Exhibit 4-b
FMC CORPORATION
OFFICERS' CERTIFICATE
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Michael J. Callahan, Executive Vice President and Chief Financial Officer,
and Robert L. Day, Secretary, of FMC Corporation, a Delaware corporation (the
"Company"), each hereby certify that we are duly authorized to, and do hereby,
deliver this certificate to Harris Trust and Savings Bank (the "Trustee"), as
Trustee under the Indenture dated as of July 1, 1996 (the "Indenture"), that
attached hereto as Exhibit 1 are the resolutions duly adopted by an Offering
Committee appointed by the Board of Directors of the Company (the "Resolutions")
establishing the Company's Medium-Term Notes, Series A, Due More than Nine
Months from Date of Issue (the "Notes") pursuant to Section 2.3 of the Indenture
and a form of the Notes duly adopted by said Offering Committee and that:
(a) Each of us has read the conditions in the Indenture relating to the
authentication and delivery by the Trustee of the Notes and has read the
definitions in the Indenture relating thereto;
(b) Each of us has examined the Indenture;
(c) Each of us has, in our respective opinions, made such examination and
investigation as is necessary to enable each of us, respectively, to express an
informed opinion as to whether such conditions have been complied with;
(d) The specific terms and conditions of the Notes, or any of them, shall
be established from time to time by either the Chief Financial Officer or the
Treasurer of the Company, acting individually, pursuant to the authority granted
by the Resolutions, and implemented by means of the execution and delivery to
the Trustee of an Officers' Certificate (as defined in the Indenture); and
(e) In the opinion of each of us, all such conditions have been complied
with.
* * * * *
Dated: January 24, 1997
FMC CORPORATION
By:/s/ Michael J. Callahan
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Michael J. Callahan
Executive Vice President
and Chief Financial Officer
By:/s/ Robert L. Day
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Robert L. Day
Secretary
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EXHIBIT 1
RESOLUTIONS
OF
FMC CORPORATION
OFFERING COMMITTEE
RESOLVED, that pursuant to the authority granted this Committee by
resolutions of the Board of Directors of FMC Corporation (the "Company") duly
adopted on August 31, 1995, October 20, 1995 and December 6, 1996, in connection
with the offering and sale of up to $500,000,000 in aggregate public offering
price of securities of the Company, this Committee hereby approves the issuance
of a series of debt securities to be known as "Medium-Term Notes, Series A" (the
"Notes"), which Notes shall be limited to an aggregate principal amount of
$400,000,000 (excluding the amount of any original issue discount) and shall be
executed, authenticated and delivered in accordance with the provisions of, and
in all respects shall be subject to the terms, conditions and covenants of that
certain Indenture dated as of July 1, 1996 between the Company and Harris Trust
and Savings Bank, as trustee (the "Trustee"), as supplemented by any
supplemental indentures (the "Indenture");
RESOLVED FURTHER, that the Notes shall have the terms and conditions
set forth on Exhibit A hereto, together with such additional terms and
conditions as shall be established by either the Chief Financial Officer or the
Treasurer of the Company acting
individually, and shall be implemented by means of the execution and delivery to
the Trustee of an Officers' Certificate (as defined in the Indenture) or a
supplemental indenture to the Indenture executed by the Chief Financial Officer
or Treasurer and such other officer as shall be required by the Indenture.
RESOLVED FURTHER, that a distribution agreement (the "Distribution
Agreement") to be dated as of January 24, 1997 among the Company and various
investment banking or similar firms, as agents (the "Agents"), which firms shall
have been approved by any of the chairman of the board, the president, the chief
financial officer or the treasurer of the Company (the "Designated Officers"),
acting individually, is hereby approved with such additions thereto, changes and
insertions thereon and deletions therefrom as the Designated Officer executing
such agreement shall deem necessary, appropriate or desirable, the authority of
such Designated Officer to be conclusively evidenced by his execution thereof.
The Company may also sell Notes (i) to any or all of the Agents, as principal or
principals, pursuant to the Distribution Agreement or (ii) directly to
purchasers thereof.
FURTHER RESOLVED, that the Company hereby appoints Harris Trust and
Savings Bank ("Harris") to act as calculation agent and paying agent in
connection with the Notes and that the Calculation Agent Agreement and the
Paying Agent Agreement, each to be dated as of January 24, 1997 between the
Company and Harris and the forms of the Notes, each attached hereto, are hereby
approved, each with such additions thereto, changes and insertions thereon and
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deletions therefrom as any of the Designated Officers executing such agreements
and Notes shall deem necessary, appropriate or desirable, the authority of such
Designated Officers to be conclusively evidenced by their execution thereof;
FURTHER RESOLVED, that the Company's Prospectus dated January 23, 1997
and the Company's Prospectus Supplement dated January 23, 1997 used in
connection with the Notes are hereby approved, with such additions and
amendments thereto, changes and insertions thereon and deletions therefrom as
any of the Company's Designated Officers shall deem necessary, appropriate or
desirable; and
RESOLVED FURTHER, that any of the Company's officers is hereby
authorized to perform all such acts and deeds and to prepare, execute, deliver
and/or file all such agreements, documents, undertakings, certificates,
instruments and other papers in the name and on behalf of the Company as he or
she shall deem necessary or appropriate, and incur such expenses as he or she
deems necessary or appropriate, in order to carry out the purpose and intent of
any and all provisions of the foregoing resolutions, and all such acts by such
officers, or any of them, whether heretofore or hereafter done or performed,
which are in accordance with the purpose and intent of these resolutions, are
hereby ratified, confirmed and approved in all respects.
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EXHIBIT A
Terms and Conditions of Medium-Term Notes, Series A
Capitalized terms used but not defined herein shall have the
respective meanings given to them in the Indenture dated as of July 1, 1996
between FMC Corporation (the "Company") and Harris Trust and Savings Bank, as
trustee, as supplemented by any supplemental indentures (the "Indenture").
A. GENERAL
1. The Medium-Term Notes, Series A (the "Notes") will be issued under the
Indenture and will constitute one series under the Indenture. The Notes will
rank pari passu with all other unsecured and unsubordinated indebtedness of the
Company. The Notes may be issued from time to time in an aggregate principal
amount of up to $400,000,000 or the equivalent thereof in one or more foreign or
composite currencies. For the purpose hereof, (i) the principal amount of any
Original Issue Discount Note (as defined below) means the first price at which a
substantial amount of the Notes is sold to the public (the "Issue Price") of
such Note and (ii) the principal amount of any Note issued in a foreign currency
or composite currency means the U.S. dollar equivalent on the date of issue of
the Issue Price of such Note.
2. The Notes will mature on any day more than nine months from the date
of issue, as set forth in the applicable officers' certificate specifying the
pricing and other terms of a Note (a "Pricing Certificate"). Except as may be
provided in the applicable Pricing Certificate, the Notes will be issued only in
fully registered form. Unless otherwise provided in the applicable Pricing
Certificate, Notes will be denominated in Authorized Denominations (as defined
below).
3. The Notes will be offered on a continuing basis, and each Note will be
issued initially as either a Global Security registered in the name of a nominee
of the Depository Trust Company, as Depository (a "Global Note"), or by a
certificate issued in definitive form (a "Definitive Note"). Except as set forth
in the Indenture, Global Notes will not be issuable as Definitive Notes.
4. The Notes may be presented for payment of principal and interest,
transfer of the Notes will be registrable and the Notes will be exchangeable at
the office or offices or agency maintained by the Company for such purpose;
provided that Global Notes will be exchangeable only in the manner and to the
extent set forth in the Indenture. On the date hereof, the agent for the
payment, transfer and exchange of the Notes (the "Paying Agent") is Harris Trust
and Savings Bank, acting through its corporate trust office at 111 West Monroe
Street, Chicago, Illinois 60603.
5. The applicable Pricing Certificate will specify the price (the "Issue
Price") of each Note to be sold pursuant thereto (unless such Note is to be sold
at 100% of its principal amount), the interest rate or interest rate formula,
maturity, currency or composite currency and principal amount and any other
terms on which each Note will be issued.
6. As used herein, the following terms shall have the meanings set forth
below:
"Authorized Denominations" means, unless otherwise provided in the
applicable Pricing Certificate (i) with respect to Notes denominated in
U.S. dollars, U.S. $1,000 or any amount in excess thereof which is an
integral multiple of U.S. $1,000 and (ii) with respect to Notes denominated
in foreign or composite currencies, the equivalent of $1,000 (rounded to an
integral multiple of 1,000 units of such Specified Currency), or any amount
in excess thereof which is an integral multiple of 1,000 units of such
Specified Currency, as determined by reference to the noon dollar buying
rate in New York City for cable transfers of such Specified Currency
published by the Federal Reserve Bank of New York (the "Market Exchange
Rate") on the Business Day (as defined below) immediately preceding the
date of issuance; provided, however, that in the case of ECU's, the Market
Exchange Rate shall be the rate of exchange determined by the Commission of
the European Communities (or any successor thereto) as published in the
Official Journal of the European Communities, or any successor publication,
on the Business Day immediately preceding the date of issuance.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close in The City of New
York or Chicago, Illinois and (i) with respect to LIBOR Notes (as defined
below), is also a London Banking Day, (ii) with respect to Notes
denominated in a Specified Currency other than U.S. dollars, Australian
dollars or ECUs, in the principal financial center of the country of the
Specified Currency, (iii) with respect to Notes denominated in Australian
dollars, in Sydney and (iv) with respect to Notes denominated in ECUs, that
is not a non-ECU clearing day, as determined by the ECU Banking Association
in Paris.
An "Interest Payment Date" with respect to any Note shall be a date on
which, under the terms of such Note, regularly scheduled interest shall be
payable. Such Interest Payment Date shall be specified in the applicable
Pricing Certificate.
"London Banking Day" means any day on which dealings in deposits in
the Index Currency (as defined below) are transacted in the London
interbank market.
"Original Issue Discount Note" means any Note that provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to the
Indenture.
The "Record Date" with respect to any Interest Payment Date shall be
the date 15 calendar days prior to such Interest Payment Date, whether or
not such date shall be a Business Day.
"Specified Currency" means U.S. dollars or another currency or a
composite currency specified to be applicable to the issuance of Notes.
B. PAYMENT CURRENCY
1. If the applicable Pricing Certificate provides for payments of
interest and principal on a non-U.S. dollar denominated Note to be made, at the
option of the holder of such Note, in U.S. dollars, conversion of the Specified
Currency into U.S. dollars will be based on the highest bid quotation in The
City of New York received by the entity appointed by the Company as exchange
rate agent, which shall initially be Harris Trust and Savings Bank (the
"Exchange Rate Agent"), at approximately 11:00 A.M., New York City time, on the
second Business Day preceding the applicable payment date from three recognized
foreign exchange dealers (one of which may be the Exchange Rate Agent) for the
purchase by the quoting dealer of the Specified Currency for U.S. dollars for
settlement on such payment date in the aggregate amount of the Specified
Currency payable to the holders of Notes and at which the applicable dealer
commits to execute a contract. If such bid quotations are not available,
payments will be made in the Specified Currency. All currency exchange costs
will be borne by the holders of Notes by deductions from such payments.
2. Except as set forth below, if the principal of, premium, if any, or
interest on, any Note is payable in a Specified Currency other than U.S. dollars
and such Specified Currency is not available to the Company for making payments
thereof due to the imposition of exchange controls or other circumstances beyond
the control of the Company or is no longer used by the government of the country
issuing such currency or for the settlement of transactions by public
institutions of or within the international banking community, then the Company
will be entitled to satisfy its obligations to holders of the Notes by making
such payments in U.S. dollars on the basis of the Market Exchange Rate on the
date of such payment or, if the Market Exchange Rate is not available on such
date, as of the most recent practicable date. Any payment made under such
circumstances in U.S. dollars where the required payment is in a Specified
Currency other than U.S. dollars will not constitute an Event of Default.
3. If payment in respect of a Note is required to be made in ECUs and
ECUs are unavailable due to the imposition of exchange controls or other
circumstances beyond the Company's control or are no longer used in the European
Monetary System, then all payments in respect of such Note shall be made in U.S.
dollars until ECUs are again available or so used. The amount of each payment in
U.S. dollars shall be computed on the basis of the equivalent of the ECU in U.S.
dollars, determined as described below, as of the second Business Day prior to
the date on which such payment is due.
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4. The equivalent of the ECU in U.S. dollars as of any date shall be
determined by the Company or the Exchange Rate Agent on the following basis. The
component currencies of the ECU for this purpose (the "Components") shall be the
currency amounts that were components of the ECU as of the last date on which
the ECU was used in the European Monetary System. The equivalent of the ECU in
U.S. dollars shall be calculated by aggregating the U.S. dollar equivalents of
the Components. The U.S. dollar equivalent of each of the Components shall be
determined by the Company or the Exchange Rate Agent on the basis of the most
recently available Market Exchange Rates for such Components.
5. If the official unit of any Component is altered by way of combination
or subdivision, the number of units of that currency as a Component shall be
divided or multiplied in the same proportion. If two or more Components are
consolidated into a single currency, the amounts of those currencies as
Components shall be replaced by an amount in such single currency equal to the
sum of the appropriate amounts of the consolidated component currencies
expressed in such single currency. If any Component is divided into two or more
currencies, the amount of the original component currency shall be replaced by
the appropriate amounts of such two or more currencies, the sum of which shall
be equal to the amount of the original component currency.
6. All determinations referred to above made by the Company or its agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on holders of Notes.
C. INTEREST AND PRINCIPAL PAYMENTS
1. Interest will be payable to the person in whose name the Note is
registered at the close of business on the applicable Record Date; provided that
the interest payable upon maturity, redemption or repayment (whether or not the
date of maturity, redemption or repayment is an Interest Payment Date) will be
payable to the person to whom principal is payable. The initial interest payment
on a Note will be made on the first Interest Payment Date falling after the date
the Note is issued; provided, however, that payments of interest (or, in the
case of a Fixed Rate Note (as hereafter defined) which pays a level amount in
respect of both principal and interest amortized over the life of the Note (an
"Amortizing Note"), principal and interest) on a Note issued less than 15
calendar days before an Interest Payment Date will be paid on the next
succeeding Interest Payment Date to the holder of record on the Record Date with
respect to such succeeding Interest Payment Date, unless otherwise specified in
the applicable Pricing Certificate.
2. U.S. dollar payments of interest, other than interest payable at
maturity (or on the date of redemption or repayment, if a Note is redeemed or
repaid by the Company prior to maturity), will be made by check mailed to the
address of the person entitled thereto as shown on the Note register. U.S.
dollar payment of principal, premium, if any, and interest upon maturity,
redemption or repayment will be made in immediately available funds against
presentation and surrender of the Note. Notwithstanding the foregoing, (a) the
Depository (as defined below), as holder of Global Notes, shall be entitled to
receive payments of interest by wire transfer of immediately available funds and
(b) a holder of U.S. $10,000,000 (or the equivalent) or more in aggregate
principal amount of Definitive Notes having the same Interest Payment Date shall
be entitled to receive payments of interest by wire transfer of immediately
available funds upon written request to the Paying Agent, provided such request
is received not later than 15 calendar days prior to the applicable Interest
Payment Date.
3. Unless otherwise specified in the applicable Pricing Certificate, a
beneficial owner of Global Notes denominated in a Specified Currency electing to
receive payments of principal or any premium or interest in a currency other
than U.S. dollars must notify the participant through which its interest is held
on or prior to the applicable Record Date, in the case of a payment of interest,
and on or prior to the sixteenth day prior to maturity, in the case of principal
or premium of such beneficial owner's election to receive all or a portion of
such payment in a Specified Currency. Such participant must notify the
Depository of such election on or prior to the third Business Day after such
Record Date. The Depository will notify the Paying Agent of such election on or
prior to the fifth Business Day after such Record Date. If complete instructions
are received by the participant and forwarded by the participant to the
Depository, and by the Depository to the Paying Agent, on or prior to such
dates, the beneficial owner will receive payments in the Specified Currency by
wire transfer of immediately available funds to an account maintained by the
payee with a bank located outside the United States; otherwise the beneficial
owner will receive payments in U.S. dollars.
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4. Certain Notes, including Original Issue Discount Notes, may be
considered to be issued with original issue discount, which must be included in
income for United States federal income tax purposes at a constant rate. Unless
otherwise specified in the applicable Pricing Certificate, if the principal of
any Original Issue Discount Note is declared to be due and payable immediately,
the amount of principal due and payable with respect to such Note shall be
limited to the aggregate principal amount of such Note multiplied by the sum of
its Issue Price (expressed as a percentage of the aggregate principal amount)
plus the original issue discount amortized from the date of issue to the date of
declaration, which amortization shall be calculated using the "interest method"
(computed in accordance with generally accepted accounting principles in effect
on the date of declaration). Special considerations applicable to any such Notes
will be set forth in the applicable Pricing Certificate.
D. FIXED RATE NOTES
1. Each Note bearing interest at a fixed rate (a "Fixed Rate Note") will
bear interest from the date of issuance at the annual rate stated on the face
thereof, except as described below under "Extension of Maturity," until the
principal thereof is paid or made available for payment. Unless otherwise
specified in the applicable Pricing Certificate, such interest will be computed
on the basis of a 360-day year of twelve 30-day months. Unless otherwise
specified in the applicable Pricing Certificate, payments of interest on Fixed
Rate Notes other than Amortizing Notes will be made semiannually on each
Interest Payment Date specified in the Pricing Certificate and at maturity or
upon any earlier redemption or repayment. Payments of principal and interest on
Amortizing Notes, which are securities on which payments of principal and
interest are made in equal installments over the life of the security, will be
made either quarterly on each Interest Payment Date or semiannually on each
Interest Payment Date, as set forth in the applicable Pricing Certificate, and
at maturity or upon any earlier redemption or repayment. Payments with respect
to Amortizing Notes will be applied first to interest due and payable thereon
and then to the reduction of the unpaid principal amount thereof. A table
setting forth repayment information in respect of each Amortizing Note will be
provided to the original purchaser and will be available, upon request, to
subsequent holders.
2. If any Interest Payment Date for any Fixed Rate Note falls on a day
that is not a Business Day, the interest payment shall be made on the next day
that is a Business Day, and no interest on such payment shall accrue for the
period from and after the Interest Payment Date. If the maturity (or date of
redemption or repayment) of any Fixed Rate Note falls on a day that is not a
Business Day, the payment of interest and principal (and premium, if any) will
be made on the next succeeding Business Day, and no interest on such payment
shall accrue for the period from and after the maturity date (or date of
redemption or repayment).
3. Interest payments for Fixed Rate Notes will include accrued interest
from and including the date of issue or from and including the last date in
respect of which interest has been paid, as the case may be, to, but excluding,
the Interest Payment Date or the date of maturity or earlier redemption or
repayment, as the case may be. The interest rates the Company will agree to pay
on newly issued Fixed Rate Notes are subject to change without notice by the
Company from time to time, but no such change will affect any Fixed Rate Notes
theretofore issued or that the Company has agreed to issue.
E. FLOATING RATE NOTES
1. Each Note bearing interest at a floating rate (a "Floating Rate Note")
will bear interest from the date of issuance until the principal thereof is paid
or made available for payment at a rate determined by reference to an interest
rate basis or formula (the "Base Rate"), which may be adjusted by a Spread
and/or Spread Multiplier (each as defined below). The applicable Pricing
Certificate will designate one or more of the following Base Rates (as each is
hereafter defined) as applicable to each Floating Rate Note: (a) the CD Rate (a
"CD Rate Note"), (b) the Commercial Paper Rate (a "Commercial Paper Rate Note"),
(c) the Federal Funds Rate (a "Federal Funds Rate Note"), (d) LIBOR (a "LIBOR
Note"), (e) the Prime Rate (a "Prime Rate Note"), (f) the Treasury Rate (a
"Treasury Rate Note"), (g) the CMT Rate (a "CMT Rate Note") or (h) such other
Base Rate or interest rate formula as is set forth in such Pricing Certificate
and in such Floating Rate Note. The "Index Maturity" for any Floating Rate Note
is the period of maturity of the instrument or obligation from which the Base
Rate is calculated and will be specified in the applicable Pricing Certificate.
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2. Unless otherwise specified in the applicable Pricing Certificate, the
interest rate on each Floating Rate Note will be calculated by reference to the
specified Base Rate (i) plus or minus the Spread, if any, and/or (ii) multiplied
by the Spread Multiplier, if any. The "Spread" is the number of basis points
(one one-hundredth of a percentage point) specified in the applicable Pricing
Certificate to be added to or subtracted from the Base Rate for such Floating
Rate Note, and the "Spread Multiplier" is the percentage specified in the
applicable Pricing Certificate to be applied to the Base Rate for such Floating
Rate Note.
3. As specified in the applicable Pricing Certificate, a Floating Rate
Note may also have either or both of the following: (i) a maximum limitation, or
ceiling, on the rate of interest which may accrue during any interest period
("Maximum Interest Rate"); and (ii) a minimum limitation, or floor, on the rate
of interest which may accrue during any interest period ("Minimum Interest
Rate"). In addition to any Maximum Interest Rate that may be applicable to any
Floating Rate Note pursuant to the above provisions, the interest rate on a
Floating Rate Note will in no event be higher than the maximum rate permitted by
Illinois law, as the same may be modified by United States law of general
application.
4. Unless otherwise specified in the applicable Pricing Certificate, the
rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (such period being the "Interest
Reset Period" for such Note, and the first day of each Interest Reset Period
being an "Interest Reset Date"), as specified in the applicable Pricing
Certificate. Unless otherwise specified in the Pricing Certificate, the Interest
Reset Date will be, in the case of Floating Rate Notes which reset daily, each
Business Day, in the case of Floating Rate Notes (other than Treasury Rate
Notes) which reset weekly, the Wednesday of each week; in the case of Treasury
Rate Notes which reset weekly, the Tuesday of each week, except as provided
below; in the case of Floating Rate Notes which reset monthly, the third
Wednesday of each month; in the case of Floating Rate Notes which reset
quarterly, the third Wednesday of March, June, September, and December; in the
case of Floating Rate Notes which reset semi-annually, the third Wednesday of
two months of each year, as specified in the applicable Pricing Certificate; and
in the case of Floating Rate Notes which reset annually, the third Wednesday of
one month of each year, as specified in the applicable Pricing Certificate;
provided, however, that (a) the interest rate in effect from the date of issue
to the first Interest Reset Date with respect to a Floating Rate Note will be
the initial interest rate set forth in the applicable Pricing Certificate (the
"Initial Interest Rate") and (b) unless otherwise specified in the applicable
Pricing Certificate the interest rate in effect for the ten calendar days
immediately prior to maturity, redemption or repayment will be that in effect on
the tenth calendar day preceding such maturity, redemption or repayment date. If
any Interest Reset Date for any Floating Rate Note would otherwise be a day that
is not a Business Day, such Interest Reset Date shall be postponed to the next
succeeding Business Day, except that in the case of a LIBOR Note, if such
Business Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day.
5. Except as provided below, unless otherwise specified in the applicable
Pricing Certificate, interest on Floating Rate Notes will be payable: (i) in the
case of Floating Rate Notes with a daily, weekly or monthly Interest Reset Date,
on the third Wednesday of each month or on the third Wednesday of March, June,
September and December, as specified in the applicable Pricing Certificate; (ii)
in the case of Floating Rate Notes with a quarterly Interest Reset Date, on the
third Wednesday of March, June, September and December; (iii) in the case of
Floating Rate Notes with a semiannual Interest Reset Date, on the third
Wednesday of the two months specified in the applicable Pricing Certificate; and
(iv) in the case of Floating Rate Notes with an annual Interest Reset Date, on
the third Wednesday of the month specified in the applicable Pricing
Certificate. If any Interest Payment Date for any Floating Rate Note would fall
on a day that is not a Business Day with respect to such Floating Rate Note,
such Interest Payment Date will be postponed to the following day that is a
Business Day with respect to such Floating Rate Note, except that, in the case
of a LIBOR Note, if such Business Day is in the next succeeding calendar month,
such Interest Payment Date shall be the immediately preceding day that is a
Business Day with respect to such LIBOR Note. If the maturity date or any
earlier redemption or repayment date of a Floating Rate Note would fall on a day
that is not a Business Day, the payment of principal, premium, if any, and
interest will be made on the next succeeding Business Day, and no interest on
such payment shall accrue for the period from and after such maturity,
redemption or repayment date, as the case may be.
6. Unless otherwise specified in the applicable Pricing Certificate,
interest payments for Floating Rate Notes shall be the amount of interest
accrued from and including the date of issue or from and including the last date
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to which interest has been paid to, but excluding, the Interest Payment Date or
maturity date or date of redemption or repayment.
7. With respect to a Floating Rate Note, accrued interest shall be
calculated by multiplying the principal amount of such Floating Rate Note by an
accrued interest factor. Such accrued interest factor will be computed by adding
the interest factors calculated for each day in the period for which interest is
being paid. Unless otherwise specified in the applicable Pricing Certificate,
the interest factor for each such day is computed by dividing the interest rate
applicable to such day by 360, in the case of CD Rate Notes, Commercial Paper
Rate Notes, Federal Funds Rate Notes, LIBOR Notes and Prime Rate Notes or by the
actual number of days in the year, in the case of Treasury Rate Notes and CMT
Rate Notes. All percentages used in or resulting from any calculation of the
rate of interest on a Floating Rate Note will be rounded, if necessary, to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
of a percentage point rounded upward, and all dollar amounts used in or
resulting from such calculation on Floating Rate Notes will be rounded to the
nearest cent, with one-half cent rounded upward. The interest rate in effect on
any Interest Reset Date will be the applicable rate as reset on such date. The
interest rate applicable to any other day is the interest rate from the
immediately preceding Interest Reset Date (or, if none, the Initial Interest
Rate).
8. Unless otherwise stated in the applicable Pricing Certificate, the
calculation agent (the "Calculation Agent") with respect to any issue of
Floating Rate Notes shall be Harris Trust and Savings Bank. Upon the request of
the holder of any Floating Rate Note, the Calculation Agent will provide the
interest rate then in effect and, if determined, the interest rate that will
become effective on the next Interest Reset Date with respect to such Floating
Rate Note.
9. The "Interest Determination Date" pertaining to an Interest Reset Date
for CD Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes, CMT
Rate Notes and Prime Rate Notes will be the second Business Day next preceding
such Interest Reset Date. The Interest Determination Date pertaining to an
Interest Reset Date for a LIBOR Note will be the second London Banking Day
preceding such Interest Reset Date. The Interest Determination Date pertaining
to an Interest Reset Date for a Treasury Rate Note will be the day of the week
in which such Interest Reset Date falls on which Treasury bills would normally
be auctioned. Treasury bills are normally sold at auction on Monday of each
week, unless that day is a legal holiday, in which case the auction is normally
held on the following Tuesday, but such auction may be held on the preceding
Friday. If, as the result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Interest Determination Date pertaining
to the Interest Reset Date occurring in the next succeeding week. If an auction
falls on a day that is an Interest Reset Date, such Interest Reset Date will be
the next following Business Day.
10. Unless otherwise specified in the applicable Pricing Certificate, the
"Calculation Date," where applicable, pertaining to an Interest Determination
Date will be the earlier of (i) the tenth calendar day after such Interest
Determination Date, or, if such day is not a Business Day, the next succeeding
Business Day, or (ii) the Business Day preceding the applicable Interest Payment
Date or Maturity Date, as the case may be.
11. Interest rates will be determined by the Calculation Agent as follows:
(a) CD Rate Notes
(i) CD Rate Notes will bear interest at the interest rate
(calculated with reference to the CD Rate and the Spread and/or Spread
Multiplier, if any, and subject to the Minimum Interest Rate and the Maximum
Interest Rate, if any) specified in the CD Rate Notes and in the applicable
Pricing Certificate.
(ii) Unless otherwise specified in the applicable Pricing
Certificate, "CD Rate" means, with respect to any Interest Determination Date,
the rate on such date for negotiable certificates of deposit having the Index
Maturity designated in the applicable Pricing Certificate as published by the
Board of Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates," or any successor publication of the Board
of Governors of the Federal Reserve System ("H.15(519)") under the heading "CDs
(Secondary Market)," or, if not so published by 9:00 A.M., New York City time,
on the Calculation Date pertaining to such Interest Determination Date,
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the CD Rate will be the rate on such Interest Determination Date for negotiable
certificates of deposit of the Index Maturity designated in the applicable
Pricing Certificate as published by the Federal Reserve Bank of New York in its
daily statistical release "Composite 3:30 P.M. Quotations for U.S. Government
Securities" (the "Composite Quotations") under the heading "Certificates of
Deposit." If such rate is not yet published in either H.15(519) or the Composite
Quotations by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the CD Rate on such Interest Determination
Date will be calculated by the Calculation Agent and will be the arithmetic mean
of the secondary market offered rates as of 10:00 A.M., New York City time, on
such Interest Determination Date for certificates of deposit in an amount that
is representative for a single transaction at that time with a remaining
maturity closest to the Index Maturity designated in the Pricing Certificate of
three leading nonbank dealers in negotiable U.S. dollar certificates of deposit
in The City of New York selected by the Calculation Agent for negotiable
certificates of deposit of major United States money center banks; provided,
however, that if the dealers selected as aforesaid by the Calculation Agent are
not quoting as set forth above, the CD Rate in effect for the applicable period
will be the same as the CD Rate for the immediately preceding Interest Reset
Period (or, if there was no such Interest Reset Period, the rate of interest
payable on the CD Rate Notes for which such CD Rate is being determined shall be
the Initial Interest Rate).
(b) Commercial Paper Rate Notes
(i) Commercial Paper Rate Notes will bear interest at the
interest rate (calculated with reference to the Commercial Paper Rate and the
Spread and/or Spread Multiplier, if any, and subject to the Minimum Interest
Rate and the Maximum Interest Rate, if any) specified in the Commercial Paper
Rate Notes and in the applicable Pricing Certificate.
(ii) Unless otherwise specified in the applicable Pricing
Certificate, "Commercial Paper Rate" means, with respect to any Interest
Determination Date, the Money Market Yield (as defined below) of the rate on
such date for commercial paper having the Index Maturity specified in the
applicable Pricing Certificate, as such rate shall be published in H.15(519),
under the heading "Commercial Paper." In the event that such rate is not
published by 9:00 A.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, then the Commercial Paper Rate shall be the
Money Market Yield of the rate on such Interest Determination Date for
commercial paper of the specified Index Maturity as published in Composite
Quotations under the heading "Commercial Paper." If by 3:00 P.M., New York City
time, on such Calculation Date such rate is not yet available in either
H.15(519) or Composite Quotations, then the Commercial Paper Rate shall be the
Money Market Yield of the arithmetic mean of the offered rates as of 11:00 A.M.,
New York City time, on such Interest Determination Date of three leading dealers
of commercial paper in The City of New York selected by the Calculation Agent
for commercial paper of the specified Index Maturity, placed for an industrial
issuer whose bond rating is "AA" or the equivalent, from a nationally recognized
statistical rating agency; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting offered rates as mentioned in
this sentence, the Commercial Paper Rate in effect for the applicable period
will be the same as the Commercial Paper Rate for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period, the rate
of interest payable on the Commercial Paper Rate Notes for which such Commercial
Paper Rate is being determined shall be the Initial Interest Rate).
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
Money Market Yield = D x 360 x 100
--------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days for which interest is being calculated.
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(c) Federal Funds Rate Notes
(i) Federal Funds Rate Notes will bear interest at the interest
rate (calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any, and subject to the Minimum Interest Rate and the
Maximum Interest Rate, if any) specified in the Federal Funds Rate Notes and in
the applicable Pricing Certificate.
(ii) Unless otherwise specified in the applicable Pricing
Certificate, the "Federal Funds Rate" means, with respect to any Interest
Determination Date, the rate on such date for Federal funds as published in
H.15(519) under the heading "Federal Funds (Effective)" or, if not so published
by 9:00 A.M., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, the Federal Funds Rate will be the rate on such
Interest Determination Date as published in the Composite Quotations under the
heading "Federal Funds/Effective Rate." If such rate is not yet published in
either H.15(519) or the Composite Quotations by 3:00 P.M., New York City time,
on the Calculation Date pertaining to such Interest Determination Date, the
Federal Funds Rate for such Interest Determination Date will be calculated by
the Calculation Agent and will be the arithmetic mean of the rates for the last
transaction in overnight Federal funds, as of 9:00 A.M., New York City time, on
such Interest Determination Date, arranged by three leading brokers of Federal
funds transactions in The City of New York selected by the Calculation Agent;
provided, however, that if the brokers selected as aforesaid by the Calculation
Agent are not quoting as set forth above, the Federal Funds Rate in effect for
the applicable period will be the same as the Federal Funds Rate for the
immediately preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the rate of interest payable on the Federal Funds Rate Notes for
which such Federal Funds Rate is being determined shall be the Initial Interest
Rate).
(d) LIBOR Notes
(i) LIBOR Notes will bear interest at the interest rate
(calculated with reference to LIBOR and the Spread and/or Spread Multiplier, if
any, and subject to the Minimum Interest Rate and the Maximum Interest Rate, if
any) specified in the LIBOR Notes and in the applicable Pricing Certificate.
(ii) Unless otherwise specified in the applicable Pricing
Certificate, "LIBOR" for each Interest Determination Date will be determined by
the Calculation Agent as follows:
(A) As of the Interest Determination Date, LIBOR will be either:
(1) if "LIBOR Reuters" is specified in the applicable Pricing Certificate,
the arithmetic mean of the offered rates (unless the specified Designated
LIBOR Page (as defined below) by its terms provides only for a single rate,
in which case such single rate shall be used) for deposits in the Index
Currency having the Index Maturity designated in the applicable Pricing
Certificate, commencing on the second London Banking Day immediately
following such Interest Determination Date, that appear on the Designated
LIBOR Page as of 11:00 A.M., London time, on that Interest Determination
Date, if at least two such offered rates appear (unless, as aforesaid, only
a single rate is required) on such Designated LIBOR Page, or (2) if "LIBOR
Telerate" is specified in the applicable Pricing Certificate, the rate for
deposits in the Index Currency (as defined below) having the Index Maturity
designated in the applicable Pricing Certificate, commencing on the second
London Banking Day immediately following such Interest Determination Date,
that appears on such Designated LIBOR Page as of 11:00 A.M., London time,
on that Interest Determination Date. If fewer than two offered rates appear
(if "LIBOR Reuters" is specified in the applicable Pricing Certificate) or
no rate appears (if "LIBOR Telerate" is specified in the applicable Pricing
Certificate), LIBOR in respect of the related Interest Determination Date
will be determined as if the parties had specified the rate described in
clause (B) below.
(B) With respect to an Interest Determination Date on which fewer
than two offered rates appear (if "LIBOR Reuters" is specified in the
applicable Pricing Certificate) or no rate appears (if "LIBOR Telerate" is
specified in the applicable Pricing Certificate), the Calculation Agent
will request the principal London offices of each of four major reference
banks in the London interbank market, as selected by the Calculation Agent,
to provide the Calculation Agent with its offered quotation for deposits in
the Index
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Currency for the period of the Index Maturity designated in the applicable
Pricing Certificate, commencing on the second London Banking Day
immediately following such Interest Determination Date, to prime banks in
the London interbank market at approximately 11:00 A.M., London time, on
such Interest Determination Date and in a principal amount of not less than
$1,000,000 (or the equivalent in the Index Currency, if the Index Currency
is not the U.S. dollar) that is representative of a single transaction in
such Index Currency in such market at such time. If at least two such
quotations are provided, LIBOR determined on such Interest Determination
Date will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR determined on such Interest Determination
Date will be the arithmetic mean of the rates quoted at approximately 11:00
A.M. (or such other time specified in the applicable Pricing Certificate),
in the applicable principal financial center for the country of the Index
Currency on such Interest Determination Date, by three major banks in such
principal financial center selected by the Calculation Agent for loans in
the Index Currency to leading European banks, having the Index Maturity
designated in the applicable Pricing Certificate and in a principal amount
of not less than $1,000,000 commencing on the second London Banking Day
immediately following such Interest Determination Date (or the equivalent
in the Index Currency, if the Index Currency is not the U.S. dollar) that
is representative for a single transaction in such Index Currency in such
market at such time; provided, however, that if the banks so selected by
the Calculation Agent are not quoting as mentioned in this sentence, LIBOR
in effect for the applicable period will be the same as LIBOR for the
immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the rate of interest payable on the LIBOR Notes for
which such LIBOR is being determined shall be the Initial Interest Rate).
(iii) "Index Currency" means the currency (including composite
currencies) specified in the applicable Pricing Certificate as the currency for
which LIBOR shall be calculated. If no such currency is specified in the
applicable Pricing Certificate, the Index Currency shall be U.S. dollars.
(iv) "Designated LIBOR Page" means either (1) if "LIBOR Reuters"
is designated in the applicable Pricing Certificate, the display on the Reuters
Monitor Money Rates Service for the purpose of displaying the London interbank
rates of major banks for the applicable Index Currency, or (2) if "LIBOR
Telerate" is designated in the applicable Pricing Certificate, the display on
the Dow Jones Telerate Service for the purpose of displaying the London
interbank rates of major banks for the applicable Index Currency. If neither
LIBOR Reuters nor LIBOR Telerate is specified in the applicable Pricing
Certificate, LIBOR for the applicable Index Currency will be determined as if
LIBOR Telerate had been specified. If the U.S. dollar is the Index Currency,
LIBOR will be determined as if Page 3750 had been specified. "Page 3750" means
the display designated as page "3750" on the Telerate Service (or such other
page as may replace the 3750 page on that service or such other service or
services as may be nominated by the British Bankers' Association for the
purposes of displaying London interbank offered rates for U.S. dollar deposits).
(e) Prime Rate Notes
(i) Prime Rate Notes will bear interest at the interest rate
(calculated with reference to the Prime Rate and the Spread and/or Spread
Multiplier, if any, and subject to the Maximum Interest Rate and the Maximum
Interest Rate, if any) specified in the Prime Rate Notes and in the applicable
Pricing Certificate.
(ii) Unless otherwise specified in the applicable Pricing
Certificate, "Prime Rate" means, with respect to any Interest Determination
Date, the rate set forth in H.15(519) for such date opposite the caption "Bank
Prime Loan." If such rate is not yet published by 9:00 A.M., New York City time,
on the Calculation Date pertaining to such Interest Determination Date, the
Prime Rate for such Interest Determination Date will be the arithmetic mean of
the rates of interest publicly announced by each bank named on the Reuters
Screen NYMF Page (as defined below) as such bank's prime rate or base lending
rate as in effect for such Interest Determination Date as quoted on the Reuters
Screen NYMF Page on such Interest Determination Date, or, if fewer than four
such rates appear on the Reuters Screen NYMF Page for such Interest
Determination Rate, the rate will be the arithmetic mean of the prime rates
quoted on the basis of the actual number of days in the year divided by 360 as
of the close of business on such Interest Determination Date by at least two of
the three major money center banks in The City of New York selected by the
Calculation Agent from which quotations are requested. If fewer than two
quotations are provided, the Prime Rate shall be calculated by the Calculation
Agent and shall be determined as the arithmetic mean on the basis of the prime
rates in The City of New
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York by the appropriate number of substitute banks or trust companies organized
and doing business under the laws of the United States, or any State thereof, in
each case having total equity capital of at least U.S. $500 million and being
subject to supervision or examination by federal or state authority, selected by
the Calculation Agent to quote such rate or rates; provided, however, that if
the banks or trust companies selected as aforesaid by the Calculation Agent are
not quoting as set forth above, the "Prime Rate" in effect for the applicable
period will be the same as the Prime Rate for the immediately preceding Interest
Reset Period (or, if there was no such Interest Reset Period, the rate of
interest payable on the Prime Rate Notes for which such Prime Rate is being
determined shall be the Initial Interest Rate). "Reuters Screen NYMF Page" means
the display designated as Page "NYMF" on the Reuters Monitor Money Rates
Services (or such other page as may replace the NYMF Page on that service for
the purpose of displaying prime rates or base lending rates of major United
States banks).
(f) Treasury Rate Notes
(i) Treasury Rate Notes will bear interest at the interest rate
(calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any, and subject to the Minimum Interest Rate and the Maximum
Interest Rate, if any) specified in the Treasury Rate Notes and in the
applicable Pricing Certificate.
(ii) Unless otherwise specified in the applicable Pricing
Certificate, the "Treasury Rate" means, with respect to any Interest
Determination Date, the rate for the auction held on such date of direct
obligations of the United States ("Treasury Bills") having the Index Maturity
designated in the applicable Pricing Certificate, as published in H.15(519)
under the heading "Treasury Bills auction average (investment)" or, if not so
published by 9:00 A.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the auction average rate on such Interest
Determination Date (expressed as a bond equivalent, on the basis of a year of
365 or 366 days as applicable, and applied on a daily basis) as otherwise
announced by the United States Department of the Treasury. In the event that the
results of the auction of Treasury Bills having the Index Maturity designated in
the applicable Pricing Certificate are not published or reported as provided
above by 3:00 P.M., New York City time, on such Calculation Date or if no such
auction is held on such Interest Determination Date, then the Treasury Rate
shall be calculated by the Calculation Agent and shall be a yield to maturity
(expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) calculated using the arithmetic mean
of the secondary market bid rates, as of approximately 3:30 P.M., New York City
time, on such Interest Determination Date, of three leading primary United
States government securities dealers selected by the Calculation Agent for the
issue of Treasury Bills with a remaining maturity closest to the Index Maturity
designated in the applicable Pricing Certificate; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting bid rates
as mentioned in this sentence, the Treasury Rate for such Interest Reset Date
will be the same as the Treasury Rate for the immediately preceding Interest
Reset Period (or, if there was no such Interest Reset Period, the rate of
interest payable on the Treasury Rate Notes for which the Treasury Rate is being
determined shall be the Initial Interest Rate).
(g) CMT Rate Notes
(i) CMT Rate Notes will bear interest at the interest rate
(calculated with reference to the CMT Rate and the Spread and/or Spread
Multiplier, if any, and subject to the Minimum Interest Rate and the Maximum
Interest Rate, if any) specified in the CMT Rate Notes and in the applicable
Pricing Certificate.
(ii) Unless otherwise indicated in an applicable Pricing
Certificate, "CMT Rate" means, with respect to any Interest Determination Date,
the rate displayed on the Designated CMT Telerate Page (as defined below) under
the caption "... Treasury Constant Maturities ... Federal Reserve Board Release
H.15 ... Mondays Approximately 3:45 p.m.," under the column for the Designated
CMT Maturity Index (as defined below) for (a) if the Designated CMT Telerate
Page is 7055, the rate on such Interest Determination Date and (b) if the
Designated CMT Telerate Page is 7052, the week or the month, as applicable,
ended immediately preceding the week in which the related Interest Determination
Date occurs. If such rate is no longer displayed on the relevant page, or if not
displayed by 3:00 P.M., New York City time, on the related Calculation Date,
then the CMT Rate for such Interest Determination Date will be such Treasury
Constant Maturity rate for the Designated CMT Maturity Index as is published in
the relevant H.15(519). If such rate is no longer published, or, if not
published by 3:00 P.M., New York City time, on the related
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Calculation Date, then the CMT Rate for such Interest Determination Date will be
such Treasury Constant Maturity rate for the Designated CMT Maturity Index (or
other United States Treasury rate for the Designated CMT Maturity Index) for the
Interest Determination Date with respect to such Interest Reset Date as may then
be published by either the Board of Governors of the Federal Reserve System or
the United States Department of the Treasury that the Calculation Agent
determines to be comparable to the rate formerly displayed on the Designated CMT
Telerate Page and published in the relevant H.15(519). If such information is
not provided by 3:00 P.M., New York City time, on the related Calculation Date,
then the CMT Rate for the Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity, based on the arithmetic mean
of the secondary market closing offer side prices as of approximately 3:30 P.M.,
New York City time on the Interest Determination Date reported, according to
their written records, by three leading primary United States government
securities dealers (each, a "Reference Dealer") in The City of New York selected
by the Calculation Agent (from five such Reference Dealers selected by the
Calculation Agent, after consultation with the Company, and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest)), for the
most recently issued direct noncallable fixed rate obligations of the United
States ("Treasury notes") with an original maturity of approximately the
Designated CMT Maturity Index and remaining term to maturity of not less than
such Designated CMT Maturity Index minus one year. If the Calculation Agent
cannot obtain three such Treasury notes quotations, the CMT Rate for such
Interest Determination Date will be calculated by the Calculation Agent and will
be a yield to maturity based on the arithmetic mean of the secondary market
offer side prices as of approximately 3:30 P.M., New York City time, on the
Interest Determination Date of three Reference Dealers in The City of New York
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for Treasury notes with an original maturity of the number of years
that is the next highest to the Designated CMT Maturity Index and a remaining
term to maturity closest to the Designated CMT Maturity Index and in an amount
of at least $100,000,000. If three or four (and not five) of such Reference
Dealers are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offer prices obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided however, that if fewer than
three Reference Dealers selected by the Calculation Agent are quoting as
described herein, the CMT Rate for such Interest Reset Date will be the same as
the CMT Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the rate of interest payable on the CMT Rate
Notes for which the CMT Rate is being determined shall be the Initial Interest
Rate). If two Treasury notes with an original maturity as described in the
second preceding sentence have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the quotes for the Treasury note with the shorter
remaining term to maturity will be used.
(iii) "Designated CMT Telerate Page" means the display on the
Dow Jones Telerate Service on the page designated in an applicable Pricing
Certificate (or any other page as may replace such page on that service for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519)),
for the purpose of displaying Treasury Constant Maturities as reported in
H.15(519). If no such page is specified in the applicable Pricing Certificate,
the Designated CMT Telerate Page shall be 7052, for the most recent week.
(iv) "Designated CMT Maturity Index" shall be the original period
to maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified in an applicable Pricing Certificate with respect to which the
CMT Rate will be calculated. If no such maturity is specified in the applicable
Pricing Certificate, the Designated CMT Maturity Index shall be two years.
F. RENEWABLE NOTES
1. The Company may also issue from time to time variable rate
renewable notes (the "Renewable Notes") that will bear interest at the interest
rate (calculated with reference to a Base Rate and the Spread and/or Spread
Multiplier, if any, and subject to the Minimum Interest Rate and the Maximum
Interest Rate, if any) specified in the Renewable Notes and in the applicable
Pricing Certificate.
2. The Renewable Notes will mature on an Interest Payment Date as
specified in the applicable Pricing Certificate (the "Initial Maturity Date"),
unless the maturity of all or any portion of the principal amount thereof is
extended in accordance with the procedures described below. On the Interest
Payment Dates (each such Interest
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Payment Date, an "Election Date"), the maturity of the Renewable Notes will be
extended to the Interest Payment Date occurring twelve months after such
Election Date, unless the holder thereof elects to terminate the automatic
extension of the maturity of the Renewable Notes or of any portion thereof
having a principal amount of $1,000 or any multiple of $1,000 in excess thereof
by delivering a notice to such effect to the Paying Agent not less than nor more
than a number of days to be specified in the applicable Pricing Certificate
prior to such Election Date. Such option may be exercised with respect to less
than the entire principal amount of the Renewable Notes; provided that the
principal amount for which such option is not exercised is at least $1,000 or
any larger amount that is an integral multiple of $1,000. Notwithstanding the
foregoing, the maturity of the Renewable Notes may not be extended beyond the
Final Maturity Date (as hereafter defined), as specified in the applicable
Pricing Certificate. If the holder elects to terminate the automatic extension
of the maturity of any portion of the principal amount of the Renewable Notes
and such election is not revoked as described below, such portion will become
due and payable on the Interest Payment Date falling six months (unless another
period is specified in the applicable Pricing Certificate) after the Election
Date prior to which the holder made such election.
3. An election to terminate the automatic extension of maturity may
be revoked as to any portion of the Renewable Notes having a principal amount of
$1,000 or any multiple of $1,000 in excess thereof by delivering a notice to
such effect to the Paying Agent on any day following the effective date of the
election to terminate the automatic extension of maturity and prior to the date
15 days before the date on which such portion would otherwise mature. Such a
revocation may be made for less than the entire principal amount of the
Renewable Notes for which the automatic extension of maturity has been
terminated; provided that the principal amount of the Renewable Notes for which
the automatic extension of maturity has been terminated and for which such a
revocation has not been made is at least $1,000 or any larger amount that is an
integral multiple of $1,000. Notwithstanding the foregoing, a revocation may
not be made during the period from and including a Record Date to but excluding
the immediately succeeding Interest Payment Date.
4. An election to terminate the automatic extension of the maturity
of the Renewable Notes, if not revoked as described above by the holder making
the election or any subsequent holder, will be binding upon such subsequent
holder.
5. The Renewable Notes may be redeemed in whole or in part at the
option of the Company on the Interest Payment Dates in each year specified in
the applicable Pricing Certificate, commencing with the Interest Payment Date
specified in the applicable Pricing Certificate, at a redemption price as stated
in the applicable Pricing Certificate, together with accrued and unpaid interest
to the date of redemption. Notwithstanding anything to the contrary herein,
notice of redemption will be provided by mailing a notice of such redemption to
each holder by first class mail, postage prepaid, at least 180 days prior to the
date fixed for redemption.
G. INDEXED NOTES
The Notes may be issued, from time to time, as Notes of which the principal
amount payable on a date more than nine months from the date of original issue
(the "Stated Maturity") and/or on which the amount of interest payable on an
Interest Payment Date will be determined by reference to currencies, currency
units, commodity prices, financial or non-financial indices or other factors
(the "Indexed Notes"), as indicated in the applicable Pricing Certificate.
Holders of Indexed Notes may receive a principal amount at maturity that is
greater than or less than the face amount of such Notes depending upon the
fluctuation of the relative value, rate or price of the specified index.
Specific information pertaining to the method for determining the principal
amount payable at maturity, a historical comparison of the relative value, rate
or price of the specified index and the face amount of the Indexed Note and
certain additional United States federal tax considerations will be described in
the applicable Pricing Certificate.
H. EXTENSION OF MATURITY
1. The Pricing Certificate relating to each Note (other than an
Amortizing Note) will indicate whether the Company has the option to extend the
maturity of such Note for one or more periods of one or more whole years (each
an "Extension Period") up to but not beyond the date (the "Final Maturity Date")
set forth in such Pricing
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Certificate. If the Company has such option with respect to any such Note (an
"Extendible Note"), the following procedures will apply, unless modified as set
forth in the applicable Pricing Certificate.
2. The Company may exercise such option with respect to an Extendible
Note by notifying the Paying Agent of such exercise at least 45 but not more
than 60 days prior to the maturity date originally in effect with respect to
such Note (the "Original Maturity Date") or, if the maturity date of such Note
has already been extended, prior to the maturity date then if effect (an
"Extended Maturity Date"). No later than 38 days prior to the Original Maturity
Date or an Extended Maturity Date, as the case may be (each, a "Maturity Date"),
the Paying Agent will mail to the holder of such Note a notice (the "Extension
Notice") relating to such Extension Period, by first class mail, postage
prepaid, setting forth (a) the election of the Company to extend the maturity of
such Note; (b) the new Extended Maturity Date; (c) the interest rate applicable
to the Extension Period (which, in the case of a Floating Rate Note, will be
calculated with reference to a Base Rate and the Spread and/or Spread
Multiplier, if any); and (d) the provisions, if any, for redemption during the
Extension Period, including the date or dates on which, the period or periods
during which and the price or prices at which such redemption may occur during
the Extension Period. Upon the mailing by the Paying Agent of an Extension
Notice to the holder of an Extendible Note, the maturity of such Note shall be
extended automatically, and, except as modified by the Extension Notice and as
described in the next paragraph, such Note will have the same terms it had prior
to the mailing of such Extension Notice.
3. Notwithstanding the foregoing, not later than 10:00 A.M., New York
City time, on the twentieth calendar day prior to the Maturity Date then in
effect for an Extendible Note (or, if such day is not a Business Day, not later
than 10:00 A.M., New York City time, on the immediately succeeding Business
Day), the Company may, at its option, revoke the interest rate provided for in
the Extension Notice and establish a higher interest rate (or, in the case of a
Floating Rate Note, a higher Spread and/or Spread Multiplier, if any) for the
Extension Period by causing the Paying Agent to send notice of such higher
interest rate (or, in the case of a Floating Rate Note, a higher Spread and/or
Spread Multiplier, if any) to the holder of such Note by first class mail,
postage prepaid, or by such other means as shall be agreed between the Company
and the Paying Agent. Such notice shall be irrevocable. All Extendible Notes
with respect to which the Maturity Date is extended in accordance with an
Extension Notice will bear such higher interest rate (or, in the case of a
Floating Rate Note, a higher Spread and/or Spread Multiplier, if any) for the
Extension Period, whether or not tendered for repayment.
4. If the Company elects to extend the maturity of an Extendible
Note, the holder of such Note will have the option to require the Company to
repay such Note on the Maturity Date then in effect at a price equal to the
principal amount thereof plus any accrued and unpaid interest to such date,
unless such Note is an Original Issue Discount Note, in which case the
applicable Pricing Certificate will specify the amount payable upon such
repayment. In order for an Extendible Note to be repaid on such Maturity Date,
the holder thereof must follow the procedures set forth below under "Repayment
at the Noteholders' Option; Repurchase" for optional repayment, except that the
period for delivery of such Note or notification to the Paying Agent shall be at
least 25 but not more than 35 days prior to the Maturity Date then in effect and
except that a holder who has tendered an Extendible Note for repayment pursuant
to an Extension Notice may, by written notice to the Paying Agent, revoke any
such tender for repayment until 3:00 P.M., New York City time, on the twentieth
calendar day prior to the Maturity Date then in effect (or, if such day is not a
Business Day, until 3:00 P.M., New York City time, on the immediately succeeding
Business Day).
I. BOOK-ENTRY SYSTEM
Upon issuance, all Fixed Rate Global Notes having the same Issue Date,
interest rate, if any, amortization schedule, if any, maturity date and other
terms, if any, will be represented by one or more Global Securities, and all
Floating Rate Global Notes having the same Issue Date, Initial Interest Rate,
Base Rate, Interest Reset Period, Interest Payment Dates, Index Maturity, Spread
and/or Spread Multiplier, if any, Minimum Interest Rate, if any, Maximum
Interest Rate, if any, maturity date and other terms, if any, will be
represented by one or more Global Securities. Each Global Security representing
Global Notes will be deposited with, or on behalf of, The Depository Trust
Company, New York, New York (the "Depository"), and registered in the name of a
nominee of the Depository. Global Notes will not be exchangeable for Definitive
Notes, except as set forth in the Indenture. Definitive Notes will not be
exchangeable for Global Notes and will not otherwise be issuable as Global
Notes.
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J. OPTIONAL REDEMPTIONS
The Pricing Certificate will indicate that the Notes cannot be redeemed
prior to maturity or will indicate the terms on which the Notes will be
redeemable at the option of the Company. Notice of redemption will be provided
by mailing a notice of such redemption to each holder by first class mail,
postage prepaid, at least 30 days and not more than 60 days prior to the date
fixed for redemption to the respective address of each holder as that address
appears upon the books maintained by the Paying Agent. Unless otherwise provided
in the applicable Pricing Certificate, the Notes, except for Amortizing Notes,
will not be subject to any sinking fund.
K. REPAYMENT AT THE NOTEHOLDERS' OPTION; REPURCHASE
1. If applicable, the Pricing Certificate relating to each Note will
indicate that the Note will be repayable at the option of the holder on a date
or dates specified prior to its maturity date and, unless otherwise specified in
such Pricing Certificate, at a price equal to 100% of the principal amount
thereof, together with accrued interest to the date of repayment, unless such
Note is an Original Issue Discount Note, in which case the Pricing Certificate
will specify the amount payable upon such repayment.
2. In order for such a Note to be repaid, the Paying Agent must receive
at least 30 days but not more than 60 days prior to the repayment date (i) the
Note with the form entitled "Option to Elect Repayment" on the reverse of the
Note duly completed or (ii) a telegram, telex, facsimile transmission or a
letter from a member of a national securities exchange, or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company in
the United States setting forth the name of the holder of the Note, the
principal amount of the Note, the principal amount of the Note to be repaid, the
certificate number or a description of the tenor and terms of the Note, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Note to be repaid, together with the duly completed form
entitled "Option to Elect Repayment" on the reverse of the Note, will be
received by the Paying Agent not later than the fifth Business Day after the
date of such telegram, telex, facsimile transmission or letter, provided,
however, that such telegram, telex, facsimile transmission or letter shall only
be effective if such Note and form duly completed are received by the Paying
Agent by such fifth Business Day. Except in the case of Renewable Notes or
Extendible Notes, and unless otherwise specified in the applicable Pricing
Certificate, exercise of the repayment option by the holder of a Note will be
irrevocable. The repayment option may be exercised by the holder of a Note for
less than the principal amount of the Note but, in that event, the principal
amount of the Note remaining outstanding after repayment must be an Authorized
Denomination.
3. If a Note is represented by a Global Security, the Depository's
nominee will be the holder of such Note and therefore will be the only entity
that can exercise a right to repayment. In order to ensure that the Depository's
nominee will timely exercise a right to repayment with respect to a particular
Note, the beneficial owner of such Note must instruct the broker or other direct
or indirect participant through which it holds an interest in such Note to
notify the Depository of its desire to exercise a right to repayment. Different
firms have different deadlines for accepting instructions from their customers
and, accordingly, each beneficial owner should consult the broker or other
direct or indirect participant through which it holds an interest in a Note in
order to ascertain the deadline by which such an instruction must be given in
order for timely notice to be delivered to the Depository.
4. The Company may purchase Notes at any price in the open market or
otherwise. Notes so purchased by the Company may, at the discretion of the
Company, be held or resold or surrendered to the relevant Trustee for
cancellation.
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