THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE
CHANGED. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS ARE NOT AN OFFER TO SELL THESE SECURITIES, NOR ARE THEY
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE
IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MARCH 29, 2004
PRELIMINARY PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH 22, 2004)
(GLAXOSMITHKLINE LOGO)
GLAXOSMITHKLINE CAPITAL INC.
$ % NOTES DUE , 2014
$ % NOTES DUE , 2034
FULLY AND UNCONDITIONALLY GUARANTEED BY
GLAXOSMITHKLINE PLC
---------------------
The 2014 notes will bear interest at a rate of % per year. We will pay
interest on the 2014 notes each and . We will make the first
interest payment on the 2014 notes on , 2004. The 2034 notes will bear
interest at a rate of % per year. We will pay interest on the 2034 notes each
and . We will make the first interest payment on the 2034
notes on , 2004. Unless we redeem the notes earlier, the 2014 notes
will mature on , 2014, and the 2034 notes will mature on ,
2034. There is no sinking fund for the notes. The notes will rank equally in
right of payment with all our other senior, unsecured debt obligations.
We may redeem some or all of the 2014 notes or the 2034 notes at any time
and from time to time at the redemption price determined in the manner described
in this prospectus supplement. We may also redeem the notes before their stated
maturity at a price equal to 100% of their principal amount plus accrued
interest to the redemption date in the event of certain changes in U.K. or U.S.
withholding taxes applicable to payments of interest.
We have applied to list the notes on the London Stock Exchange.
---------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the prospectus to which it relates is truthful or
complete. Any representation to the contrary is a criminal offense.
---------------------
<Table>
<Caption>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND GLAXOSMITHKLINE
PUBLIC COMMISSIONS CAPITAL INC.
-------- ------------- ---------------
Per 2014 note............................................ % % %
Per 2034 note............................................ % % %
Combined Total........................................... $ $ $
</Table>
Interest on the notes will accrue from , 2004, to the date of
delivery.
The underwriters expect to deliver the notes to purchasers on or about
, 2004.
JOINT BOOKRUNNING MANAGERS
CITIGROUP JPMORGAN LEHMAN BROTHERS
, 2004
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<Table>
<Caption>
PAGE
----
Incorporation of Certain Documents by Reference............. S-2
Presentation of Financial Information....................... S-2
Summary..................................................... S-3
Use of Proceeds............................................. S-7
Ratios of Earnings to Fixed Charges......................... S-7
Capitalization.............................................. S-8
Description of the Notes.................................... S-10
Income Tax Considerations................................... S-13
Underwriting................................................ S-18
Experts..................................................... S-19
PROSPECTUS
About this Prospectus....................................... 2
Where You Can Find More Information......................... 3
Incorporation of Certain Documents by Reference............. 3
Presentation of Financial Information....................... 3
Forward-Looking Statements.................................. 4
Use of Proceeds............................................. 5
Ratios of Earnings to Fixed Charges......................... 5
GlaxoSmithKline plc......................................... 5
GlaxoSmithKline Capital Inc................................. 6
GlaxoSmithKline Capital plc................................. 6
Legal Ownership of Debt Securities.......................... 6
Description of Debt Securities.............................. 8
Income Tax Considerations................................... 18
Plan of Distribution........................................ 19
Validity of Securities...................................... 20
Experts..................................................... 20
Limitations on Enforcement of U.S. Laws..................... 20
</Table>
---------------------
You should rely only on the information provided or incorporated by
reference in this prospectus supplement or the accompanying prospectus. We have
not authorized anyone else to provide you with different information. You should
not assume that the information in this prospectus supplement or the
accompanying prospectus is accurate as of any date other than the date on the
front of these documents. We are not making an offer of these securities in any
state or jurisdiction where the offer is not permitted.
The distribution or possession of this prospectus supplement and the
accompanying prospectus in or from certain jurisdictions may be restricted by
law. You should inform yourself about and observe any such restrictions, and
neither we nor any of the underwriters accepts any liability in relation to any
such restrictions.
S-1
This document is only being distributed to and is only directed to:
- persons who are outside the United Kingdom,
- investment professionals falling within Article 19(5) of the U.K.
Financial Services and Markets Act 2000 (Financial Promotion) Order 2001,
or
- high net worth entities, and other persons to whom it may lawfully be
communicated, falling within Article 49(2) of that Order.
The notes are only available to, and any invitation, offer or agreement to
subscribe, purchase or otherwise acquire the notes will only be made to, the
persons described above. Any person who does not fall within the above
categories should not act or rely on this document or any of its contents.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission, or the SEC, allows us to
"incorporate by reference" information contained in documents we file with the
SEC, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus supplement and the accompanying prospectus.
We are incorporating by reference our Annual Report on Form 20-F for the
fiscal year ended December 31, 2003 (File No. 1-15170). We also incorporate by
reference any future annual reports on Form 20-F we file with the SEC under the
Securities Exchange Act of 1934, as amended, or the Exchange Act, after the date
of this prospectus and prior to the time we sell all of the notes, and any
future reports on Form 6-K we furnish to the SEC during such period that are
identified in such reports as being incorporated by reference in this
prospectus. The information contained in these future filings will automatically
update and supersede the information contained in this prospectus supplement and
the accompanying prospectus or incorporated by reference to any previously filed
document.
You may request copies of these documents at no cost, by writing or
telephoning us at GlaxoSmithKline plc, 980 Great West Road, Brentford, Middlesex
TW8 9GS, England, telephone: +44(0)20 8047-5000, Attention: Company Secretary.
The documents incorporated by reference are also available through our website
at www.gsk.com. We are not incorporating the contents of our website into this
prospectus supplement.
PRESENTATION OF FINANCIAL INFORMATION
We present our financial statements in pounds Sterling and in accordance
with generally accepted accounting principles in the United Kingdom, or U.K.
GAAP. For a discussion of certain significant differences between U.K. GAAP and
generally accepted accounting principles in the United States, or U.S. GAAP, as
they relate to GlaxoSmithKline, we refer you to Note 36 to our audited
consolidated financial statements for the fiscal year ended December 31, 2003,
which are included in our Annual Report on Form 20-F and are incorporated by
reference into this prospectus supplement and the accompanying prospectus.
When we refer to "L," we mean pounds Sterling. When we refer to "$," we
mean U.S. dollars. Except where noted, all financial information is presented in
accordance with U.K. GAAP.
S-2
SUMMARY
This summary highlights selected information from this prospectus
supplement, the accompanying prospectus and the documents incorporated by
reference and does not contain all of the information that may be important to
you. You should carefully read this entire prospectus supplement, the
accompanying prospectus and the documents incorporated by reference.
GLAXOSMITHKLINE PLC
We are a major global healthcare company engaged in the creation and
discovery, development, manufacture and marketing of pharmaceutical and consumer
health-related products. Our two principal operational industry segments are
pharmaceuticals (prescription pharmaceuticals and vaccines) and consumer
healthcare (over-the-counter medicines, oral care and nutritional healthcare).
We are a public limited company incorporated under the laws of England and
Wales. Our shares are listed on the London Stock Exchange and our American
Depositary Shares are listed on the New York Stock Exchange. On December 27,
2000, GlaxoSmithKline plc acquired Glaxo Wellcome plc and SmithKline Beecham
plc, both English public limited companies, through a merger of the two
companies. Both Glaxo Wellcome and SmithKline Beecham were major global
healthcare businesses.
Our registered head office is in the London area at 980 Great West Road,
Brentford, Middlesex TW8 9GS, England, and our telephone number is +44(0)20
8047-5000. We also have operational headquarters in Philadelphia, Pennsylvania
and Research Triangle Park, North Carolina and operations in some 102 countries,
with products sold in over 150 countries. Our principal research and development
facilities are in the United Kingdom, the United States, Japan, Italy and
Belgium and our products are currently manufactured in some 38 countries. The
major markets for our products are the United States, Japan, the United Kingdom,
France, Germany and Italy.
GLAXOSMITHKLINE CAPITAL INC.
GlaxoSmithKline Capital Inc. is a Delaware corporation. It is a
wholly-owned subsidiary of GlaxoSmithKline plc, and it exists for the purpose of
issuing debt securities, the proceeds of which will be invested by it in
marketable securities or advanced to, or otherwise invested in, subsidiaries or
affiliates of GlaxoSmithKline plc. The registered offices of GlaxoSmithKline
Capital Inc. are located at 1105 North Market Street, Suite 1300, Wilmington,
Delaware 19801. Its telephone number is (302) 651-8319.
S-3
THE OFFERING
Notes......................... $ principal amount of % Notes due
2014 (the "2014 notes") and $
principal amount of % Notes due 2034 (the
"2034 notes") (collectively, the "notes").
Issuer........................ GlaxoSmithKline Capital Inc.
Guarantee..................... GlaxoSmithKline plc will fully and
unconditionally guarantee the payment of
principal, interest and additional amounts, if
any, payable in respect of the notes.
Denominations................. The notes will be issued only in book-entry
form, in denominations of $1,000 and integral
multiples of $1,000.
Interest rate................. The 2014 notes will bear interest at a rate of
% annually. The 2034 notes will bear interest
at a rate of % annually.
Interest payment dates........ For the 2014 notes, every and
, commencing , 2004. For
the 2034 notes, every , and
, commencing , 2004.
Regular record dates for
interest...................... For the 2014 notes, every and
. For the 2034 notes, every
, and .
Calculation of interest....... Interest will be calculated on the basis of a
360-day year consisting of twelve 30-day
months.
Ranking....................... The notes and the guarantee will rank equally
in right of payment with all other senior,
unsecured debt obligations of GlaxoSmithKline
Capital Inc. and GlaxoSmithKline plc,
respectively.
Optional make-whole
redemption.................... The notes will be redeemable at our option, in
whole or in part at any time and from time to
time. See "Description of the Notes -- Optional
Make-Whole Redemption" beginning on page S-11
of this prospectus supplement. Upon redemption,
we will pay a redemption price equal to the
greater of (i) 100% of the principal amount of
the notes to be redeemed and (ii) the sum of
the present values of the remaining scheduled
payments of principal and interest on the notes
to be redeemed together with, in each case,
accrued interest to the date of redemption. The
present value will be determined by discounting
the remaining principal and interest payments
to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve
30-day months) using the Treasury Rate (as
defined in this prospectus supplement) plus %
in the case of the 2014 notes and plus % in
the case of the 2034 notes. The "Comparable
Treasury Issue" for purpose of the definition
contained in "Description of the
Notes -- Optional Make-Whole Redemption" will
be the U.S. Treasury security selected by the
quotation agents as having a maturity
comparable to the remaining term of the notes
to be redeemed that would be utilized, at the
time of selection and in accordance with
customary financial practice, in pricing new
issues of corporate debt securities of
comparable maturity to the remaining term of
the notes.
S-4
Payment of additional
amounts....................... Subject to certain exceptions, if we are
required to withhold or deduct any amount for
or on account of any U.K. or U.S. withholding
tax from any payment made on the notes, we will
pay additional amounts on those payments so
that the amount received by noteholders will
equal the amount that would have been received
if no such taxes had been applicable. See
"Description of Debt
Securities -- Covenants -- Payment of
Additional Amounts" in the accompanying
prospectus.
Tax redemption................ In the event of changes in U.K. or U.S.
withholding taxes applicable to payments of
interest, we may redeem the notes in whole (but
not in part) at any time, at a price equal to
100% of their principal amount plus accrued
interest to the redemption date. See
"Description of Debt Securities -- Optional
Redemption for Tax Reasons" in the accompanying
prospectus.
Book-entry issuance,
settlement and clearance...... We will issue the notes as global notes in
book-entry form registered in the name of The
Depository Trust Company, New York, New York,
or its nominee. The sale of the notes will
settle in immediately available funds through
DTC. Investors may hold interests in a global
note through organizations that participate,
directly or indirectly, in the DTC system.
Those organizations will include the
Clearstream and Euroclear systems in Europe.
Governing law................. The notes will be governed by the laws of the
State of New York.
Further Issuances............. We may from time to time, without the consent
of the holders of the notes, create and issue
further notes having the same terms and
conditions in all respects as the notes being
offered hereby, except for the issue date, the
issue price and the first payment of interest
thereon. Additional 2014 notes issued in this
manner will be consolidated with and will form
a single series with the 2014 notes being
offered hereby. Additional 2034 notes issued in
this manner will be consolidated with and will
form a single series with the 2034 notes being
offered hereby.
Listing....................... We have applied to list the notes on the London
Stock Exchange.
Use of proceeds............... We intend to use the net proceeds from the sale
of the notes for general corporate purposes.
Concurrent offering........... Concurrently with the offering of the notes, we
intend to issue through our wholly-owned
subsidiary, GlaxoSmithKline Capital plc,
$ of notes that will bear interest at a
rate of % per year, due 2007. The offering
of the notes contemplated by this prospectus
supplement is not contingent upon the
completion of such concurrent offering.
S-5
SUMMARY CONSOLIDATED FINANCIAL DATA
The summary consolidated financial data set forth below have been derived
from our audited consolidated financial statements, which have been reported on
by PricewaterhouseCoopers LLP. The summary consolidated financial data should be
read in conjunction with, and are qualified in their entirety by reference to,
our audited consolidated financial statements.
Our financial statements are prepared in accordance with U.K. GAAP. For a
discussion of certain significant differences between U.K. GAAP and U.S. GAAP as
they relate to us, we refer you to Note 36 to our audited consolidated financial
statements for the fiscal year ended December 31, 2003, which are included in
our Annual Report on Form 20-F and incorporated by reference into this
prospectus supplement and the accompanying prospectus.
During 2002, we implemented FRS 19 "Deferred Tax" under U.K. GAAP. This FRS
requires deferred tax to be accounted for on a full provision basis, rather than
a partial provision basis as in 2001 and earlier years. This change has been
accounted for as a prior year adjustment for U.K. GAAP purposes and comparative
information has been restated as necessary. This change had no impact on U.S.
GAAP results.
<Table>
<Caption>
AS OF AND FOR THE YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
2003 2003 2002 2001 2000 1999
---------------- ------- ------- ------- ------- -------
(MILLIONS OF (MILLIONS OF POUNDS STERLING)
U.S. DOLLARS)(1)
PROFIT AND LOSS STATEMENT DATA:
U.K. GAAP
Sales........................... $ 38,379 L21,441 L21,212 L20,489 L18,079 L16,796
Trading profit.................. 11,680 6,525 5,662 4,697 4,455 3,930
Operating profit................ 11,442 6,392 5,551 4,734 4,729 4,343
Profit before taxation.......... 11,329 6,329 5,506 4,517 6,029 4,236
Earnings........................ 8,026 4,484 3,915 3,053 4,106 3,077
U.S. GAAP
Sales........................... 37,799 L21,117 L21,212 L20,489 L 9,559 L8,490
Net income/(loss)............... 4,332 2,420 413 (143) (5,228) 913
BALANCE SHEET DATA
U.K. GAAP
Total assets.................... $ 42,915 L23,975 L22,327 L22,343 L21,999 L19,162
Net assets...................... 15,152 8,465 7,388 8,252 8,834 6,534
Long-term debt.................. 6,535 3,651 3,092 2,108 1,751 1,897
Equity shareholders' funds...... 13,819 7,720 6,581 7,390 7,590 5,391
U.S. GAAP
Total assets.................... $100,956 L56,400 L57,671 L61,341 L65,786 L13,901
Net assets...................... 62,401 34,861 35,729 40,969 46,239 7,281
Shareholders' equity............ 61,068 34,116 34,922 40,107 44,995 7,230
</Table>
- ---------------
(1) U.S. dollar amounts provided are translations from the Sterling amounts,
solely for the convenience of the reader, at an exchange rate of $1.79 per
pound Sterling, the closing exchange rate on December 31, 2003. You should
not view such translations as a representation that such Sterling amounts
actually represent such U.S. dollar amounts or could be or could have been
converted into U.S. dollars at the rates indicated or at any other rate.
S-6
USE OF PROCEEDS
We estimate the net proceeds from the sale of the notes to be approximately
$ million after deducting underwriting discounts and expenses of the
offering. We expect to use the net proceeds for our general corporate purposes.
We may also invest the net proceeds in marketable securities as part of our
liquidity management process.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratios of earnings to fixed
charges computed under U.K. GAAP and U.S. GAAP for the periods indicated. Ratios
computed under U.S. GAAP are significantly lower than those computed under U.K.
GAAP due mainly to differences in accounting treatment of the merger of Glaxo
Wellcome plc and SmithKline Beecham plc in 2000. For a description of these
differences, see Note 36 to our audited consolidated financial statements for
the fiscal year ended December 31, 2003, which are incorporated by reference
into this prospectus supplement and the accompanying prospectus.
Earnings for this purpose have been calculated by (i) adding profit on
ordinary activities before taxation (after eliminating our share of
profits/losses of joint ventures and associated undertakings) to fixed charges
and (ii) subtracting from that total the amount of pre-tax earnings required to
pay dividends on outstanding preference shares and the minority interest in
pre-tax profit of subsidiaries that have not incurred fixed charges.
Fixed charges for this purpose consist of (i) interest payable (including
in respect of finance leases), (ii) that portion of operating lease rental
expense representative of the interest factor (being one-third of such rental
expense) and (iii) the amount of pre-tax earnings required to pay dividends on
outstanding preference shares.
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
--------------------------------
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
Ratio of earnings to fixed charges -- U.K. GAAP............. 22.1 19.9 15.1 13.6 11.0
Ratio of earnings to fixed charges -- U.S. GAAP............. 12.1 3.3(1) 1.7 --(2) 5.6
</Table>
- ---------------
(1) Reflects the impact of adoption of SFAS 142, "Goodwill and Other Intangible
Assets," pursuant to which we ceased amortization of goodwill and
indefinite-lived intangible assets beginning January 1, 2002.
(2) Our earnings determined in accordance with U.S. GAAP were insufficient to
cover fixed charges by L4.4 billion for the year ended December 31, 2000.
S-7
CAPITALIZATION
The following table sets forth GlaxoSmithKline group's consolidated
capitalization (including short-term debt) as of December 31, 2003, on an actual
basis and on an as adjusted basis to give effect to the sale of the notes. You
should read the information in this table in conjunction with our audited
financial statements as of December 31, 2003, and for the years ended December
31, 2003 and 2002, which are incorporated by reference into this prospectus
supplement and the accompanying prospectus.
<Table>
<Caption>
As of December 31, 2003
-------------------------
ACTUAL AS ADJUSTED(1)
------- ---------------
(in millions)
Capital and Reserves
Issued (fully paid) share capital(2)...................... L 1,487 L 1,487
Share premium account..................................... 264 264
Other reserves............................................ 5,969 5,969
------- -------
Shareholders' funds -- equity interests..................... L 7,720 L 7,720
======= =======
Non-equity minority interest
Preference Shares issued by subsidiaries(3)............... 503 503
Equity minority interests................................... 242 242
Total capital employed...................................... 8,465 8,465
------- -------
Borrowings(4)(5)
Notes offered hereby(4)................................... -- ( )
2.0% to 8.75% Eurobonds 2004-2006......................... (884) (884)
4.875% to 5.25% Sterling Notes 2008-2033.................. (1,472) (1,472)
3.25% to 3.375% Euro EMTNs 2008-2009...................... (1,056) (1,056)
Floating Rate U.S. Dollar EMTNs 2004...................... (277) (277)
7.375% U.S. Dollar MTN 2005............................... (56) (56)
Bank and other loans due after more than one year......... (289) (289)
Short term bank loans, overdrafts and commercial paper.... (1,069) (1,069)
------- -------
L(5,103) L ( )
======= =======
</Table>
- ---------------
(1) The table above does not reflect the intended offering of up to $
in principal amount of % notes due 2007, to be issued concurrently
with this offering by our wholly-owned subsidiary, GlaxoSmithKline Capital
plc, and guaranteed by GlaxoSmithKline plc. Assuming the successful
completion of such intended offering in the amount of $ in
principal, the GlaxoSmithKline group's total capitalization as of December
31, 2003 would have been L .
(2) As of December 31, 2003, the authorized and issued share capital of
GlaxoSmithKline plc was:
<Table>
<Caption>
AUTHORIZED ISSUED
---------- ---------
(IN THOUSANDS)
Ordinary Shares of 25p each................................. 10,000,000 5,949,464
</Table>
(3) As of December 31, 2003, SB Holdings Corporation ("SBH Corp."), a
subsidiary incorporated in the State of Delaware, had issued $500 million
of Flexible Auction Market Preferred Stock ("FAMPS"), comprising 5,000
shares of $100,000 each, issued in six series. The dividend on half of
these shares was fixed on issuance in 1996 for a seven-year period. The
dividend on the other half was fixed for a five-year period which ended
during 2001 and subsequently varied predominately with prevailing interest
rates. SBH Corp. also had in issue $400 million of Auction Rate Preference
Stock ("ARPS"), comprising
S-8
4,000 shares of $100,000 each, issued in five series, the dividend on which
also varied under conditions similar to the FAMPS described above. The
preference shares represent a long-term non-equity minority interest in the
GlaxoSmithKline group balance sheet in accordance with FRS 4 "Capital
Instruments" and UITF33 "Obligations in capital instruments." Notice to
redeem all eleven series was given in February 2004, with redemption
intended to be completed in March and April 2004.
(4) Balances in foreign currencies (including the principal amount of the
notes) have been translated into pounds Sterling at exchange rates as of
December 31, 2003 as follows:
<Table>
L/$.................. 1.79
L/euro............... 1.42
L/Yen................ 192.00
</Table>
(5) All of the Eurobonds referred to in the table above are fixed rate
borrowings. The interest rates shown on these fixed rate borrowings in the
table above are those contracted in the borrowings before taking into
account any currency swaps.
(6) On March 10, 2003, one of our series of Floating Rate U.S. Dollar EMTNs, in
the principal amount of $245,000,000, matured and was repaid.
(7) As of December 31, 2003, contingent liabilities, comprised of guarantees,
discounted bills and other items arising in the normal course of business,
amounted to L236 million. As of March 24, 2004, there have been no material
changes with respect to contingent liabilities (excluding litigation, which
is described below).
(8) Except as disclosed above (and, with respect to contingent liabilities,
including litigation proceedings, except as set forth in Note (7) above and
described in our Annual Report on Form 20-F for the year ended December 31,
2003), we did not have, as of December 31, 2003, any borrowings or
indebtedness in the nature of borrowing, loan capital, issued or created
but unissued, term loans, bank overdrafts, liabilities under acceptances or
acceptance credits, mortgages, charges, hire purchase commitments,
obligations under finance leases, guarantees or other material contingent
liabilities.
(9) On October 23, 2002, GlaxoSmithKline plc announced plans to invest up to L4
billion buying its shares in the market. This follows the completion of the
previous L4 billion program in 2002. The program covers purchases by
GlaxoSmithKline plc's employee trusts relating to share option grants and
other share-based incentives and purchases by GlaxoSmithKline plc of shares
for cancellation. A total of L1,199 million was spent under this program
prior to December 31, 2003, and an additional L234 million was spent
between December 31, 2003 and March 24, 2004. This L234 million represents
21,815,000 shares in total, of which L60 million was utilized to purchase
5,590,000 shares to be held as Treasury shares.
(10) All of the Medium Term Notes referred to in the table above have been
swapped into floating rate borrowings. The interest rates shown on these
fixed rate borrowings in the table above are those contracted on the
borrowings before taking into account any interest rate swaps. The net
effect of these agreements is to convert fixed rate liabilities with the
interest rates shown above to floating rate liabilities with interest rates
at a margin to the London Interbank Offered Rate.
(11) There has been no material change in the net borrowings or indebtedness in
the nature of borrowings of the GlaxoSmithKline group since December 31,
2003. In addition, except as set forth above, there has been no material
change in the authorized and issued share capital and reserves of the
GlaxoSmithKline group since December 31, 2003.
S-9
DESCRIPTION OF THE NOTES
The following description of the particular terms of the notes offered by
this prospectus supplement adds information to the description of the general
terms and provisions of debt securities under the heading "Description of Debt
Securities" beginning on page 8 of the accompanying prospectus.
GENERAL
We will issue the notes pursuant to an indenture among GlaxoSmithKline plc,
GlaxoSmithKline Capital Inc. and Citibank, N.A., the trustee for the notes. We
will issue the 2014 notes in the aggregate principal amount of $ . The
2014 notes will mature on , 2014. We will issue the 2034 notes in the
aggregate principal amount of $ . The 2034 notes will mature on
, 2034. We will issue the notes only in book-entry form, in
denominations of $1,000 and integral multiples of $1,000.
The notes will bear interest at the annual rate shown on the cover of this
prospectus supplement and will accrue interest from , 2004, or from
the most recent date to which interest has been paid (or provided for) to but
not including the next date upon which interest is required to be paid.
Commencing , 2004, interest will be payable on the 2014 notes
twice a year, on and , or if such day is not a business day,
the next succeeding business day, to the person in whose name a 2014 note is
registered at the close of business on the or that precedes
the date on which interest will be paid. Commencing , 2004, interest
will be payable on the 2034 notes twice a year, on and , or
if such day is not a business day, the next succeeding business day, to the
person in whose name a 2034 note is registered at the close of business on the
or that precedes the date on which interest will be paid.
Interest on the notes will be paid on the basis of a 360-day year consisting of
twelve 30-day months. "Business day" means any day other than a Saturday, a
Sunday or a day on which banking institutions in the City of New York or London,
England are authorized or obligated by law, regulation or executive order to be
closed.
The notes will be fully and unconditionally guaranteed by GlaxoSmithKline
plc. If for any reason, we do not make any required payment in respect of the
notes when due, whether on the normal due date, on acceleration, redemption or
otherwise, GlaxoSmithKline plc will cause the payment to be made to or to the
order of the trustee. You will be entitled to payment under the relevant
guarantee of GlaxoSmithKline plc without taking any action whatsoever against
us.
COVENANTS
Subject to certain exceptions, if we are required to withhold or deduct any
amount for or on account of any U.K. or U.S. withholding tax from any payment
made on the notes, we will pay additional amounts on those payments so that the
amount received by noteholders will equal the amount that would have been
received if no such taxes had been applicable. See "Description of Debt
Securities -- Covenants -- Payment of Additional Amounts" in the accompanying
prospectus.
As contemplated by the last paragraph under "Description of Debt
Securities -- Defeasance" beginning on page 17 of the accompanying prospectus,
the satisfaction of certain conditions will permit us to omit to comply with
some or all of our obligations, covenants and agreements under the indenture
with respect to the notes. In addition, we may omit to comply with certain
covenants through covenant defeasance. We refer you to the information under
"Description of Debt Securities -- Defeasance" in the accompanying prospectus
for more information on how we may do this.
Except as described in the accompanying prospectus, the indenture for the
notes does not contain any covenants or other provisions designed to protect
holders of the notes against a reduction in our creditworthiness in the event of
a highly leveraged transaction or that would prohibit other transactions that
might adversely affect holders of the notes, including, through the incurrence
of additional indebtedness.
S-10
OPTIONAL MAKE-WHOLE REDEMPTION
We may redeem the notes, in whole or in part, at our option at any time and
from time to time at a redemption price equal to the greater of (i) 100% of the
principal amount of the notes to be redeemed and (ii) as certified to the
trustee by us, the sum of the present values of the Remaining Scheduled Payments
discounted to the date of redemption on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate plus %, in
the case of the 2014 notes, and plus %, in the case of the 2034 notes,
together with, in each case, accrued interest on the principal amount of the
notes to be redeemed to the date of redemption. In connection with such optional
redemption the following defined terms apply:
- "Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semi-annual equivalent yield to maturity (computed as
of the third business day immediately preceding that redemption date) of
the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for that redemption date;
- "Comparable Treasury Issue" means the U.S. Treasury security selected by
the Independent Investment Banker that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of comparable maturity to the
remaining term of the notes. "Independent Investment Banker" means one of
the Reference Treasury Dealers appointed by us to act as the "Independent
Investment Banker;"
- "Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on
the third business day preceding that redemption date, as set forth in
the daily statistical release designated H.15 (519) (or any successor
release) published by the Federal Reserve Bank of New York and designated
"Composite 3:30 p.m. Quotations for U.S. Government Securities" or (ii)
if such release (or any successor release) is not published or does not
contain such prices on such business day, (A) the average of the
Reference Treasury Dealer Quotations for that redemption date, after
excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Independent Investment Banker for the notes
obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such Quotations;
- "Reference Treasury Dealer" means each of Citigroup Global Markets Inc.,
J.P. Morgan Securities Inc. or Lehman Brothers Inc. and their respective
successors and one other nationally recognized investment banking firm
that is a Primary Treasury Dealer specified from time to time by us,
provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), we shall substitute therefor another nationally
recognized investment banking firm that is a Primary Treasury Dealer;
- "Reference Treasury Dealer Quotation" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as
determined by the Independent Investment Banker, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Independent
Investment Banker by such Reference Treasury Dealer at 3:30 p.m., New
York City time, on the third business day preceding that redemption date;
and
- "Remaining Scheduled Payments" means, with respect to each note to be
redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related redemption date but
for such redemption, provided, however, that, if that redemption date is
not an interest payment date with respect to such notes, the amount of
the next succeeding scheduled interest payment thereon will be reduced by
the amount of interest accrued thereon to that redemption date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the notes to be redeemed.
Notice of redemption will be published in a daily newspaper of general
circulation in the United States and we will give notice to the London Stock
Exchange of any such redemption. On and after any redemption date, interest will
cease to accrue on the notes or any portion thereof
S-11
called for redemption. On or before any redemption date, we shall deposit with a
paying agent (or the trustee) money sufficient to pay the redemption price of
and accrued interest on the notes to be redeemed on such date. If less than all
the notes are to be redeemed, the notes to be redeemed shall be selected by the
trustee by such method as the trustee shall deem fair and appropriate. The
redemption price shall be calculated by the Independent Investment Banker and
us, and the trustee and any paying agent for the notes shall be entitled to rely
on such calculation.
FURTHER ISSUANCES
We are initially offering the 2014 notes in the aggregate principal amount
of $ and the 2034 notes in the aggregate principal amount of $ . We
may from time to time, without the consent of the holders of the notes, create
and issue further notes having the same terms and conditions in all respects as
the notes being offered hereby, except for the issue date, the issue price and
the first payment of interest thereon. Additional 2014 notes issued in this
manner will be consolidated with and will form a single series with the 2014
notes being offered hereby. Additional 2034 notes issued in this manner will be
consolidated with and will form a single series with the 2034 notes being
offered hereby.
BOOK-ENTRY SYSTEM
We will issue the notes in the form of one or more fully registered global
securities. We will deposit these global securities with, or on behalf of, The
Depository Trust Company, or DTC, and register these securities in the name of
DTC's nominee. Direct and indirect participants in DTC will record beneficial
ownership of the notes by individual investors. The transfer of ownership of
beneficial interests in a global security will be effected only through records
maintained by the depositary or its nominee, or by participants or persons that
hold through participants.
Upon receipt of any payment in respect of a global security, the depositary
or its nominee will immediately credit participants' accounts with amounts
proportionate to their respective beneficial interests in the principal amount
of the global security as shown in the records of the depositary or its nominee.
Payments by participants to owners of beneficial interests in a global security
held through participants will be governed by standing instructions and
customary practices and will be the responsibility of those participants.
DTC holds securities of institutions that have accounts with it or its
participants. Through its maintenance of an electronic book-entry system, DTC
facilitates the clearance and settlement of securities transactions among its
participants and eliminates the need to deliver securities certificates
physically. DTC's participants include securities brokers and dealers, including
the underwriters of this offering, banks, trust companies, clearing corporations
and other organizations. DTC is owned by a number of its participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and NASD, Inc.
Access to DTC'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. DTC agrees with
and represents to its participants that it will administer its book-entry system
in accordance with its rules and bylaws and requirements of law. The rules
applicable to DTC and its participants are on file with the Commission.
DTC has advised us and the underwriters that it is a limited-purpose trust
company organized under the laws of the State of New York, a "banking
organization" within the meaning of the New York banking law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered under the
provisions of Section 17A of the Exchange Act.
CONCERNING THE TRUSTEE
Citibank, N.A., the trustee for the notes, is an affiliate of Citigroup
Global Markets Inc., one of the underwriters for the notes.
S-12
INCOME TAX CONSIDERATIONS
The following discussion summarizes certain U.S. federal income and estate
and U.K. tax considerations that may be relevant to you in connection with your
ownership of the notes, if you purchase the notes at original issuance. This
summary is based on laws, regulations, rulings and decisions now in effect in
the United States and on laws and regulations in effect in the United Kingdom
and may change. Any change could apply retroactively and could affect the
continued validity of this summary.
The summary does not describe all of the tax considerations that may be
relevant to you or your situation, particularly if you are subject to special
tax rules. You should consult your own tax advisor to determine your particular
tax consequences in respect of the purchase, ownership or disposition of the
notes.
The summary in respect of U.K. tax considerations does not deal with the
position of certain classes of noteholders, such as dealers, and relates only to
those persons who are the absolute beneficial owners of the notes and who hold
the notes as an investment.
UNITED STATES TAXATION
In general, a United States person who holds notes or owns a beneficial
interest in the notes will be subject to United States federal taxation. You are
a United States person for U.S. federal income tax purposes if you are:
- a citizen or resident of the United States or its territories,
possessions or other areas subject to its jurisdiction,
- a corporation, partnership or other entity organized under the laws of
the United States or any political subdivision,
- an estate, the income of which is subject to United States federal income
taxation regardless of its source or
- a trust if (i) a United States court is able to exercise primary
supervision over the trust's administration and (ii) one or more United
States persons have the authority to control all of the trust's
substantial decisions.
UNITED STATES PERSONS
If you are a United States person, the interest you receive on the notes
will generally be subject to United States taxation and will be considered
ordinary interest income on which you will be taxed in accordance with the
method of accounting that you use for tax purposes. When you sell, exchange or
otherwise dispose of the notes (including pursuant to our optional redemption of
the notes), you generally will recognize gain or loss equal to the difference
between the amount you realize on the transaction and your tax basis in the
notes. You will also recognize gain or loss, as described further below, if
GlaxoSmithKline plc or another subsidiary of GlaxoSmithKline plc (the "GSK
entity") assumes the obligations of GlaxoSmithKline Capital Inc. as described
under "Description of Debt Securities -- Substitution of Issuer" in the
accompanying prospectus. Your tax basis in a note generally will equal the cost
of the note to you. If you are an individual and the note being sold, exchanged
or otherwise disposed of is a capital asset held for more than one year, you may
be eligible for reduced rates of taxation on any capital gain realized. Your
ability to deduct capital losses is subject to limitations.
As described under "-- U.K. Taxation" below, interest payments made on the
notes should be payable without withholding or deduction for or on account of
U.K. income tax. If, however, such taxes were to be imposed, taxes paid at the
appropriate rate applicable to you will be treated as foreign income taxes
eligible for credit against your U.S. federal income tax liability, subject to
generally applicable limitations and conditions, or, at your election, for
deduction in computing your taxable income. Interest and additional amounts, if
any,
S-13
will constitute income from sources without the United States for U.S. foreign
tax credit purposes. Such income generally will constitute "passive income" or,
in the case of certain United States persons holding notes, "financial services
income" for U.S. foreign tax credit purposes unless the U.K. withholding tax
applicable to you is imposed at a rate of at least 5%, in which case such income
generally will constitute "high withholding tax interest."
The calculation of foreign tax credits and, in the case where you elect to
deduct foreign taxes, the availability of deductions, involves the application
of rules that depend on your particular circumstances. You should consult your
own tax advisor regarding the availability of foreign tax credits and the
treatment of additional amounts.
SUBSTITUTION OF GLAXOSMITHKLINE CAPITAL INC. AS ISSUER
For U.S. federal income tax purposes, an assumption by a GSK entity of all
the rights and obligations of GlaxoSmithKline Capital Inc., as described under
"Description of Debt Securities - Substitution of Issuer" in the accompanying
prospectus, would be treated as a deemed taxable exchange of notes for new notes
issued by such GSK entity. You will generally recognize capital gain or loss in
an amount equal to the difference between the issue price, as described below,
of the new notes and your adjusted tax basis in the notes, as described above.
The issue price of the new notes will depend on whether the new notes or
the notes are considered to be "traded on an established market." Each of the
notes and the new notes will be considered to be traded on an established market
if, at any time during the 60-day period ending 30 days after the issue date of
the new notes (i) the notes or the new notes are traded on certain international
stock exchanges, including the London Stock Exchange, (ii) the notes or the new
notes, as the case may be, appear on a system of general circulation (including
computer listings disseminated to subscribing brokers, dealers or traders) that
provides a reasonable basis to determine fair market value by disseminating
either recent price quotations (including rates, yields or other pricing
information) of one or more identified brokers, dealers or traders or actual
prices (including rates, yields or other pricing information) of recent sales
transactions or (iii) price quotations are readily available from dealers,
brokers or traders. It is anticipated that the notes and the new notes will be
listed on the London Stock Exchange. In such event, the new notes would be
traded on an established market and, accordingly, the issue price of the new
notes would be their fair market value on their issue date (determined by
reference to their trading price at such time). Depending on their issue price,
the new notes may be issued with original issue discount (or "OID") or premium
for U.S. federal income tax purposes. Subject to a de minimis exception, the
amount of OID, if any, would be equal to the excess of the stated principal
amount of the new notes over the issue price of the new notes and generally
would be includible in income over the term of the new notes on a constant yield
basis. The amount of premium, if any, would be equal to the excess of the issue
price of the new notes over the stated principal amount of the new notes, and
you could elect to amortize any such premium under a constant yield method as an
offset to interest income on the new notes. Any such election would apply to all
obligations owned or acquired by you in that taxable year and all subsequent
taxable years and could not be revoked without the permission of the IRS. You
should consult your own tax advisor regarding the tax consequences of such a
deemed taxable exchange in the event that there is a substitution of issuers.
NON-UNITED STATES PERSONS
Under current U.S. federal income tax law, if you are not a United States
person, the interest payments that you receive on the notes generally will be
exempt from U.S. federal income taxes, including withholding tax. However, to
receive this exemption you may be required to satisfy certain certification
requirements (described below) of the United States Internal Revenue Service to
establish that you are not a United States person.
S-14
Even if you are not a United States person, you may still be subject to
U.S. federal income taxes on any interest payments you receive if:
- you are an insurance company carrying on a United States insurance
business, within the meaning of the United States Internal Revenue Code
of 1986, or
- you have an office or other fixed place of business in the United States
that receives the interest and you (i) earn the interest in the course of
operating a banking, financing or similar business in the United States
or (ii) are a corporation the principal business of which is trading in
stock or securities for its own account, and certain other conditions
exist.
If you are not a United States person, any gain you realize on a sale or
exchange of the notes generally will be exempt from U.S. federal income tax,
including withholding tax, unless:
- your gain is effectively connected with your conduct of a trade or
business in the United States or
- you are an individual holder and are present in the United States for 183
days or more in the taxable year of the sale, and either (i) your gain is
attributable to an office or other fixed place of business that you
maintain in the United States or (ii) you have a tax home in the United
States.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The fiscal agent must file information returns with the United States
Internal Revenue Service in connection with payments on the notes made to
certain United States persons. If you are a United States person, you generally
will not be subject to U.S. backup withholding tax on such payments if you
provide your taxpayer identification number to the fiscal agent. You may also be
subject to information reporting and backup withholding tax requirements with
respect to the proceeds from a sale of the notes. If you are not a United States
person, in order to avoid information reporting and backup withholding tax
requirements you may have to comply with certification procedures to establish
that you are not a United States person.
ESTATE TAX
A note held by an individual holder who at the time of death is a
non-resident alien will not be subject to U.S. federal estate tax.
U.K. TAXATION
PAYMENTS OF INTEREST
Payments of interest on the notes will be exempt from withholding or
deduction for or on account of U.K. tax under the provisions of U.K. tax law
relating to "quoted Eurobonds" as long as the notes continue to be listed on a
"recognized stock exchange" within the meaning of section 841 of the Income and
Corporation Taxes Act 1988. The London Stock Exchange is recognized for these
purposes. Accordingly, interest payments made on the notes, whether in global or
definitive form, will be payable without withholding or deduction for or on
account of U.K. income tax provided the notes are listed on a "recognized stock
exchange."
If the notes cease to be listed on a "recognized stock exchange," interest
would be paid after deduction of U.K. tax at the rate, currently, of 20%,
although if you are eligible for the benefits of a relevant tax treaty you may
be entitled to a reduced rate of withholding. Currently, a U.S. holder of debt
securities who is eligible for benefits under the Convention between the United
States and the United Kingdom for the Avoidance of Double Taxation which came
into force on March 31, 2003, and has effect in relation to tax withheld on
interest from May 1, 2003 would be entitled to receive payments of interest free
of U.K. withholding tax and may be able to obtain a direction to that effect
from the Inland Revenue. However, a direction will only be issued on prior
application to the Inland Revenue.
S-15
Payments of interest on a note will constitute U.K. source income for U.K.
tax purposes and, as such, remain subject to U.K. income tax (in respect of
individual noteholders) and U.K. corporation tax (in respect of corporate
noteholders) by direct assessment even though paid without deduction of any U.K.
withholding tax. However, where the interest is paid without deduction of any
U.K. withholding tax, the interest will not be assessed to U.K. tax in the hands
of holders of notes who are not resident (or, in the case of individuals only,
ordinarily resident) in the United Kingdom for tax purposes, except where such
persons carry on a trade, profession or vocation in the United Kingdom through a
U.K. permanent establishment (in the case of individuals through a branch or
agency) to which the holding of the notes is attributable, in which case
(subject to exemptions for interest received by certain categories of agent) tax
may be levied on the U.K. permanent establishment or on the branch or agency.
As indicated under "Description of Debt Securities -- Covenants -- Payment
of Additional Amounts" in the accompanying prospectus, holders of notes should
note that the provisions relating to additional amounts would not apply if the
Inland Revenue sought to assess directly the person entitled to the relevant
interest to U.K. tax. However exemption from, or reduction of, such U.K. tax
liability might be available under an applicable tax treaty.
PURCHASE, SALE AND RETIREMENT OF DEBT SECURITIES
If you are an individual, you will not be liable for U.K. taxation on
capital gains realized on the sale or other disposal or redemption of a note
unless you are resident or ordinarily resident in the United Kingdom for tax
purposes, or you carry on a trade, profession or vocation in the United Kingdom
through a branch or agency and such note is or has been used or acquired for the
purpose of such trade, profession or vocation, or such branch or agency.
Under the U.K. loan relationships legislation, certain corporate investors
holding the notes will be charged to U.K. corporation tax on income, depending
on their "authorized" accounting method, on any accruing premium, discount or
gain as well as accruing interest during the period of ownership. If you are an
individual you will not be taxed under these provisions. If you are not a
corporation which is a U.K. resident for tax purposes you will not be subject to
this legislation unless you are carrying on a trade or business through a
permanent establishment in the United Kingdom and you hold the notes in
connection with such trade or business.
U.K. STAMP TAXES IN RELATION TO DEBT SECURITIES
No U.K. Stamp Duty or Stamp Duty Reserve Tax is payable on the issue or the
transfer of the global note, provided that interest paid on the note represents
a reasonable commercial return.
EU SAVINGS DIRECTIVE
On June 3, 2003, the European Council of Economics and Finance Ministers
adopted a Directive on the taxation of savings income under which Member States
will be required, if a number of important conditions are met and from a date
not earlier than January 1, 2005, to provide to the tax authorities of another
Member State details of payments of interest (or similar income) paid by a
person within its jurisdiction to an individual resident in that other Member
State, except that, for a transitional period, Austria, Belgium and Luxembourg
will instead be required (unless during that period they elect otherwise) to
operate a withholding system in relation to such payments (the ending of such
transitional period being dependent on the conclusion of certain other
agreements relating to information exchange with certain other countries).
U.K. INHERITANCE TAX IN RELATION TO DEBT SECURITIES
A note held by an individual whose domicile is determined to be the United
States for purposes of the United States-United Kingdom Double Taxation
Convention relating to estate and gift taxes (the "Estate Tax
S-16
Treaty") and who is not for such purposes a national of the United Kingdom will
not, provided any U.S. federal estate or gift tax chargeable has been paid, be
subject to U.K. inheritance tax on the individual's death or on a lifetime
transfer of a note except in certain cases where the note (i) is comprised in a
settlement (unless, at the time of the settlement, the settlor was domiciled in
the United States and was not a national of the United Kingdom), (ii) is part of
the business property of a U.K. permanent establishment of an enterprise, or
(iii) pertains to a U.K. fixed base of an individual used for the performance of
independent personal services. In such cases, the Estate Tax Treaty generally
provides a credit against U.S. federal tax liability for the amount of any tax
paid in the United Kingdom in a case where the note is subject both to U.K.
inheritance tax and to U.S. federal estate or gift tax.
PAYMENT BY GLAXOSMITHKLINE PLC AS GUARANTOR
As a matter of U.K. tax law, it is possible that payments made by
GlaxoSmithKline plc as guarantor would be subject to withholding on account of
U.K. tax. This withholding would be subject to any claim which would be made
under any applicable double tax treaty.
S-17
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement dated , 2004, we have agreed to sell to the underwriters
named below, for whom Citigroup Global Markets Inc., J.P. Morgan Securities Inc.
and Lehman Brothers Inc. are acting as representatives, the following respective
principal amounts of the notes:
<Table>
<Caption>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT OF
UNDERWRITER OF 2014 NOTES 2034 NOTES
- ----------- ---------------- -------------------
Citigroup Global Markets Inc........................ $ $
J.P. Morgan Securities Inc..........................
Lehman Brothers Inc.................................
-------------- ------------
Total............................................. $ $
============== ============
</Table>
The underwriting agreement provides that the underwriters are obligated to
purchase all of the notes if any are purchased. The underwriting agreement also
provides that if an underwriter defaults, the purchase commitments of
non-defaulting underwriters may be increased or the offering of notes may be
terminated.
The underwriters propose to offer the notes initially at the public
offering price on the cover page of this prospectus supplement and to selling
group members at that price less a selling concession of % of the principal
amount per 2014 note and % of the principal amount per 2034 note. The
underwriters and selling group members may allow a discount of % of the
principal amount per 2014 note and % per principal amount per 2034 note on
sales to other broker-dealers. After the initial public offering, the
underwriters may change the public offering price and concession and discount to
broker-dealers.
We estimate that our out-of-pocket expenses for this offering will be
approximately $ .
The notes are a new issue of securities with no established trading market.
One or more of the underwriters intends to make a secondary market for the
notes. However, they are not obligated to do so and may discontinue making a
secondary market for the notes at any time without notice. No assurance can be
given as to how liquid the trading market for the notes will be.
Each underwriter has agreed that it will not offer or sell, directly or
indirectly, any of the notes in any jurisdiction where such offer or sale is not
permitted. Each underwriter has also represented and agreed that:
- it has not offered or sold and, prior to the expiration of the period of
six months from the closing date for the issuance of the notes, will not
offer or sell any notes to persons in the United Kingdom, except to those
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments, as principal or agent, for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United
Kingdom for purposes of the Public Offers of Securities Regulations 1995;
- it has complied and will comply with all applicable provisions of the
Financial Services and Markets Act 2000, or FSMA, with respect to
anything done by it in relation to the notes in, from or otherwise
involving the United Kingdom; and
- it has only communicated or caused to be communicated and it will only
communicate or cause to be communicated an invitation or inducement to
engage in investment activity (within the meaning of Section 21 of FSMA)
received by it in connection with the issue or sale of the notes in
circumstances in which Section 21(1) of FSMA does not apply to
GlaxoSmithKline Capital Inc. or GlaxoSmithKline plc.
We have agreed to indemnify the underwriters against liabilities under the
Securities Act of 1933, as amended, or contribute to payments that the
underwriters may be required to make in that respect.
S-18
In the ordinary course of their respective businesses, the underwriters and
their affiliates have engaged, and in the future may engage, in commercial
banking and/or investment banking transactions with us and our affiliates.
Citibank, N.A., the trustee for the notes, is an affiliate of Citigroup Global
Markets Inc., one of the underwriters for the notes.
In connection with the offering, the underwriters may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act.
- Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.
- Over-allotment involves sales by the underwriters of notes in excess of
the principal amount of notes the underwriters are obligated to purchase,
which creates a syndicate short position.
- Syndicate covering transactions involve purchases of notes in the open
market after the distribution has been completed in order to cover
syndicate short positions.
- Penalty bids permit the underwriters to reclaim a selling concession from
a syndicate member when the notes originally sold by such syndicate
member are purchased in a stabilizing or a syndicate covering transaction
to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty
bids may have the effect of raising or maintaining the market price of the notes
or preventing or retarding a decline in the market price of the notes. As a
result, the price of the notes may be higher than the price that might otherwise
exist in the open market. These transactions, if commenced, may be discontinued
at any time.
We expect that delivery of the notes will be made against payment therefor
on or about , 2004, which is the fifth business day after the date hereof. Under
Rule 15c6-1 of the Securities Exchange Act, trades in the secondary market
generally are required to settle in three business days, unless the parties to
any such trade expressly agree otherwise. Accordingly, purchasers who wish to
trade the notes on the date hereof or the next following business day will be
required, by virtue of the fact that the notes initially will not settle in T+3,
to specify an alternative settlement cycle at the time of such trade to prevent
a failed settlement and should consult their own advisor.
EXPERTS
Our consolidated financial statements incorporated into this prospectus
supplement, and the registration statement of which the prospectus is a part, by
reference to our annual report on Form 20-F for the year ended December 31,
2003, have been so incorporated in reliance on the report (which contains an
explanatory paragraph to reference Note 36 to the consolidated financial
statements that describes the financial statement impacts of the differences in
generally accepted accounting principles in the United Kingdom as compared with
those in the United States) of PricewaterhouseCoopers LLP, independent chartered
accountants and registered auditors, given on their authority as experts in
auditing and accounting.
S-19
PROSPECTUS
(GLAXOSMITHKLINE LOGO)
$5,000,000,000
GlaxoSmithKline Capital Inc.
GlaxoSmithKline Capital plc
Debt Securities
Fully and Unconditionally Guaranteed by
GlaxoSmithKline plc
---------------------
We may offer debt securities from time to time in one or more series
through this prospectus. The debt securities will be issued through one of our
finance subsidiaries, GlaxoSmithKline Capital Inc. or GlaxoSmithKline Capital
plc, and any debt securities we issue will be fully and unconditionally
guaranteed by GlaxoSmithKline plc.
We will receive an aggregate amount of up to $5,000,000,000 (or its
equivalent in foreign currencies, currency units or composite currencies) from
the sales of these debt securities.
We will provide the specific terms of the debt securities we offer in one
or more supplements to this prospectus. You should read this prospectus and any
related prospectus supplement carefully before you invest. Our debt securities
may be denominated in U.S. dollars or in any other currencies, currency units or
composite currencies as we may designate.
We may offer these debt securities through underwriters, agents or dealers
or directly to institutional purchasers. The accompanying prospectus supplement
will set forth the names of any underwriters or agents and any applicable
commissions or discounts. The prospectus supplement will also set forth the
proceeds we will receive from any sale of debt securities.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION NOR ANY OTHER REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is March 22, 2004.
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
About this Prospectus....................................... 2
Where You Can Find More Information......................... 3
Incorporation of Certain Documents by Reference............. 3
Presentation of Financial Information....................... 3
Forward-Looking Statements.................................. 4
Use of Proceeds............................................. 5
Ratios of Earnings to Fixed Charges......................... 5
GlaxoSmithKline plc......................................... 5
GlaxoSmithKline Capital Inc................................. 6
GlaxoSmithKline Capital plc................................. 6
Legal Ownership of Debt Securities.......................... 6
Description of Debt Securities.............................. 8
Income Tax Considerations................................... 18
Plan of Distribution........................................ 19
Validity of Securities...................................... 20
Experts..................................................... 20
Limitations on Enforcement of U.S. Laws..................... 20
</Table>
---------------------
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. You should not assume
that the information in this prospectus or any prospectus supplement is accurate
as of any date other than the date on the front of these documents. We are not
making an offer of these securities in any state or jurisdiction where the offer
is not permitted.
---------------------
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or the SEC, using a "shelf" registration
process. Under this shelf process, we may sell any combination of the debt
securities described in this prospectus in one or more offerings up to an
aggregate offering price of $5,000,000,000 (or its equivalent in foreign
currencies, currency units or composite currencies).
This prospectus provides you with a general description of the debt
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement, attached to the front of this prospectus, that will
contain specific information about the terms of that offering. Those terms may
vary from the terms described in this prospectus. As a result, the summary
description of the debt securities in this prospectus is subject to, and
qualified by reference to, the descriptions of the particular terms of any debt
securities contained in any related prospectus supplement. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read both this prospectus and any prospectus supplement
together with the additional information described under the headings "Where You
Can Find More Information" and "Incorporation of Certain Documents by
Reference."
This prospectus does not include all of the information contained in the
registration statement of which it is a part. We refer you to the registration
statement and the related exhibits for a more complete understanding of our debt
securities and the shelf registration process.
2
As used in this prospectus, the term "finance subsidiaries" refers to
GlaxoSmithKline Capital Inc., a Delaware corporation, and GlaxoSmithKline
Capital plc, an English public limited company. Any debt securities we offer
will be issued by one of the finance subsidiaries and will be fully and
unconditionally guaranteed by GlaxoSmithKline plc, an English public limited
company (which we refer to as "GlaxoSmithKline"). The term "guarantor" refers to
GlaxoSmithKline in its capacity as guarantor of the debt securities. Unless the
context requires otherwise, the terms "we," "our" and "us" refer to
GlaxoSmithKline and its consolidated subsidiaries.
WHERE YOU CAN FIND MORE INFORMATION
We file annual reports and other information with the SEC. You may read and
copy any document we file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. In addition, the SEC maintains
an Internet site at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding issuers that file
electronically with the SEC. We began filing documents electronically with the
SEC on November 4, 2002; our filings were previously made in paper format.
Reports and other information concerning our business may also be inspected at
the offices of the New York Stock Exchange at 20 Broad Street, New York, New
York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC and that is incorporated by reference will automatically update and
supersede this information.
The following documents, which have been filed with or furnished to the
Commission, are incorporated by reference:
- our annual report on Form 20-F for the fiscal year ended December 31,
2002 (File No. 1-15170), and
- our reports on Form 6-K dated March 4, 2004 (containing our financial
results for the six months ended June 30, 2003 and the year ended
December 31, 2003) (File No. 1-15170).
We also incorporate by reference any future annual reports on Form 20-F we
file with the SEC under the Securities Exchange Act of 1934, as amended, or the
Exchange Act, after the date of this prospectus and prior to the time we sell
all of the debt securities described in this prospectus, and any future reports
on Form 6-K we furnish to the SEC during such period that are identified in such
reports as being incorporated by reference in this prospectus.
You may request a copy of these filings, at no cost, by writing or
telephoning us at our principal
executive offices at the following address: GlaxoSmithKline plc, 980 Great West
Road, Brentford, Middlesex TW8 9GS, England, telephone +44(0)20 8047-5000,
Attention: Company Secretary. Our Internet address is www.gsk.com. We are not
incorporating the contents of our website into this prospectus.
PRESENTATION OF FINANCIAL INFORMATION
We present our financial statements in pounds Sterling and in accordance
with generally accepted accounting principles in the United Kingdom, or U.K.
GAAP. For a discussion of certain significant differences between U.K. GAAP and
generally accepted accounting principles in the United States, or U.S. GAAP, as
they relate to GlaxoSmithKline, we refer you to the notes to our audited
consolidated financial statements, which are incorporated by reference into this
prospectus. Except where noted, all financial information is presented in
accordance with U.K. GAAP.
When we refer to "L," we mean pounds Sterling. When we refer to "$," we
mean U.S. dollars.
3
FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated by reference in this
prospectus include forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, or the Securities Act, and Section
21E of the Exchange Act. You should not place undue reliance on these
statements. In addition, in the future we and others on our behalf may make
statements that constitute forward-looking statements. Such forward-looking
statements may include, without limitation, statements relating to the
following:
- our plans, objectives and goals;
- our future economic performance and prospects;
- the potential effect on our future performance of certain contingencies;
and
- assumptions underlying any such statements.
You can identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. Words such as "believes,"
"anticipates," "expects," "intends," "estimates" and "plans" and similar
expressions are intended to identify forward-looking statements, but these are
not the exclusive means of identifying such statements. We do not intend to
update these forward-looking statements except as may be required by applicable
securities laws.
Forward-looking statements are subject to important risks, uncertainties
and assumptions that are difficult to predict. The results or events predicted
in forward-looking statements may differ materially from actual results or
events. Some of the factors that could cause actual results or events to differ
from current expectations include the following:
- the highly competitive nature of the pharmaceutical business and
potential innovations and technical advances by our competitors, in
addition to the intensification of price competition resulting from
consolidation in the industry;
- competition from producers of generic pharmaceutical products, especially
upon the loss of patents for our products due to their expiration,
successful legal challenges to our patents by our competitors or the
reduction and relaxation of patent protection in some developing
countries;
- new and possibly increasing levels of price controls with respect to our
products in many markets;
- the risks associated with the increasingly demanding regulatory controls
governing the pharmaceutical industry, which could include increased
costs of production and time for product development, as well as a
heightened risk that previously granted regulatory approvals could be
withdrawn;
- the cost, uncertainty and other risks associated with the development of
new pharmaceutical products that may never reach the market or that may
have limited marketability or profitability, despite our significant
investment of time and money in their development;
- the outcome of current legal proceedings;
- changes in environmental regulations, which could increase our costs of
compliance and otherwise affect our business;
- our ability to maintain sufficient liquidity and to access capital
markets;
- the strength of the global economy in general and the strength of the
economies of the countries in which we conduct our operations in
particular;
- changes in tax, inflation, interest or foreign currency exchange rates
and controls or other economic factors affecting our businesses or the
possibility of political unrest in countries in which we do business;
4
- the effects of changes in accounting policies or practices; and
- acquisitions we may undertake in the future.
We caution you that the foregoing list of important factors is not
exhaustive. When evaluating forward-looking statements, you should carefully
consider the foregoing factors and other uncertainties and events, as well as
the risk factors set forth in our annual report on Form 20-F for the year ended
December 31, 2002 and subsequent annual reports on Form 20-F and other documents
filed with the SEC and any risk factors relating to us or a particular offering
discussed or incorporated by reference in the applicable prospectus supplement.
USE OF PROCEEDS
Unless we tell you otherwise in a prospectus supplement, we will use the
net proceeds from the sale of the debt securities described in this prospectus
for our general corporate purposes, including to refinance existing
indebtedness. We may also invest the net proceeds in marketable securities as
part of our liquidity management process.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratios of earnings to fixed
charges computed under U.K. GAAP and U.S. GAAP for the periods indicated. Ratios
computed under U.S. GAAP are significantly lower than those under U.K. GAAP due
mainly to differences in accounting treatment of the merger of Glaxo Wellcome
plc and SmithKline Beecham plc in 2000. For a description of these differences,
see Note 37 to our consolidated financial statements contained in our annual
report on Form 20-F for the year ended December 31, 2002, which is incorporated
by reference into this prospectus.
Earnings for this purpose have been calculated by (i) adding profit on
ordinary activities before taxation (after eliminating our share of
profits/losses of joint ventures and associated undertakings) to fixed charges
and (ii) subtracting from that total the amount of pre-tax earnings required to
pay dividends on outstanding preference shares and the minority interest in
pre-tax profit of subsidiaries that have not incurred fixed charges.
Fixed charges for this purpose consist of (i) interest payable (including
expense on debt and interest in respect of finance leases), (ii) that portion of
operating lease rental expense representative of the interest factor (being
one-third of such rental expense) and (iii) the amount of pre-tax earnings
required to pay dividends on outstanding preference shares.
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
----------------------------------
2002 2001 2000 1999 1998
----- ---- ----- ---- ----
Ratio of earnings to fixed charges -- U.K. GAAP... 19.9 15.1 13.6 11.0 8.6
Ratio of earnings to fixed charges -- U.S. GAAP... 3.3(1) 1.7 --(2) 5.6 5.7
</Table>
- ---------------
(1) Reflects the impact of adoption of SFAS 142, "Goodwill and Other
Intangible Assets" pursuant to which we ceased amortization of goodwill
and indefinite-lived intangible assets beginning January 1, 2002.
(2) Our earnings determined in accordance with U.S. GAAP were insufficient
to cover fixed charges by L4.4 billion for the year ended December 31,
2000.
GLAXOSMITHKLINE PLC
GlaxoSmithKline is a major global healthcare company engaged in the
creation and discovery, development, manufacture and marketing of pharmaceutical
and consumer health-related products. Our two principal operational industry
segments are pharmaceuticals (prescription pharmaceuticals and vaccines) and
consumer healthcare (over-the-counter medicines, oral care and nutritional
healthcare).
5
GlaxoSmithKline is a public limited company incorporated under the laws of
England and Wales. Our shares are listed on the London Stock Exchange and our
American Depositary Shares are listed on the New York Stock Exchange. On
December 27, 2000, GlaxoSmithKline acquired Glaxo Wellcome plc and SmithKline
Beecham plc, both English public limited companies, through a merger of the two
companies. Both Glaxo Wellcome and SmithKline Beecham were major global
healthcare businesses.
Our corporate head office is in the London area at 980 Great West Road,
Brentford, Middlesex TW8 9GS, England, and our telephone number is +44(0)20
8047-5000. We also have operational headquarters in Philadelphia, Pennsylvania
and Research Triangle Park, North Carolina and operations in some 102 countries,
with products sold in over 150 countries. Our principal research and development
facilities are in the United Kingdom, the United States, Japan, Italy and
Belgium and our products are currently manufactured in some 38 countries. The
major markets for our products are the United States, Japan, the United Kingdom,
France, Germany and Italy.
GLAXOSMITHKLINE CAPITAL INC.
GlaxoSmithKline Capital Inc. is a Delaware corporation. It is a
wholly-owned subsidiary of GlaxoSmithKline, and it exists for the purpose of
issuing debt securities, the proceeds of which will be invested by it in
marketable securities or advanced to, or otherwise invested in, subsidiaries or
affiliates of GlaxoSmithKline. The principal executive offices of
GlaxoSmithKline Capital Inc. are located at 1105 North Market Street, Suite
1300, Wilmington, Delaware 19801. Its telephone number is (302) 651-8319.
GLAXOSMITHKLINE CAPITAL PLC
GlaxoSmithKline Capital plc is a public limited company incorporated under
the laws of England and Wales. It is a wholly-owned subsidiary of
GlaxoSmithKline, and it exists for the purpose of issuing debt securities, the
proceeds of which will be invested by it in marketable securities or advanced
to, or otherwise invested in, subsidiaries or affiliates of GlaxoSmithKline. The
principal executive offices of GlaxoSmithKline Capital plc are located at 980
Great West Road, Brentford, Middlesex TW8 9GS, England. Its telephone number is
+44(0)20 8047-5000.
LEGAL OWNERSHIP OF DEBT SECURITIES
"STREET NAME" AND OTHER INDIRECT HOLDERS
We generally will not recognize investors who hold debt securities in
accounts at banks or brokers as legal holders of those debt securities. This is
called holding in "street name." Instead, we recognize only the bank or broker
or the financial institution the bank or broker uses to hold the debt
securities. These intermediary banks, brokers and other financial institutions
pass along principal, interest and other payments on the debt securities, either
because they agree to do so in their customer agreements or because they are
legally required to do so. If you hold debt securities in street name, you
should check with your own institution to find out:
- how it handles payments and notices with respect to securities;
- whether it imposes fees or charges;
- how it would handle voting if ever required;
- how and when you should notify it to exercise on your behalf any rights
or options that may exist under the debt securities;
- whether and how you can instruct it to send you securities registered in
your own name so you can be a direct holder as described below; and
- how it would pursue rights under the debt securities if there were a
default or other event triggering the need for holders to act to protect
their interests.
6
REGISTERED HOLDERS
Our obligations, as well as the obligations of the trustee and any third
parties employed by us or the trustee, extend only to persons who are registered
as holders of debt securities. As noted above, we do not have obligations to you
if you hold in street name or through other indirect means, either because you
choose to hold debt securities in that manner or because the debt securities are
issued in the form of global securities as described below. For example, once we
make payment to the registered holder, we have no further responsibility for the
payment even if that holder is legally required to pass the payment along to you
as a street name customer but does not do so.
GLOBAL SECURITIES
A global security is a special type of indirectly held security. If we
choose to issue debt securities in the form of global securities, the ultimate
beneficial owners of the debt securities will be indirect holders. We do this by
requiring that the global security be registered in the name of a financial
institution we select and by requiring that the debt securities represented by
the global security not be registered in the name of any other holder except in
the special situations described below. The financial institution that acts as
the sole registered holder of the global security is called the depositary. Any
person wishing to own a debt security may do so indirectly through an account
with a broker, bank or other financial institution that in turn has an account
with the depositary. The prospectus supplement will indicate whether your series
of debt securities will be issued only as global securities.
Transfers of debt securities represented by the global security will be
made only on the records of the depositary or its nominee by transferring such
debt securities from the account of one broker, bank or financial institution to
the account of another broker, bank or financial institution. These transfers
are made electronically only and are also known as book-entry transfers.
Securities in global form are sometimes also referred to as being in book-entry
form.
As an indirect holder, your rights relating to a global security will be
governed by the account rules of your broker, bank or financial institution and
of the depositary, as well as general laws relating to securities transfers. We
will not recognize you as a holder of debt securities and instead will deal only
with the depositary that holds the global security.
You should be aware that if debt securities are issued only in the form of
a global security:
- you cannot have debt securities registered in your own name;
- you cannot receive physical certificates for your interest in the debt
securities;
- you will be a street name holder and must look to your own bank or broker
for payments on the debt securities and protection of your legal rights
relating to the debt securities;
- you may not be able to sell interests in the debt securities to some
insurance companies and other institutions that are required by law to
own securities in the form of physical certificates;
- the depositary's policies will govern payments, transfers, exchanges and
other matters relating to your indirect interest in the global security.
We and the trustee will have no responsibility for any aspect of the
depositary's actions or for its records of ownership interests in the
global security. We and the trustee also will not supervise the
depositary in any way; and
- the depositary will require that indirect interests in the global
security be purchased or sold within its system using same-day funds for
settlement.
In a few special situations described below, the global security will
terminate and the indirect interests in it will be exchanged for registered debt
securities represented by physical certificates. After that exchange, the choice
of whether to hold debt securities in registered form or in street name will be
up to you. You must consult your bank or broker to find out how to have your
interests in debt securities transferred to your name, so that you will be a
registered holder.
7
Unless we specify otherwise in the prospectus supplement, the special
situations for termination of a global security are:
- when the depositary notifies us that it is unwilling or unable to
continue as depositary and we do not or cannot appoint a successor
depositary within 90 days;
- the depositary ceases to be a clearing agency registered under the
Exchange Act and we do not appoint a successor depositary within 90 days;
- an event of default has occurred and is continuing and beneficial owners
representing a majority in principal amount of the applicable series of
debt securities have advised the depositary to cease acting as the
depositary; or
- we decide we do not want to have the debt securities of that series
represented by a global security.
The prospectus supplement may also list additional situations for
terminating a global security that would apply only to the particular series of
debt securities covered by the prospectus supplement. When a global security
terminates, the depositary (and not us or the trustee) is responsible for
deciding the names of the institutions that will be the initial registered
holders.
THE TERM "HOLDER" AS USED IN THIS PROSPECTUS AND ELSEWHERE
In the descriptions of the debt securities included in this prospectus and
any prospectus supplement, when we refer to the "holder" of a given debt
security as being entitled to certain rights or payments, or being permitted to
take certain actions, we are in all cases referring to the registered holder of
the debt security.
While you would be the registered holder if you held a certificated
security registered in your name, it is likely that the holder will actually be
either the broker, bank or other financial institution where you have your
street name account, or, in the case of a global security, the depositary. If
you are an indirect holder, you will need to coordinate with the institution
through which you hold your interest in a debt security in order to determine
how the provisions involving holders described in this prospectus and any
prospectus supplement will actually apply to you. For example, if the debt
security in which you hold a beneficial interest in street name can be repaid at
the option of the holder, you cannot exercise the option yourself by following
the procedures described in the prospectus supplement. Instead, you would need
to cause the institution through which you hold your interest to take those
actions on your behalf. Your institution may have procedures and deadlines
different from or additional to those described in the prospectus supplement
relating to the debt security.
DESCRIPTION OF DEBT SECURITIES
This section describes the general terms that will apply to any debt
securities that we may offer pursuant to this prospectus. The specific terms of
any offered debt securities, and the extent to which the general terms described
in this section apply to those debt securities, will be described in the related
prospectus supplement at the time of the offer.
GENERAL
As used in this prospectus, "debt securities" means the debentures, notes,
bonds, guarantees and other evidences of indebtedness that we issue and
GlaxoSmithKline fully and unconditionally guarantees and, in each case, the
trustee authenticates and delivers under the applicable indenture. The debt
securities will be our direct unsecured obligations and will rank equally and
ratably without preference among themselves and at least equally with all of our
other unsecured and unsubordinated indebtedness.
The debt securities will be issued in one or more series under indentures
among the finance subsidiaries, Citibank, N.A., as trustee, and GlaxoSmithKline,
as guarantor. The indentures applicable to GlaxoSmithKline Capital Inc. and
GlaxoSmithKline Capital plc, respectively, will each be qualified under the
Trust
8
Indenture Act of 1939, as amended. In the following discussion, we sometimes
refer to these indentures collectively as the "indentures."
This prospectus briefly outlines the provisions of the indentures. The
terms of the indentures will include both those stated in the indentures and
those made part of the indentures by the Trust Indenture Act. The forms of the
indentures have been filed as exhibits to the registration statement of which
this prospectus forms a part, and you should read the indentures for provisions
that may be important to you.
The indentures do not contain any covenants or other provisions designed to
protect holders of the debt securities against a reduction in the
creditworthiness of GlaxoSmithKline or the finance subsidiaries in the event of
a highly leveraged transaction or that would prohibit other transactions that
might adversely affect holders of the debt securities.
ISSUANCE IN SERIES
The debt securities offered through this prospectus will be limited to an
aggregate initial public offering price of $5,000,000,000 or the equivalent in
one or more foreign currencies, currency units or composite currencies. The
indentures do not limit the amount of debt securities that may be issued. The
debt securities may be issued in one or more series with the same or various
maturities, at a price of 100% of their principal amount or at a premium or a
discount. Not all debt securities of any one series need be issued at the same
time, and, unless otherwise provided, any series may be reopened, without the
consents of the holders of debt securities of that series, for issuances of
additional debt securities of that series. Except in the limited circumstances
described below under "-- Covenants -- Limitation on Liens," the debt securities
will not be secured by any property or assets of the guarantor or the finance
subsidiaries.
The terms of any authorized series of debt securities will be described in
a prospectus supplement. These terms will include some or all of the following:
- the title, aggregate principal amount and denominations of the debt
securities;
- the date or dates on which principal will be payable;
- the percentage of the principal amount at which the debt securities will
be issued and whether the debt securities will be "original issue
discount" securities for U.S. federal income tax purposes. If original
issue discount debt securities are issued (securities that are issued at
a substantial discount below their principal amount because they pay no
interest or pay interest that is below market rates at the time of
issuance), the special U.S. federal income tax and other considerations
of a purchase of original issue discount debt securities will be
described;
- the rate or rates, which may be fixed or variable, at which the debt
securities will bear interest;
- the interest payment dates;
- any optional or mandatory redemption terms;
- whether any sinking fund is required;
- the currency in which the debt securities will be denominated or
principal, premium or interest will be payable, if other than U.S.
dollars;
- whether the debt securities are to be issued as individual certificates
to each holder or in the form of global certificates held by a depositary
on behalf of beneficial owners;
- information describing any book-entry features;
- whether and under what circumstances additional amounts will be paid on
any debt securities as a result of withholding taxes and whether the debt
securities can be redeemed if additional amounts must be paid;
- the names and duties of any co-trustees, depositaries, authenticating
agents, paying agents, transfer agents or registrars for any series;
9
- the applicability of the defeasance and covenant defeasance provisions
described in this prospectus, or any modifications of those provisions;
- any deletions from, modifications of or additions to the events of
default or covenants with respect to the debt securities; and
- any other terms, conditions, rights or preferences of the debt
securities.
The prospectus supplement relating to any series of debt securities may add
to or change statements contained in this prospectus. The prospectus supplement
may also include, if applicable, a discussion of certain U.S. federal income tax
and U.K. income tax considerations.
GLAXOSMITHKLINE GUARANTEES
Debt securities issued by us will be fully and unconditionally guaranteed
by GlaxoSmithKline. If for any reason, the applicable finance subsidiary does
not make any required payment in respect of its debt securities when due,
whether on the normal due date, on acceleration, redemption or otherwise,
GlaxoSmithKline will cause the payment to be made to or to the order of the
trustee. The holder of a guaranteed debt security will be entitled to payment
under the relevant guarantee of GlaxoSmithKline without taking any action
whatsoever against the finance subsidiary.
PAYMENT AND TRANSFER
The debt securities will be issued only as registered securities, which
means that the name of the holder will be entered in a register that will be
kept by the trustee or another agent appointed by us. Unless stated otherwise in
a prospectus supplement, and except as described under "-- Book-Entry System"
below, payments of principal, interest and additional amounts, if any, will be
made at the office of the paying agent or agents named in the prospectus
supplement or by check mailed to you at your address as it appears in the
register.
Unless other procedures are described in a prospectus supplement and except
as described under "-- Book Entry System" below, you will be able to transfer
registered debt securities at the office of the transfer agent or agents named
in the prospectus supplement. You may also exchange registered debt securities
at the office of the transfer agent for an equal aggregate principal amount of
registered debt securities of the same series having the same maturity date,
interest rate and other terms as long as the debt securities are issued in
authorized denominations.
Neither we nor the trustee will impose any service charge for any transfer
or exchange of a debt security; however, we may ask you to pay any taxes or
other governmental charges in connection with a transfer or exchange of debt
securities.
BOOK-ENTRY SYSTEM
Debt securities may be issued under a book-entry system in the form of one
or more global securities. The global securities will be registered in the name
of a depositary or its nominee and deposited with that depositary or its
custodian. Unless stated otherwise in the prospectus supplement, The Depository
Trust Company, New York, New York, or DTC, will be the depositary if a
depositary is used.
DTC has advised us as follows:
- DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act;
- DTC was created to hold securities of its participants and to facilitate
the clearance and settlement of securities transactions, such as
transfers and pledges, among its participants in such securities through
10
electronic computerized book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of
securities certificates;
- DTC's participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations, some of
whom (and/or their representatives) own DTC; and
- access to DTC'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.
According to DTC, the foregoing information with respect to DTC has been
provided to the financial community for informational purposes only and is not
intended to serve as a representation, warranty or contract modification of any
kind.
Following the issuance of a global security in registered form, the
depositary will credit the accounts of its participants with the debt securities
upon our instructions. Only persons who hold directly or indirectly through
financial institutions that are participants in the depositary can hold
beneficial interests in the global securities. Since the laws of some
jurisdictions require certain types of purchasers to take physical delivery of
such securities in definitive form, you may encounter difficulties in your
ability to own, transfer or pledge beneficial interests in a global security.
So long as the depositary or its nominee is the registered owner of a
global security, we and the trustee will treat the depositary as the sole owner
or holder of the debt securities for purposes of the applicable indenture.
Therefore, except as set forth below, you will not be entitled to have debt
securities registered in your name or to receive physical delivery of
certificates representing the debt securities. Accordingly, you will have to
rely on the procedures of the depositary and the participant in the depositary
through whom you hold your beneficial interest in order to exercise any rights
of a holder under the indenture. We understand that under existing practices,
the depositary would act upon the instructions of a participant or authorize
that participant to take any action that a holder is entitled to take.
We will make all payments of principal, interest and additional amounts, if
any, on the debt securities to the depositary. It is expected that the
depositary will then credit participants' accounts proportionately with these
payments on the payment date and that the participants will in turn credit their
customers' accounts in accordance with their customary practices. Neither we nor
the trustee will be responsible for making any payments to participants or
customers of participants or for maintaining any records relating to the
holdings of participants and their customers, and you will have to rely on the
procedures of the depositary and its participants.
Global securities are generally not transferable. Physical certificates
will be issued to beneficial owners of a global security if:
- the depositary notifies us that it is unwilling or unable to continue as
depositary and we do not or cannot appoint a successor depositary within
90 days;
- the depositary ceases to be a clearing agency registered under the
Exchange Act and we do not appoint a successor depositary within 90 days;
- an event of default has occurred and is continuing and beneficial owners
representing a majority in principal amount of the applicable series of
debt securities have advised the depositary to cease acting as the
depositary; or
- we decide we do not want to have the debt securities of that series
represented by a global security.
CONSOLIDATION, MERGER OR SALE
We and our finance subsidiaries will agree in the indentures not to
consolidate with or merge with or into any other person or convey or transfer
all or substantially all of our respective properties and assets to any person,
unless:
- we or the applicable finance subsidiary, as the case may be, are the
continuing person, or the successor expressly assumes by supplemental
indenture our obligations under the applicable indenture;
11
- the continuing person is a U.S. or U.K. company or is organized and
validly existing under the laws of a jurisdiction that is a member
country of the Organisation for Economic Cooperation and Development (or
any successor) and, if it is not a U.S. or U.K. company, the continuing
person agrees by supplemental indenture to be bound by a covenant
comparable to that described below under "-- Covenants -- Payment of
Additional Amounts" with respect to taxes imposed in the continuing
person's jurisdiction of organization (in which case the continuing
person will benefit from a redemption option comparable to that described
below under "-- Optional Redemption for Tax Reasons" in the event of
changes in taxes in that jurisdiction after the date of the
consolidation, merger or sale);
- immediately after the transaction, no default under the debt securities
has occurred and is continuing; and
- we deliver to the trustee an officer's certificate and, if we or the
applicable finance subsidiary are not the continuing person, an opinion
of counsel, in each case stating that the transaction and the
supplemental indenture, if required, comply with these provisions and the
indenture.
COVENANTS
PAYMENT OF ADDITIONAL AMOUNTS
Payments made by us under or with respect to the debt securities will be
free and clear of and without withholding or deduction for or on account of any
present or future tax, duty, levy, impost, assessment or other governmental
charge of any nature whatsoever imposed or levied by or on behalf of (i) the
government of the United Kingdom or of any territory of the United Kingdom or by
any authority or agency therein or thereof having power to tax or (ii) the
government of the United States or any state or territory of the United States
or by any authority or agency therein or thereof having the power to tax, which
we refer to collectively as "Taxes," unless we are required to withhold or
deduct Taxes by law.
If we are required to withhold or deduct any amount for or on account of
Taxes from any payment made with respect to the debt securities, we will pay
such additional amounts as may be necessary so that the net amount received by
each holder (including additional amounts) after such withholding or deduction
will not be less than the amount the holder would have received if the Taxes had
not been withheld or deducted; provided that no additional amounts will be
payable with respect to Taxes:
- that would not have been imposed but for the existence of any present or
former connection between such holder or beneficial owner of the debt
securities (or between a fiduciary, settlor, beneficiary, member or
shareholder of, or possessor of a power over, such holder or beneficial
owner, if such holder or beneficial owner is an estate, trust,
partnership or corporation) and the United Kingdom or the United States
or any political subdivision or territory or possession thereof or
therein or area subject to its jurisdiction, including, without
limitation, such holder or beneficial owner (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been a
citizen or resident thereof or treated as a resident thereof or domiciled
thereof or a national thereof or being or having been present or engaged
in trade or business therein or having or having had a permanent
establishment therein;
- that are estate, inheritance, gift, sales, transfer, personal property,
wealth or similar taxes, duties, assessments or other governmental
charges;
- payable other than by withholding from payments of principal of or
interest on the debt securities;
- that would not have been imposed but for the failure of the applicable
recipient of such payment to comply with any certification,
identification, information, documentation or other reporting requirement
to the extent:
- such compliance is required by applicable law or administrative
practice or an applicable treaty as a precondition to exemption from,
or reduction in, the rate of deduction or withholding of such Taxes;
and
12
- at least 30 days before the first payment date with respect to which
such additional amounts shall be payable, we have notified such
recipient in writing that such recipient is required to comply with
such requirement;
- that would not have been imposed but for the presentation of a debt
security (where presentation is required) for payment on a date more than
30 days after the date on which such payment became due and payable or
the date on which payment thereof was duly provided for, whichever
occurred later;
- that are imposed on a payment to an individual and are required to be
made pursuant to any European Union directive on the taxation of savings
income relating to the proposal for a directive on the taxation of
savings income published by the ECOFIN Council on December 13, 2001 or
otherwise implementing the conclusions of the ECOFIN Council meeting of
November 26-27, 2000, or any law implementing or complying with, or
introduced in order to conform to, such a directive;
- that would not have been imposed if presentation for payment of the
relevant debt securities had been made to a paying agent other than the
paying agent to which the presentation was made; or
- any combination of the foregoing items;
nor shall additional amounts be paid with respect to any payment of the
principal of or interest on any debt security to any such holder who is a
fiduciary or a partnership or a beneficial owner who is other than the sole
beneficial owner of such payment to the extent a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or a beneficial owner
would not have been entitled to such additional amounts had it been the holder
of the debt security.
We have agreed in each indenture that at least one paying agent for each
series of debt securities will be located outside the United Kingdom. We have
also agreed that, if the conclusions of the ECOFIN Council meeting of November
26-27, 2000 are implemented, and if we maintain a paying agent with respect to a
particular series of debt securities in any member state of the European Union,
we will maintain a paying agent in at least one member state (other than the
United Kingdom) that will not be obliged to withhold or deduct taxes pursuant to
the European Union directive on the taxation of savings proposed at the ECOFIN
Council meeting of November 26-27, 2000, provided there is at least one member
state that does not require a paying agent to withhold or deduct pursuant to
such directive.
Our obligation to pay additional amounts if and when due will survive the
termination of the indentures and the payment of all amounts in respect of the
debt securities.
LIMITATION ON LIENS
We may not, and we may not permit any of our subsidiaries to, incur or
assume any lien on or with respect to any of our or our subsidiaries' property,
assets or revenues, present or future, to secure any relevant indebtedness (as
this term is defined below) without making (or causing our subsidiaries to make)
effective provision for securing the debt securities equally and ratably with
such relevant indebtedness as to such property, assets or revenues, for as long
as such relevant indebtedness is so secured.
The restrictions on liens will not apply to:
- liens arising by operation of law;
- liens on property, assets or revenues of any person, which liens are
existing at the time such person becomes a subsidiary; and
- liens on property, assets or revenues of a person existing at the time
such person is merged with or into or consolidated with us or any of our
subsidiaries or at the time of a sale, lease or other disposition to us
of the properties of a person as an entirety or substantially as an
entirety.
13
For purposes of the limitation on liens covenant, the term "relevant
indebtedness" means any of our debt that:
- is in the form of or represented by bonds, notes, loan stock, depositary
receipts or other securities issued (otherwise than to constitute or
represent advances made by banks or other lending institutions);
- is denominated in, or confers any right of payment by reference to, any
currency other than the currency of the country in which the issuer of
the indebtedness has its principal place of business, or is denominated
in or by reference to the currency of such country but more than 20% of
which is placed or offered for subscription or sale by or on behalf of,
or by agreement with, the issuer outside such country; and
- at its date of issue is, or is intended by the issuer to become, quoted,
listed, traded or dealt in on any stock exchange, over-the-counter market
or other securities market.
ADDITIONAL COVENANTS
We may be subject to additional covenants, including restrictive covenants
in respect of a particular series of debt securities. Such additional covenants
will be set forth in the applicable prospectus supplement and, to the extent
necessary, in the supplemental indenture or board resolution relating to that
series of debt securities.
OPTIONAL REDEMPTION FOR TAX REASONS
We may redeem any series of debt securities in whole but not in part at any
time, on giving not less than 30 nor more than 60 days' notice of such
redemption, at a redemption price equal to the principal amount plus accrued
interest, if any, to the date fixed for redemption (except in the case of
discounted debt securities, which may be redeemed at the redemption price
specified by the terms of each series of such debt securities), if:
- we determine that, as a result of any change in or amendment to the laws
or any regulations or rulings promulgated thereunder of the United
Kingdom (or of any political subdivision or taxing authority thereof) or
the United States (or of any political subdivision or taxing authority
thereof), or any change in the application or official interpretation of
such laws, regulations or rulings, or any change in the application or
official interpretation of, or any execution of or amendment to, any
treaty or treaties affecting taxation to which any such jurisdiction is a
party, which change, execution or amendment becomes effective on or after
the issue date or such other date specified in the debt securities of
that series:
- we would be required to pay additional amounts (as described under
"-- Covenants -- Payment of Additional Amounts" above) with respect to
that series of debt securities on the next succeeding interest payment
date and the payment of such additional amounts cannot be avoided by
the use of reasonable measures available to us, or
- withholding tax has been or would be required to be withheld with
respect to interest income received or receivable by the applicable
finance subsidiary directly from the guarantor (or any affiliate) and
such withholding tax obligation cannot be avoided by the use of
reasonable measures available to the applicable finance subsidiary or
the guarantor (or any affiliate); or
- we determine, based upon an opinion of independent counsel of recognized
standing that, as a result of any action taken by any legislative body
of, taxing authority of, or any action brought in a court of competent
jurisdiction, in the United Kingdom (or of any political subdivision or
taxing authority thereof) or the United States (or of any political
subdivision or taxing authority thereof) (whether or not such action was
taken or brought with respect to the applicable finance subsidiary or the
guarantor), which action is taken or brought on or after the issue date
or such other date specified in the debt securities of that series, there
is a substantial probability that the circumstances described above would
exist; provided, however, that no such notice of redemption may be given
earlier than 90 days prior to the earliest date on which we would be
obligated to pay such additional amounts. We
14
will also pay to each holder, or make available for payment to each such
holder, on the redemption date any additional amounts resulting from the
payment of such redemption price.
Prior to the publication of any notice of redemption, we will deliver to the
trustee:
- an officer's certificate stating that we are entitled to effect a
redemption and setting forth a statement of facts showing that the
conditions precedent of the right so to redeem have occurred; or
- an opinion of counsel to the effect that the conditions specified above
have been satisfied.
Any notice of redemption will be irrevocable once we deliver it to the trustee.
EVENTS OF DEFAULT
Unless otherwise specified in a prospectus supplement, an event of default
with respect to a series of debt securities occurs upon:
- default in payment of the principal (or premium, if any) of any debt
security of that series when due (including as a sinking fund
installment), and, in the case of technical or administrative
difficulties, the continuance of that default for more than two business
days;
- default in payment of interest on or any additional amounts payable in
respect of any debt security of that series when due and payable, and the
continuance of that default for 30 days;
- default in performing any other covenant in the indenture applicable to
that series for 60 days after the receipt of written notice from the
trustee or from the holders of 25% in principal amount of the debt
securities of that series;
- failure to pay indebtedness for borrowed money of the guarantor or either
finance subsidiary (not including any indebtedness for which recourse is
limited to property purchased) having in any particular case an
outstanding principal amount in excess of $25,000,000 (or its equivalent
in any other currency) where any such failure results in such
indebtedness being accelerated and becoming due and payable prior to its
stated maturity and such acceleration shall not have been rescinded or
annulled or such indebtedness shall not have been discharged;
- certain events of bankruptcy, insolvency or reorganization of the
guarantor or the finance subsidiaries; or
- any other event of default provided with respect to that particular
series of debt securities.
Any additional or different events of default applicable to a particular
series of debt securities will be described in the prospectus supplement
relating to such series.
An event of default with respect to a particular series of debt securities
will not necessarily constitute an event of default with respect to any other
series of debt securities.
The trustee may withhold notice to the holders of debt securities of any
default (except in the payment of principal, premium or interest) if it
considers such withholding of notice to be in the best interests of the holders.
A default is any event which is an event of default described above or would be
an event of default but for the giving of notice or the passage of time.
If an event of default occurs and continues, the trustee or the holders of
the aggregate principal amount of the debt securities specified below may
require the relevant issuer to repay immediately, or accelerate:
- the entire principal of the debt securities of such series; or
- if the debt securities are original issue discount securities, such
portion of the principal as may be described in the applicable prospectus
supplement.
If the event of default occurs because of a default in a payment of
principal or interest on the debt securities, then the trustee or the holders of
at least 25% of the aggregate principal amount of debt securities of that series
can accelerate that series of debt securities. If the event of default occurs
because of a failure to
15
perform any other covenant in the applicable indenture or any covenant for the
benefit of one or more, but not all, of the series of debt securities, then the
trustee or the holders of at least 25% of the aggregate principal amount of debt
securities of all series affected, voting as one class, can accelerate all of
the affected series of debt securities. If the event of default occurs because
of bankruptcy proceedings, then all of the debt securities under the indenture
will be accelerated automatically. Therefore, except in the case of a default on
a payment of principal or interest on the debt securities of your series or a
default due to our bankruptcy or insolvency, it is possible that you may not be
able to accelerate the debt securities of your series because of the failure of
holders of other series to take action.
The holders of a majority of the aggregate principal amount of the debt
securities of all affected series, voting as one class, can rescind this
accelerated payment requirement or waive any past default or event of default or
allow noncompliance with any provision of the applicable indenture. However,
they cannot waive a default in payment of principal of, premium, if any, or
interest on any of the debt securities when due otherwise than as a result of
acceleration.
After an event of default, the trustee must exercise the same degree of
care a prudent person would exercise under the circumstances in the conduct of
her or his own affairs. Subject to these requirements, the trustee is not
obligated to exercise any of its rights or powers under the applicable indenture
at the request, order or direction of any holders, unless the holders offer the
trustee reasonable indemnity. If they provide this reasonable indemnity, the
holders of a majority in principal amount of all affected series of debt
securities, voting as one class, may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee, or exercising
any power conferred upon the trustee, for any series of debt securities.
However, the trustee may refuse to follow any direction that conflicts with law
or the indenture or is unduly prejudicial to the rights of other holders.
No holder will be entitled to pursue any remedy with respect to the
indenture unless the trustee fails to act for 60 days after it is given:
- notice of default by that holder;
- a written request to enforce the indenture by the holders of not less
than 25% in principal amount of all outstanding debt securities of any
affected series; and
- an indemnity to the trustee, satisfactory to the trustee;
and during this 60-day period the holders of a majority in principal amount of
all outstanding debt securities of such affected series do not give a direction
to the trustee that is inconsistent with the enforcement request. These
provisions will not prevent any holder of debt securities from enforcing payment
of the principal of (and premium, if any) and interest on the debt securities at
the relevant due dates.
If an event of default with respect to a series of debt securities occurs
and is continuing, the trustee will mail to the holders of those debt securities
a notice of the event of default within 90 days after it occurs. However, except
in the case of a default in any payment in respect of a series of debt
securities, the trustee shall be protected in withholding notice of an event of
default if it determines in good faith that this is in the interests of the
holders of the relevant debt securities.
MODIFICATION OF THE INDENTURES
In general, rights and obligations of us and the holders under the
indentures may be modified if the holders of a majority in aggregate principal
amount of the outstanding debt securities of each series affected by the
modification consent to such modification. However, each of the indentures
provides that, unless each affected holder agrees, an amendment cannot:
- make any adverse change to any payment term of a debt security such as
extending the maturity date, extending the date on which we have to pay
interest or make a sinking fund payment, reducing the interest rate,
reducing the amount of principal we have to repay, changing the currency
in which we have to make any payment of principal, premium or interest,
modifying any redemption or repurchase right to the detriment of the
holder and impairing any right of a holder to bring suit for payment;
16
- waive any payment default;
- reduce the percentage of the aggregate principal amount of debt
securities needed to make any amendment to the applicable indenture or to
waive any covenant or default; or
- make any other change to the amendment provisions of the applicable
indenture.
However, if we and the trustee agree, the applicable indenture may be
amended without notifying any holders or seeking their consent if the amendment
does not materially and adversely affect any holder. We and the trustee are
permitted to make modifications and amendments to the applicable indenture
without the consent of any holder of debt securities for any of the following
purposes:
- to cure any ambiguity, defect or inconsistency in the indenture; provided
that such modifications or amendments will not materially and adversely
affect the interests of the holders of the debt securities;
- to comply with sections of the indenture governing when we may merge and
substituted obligors;
- to comply with any requirements of the SEC in connection with the
qualification of the indenture under the Trust Indenture Act;
- to evidence and provide for the acceptance by a successor trustee of
appointment under the indenture with respect to the debt securities of
any or all series;
- to establish the form or forms or terms of the debt securities of any
series or of the coupons appertaining to such debt securities as
permitted under the indenture;
- to provide for uncertificated debt securities and to make all appropriate
changes for such purpose;
- to provide for a further guarantee from a third party on outstanding debt
securities of any series and the debt securities of any series that may
be issued under the indenture;
- to change or eliminate any provision of the indenture; provided that any
such change or elimination will become effective only when there are no
outstanding debt securities of any series created prior to the execution
of such supplemental indenture that is entitled to the benefit of such
provision;
- to supplement any of the provisions of the indenture to such extent as
will be necessary to permit or facilitate the defeasance and discharge of
any series of debt securities pursuant to the indenture; provided that
any such action will not adversely affect the interests of the holders of
such or any other series of debt securities in any material respect; or
- to make any change that does not materially and adversely affect the
rights of any holder of the debt securities.
DEFEASANCE
The term defeasance means discharge from some or all of the obligations
under the indentures. If we deposit with the trustee sufficient cash or
government securities to pay the principal, interest, any premium and any other
sums due to the stated maturity date or a redemption date of the debt securities
of a particular series, then at our option:
- we will be discharged from our respective obligations with respect to the
debt securities of such series; or
- we will no longer be under any obligation to comply with the restrictive
covenants, if any, contained in the applicable indenture and any
supplemental indenture or board resolution with respect to the debt
securities of such series, and the events of default relating to failures
to comply with covenants will no longer apply to us.
If this happens, the holders of the debt securities of the affected series
will not be entitled to the benefits of the applicable indenture except for
registration of transfer and exchange of debt securities and replacement
17
of lost, stolen or mutilated debt securities. Instead, the holders will only be
able to rely on the deposited funds or obligations for payment.
We must deliver to the trustee an opinion of counsel to the effect that the
deposit and related defeasance would not cause the holders of the debt
securities to recognize income, gain or loss for U.S. federal income tax
purposes. In the case of a complete discharge, we may, in lieu of an opinion of
counsel, deliver a ruling to such effect received from or published by the U.S.
Internal Revenue Service.
SUBSTITUTION OF ISSUER
We may at our option at any time, without the consent of any holders of
debt securities, cause GlaxoSmithKline or any other subsidiary of
GlaxoSmithKline to assume the obligations of the relevant finance subsidiary
under any series of debt securities, provided that the new obligor executes a
supplemental indenture in which it agrees to be bound by the terms of those debt
securities and the relevant indenture. If
the new obligor is not a U.S. or U.K. company, it must be a member of the
Organisation for Economic
Cooperation and Development (or any successor) and it must also agree in the
supplemental indenture to be bound by a covenant comparable to that described
above under "-- Covenants -- Payment of Additional Amounts" with respect to
taxes imposed in its jurisdiction of organization (in which case the new obligor
will benefit from a redemption option comparable to that described above under
"-- Optional Redemption for Tax Reasons" in the event of changes in taxes in
that jurisdiction after the date of the substitution). In the case of such a
substitution, the relevant finance subsidiary will be relieved of any further
obligation under the assumed series of debt securities.
INFORMATION CONCERNING THE TRUSTEE
Citibank, N.A. will be the trustee. The trustee will be required to perform
only those duties that are specifically set forth in the indentures, except when
a default has occurred and is continuing with respect to the debt securities.
After a default, the trustee must exercise the same degree of care that a
prudent person would exercise under the circumstances in the conduct of her or
his own affairs. Subject to these requirements, the trustee will be under no
obligation to exercise any of the powers vested in it by the indentures at the
request of any holder of debt securities unless the holder offers the trustee
reasonable indemnity against the costs, expenses and liabilities that might be
incurred by exercising those powers.
Citibank has loaned money to GlaxoSmithKline and certain of our
subsidiaries, and Citibank and its affiliates have provided other banking and
related services to us and our subsidiaries in the past and may do so in the
future as a part of their regular business.
GOVERNING LAW
The debt securities, the related guarantees and the indentures will be
governed by and construed in accordance with the laws of the State of New York.
INCOME TAX CONSIDERATIONS
The applicable prospectus supplement will describe the principal U.K. tax
consequences to an investor who is not resident or deemed to be resident in the
United Kingdom for U.K. tax purposes, who is a resident of the United States for
purposes of the United Kingdom-United States Income Tax Convention, who deals
with us at arm's length for purposes of any U.K. income tax law at all times,
and who meets certain other requirements, of acquiring, owning and disposing of
debt securities, including whether the payment by us of principal (and premium,
if any) and interest will be subject to U.K. withholding tax.
The applicable prospectus supplement may describe certain U.S. federal
income tax considerations relevant to a particular series of debt securities.
18
PLAN OF DISTRIBUTION
We may sell our securities through agents, underwriters, dealers or
directly to purchasers.
Our agents may solicit offers to purchase our securities.
- We will name any agent involved in offering or selling our securities,
and any commissions that we will pay to the agent, in our prospectus
supplement.
- Unless we indicate otherwise in our prospectus supplement, our agents
will act on a best efforts basis for the period of their appointment.
- Our agents may be deemed to be underwriters under the Securities Act of
any of our securities that they offer or sell.
We may use an underwriter or underwriters in the offer or sale of our
securities.
- If we use an underwriter or underwriters, we will execute an underwriting
agreement with the underwriter or underwriters at the time that we reach
an agreement for the sale of our securities.
- We will include the names of the specific managing underwriter or
underwriters, as well as any other underwriters, and the terms of the
transactions, including the compensation the underwriters and dealers
will receive, in our prospectus supplement.
- The underwriters will use our prospectus supplement to sell our
securities.
- If we use an underwriter or underwriters, the underwriter or underwriters
will acquire our securities for their own account and may resell our
securities in one or more transactions, including negotiated
transactions. These sales will be made at a fixed price or at varying
prices determined at the time of the sale.
We may use a dealer to sell our securities.
- If we use a dealer, we, as principal, will sell our securities to the
dealer.
- The dealer will then sell our securities to the public at varying prices
that the dealer will determine at the time it sells our securities.
- We will include the name of the dealer and the terms of our transactions
with the dealer in our prospectus supplement.
We may solicit directly offers to purchase our securities, and we may
directly sell our securities to institutional or other investors. We will
describe the terms of our direct sales in our prospectus supplement.
We may indemnify agents, underwriters and dealers against certain
liabilities, including liabilities under the Securities Act. Our agents,
underwriters and dealers, or their affiliates, may be customers of, engage in
transactions with or perform services for, us or our subsidiaries and affiliates
in the ordinary course of business.
We may authorize our agents and underwriters to solicit offers by certain
institutions to purchase our securities at the public offering price under
delayed delivery contracts.
- If we use delayed delivery contracts, we will disclose that we are using
them in the prospectus supplement and will tell you when we will demand
payment and delivery of the securities under the delayed delivery
contracts.
- These delayed delivery contracts will be subject only to the conditions
that we set forth in the prospectus supplement.
- We will indicate in our prospectus supplements the commission that
underwriters and agents soliciting purchases of our securities under
delayed delivery contracts will be entitled to receive.
19
VALIDITY OF SECURITIES
Cleary, Gottlieb, Steen & Hamilton, our U.S. and U.K. counsel, will pass
upon the validity of the debt securities and guarantees as to matters of U.S.
and English law. Sidley Austin Brown & Wood LLP will pass upon the validity of
the debt securities and guarantees under U.S. law and English law for any agents
or underwriters. Cleary, Gottlieb, Steen & Hamilton and Sidley Austin Brown &
Wood LLP regularly provide legal services to us and our subsidiaries and
affiliates.
EXPERTS
Our consolidated financial statements incorporated into this prospectus,
and the registration statement of which this prospectus is a part, by reference
to our annual report on Form 20-F for the year ended December 31, 2002 have been
so incorporated in reliance on the report (which contains an explanatory
paragraph to reference Note 37 to the consolidated financial statements that
describes the financial statement impacts of the differences in generally
accepted accounting principles in the United Kingdom as compared with those in
the United States) of PricewaterhouseCoopers LLP, independent chartered
accountants and registered auditors, given on their authority as experts in
auditing and accounting.
LIMITATIONS ON ENFORCEMENT OF U.S. LAWS
We are a global pharmaceutical and health-care products company domiciled
in the United Kingdom. Many of our directors and executive officers (as well as
certain directors, managers and executive officers of our finance subsidiaries),
and certain experts named in this prospectus, reside outside the United States,
and all or a substantial portion of our assets and the assets of such persons
are located outside the United States. As a result, it may be difficult for you
to serve legal process on us or our directors and executive officers (as well as
certain directors, managers and executive officers of the finance subsidiaries)
or have any of them appear in a U.S. court. There is some doubt as to the
enforceability in the United Kingdom, in original actions or in actions for
enforcement of judgments of U.S. courts, of civil liabilities based solely on
the federal securities laws of the United States. In addition, awards for
punitive damages in actions brought in the United States or elsewhere may be
unenforceable in the United Kingdom.
20
[GSK Logo]