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PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED AUGUST 22, 1996)
$3,000,000,000
[LOGO]
MEDIUM-TERM NOTES, SERIES H
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
------------------------------------------
Beneficial Corporation (the 'Company') may offer from time to time up to
$3,000,000,000 aggregate principal amount, or aggregate initial issue price, of
its Medium-Term Notes, Series H (the 'Notes') (subject to reduction as a result
of the offering, if any, of Securities, other than the Notes, pursuant to the
Registration Statement of which the accompanying Prospectus is a part), bearing
interest at fixed or variable rates ('Fixed Rate Notes' and 'Floating Rate
Notes,' respectively). The interest rates on Fixed Rate Notes and the method of
determining the interest rates on Floating Rate Notes will be established by the
Company from time to time and will be set forth in accompanying prospectus
supplements to this Prospectus Supplement ('Pricing Supplements'). Such interest
rates and such methods of determining interest rates are subject to change by
the Company, but no such change will affect any Note theretofore issued or as to
which an offer to purchase has been accepted by the Company. The Notes will have
maturities nine months or more from the date of issue. See 'Description of
Notes.'
The Notes will be issued only in fully registered form and in denominations
of $25,000 and any integral multiple of $1,000 in excess thereof. Each Note will
be represented by either a global security (a 'Global Note') registered in the
name of a nominee of The Depository Trust Company, as Depositary (the
'Depositary') (each such Note represented by a Global Note being referred to
herein as a 'Book-Entry Note'), or a certificate issued in definitive form (a
'Certificated Note'), as set forth in the applicable Pricing Supplement.
Beneficial interests in Book-Entry Notes will be shown on, and transfers thereof
will be effected only through, the records maintained by the Depositary's
participants.
Interest on Fixed Rate Notes will accrue from their dates of issue and,
unless otherwise specified in the applicable Pricing Supplement, will be payable
semiannually on each June 15 and December 15 and at maturity. The interest rate
on Floating Rate Notes will be determined by reference to the 'Commercial Paper
Rate,' 'Prime Rate,' 'Federal Funds Rate,' 'LIBOR,' 'Treasury Rate' or other
interest rate basis or formula, and may be adjusted by a 'Spread' and/or 'Spread
Multiplier' as defined herein. Interest on each Floating Rate Note will accrue
from its date of issue and will be payable as set forth in the applicable
Pricing Supplement and at maturity.
------------------------
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 AND ANY SUPPLEMENT HERETO. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Price to Agents' Discounts or Proceeds to
Public(1)(2) Commissions(2) Company(1)(2)(3)
<S> <C> <C> <C>
Per Note............ 100% Not to exceed .700% Not less than 99.300%
Total............... $3,000,000,000 Not to exceed $21,000,000 Not less than $2,979,000,000
</TABLE>
(1) Unless otherwise specified in a Pricing Supplement, Notes will be issued at
100% of principal amount.
(2) The Company has agreed to pay Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, J.P. Morgan Securities Inc., UBS Securities
LLC, Chase Securities Inc. and Salomon Brothers Inc (each, an 'Agent,' and
together, the 'Agents') a commission not to exceed .700% (or, with respect
to Notes for which the stated maturity is more than 30 years, such
commission as shall be agreed to by the Company and the related Agent at the
time of sale) of the principal amount of any Note sold through them,
depending upon the maturity of such Note. The Company also may sell Notes to
the Agents for resale to investors and other purchasers from time to time in
one or more transactions, including negotiated transactions, at varying
prices determined at the time of resale, or otherwise. Unless otherwise
specified in the applicable Pricing Supplement, any Note sold to an Agent as
principal will be purchased by it at a price equal to 100% of the principal
amount thereof less a discount equal to the commission applicable to an
agency sale of a Note of identical maturity. See 'Plan of Distribution'
concerning indemnification and other arrangements.
(3) Assuming Notes are issued at 100% of principal amount and before deducting
estimated expenses of $1,984,483.
------------------------
The Notes are offered on a continuing basis by the Company through the
Agents, which have agreed to use their best efforts to solicit purchases of the
Notes. Notes also may be sold to the Agents as principals, for resale to
investors and other purchasers. Notes also may be offered through other agents
or to other persons as principals. In such case, the names of the other agents
or principals will be set forth in a Pricing Supplement.
The Notes will not be listed on any securities exchange, and there can be
no assurance that the entire principal amount of the Notes offered by this
Prospectus Supplement and the accompanying Prospectus will be sold or that there
will be a secondary market for the Notes. The Company reserves the right to
withdraw, cancel or modify the offer made hereby without notice. The Company or
the soliciting Agent may reject any order in whole or in part. See 'Plan of
Distribution.'
------------------------
MERRILL LYNCH & CO.
J.P. MORGAN & CO.
UBS SECURITIES
CHASE SECURITIES INC.
SALOMON BROTHERS INC
------------------------
The date of this Prospectus Supplement is August 22, 1996
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DESCRIPTION OF NOTES
The following description of the particular terms of the Notes supplements
and, to the extent inconsistent therewith, replaces the description of the
general terms of the Securities set forth under the heading 'Description of
Securities' in the accompanying Prospectus, to which description reference is
made. The following description will apply to each Note unless otherwise
specified in the applicable Pricing Supplement. The Notes are referred to in the
Prospectus as the 'Offered Securities.'
GENERAL: The Notes are unsecured general obligations of the Company which
rank on a parity with the other unsecured and unsubordinated indebtedness for
borrowed money of the Company and are to be issued under an indenture, dated as
of April 1, 1989, as supplemented and restated by the First Supplemental and
Restated Indenture, dated as of December 1, 1990, between the Company and The
Chase Manhattan Bank (formerly The Chase Manhattan Bank (National Association)),
Trustee (the 'Trustee'), which indenture is referred to in this Prospectus
Supplement and the accompanying Prospectus as the 'Indenture.' For purposes of
the Indenture, the Notes offered hereby are part of a single series, unlimited
in aggregate principal amount.
Each Note will mature nine months or more from the date of issue, as
selected by the purchaser at the time of purchase and agreed to by the Company.
Fixed Rate Notes will mature on any Business Day (as defined below); Floating
Rate Notes will mature only on an Interest Payment Date (as hereinafter
defined), unless otherwise specified in the applicable Pricing Supplement. The
Notes are not redeemable prior to maturity.
The Notes are issuable in denominations of $25,000 and any larger
denomination which is an integral multiple of $1,000 approved by the Company.
Each Note is issuable in registered form only, without coupons.
Each Note will be issued initially in either book-entry form or
certificated form, as described below. See 'Book-Entry System.'
Payments on Notes issued in book-entry form will be made to the Depositary
or its nominee in accordance with the arrangements then in effect between the
Trustee and the Depositary. See ' -- Book-Entry System' in this Prospectus
Supplement and 'Description of Securities -- Global Securities' in the
accompanying Prospectus. In the case of Notes issued in certificated form,
principal and interest will be payable, the transfer of the Notes will be
registrable and Notes will be exchangeable for Notes bearing identical terms and
provisions at the office or agency of the Company in New York City designated
for such purpose; provided, however, that the payment of interest, other than
interest at maturity, may be made at the option of the Company by check mailed
to the address of the person in whose name the applicable Note is registered at
the close of business on the relevant record date as shown on the applicable
security register maintained by the Trustee. Interest will be payable on each
date specified in the Note on which an installment of interest is due and
payable (an 'Interest Payment Date') and at maturity.
Notwithstanding the foregoing, a holder of at least U.S. $10,000,000 in
aggregate principal amount of Notes issued in certificated form having the same
Interest Payment Dates may by written notice to the Trustee on or before the
relevant record date preceding an Interest Payment Date arrange to have the
interest payable on all Notes held by such holder on such Interest Payment Date
and all subsequent Interest Payment Dates, until written notice to the contrary
is given to the Trustee, made by wire transfer of immediately available funds to
an account at a bank in the City of New York (or other bank consented to by the
Company) designated by such holder (provided that such bank has appropriate
facilities therefor.)
BOOK-ENTRY SYSTEM: Upon issuance, all Fixed Rate Notes in book-entry form
having the same date of issue, interest rate and maturity will be represented by
a single Global Note and all Floating Rate Notes in book-entry form having the
same interest rate formula, date of issue, Initial Interest Rate, Interest
Payment Dates, Index Maturity, Interest Reset Dates, Spread and/or Spread
Multiplier, if any, maximum or minimum interest rate limitations, if any, and
maturity will be represented by a single Global Note. Each Global Note
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. A
beneficial interest in a
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Book-Entry Note will be exchanged for Certificated Notes only under the limited
circumstances described in the accompanying Prospectus under 'Description of
Securities -- Global Securities.'
The Depositary has advised the Company and the Agents that it 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, as amended. 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 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 which
(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 procedures with respect to Global
Securities representing Book-Entry Notes is set forth in the accompanying
Prospectus under 'Description of Securities -- Global Securities.' The
Depositary has confirmed to the Company, the Agents and the Trustee that it
intends to follow such procedures.
INTEREST RATE: Interest rates, interest payment periods, interest reset
periods, interest payment dates, interest reset dates and all other aspects of
interest rate bases or formulas are subject to change by the Company from time
to time, as specified in the applicable Pricing Supplement, but no such change
will affect any Note already issued or as to which an offer to purchase has been
accepted by the Company.
Unless otherwise specified in the applicable Pricing Supplement, each Note
will bear interest, until the principal thereof is paid or made available for
payment, at either (a) a fixed rate or (b) a rate determined by reference to an
interest rate basis or formula, which may be adjusted by a Spread ('Spread' is
the number of basis points specified in the applicable Pricing Supplement as
being applicable to the interest rate for such Note) and/or Spread Multiplier
('Spread Multiplier' is the percentage specified in the applicable Pricing
Supplement of the interest rate basis applicable to such Note). A Floating Rate
Note may also have either or both of the following: (i) a maximum limitation, or
ceiling, on the rate of interest which may accrue during any interest period;
and (ii) a minimum limitation, or floor, on the rate of interest which may
accrue during any interest period. The applicable Pricing Supplement relating to
a Note may designate either a fixed rate of interest per annum payable on the
applicable Note, in which case such Note will be a Fixed Rate Note, or one of
the following interest rate bases as applicable to the relevant Note: (a) the
Commercial Paper Rate, in which case such Note will be a Commercial Paper Rate
Note, (b) the Prime Rate, in which case such Note will be a Prime Rate Note, (c)
the Federal Funds Rate, in which case such Note will be a Federal Funds Rate
Note, (d) LIBOR, in which case such Note will be a LIBOR Note, (e) the Treasury
Rate, in which case such Note will be a Treasury Rate Note or (f) such other
interest rate basis or formula as is set forth in such Pricing Supplement.
FIXED RATE NOTES: Each Fixed Rate Note will bear interest from the date of
issue at the rate per annum stated on the face thereof, until the principal
thereof is paid or made available for payment. Unless otherwise specified in the
applicable Pricing Supplement, interest will be payable semiannually on June 15
and December 15 of each year and at maturity. Unless otherwise specified in the
applicable Pricing Supplement, interest will be computed on the basis of a
360-day year of twelve 30-day months and will be payable to the person in whose
name a Fixed Rate Note is registered at the close of business on the last
calendar day of the month next preceding the June 15 or December 15 on which
interest is payable (the 'Fixed Rate Note Record Date'); however, interest
payable on a maturity date will be payable to the person to whom principal shall
be payable. Unless otherwise specified in the applicable Pricing Supplement, the
first payment of interest on any Fixed Rate Note originally issued between a
Fixed Rate Note Record Date and a June 15 or December 15 will be made on the
December 15 or June 15 following the next succeeding Fixed Rate Note Record Date
to the registered owner on such Fixed Rate Note Record Date. If any Interest
Payment Date or the maturity date of a Fixed Rate Note falls
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on a day that is not a Business Day (as defined below), payment of principal or
interest 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, as
the case may be.
Unless otherwise indicated in the applicable Pricing Supplement, interest
payments on Fixed Rate Notes on any Interest Payment Date shall be the amount of
interest accrued from and including the date of issue or from and including the
immediately preceding Interest Payment Date in respect of which interest has
been paid or duly provided for to but excluding such Interest Payment Date.
FLOATING RATE NOTES: The applicable Pricing Supplement will specify the
interest rate formula and the Spread and/or Spread Multiplier, if any, and the
maximum or minimum interest rate limitation, if any, applicable to each Floating
Rate Note. In addition, such Pricing Supplement will define or particularize for
each Floating Rate Note the following terms, if applicable: Initial Interest
Rate, Interest Payment Dates, Index Maturity and Interest Reset Dates.
The interest rate on each Floating Rate Note will be calculated by
reference to the specified interest rate formula adjusted by the Spread and/or
Spread Multiplier, if any. 'Business Day' means any day that is not a Saturday
or Sunday and that in the City of New York (and, with respect to LIBOR Notes,
the City of London) is not a day on which banking institutions are authorized or
obligated by law to close. 'Index Maturity' means, with respect to a Floating
Rate Note, the period to maturity of the instrument or obligation on which the
interest rate formula is based, as specified in the applicable Pricing
Supplement.
All percentages resulting from any calculation on Floating Rate Notes will
be rounded if necessary to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point being rounded upward
(e.g., 5.876545% (or .05876545) rounded to 5.87655% (or .0587655)), and all
dollar amounts used in or resulting from such calculation on Floating Rate Notes
will be rounded to the nearest cent (with one-half cent being rounded upward).
Notwithstanding any maximum interest rate which may be applicable to any
Floating Rate Note pursuant to the above provisions, the interest rate on a
Floating Rate Note will in no event be higher than the maximum rate permitted by
New York law, as the same may be modified by United States law of general
application. Under present New York law the maximum rate of interest is 25% per
annum on a simple interest basis. The limit does not apply to Floating Rate
Notes in principal amounts in excess of $2,500,000.
Unless otherwise specified in the applicable Pricing Supplement, Floating
Rate Notes will have daily, weekly, monthly, quarterly, semi-annual or annual
resets of the rate of interest, which will be specified in the applicable
Pricing Supplement and in the applicable Note. Unless otherwise specified in the
applicable Pricing Supplement, the 'Interest Reset Date' will be, in the case of
Floating Rate Notes which reset daily, each Business Day; in the case of
Floating Rate Notes which reset weekly, the Wednesday of each week (with the
exception of weekly reset Treasury Rate Notes which will reset the Tuesday of
each week, except as specified below); in the case of Floating Rate Notes which
reset monthly, the third Wednesday of each month; in the case of Floating Rate
Notes which reset quarterly, the third Wednesday of March, June, September and
December of each year; in the case of Floating Rate Notes which reset
semi-annually, the third Wednesday of the two months of each year specified in
the Floating Rate Note; and in the case of Floating Rate Notes which reset
annually, the third Wednesday of the month specified in the Floating Rate Note.
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 succeeding day that is a Business Day, except that in the case of a LIBOR
Note, if such Business Day is in the succeeding calendar month, such Interest
Reset Date shall be the next preceding Business Day with respect to such LIBOR
Note.
Each Floating Rate Note will bear interest from the date of issue at the
rates determined as described below until the principal thereof is paid or
otherwise made available for payment. Except as provided above 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 of each
year as specified in the Floating Rate
S-4
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Note; in the case of Floating Rate Notes which reset quarterly, on the third
Wednesday of March, June, September and December of each year; in the case of
Floating Rate Notes which reset semi-annually, on the third Wednesday of the two
months of each year specified in the Floating Rate Note; and in the case of
Floating Rate Notes which reset annually, on the third Wednesday of the month
specified in the Floating Rate Note, and, in each case, at maturity. If an
Interest Payment Date (other than Interest Payment Date occurring on a maturity
date) with respect to any Floating Rate Note would otherwise fall on a day that
is not a Business Day with respect to such Note, such Interest Payment Date will
be the following day that is a Business Day with respect to such Note, except
that in the case of a LIBOR Note, if such day falls in the next calendar month,
such Interest Payment Date will be the preceding day that is a Business Day with
respect to such LIBOR Note. If the maturity date of any Floating Rate Note would
fall on a day that is not a Business Day, the payment of principal and interest
will 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.
Interest will be payable on Floating Rate Notes on each Interest Payment
Date and at maturity, Interest will be payable to the person in whose name a
Floating Rate Note is registered at the close of business on the fifteenth
calendar day prior to the Interest Payment Date (the 'Floating Rate Note Record
Date'); provided, however, interest payable at maturity will be payable to the
person to whom principal shall be payable. Unless otherwise specified in the
applicable Pricing Supplement, the first payment of interest on any Floating
Rate Note issued between a Floating Rate Note Record Date and an Interest
Payment Date will be made on the Interest Payment Date following the next
succeeding Floating Rate Note Record Date to the registered owner on such next
succeeding Floating Rate Note Record Date.
Unless otherwise indicated in the applicable Pricing Supplement, interest
payments on Floating Rate Notes on any Interest Payment Date shall be the amount
of interest accrued from and including the date of issue or from and including
the immediately preceding Interest Payment Date to but excluding such Interest
Payment Date. Accrued interest shall be calculated by multiplying the face
amount of such Floating Rate Note by an accrued interest factor. Such accrued
interest factor shall be computed by adding the interest factors calculated for
each day of the related period. The interest factor for each such day is
computed by dividing the interest rate applicable to such day by 360, in the
case of Commercial Paper Rate Notes, Prime Rate Notes, Federal Funds Rate Notes
and LIBOR Notes, or by the actual number of days in the year, in the case of
Treasury Rate Notes. The interest rate in effect on each day will be (a) 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
(b) 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 or minimum interest rate limitation
referred to above and to any adjustment by a Spread and/or Spread Multiplier as
referred to above; provided, however, that, unless otherwise specified in the
applicable Pricing Supplement, (i) the interest rate in effect for the period
from the date of issue to the first Interest Reset Date with respect to a
Floating Rate Note will be the Initial Interest Rate specified in the applicable
Pricing Supplement and (ii) except with respect to Notes which reset on a daily
or weekly basis, the interest rate in effect on the ten calendar days
immediately prior to maturity will be the rate in effect on the tenth calendar
day preceding such maturity.
Unless otherwise specified in the applicable Pricing Supplement, the
'Interest Determination Date' pertaining to an Interest Reset Date for
Commercial Paper Rate Notes, Prime Rate Notes and Federal Funds 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 day on which dealings in deposits in U.S. dollars are transacted in
the London interbank market (a 'London Business Day') preceding such Interest
Reset Date; and 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 are auctioned, except as provided
below. 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
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next succeeding week. If an auction falls on a day that is an Interest Reset
Date, such Interest Reset Date will be the next following Business Day.
Unless otherwise specified in the applicable Pricing Supplement, the
'Calculation Date,' where applicable, pertaining to an Interest Determination
Date will be the earlier of (i) the tenth calendar day after such Interest
Determination Date or if any such day is not a Business Day, the next succeeding
Business Day or (ii) the Business Day prior to the applicable Interest Payment
Date, or maturity, as the case may be.
Unless otherwise provided in the applicable Pricing Supplement, the Trustee
will be the calculation agent (the 'Calculation Agent') with respect to the
Floating Rate Notes.
Upon the request of the holder of any Floating Rate Note, the Calculation
Agent will provide the interest rate then in effect and, if determined, the
interest rate which will become effective as a result of a determination made on
the most recent Interest Reset Date with respect to such Floating Rate Note.
COMMERCIAL PAPER RATE NOTES
Commercial Paper Rate Notes will bear interest at rates to be calculated
with reference to the Commercial Paper Rate and the Spread and/or Spread
Multiplier, if any, in accordance with the following provisions and the
additional or different terms specified in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
'Commercial Paper Rate' means, with respect to any Interest Determination Date
relating to a Commercial Paper Rate Note (a 'Commercial Paper Interest
Determination Date'), the Money Market Yield (as defined below) on such date of
the rate for commercial paper having the Index Maturity specified in the
applicable Pricing Supplement as published by the Board of Governors of the
Federal Reserve System in 'Statistical Release H.15 (519), Selected Interest
Rates' ('H.15 (519)'), or any successor publication, under the heading
'Commercial Paper.' In the event that such rate is not published prior to 3:00
P.M. New York City time on the Calculation Date pertaining to such Commercial
Paper Interest Determination Date, then the Commercial Paper Rate shall be the
Money Market Yield of the rate for commercial paper of the specified Index
Maturity on such Commercial Paper Interest Determination Date 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 by 3:00 P.M. New York City
time on such Calculation Date, the rate for a Commercial Paper Interest
Determination Date is not yet published in either H.15 (519) or Composite
Quotations, the rate for that Commercial Paper 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, as of 11:00 A.M. New York City time on
such Commercial Paper Interest Determination Date, of three leading dealers of
commercial paper in the City of New York selected by the Calculation Agent, for
commercial paper of the specified Index Maturity placed for an industrial issuer
whose bond rating is 'AA' or the equivalent from a nationally recognized rating
agency; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Commercial
Paper Rate will continue to be the Commercial Paper Rate in effect on such
Commercial Paper Interest Determination Date.
'Money Market Yield' shall be a yield calculated in accordance with the
following formula:
<TABLE>
<S> <C> <C>
D x 360
Money Market Yield = -------------- x 100
360 - (D x M)
</TABLE>
where 'D' refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and 'M' refers to the actual number
of days in the interest period for which interest is being calculated.
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PRIME RATE NOTES
Prime Rate Notes will bear interest at rates to be calculated with
reference to the Prime Rate and the Spread and/or Spread Multiplier, if any, in
accordance with the following provisions and the additional or different terms
specified in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, 'Prime
Rate' means, with respect to any Interest Determination Date relating to a Prime
Rate Note or any Interest Determination Date for a Note whose interest rate is
determined with reference to the Prime Rate (a 'Prime Rate Interest
Determination Date'), the rate set forth in the H.15(519), or any successor
publication, for that day under the heading 'Bank Prime Loan.' If prior to 3:00
P.M. New York City time on the Calculation Date pertaining to such Prime Rate
Interest Determination Date such rate is not yet published in the H.15(519), or
any successor publication, the rate for that Prime Rate Interest Determination
Date 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 Prime Rate Interest
Determination Date. If fewer than four (4) such rates appear on the Reuters
Screen USPRIME1 Page for that Prime Rate Interest Determination Date, the Prime
Rate 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 Prime Rate Interest Determination Date by three (3) major money center
banks in New York City selected by the Calculation Agent. If fewer than three
quotations are provided, the Prime Rate shall be calculated by the Calculation
Agent and shall be determined as the arithmetic mean of the prime rates so
quoted in the City of New York on such date by three substitute banks or trust
companies organized and doing business under the laws of the United States, or
any State thereof, having total equity capital of at least $500,000,000 and
being subject to supervision or examination by a Federal or State authority,
selected by the Calculation Agent; provided, however, that if the banks or trust
companies selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Prime Rate will continue to be the Prime Rate in
effect on such Prime Rate 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).
FEDERAL FUNDS RATE NOTES
Federal Funds Rate Notes will bear interest at rates to be calculated with
reference to the Federal Funds Rate and the Spread and/or Spread Multiplier, if
any, in accordance with the following provisions and the additional or different
terms specified in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, 'Federal
Funds Rate' means, with respect to any Interest Determination Date relating to a
Federal Funds Rate Note (a 'Federal Funds Interest Determination Date'), the
rate on that day for Federal Funds as such rate shall be published in H.15(519)
under the heading 'Federal Funds (Effective)' or, if not so published by 3:00
P.M., New York City time, on the Calculation Date pertaining to such Federal
Funds Interest Determination Date, then the Federal Funds Rate will be the rate
on such Federal Funds Interest Determination Date as published in Composite
Quotations under the heading 'Federal Funds/Effective Rate.' If such rate is not
published by 3:00 P.M., New York City time, on such Calculation Date in either
H.15(519) or Composite Quotations, then the Federal Funds Rate for such Federal
Funds Interest Determination Date will be calculated by the Calculation Agent
and will be the arithmetic mean of the rates for the last transaction in
overnight Federal Funds arranged by each of three leading brokers of Federal
Funds transactions in the City of New York selected by the Calculation Agent
(after consultation with the Company) as of 11:00 A.M., New York City time, on
such Federal Funds Interest Determination Date; provided, however, that if the
brokers selected as aforesaid by the Calculation Agent are not quoting as
described above, the Federal Funds Rate with respect to such Federal Funds
Interest Determination Date will be the Federal Funds Rate in effect on such
Federal Funds Interest Determination Date, if any, or the Initial Interest Rate.
S-7
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LIBOR NOTES
LIBOR Notes will bear interest at rates to be calculated with reference to
LIBOR and the Spread and/or Spread Multiplier, if any, in accordance with the
following provisions and the additional or different terms specified in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR will
be determined by the Calculation Agent in accordance with the following
provisions:
(i) With respect to an Interest Determination Date relating to a LIBOR
Note (a 'LIBOR Interest Determination Date'), LIBOR, as specified in the
applicable Pricing Supplement, will be determined on the basis of either:
(a) the arithmetic mean of the offered rates for deposits in U.S. dollars
having the Index Maturity designated in the applicable Pricing Supplement,
commencing on the second London Business Day immediately following that
LIBOR Interest Determination Date, that appear on the Reuters Screen LIBO
Page as of 11:00 a.m., London time, on that LIBOR Interest Determination
Date, if at least two such offered rates appear on the Reuters Screen LIBO
Page ('LIBOR Reuters'), or (b) the rate for deposits in U.S. dollars having
the Index Maturity designated in the applicable Pricing Supplement,
commencing on the second London Business Day immediately following that
LIBOR Interest Determination Date, that appears on the Telerate Page 3750
as of 11:00 a.m., London time, on that LIBOR Interest Determination Date
('LIBOR Telerate'). 'Reuters Screen LIBO Page' means the display designated
as page 'LIBO' on the Reuters Monitor Money Rates Service (or such other
page as may replace the LIBO page on that service for the purpose of
displaying London interbank offered rates of major banks). 'Telerate Page
3750' means the display designated as page '3750' on the Telerate Service
(or such other page as may replace the 3750 page on that service or such
other service or services as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates
for U.S. dollar deposits). If neither LIBOR Reuters nor LIBOR Telerate is
specified in the applicable Pricing Supplement, LIBOR will be determined as
if LIBOR Telerate had been specified. If fewer than two offered rates
appear on the Reuters Screen LIBO Page, or if no rate appears on the
Telerate Page 3750, as applicable, LIBOR in respect of that LIBOR Interest
Determination Date will be determined as if the parties had specified the
rate described in (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which
fewer than two offered rates appear on the Reuters Screen LIBO Page, as
specified in (i) (a) above, or on which no rate appears on Telerate Page
3750, as specified in (i) (b) above, as applicable, LIBOR will be
determined on the basis of the rates at which deposits in U.S. dollars
having the Index Maturity designated in the applicable Pricing Supplement
are offered at approximately 11:00 a.m., London time, on that LIBOR
Interest Determination Date by four major banks in the London interbank
market selected by the Calculation Agent ('Reference Banks') to prime banks
in the London interbank market commencing on the second London Business Day
immediately following that LIBOR Interest Determination Date and in a
principal amount equal to an amount of not less than $1,000,000 that is
representative for a single transaction in such market at such time. The
Calculation Agent will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR in respect of that LIBOR Interest
Determination Date will be the arithmetic mean of such quotations. If fewer
than two quotations are provided, LIBOR in respect of that LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 a.m., New York City time, on that LIBOR Interest
Determination Date by three major banks in the City of New York selected by
the Calculation Agent for loans in U.S. dollars to leading European banks
having the Index Maturity designated in the applicable Pricing Supplement
commencing on the second London Business Day immediately following the
LIBOR Interest Determination Date and in a principal amount equal to an
amount of not less than $1,000,000 that is representative for a single
transaction in such market at such time; provided, however, that if the
banks selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR with respect to such LIBOR Interest
Determination Date will be the rate of LIBOR in effect on such date.
S-8
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TREASURY RATE NOTES
Treasury Rate Notes will bear interest at rates to be calculated with
reference to the Treasury Rate and the Spread and/or Spread Multiplier, if any,
in accordance with the following provisions and the additional or different
terms specified in the applicable Pricing Supplement.
Unless otherwise indicated in the Pricing Supplement, 'Treasury Rate'
means, with respect to any Interest Determination Date relating to a Treasury
Rate Note (a 'Treasury Interest Determination Date'), the rate for the most
recent auction of direct obligations of the United States ('Treasury Bills')
having the Index Maturity specified in the applicable Pricing Supplement as
published in H.15(519), or any successor publication, under the heading
'Treasury Bills -- Auction Average (Investment),' or if not so published by 3:00
P.M. New York City time on the Calculation Date pertaining to such Treasury
Interest Determination Date, the auction average rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) as otherwise announced by the United States Department of the
Treasury. In the event that the results of the auction of Treasury Bills having
the Index Maturity specified in the applicable Pricing Supplement are not
published or announced 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 in which a
Treasury Interest Determination Date falls, the Treasury Rate shall be
calculated by the Calculation Agent and shall be a yield to maturity (expressed
as a bond equivalent on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) of the arithmetic mean of the secondary market bid
rates as of approximately 3:30 P.M. New York City time on such Treasury Interest
Determination Date, of three leading primary United States government securities
dealers selected by the Calculation Agent, for the issue of Treasury Bills with
a remaining maturity closest to the specified Index Maturity; provided, however,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, the Treasury Rate will continue to be the
Treasury Rate in effect on such Treasury Interest Determination Date.
INDEXED NOTES
Notes may also be issued as Indexed Notes, in which case payments of
principal and/or interest (whether at Maturity or otherwise) in respect of
Indexed Notes will be calculated by reference to such index and/or formula as
indicated in the Notes and in the applicable Pricing Supplement.
AMORTIZING NOTES
Notes may also be issued as Amortizing Notes, in which case payments of
principal and interest will be made in installments over the term of the Notes,
on the basis of reference indices established upon issuance, or otherwise, in
each case, as indicated in the Notes and in the applicable Pricing Supplement.
DEFEASANCE OF THE NOTES
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will be subject to defeasance as provided in the Indenture. See 'Description of
Securities -- Satisfaction and Discharge of Indenture; Defeasance' in the
accompanying Prospectus.
CERTAIN TAX CONSEQUENCES
The following summary of selected United States Federal income tax
consequences of the ownership of Notes is for general information only and is
not intended to be a complete analysis of the tax considerations that may be
important to a particular investor. It is not addressed to holders subject to
special tax treatment such as dealers in securities, insurance companies,
financial institutions, tax-exempt entities and foreign individuals and
entities. Additional tax and other considerations may be described in the
applicable Pricing Supplement. In all cases, prospective investors should
consult their own tax advisors as to the tax consequences of the acquisition,
ownership, and disposition of Notes, including possible changes that may be made
in the proposed Treasury regulations and the application and effect of state,
local, and foreign tax laws.
INTEREST AND ORIGINAL ISSUE DISCOUNT: The Notes are to be issued at prices
equal to their principal amounts and will bear interest at the fixed or variable
rates set forth in the applicable Pricing Supplements. Accordingly, unless an
applicable Pricing Supplement otherwise states, (i) amounts
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<PAGE>
denominated as interest will be treated as interest for tax purposes and (ii)
except with respect to certain short-term Notes as discussed below, the Notes
should not be deemed to have been issued with original issue discount.
Therefore, holders will take the stated interest on the Notes into income in
accordance with their methods of tax accounting.
SHORT-TERM NOTES: A note that matures one year or less from the date of its
issuance will be deemed to have been issued with original issue discount equal
to the excess of the total payments on the Note over its issue price. Holders
who report income for tax purposes on the accrual method, and certain other
holders, are required to accrue original issue discount on such Notes on a
straight-line basis unless an election is made to use a constant-yield method
based on daily compounding. Other holders may elect to be subject to this rule.
If the holder is not required, and does not elect, to include the original issue
discount in income under this rule, (i) any gain realized on the sale or
maturity of such a Note will be ordinary income rather than capital gain to the
extent of the original issue discount accrued through the date of sale or
maturity, and (ii) any deductions for interest on borrowings allocable to those
Notes will be deferred until such accrued original issue discount is included in
income.
PLAN OF DISTRIBUTION
The Notes are offered on a continuing basis by the Company through the
Agents. Each Agent has agreed to use its best efforts to solicit purchases of
the Notes. The Company has the sole right to accept offers to purchase Notes and
may reject any proposed purchase of Notes in whole or in part. Each Agent has
the right, in its discretion reasonably exercised, to reject in whole or in part
any proposed purchase of Notes solicited by it. The Company has agreed to pay
each Agent a commission not to exceed .700% (or, with respect to Notes for which
the stated maturity is more than 30 years, such commission as shall be agreed to
by the Company and the related Agent at the time of sale) of the principal
amount of any Note sold through such Agent, depending upon the maturity of such
Note. The Company also may sell Notes to an Agent as principal for resale to
investors and other purchasers from time to time in one or more transactions,
including negotiated transactions, at varying prices determined at the time of
resale, or otherwise. Unless otherwise specified in the applicable Pricing
Supplement, any Note sold to an Agent as principal will be purchased by it at a
price equal to 100% of the principal amount thereof less a discount equal to the
commission applicable to an agency sale of a Note of identical maturity.
Unless otherwise specified in the applicable Pricing Supplement, payment of
the purchase price of the Notes will be required to be made in immediately
available funds in The City of New York on the date of settlement.
Notes also may be offered through other agents or to other persons as
principals, as may be designated by the Company from time to time. In such event
the names of such other agents or principals will be set forth in a Pricing
Supplement.
The Agents (and such other persons who may act as agents or principals, as
described above) may be deemed to be 'underwriters' within the meaning of the
Securities Act of 1933, as amended (the 'Act'). The Company has agreed to
indemnify the Agents (and may agree to indemnify such other agents or
principals) against certain liabilities, including liabilities under the Act, or
contribute to the payments they may be required to make in respect thereof, and
to reimburse them for legal and certain other expenses incurred by them in
connection with the offer and sale of the Notes.
The Agents have advised the Company that they may from time to time
purchase and sell Notes in the secondary market, but the Agents are not
obligated to do so. There can be no assurance that there will be a secondary
market for the Notes.
Each of the Agents and certain of their affiliates may engage in
transactions (which may include general banking and financing transactions) with
or perform services for the Company and its affiliates in the ordinary course of
business. Chase Securities Inc. is an affiliate of the Trustee.
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[LOGO]
DEBT SECURITIES
Beneficial Corporation (the 'Company' or 'Beneficial') may offer from time
to time its debt securities (the 'Securities') for proceeds up to $3,000,000,000
(or the equivalent in foreign currency or currency units) on terms to be
determined at the time of sale. The Securities may be sold for U.S. dollars,
foreign currencies or currency units, and the principal of, premium, if any, and
interest, if any, on the Securities may be payable in U.S. dollars, foreign
currencies or currency units. The Securities may be issued in one or more series
with the same or various maturities at or above par or with an original issue
discount. The Securities may be issued in registered form without coupons
('Registered Securities'), in bearer form with coupons attached ('Bearer
Securities') or in the form of one or more global securities (each a 'Global
Security'). Pursuant to the requirements of certain United States tax laws,
Bearer Securities will be offered only to non-United States persons and to
offices located outside the United States of certain United States financial
institutions. The specific designation, aggregate principal amount, currency or
currency unit in which the principal, premium, if any, or interest, if any, is
payable, authorized denominations, purchase price, maturity, rate or rates
(which may be fixed or variable) and time of payment of any interest, redemption
terms, any listing on a securities exchange and any other specific terms of the
Securities in respect of which this Prospectus is being delivered (the 'Offered
Securities') are set forth in the accompanying supplement to this Prospectus
(the 'Prospectus Supplement'), together with the terms of offering of the
Offered Securities.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRE SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Securities may be offered through underwriters, agents or dealers, or
directly to purchasers by the Company or subsidiaries of the Company. If an
underwriter, agent or dealer is involved in the offering of any Offered
Securities, the underwriter's discount, agent's commission or dealer's purchase
price will be set forth in, or may be calculated from, the Prospectus
Supplement, and the net proceeds to the Company from such offering will be the
public offering price of the Offered Securities less such discount in the case
of an underwriter, the purchase price of the Offered Securities less such
commission in the case of an agent or the purchase price of the Offered
Securities in the case of a dealer, and less, in each case, the other expenses
of the Company associated with the issuance and distribution of the Offered
Securities. See 'Plan of Distribution.'
THE DATE OF THIS PROSPECTUS IS AUGUST 22, 1996.
<PAGE>
<PAGE>
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, proxy statements and other information with the
Securities and Exchange Commission (the 'Commission'). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; at the Commission's New York Regional
Office, 7 World Trade Center, 13th Floor, New York, New York 10048; and at its
Chicago Regional Office, 500 West Madison Street, Chicago, Illinois 60661.
Copies of such material can be obtained from the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington
D.C. 20549 at prescribed rates. Such reports, proxy statements and other
information concerning the Company also can be inspected at the office of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
------------------------
INFORMATION INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995, the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996 and June 30, 1996 and the Company's Current Reports on Form 8-K
dated January 29, 1996, March 11, 1996, March 12, 1996, April 22, 1996, July 22,
1996 and July 24, 1996, which have been filed by the Company with the Commission
pursuant to the Exchange Act, are incorporated herein by reference.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
of the Securities, shall be deemed to be incorporated in this Prospectus by
reference and to be a part hereof from the respective date of filing of each
such document. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement herein or in any
other subsequently filed document which also is, or is deemed to be,
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of any or all of
the documents incorporated by reference herein, other than exhibits to such
documents. Requests should be directed to Scott A. Siebels, Esq., Vice
President, Corporate Secretary and Associate Counsel, Beneficial Corporation,
One Christina Centre, 301 North Walnut Street, Wilmington, Delaware 19801
(telephone number 302-425-2500).
THE COMPANY
Beneficial is a holding company, subsidiaries of which are engaged
principally in the consumer finance and credit-related insurance businesses. The
Company was organized under the laws of the State of Delaware on May 9, 1929,
through the consolidation of three companies which had been operated under the
same management. Its principal executive offices are located at One Christina
Centre, 301 North Walnut Street, Wilmington, Delaware 19801 (telephone number
302-425-2500).
2
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
- ------------------------------------ ------------
1991 1992 1993 1994 1995 1995 1996
- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
1.37 1.38 1.49 1.47 1.32 1.33 1.77
</TABLE>
In computing the ratio of earnings to fixed charges, earnings consist of
net income to which has been added income taxes and fixed charges. Fixed charges
consist principally of interest on all indebtedness and that portion of rentals
considered to represent an appropriate interest factor.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Securities will be added to the Company's general funds and applied to reduce
short-term debt.
Existing long-term and short-term debt has been incurred primarily to
provide subsidiaries of the Company with funds to carry on their respective
businesses. The Company anticipates that it will be required to obtain
additional financing from time to time to meet the needs of its subsidiaries.
The Company has not experienced, and does not anticipate, any difficulty in
obtaining funds at prevailing rates.
DESCRIPTION OF SECURITIES
The Securities are to be issued under an indenture dated as of April 1,
1989, as supplemented and restated, between the Company and The Chase Manhattan
Bank (formerly The Chase Manhattan Bank (National Association)), Trustee (the
'Indenture'). The Indenture is filed as an exhibit to the Registration Statement
of which this Prospectus is a part. The Indenture incorporates the Company's
Amended and Restated Standard Multiple-Series Indenture Provisions, a copy of
which is also filed as an exhibit to the Registration Statement. The Indenture
does not limit the aggregate principal amount of Securities which may be issued
thereunder. The Company may enter into one or more additional indentures
providing for the issuance of Securities with one or more banking institutions
organized under the laws of the United States of America or any state serving as
trustee, or any corporation or other person organized and doing business under
the laws of a foreign government permitted to act as trustee pursuant to a rule,
regulation or order of the Commission. Reference is made to the Prospectus
Supplement for information regarding the Indenture or any additional indenture
under which the Offered Securities will be issued.
The statements under this heading are subject to the detailed provisions of
the Indenture. Whenever particular provisions of the Indenture or terms defined
therein are referred to, such provisions or definitions are incorporated by
reference herein as a part of the statements made and the statements are
qualified in their entirety by such reference.
GENERAL: The Securities will be unsecured general obligations of the
Company and will rank on a parity with the other unsecured and unsubordinated
indebtedness for borrowed money of the Company. The Indenture provides that the
Offered Securities and other unsecured debt securities of the Company, without
limitation as to aggregate principal amount (collectively the 'Indenture
Securities'), may be issued in one or more series, and a single series may be
issued at various times, with different maturity dates and different interest
rates, in each case as authorized from time to time by the Company.
One or more series of the Indenture Securities may be issued with the same
or various maturities at par or at a discount. Offered Securities bearing no
interest or interest at a rate which at the time of issuance is below the market
rate ('Original Issue Discount Securities') will be sold at a discount (which
may be substantial) below their stated principal amount. Federal income tax
consequences and other special considerations applicable to any such Original
Issue Discount Securities will be described in the Prospectus Supplement
relating thereto.
If any of the Offered Securities are sold for any foreign currency or
currency unit or if the principal of, premium, if any, or interest, if any, on
any of the Offered Securities is payable in any foreign currency or currency
unit, the restrictions, elections, tax consequences, specific terms and other
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information with respect to such issue of Offered Securities and such foreign
currency or currency unit will be set forth in the Prospectus Supplement
relating thereto.
The Prospectus Supplement will state the price or prices (which may be
expressed as a percentage of the aggregate principal amount thereof) at which
the Offered Securities will be sold.
Reference is made to the Prospectus Supplement relating to the Offered
Securities for the following terms thereof:
(1) the specific designation of the Offered Securities;
(2) the aggregate principal amount of the Offered Securities;
(3) the date or dates on which the principal of and premium, if any,
on the Offered Securities shall be payable or the method of determination
thereof;
(4) the rate or rates (which may be fixed or variable) at which the
Offered Securities shall bear interest, if any, or the method by which such
rate or rates shall be determined, the date or dates from which such
interest shall accrue, or the method by which such date or dates shall be
determined, the date or dates on which such interest shall be payable and
the record dates therefor;
(5) if other than in U.S. dollars, the currency or currency unit in
which payment of the principal of, premium, if any, and interest, if any,
on the Offered Securities shall be payable;
(6) if the amount of payments of the principal of, premium, if any, or
interest, if any, on the Offered Securities may be determined with
reference to an index, formula or other method based on a currency or
currency unit other than that in which the Offered Securities are stated to
be payable, the manner in which such amounts shall be determined;
(7) if the principal of, premium, if any, or interest, if any, on the
Offered Securities are to be payable at the election of the Company or a
holder thereof in a currency or currency unit other than that in which the
Offered Securities are stated to be payable, the period or periods within
which and the terms and conditions upon which such election may be made;
(8) the place or places where the principal of, premium, if any, and
interest, if any, on the Offered Securities shall be payable;
(9) the period or periods within which, the price or prices at which
and the terms and conditions upon which the Offered Securities may be
redeemed, in whole or in part, at the option of the Company;
(10) the obligation, if any, of the Company to redeem, purchase or
repay the Offered Securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which the Offered Securities shall be redeemed, purchased or repaid,
in whole or in part, pursuant to such obligation;
(11) whether the Offered Securities are to be issued as Bearer
Securities and, if so, (i) whether the Offered Securities are also to be
issued as Registered Securities and (ii) the manner in which such Bearer
Securities are to be dated;
(12) whether the Offered 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;
(13) if a temporary Global Security is to be issued with respect to
the Offered Securities, whether any interest thereon payable on an interest
payment date prior to the issuance of a permanent Global Security or
definitive Bearer Securities will be paid to the Depositary for such
temporary Global Security and, in such event, the terms and conditions upon
which such interest payments received by such Depositary will be credited
to the account of the persons entitled thereto on such interest payment
date;
(14) if a temporary Global Security is to be issued with respect to
the Offered Securities, the terms upon which interests in such temporary
Global Security may be exchanged for interests in a permanent Global
Security or for definitive Securities of the series and the terms upon
which
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interests in a permanent Global Security, if any, may be exchanged for
definitive Securities of the series;
(15) if any of the Offered Securities are to be issued in registered
form, the denominations, if other than denominations of $1,000 and any
integral multiple thereof, in which such Registered Securities are to be
issued and, if any of the Offered Securities are to be issued in bearer
form, the denominations, if other than the denomination of $5,000, in which
such Bearer Securities are to be issued;
(16) if other than the principal amount thereof, the portion of the
principal amount of the Offered Securities payable upon declaration of
acceleration of the maturity of the Offered Securities;
(17) the provisions, if any, relating to the cancellation and
satisfaction of the Indenture with respect to the Offered Securities prior
to the maturity thereof pursuant to Section 12.02 thereof (see
'Satisfaction and Discharge of Indenture; Defeasance');
(18) any deletions from or modifications of or additions to the Events
of Default set forth in Section 6.01 of the Indenture pertaining to the
Offered Securities;
(19) whether and under what circumstances and with what procedures and
documentation the Company will pay additional amounts on any of the Offered
Securities to any holder who is not a United States Person (including a
definition of such term), in respect of any tax, assessment or governmental
charge withheld or deducted and, if so, whether the Company will have the
option to redeem such Securities rather than pay additional amounts (and
the terms of any such option);
(20) the Person to whom any interest on any Registered Security shall
be payable, if other than the Person in whose name that Security (or a
predecessor Security) is registered at the close of business on the record
date therefor, the manner in which, or the Person to whom, any interest on
any Bearer Security shall be payable, if otherwise than upon presentation
and surrender of the coupons appertaining thereto as they severally mature
and the extent to which, or the manner in which, any interest payable on a
temporary Global Security will be paid;
(21) the form of the Offered Securities; and
(22) any other terms of the Offered Securities not inconsistent with
the provisions of the Indenture and not adversely affecting the rights of
the holders of any other series of Indenture Securities then outstanding.
(Section 3.01)
The Company may authorize the issuance and provide for the terms of a
series of Indenture Securities pursuant to a resolution of its Board of
Directors or any duly authorized committee thereof or pursuant to a supplemental
indenture. The provisions of the Indenture described above provide the Company
with the ability, in addition to the ability to issue Indenture Securities with
terms different from those of Indenture Securities previously issued, to
'reopen' a previous issue of a series of Indenture Securities and to issue
additional Indenture Securities of such series.
The Indenture Securities may be issued as Registered Securities, Bearer
Securities or both. Indenture Securities of a series may be issued in whole or
in part in the form of one or more Global Securities, as described below under
'Global Securities.' Unless the Prospectus Supplement relating thereto specifies
otherwise, Registered Securities denominated in U.S. dollars will be issued only
in denominations of $1,000 or any integral multiple thereof and Bearer
Securities denominated in U.S. dollars will be issued only in the denomination
of $5,000. One or more Global Securities will be issued in a denomination or
aggregate denominations equal to the aggregate principal amount of outstanding
Indenture Securities of the series to be represented by such Global Security or
Securities. The Prospectus Supplement relating to a series of Indenture
Securities denominated in a foreign currency or currency unit will specify the
denomination thereof. (Section 3.02)
Limitations on the issuance of Bearer Securities, as well as certain
Federal income tax consequences and other special considerations applicable to
any such Bearer Securities, will be described in the Prospectus Supplement
relating thereto.
At the option of a holder of the Indenture Securities upon request
confirmed in writing, and subject to the terms of the Indenture, Bearer
Securities of any series may be exchanged for either an equal
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aggregate principal amount of Bearer Securities (if Bearer Securities of such
series are to be issued in more than one denomination) or an equal aggregate
principal amount of Registered Securities (if the Indenture Securities of such
series are to be issued as Registered Securities), but no Bearer Security will
be delivered in or to the United States, and Registered Securities of any series
(other than a Global Security, except as set forth below) will be exchangeable
into an equal aggregate principal amount of Registered Securities of the same
series (with the same interest rate and maturity date) of different authorized
denominations. If a holder surrenders Bearer Securities in exchange for
Registered Securities between a Regular Record Date or, in certain
circumstances, a Special Record Date, and the relevant interest payment date,
such holder will not be required to surrender the coupon relating to such
interest payment date. Registered Securities may not be exchanged for Bearer
Securities. (Section 3.05)
Indenture Securities may be presented for exchange, and Registered
Securities (other than a Global Security) may be presented for transfer (with
the form of transfer endorsed thereon duly executed), at the office of any
transfer agent or at the office of the Security Registrar, without service
charge and upon payment of any taxes and other governmental charges as described
in the Indenture. Such transfer or exchange will be effected upon the transfer
agent or the Security Registrar, as the case may be, being satisfied with the
documents of title and identity of the person making the request. Bearer
Securities will be transferable by delivery. (Section 3.05)
GLOBAL SECURITIES: The Indenture 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, the Depositary identified in the Prospectus
Supplement relating thereto. Global Securities may be issued in either
registered or bearer form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for the individual Indenture
Securities represented thereby, a Global Security may not be transferred except
as a whole by the 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 Depositary or a nominee of such successor Depositary. (Sections 3.03
and 3.05)
The specific terms of the depositary arrangement with respect to any
Indenture Securities of a series will be described in the Prospectus Supplement
relating thereto. The Company anticipates that the following provisions will
apply to all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Indenture Securities represented
by such Global Security to the accounts of institutions that have accounts with
such Depositary ('participants'). The accounts to be credited shall be
designated by the underwriters or agents through which such Indenture Securities
were sold or by the Company, if such Indenture Securities are offered and sold
directly by the Company. Ownership of beneficial interests in a Global Security
will be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests in such Global Security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the Depositary for such Global Security or by participants
or persons that hold through participants. The laws of some states 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, or its nominee, is the
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 Indenture Securities
represented by such Global Security for all purposes under the Indenture. Except
as set forth below, owners of beneficial interests in a Global Security will not
be entitled to have Indenture Securities of the series represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of Indenture Securities of such series in definitive
form and will not be considered the owners or holders thereof under the
Indenture.
Subject to certain limitations on the issuance of Bearer Securities which
will be described in the Prospectus Supplement relating thereto, payments of
principal of, premium, if any, and interest, if any, on Indenture 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
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Global Security representing such Indenture Securities. None of the Company, the
Trustee for such Indenture Securities, any paying agent or the Security
Registrar for such Indenture 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 Indenture
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Company expects that the Depositary for Indenture Securities of a
series, upon receipt of any payment of principal, premium, if any, or interest,
if any, in respect of a permanent Global Security, will credit immediately
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
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. Receipt by owners of beneficial
interests in a temporary Global Security of payments in respect of such
temporary Global Security may be subject to restrictions. Any such restrictions
will be described in the Prospectus Supplement relating thereto.
If a Depositary for Indenture Securities of a series is at any time
unwilling or unable to continue as Depositary and a successor depositary is not
appointed by the Company within ninety days, the Company will issue Indenture
Securities of such series in definitive form in exchange for the Global Security
or Securities representing the Indenture Securities of such series. In addition,
the Company may at any time and in its sole discretion determine not to have any
Indenture Securities of a series represented by one or more Global Securities
and, in such event, will issue Indenture Securities of such series in definitive
form in exchange for the Global Security or Securities representing such
Indenture Securities. Further, if the Company so specifies with respect to the
Indenture Securities of a series, each Person specified by the Depositary of the
Global Security representing Indenture Securities of such series may, on terms
acceptable to the Company and the Depositary for such Global Security, receive
Indenture Securities of such series in definitive form. In any such instance,
each Person so specified by the Depositary of the Global Security will be
entitled to physical delivery in definitive form of Indenture Securities of the
series represented by such Global Security equal in principal amount to such
Person's beneficial interest in the Global Security. Indenture Securities of
such series so issued in definitive form will be issued (a) as Registered
Securities if the Indenture Securities of such series are to be issued as
Registered Securities, (b) as Bearer Securities if the Indenture Securities of
such series are to be issued as Bearer Securities or (c) as either Registered or
Bearer Securities, if the Indenture Securities of such series are to be issued
in either form. A description of certain restrictions on the issuance of a
Bearer Security in definitive form in exchange for an interest in a Global
Security will be contained in the Prospectus Supplement relating thereto.
(Section 3.05)
PAYMENT AND PAYING AGENTS: Payment of principal of, premium, if any, and
interest, if any, on Bearer Securities will be payable in the currency or
currency unit designated in the Prospectus Supplement, subject to any applicable
laws and regulations, at such paying agencies outside the United States as the
Company may appoint from time to time. Any such payment may be made, at the
option of a holder, by a check in the designated currency or currency unit or by
transfer to an account in the designated currency or currency unit maintained by
the payee with a bank located outside the United States. No payment with respect
to any Bearer Security will be made at the principal corporate trust office of
the Trustee or any other paying agency maintained by the Company in the United
States nor will any such payment be made by transfer to an account with a bank
located, or by check mailed to an address, in the United States. Notwithstanding
the foregoing, payments of principal of and premium, if any, and interest, if
any, on Bearer Securities may be made in U.S. dollars at the principal corporate
trust office of the Trustee in the City of New York, if payment of the full
amount thereof at all paying agencies outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions.
(Sections 3.11 and 5.02)
Payment of principal of and premium, if any, on Registered Securities will
be made in the designated currency or currency unit against surrender of such
Registered Securities at the principal corporate trust office of the Trustee in
the City of New York. Unless otherwise indicated in the
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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. Unless otherwise indicated in the Prospectus Supplement, payments of
such interest will be made at the principal corporate trust office of the
Trustee in the City of New York, or by a check in the designated currency or
currency unit mailed to each holder of a Registered Security at such holder's
registered address. (Section 3.11)
The paying agents outside the United States, if any, initially appointed by
the Company for a series of Indenture Securities will be named in the Prospectus
Supplement. The Company may terminate the appointment of any of the paying
agents from time to time, except that the Company will maintain at least one
paying agent in the City of New York, for payments with respect to Registered
Securities and at least one paying agent in a city in Europe so long as any
Bearer Securities are outstanding where Bearer Securities may be presented for
payment and may be surrendered for exchange, provided that so long as any series
of Indenture Securities is listed on The International Stock Exchange of the
United Kingdom and the Republic of Ireland 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 such series of Indenture Securities. (Section 5.02)
All moneys paid by the Company to a paying agent for the payment of
principal of, premium, if any, or interest, if any, on any Indenture Security
that remains unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will be repaid to the Company and the
holder of such Indenture Security entitled to receive such payment will
thereafter look only to the Company for payment thereof. (Section 12.05)
RESTRICTIONS UPON CREATION OF LIENS: The Company covenants in the Indenture
that it will not itself, and it will not permit any Consolidated Subsidiary
other than a Foreign Subsidiary to, create, assume or incur any encumbrance upon
any of the properties, owned at the date of such Indenture or thereafter
acquired, of the Company or any Consolidated Subsidiary, without effectively
providing that the Indenture Securities shall be secured on an equal and ratable
basis with the indebtedness thereby secured; provided, however, that the
foregoing restriction shall not prevent the Company or any Consolidated
Subsidiary from (i) suffering to exist mortgages or encumbrances existing at the
date of such Indenture on property owned at such date or creating or suffering
to exist purchase money mortgages or liens upon any after-acquired property, or
acquiring property subject to mortgages or encumbrances existing thereon at the
date of acquisition thereof, or suffering to exist mortgages or encumbrances
upon property of a Consolidated Subsidiary existing at the time such corporation
becomes a Consolidated Subsidiary, or replacing, extending, renewing or
refunding such mortgages or encumbrances and/or the indebtedness secured
thereby, provided that the principal amount of any indebtedness so replaced,
extended, renewed or refunded shall not be increased, (ii) making deposits or
giving any other form of security to governmental agencies for certain purposes
or depositing assets as collateral in connection with any legal proceedings by
or against the Company or a Consolidated Subsidiary, (iii) purchasing property
or assets upon conditional sale agreements or lease agreements or conditional
sale and lease agreements, (iv) creating or suffering to exist in favor of any
lender of moneys or holder of their commercial paper a banker's lien or a right
of offset on moneys of the Company or a Consolidated Subsidiary deposited with
such lender or holder in the ordinary course of business, or lent or otherwise
made available to such lender or to an affiliate thereof in connection with the
obtaining from such lender of borrowings in currencies other than United States
dollars, or (v) suffering to be created or to exist liens for taxes, assessments
and governmental charges or levies, or liens imposed by law, for sums not due
and payable or being contested in good faith; and provided, further, that the
foregoing restrictions shall not prevent any Consolidated Subsidiary from
mortgaging its property to the Company as security for indebtedness owing to the
Company. (Section 5.04)
RESTRICTIONS ON DISPOSITION OF STOCK OF CONSOLIDATED SUBSIDIARIES: The
Company covenants in the Indenture that it will not itself, and will not permit
any Consolidated Subsidiary to, sell or otherwise dispose of any shares of stock
of any Consolidated Subsidiary (the 'Issuing Subsidiary'), unless (i) the
Issuing Subsidiary is a Foreign Subsidiary and such shares are shares of common
stock, and after giving effect to such sale or other disposition the Company
directly or indirectly (through one or more
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Consolidated Subsidiaries or otherwise) would own not less than 66 2/3% of the
outstanding common stock of the Issuing Subsidiary, or (ii) such sale or other
disposition is from or by a Consolidated Subsidiary to the Company, or from or
by the Company or a Consolidated Subsidiary to a Wholly-owned Subsidiary, or for
the purpose of permitting any such shares of stock to be held by persons in
order to qualify them to act as directors or officers of the Issuing Subsidiary
or to be held by stockholders other than the Company or one or more Consolidated
Subsidiaries in order that the Issuing Subsidiary may transact business, or
(iii) simultaneously with such sale or other disposition, all of the shares of
stock and indebtedness of the Issuing Subsidiary at the time owned by the
Company and/or by other Consolidated Subsidiaries shall be sold or disposed of
for a consideration or considerations which (a) shall not include any stock of
another corporation, unless immediately after the receipt of such stock such
other corporation would be a Consolidated Subsidiary, and (b) shall not include
obligations of another corporation, unless the shares of stock and indebtedness
so sold or disposed of shall be validly pledged and free and clear of other
liens, charges and encumbrances, as security for such obligations. (Section
5.05)
CONCERNING THE TRUSTEE: The Indenture is subject to the mandatory
provisions of the Trust Indenture Act of 1939, as amended (the 'TIA'), which,
among other things provide that the Trustee shall, prior to the occurrence of
any Event of Default with respect to the Indenture Securities of any series and
after the curing or waiving of all Events of Default with respect to such series
which have occurred, perform only such duties as are specifically set forth in
such Indenture and in the TIA. During the existence of any Event of Default with
respect to the Indenture Securities of any series, the Trustee shall exercise
such of the rights and powers vested in it under such Indenture and in the TIA
with respect to such series and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
The Trustee may acquire and hold Indenture Securities and, subject to
certain conditions, otherwise deal with the Company as if it were not Trustee
under the Indenture. (Section 7.03)
The Company has lines of credit from The Chase Manhattan Bank. The Chase
Manhattan Bank is also trustee under various indentures covering outstanding
indebtedness of the Company.
MODIFICATION OF THE INDENTURE: The Indenture contains provisions permitting
the Company and the Trustee, without the consent of the holders of the Indenture
Securities, to establish, among other things, the form and terms of any series
of Indenture Securities issuable thereunder by one or more supplemental
indentures, and, with the consent of the holders of not less than a majority of
the aggregate principal amount of the Indenture Securities of any series at the
time outstanding, evidenced as in such Indenture provided, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of such Indenture or of any supplemental
indenture with respect to Indenture Securities of such series or modifying in
any manner the rights of the holders of the Indenture Securities of such series;
provided, however, that no such supplemental indenture shall (i) extend the
fixed maturity, or the earlier optional date of maturity, if any, of any
Indenture Security of a particular series or reduce the principal amount thereof
or the premium thereon, if any, or reduce the rate or extend the time of payment
of interest, if any, thereon, or make the principal thereof or premium, if any,
or interest, if any, thereon payable in any currency or currency unit other than
as provided pursuant to the Indenture or in the Indenture Securities of such
series without the consent of the holder of each Indenture Security so affected,
or (ii) reduce the aforesaid percentage of Indenture Securities of any series,
the holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Indenture Securities of such series
outstanding thereunder. (Sections 10.01 and 10.02)
DEFAULT AND CERTAIN RIGHTS ON DEFAULT: The Indenture provides that upon the
happening of any Event of Default with respect to any series of Indenture
Securities specified therein (unless it is inapplicable to such series of
Indenture Securities or it is specifically deleted in the supplemental indenture
or Board Resolution under which such series of Indenture Securities is issued or
has been modified in any such supplemental indenture), including (i) failure to
pay interest when due on the Indenture Securities of such series outstanding
thereunder, continued for 30 days; (ii) failure to pay principal or premium if
any, when due on the Indenture Securities of such series outstanding thereunder,
(iii) failure by the Company to observe or perform certain obligations required
of it in the
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event of a merger or consolidation or disposition or lease of substantially all
of its properties after written notice from the Trustee or the holders of 25% or
more in aggregate principal amount of the Indenture Securities of such series
outstanding thereunder, (iv) failure to observe or perform any other covenant of
the Company in the Indenture or the Indenture Securities of such series (other
than a covenant included in the Indenture or the Indenture Securities solely for
the benefit of a series of Indenture Securities other than such series),
continued for 60 days after written notice from the Trustee or the holders of
25% or more in aggregate principal amount of the Indenture Securities of such
series outstanding thereunder, (v) certain events of bankruptcy, insolvency or
reorganization; (vi) the rendering against the Company of final judgment for the
payment of money in excess of $500,000, of which the Trustee has notice, and the
failure to satisfy such judgment or to appeal therefrom (or from the order,
decree or process pursuant to which such judgment was granted, passed, entered
or affirmed) and to obtain a stay of execution thereof within the period
prescribed by law for appeals, and to have such judgment discharged within 90
days after the expiration of such period or the period of any such stay,
whichever shall later expire; (vii) default, of which the Trustee has notice, in
the payment of any installment of interest, when and as the same shall become
due and payable, on any bond, debenture, note or other evidence of indebtedness
of, or assumed by, the Company (including an Indenture Security of another
series) and continuance of such default for the period of grace, if any,
provided for therein, or default in the payment of the principal of or premium,
if any, on any such bond, debenture, note or other evidence of indebtedness when
and as the same shall become due and payable, whether at maturity, by
declaration, upon redemption, or otherwise, and the time for payment of such
interest, principal or premium shall not have been effectively extended, unless
the Company is contesting in good faith its liability for the payment of the
installment of interest or of principal or premium in question and shall have
been advised by its counsel that it has a meritorious defense thereto; and
(viii) any other Event of Default as may be specified for such series, the
Trustee or the holders of 25% or more in aggregate principal amount of Indenture
Securities of such series outstanding thereunder may declare the principal
amount of all Indenture Securities of such series to be due and payable
immediately, but if all defaults with respect to Indenture Securities of such
series (other than non-payment of accelerated principal) are cured and there has
been no sale of property under any judgment or decree for the payment of moneys
due which shall have been obtained or entered, the holders of a majority in
aggregate principal amount of the Indenture Securities of such series
outstanding thereunder may waive the default and rescind the declaration and its
consequences. (Section 6.01)
The Indenture provides that the holders of a majority in aggregate
principal amount of the Indenture Securities of any series outstanding
thereunder may, subject to certain exceptions, direct the time, method and place
of conducting any proceeding for any remedy available to, or exercising any
power or trust conferred upon, the Trustee with respect to Indenture Securities
of such series and may on behalf of all holders of Indenture Securities of such
series waive any past default and its consequences with respect to Indenture
Securities of such series, except a default in the payment of the principal of,
premium, if any, or interest, if any, on any of the Indenture Securities of such
series. (Section 6.06)
Holders of any Security of any series may not institute any proceeding to
enforce the Indenture unless the Trustee thereunder shall have refused or
neglected to act for 60 days after a request and offer of satisfactory indemnity
by the holders of 25% or more in aggregate principal amount of the Indenture
Securities of such series outstanding thereunder, but the right of any holder of
any Security of any series to enforce payment of the principal of, premium, if
any, or interest, if any, on his Indenture Securities when due shall not be
impaired without the consent of such holder. (Section 6.04)
The Trustee is required to give the holders of any Security of any series
notice of all defaults with respect to such series known to it within 90 days
after the occurrence thereof (Events of Default summarized above, exclusive of
any grace period and irrespective of any requirement that notice of default be
given), unless cured before the giving of such notice but, except for defaults
in payments of the principal of, premium, if any, or interest, if any, on the
Indenture Securities of such series, the Trustee may withhold notice if and so
long as it determines in good faith that the withholding of such notice is in
the interests of the holders of the Securities of such series. (Section 315 of
the TIA)
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The Company is required to deliver to the Trustee each year an officers'
certificate stating whether such officers have obtained knowledge of any default
by the Company in the performance of certain covenants and, if so, specifying
such default and the nature thereof. (Section 5.09)
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE: Unless otherwise
specified in the Prospectus Supplement relating to certain Indenture Securities,
the Indenture may be discharged upon payment of the principal of, premium, if
any, and interest, if any, on all the Indenture Securities and all other sums
due thereunder. In addition, unless otherwise specified in the Prospectus
Supplement relating to certain Indenture Securities, the Company may defease the
Indenture Securities by depositing with the Trustee, in trust for the benefit of
the holders thereof, (i) funds (in such currency or currency unit in which any
Indenture Securities of such particular series are payable) sufficient to pay,
or (ii) in the case of Indenture Securities payable in U.S. dollars, U.S.
Government Obligations or in the case of Indenture Securities payable in a
foreign currency, Foreign Government Securities as will, or will together with
the income thereon without consideration of any reinvestment thereof, be
sufficient to pay in the currency or currency unit in which the Indenture
Securities are payable, all sums due for the principal of, premium, if any, and
interest, if any, on the Indenture Securities of such series, as they shall
become due from time to time, and, providing certain other conditions are met,
the Trustee shall cancel and satisfy the Indenture with respect to such series
to the extent provided therein. (Sections 12.01 and 12.02)
For federal income tax purposes, a defeasance may be treated as a taxable
exchange of the related Indenture Securities for (i) an issue of obligations of
the trust or (ii) a direct interest in the cash and securities held in the
trust. In that case, holders of such Indenture Securities would recognize gain
or loss equal to the difference between the holder's cost or other tax basis for
the Indenture Securities and the value of the holder's interest in the trust
obligations or in the cash and securities held in the trust, as the case may be.
Under this tax treatment, the holder would recognize the gain or loss if the
trust obligations or the cash or securities deposited, as the case may be, had
actually been received by them in exchange for their Indenture Securities. Such
holders thereafter would be required to include in income a share of the income,
gain or loss of the trust a different amount than would be includable in the
absence of the defeasance. Prospective investors are urged to consult their own
tax advisors as to the specific consequences to them of defeasance.
REPORTS FURNISHED TO HOLDERS OF SECURITIES: The Company will furnish to the
holders of Securities copies of all quarterly and annual financial reports
distributed to its stockholders generally as soon as practicable after the
mailing of such material to the stockholders. (Section 5.10)
PLAN OF DISTRIBUTION
The Company may offer the Securities (i) to or through one or more
underwriters, (ii) to or through dealers, (iii) through agents or (iv) directly
or through its subsidiaries to purchasers. The Prospectus Supplement will
describe the method of distribution of the Offered Securities.
The distribution of Offered Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such market
prices or at negotiated prices.
If underwriters are used in the offering of Offered Securities, the names
of the managing underwriter or underwriters and any other underwriters, and the
terms of the transaction, including compensation of the underwriters and
dealers, if any, will be set forth in the Prospectus Supplement relating to such
offering. Only underwriters named in a Prospectus Supplement will be deemed to
be underwriters in connection with the Offered Securities described therein.
Firms not so named will have no direct or indirect participation in the
underwriting of such Offered Securities, although such a firm may participate in
the distribution of such Offered Securities under circumstances entitling it to
a dealer's commission. It is anticipated that any underwriting agreement
pertaining to any Offered Securities will (1) entitle the underwriters to
indemnification by the Company against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended (the 'Securities Act'),
or to contribution for payments which the underwriters may be required to make
in respect thereof, (2) provide that the obligations of the underwriters will be
subject to certain conditions precedent, and (3)
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provide that the underwriters generally will be obligated to purchase all
Offered Securities if any are purchased.
The Company also may sell Offered Securities to a dealer as principal. In
such event, the dealer may then resell such Offered Securities to the public at
varying prices to be determined by such dealer at the time of resale. The name
of the dealer and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
Offered Securities also may be offered through agents designated by the
Company from time to time. Any such agent will be named, and the terms of any
such agency will be set forth, in the Prospectus Supplement relating thereto.
Unless otherwise indicated in such Prospectus Supplement, any such agent will
act on a best efforts basis for the period of its appointment and any such agent
may utilize dealers or selling groups in connection with the resale of Notes
purchased by such agent as principal.
As one of the means of direct issuance of the Offered Securities, the
Company may utilize the services of any available electronic auction system to
conduct an electronic 'dutch auction' of the Offered Securities among potential
purchasers who are eligible to participate in the auction of such Offered
Securities, if so described in the Prospectus Supplement.
Dealers and agents named in a Prospectus Supplement may be deemed to be
underwriters (within the meaning of the Securities Act) of the Offered
Securities described therein and, under agreements which may be entered into
with the Company, may be entitled to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act, or to
contribution for payments which they may be required to make in respect thereof.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, the Company in the ordinary course of business.
Each underwriter, dealer and agent participating in the distribution of any
Offered Securities that are to be issued as 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 qualifying financial
institutions) in connection with the original issuance of such Offered
Securities.
As used herein, 'United States' means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction, and 'United States
person' means an individual who is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or any estate or
trust the income of which is subject to United States Federal income taxation
regardless of its source.
Offers to purchase Offered Securities may be solicited directly by the
Company or through its subsidiaries and sales thereof may be made by the Company
directly to institutional investors or others. The terms of any such sales will
be described in the Prospectus Supplement relating thereto.
If so indicated in a Prospectus Supplement, the Company will authorize
underwriters or other agents of the Company to solicit offers by certain
institutions to purchase the Offered Securities from the Company pursuant to
contracts providing for payment and delivery at 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 (1) the purchase of the Offered
Securities shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject and (2) if the Offered
Securities are also being sold to underwriters, the Company shall have sold to
such underwriters the Offered Securities not subject to delayed delivery.
Underwriters and other agents will not have any responsibility in respect of the
validity or performance of such contracts.
The anticipated date of delivery of Offered Securities will be as set forth
in the Prospectus Supplement relating to the offering of such Securities.
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LEGAL MATTERS
The legality of the Securities offered hereby will be passed upon by Dewey
Ballantine, 1301 Avenue of the Americas, New York, New York, on behalf of the
Company, and by Whitman Breed Abbott & Morgan, 200 Park Avenue, New York, New
York, on behalf of the underwriters or agents, if any.
EXPERTS
The financial statements and the related supplemental schedule and
supplemental note incorporated in this Prospectus by reference from the
Company's Annual Report on Form 10-K for the year ended December 31, 1995 have
been audited by Deloitte & Touche LLP, independent public accountants, as stated
in their report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
13
<PAGE>
<PAGE>
______________________________ _____________________________
______________________________ _____________________________
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT HERETO AND THE ACCOMPANYING
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN OR THEREIN AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE AGENTS. NEITHER THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT HERETO AND THE ACCOMPANYING
PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATES AS OF WHICH INFORMATION IS GIVEN HEREIN
OR THEREIN. THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT HERETO AND THE
ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN
ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
DESCRIPTION OF NOTES............................. S-2
CERTAIN TAX CONSEQUENCES......................... S-9
PLAN OF DISTRIBUTION............................. S-10
PROSPECTUS
AVAILABLE INFORMATION............................ 2
INFORMATION INCORPORATED BY REFERENCE............ 2
THE COMPANY...................................... 2
RATIO OF EARNINGS TO FIXED CHARGES............... 3
USE OF PROCEEDS.................................. 3
DESCRIPTION OF SECURITIES........................ 3
PLAN OF DISTRIBUTION............................. 11
LEGAL MATTERS.................................... 13
EXPERTS.......................................... 13
</TABLE>
$3,000,000,000
[LOGO]
MEDIUM-TERM NOTES, SERIES H
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
------------------------
PROSPECTUS SUPPLEMENT
------------------------
MERRILL LYNCH & CO.
J.P. MORGAN & CO.
UBS SECURITIES
CHASE SECURITIES INC.
SALOMON BROTHERS INC
AUGUST 22, 1996
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