each week, unless that day is a legal holiday, in which case the auction
is normally held on the following Tuesday, except that such auction may be
held on the preceding Friday. If, as the result of a legal holiday, an
auction is so held on the preceding Friday, such Friday will be the Interest
Determination Date pertaining to the Interest Reset Date occurring in the
next succeeding week for such a Treasury Rate Note. If an auction date shall
fall on any Interest Reset Date for a Treasury Rate Note, then such Interest
Reset Date shall instead be the first Business Day immediately following such
auction date. If no auction is held in any week (or on the preceding Friday),
the Interest Determination Date shall be the Monday of the week in which the
Interest Reset Date falls.
The "Calculation Date", where applicable, pertaining to an Interest
Determination Date will be the first to occur of either (a) the tenth
calendar day after such Interest Determination Date or, if such day is not a
Business Day, the next succeeding Business Day or (b) the Business Day
preceding the date any payment is required to be made for any period
following the applicable Interest Reset Date or Maturity Date (or the date of
redemption or repayment).
Unless otherwise specified in the applicable Pricing Supplement, The Chase
Manhattan Bank (National Association) shall be the calculation agent (in such
capacity, the "Calculation Agent") with respect to Floating Rate Notes. Upon
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 that will become effective on the next Interest Reset Date with respect
to such Floating Rate Note.
"Index Maturity" is the particular maturity (specified in the applicable
Pricing Supplement) of the type of instrument or obligation from which a Base
Rate is calculated.
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 in such Note and in the applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Commercial Paper Rate" means, with respect to any Interest Determination
Date, the Money Market Yield (calculated as described below) of the rate on
such date for commercial paper having the Index Maturity designated in the
applicable Pricing Supplement as such rate is published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication of such Board
("H.15(519)"), under the heading "Commercial Paper." If such rate is not
published by 9:00 a.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the Commercial Paper
Rate shall be the Money Market Yield of the rate on that Interest
Determination Date for commercial paper having the Index Maturity designated
in the applicable Pricing Supplement as published by the Federal Reserve Bank
of New York in its daily statistical release "Composite 3:30 p.m. Quotations
for U.S. Government Securities" ("Composite Quotations") under the heading
"Commercial Paper." If such rate is not published by 3:00 p.m., New York City
time, on the Calculation Date pertaining to such Interest Determination Date,
then the Commercial Paper Rate for that Interest Determination Date shall be
calculated by the Calculation Agent and shall be the Money Market Yield of
the arithmetic mean of the offered rates of three leading dealers of
commercial paper in The City of New York, which may include The Chase
Manhattan Bank (National Association) (in such capacity, "Chase"), selected
by the Calculation Agent (after consulting with the Company) as of 11:00
a.m., New York
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City time, on that Interest Determination Date, for commercial paper having
the Index Maturity designated 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 the dealers
selected as aforesaid are not quoting as mentioned in this sentence, the
Commercial Paper Rate will be the Commercial Paper Rate in effect on such
Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = D X 360
------------- X 100
360 - (D X M)
where "D" refers to the per annum rate for the 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.
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 in
such Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR"
will be determined by the Calculation Agent in accordance with the following
provisions:
(i) With respect to an Interest Determination Date, LIBOR shall equal
either: (A) the arithmetic mean, as determined by the Calculation Agent,
of the offered rates which appear on the display specified in the
applicable Pricing Supplement on the LIBOR page of the Reuters Monitor
Money Rates Service (or such other relevant page as may replace that page
on that service) (the "Reuters Screen") or (B) the offered rate which
appears on page 3750 of the Dow Jones Telerate Service (or such other page
as may replace that page on that service) (the "Telerate Page"), in each
case as of 11:00 a.m., London time, on such Interest Determination Date;
if neither the Reuters Screen nor the Telerate Page is specified in the
applicable Pricing Supplement, LIBOR will be determined as if the Telerate
Page had been specified; provided, however, in the case of (A) above, if
fewer than two such offered rates so appear on the Reuters Screen, or in
the case of (B) above, if no rate appears on the Telerate Page, LIBOR for
such Interest Determination Date will be determined as described in (ii)
below.
(ii) If, on any Interest Determination Date, fewer than two offered
rates appear on the Reuters Screen and if no rate appears on the Telerate
Page, as the case may be, the Calculation Agent will request the principal
London office of each of four major banks in the London interbank market,
which may include Chase, as selected by the Calculation Agent (after
consulting with the Company), to provide the Calculation Agent with its
quotation of the rate offered to prime banks in the London interbank
market at approximately 11:00 a.m., London time, on such Interest
Determination Date for deposits in U.S. dollars having the Index Maturity,
and in a principal amount equal to an amount not less than $1,000,000 that
is representative of a single transaction in such market at such time (a
"Representative Amount"). If at least two such quotations are provided,
LIBOR will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR will be the arithmetic mean of the rates
quoted at approximately 11:00 a.m., New York City time, on such Interest
Determination Date by three major U.S. banks, which may include Chase,
selected by the Calculation Agent (after consulting with the Company), for
loans in U.S. dollars to leading European banks having the Index Maturity
designated in the Pricing Supplement, commencing on the second London
Banking Day immediately following that Interest Determination Date and in
a Representative Amount, provided, however, that if fewer than three banks
selected as aforesaid by the Calculation Agent are quoting as mentioned in
this sentence, LIBOR for such date will be LIBOR in effect on such
Interest Determination Date.
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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 in such Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Treasury Rate" means, with respect to any Interest Determination Date, the
rate for the auction held on such Interest Determination Date of direct
obligations of the United States ("Treasury bills") having the Index Maturity
designated in the applicable Pricing Supplement as such rate is published in
H.15(519) under the heading "U.S. Government Securities--Treasury
bills--auction average (investment)" or, if such rate is not so published by
9:00 a.m., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, then the Treasury Rate shall be 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) as otherwise made
available by the United States Department of the Treasury. In the event that
the results of the auction of Treasury bills having the Index Maturity
designated in the applicable Pricing Supplement is not published or made
available as provided above by 3:00 p.m., New York City time, on such
Calculation Date or if no such auction is held in a particular week (or on
the preceding Friday, if applicable), then the Treasury Rate for that
Interest Determination Date shall be calculated by the Calculation Agent and
shall be a yield to maturity (expressed as a bond equivalent, on the basis of
a year of 365 or 366 days, as applicable, and applied on a daily basis) of
the arithmetic mean of the secondary market bid rates, as of approximately
3:30 p.m., New York City time, on such Interest Determination Date, of three
leading primary United States government securities dealers selected by the
Calculation Agent (after consulting with the Company) for the issue of
Treasury bills with a remaining maturity closest to the Index Maturity
designated in the applicable Pricing Supplement; provided, however, that if
the dealers selected as aforesaid are not quoting as mentioned in this
sentence, the Treasury Rate will be the Treasury Rate in effect on such
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 in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Federal Funds Rate" means, with respect to any Interest Determination Date,
the rate on that day for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)," or, if such rate is not so published by
11:00 a.m., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, then the Federal Funds Rate shall be the rate on
such Interest Determination Date as published in Composite Quotations under
the heading "Federal Funds/Effective Rate." If such rate is not published in
either H.15(519) or Composite Quotations by 3:00 p.m., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, the
Federal Funds Rate for such Interest Determination Date shall be calculated
by the Calculation Agent and will be the arithmetic mean of the rates for the
last transaction in overnight Federal Funds arranged by each of three leading
brokers of Federal Funds transactions in New York City, which may include
Chase, selected by the Calculation Agent (after consulting with the Company)
prior to 11:00 a.m., New York City time, on such Interest Determination Date;
provided, however, that if the brokers selected as aforesaid are not quoting
as mentioned in this sentence, the Federal Funds Rate with respect to such
Interest Determination Date will remain the Federal Funds Rate then in effect
on such Interest Determination Date.
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 in such Note and in the applicable Pricing Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, the
"Prime Rate" means, with respect to any Interest Determination Date, the rate
on such date as published in H.15(519) under the heading "Bank Prime Loan."
In the event that such rate is not published by 9:00 a.m., New York City
time, on the Calculation Date pertaining to such Interest Determination Date,
then the Prime Rate will be determined by the Calculation Agent and will be
the arithmetic mean of the rates of interest publicly announced by each bank
that appears on the Reuters Screen USPRIME1 Page as such bank's prime rate or
base lending rate as in effect for that Interest Determination Date. "Reuters
Screen USPRIME1 Page" means the display designated as page "USPRIME1" on the
Reuters Monitor Money Rates Service (or such other page as may replace the
USPRIME1 page on that service for the purpose of displaying prime rates or
base lending rates of major United States banks). If fewer than four such
rates but more than one such rate appear on the Reuters Screen USPRIME1 Page
for such Interest Determination Date, the Prime Rate shall be determined by
the Calculation Agent and will be the arithmetic mean of the prime rates
quoted on the basis of the actual number of days in the year divided by 360
as of the close of business on such Interest Determination Date by at least
two major money center banks in New York City selected by the Calculation
Agent (after consulting with the Company). If fewer than two such rates
appear on the Reuters Screen USPRIME1 Page, the Prime Rate will be determined
by the Calculation Agent and will be the arithmetic mean of the prime rates
furnished in New York City by three substitute banks or trust companies
organized and doing business under the laws of the United States, or any
State thereof, in each case having total equity capital of at least U.S.
$500,000,000 and being subject to supervision or examination by Federal or
State authority, which may include Chase, selected by the Calculation Agent
(after consulting with the Company) to provide such rate or rates; provided,
however, that if the banks selected as aforesaid are not quoting as mentioned
in this sentence, the Prime Rate will remain the Prime Rate in effect on such
Interest Determination Date.
CMT RATE NOTES
Each CMT Rate Note will bear interest at the interest rate calculated with
reference to the CMT Rate and the Spread or Spread Multiplier, if any,
specified in such Note and any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "CMT
Rate" means, with respect to any Interest Determination Date, the rate on
such date as displayed on the Designated CMT Telerate Page (as defined below)
under the caption ". . . Treasury Constant Maturities . . . Federal Reserve
Board Release H.15 . . . Mondays Approximately 3:45 P.M.," under the column
for the Designated CMT Maturity Index (as defined below) for (i) if the
Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the
week, or the month, as applicable, ended immediately preceding the week in
which the related CMT Rate Interest Determination Date occurs. If such rate
is no longer displayed on the relevant page, or if not displayed by 3:00
P.M., New York City time, on the related Calculation Date, then the CMT Rate
for such CMT Rate Interest Determination Date will be such treasury constant
maturity rate for the Designated CMT Maturity Index as published in the
relevant H.15(519). If such rate is no longer published, or if not published
by 3:00 P.M., New York City time, on the related Calculation Date, then the
CMT Rate for such CMT Rate Interest Determination Date will be such treasury
constant maturity rate for the Designated CMT Maturity Index (or other United
States Treasury rate for the Designated CMT Maturity Index) for the CMT Rate
Interest Determination Date with respect to such Interest Reset Date as may
then be published by either the Board of Governors of the Federal Reserve
System or the United States Department of the Treasury that the Calculation
Agent determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in the relevant H.15(519). If such
information is not provided by 3:00 P.M., New York City time, on the related
Calculation Date, then the CMT Rate for the CMT Rate Interest Determination
Date will be calculated by the Calculation Agent, and will be a yield to
maturity, based on the arithmetic mean of the secondary market closing offer
side prices as of approximately 3:30 P.M., New York City time, on the CMT
Rate Interest Determination Date reported, according to their written
records, by three leading
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primary United States government securities dealers (each, a "Reference
Dealer") in The City of New York (which may include the Agents or their
affiliates) selected by the Calculation Agent after consulting with the
Company (from five such Reference Dealers selected by the Calculation Agent
after consulting with the Company and eliminating the highest quotation (or,
in the event of equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest) ), for the most recently issued
direct noncallable fixed rate obligations of the United States ("Treasury
Notes") with an original maturity of approximately the Designated CMT
Maturity Index and a remaining term to maturity of not less than such
Designated CMT Maturity Index minus one year. If the Calculation Agent cannot
obtain three such Treasury Note quotations, the CMT Rate for such CMT Rate
Interest Determination Date will be calculated by the Calculation Agent and
will be a yield to maturity based on the arithmetic mean of the secondary
market offer side prices as of approximately 3:30 P.M., New York City time,
on the CMT Rate Interest Determination Date of three Reference Dealers in The
City of New York (from five such Reference Dealers selected by the
Calculation Agent after consulting with the Company and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest) ), for
Treasury Notes with an original maturity of the number of years that is the
next highest to the Designated CMT Maturity Index and a remaining term to
maturity closest to the Designated CMT Maturity Index and in an amount of at
least $100 million. If three or four (and not five) of such Reference Dealers
are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offer prices obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided however, that if fewer
than three Reference Dealers selected by the Calculation Agent after
consulting with the Company are quoting as described herein, the CMT Rate
will be the CMT Rate in effect on such CMT Rate Interest Determination Date.
If two Treasury Notes with an original maturity as described in the third
preceding sentence have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the quotes for the Treasury Note with the
shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in the applicable Pricing Supplement (or any
other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519) ), for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519).
If no such page is specified in the applicable Pricing Supplement, the
Designated CMT Telerate Page shall be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30 years)
specified in the applicable Pricing Supplement with respect to which the CMT
Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.
BOOK-ENTRY NOTES
Upon issuance, all Fixed Rate Book-Entry Notes having the same Issue Date,
Interest Rate, Interest Payment Dates, redemption provision, if any,
repayment provision, if any, and Maturity Date and all Floating Rate
Book-Entry Notes having the same Base Rate, Initial Interest Rate, Interest
Reset Dates, Interest Reset Period, Spread or Spread Multiplier, Index
Maturity, redemption provision, if any, repayment provision, if any, and
Maturity Date will be represented by a single Global Security. Each Global
Security representing Book-Entry Notes will be deposited with, or on behalf
of, the Depositary and registered in the name of a nominee of the Depositary.
The Depositary has advised the Company and the Agent as follows: the
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. The Depositary was created to hold
securities of its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating
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the need for physical movement of securities certificates. The Depositary's
participants include securities brokers and dealers (including the Agents),
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.
A further description of the Depositary's procedure with respect to Global
Securities representing Book-Entry Notes is set forth in the accompanying
Prospectus under "Description of Debt Securities--Global Securities." The
Depositary has confirmed to the Company, the Agents and the Trustee that it
intends to follow such procedures.
SINKING FUND
Unless otherwise specified in the applicable Pricing Supplement, no
sinking fund will be provided for the Notes.
REDEMPTION
Although the Notes will not generally be redeemable prior to their
Maturity Date, the Company in the applicable Pricing Supplement relating to a
Note may specify that such Note will be redeemable at the Company's option on
a date or dates specified prior to its Maturity Date at a price or prices set
forth in the applicable Pricing Supplement, together with accrued interest to
the date of redemption. The Company may redeem any of the Notes which are
redeemable and remain outstanding either in whole or from time to time in
part, upon not less than 30, nor more than 60, days notice. If less than all
of the Notes with like tenor and terms are not redeemed, the Notes to be
redeemed shall be selected by the Trustee by such method as the Trustee shall
deem fair and appropriate.
The amount of any Discount Note payable in the event of redemption by the
Company or acceleration of the Maturity Date thereof, in lieu of the stated
principal amount due at the Maturity Date, shall be the Amortized Face Amount
of such Discount Note as of the date of such redemption, repayment or
acceleration. The "Amortized Face Amount" of a Discount Note shall be the
amount equal to (a) the Issue Price of such Discount Note set forth in the
applicable Pricing Supplement plus (b) the portion of the difference between
the Issue Price and the principal amount of such Discount Note that has
accrued at the yield to maturity set forth in the Pricing Supplement
(computed in accordance with generally accepted United States bond yield
computation principles) at the date as of which the Amortized Face Amount is
calculated, but in no event shall the Amortized Face Amount of such Discount
Note exceed its stated principal amount. See also "Certain Federal Income Tax
Considerations--United States Persons--Discount Notes."
REPAYMENT AND REPURCHASE
Although the Notes will not generally be repayable at the option of the
holder prior to their Maturity Date, the Company, in the Pricing Supplement
relating to a Note, may specify that such Note will be repayable at the
option of the holder on a date or dates specified prior to its Maturity Date
at a price or prices set forth in the applicable Pricing Supplement, together
with accrued interest to the date of repayment.
In order for a Note to be repaid, the Paying Agent (the Company has
initially appointed the Trustee as Paying Agent) must receive at least 30,
but not more than 45, days prior to the repayment date (i) the Note with the
form entitled "Option to Elect Repayment" on the reverse of the Note duly
completed or (ii) a facsimile transmission or a letter from a member of a
national securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or trust company in the United States of
America setting forth the name of the holder of the Note, the principal
amount of the Note, the principal amount of the Note to be repaid, the
certificate number or a description of the tenor and terms of the Note, a
statement that the option to elect repayment is
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being exercised thereby and a guarantee that the Note to be repaid with the
form entitled "Option to Elect Repayment" on the reverse of the Note duly
completed will be received by the Paying Agent not later than five Business
Days after the date of such facsimile transmission or letter and such Note
and form duly completed are received by the Paying Agent by such fifth
Business Day. Exercise of the repayment option by the holder of a Note shall
be irrevocable. The repayment option may be exercised by the holder of a Note
for less than the entire principal amount of the Note provided that the
principal amount of the Note remaining outstanding after repayment is an
authorized denomination.
The Company may at any time purchase Notes at any price in the open market
or otherwise. Notes so purchased by the Company may be held or resold or, at
the discretion of the Company may be surrendered to the Trustee for
cancellation.
CERTAIN LIMITATIONS ON CLAIMS IN BANKRUPTCY
If a bankruptcy proceeding is commenced in respect of the Company, the
claim of the holder of a Discount Note may, under Section 502(b)(2) of Title
11 of the United States Code, be limited to the issue price of such Note plus
that portion of any original issue discount that is amortized from the date
of issue to the commencement of the proceeding.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the principal U.S. Federal tax consequences
resulting from the beneficial ownership of Notes by certain persons. This
summary does not purport to consider all the possible U.S. Federal 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 held as capital assets, whether issued in U.S.
dollars or currencies or composite currencies other than U.S. dollars
("Foreign Currency"). Moreover, except as expressly indicated, it addresses
initial purchasers and does not address 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 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-U.S.
Holders", this summary is not applicable to non-United States persons not
subject to U.S. Federal income tax on their worldwide income. This summary is
based upon the U.S. 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, any of 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 U.S. 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.
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ORIGINAL ISSUE DISCOUNT
The following discussion summarizes the U.S. 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 2, 1994, the Treasury
Department published final regulations (the "OID Regulations") which expand
and illustrate the rules set forth in the Code.
Special rules apply to OID on a 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 an issue of 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 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
Floating Rate Note may be a Discount Note where (i) it 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 Note 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) it provides for significant front-loading or back-loading of
interest; (iii) it bears interest at certain combinations of floating or
fixed rates; or (iv) it provides for certain other kinds of contingent
payments. Notice will be given in the applicable Pricing Supplement when 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 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.
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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 or 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
Notes 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 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.
U.S. Holders of Discount Notes 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
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 treating
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.
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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, a cash basis U.S. Holder of a Short-Term Note is not
required to include OID in income as it accrues for U.S. Federal income tax
purposes unless it 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
include OID in income as it accrues 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 Short-Term Notes will be ordinary
income to the extent of the OID accrued on a straight-line basis (unless an
election is made to accrue the OID under the constant yield method) through
the date of sale or retirement. U.S. Holders who are not required and do not
elect to include OID on Short-Term Notes in income as it accrues 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 U.S. Holder, on a constant-yield basis.
For purposes of determining the amount of OID subject to these rules, the
OID Regulations provide that interest payments on a Short-Term Note are not
qualified stated interest, but instead are included in the Short-Term Note's
stated redemption price at maturity. However, all payments on Short-Term
Notes, whether denominated as principal or interest, will be treated as
taxable payments of accrued OID, to the extent that OID as accrued at time of
payment.
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 may not be revoked without the consent of the Internal
Revenue Service ("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 Market Discount 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
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with respect to which it is made and is irrevocable. 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 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 above under "Notes Purchased at a
Market Discount"), acquisition discount, DE MINIMIS market discount and
unstated interest, as adjusted by any amortizable bond premium (described
above 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.
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
above, then the electing U.S. Holder will be treated as having made the
election (discussed above 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 below under "Foreign Currency Notes--Exchange Gain or Loss", 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.
S-16
<PAGE>
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 may not be revoked 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.
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.
NON-U.S. HOLDERS
Subject to the discussion of backup withholding below, payments of
principal (and premium, if any) and interest (including OID) by the Company
or any agent of the Company (acting in its capacity as such) to any holder of
a Note that is not a U.S. Holder (a "Non-U.S. Holder") will not be subject to
U.S. Federal withholding tax, provided, in the case of interest (including
OID), that (i) the Non-U.S. Holder does not actually or constructively own
10% or more of the total combined voting power of all classes of stock of the
Company entitled to vote, (ii) the Non-U.S. Holder is not a controlled
foreign corporation for U.S. tax purposes that is related to the Company
(directly or
S-17
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indirectly) through stock ownership and (iii) either (A) the Non-U.S. Holder
certifies to the Company or its agent under penalties of perjury that it is
not a United States person and provides its name and address or (B) a
securities clearing organization, bank or other financial institution that
holds customers' securities in the ordinary course of its trade or business
(a "financial institution") and holds the Note certifies to the Company or
its agent under penalties of perjury that such statement has been received
from the Non-U.S. Holder by it or by another financial institution and
furnishes the payor with a copy thereof.
If a Non-U.S. Holder is engaged in a trade or business in the United
States and interest (including OID) on the Note is effectively connected with
the conduct of such trade or business, such Non-U.S. Holder may claim
exemption from U.S. Federal withholding tax on such interest (or OID) by
providing, in lieu of the certificate described in the preceding paragraph, a
properly executed IRS Form 4224. However, such a Non-U.S. Holder may be
subject to U.S. Federal income tax on such interest (or OID) in the same
manner as if it were a U.S. Holder. In addition, if the Non-U.S. Holder is a
foreign corporation, it may be subject to a branch profits tax equal to 30%
of its effectively connected earnings and profits for the taxable year,
subject to certain adjustments. For purposes of the branch profits tax,
interest (including OID) on a Note will be included in the earnings and
profits of such holder if such interest (or OID) is effectively connected
with the conduct by such holder of a trade or business in the United States.
Any capital gain, market discount or exchange gain realized on the sale,
exchange, retirement or other disposition of a Note by a Non-U.S. Holder will
not be subject to U.S. Federal income or withholding taxes if (i) such gain
is not effectively connected with a U.S. trade or business of the Non-U.S.
Holder and (ii) in the case of an individual, such Non-U.S. Holder (A) is not
present in the United States for 183 days or more in the taxable year of the
sale, exchange, retirement or other disposition or (B) does not have a tax
home (as defined in Section 911(d)(3) of the Code) in the United States in
the taxable year of the sale, exchange, retirement or other disposition and
the gain is not attributable to an office or other fixed place of business
maintained by such individual in the United States.
Notes held by an individual who is neither a citizen nor a resident of the
United States for U.S. Federal tax purposes at the time of such individual's
death will not be subject to U.S. Federal estate tax, provided that the
income from such Notes was not or would not have been effectively connected
with a U.S. trade or business of such individual and that such individual
qualified for the exemption from U.S. Federal withholding tax (without regard
to the certification requirements) described above.
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 who establish their eligibility for an
exemption, 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
S-18
<PAGE>
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 payment 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 U.S. Federal income tax liability if the required
information is furnished to the IRS. Provisions relating to information
reporting and backup withholding are the subject of proposed regulations
which would modify the current rules in certain respects for payments made
after December 31, 1997.
PLAN OF DISTRIBUTION
The Notes are offered on a continuing basis by the Company through the
Agents, which have agreed to use their best efforts to solicit orders for the
purchase of the Notes. The Company reserves the right to sell Notes directly
to investors on its own behalf in those jurisdictions where it is authorized
to do so. The Company will have the sole right to accept orders to purchase
Notes and may reject any proposed purchase of Notes in whole or in part. Each
Agent will have the right, in its discretion reasonably exercised, to reject
any proposed purchase of Notes through it in whole or in part. Payment of the
purchase price of Notes will be required to be made in immediately available
funds. The Company will pay each Agent a commission ranging from .125% to
.750%, depending upon maturity of the Notes sold, of the principal amount of
Notes sold through such Agent. No commission will be payable on any sales
made directly by the Company.
The Company may also sell Notes at a discount to an Agent as principal for
resale to one or more investors and other purchasers at varying prices
related to prevailing market prices at the time of resale or, if set forth in
the applicable Pricing Supplement, at a fixed public offering price, as
determined by such Agent. After any initial public offering of Notes to be
resold to investors and other purchasers, the public offering price (in the
case of Notes to be resold at a fixed public offering price) the concession
and the discount may be changed. In addition, an Agent may offer Notes
purchased by it as principal to other dealers. Notes sold by an Agent to a
dealer may be sold at a discount and, unless otherwise specified in the
applicable Pricing Supplement, such discount allowed will not be in excess of
the discount received by such Agent from the Company. Unless otherwise
specified in the applicable Pricing Supplement, any Note purchased by an
Agent as principal will be purchased at 100% of the principal amount thereof
less a percentage equal to the commission applicable to an agency sale of a
Note of identical maturity.
Concurrently with the offering of the Notes through the Agents or
otherwise as described herein, the Company may issue other Debt Securities as
described in the accompanying Prospectus.
The Agents, whether acting as agent or principal, may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 (the
"Securities Act"). The Company has agreed to indemnify the Agents against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments that the Agent may be required to make in respect
thereof.
No Note will have an established trading market when issued. The Notes
will not be listed on any securities exchange. Each Agent may make a market
in the Notes, but such Agent is not obligated to do so and may discontinue
any market-making at any time without notice. There can be no assurance of a
secondary market for any Notes or that the Notes will be sold.
Each Agent and certain of its affiliates may from time to time engage in
transactions with, and perform investment banking and commercial lending
services for, the Company and certain of its affiliates in the ordinary
course of business.
S-19
<PAGE>
$800,000,000
RYDER SYSTEM, INC.
DEBT SECURITIES
-------------------------
Ryder System, Inc. (the "Company") from time to time may offer its debt
securities (the "Debt Securities"), in one or more Series, of up to
$800,000,000 in aggregate principal amount (or net proceeds in the case of
securities issued at an original issue discount), including the equivalent
thereof in other currencies, or composite currency units such as the European
Currency Unit, in amounts, at prices and on terms to be determined at the
time of offering. See "Plan of Distribution."
The Debt Securities, when issued, will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company.
When a particular Series of Debt Securities is offered (the "Offered Debt
Securities"), a supplement to this Prospectus will be delivered (the
"Prospectus Supplement") together with this Prospectus setting forth the
terms of such Offered Debt Securities, including the specific designation,
aggregate principal amount, denominations, maturity, interest rate (or method
for its calculation) and payment dates, if any, any redemption or repayment
terms, the initial public offering price, whether such Offered Debt
Securities will be issued, in whole or in part, in registered, bearer or
global form (or any two or three of such forms), the names of, and the
principal amounts to be purchased by or through underwriters, dealers or
agents, if any, and the compensation of such persons, any listing of the
Offered Debt Securities on a securities exchange and other terms in
connection with the offering and sale of such Offered Debt Securities.
The Company may sell the Debt Securities to or through underwriters and also
may sell the Debt Securities directly to other purchasers or through agents
or dealers. See "Plan of Distribution."
-------------------------
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 Debt Securities
unless accompanied by a Prospectus Supplement.
The Date of this Prospectus is April 20, 1995.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT OTHER THAN THOSE CONTAINED
IN, OR INCORPORATED BY REFERENCE IN, THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY AGENT,
UNDERWRITER OR DEALER. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
DEBT SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THE DELIVERY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT THE
INFORMATION CONTAINED 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 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"). Such reports and other information
concerning the Company can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices at 500 West
Madison Street, Chicago, Illinois 60661-2511 and 7 World Trade Center, New
York, New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. Certain securities of the Company are listed
on the New York, Chicago and Pacific stock exchanges. Reports and other
information concerning the Company can also be inspected in the offices of
such stock exchanges.
The Company has filed with the Commission a registration statement on Form
S-3 with respect to the Debt Securities (herein, together with all amendments
and exhibits, referred to as the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus
does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules
and regulations of the Commission. For further information, reference is
hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, which has been filed by the Company with the Commission
pursuant to the Exchange Act, is incorporated by reference in this Prospectus
and shall be deemed to be a part hereof.
All documents filed by the Company with the Commission 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 made by this
Prospectus and any accompanying Prospectus Supplement shall be deemed to be
incorporated herein by reference and shall be deemed to be a part hereof from
the date of filing of such documents (such documents, and the documents
enumerated above, being herein referred to as "Incorporated Documents";
provided, however, that the documents enumerated above and documents
subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act prior to the filing with the Commission of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1994 shall not be Incorporated Documents or be incorporated by reference in
this Prospectus or be a part hereof from and after the filing of such Annual
Report on Form 10-K).
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of the Registration Statement or this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed Incorporated Documents or in an accompanying Prospectus
Supplement modifies or supersedes such statement. Any such
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<PAGE>
statement so modified or superseded shall not be deemed, except as modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all Incorporated Documents, other
than exhibits to such Incorporated Documents unless such exhibits are
specifically incorporated by reference into the Incorporated Documents.
Requests should be directed to James M. Herron, Senior Executive Vice
President and General Counsel, Ryder System, Inc., 3600 N.W. 82nd Avenue,
Miami, Florida 33166 (Telephone: 305/593-3283).
RYDER SYSTEM, INC.
The Company was incorporated in Florida in 1955. Through its subsidiaries,
the Company engages primarily in the following businesses: (1) full service
leasing and short-term rental of trucks, tractors and trailers; (2)
integrated logistics services; (3) public transit management and student
transportation; and (4) transportation by truck of automobiles, trucks and
dry freight.
The principal executive offices of the Company are located at 3600 N.W.
82nd Avenue, Miami, Florida 33166. Its telephone number is 305/593-3726.
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement, the net proceeds
available to the Company from the sale of the Offered Debt Securities may be
used for general corporate purposes, which might include the repayment of
indebtedness, working capital, capital expenditures, acquisitions and the
repurchase of shares of the Company's equity securities. Pending use for
these purposes, the Company may invest proceeds from the sale of the Offered
Debt Securities in short-term marketable securities. The precise amount and
timing of sales of any Debt Securities will be dependent on market conditions
and the availability and cost of other funds to the Company.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company and its subsidiaries, whether or not consolidated, for each of
the periods indicated. For purposes of computing the ratio of earnings to
fixed charges, fixed charges consist of interest expense plus interest
capitalized and that portion (one third) of rental expense considered to
represent interest. Earnings are computed by adding fixed charges, except
interest capitalized, to earnings from continuing operations before income
taxes. On December 7, 1993, the Company completed the spin-off of its
aviation services businesses through a distribution of common shares of
Aviall, Inc. to holders of the Company's common stock. Prior period ratios
have been restated to exclude discontinued operations, such as those aviation
services businesses.
YEARS ENDED DECEMBER 31,
---------------------------------------
1994 1993 1992 1991 1990
---------------------------------------
2.36 2.23 1.90 1.29 1.43
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain
general terms and provisions of the Debt Securities to which a Prospectus
Supplement may relate. The particular terms of the Offered Debt Securities
and the extent, if any, to which such general provisions do not apply to the
Offered Debt Securities will be described in the Prospectus Supplement
relating to such Offered Debt Securities.
The Offered Debt Securities may be issued from time to time under an
Indenture dated as of May 1, 1987 and supplemented as of November 15, 1990
and June 24, 1992 (as supplemented, the "Indenture"), between the Company and
The Chase Manhattan Bank (National Association), as
3
<PAGE>
Trustee (the "Trustee"). The following are brief summaries of certain
provisions of the Indenture and are subject to the detailed provisions of
such Indenture, to which reference is hereby made for a complete statement of
such provisions. References appearing below are to the Indenture and,
wherever particular provisions are referred to, such provisions are
incorporated by reference as a part of the statement made, and the statement
is qualified in its entirety by such reference. Whenever a capitalized term
is referred to and not herein defined, the definition thereof is contained in
the Indenture.
GENERAL
The Debt Securities which may be offered under the Indenture are not
limited in amount and may be issued from time to time in one or more Series.
(Section 2.01.)
The Debt Securities may be issued in fully registered form without coupons
("Registered Securities") or in bearer form with or without coupons ("Bearer
Securities"). In addition, Debt Securities may be issued in the form of one
or more global securities (each a "Global Security"). Registered Securities
which are book-entry securities ("Book-Entry Securities") will be issued as
registered Global Securities. Bearer Securities may be issued in the form of
temporary or definitive Global Securities. Unless otherwise provided in the
Prospectus Supplement, the Debt Securities will be only Registered
Securities.
Debt Securities of a single Series may be issued at various times with
different maturity dates and different principal repayment provisions, may
bear interest at different rates, may be issued at or above par or with an
original issue discount, and may otherwise vary, all as provided in the
Indenture.
The Debt Securities will be unsecured and unsubordinated general
obligations of the Company and will rank on a parity with all other unsecured
and unsubordinated indebtedness of the Company.
Reference is made to the Prospectus Supplement relating to the particular
Series of Offered Debt Securities for the following terms of such Debt
Securities: (a) the title of such Debt Securities; (b) any limit upon the
aggregate principal amount of such Debt Securities; (c) the initial public
offering price; (d) the currency or currency unit of payment; (e) the date or
date on which the principal of such Debt Securities is payable; (f) the rate
or rates at which such Debt Securities will bear interest or the method for
calculating such rate, if any, the date or dates from which such interest
will accrue, the dates on which such interest will be payable and the record
date for the interest payable on any interest payment date; (g) whether such
Debt Securities will be issued as Registered Securities or Bearer Securities
or both; (h) the place where the principal of and interest on such Debt
Securities will be payable; (i) the period or periods, if any, within which
the price or prices at which and the terms and conditions upon which such
Debt Securities may be redeemed by the Company; (j) the obligation, if any,
of the Company to redeem or purchase such Debt Securities pursuant to any
sinking fund or at the option of a Holder thereof, and the terms and
conditions upon which such Debt Securities shall be redeemed or purchased
pursuant to such obligation; (k) any provisions for the remarketing of the
Debt Securities by and on behalf of the Company; (l) if other than
denominations of $1,000 and integral multiples thereof, the denominations in
which such Debt Securities shall be issuable; (m) if other than the principal
amount thereof, the portion of the principal amount of such Debt Securities
which shall be payable upon declaration of acceleration of the maturity
thereof; (n) whether the Offered Debt Securities are to be issued in whole or
in part in the form of one or more Global Securities and, if so, the identity
of the depositary for such Global Security or Securities; (o) whether and
under what circumstances the Company will pay additional amounts to any
Holder of Offered Debt Securities who is not a United States person in
respect of any tax, assessment or other governmental charge required to be
withheld or deducted and, if so, whether the Company will have the option to
redeem rather than pay any additional amounts; (p) any additions, deletions
or modifications to the covenants, events of default or the ability of the
Company to discharge its obligations set forth in the Indenture, that will be
applicable with respect
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<PAGE>
to the Offered Debt Securities; or (q) any other terms not inconsistent with
the Indenture. (Section 2.02.) If any Debt Securities of a particular Series
are Bearer Securities, the Prospectus Supplement will describe additional
provisions relating to, and any applicable restrictions on, such Bearer
Securities, including certain tax consequences.
A Debt Security will not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent. Such signature will be
conclusive evidence that the Debt Security has been authenticated under the
Indenture. (Section 2.03.)
The Company will maintain an office or agency where registered Debt
Securities may be presented for registration of transfer or exchange
("Registrar") and an office or agency where the Debt Securities and coupons,
if any, may be presented for payment ("Paying Agent"). For a discussion of
certain restrictions on the registration, transfer and exchange of Global
Securities, see "Global Securities". If the Company fails to maintain a
Registrar or Paying Agent, the Trustee will act as such. (Sections 2.05 and
4.04.)
CERTAIN DEFINITIONS
A summary of the definitions of certain terms in the Indenture follows
(reference should be made to Article 1 of the Indenture for complete
definitions of the following and other terms):
"Additional Amounts" means any additional amounts which are required by
a Debt Security or by or pursuant to a Board Resolution, under
circumstances specified therein, to be paid by the Company in respect of
certain taxes, assessments or other governmental charges imposed on
certain Holders of Debt Securities.
"After-Acquired Indebtedness" means (a) pre-existing indebtedness
assumed by the Company or a Restricted Subsidiary as a result of the
acquisition of the assets or stock of an entity other than a Subsidiary of
the Company and (b) liens on property existing at the time of acquisition
of said property.
"Indebtedness" means indebtedness other than Subordinated Indebtedness
of the Company or its Restricted Subsidiaries for borrowed money or
leasing obligations as reflected on the Consolidated balance sheet of the
Company and its Restricted Subsidiaries, and indebtedness of other parties
guaranteed by the Company or its Restricted Subsidiaries.
"Leasing Indebtedness" means the capitalized Indebtedness of any lease
obligations on personal property.
"Net Tangible Assets" means total assets as reflected on the
Consolidated balance sheet of the Company and its Restricted Subsidiaries,
after deduction for minority interests, less: (a) goodwill and other
intangibles, (b) amounts invested in, advanced to, or equity in
Unrestricted Subsidiaries and (c) unamortized debt discount.
"Original Issue Discount Debt Security" means a Debt Security which
provides that an amount less than the principal amount thereof shall
become due and payable upon acceleration of the maturity or redemption
thereof, or any Debt Security which for United States Federal income tax
purposes would be considered an original issue discount debt security.
"Restricted Subsidiary" means any Subsidiary other than an Unrestricted
Subsidiary.
"Secured Indebtedness" means Indebtedness, other than Intercompany
Indebtedness, secured by a lien on any property and any unsecured
Indebtedness of any Restricted Subsidiary other than a Foreign Financing
Subsidiary.
"Unrestricted Subsidiary" means (a) any Subsidiary (other than a
Foreign Financing Subsidiary) substantially all of the property of which
is located or substantially all of the business of which is conducted
outside of the United States of America or its possessions, Canada or the
United Kingdom and (b) any other Subsidiary (including, if so designated,
a
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<PAGE>
Foreign Financing Subsidiary) so designated by the Board of Directors or
the Chief Executive Officer of the Company.
CERTAIN COVENANTS OF THE COMPANY
LIMITATION ON SECURED INDEBTEDNESS.
Unless otherwise provided in the Prospectus Supplement, the Company and
its Restricted Subsidiaries will not incur any Secured Indebtedness unless
Debt Securities then outstanding are equally and ratably secured, with the
following exceptions: (a) Secured Indebtedness existing at the date of the
Indenture, (b) Indebtedness of a corporation in existence at the time it
becomes a Restricted Subsidiary, (c) After-Acquired Indebtedness, (d)
Intercompany Indebtedness secured in favor of the Company or any Restricted
Subsidiary, (e) Indebtedness deemed Secured Indebtedness by virtue of certain
liens or charges not yet due or payable without penalty or which are being
contested and for which reserves have been set aside, (f) industrial revenue
bond Indebtedness, (g) Real Property Indebtedness, (h) Leasing Indebtedness
not to exceed 10% of Consolidated Net Tangible Assets and (i) additional
Secured Indebtedness and Leasing Indebtedness not to exceed a total of 15% of
Consolidated Net Tangible Assets. (Section 4.06.)
LIMITATION ON CONSOLIDATIONS AND MERGERS.
The Company shall not consolidate with or merge into, or transfer all or
substantially all of its assets to, another entity unless such entity is a
corporation that assumes all the obligations under the Debt Securities and
the Indenture and certain other conditions are met (whereupon all such
obligations of the Company shall terminate). (Section 5.01.)
EVENTS OF DEFAULT AND REMEDIES
Unless otherwise provided in the Prospectus Supplement, the Events of
Default with respect to the Debt Securities of any Series are: (a) default
for 30 days in the payment of interest thereon, (b) default in the payment of
principal thereof, (c) default in performance of any other agreement of the
Company with respect thereto which continues for 90 days after written
notice, and (d) certain events of bankruptcy, insolvency or reorganization.
(Section 6.01.) If an Event of Default is continuing with respect to the Debt
Securities of any Series, the Trustee or the Holders of 25% in principal
amount of the Debt Securities of that Series, by notice in writing to the
Company and the Trustee, may accelerate the principal of such Debt
Securities, but the Holders of a majority in principal amount of such Debt
Securities may rescind such acceleration if all existing Events of Default
have been cured. (Section 6.02.)
Holders of Debt Securities may not enforce the Indenture except in the
case of the failure of the Trustee, for 60 days, to act after notice of an
Event of Default and a request to enforce the Indenture by the Holders of 25%
in principal amount of the Series of Debt Securities affected thereby and an
offer of indemnity satisfactory to the Trustee. (Section 6.06.) This
provision will not prevent any Holder of a Debt Security from enforcing
payment of the principal of and interest on such Debt Security at the
respective due dates thereof. (Section 6.07.) The Holders of a majority in
principal amount of the Debt Securities of any Series may direct the manner
of conducting any proceedings for any remedy or trust power available to the
Trustee. The Trustee, however, may refuse to follow any direction that
conflicts with law or the Indenture, is unduly prejudicial to Holders of
other Debt Securities or would involve the Trustee in personal liability.
(Section 6.05.)
Holders of a majority in principal amount of any Series of Debt Securities
may waive any Default with respect to that Series except a Default in payment
of the principal or interest. (Section 6.04.)
The Company will furnish an annual Officers' Certificate to the Trustee as
to knowledge of any Default under the Indenture. (Section 4.03.)
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SATISFACTION AND DISCHARGE
Unless otherwise provided in the Prospectus Supplement, the Company may
terminate certain of its obligations under the Indenture, including its
obligation to comply with the covenants described above with respect to the
Debt Securities of any Series which does not provide for the payment of any
Additional Amounts, on the terms and subject to the conditions contained in
the Indenture, by depositing in trust with the Trustee, money or U.S.
Government Obligations sufficient to pay principal and interest on such Debt
Securities to maturity. Such deposit and termination is conditioned upon the
Company's delivery of an opinion of independent tax counsel that the Holders
of such Debt Securities will have no Federal income tax consequences as a
result of such deposit and termination. Such termination will not relieve the
Company of its obligation to pay when due the principal of or interest on the
Debt Securities if the Debt Securities are not paid from the money or U.S.
Government Obligations held by the Trustee for the payment thereof. (Section
8.01.)
MODIFICATION AND WAIVER
The Company and the Trustee, with the consent of the Holders of 66 2/3 %
in principal amount of the Debt Securities affected, may execute supplemental
indentures amending the Indenture or such Debt Securities, except that no
such amendment may, without the consent of the Holders of the affected Debt
Securities, among other things, change the maturity or reduce the principal
amount thereof, change the rate or the time of payment of interest thereon,
change any obligation of the Company to pay Additional Amounts relating to a
particular Debt Security or reduce the amount of principal of an Original
Issue Discount Debt Security that would be due and payable upon a declaration
of acceleration of the maturity thereof. (Sections 9.02 and 9.03.)
The Company and the Trustee may also, without the consent of any Holders
of Debt Securities, enter into supplemental indentures for the purposes,
among other things, of curing ambiguities and inconsistencies and making
changes that do not adversely affect the rights of any Holders of Debt
Securities. (Section 9.01.)
PAYMENT AND PAYING AGENTS
Unless otherwise provided in the Prospectus Supplement, payment of
principal of, premium, if any, and interest, if any, on Registered Securities
will be made in U.S. dollars at the office of such Paying Agent or Paying
Agents as the Company may designate from time to time, except that at the
option of the Company payment of any interest may be made by check mailed to
the address of the person entitled thereto as such address shall appear in
the security register maintained by the Registrar. Unless otherwise provided
in the Prospectus Supplement, payment of any installment of interest on
Registered Securities will be made to the person in whose name such
Registered Security is registered at the close of business on the regular
record date for such interest. (Section 4.01.)
Unless otherwise provided in the Prospectus Supplement, payment of
principal of, premium, if any, and interest, if any, on Bearer Securities
will be payable in U.S. dollars, subject to any applicable laws and
regulations, at the offices of such Paying Agents outside the United States
as the Company may designate from time to time and payment of interest on
Bearer Securities with coupons appertaining thereto on any Interest Payment
Date will be made only against surrender of the coupon relating to such
Interest Payment Date. No payment of interest on a Bearer Security will be
made unless on the earlier of the date of the first such payment by the
Company or the delivery by the Company of the Bearer Security in definitive
form, a written certificate in the form required by the Indenture is provided
to the Trustee stating that on such date the Bearer Security is not owned by
a United States person or, if a beneficial interest in such Bearer Security
is owned by a United States person, that such United States person (i) is a
foreign branch of a United States financial institution, (ii) acquired and
holds the Bearer Security through the foreign branch of a United States
financial institution (and, in either case (i) or (ii), such financial
institution agrees to comply with the
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requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations thereunder) or (iii) is
a financial institution purchasing for resale during the restricted period
(as defined under "Global Securities--Bearer Securities") only to non-United
States persons outside the United States. As used herein, "United States"
means the United States of America (including the states and the District of
Columbia), its territories, its possessions and any other areas subject to
its jurisdiction. No payment with respect to any Bearer Security will be made
at any office or agency of the Company in the United States or by check
mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States. Notwithstanding the
foregoing, payments of principal of, premium, if any, and interest, if any,
on Bearer Securities denominated and payable in U.S. dollars will be made at
the office of the Company's Paying Agent in The City of New York, if (but
only if) payment of the full amount thereof at all offices or agencies
outside the United States is illegal or effectively precluded by exchange
controls or other similar restrictions. (Section 4.04.)
Unless otherwise provided in the Prospectus Supplement, the Corporate
Trust Office of the Trustee in The City of New York will be designated as the
Company's sole Paying Agent for payments with respect to Offered Debt
Securities that are issuable solely as Registered Securities and as the
Company's Paying Agent in The City of New York for payments with respect to
Offered Debt Securities (subject to the limitations described above in the
case of Bearer Securities) that are issuable solely as Bearer Securities or
as both Registered Securities and Bearer Securities. Any Paying Agents
outside the United States and any other Paying Agents in the United States
initially designated by the Company for the Offered Debt Securities will be
named in the 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, if Debt Securities of a Series are issuable solely as Registered
Securities, the Company will be required to maintain a Paying Agent in each
place of payment for such Series and, if Debt Securities of a Series are
issuable as Bearer Securities, the Company will be required to maintain (i) a
Paying Agent in The City of New York for payments with respect to any
Registered Securities of the Series (and for payments with respect to Bearer
Securities of the Series in the circumstances described above, but not
otherwise) and (ii) a Paying Agent in a place of payment located outside the
United States where Debt Securities of such Series and any coupons
appertaining thereto may be presented and surrendered for payment; provided,
that if the Debt Securities of such Series are listed on The International
Stock Exchange of the United Kingdom and the Republic of Ireland Limited or
the Luxembourg Stock Exchange or any other stock exchange located outside the
United States and such stock exchange shall so require, the Company will
maintain a Paying Agent in London or Luxembourg or any other required city
located outside the United States, as the case may be, for the Debt
Securities of such Series. (Section 4.04.)
GLOBAL SECURITIES
The Debt Securities of a Series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (a "Depositary") identified in the Prospectus
Supplement relating to such Series. Global Securities may be issued in either
registered or bearer form, and in either temporary or definitive form. Unless
and until it is exchanged in whole for Debt Securities in definitive form, a
Global Security may not be transferred except as a whole by the U.S.
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor. (Section 2.16.)
The specific terms of any depositary arrangement with respect to the
Offered Debt Securities will be described in the Prospectus Supplement
relating thereto. Unless otherwise specified, the Company anticipates that
the following provision will apply to all depositary arrangements.
Unless otherwise specified in the Prospectus Supplement, Registered
Securities which are to be represented by a Global Security to be deposited
with or on behalf of a Depositary will be
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represented by a Global Security registered in the name of such Depositary or
its nominee. (Section 2.16.) Upon the issuance of a Global Security in
registered form, the Depositary for such Global Security will credit, on its
book-entry registration and transfer system, the respective principal amounts
of the Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited shall be designated by the
underwriters or selling agents for such Debt Securities, or by the Company if
such Debt Securities are offered and sold directly by the Company. Ownership
of beneficial interests in such Global Securities will be limited to
participants or persons that may hold interests through participants.
Ownership of beneficial interests in such Global Securities will be shown on,
and the transfer of that ownership will be effected only through, records
maintained by the Depositary or its nominee for such Global Security or by
participants or persons that hold through participants. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security in registered form, or its
nominee, is the registered owner of such Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or Holder
of the Debt Securities represented by such Global Security for all purposes
under the Indenture governing such Debt Securities. Except as set forth
below, owners of beneficial interests in such Global Securities will not be
entitled to have Debt Securities of the Series represented by such Global
Security registered in their names, will not receive or be entitled to
receive physical delivery of Debt Securities of such Series in definitive
form and will not be considered the owners or Holders thereof under the
Indenture.
Payment of principal of, premium, if any, and interest, if any, on Debt
Securities registered in the name of or held by a Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or the Holder of the Global Security representing such Debt
Securities. None of the Company, the Trustee, any Paying Agent or the
Registrar for such Debt Securities will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in a Global Security for such Debt Securities
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests. (Section 2.15.)
The Company expects that the Depositary for Debt Securities of a Series,
upon receipt of any payment of principal of, premium, if any, or interest, if
any, on permanent Global Securities, will immediately credit participants'
accounts with payments in amounts proportionate to their respective
beneficial interests in the principal amount of such Global Securities as
shown on the records of such Depositary. The Company also expects that
payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name,"
and will be the responsibility of such participants.
If a Depositary for Registered Securities is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed
by the Company within 90 days, the Company will issue individual certificates
for the Registered Securities in definitive form in exchange for the Global
Security or Securities representing such Registered Securities. In addition,
the Company may at any time and in its sole discretion determine not to have
any Registered Securities represented by one or more Global Securities and,
in such event, will issue individual certificates for the Registered
Securities in definitive form in exchange for the Global Security or
Securities representing such Registered Securities. In any such instance, an
owner of a beneficial interest in a Global Security will be entitled to
physical delivery in definitive form of individual certificates for the
Registered Securities of the Series represented by such Global Security equal
in principal amount to such beneficial interest and to have such individual
certificates registered in the name of the owner of such beneficial interest.
(Section 2.16.)
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BEARER SECURITIES.
If so specified in the Prospectus Supplement, all or any portion of the
Debt Securities of a Series that are issuable as Bearer Securities initially
will be represented by one or more temporary Global Securities, without
interest coupons, to be deposited with a Common Depositary in London for
Morgan Guaranty Trust Company of New York, Brussels Office, as operator of
the Euro-clear System ("Euro-clear") and Centrale de Livraison de Valeurs
Mobilieres, S.A. ("CEDEL") for credit to the respective accounts of the
beneficial owners of such Debt Securities (or to such other accounts as they
may direct). On and after the exchange date determined as provided in any
such temporary Global Security and described in the Prospectus Supplement,
each such temporary Global Security will be exchangeable for definitive
Global Securities without interest coupons, as specified in the Prospectus
Supplement, upon written certification (as described under "Payment and
Paying Agents") of non-United States beneficial ownership. Thereafter, the
beneficial owner of a Debt Security represented by a definitive Global
Security may at any time upon 30 days notice to the Trustee given through
Euro-clear or CEDEL, exchange its interest for definitive Bearer Securities
or Bearer Securities with coupons, if any. No Bearer Security delivered in
exchange for a portion of a temporary Global Security shall be mailed or
otherwise delivered to any location in the United States in connection with
such exchange. (Section 2.04.)
Unless otherwise provided in the Prospectus Supplement, interest in
respect of any portion of a temporary Global Security payable in respect of
an Interest Payment Date occurring prior to the issuance of definitive Debt
Securities will be paid to each of Euro-clear and CEDEL with respect to the
portion of the temporary Global Security held for its account upon delivery
to the Trustee of a certificate of non-United States beneficial ownership
signed by Euro-clear or CEDEL, as the case may be, in the form required by
the Indenture and dated no earlier than such Interest Payment Date. (Section
4.01.)
ABSENCE OF CERTAIN COVENANTS
The Company is not restricted by the Indenture from paying dividends or
from incurring, assuming or becoming liable for any type of debt or other
obligation or creating liens on its property, except as set forth under
"Limitation on Secured Indebtedness." The Indenture does not require the
maintenance of any financial ratios or specified levels of net worth or
liquidity. The Indenture contains no provisions which afford Holders of the
Debt Securities protection in the event of a highly leveraged transaction
involving the Company.
TITLE
Title to any Bearer Securities and any coupons appertaining thereto will
pass by delivery. The Company, the Trustee and any agent of the Company or
the Trustee may treat the bearer of any Bearer Security and the bearer of any
coupon and the registered owner of any Registered Security (including
Registered Securities in global registered form) as the absolute owner
thereof (whether or not such Debt Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes.
REGARDING THE TRUSTEE
The Company may from time to time maintain lines of credit, deposit
accounts and other customary banking relationships with (or with affiliates
of) The Chase Manhattan Bank (National Association), which also serves as
Trustee under the Indenture. M. Anthony Burns, Chairman of the Board,
President, Chief Executive Officer and a director of the Company and David T.
Kearns, a director of the Company, presently also serve as directors of The
Chase Manhattan Corporation, the parent company of the Trustee.
NOTICES
Notices to Holders of registered Debt Securities will be mailed by first
class mail to the address on the register kept by the Registrar. Notices to
Holders of Bearer Securities will be given by
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publication at least twice in a daily newspaper in London and, if any of the
Bearer Securities are listed on any stock exchange, in such other publication
as might be required by such exchange. (Section 10.02.)
PLAN OF DISTRIBUTION
GENERAL
The Company may sell the Debt Securities to or through underwriters and
also may sell the Debt Securities directly to other purchasers or through
agents or dealers. Only underwriters named in a Prospectus Supplement are
deemed to be underwriters in connection with the Debt Securities offered
thereby.
The distribution of the Debt Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed
from time to time, or at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. Each
Prospectus Supplement will describe the method of distribution of the Offered
Debt Securities. The Offered Debt Securities may include previously issued
Debt Securities which have been acquired and are being remarketed on behalf
of the Company.
In connection with the sale of the Debt Securities, such underwriters may
receive compensation from the Company or from purchasers of the Debt
Securities for whom they may act as agents in the form of discounts,
concessions or commissions. Underwriters, dealers and agents that participate
in the distribution of the Debt Securities may be deemed to be underwriters
and any discounts or commissions received by them and any profit on the
resale of the Debt Securities by them may be deemed to be underwriting
discounts and commissions under the Securities Act. Any such underwriter,
dealer or agent will be identified, and any such compensation will be
described, in the Prospectus Supplement. Any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers may
be changed from time to time.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of the Debt Securities
may be entitled to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the underwriters, dealers or
agents may be required to make in respect thereof.
Unless otherwise specified in the Prospectus Supplement, each underwriter,
dealer and agent participating in the distribution of any Debt Securities
which are Bearer Securities will agree that it will not offer, sell or
deliver, directly or indirectly, Bearer Securities in the United States or to
United States persons (other than offices located outside the United States
of certain United States financial institutions) in connection with the
original issuance of the Debt Securities.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, the Company will authorize
dealers or other persons acting as the Company's agents to solicit offers by
certain institutions to purchase Debt Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must
be approved by the Company. The obligations of any purchaser under any such
contract will not be subject to any conditions except that (a) the purchase
of the Offered Debt Securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject and (b) if the Offered Debt Securities are also being sold to
underwriters, the Company shall have sold to such underwriters the Offered
Debt Securities not sold for delayed delivery. The dealers and such other
persons will not have any responsibility in respect of the validity or
performance of such contracts.
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EXPERTS
The financial statements of Ryder System, Inc. as of December 31, 1994 and
1993, and for each of the years in the three-year period ended December 31,
1994, have been incorporated by reference herein in reliance upon the report
of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing. The reports of KPMG Peat Marwick LLP
covering the December 31, 1994 and 1993 financial statements refer to a
change in accounting method, for income taxes and post-retirement benefits
other than pensions, in 1993. To the extent that KPMG Peat Marwick LLP audits
and reports on financial statements of Ryder System, Inc. issued at future
dates, and consents to the use of their reports thereon, such financial
statements also will be incorporated by reference herein in reliance upon
their report and said authority.
LEGAL OPINIONS
Certain legal matters relating to the Debt Securities to be offered hereby
will be passed upon for the Company by James M. Herron, Senior Executive Vice
President and General Counsel of the Company, and for the underwriters, if
any, by Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New
York, New York 10019. Mr. Herron owns 11,246 shares of common stock of the
Company and options to purchase 190,667 shares of such stock.
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT
AND SUCH PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCES
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR
IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
---------------
TABLE OF CONTENTS
PAGE
PROSPECTUS SUPPLEMENT
Ratio of Earnings to Fixed Charges .... S-2
Terms of the Notes ..................... S-2
Certain U.S. Federal Income Tax
Considerations ....................... S-12
Plan of Distribution ................... S-19
PROSPECTUS
Available Information .................. 2
Incorporation of Certain Documents
by Reference ......................... 2
Ryder System, Inc. ..................... 3
Use of Proceeds ........................ 3
Ratio of Earnings to Fixed Charges .... 3
Description of Debt Securities ......... 3
Plan of Distribution ................... 11
Experts ................................ 12
Legal Opinions ......................... 12
$200,000,000
RYDER SYSTEM, INC.
MEDIUM-TERM NOTES,
SERIES 14
DUE NINE MONTHS
OR MORE
FROM DATE OF ISSUE
[RYDER LOGO]
SALOMON BROTHERS INC
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO.
INCORPORATED
PROSPECTUS SUPPLEMENT
DATED MAY 24, 1996
