1
 
           PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JANUARY 14, 1994
 
                                U.S.$400,000,000
 
                              SARA LEE CORPORATION
                          MEDIUM-TERM NOTES, SERIES B
           WITH MATURITIES OF NINE MONTHS OR MORE FROM DATE OF ISSUE
                            ------------------------
 
     Sara Lee Corporation (the "Company") may offer from time to time its
Medium-Term Notes, Series B (the "Notes"). The amount of Notes to be offered
hereby will not exceed U.S.$400,000,000 aggregate public offering price (or the
equivalent thereof in foreign currencies or currency units), subject to
reduction under certain circumstances as a result of the sale of other
Securities of the Company under the Prospectus to which this Prospectus
Supplement relates. The Company may from time to time authorize an increase in
the aggregate public offering price of Notes to be sold, which Notes will
constitute a part of the same series as the Notes offered hereby. The Notes will
be offered at varying maturities of nine months or more from their dates of
issue and may be subject to redemption at the option of the Company or repayment
at the option of the Holder prior to the Stated Maturity (as defined below)
thereof as set forth in a Pricing Supplement to this Prospectus Supplement (a
"Pricing Supplement"). Each Note will be denominated in U.S. dollars or in other
currencies or currency units (the "Specified Currency") as may be designated by
the Company and set forth in the applicable Pricing Supplement. See "Important
Currency Information" and "Currency Risks."
                            ------------------------    (CONTINUED ON NEXT PAGE)
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
     EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
     SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
        COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
          PROSPECTUS SUPPLEMENT, THE PROSPECTUS OR ANY SUPPLEMENT
              HERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
                                   OFFENSE.
                            ------------------------
 


                                    PRICE TO        AGENTS' COMMISSION              PROCEEDS TO
                                   PUBLIC(1)          OR DISCOUNT(2)               COMPANY(2)(3)
                                  ------------      -------------------      --------------------------
                                                                    
Per Note.......................     100.000%            .125%-.750%               99.250%-99.875%
Total..........................   $400,000,000      $500,000-$3,000,000      $397,000,000-$399,500,000

 
- ---------------
(1) Unless otherwise specified in the Pricing Supplement relating thereto, each
    Note will be issued at 100% of the principal amount thereof.
(2) The Company will pay Goldman, Sachs & Co., Lazard Freres & Co., Lehman
    Brothers, Lehman Brothers Inc. (including its affiliate Lehman Special
    Securities Inc.) and Salomon Brothers Inc (each an "Agent," and
    collectively, the "Agents") a commission, in the form of a discount, ranging
    from .125% to .750% of the principal amount of any Note, depending upon its
    Stated Maturity, sold through such Agent. Any Agent, acting as principal,
    may also purchase Notes at a discount for resale to investors or other
    purchasers at varying prices related to prevailing market prices at the time
    of resale or, if so agreed, at a fixed public offering price. No commission
    will be payable on any Note sold directly by the Company. The Company has
    agreed to indemnify each Agent against certain liabilities, including
    liabilities under the Securities Act of 1933, as amended.
(3) Before deducting expenses payable by the Company estimated at $315,000.
                            ------------------------
 
     The Notes are being offered on a continuing basis by the Company through
the Agents, each of which has agreed to use its reasonable best efforts to
solicit offers to purchase the Notes. The Company also may sell Notes to any
Agent, acting as principal, for resale to one or more investors or to one or
more broker-dealers (acting as a principal for purposes of resale) at varying
prices related to prevailing market prices at the time of resale, as determined
by such Agent, or, if so agreed, at a fixed public offering price. The Company
has reserved the right to sell Notes directly to investors on its own behalf.
The Notes will not be listed on any securities exchange, and there can be no
assurance that the Notes will be sold or that there will be a secondary market
for the Notes. The Company reserves the right to withdraw, cancel or modify the
offer made hereby without notice. The Company or the Agent that solicits any
offer to purchase Notes may reject any offer in whole or in part. See
"Supplemental Plan of Distribution."
GOLDMAN, SACHS & CO.
                    LAZARD FRERES & CO.
                                       LEHMAN BROTHERS
                            ------------------------ SALOMON BROTHERS INC
 
          The date of this Prospectus Supplement is February 15, 1994
   2
 
(CONTINUED FROM PREVIOUS PAGE)
 
     Unless otherwise specified in the applicable Pricing Supplement, Notes
denominated in U.S. dollars will be issued only in denominations of $1,000 or
any amount in excess thereof which is an integral multiple of $1,000. If the
Notes are to be denominated in a foreign currency or units of a foreign
composite currency, the authorized denominations and currency exchange rate
information will be set forth in the applicable Pricing Supplement. The
principal amount payable at Maturity (as defined below) and/or any interest or
premium on a Note may be determined by reference to the relationship between two
or more currencies, to the price of one or more specified securities or
commodities, to one or more securities or commodities exchange indices or other
indices or by other similar methods (an "Indexed Note"), as set forth in the
applicable Pricing Supplement. An Indexed Note, the principal amount payable at
Maturity and/or the interest rate of which is determined by reference to the
relationship between two currencies, two composite currencies or one currency
and one composite currency is referred to herein as a "Currency Indexed Note."
 
     The interest rate on, or interest rate formula for, each Note will be
established by the Company at the date of issuance of such Note and will be set
forth in the applicable Pricing Supplement. Interest rates and interest rate
formulas are subject to change by the Company, but no such change will affect
the interest rate on, or interest rate formula for, any Note theretofore issued
or which the Company has agreed to sell. Unless otherwise indicated in the
applicable Pricing Supplement, each Note will bear interest at a fixed rate (a
"Fixed Rate Note"), which may be zero in the case of certain Notes issued at a
price representing a discount from the principal amount payable at Stated
Maturity, or at a floating rate (a "Floating Rate Note") as set forth therein
and specified in the applicable Pricing Supplement. A Fixed Rate Note may pay a
level amount in respect of both interest and principal amortized over the life
of the Note (an "Amortizing Note").
 
     Unless otherwise specified in the applicable Pricing Supplement, interest
on each Fixed Rate Note other than an Amortizing Note will accrue from its date
of issue and will be payable semiannually on each March 15 and September 15 and
at Maturity. Interest on each Floating Rate Note will accrue from its date of
issue at rates determined as set forth therein and in the applicable Pricing
Supplement and will be payable on the dates set forth therein and in the
applicable Pricing Supplement. Unless otherwise specified in the applicable
Pricing Supplement, each Note will be issued in fully registered form and will
be represented by a global certificate (a "Global Security") registered in the
name of a nominee of The Depository Trust Company, as Depositary (the
"Depositary") (each such Note represented by a Global Security being referred to
herein as a "Book-Entry Note"). If specified in the applicable Pricing
Supplement, Notes may be represented by a certificate issued in definitive form
(a "Certificated Note"). Interests in Book-Entry Notes will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depositary (with respect to beneficial interests of participants) and its
participants. Owners of beneficial interests in Book-Entry Notes will be
entitled to physical delivery of Certificated Notes only under the limited
circumstances described herein. See "Description of Notes -- Book-Entry System."
 
     The Specified Currency, any applicable interest rate or formula, the Issue
Price, the Stated Maturity, any Interest Payment Dates (each as defined below),
any redemption and repayment provisions and any other terms applicable to each
Note will be established at the time of issuance of such Note and set forth in
the applicable Pricing Supplement. See "Description of Notes."
 
                                       S-2
   3
 
                              DESCRIPTION OF NOTES
 
     The following description of the particular terms of the Notes offered
hereby supplements, and to the extent inconsistent therewith, replaces the
description of the general terms and provisions of the Debt Securities and the
Indenture, dated as of October 2, 1990 (the "Indenture"), between the Company
and Continental Bank, N.A., as trustee (the "Trustee"), set forth in the
accompanying Prospectus under the heading "Description of Debt Securities," to
which description reference is hereby made. Capitalized terms set forth below
that are not otherwise defined herein have the meanings specified in the
Indenture and/or the Notes. Unless otherwise specified in the applicable Pricing
Supplement, the Notes will have the terms described below.
 
GENERAL
 
     The Notes constitute a single series of Debt Securities for purposes of the
Indenture and are limited to U.S.$400,000,000 aggregate public offering price
(or the equivalent thereof in foreign currencies or currency units), subject to
reduction under certain circumstances as a result of the sale of other
Securities of the Company under the accompanying Prospectus. The Company may
from time to time authorize an increase in the aggregate public offering price
of Notes to be sold, which Notes will constitute a part of the same series as
the Notes offered hereby. In this Prospectus Supplement, the accompanying
Prospectus and any Pricing Supplement, reference to "U.S. dollars," "U.S.$,"
"$," "dollars" or "cents" are to United States currency, unless otherwise
indicated in the applicable Pricing Supplement. The Company may from time to
time sell additional series of Debt Securities, including additional series of
medium-term notes.
 
     The Notes will be offered on a continuing basis and each Note will mature
nine months or more from its date of issue, as selected by the initial purchaser
and agreed to by the Company, and may be subject to redemption at the option of
the Company or repayment at the option of the Holder prior to Stated Maturity as
set forth below under "Redemption and Repayment." Each Note will be denominated
in U.S. dollars or in such other Specified Currency as is specified in the
applicable Pricing Supplement. Each Note will be either (i) a Fixed Rate Note,
which may bear interest at a rate of zero in the case of a Note issued at an
Issue Price representing a discount from the principal amount payable at Stated
Maturity (a "Zero-Coupon Note"), or (ii) a Floating Rate Note which will bear
interest at a rate determined by reference to the interest rate basis or
combination of interest rate bases specified in the applicable Pricing
Supplement, which may be adjusted by a Spread and/or Spread Multiplier (each as
defined below).
 
     Each Note will be issued initially as either a Book-Entry Note or a
Certificated Note in fully registered form without coupons. Except as set forth
below under "Book-Entry System," Book-Entry Notes will not be exchangeable for
Certificated Notes.
 
     Unless otherwise specified in the applicable Pricing Supplement, Notes
denominated in U.S. dollars will be issuable in denominations of $1,000 and
integral multiples of $1,000 in excess thereof. The authorized denominations of
any Note denominated in other than U.S. dollars will be the amount of the
Specified Currency for such Note equivalent, at the noon buying rate in The City
of New York for cable transfers for such Specified Currency as certified for
customs purposes by the Federal Reserve Bank of New York (the "Market Exchange
Rate") on the first Business Day (as defined below) in The City of New York and
the country issuing such currency (or, in the case of European Currency Units
("ECUs"), Brussels) next preceding the date on which the Company accepts the
offer to purchase such Note, to U.S.$1,000, or such other minimum denomination
as may be allowed or required from time to time by any relevant central bank or
equivalent governmental body, however designated, or by any laws or regulations
applicable to the Notes or to such Specified Currency. The Notes will be issued
in integral multiples of 1,000 units of any such Specified Currency in excess of
their minimum denominations. If any of the Notes are to be denominated in a
Specified Currency other than U.S. dollars, or if the principal of and premium,
if any, and any interest on any of the Notes not denominated in U.S. dollars is
to be payable at the option of the Holder or
 
                                       S-3
   4
 
the Company in U.S. dollars, the applicable Pricing Supplement will provide
additional information, including applicable exchange rate information,
pertaining to the terms of such Notes and other matters of interest to the
Holders thereof.
 
     "Business Day," with respect to any particular location, means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in such location are authorized by law or regulation to close.
"Market Day" means with respect to any Note other than any LIBOR Note (as
defined below), any Business Day in The City of New York and, with respect to
any LIBOR Note, any Business Day in The City of New York which is also a London
Business Day. "London Business Day" means any day on which dealings in deposits
in the Specified Currency are transacted in the London interbank market. "Index
Maturity" means, with respect to a Floating Rate Note, the period to maturity of
the instrument or obligation on which the interest rate formula is based, as
specified in the applicable Pricing Supplement.
 
     "Original Issue Discount Note" means (i) a Note, including any Zero-Coupon
Note, that has a stated redemption price at Maturity that exceeds its Issue
Price (as defined below) by at least 0.25% of its principal amount multiplied by
the number of full years from the Original Issue Date (as defined below) to the
Stated Maturity for such Note and (ii) any other Note designated by the Company
as issued with original issue discount for United States federal income tax
purposes.
 
     The Pricing Supplement relating to each Note will describe the following
terms, as applicable: (i) the Specified Currency with respect to such Note (and,
if such Specified Currency is other than U.S. dollars, certain other terms
relating to such Note, including the authorized denomination); (ii) the price
(expressed as a percentage of the aggregate principal amount thereof) at which
such Note will be issued (the "Issue Price"); (iii) the date on which such Note
will be issued (the "Original Issue Date"); (iv) the date on which such Note
will mature (the "Stated Maturity") and whether the Stated Maturity may be
extended by the Company and, if so, the Extension Periods and the Final Maturity
Date (each as defined below); (v) whether such Note is a Fixed Rate Note or a
Floating Rate Note; (vi) if such Note is a Fixed Rate Note, whether such Note is
an Amortizing Note; (vii) if such Note is a Fixed Rate Note, the rate per annum
at which such Note will bear interest, if any, the Interest Payment Date or
Dates and, if so specified in the applicable Pricing Supplement, that such rate
may be changed by the Company prior to the Stated Maturity and, if so, the basis
or formula for such change, if any; (viii) if such Note is a Floating Rate Note,
the Base Rate, the Initial Interest Rate, if available, the Interest Reset Date
or Dates, the Calculation Date or Dates, the Maximum Interest Rate, if any, the
Minimum Interest Rate, if any, the Spread, if any, the Spread Multiplier, if any
(all as defined below), the Interest Payment Date or Dates, the Index Maturity,
and any other terms relating to the particular method of calculating the
interest rate for such Note and, if so specified in the applicable Pricing
Supplement, that any such Spread and/or Spread Multiplier may be changed by the
Company prior to the Stated Maturity and, if so, the basis or formula for such
change, if any; (ix) whether such Note is an Original Issue Discount Note and,
if so, the yield to maturity; (x) the regular record date or dates (a "Regular
Record Date") if other than as set forth below with respect to Fixed Rate Notes
and Floating Rate Notes; (xi) whether such Note may be redeemed at the option of
the Company, or repaid at the option of the Holder, prior to the Stated Maturity
and, if so, the provisions relating to such redemption or repayment; (xii)
whether such Note is an Indexed Note and, if so, the specific terms thereof;
(xiii) whether such Note is a Renewable Note (as defined below) and, if so, the
specific terms thereof; (xiv) certain specified United States federal income tax
consequences of the purchase, ownership and disposition of such Note; and (xv)
any other term of such Note not inconsistent with the provisions of the
Indenture.
 
     The Notes will constitute unsecured and unsubordinated indebtedness of the
Company and will rank PARI PASSU with the Company's other unsecured and
unsubordinated indebtedness.
 
     Certificated Notes may be presented to the Trustee for registration of
transfer or exchange at 231 South LaSalle Street, Chicago, Illinois 60697 (the
"Corporate Trust Office").
 
                                       S-4
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PAYMENT OF PRINCIPAL AND INTEREST
 
     Unless otherwise specified in the applicable Pricing Supplement, payments
of principal of (and premium, if any) and interest on all Notes will be made in
the applicable Specified Currency; PROVIDED, HOWEVER, that payments of principal
of (and premium, if any) and interest on Notes denominated in other than U.S.
dollars will nevertheless be made in U.S. dollars (i) at the option of the
Holders thereof under the procedures described below and (ii) at the option of
the Company on the basis of the Market Exchange Rate on the last date such
Specified Currency was available (the "Conversion Date"), if such Specified
Currency is unavailable, in the good faith judgment of the Company, due to the
imposition of exchange controls or other circumstances beyond the control of the
Company (and any such payment made by the Company will not constitute an Event
of Default under the Indenture).
 
     Payments of interest and principal (and premium, if any) to Beneficial
Owners (as defined herein) of Book-Entry Notes are expected to be made in
accordance with the Depositary's and its participants' procedures in effect from
time to time as described below under "Book-Entry System."
 
     Unless otherwise specified in the applicable Pricing Supplement, payments
of interest and, in the case of Amortizing Notes, principal (and premium, if
any) with respect to any Certificated Note to be made in U.S. dollars (other
than interest and, in the case of Amortizing Notes, principal payable at
Maturity) will be made by mailing a check to the Holder at the address of such
Holder appearing on the security register for the Notes on the applicable
Regular Record Date. Notwithstanding the foregoing, a Holder of U.S.$10,000,000
or more in aggregate principal amount of Certificated Notes of like tenor and
terms shall be entitled to receive such payment of interest in U.S. dollars by
wire transfer of immediately available funds to such account with a bank located
in the United States as shall be designated by such person, but only if
appropriate payment instructions have been received in writing by the Trustee,
acting as paying agent (the "Paying Agent," which expression includes any
additional or successor paying agent appointed by the Company in accordance with
the Indenture), not less than 15 calendar days prior to the applicable Interest
Payment Date. Payment of the principal of (and premium, if any) and interest due
with respect to any Certificated Note at Maturity to be made in U.S. dollars
will be made in immediately available funds upon surrender of such Note at the
principal office of the Paying Agent in The City of Chicago, Illinois, provided
that the Certificated Note is presented to the Paying Agent in time for the
Paying Agent to make such payments in such funds in accordance with its normal
procedures.
 
     Unless otherwise specified in the applicable Pricing Supplement, payments
of interest and principal (and premium, if any) with respect to any Note to be
made in a Specified Currency other than U.S. dollars will be made by wire
transfer to such account with a bank located in the country issuing the
Specified Currency (or, with respect to Notes denominated in ECUs, Brussels) or
other jurisdiction acceptable to the Company and the Trustee as shall have been
designated at least 15 days prior to the Interest Payment Date or Maturity, as
the case may be, by the Holder of such Note on the relevant Regular Record Date
or at Maturity, provided that, in the case of payment of principal of (and
premium, if any) and any interest due at Maturity, the Note is presented to the
Paying Agent in time for the Paying Agent to make such payments in such funds in
accordance with its normal procedures. Such designation shall be made by filing
the appropriate information with the Trustee at its Corporate Trust Office, and,
unless revoked, any such designation made with respect to any Note by a Holder
will remain in effect with respect to any further payments with respect to such
Note payable to such Holder. If a payment with respect to any such Note cannot
be made by wire transfer because the required designation has not been received
by the Trustee on or before the requisite date or for any other reason, a notice
will be mailed to the Holder at its registered address requesting a designation
pursuant to which such wire transfer can be made and, upon the Trustees' receipt
of such a designation, such payment will be made within 15 days of such receipt.
The Company will pay any administrative costs imposed by banks in connection
with making payments by wire transfer, but any tax, assessment or governmental
charge imposed upon payments will be borne by the Holders of the Notes in
respect of which such payments are made.
 
                                       S-5
   6
 
     If so specified in the applicable Pricing Supplement, except as provided
below, payments of interest and principal (and premium, if any) with respect to
any Note denominated in other than U.S. dollars will be made in U.S. dollars if
the Holder of such Note on the relevant Regular Record Date or at Maturity, as
the case may be, has transmitted a written request for such payment in U.S.
dollars to the Paying Agent at its principal office in The City of Chicago,
Illinois on or prior to such Regular Record Date or the date 15 days prior to
Maturity, as the case may be. Such request may be delivered by mail, by hand or
by cable, telex or any other form of facsimile transmission. Any such request
made with respect to any Note by a Holder will remain in effect with respect to
any further payments of interest and principal (and premium, if any) with
respect to such Note payable to such Holder, unless such request is revoked by
written notice received by the Paying Agent on or prior to the relevant Regular
Record Date or the date 15 days prior to Maturity, as the case may be (but no
such revocation may be made with respect to payments made on any such Note if an
Event of Default has occurred with respect thereto or upon the giving of a
notice of redemption). Holders of Notes denominated in other than U.S. dollars
whose Notes are registered in the name of a broker or nominee should contact
such broker or nominee to determine whether and how an election to receive
payments in U.S. dollars may be made.
 
     The U.S. dollar amount to be received by a Holder of a Note denominated in
other than U.S. dollars who elects to receive payments in U.S. dollars will be
based on the highest indicated bid quotation for the purchase of U.S. dollars
for the Specified Currency obtained by the Currency Determination Agent (as
defined below) at approximately 11:00 A.M., New York City time, on the second
Business Day next preceding the applicable payment date from the bank composite
or multi-contributor pages of the Quoting Source for three (or two if three are
not available) major banks in The City of New York. The first three (or two)
such banks selected by the Currency Determination Agent which are offering
quotes on the Quoting Source will be used. If fewer than two such bid quotations
are available at 11:00 A.M., New York City time, on the second Business Day next
preceding the applicable payment date, such payment will be based on the Market
Exchange Rate as of the second Business Day next preceding the applicable
payment date. If the Market Exchange Rate for such date is not then available,
such payment will be made in the Specified Currency. As used herein, the
"Quoting Source" means Reuters Monitor Foreign Exchange Service, or if the
Currency Determination Agent determines that such service is not available,
Telerate Monitor Foreign Exchange Service, or if the Currency Determination
Agent determines that neither service is available, such comparable display or
other comparable manner of obtaining quotations as shall be agreed between the
Company and the Currency Determination Agent. All currency exchange costs
associated with any payment in U.S. dollars on any such Note will be borne by
the Holder thereof by deductions from such payment. Unless otherwise provided in
the applicable Pricing Supplement, Continental Bank, N.A. will be the Currency
Determination Agent (the "Currency Determination Agent") with respect to the
Notes.
 
     If payment in respect of a Note is required to be made in any currency unit
(E.G., ECUs) and such currency unit is unavailable, in the good faith judgment
of the Company, due to the imposition of exchange controls or other
circumstances beyond the Company's control, then all payments in respect of such
Note shall be made in U.S. dollars until such currency unit is again available.
The amount of each payment of U.S. dollars shall be computed on the basis of the
equivalent of the currency unit in U.S. dollars, which shall be determined by
the Currency Determination Agent on the following basis. The component
currencies of the currency unit for this purpose (the "Component Currencies")
shall be the currency amounts that were components of the currency unit as of
the last date such currency unit was available (the "Conversion Date"). The
equivalent of the currency unit in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of the Component Currencies. The U.S.
dollar equivalent of each of the Component Currencies shall be determined by the
Currency Determination Agent on the basis of the Market Exchange Rate for each
such Component Currency that is available as of the third Business Day prior to
the date on which the relevant payment is due and for each such Component
Currency that is unavailable, if any, as of the Conversion Date for such
Component Currency.
 
                                       S-6
   7
 
     If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
 
     All determinations referred to above made by the Currency Determination
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.
 
     If any Interest Payment Date, other than Maturity, for any Floating Rate
Note would otherwise be a day that is not a Market Day (or, in the case of any
Note denominated in other than U.S. dollars, a Business Day in the country
issuing the Specified Currency (or, in the case of ECUs, Brussels)), such
Interest Payment Date shall be postponed to the next day that is a Market Day,
except that in the case of a LIBOR Note, if such Market Day is in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Market Day. If the Maturity for any Fixed Rate Note or Floating Rate
Note or the Interest Payment Date for any Fixed Rate Note falls on a day that is
not a Market Day, payment of principal, premium, if any, and interest with
respect to such Note will be paid on the next succeeding Market Day with the
same force and effect as if made on the due date, and no interest shall be
payable on the date of payment for the period from and after the due date.
 
     Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any Original Issue Discount Note is declared to be due and payable
immediately as described in the Prospectus under "Description of Debt Securities
- -- Events of Default," the amount of principal due and payable with respect to
such Note shall be the Amortized Face Amount of such Note as of the date of such
declaration. The "Amortized Face Amount" of an Original Issue Discount Note
shall be an amount equal to the sum of (i) the aggregate principal amount of
such Note multiplied by the Issue Price set forth in the applicable Pricing
Supplement plus (ii) the portion of the difference between the Issue Price and
the principal amount of such Note that has accrued at the yield to maturity set
forth in the Pricing Supplement (computed in accordance with generally accepted
United States bond yield computation principles) to such date of declaration,
but in no event shall the Amortized Face Amount of an Original Issue Discount
Note exceed its principal amount.
 
INTEREST AND INTEREST RATES
 
     Each Note other than a Zero-Coupon Note will bear interest from its
Original Issue Date or from the most recent Interest Payment Date to which
interest on such Note has been paid or duly provided for at a fixed rate or
rates per annum, or at a rate or rates per annum determined pursuant to a Base
Rate stated therein and in the applicable Pricing Supplement that may be
adjusted by a Spread and/or Spread Multiplier, until the principal thereof is
paid or made available for payment. Interest will be payable on each Interest
Payment Date and at Maturity. "Maturity" means the date on which the principal
of a Note or an installment of principal becomes due and payable in full in
accordance with its terms and the terms of the Indenture, whether at Stated
Maturity or by declaration of acceleration, call for redemption, repayment or
otherwise. Interest will be payable to the Holder at the close of business on
the Regular Record Date next preceding such Interest Payment Date; PROVIDED,
HOWEVER, that interest payable at Maturity will be payable to the person to whom
principal shall be payable. The first payment of interest on any Note originally
issued between a Regular Record Date for such Note and the succeeding Interest
Payment Date will be made on the Interest Payment Date following the next
succeeding Regular Record Date for such Note to the Holder on such next Regular
Record Date.
 
                                       S-7
   8
 
     Interest rates, Base Rates, Spreads and Spread Multipliers are subject to
change by the Company from time to time but no such change will affect any Note
theretofore issued or which the Company has agreed to sell. The Interest Payment
Dates and the Regular Record Dates for each Fixed Rate Note shall be as
described below under "Fixed Rate Notes." The Interest Payment Dates for each
Floating Rate Note shall be as described below under "Floating Rate Notes" and
in the applicable Pricing Supplement, and the Regular Record Dates for a
Floating Rate Note will be the fifteenth day (whether or not a Market Day) next
preceding each Interest Payment Date.
 
FIXED RATE NOTES
 
     Each Fixed Rate Note will bear interest from its Original Issue Date at the
annual rate or rates stated thereon and in the applicable Pricing Supplement.
Payments of interest on any Fixed Rate Note with respect to any Interest Payment
Date will include interest accrued to but excluding such Interest Payment Date.
Fixed Rate Notes may bear one or more annual rates of interest during the
periods or under the circumstances specified therein and in the applicable
Pricing Supplement. Unless otherwise specified in the applicable Pricing
Supplement, interest on the Fixed Rate Note will be computed on the basis of a
360-day year of twelve 30-day months. Unless otherwise specified in an
applicable Pricing Supplement, the Interest Payment Dates for the Fixed Rate
Notes other than Amortizing Notes will be March 15 and September 15 of each
year, and the Regular Record Dates will be February 28 and August 31 of each
year. Unless otherwise specified in the applicable Pricing Supplement, payments
of principal and interest on Amortizing Notes will be made either quarterly on
each March 15, June 15, September 15 and December 15 or semiannually on each
March 15 and September 15 as set forth in the applicable Pricing Supplement, and
at Maturity. 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 thereof and
will be available, upon request, to subsequent Holders.
 
FLOATING RATE NOTES
 
     Each Floating Rate Note will bear interest at a rate determined by
reference to an interest rate basis (the "Base Rate"), which may be adjusted by
adding to or subtracting from the Base Rate a fixed percentage per annum (the
"Spread") and/or by multiplying the Base Rate by a fixed interest factor (the
"Spread Multiplier"). The applicable Pricing Supplement will designate one or
more of the following Base Rates as applicable to each Floating Rate Note: (a)
the Commercial Paper Rate (a "Commercial Paper Rate Note"), (b) the Federal
Funds Rate (a "Federal Funds Rate Note"), (c) the CD Rate (a "CD Rate Note"),
(d) LIBOR (a "LIBOR Note"), (e) the Prime Rate (a "Prime Rate Note"), (f) the
Treasury Rate (a "Treasury Rate Note") or (g) such other Base Rate or interest
rate formula as is set forth in such Pricing Supplement and in such Floating
Rate Note.
 
     Each Floating Rate Note will bear interest from its Original Issue Date to
the first Interest Reset Date (as defined below) for such Note at the Initial
Interest Rate (the "Initial Interest Rate") set forth on the face thereof and,
if available, in the applicable Pricing Supplement. Thereafter, the interest
rate on each Floating Rate Note for each Reset Period (as defined below) will be
equal to the interest rate calculated by reference to the Base Rate specified on
the face thereof and in the applicable Pricing Supplement plus or minus the
Spread, if any, and/or times the Spread Multiplier, if any. The Spread and/or
Spread Multiplier for a Floating Rate Note may be subject to adjustment during a
Reset Period under circumstances specified therein and in the applicable Pricing
Supplement.
 
     The Company will appoint, and enter into an agreement with, an agent (a
"Calculation Agent") to calculate interest rates on Floating Rate Notes. Unless
otherwise specified in the applicable Pricing Supplement, the Calculation Agent
for each Floating Rate Note will be Continental Bank, N.A. All determinations to
be made by the Calculation Agent shall be at its sole discretion and
 
                                       S-8
   9
 
shall, in the absence of manifest error, be conclusive for all purposes and
binding on the Holders of Notes.
 
     The interest rate on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (such type of period being the
"Reset Period" for such Note, and the first day of each Reset Period being an
"Interest Reset Date"), as specified on the face thereof and in the applicable
Pricing Supplement. Unless otherwise specified in the applicable Pricing
Supplement, the Interest Reset Dates will be, in the case of Floating Rate Notes
that reset daily, each Business Day; in the case of Floating Rate Notes (other
than Treasury Rate Notes) that reset weekly, Wednesday of each week; in the case
of Treasury Rate Notes that reset weekly, Tuesday of each week; in the case of
Floating Rate Notes that reset monthly, the third Wednesday of each month; in
the case of Floating Rate Notes that reset quarterly, the third Wednesday of
each March, June, September and December; in the case of Floating Rate Notes
that reset semiannually, the third Wednesday of each of two months of each year
specified on the face thereof and in the applicable Pricing Supplement; and, in
the case of Floating Rate Notes that reset annually, the third Wednesday of one
month of each year specified on the face thereof and in the applicable Pricing
Supplement; PROVIDED, HOWEVER, that the interest rate in effect for the ten days
immediately prior to the Maturity of a Floating Rate Note will be that in effect
on the tenth day preceding such Maturity. If an Interest Reset Date for a
Floating Rate Note would otherwise be a day that is not a Market Day, the
Interest Reset Date for such Floating Rate Note shall be postponed to the next
day that is a Market Day, except that, in the case of a LIBOR Note, if such
Market Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Market Day.
 
     The interest rate for each Reset Period will be the rate determined by the
Calculation Agent on the Calculation Date pertaining to such Reset Period by
reference to the Interest Determination Date pertaining to such Reset Period.
Unless otherwise specified in the applicable Pricing Supplement, the "Interest
Determination Date" pertaining to a Reset Period for (a) a Commercial Paper Rate
Note (the "Commercial Paper Interest Determination Date"), (b) a Federal Funds
Rate Note (the "Federal Funds Interest Determination Date"), (c) a CD Rate Note
(the "CD Interest Determination Date") or (d) a Prime Rate Note (the "Prime
Interest Determination Date") will be the second Market Day prior to the
Interest Reset Date that commences such Reset Period. Unless otherwise specified
in the applicable Pricing Supplement, the Interest Determination Date pertaining
to a Reset Period for a LIBOR Note (the "LIBOR Interest Determination Date")
will be the second London Business Day prior to the Interest Reset Date that
commences such Reset Period. Unless otherwise specified in the applicable
Pricing Supplement, the Interest Determination Date pertaining to a Reset Period
for a Treasury Rate Note (the "Treasury Interest Determination Date") will be
the day of the week in which the Interest Reset Date that commences such Reset
Period falls on which Treasury bills would normally be auctioned. Treasury bills
are usually sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is usually held on the following Tuesday,
except that such auction may be held on the preceding Friday. If, as a result of
a legal holiday, an auction is so held on the preceding Friday, such Friday will
be the Treasury Interest Determination Date pertaining to the Reset Period
commencing in the next succeeding week. If an auction date shall fall on any
Interest Reset Date for a Treasury Rate Note, then such Interest Reset Date
shall instead be the first Business Day immediately following such auction date.
Unless otherwise specified in the applicable Pricing Supplement, the
"Calculation Date" pertaining to any Reset Period shall be the earlier of (i)
the tenth calendar day after the Interest Determination Date pertaining to such
Reset Period or, if such day is not a Market Day, the next succeeding Market Day
or (ii) the Market Day preceding the applicable Interest Payment Date or
Maturity, as the case may be.
 
     Except as provided below or in the applicable Pricing Supplement, interest
on Floating Rate Notes will be payable, in the case of Floating Rate Notes that
reset daily, weekly or monthly, on the third Wednesday of each month or on the
third Wednesday of March, June, September and December of each year, as
specified on the face thereof and in the applicable Pricing Supplement; in
 
                                       S-9
   10
 
the case of Floating Rate Notes that reset quarterly, on the third Wednesday of
March, June, September and December of each year; in the case of Floating Rate
Notes that reset semiannually, on the third Wednesday of each of two months of
each year specified on the face thereof and in the applicable Pricing
Supplement; and, in the case of Floating Rate Notes that reset annually, on the
third Wednesday of one month of each year specified on the face thereof and in
the applicable Pricing Supplement (each such day being an "Interest Payment
Date").
 
     Each payment of interest on a Floating Rate Note will include interest
accrued to but excluding the applicable Interest Payment Date; PROVIDED,
HOWEVER, that if such Note resets daily or weekly, interest payable on any
Interest Payment Date, other than interest payable on any date on which
principal for such Note is payable, will include interest accrued to and
including the next preceding Regular Record Date. Accrued interest from the
Original Issue Date, or from the last date to which interest has been paid or
duly provided for, is calculated by multiplying the face amount of a Note by an
accrued interest factor. The accrued interest factor is computed by adding the
interest factors calculated for each day from the Original Issue Date, or from
the last date to which interest has been paid or duly provided for, to the date
for which accrued interest is being calculated. The interest factor for each
such day is computed by dividing the interest rate applicable to such date by
360, in the case of Commercial Paper Rate Notes, Federal Funds Rate Notes, CD
Rate Notes, Prime Rate Notes and LIBOR Notes, or by the actual number of days in
the year, in the case of Treasury Rate Notes.
 
     All percentages resulting from any calculation on Floating Rate Notes will
be rounded upward, if necessary, to the nearest one hundred-thousandth of a
percentage point with five one-millionths of one percentage point being rounded
upward (E.G., 9.876545% or .09876545, being rounded to 9.87655% or .0987655,
respectively), and all dollar amounts used in or resulting from such calculation
on Floating Rate Notes will be rounded to the nearest cent (with one-half cent
being rounded upward).
 
     The Calculation Agent will, upon the request of the Holder of any Floating
Rate Note, provide the interest rate then in effect and, if different, the
interest rate that will become effective as a result of a determination made on
the most recent Interest Determination Date with respect to such Note.
 
     Any Floating Rate Note may also have either or both of the following: (i) a
maximum numerical interest rate limitation, or ceiling, on the rate of interest
that may accrue during any Reset Period (the "Maximum Interest Rate") and (ii) a
minimum numerical interest rate limitation, or floor, on the rate of interest
that may accrue during any Reset Period (the "Minimum Interest Rate"). The
interest rate on any Note will in no event be higher than the maximum rate
permitted by New York law as the same may be modified by United States law of
general application. Under present New York law, the maximum rate of interest is
25% per annum on a simple interest basis. This limit may not apply to Notes in
which $2,500,000 or more has been invested, including Notes purchased by an
Agent or Agents in such aggregate principal amount or more for resale to
investors.
 
COMMERCIAL PAPER RATE NOTES
 
     Each Commercial Paper Rate Note will bear interest at the interest rate
(calculated with reference to the Commercial Paper Rate and the Spread and/or
Spread Multiplier, if any) specified in such Commercial Paper Rate Note and in
the applicable Pricing Supplement.
 
     Unless otherwise indicated in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to any Commercial Paper Interest
Determination Date, the Money Market Yield (calculated as described below) of
the rate on such date for commercial paper having the Index Maturity designated
in the applicable Pricing Supplement as such rate is published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication of the Board of Governors
("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 Commercial Paper Interest Determination Date, then the
 
                                      S-10
   11
 
Commercial Paper Rate shall be the Money Market Yield of the rate on such
Commercial Paper Interest Determination Date for commercial paper having the
Index Maturity designated in the applicable Pricing Supplement as published by
the Federal Reserve Bank of New York in its daily statistical release "Composite
3:30 p.m. Quotation for U.S. Government Securities" ("Composite Quotations")
under the heading "Commercial Paper." If by 3:00 P.M., New York City time, on
such Calculation Date such rate is not yet published in Composite Quotations,
then the Commercial Paper Rate for such Commercial Paper Interest Determination
Date shall be calculated by the Calculation Agent and shall be the Money Market
Yield of the arithmetic mean of the offered rates as of 11:00 A.M., New York
City time, on such Commercial Paper Interest Determination Date of three leading
dealers of commercial paper in The City of New York selected by the Calculation
Agent for commercial paper having the Index Maturity designated in the
applicable Pricing Supplement placed for an industrial issuer whose bond rating
is "AA," or the equivalent, from a nationally recognized securities rating
agency; PROVIDED, HOWEVER, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Commercial
Paper Rate with respect to such Commercial Paper Interest Determination Date
will be the Commercial Paper Rate in effect on such Commercial Paper Interest
Determination Date.
 
     "Money Market Yield" means a yield (expressed as a percentage rounded to
the nearest one hundred-thousandth of a percentage point) calculated in
accordance with the following formula:

                 Money Market Yield =       D x 360       X 100
                                         --------------
                                         360 - (D x  M)
                                   
 
where "D" refers to the per annum rate for the commercial paper, quoted on a
bank discount basis and expressed as a decimal; and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
 
FEDERAL FUNDS RATE NOTES
 
     Each Federal Funds Rate Note will bear interest at the interest rate
(calculated with reference to the Federal Funds Rate Note and the Spread and/or
Spread Multiplier, if any) specified in such Federal Funds Rate Note and in the
applicable Pricing Supplement.
 
     Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Federal Funds Interest Determination
Date, the rate on such date for Federal Funds 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 Federal Funds
Interest Determination Date, the Federal Funds Rate will be the rate on such
Federal Funds Interest Determination Date as published in Composite Quotations
under the heading "Federal Funds/Effective Rate." If such rate is not published
by 3:00 P.M., New York City time, on the Calculation Date pertaining to such
Federal Funds Interest Determination Date, then the Federal Funds Rate for such
Federal Funds Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the rates as of 9:00 A.M., New York
City time, on such Federal Funds Interest Determination Date for the last
transaction in overnight Federal Funds arranged by three leading brokers of
Federal Funds transactions in The City of New York selected by the Calculation
Agent; PROVIDED, HOWEVER, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Federal
Funds Rate with respect to such Federal Funds Interest Determination Date will
be the Federal Funds Rate in effect on such Federal Funds Interest Determination
Date.
 
CD RATE NOTES
 
     Each CD Rate Note will bear interest at the interest rate (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any),
specified in such CD Rate Note and in the applicable Pricing Supplement.
 
                                      S-11
   12
 
     Unless otherwise indicated in the applicable Pricing Supplement, "CD Rate"
means, with respect to any CD Interest Determination Date, the rate on such date
for negotiable certificates of deposit having the Index Maturity designated in
the applicable Pricing Supplement as published in 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 CD Interest Determination Date,
the CD Rate will be the rate on such CD Interest Determination Date for
negotiable certificates of deposit having the Index Maturity designated in the
applicable Pricing Supplement as published in Composite Quotations under the
heading "Certificates of Deposit." If such rate is not published by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to such CD Interest
Determination Date, then the CD Rate for such CD 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
CD Interest Determination Date 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 of the highest credit standing (in the market for negotiable
certificates of deposit) with a remaining maturity closest to the Index Maturity
designated in the applicable Pricing Supplement in a denomination of $5,000,000;
PROVIDED, HOWEVER, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the CD Rate with respect to
such CD Interest Determination Date will be the CD Rate in effect on such CD
Interest Determination Date.
 
LIBOR NOTES
 
     Each LIBOR Note will bear interest at the interest rate (calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any) specified in
such LIBOR Note and in the applicable Pricing Supplement.
 
     Unless otherwise indicated in the applicable Pricing Supplement, "LIBOR"
will be determined by the Calculation Agent in accordance with the following
provisions:
 
          (i) With respect to a LIBOR Interest Determination Date, LIBOR will
     be, as specified in the applicable Pricing Supplement, either: (a) the
     arithmetic mean of the offered rates for deposits in the Designated Deposit
     Currency (as defined below) having the Index Maturity designated in the
     applicable Pricing Supplement, commencing on the second London Business Day
     immediately following such LIBOR Interest Determination Date, that appear
     on the Reuters Screen LIBO Page as of 11:00 A.M., London time, on such
     LIBOR Interest Determination Date, if at least two such offered rates
     appear on the Reuters Screen LIBO Page ("LIBOR Reuters"), or (b) the rate
     for deposits in the Designated Deposit Currency having the Index Maturity
     designated in the applicable Pricing Supplement, commencing on the second
     London Business Day immediately following such LIBOR Interest Determination
     Date, that appears on Telerate Page 3750 as of 11:00 A.M., London time, on
     such LIBOR Interest Determination Date ("LIBOR Telerate"). "Reuters Screen
     LIBO Page" means the display designated as page "LIBO" on the Reuters
     Monitor Money Rates Service (or such other page as may replace page LIBO on
     that service for the purpose of displaying London interbank offered rates
     of major banks). "Telerate Page 3750" means the display designated as page
     "3750" on the Telerate Service (or such other page as may replace the 3750
     page on that service or such other service or services as may be nominated
     by the British Bankers' Association for the purpose of displaying London
     interbank offered rates for the Designated Deposit Currency). If neither
     LIBOR Reuters nor LIBOR Telerate is specified in the applicable Pricing
     Supplement, LIBOR will be determined as if LIBOR Telerate had been
     specified. If at least two such offered rates appear on the Reuters Screen
     LIBO Page, the rate in respect of such LIBOR Interest Determination Date
     will be the arithmetic mean of such offered rates as determined by the
     Calculation Agent. If fewer than two offered rates appear on the Reuters
     Screen LIBO Page, or if no rate appears on Telerate Page 3750, as
     applicable, LIBOR in respect of such LIBOR Interest Determination Date will
     be determined as if the parties had specified the rate described in (ii)
     below.
 
                                       S-12
   13
 
          (ii) With respect to a LIBOR Interest Determination Date on which
     fewer than two offered rates appear on the Reuters Screen LIBO Page, as
     specified in (i)(a) above, or on which no rate appears on Telerate Page
     3750, as specified in (i)(b) above, as applicable, LIBOR will be determined
     on the basis of the rates at which deposits in the Designated Deposit
     Currency having the Index Maturity designated in the applicable Pricing
     Supplement are offered at approximately 11:00 A.M., London time, on such
     LIBOR Interest Determination Date by four major banks in the London
     interbank market selected by the Calculation Agent (the "Reference Banks")
     to prime banks in the London interbank market, commencing on the second
     London Business Day immediately following such LIBOR Interest Determination
     Date and in a principal amount equal to an amount of not less than
     $1,000,000 that is representative for a single transaction in such market
     at such time. The Calculation Agent will request the principal London
     office of each of the Reference Banks to provide a quotation of its rate.
     If at least two such quotations are provided, LIBOR in respect of such
     LIBOR Interest Determination Date will be the arithmetic mean of such
     quotations. If fewer than two quotations are provided, LIBOR in respect to
     such LIBOR Interest Determination Date will be the arithmetic mean of the
     rates quoted at approximately 11:00 A.M., New York City time, on such LIBOR
     Interest Determination Date by three major banks in The City of New York
     selected by the Calculation Agent for loans in the Designated Deposit
     Currency to leading European banks having the Index Maturity designated in
     the applicable Pricing Supplement, commencing on the second London Business
     Day immediately following such LIBOR Interest Determination Date and in a
     principal amount equal to an amount of not less than $1,000,000 that is
     representative for a single transaction in such market at such time;
     PROVIDED, HOWEVER, that if the banks selected as aforesaid by the
     Calculation Agent are not quoting as mentioned in this sentence, LIBOR with
     respect to such LIBOR Interest Determination Date will be the interest rate
     otherwise in effect on such LIBOR Interest Determination Date. "Designated
     Deposit Currency" means, with respect to any LIBOR Note, the currency
     (including a currency unit), if any, designated in the applicable LIBOR
     Note as the Designated Deposit Currency. If no such currency is designated
     in the applicable LIBOR Note, the Designated Deposit Currency shall be U.S.
     dollars.
 
PRIME RATE NOTES
 
     Each Prime Rate Note will bear interest at the interest rate (calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any) specified in such Prime Rate Note and in the applicable Pricing Supplement.
 
     Unless otherwise indicated in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Prime Interest Determination Date, the rate set
forth in H.15(519) for such date opposite the caption "Bank Prime Loan," or, if
not so published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Prime Interest Determination Date, the Prime Rate will be
calculated by the Calculation Agent and will be the arithmetic mean of the rates
of interest publicly announced by each bank named on the Reuters Screen NYMF
Page as such bank's prime rate or base lending rate as in effect for such Prime
Interest Determination Date as quoted on the Reuters screen NYMF Page on such
Prime Interest Determination Date, or, if fewer than four such rates appear on
the Reuters Screen NYMF Page for such Prime Interest Determination Date, the
rate shall be the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by 360 as of the close of business on
such Prime 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 quoted as
aforesaid, the Prime Rate for such Prime Interest Determination Date shall be
calculated by the Calculation Agent and shall be the arithmetic means of the
prime rates quoted in The City of New York on such date 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, having total equity capital
of at least U.S.$500 million and being subject to supervision or examination by
a federal or State authority, selected by the Calculation Agent to quote such
rate or rates; PROVIDED, HOWEVER, that if
 
                                       S-13
   14
 
the Prime Rate is not published in H.15(519) and the banks or trust companies
selected as aforesaid are not quoting as mentioned in this sentence, the Prime
Rate with respect to such Prime Interest Determination Date will be the interest
rate otherwise in effect on such Prime Interest Determination Date. "Reuters
Screen NYMF Page" means the display designated as page "NYMF" on the Reuters
Monitor Money Rates Service (or such other page as may replace page NYMF on that
service for the purpose of displaying prime rates or base lending rates of major
United States banks).
 
TREASURY RATE NOTES
 
     Each Treasury Rate Note will bear interest at the interest rate (calculated
with reference to the Treasury Rate and the Spread and/or Spread Multiplier, if
any) specified in such Treasury Rate Note and in the applicable Pricing
Supplement.
 
     Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury Interest Determination Date, the rate
for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity designated in the applicable
Pricing Supplement as published in H.15(519) under the heading "U.S. Government
Treasury bills -- auction average (investment)" or, if not so published by 3:00
P.M., New York City time, on the Calculation Date pertaining to such Treasury
Interest Determination Date, the auction average rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) as otherwise announced by the United States Department of the
Treasury. In the event that the results of the auction of Treasury bills having
the Index Maturity designated in the applicable Pricing Supplement 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 in a particular week, then
the Treasury Rate shall be calculated by the Calculation Agent and shall be a
yield to maturity (expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean
of the secondary market bid rates, as of 3:30 P.M., New York City time, on such
Treasury Interest Determination Date, of three leading primary U.S. 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 Supplement; PROVIDED, HOWEVER, that if the dealers selected
as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Treasury Rate with respect to such Treasury Interest Determination
Date will be the interest rate otherwise in effect on such Treasury Interest
Determination Date.
 
CURRENCY INDEXED NOTES
 
GENERAL
 
     The Company may from time to time offer Notes the principal amount payable
at Maturity and/or the interest rate of which is determined by reference to the
rate of exchange between the currency or composite currency in which such Notes
(the "Currency Indexed Notes") are denominated (the "Denominated Currency") and
the other currency or composite currency specified as the Indexed Currency (the
"Indexed Currency") in the applicable Pricing Supplement, or as determined in
such other manner as may be specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, Holders of
Currency Indexed Notes will be entitled to receive (i) an amount exceeding the
stated face amount of the principal (the "Face Amount") of, and/or interest
calculated at the stated rate of interest on, their Currency Indexed Notes if,
at Maturity or upon the relevant Interest Payment Date, as the case may be, the
rate at which the Denominated Currency can be exchanged for the Indexed Currency
exceeds the rate of such exchange designated as the Base Exchange Rate,
expressed in units of the Indexed Currency per one unit of the Denominated
Currency, in the applicable Pricing Supplement (the "Base Exchange Rate") or
(ii) an amount less than such Face Amount and/or interest calculated at such
stated interest rate if, at Maturity or upon the relevant Interest Payment Date,
as the case may be, the rate at which the Denominated Currency can be exchanged
for the Indexed Currency is
 
                                     S-14
   15
 
less than such Base Exchange Rate, in each case determined as described below
under "Payment of Principal and Interest." Information as to the relative
historical value (which information is not necessarily indicative of relative
future value) of the applicable Denominated Currency against the applicable
Indexed Currency, any exchange controls applicable to such Denominated Currency
or Indexed Currency and certain tax consequences to Holders of Currency Indexed
Notes will be set forth in the applicable Pricing Supplement.
 
PAYMENT OF PRINCIPAL AND INTEREST
 
     Unless otherwise specified in the applicable Pricing Supplement, the
payment of principal at Maturity and interest on each Interest Payment Date
(until the principal thereof is paid or made available for payment) will be
payable in the Denominated Currency (except as otherwise described under
"Payment Currency") in amounts calculated in the manner described below.
 
     Unless otherwise specified in the applicable Pricing Supplement, principal
at Maturity, if indexed, will be payable in an amount equal to the Face Amount
of the Currency Indexed Note, plus or minus an amount determined by reference to
the difference between the Base Exchange Rate specified in the applicable
Pricing Supplement and the rate at which the Denominated Currency can be
exchanged for the Indexed Currency on the second Business Day (the
"Determination Date") prior to the Maturity of such Currency Indexed Note, as
determined by the determination agent specified in the applicable Pricing
Supplement (the "Determination Agent"). Such rate of exchange shall be based
upon the highest bid of the open market spot offer quotations for the Indexed
Currency (spot bid quotations for the Denominated Currency) obtained by the
Determination Agent from the Reference Dealers in The City of New York at
approximately 11:00 A.M., New York City time, on the Determination Date, for an
amount of Indexed Currency equal to the aggregate Face Amount of such Currency
Indexed Notes multiplied by the Base Exchange Rate, with settlement on the
Maturity to be in the Denominated Currency (such rate of exchange, as so
determined and expressed in units of the Indexed Currency per one unit of the
Denominated Currency, is hereafter referred to as the "Spot Rate"). If such
quotations from the Reference Dealers are not available on the Determination
Date due to circumstances beyond the control of the Company or the Determination
Agent, the Spot Rate will be determined on the basis of the most recently
available quotations from the Reference Dealers. As used herein, the term
"Reference Dealers" shall mean the three banks or firms specified as such in the
applicable Pricing Supplement, or if any of them shall be unwilling or unable to
provide the requested quotations, such other major money center bank or banks in
The City of New York selected by the Determination Agent to act as Reference
Dealer or Dealers in replacement therefor. The principal amount of and interest
on the Currency Indexed Notes determined by the Determination Agent to be
payable will be payable to the Holders thereof in the manner set forth herein
and in the applicable Pricing Supplement. In the absence of manifest error, the
determination by the Determination Agent of the Spot Rate and of the amount of
principal and interest payable in respect of Currency Indexed Notes shall be
final and binding on the Company and the Holders of such Currency Indexed Notes.
 
     Unless otherwise specified in the applicable Pricing Supplement, on the
basis of the aforesaid determination by the Determination Agent and the formulas
and limitations set forth below, (i) if the Base Exchange Rate equals the Spot
Rate for any Currency Indexed Note, then the principal amount of such Currency
Indexed Note payable at Maturity would be equal to the Face Amount of such
Currency Indexed Note; (ii) if the Spot Rate exceeds the Base Exchange Rate
(I.E., the Denominated Currency has appreciated against the Indexed Currency
during the term of the Currency Indexed Note), then the principal amount so
payable would be greater than the Face Amount of such Currency Indexed Note;
(iii) if the Spot Rate is less than the Base Exchange Rate (I.E., the
Denominated Currency has depreciated against the Indexed Currency during the
term of the Currency Indexed Note) but is greater than one-half of the Base
Exchange Rate, then the principal amount so payable would be less than the Face
Amount of such Currency Indexed Note; and (iv) if the Spot Rate is less than or
equal to one-half of the Base Exchange Rate, then the Spot
 
                                       S-15
   16
 
Rate will be deemed to be one-half of the Base Exchange Rate and no principal
amount of the Currency Indexed Note would be payable at Maturity.
 
     With respect to the payment of interest on each Interest Payment Date, if
indexed, the amount will be the Face Amount multiplied by the relevant interest
rate, indexed as specified in the applicable Pricing Supplement.
 
     Unless otherwise specified in the applicable Pricing Supplement, the
formulas to be used by the Determination Agent to determine the principal amount
of a Currency Indexed Note payable at Maturity and the interest payable on each
Interest Payment Date will be as follows:
 
     As to principal, if the Spot Rate equals or exceeds the Base Exchange Rate,
the principal amount of a Currency Indexed Note payable at Maturity shall equal:

                                      Spot Rate -- Base Exchange Rate
          Face Amount + (Face Amount X-------------------------------)
                                                 Spot Rate

and if the Base Exchange Rate exceeds the Spot Rate, the principal amount of a
Currency Indexed Note payable at Maturity (which shall, in no event, be less
than zero) shall equal:
                                     Base Exchange Rate -- Spot Rate.
         Face Amount + (Face Amount X-------------------------------)
                                                 Spot Rate

     As to interest, the amount of interest payable on any Interest Payment Date
on a Currency Indexed Note shall equal:
                                                 Base Exchange Rate
             Face Amount + Stated Interest Rate X------------------
                                                   Spot Rate.
 
OTHER INDEXED NOTES AND CERTAIN TERMS APPLICABLE TO ALL INDEXED NOTES
 
     In addition to Currency Indexed Notes, Notes may be issued as other Indexed
Notes, the principal amount payable at Maturity and/or the interest rate to be
paid thereon to be determined by reference to the relationship between two or
more currencies, to the price of one or more specified securities or
commodities, to one or more securities or commodities exchange indices or other
indices or by other similar methods or formulas. The Pricing Supplement relating
to such an Indexed Note will describe, as applicable, the method by which the
amount of interest payable on any Interest Payment Date and the amount of
principal payable at Maturity in respect of such Indexed Note will be
determined, certain special tax consequences of the purchase, ownership or
disposition of such Indexed Notes, certain risks associated with an investment
in such Indexed Notes and other information relating to such Indexed Notes.
 
     Unless otherwise specified in the applicable Pricing Supplement, the
maximum principal amount payable at Maturity in respect of any Indexed Note will
be an amount equal to twice the face amount thereof and the minimum principal
amount so payable will be zero.
 
     Unless otherwise specified in the applicable Pricing Supplement, (i) for
the purpose of determining whether Holders of the requisite principal amount of
Debt Securities outstanding under the Indenture have made a demand or given a
notice or waiver or taken any other action, the outstanding principal amount of
Indexed Notes will be deemed to be the U.S. dollar equivalent, determined on the
Original Issue Date of such Indexed Note, of such principal (or, in the case of
a discounted Indexed Note, the U.S. dollar equivalent on the Original Issue Date
equal to the amount of the principal thereof that would be due and payable as of
the date of such determination upon a declaration of acceleration of the Stated
Maturity thereof) and (ii) if the payment of principal of and interest on any
Indexed Note is accelerated in accordance with the provisions described under
"Description of Debt Securities -- Events of Default" in the Prospectus, then
the Company shall pay to the Holder of such Indexed Note on the date of
acceleration the principal amount determined by reference to the formula by
which the principal amount of such Indexed Note would be determined on the
Stated Maturity thereof, as if the date of acceleration were the Stated
Maturity.
 
                                      S-16
   17
 
     An investment in Indexed Notes entails significant risks, including wide
fluctuations in market value as well as in the amounts of payments due
thereunder, that are not associated with a similar investment in a conventional
debt security. Such risks depend on a number of factors including supply and
demand for the particular commodity and economic and political events over which
the Company has no control. Fluctuations in the price of any particular security
or commodity, in the rates of exchange between particular currencies or in
particular indices that have occurred in the past are not necessarily
indicative, however, of fluctuations in the price or rates of exchange that may
occur during the term of any Indexed Notes. Accordingly, prospective investors
should consult their own financial and legal advisors as to the risks entailed
by an investment in Indexed Notes. Indexed Notes are not an appropriate
investment for investors who are unsophisticated with respect to securities,
commodities and/or foreign currency transactions.
 
DUAL CURRENCY NOTES
 
     The Company may from time to time offer Notes (the "Dual Currency Notes")
as to which the Company has a one time option, exercisable on any one of the
dates specified in the applicable Pricing Supplement (each an "Option Election
Date") in whole, but not in part, with respect to all Dual Currency Notes issued
on the same day and having the same terms (a "Tranche"), of thereafter making
all payments of principal, premium, if any, and interest (which payments would
otherwise be made in the Specified Currency of such Notes) in the optional
currency specified in the applicable Pricing Supplement (the "Optional Payment
Currency"). Information as to the relative value of the Specified Currency
compared to the Optional Payment Currency will be set forth in the applicable
Pricing Supplement.
 
     The Pricing Supplement for each issuance of Dual Currency Notes will
specify, among other things, the Specified Currency and Optional Payment
Currency of such issuance and the Designated Exchange Rate for such issuance,
which will be a fixed exchange rate used for converting amounts denominated in
the Specified Currency into amounts denominated in the Optional Payment Currency
(the "Designated Exchange Rate"). The Pricing Supplement will also specify the
Option Election Dates and Interest Payment Dates for the related issuance of
Dual Currency Notes. Each Option Election Date will be a certain number of days
before an Interest Payment Date or the Stated Maturity, as set forth in the
applicable Pricing Supplement, and will be the date on which the Company may
select whether to make all scheduled payments due thereafter in the Optional
Payment Currency rather than in the Specified Currency.
 
     If the Company makes such an election, the amount payable in the Optional
Payment Currency shall be determined using the Designated Exchange Rate
specified in the applicable Pricing Supplement. If such election is made, notice
of such election shall be mailed in accordance with the terms of the applicable
Tranche of Dual Currency Notes within two Business Days of the Option Election
Date and shall state (i) the first date, whether an Interest Payment Date and/or
the Stated Maturity, on which scheduled payments in the Optional Payment
Currency will be made and (ii) the Designated Exchange Rate. Any such notice by
the Company, once given, may not be withdrawn. The equivalent value in the
Specified Currency of payments made after such an election may be less, at the
then current exchange rate, than if the Company had made such payment in the
Specified Currency.
 
     For federal income tax purposes, Holders of Dual Currency Notes may be
subject to rules which differ from the general rules applicable to Holders of
other types of Notes offered hereby. See "Certain Federal Tax Consequences." The
applicable Pricing Supplement will describe any special tax consequences to
Holders of Dual Currency Notes.
 
AMORTIZING NOTES
 
     The Company may from time to time offer Amortizing Notes. Unless otherwise
specified in the applicable Pricing Supplement, interest on each Amortizing Note
will be computed on the basis of a
 
                                      S-17
   18
 
360-day year of twelve 30-day months. Payments with respect to Amortizing Notes
will be applied first to interest due and payable thereon and then to the
reduction of the unpaid principal amount thereof. Further information concerning
additional terms and conditions of any issue of Amortizing Notes will be
provided in the applicable Pricing Supplement. A table setting forth repayment
information in respect of each Amortizing Note will be included in the
applicable Pricing Supplement and set forth on such Notes.
 
ORIGINAL ISSUE DISCOUNT NOTES
 
     The Company may from time to time offer Original Issue Discount Notes. The
applicable Pricing Supplement to certain Original Issue Discount Notes may
provide that Holders of such Notes will not receive periodic payments of
interest. For the purpose of determining whether Holders of the requisite
principal amount of Debt Securities outstanding under the Indenture have made a
demand or given a notice or waiver or taken any other action, the outstanding
principal amount of Original Issue Discount Notes shall be deemed to be the
amount of the principal that would be due and payable upon declaration of
acceleration of the Stated Maturity thereof as of the date of such
determination.
 
     Notwithstanding anything in this Prospectus Supplement to the contrary,
unless otherwise specified in the applicable Pricing Supplement, if a Note is an
Original Issue Discount Note, the amount payable on such Note in the event of
Maturity prior to the Stated Maturity shall be the Amortized Face Amount of such
Note as of such Maturity.
 
INTEREST RATE RESET
 
     If the Company has the option with respect to any Note to reset the
interest rate, in the case of a Fixed Rate Note, or to reset the Spread and/or
Spread Multiplier, in the case of a Floating Rate Note, the Pricing Supplement
relating to such Note will indicate such option, and, if so, (i) the date or
dates on which such interest rate or such Spread and/or Spread Multiplier, as
the case may be, may be reset (each an "Optional Reset Date") and (ii) the basis
or formula, if any, for such resetting.
 
     The Company may exercise such option with respect to a Note by notifying
the Paying Agent of such exercise at least 45 but not more than 60 days prior to
an Optional Reset Date for such Note. Not later than 40 days prior to such
Optional Reset Date, the Paying Agent will mail to the Holder of such Note a
notice (the "Reset Notice"), first class, postage prepaid, setting forth (i) the
election of the Company to reset the interest rate, in the case of a Fixed Rate
Note, or the Spread and/or Spread Multiplier, in the case of a Floating Rate
Note, (ii) such new interest rate or such new Spread and/or Spread Multiplier,
as the case may be, and (iii) the provisions, if any, for redemption during the
period from such Optional Reset Date to the next Optional Reset Date or, if
there is no such next Optional Reset Date, to the Stated Maturity of such Note
(each such period a "Subsequent Interest Period"), including the date or dates
on which or the period or periods during which and the price or prices at which
such redemption may occur during such Subsequent Interest Period.
 
     Notwithstanding the foregoing, not later than 20 days prior to an Optional
Reset Date for a Note, the Company may, at its option, revoke the interest rate,
in the case of a Fixed Rate Note, or the Spread and/or Spread Multiplier, in the
case of a Floating Rate Note, in either case provided for in the Reset Notice
and establish a higher interest rate, in the case of a Fixed Rate Note, or a
higher Spread and/or Spread Multiplier, in the case of a Floating Rate Note, for
the Subsequent Interest Period commencing on such Optional Reset Date by mailing
or causing the Paying Agent to mail notice of such higher interest rate or
higher Spread and/or Spread Multiplier, as the case may be, first class, postage
prepaid, to the Holder of such Note. Such notice shall be irrevocable. All Notes
with respect to which the interest rate or Spread and/or Spread Multiplier is
reset on an Optional
 
                                      S-18
   19
 
Reset Date will bear such higher interest rate, in the case of a Fixed Rate
Note, or higher Spread and/or Spread Multiplier, in the case of a Floating Rate
Note.
 
     If the Company elects to reset the interest rate or the Spread and/or
Spread Multiplier of a Note, the Holder of such Note will have the option to
elect repayment of such Note by the Company on any Optional Reset Date at a
price equal to the principal amount thereof plus any accrued interest to such
Optional Reset Date. In order for a Note to be so repaid on an Optional Reset
Date, the Holder thereof must follow the procedures set forth below under
"Redemption and Repayment" 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 such Optional Reset Date and except that a
Holder who has tendered a Note for repayment pursuant to a Reset Notice may, by
written notice to the Paying Agent, revoke any such tender for repayment until
the close of business on the tenth day prior to such Optional Reset Date.
 
EXTENSION OF MATURITY
 
     If the Company has the option to extend the Stated Maturity of any Note for
one or more periods (each an "Extension Period") up to but not beyond the date
(the "Final Maturity Date") set forth in the Pricing Supplement relating to such
Note, such Pricing Supplement will indicate such option and the basis or
formula, if any, for setting the interest rate, in the case of a Fixed Rate
Note, or the Spread and/or Spread Multiplier, in the case of a Floating Rate
Note, applicable to any such Extension Period.
 
     The Company may exercise such option with respect to a Note by notifying
the Paying Agent of such exercise at least 45 but not more than 60 days prior to
the Stated Maturity of such Note in effect prior to the exercise of such option
(the "Original Stated Maturity"). No later than 40 days prior to the Original
Stated Maturity, the Paying Agent will mail to the Holder of such Note a notice
(the "Extension Notice") relating to such Extension Period, first class, postage
prepaid, setting forth (i) the election of the Company to extend the Stated
Maturity of such Note, (ii) the new Stated Maturity, (iii) in the case of a
Fixed Rate Note, the interest rate applicable to the Extension Period or, in the
case of a Floating Rate Note, the Spread and/or Spread Multiplier applicable to
the Extension Period, and (iv) the provisions, if any, for redemption during the
Extension Period, including the date or dates on which or the period or periods
during which and the price or prices at which such redemption may occur during
the Extension Period. Upon the mailing by the Paying Agent of an Extension
Notice to the Holder of a Note, the Stated Maturity of such Note shall be
extended automatically as set forth in the Extension Notice, and, except as
modified by the Extension Notice and as described in the next paragraph, such
Note will have the same terms as prior to the mailing of such Extension Notice.
 
     Notwithstanding the foregoing, not later than 20 days prior to the Original
Stated Maturity for a Note, the Company may, at its option, revoke the interest
rate, in the case of a Fixed Rate Note, or the Spread and/or Spread Multiplier,
in the case of a Floating Rate Note, provided for in the Extension Notice and
establish a higher interest rate, in the case of a Fixed Rate Note, or a higher
Spread and/or Spread Multiplier, in the case of a Floating Rate Note, for the
Extension Period by mailing or causing the Paying Agent to mail notice of such
higher interest rate or higher Spread and/or Spread Multiplier, as the case may
be, first class, postage prepaid, to the Holder of such Note. Such notice shall
be irrevocable. All Notes with respect to which the Stated Maturity is extended
will bear such higher interest rate, in the case of a Fixed Rate Note, or higher
Spread and/or Spread Multiplier, in the case of a Floating Rate Note, for the
Extension Period.
 
     If the Company elects to extend the Stated Maturity of a Note, the Holder
of such Note will have the option to elect repayment of such Note by the Company
at the Original Stated Maturity at a price equal to the principal amount thereof
plus any accrued interest to such date. In order for a Note to be so repaid on
the Original Stated Maturity, the Holder thereof must follow the procedures set
forth below under "Redemption and Repayment" for optional repayment, except that
the period for
 
                                      S-19
   20
 
delivery of such Note or notification to the Paying Agent shall be at least 25
but not more than 35 days prior to the Original Stated Maturity and except that
a Holder who has tendered a Note for repayment pursuant to an Extension Notice
may, by written notice to the Paying Agent revoke any such tender for repayment
until the close of business on the tenth day prior to the Original Stated
Maturity.
 
RENEWABLE NOTES
 
     The Company may from time to time offer Notes which will mature on an
Interest Payment Date specified in the applicable Pricing Supplement occurring
in or prior to the twelfth month following the Original Issue Date of such Notes
(the "Initial Maturity Date") unless the term of all or any portion of any such
Note (a "Renewable Note") is renewed in accordance with the procedures described
below.
 
     On the Interest Payment Date occurring in the sixth month (unless a
different interval (the "Special Election Interval") is specified in the
applicable Pricing Supplement) prior to the Initial Maturity Date of a Renewable
Note (the "Initial Renewal Date") and on the Interest Payment Date occurring in
each sixth month (or in the last month of each Special Election Interval) after
such Initial Renewal Date (each, together with the Initial Renewal Date, a
"Renewal Date"), the term of such Renewable Note may be extended to the Interest
Payment Date occurring in the twelfth month (or, if a Special Election Interval
is specified in the applicable Pricing Supplement, the last month in a period
equal to twice the Special Election Interval) after such Renewal Date, if the
Holder of such Renewable Note elects to extend the term of such Renewable Note
or any portion thereof as described below. If a Holder does not elect to extend
the term of any portion of the principal amount of a Renewable Note during the
specified period prior to any Renewal Date, such portion will become due and
payable on the Interest Payment Date occurring in the sixth month (or the last
month in the Special Election Interval) after such Renewal Date (the "New
Maturity Date").
 
     A Holder of a Renewable Note may elect to renew the term of such Renewable
Note, or if so specified in the applicable Pricing Supplement, any portion
thereof, by delivering a notice to such effect to the Trustee (or any duly
appointed paying agent) at the Corporate Trust Office not less than 15 nor more
than 30 days prior to such Renewal Date (unless another period is specified in
the applicable Pricing Supplement as the "Special Election Period"). Such
election will be irrevocable and will be binding upon each subsequent Holder of
such Renewable Note. An election to renew the term of a Renewable Note may be
exercised with respect to less than the entire principal amount of such
Renewable Note only if so specified in the applicable Pricing Supplement and
only in such principal amount, or any integral multiple in excess thereof, as is
specified in the applicable Pricing Supplement. Notwithstanding the foregoing,
the term of the Renewable Notes may not be extended beyond the Stated Maturity
specified for such Renewable Notes in the applicable Pricing Supplement.
 
     If the Holder does not elect to renew the term, such Renewable Note must be
presented to the Trustee (or any duly appointed paying agent) simultaneously
with notice of such election (or, in the event notice of such election, together
with a guarantee of delivery within five Business Days, is transmitted on behalf
of a Holder from a member of a national securities exchange, the National
Association of Securities Dealers, Inc. (the "NASD") or a commercial bank or
trust company in the United States, within five Business Days of the date of
such notice). With respect to a Renewable Note that is a Certificated Note, as
soon as practicable following receipt of such Renewable Note the Trustee (or any
duly appointed paying agent) shall issue in exchange therefor in the name of
such Holder (i) a Note, in a principal amount equal to the principal amount of
such exchanged Renewable Note for which the election not to renew the term
thereof was exercised, with terms identical to those specified on such Renewable
Note (except for the Original Issue Date and the Initial Interest Rate and
except that such Note shall have a fixed, nonrenewable Stated Maturity on the
New Maturity Date) and (ii) if such election not to renew is made with respect
to less than the full principal amount of such Holder's Renewable Note, a
replacement Renewable Note, in a principal
 
                                      S-20
   21
 
amount equal to the principal amount of such exchanged Renewable Note for which
the election to renew was made, with terms identical to such exchanged Renewable
Notes.
 
COMBINATION OF PROVISIONS
 
     If so specified in the applicable Pricing Supplement, any Note may be
subject to all of the provisions, or any combination of the provisions,
described above under "Interest Rate Reset," "Extension of Maturity" and
"Renewable Notes."
 
REDEMPTION AND REPAYMENT
 
     Unless one or more Redemption Dates ("Redemption Dates") are specified in
the applicable Pricing Supplement, the Notes will not be redeemable prior to
their Stated Maturity. If one or more Redemption Dates are so specified with
respect to any Note, the applicable Pricing Supplement will also specify one or
more redemption prices (expressed as a percentage of the principal amount of
such Note) ("Redemption Prices") and the redemption period or periods
("Redemption Periods") during which such Redemption Prices shall apply. Unless
otherwise specified in the applicable Pricing Supplement, any such Note shall be
redeemable at the option of the Company at the specified Redemption Price
applicable to the Redemption Period during which such Note is to be redeemed,
together with interest accrued to the Redemption Date. Unless otherwise
specified in the applicable Pricing Supplement, the Notes will not be subject to
any sinking fund. The Company may redeem any of the Notes that are redeemable
and remain outstanding either in whole or from time to time in part, upon not
less than 30 nor more than 60 days' notice.
 
     Unless otherwise specified in the applicable Pricing Supplement, Notes
cannot be repaid prior to Stated Maturity. If a Note is repayable at the option
of the Holder on a date or dates specified prior to Stated Maturity, the
applicable Pricing Supplement will set forth the price or prices of such
repayment, together with accrued interest to the date of repayment.
 
     In order for a Note that is repayable at the option of the Holder to be
repaid, the Paying Agent must receive at least 30 days but not more than 60 days
prior to the repayment date (a) appropriate wire instructions and (b) either (i)
the Note with the form entitled "Option to Elect Repayment" attached to the Note
duly completed or (ii) a telegram, telex, facsimile transmission or letter from
a member of a national securities exchange or the NASD 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 portion of 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 with the form
entitled "Option to Elect Repayment" attached to the Note duly completed will be
received by the Paying Agent not later than five Business Days after the date of
such telegram, telex, facsimile transmission or letter and such Note and form
duly completed must be received by the Paying Agent by such fifth Business Day.
Exercise of the repayment option by the Holder of a Note shall be irrevocable,
except as otherwise described above under "Interest Rate Reset" and "Extension
of Maturity." The repayment option may be exercised by the Holder of a Note for
less than the entire principal amount of the Note provided that the principal
amount of the Note remaining outstanding after repayment is an authorized
denomination. No transfer or exchange of any Note (or, in the event that any
Note is to be repaid in part, the portion of the Note to be repaid) will be
permitted after exercise of a repayment option. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any Note for
repayment will be determined by the Trustee, whose determination will be final,
binding and non-appealable.
 
     If a Note is represented by a Global Security, the Depositary'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 Depositary'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
 
                                      S-21
   22
 
participant through which it holds an interest in such Note to notify the
Depositary of its desire to exercise a right to repayment. Different firms have
different cut-off times for accepting instructions from their customers and,
accordingly, each 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 cut-off time by which such an instruction must be given in order
for timely notice to be delivered to the Depositary.
 
     Notwithstanding anything in this Prospectus Supplement to the contrary,
unless otherwise specified in the applicable Pricing Supplement, if a Note is an
Original Issue Discount Note, the amount payable on such Note in the event of
redemption or repayment prior to its Stated Maturity shall be the Amortized Face
Amount of such Note, as specified in the applicable Pricing Supplement, as of
the Redemption Date or the date of repayment, as the case may be.
 
REPURCHASE
 
     The Company may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Company may be held or
resold or, at the discretion of the Company, may be surrendered to the Trustee
for cancellation.
 
OTHER PROVISIONS
 
     Any provisions with respect to the determination of an interest rate basis,
the specification of interest rate basis, calculation of the interest rate
applicable to, or the principal payable at Maturity on, any Note, its Interest
Payment Dates or any other matter relating thereto may be modified by the terms
as specified under "Other Provisions" on the face of such Note, or in an
addendum relating thereto if so specified on the face thereof, and in the
applicable Pricing Supplement.
 
BOOK-ENTRY SYSTEM
 
     The Depositary will act as securities depositary for the Book-Entry Notes.
The Book-Entry Notes will be issued as fully-registered securities registered in
the name of Cede & Co. (the Depositary's partnership nominee). One
fully-registered Global Security will be issued for each issue of the Notes,
each in the aggregate principal amount of such issue, and will be deposited with
the Depositary. If, however, the aggregate principal amount of any issue exceeds
$150 million, one Global Security will be issued with respect to each $150
million of principal amount and an additional Global Security will be issued
with respect to any remaining principal amount of such issue.
 
     The Depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. The Depositary holds securities that its
participants ("Participants") deposit with the Depositary. The Depositary also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
("Direct Participants") include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. The
Depositary is owned by a number of its Direct Participants and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc., and the NASD. Access to
the Depositary's system is also available to others such as securities brokers
and dealers, banks and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to the Depositary and its
Participants are on file with the Securities and Exchange Commission.
 
     Purchases of Book-Entry Notes under the Depositary's system must be made by
or through Direct Participants, which will receive a credit for the Book-Entry
Notes on the Depositary's records.
 
                                      S-22
   23
 
The ownership interest of each actual purchaser of each Book-Entry Note
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from the Depositary of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Book-Entry Notes are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Book-Entry Notes, except in the event that use of the book-entry
system for one or more Book-Entry Notes is discontinued.
 
     To facilitate subsequent transfers, all Global Securities deposited by
Participants with the Depositary are registered in the name of the Depositary's
partnership nominee, Cede & Co. The deposit of Global Securities with the
Depositary and their registration in the name of Cede & Co. effects no change in
beneficial ownership. The Depositary has no knowledge of the actual Beneficial
Owners of the Book-Entry Notes; the Depositary's records reflect only the
identity of the Direct Participants to whose accounts such Book-Entry Notes are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
 
     Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
 
     Redemption notices shall be sent to Cede & Co. If less than all of the
Book-Entry Notes are being redeemed, and unless otherwise notified by either the
Company or the Trustee, the Depositary's practice is to determine by lot the
amount of the interest of each Direct Participant in such issue to be redeemed.
 
     Neither the Depositary nor Cede & Co. will consent or vote with respect to
Book-Entry Notes. Under its usual procedures, the Depositary will mail an
Omnibus Proxy to the Company as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Book-Entry Notes are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
 
     Principal and interest payments on the Book-Entry Notes will be made to the
Depositary. The Depositary's practice is to credit Direct Participants' accounts
on the payable date in accordance with their respective holdings shown on the
Depositary's records unless the Depositary has reason to believe that it will
not receive payment on the payable date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as in
the case with securities held for the accounts of customers in bearer form or
registered in "street name" and will be the responsibility of such Participant
and not of the Depositary, any Agents, or the Company, subject to any statutory
or regulatory requirements as may be in effect from time to time. Payment of
principal and interest to the Depositary is the responsibility of the Company or
Agents, disbursement of such payments to Direct Participants shall be the
responsibility of the Depositary, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect
Participants.
 
     A Beneficial Owner shall give notice to elect to have its Book-Entry Notes
purchased or tendered, through its Participant, to the Paying Agent, and shall
effect delivery of such Book-Entry Notes by causing the Direct Participant to
transfer the Participant's interest in the Book-Entry Notes, on the Depositary's
records, to the Paying Agent. The requirement for physical delivery of Book-
Entry Notes in connection with a demand for purchase or a mandatory purchase
will be deemed satisfied when the ownership rights in the Book-Entry Notes are
transferred by Direct Participants on the Depositary's records.
 
                                      S-23
   24
 
     The Depositary may discontinue providing its services as securities
depository with respect to the Book-Entry Notes at any time by giving reasonable
notice to the Company or the Agents. Under such circumstances, in the event that
a successor securities depositary is not obtained, Certificated Notes are
required to be printed and delivered in exchange for the Book-Entry Notes
represented by the Global Securities held by the Depositary.
 
     The Company may decide to discontinue use of the system of book-entry
transfers through the Depositary (or a successor securities depositary). In that
event, Certificated Notes will be printed and delivered in exchange for the
Book-Entry Notes represented by the Global Securities held by the Depositary.
 
     The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
 
     Neither the Company, the Trustee, any paying agent nor the registrar for
the Notes will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
 
                         IMPORTANT CURRENCY INFORMATION
 
     Purchasers are required to pay for each Note in the Specified Currency for
such Note. Currently, there are limited facilities in the United States for
conversion of U.S. dollars into foreign currencies and vice versa, and banks
generally do not offer non-U.S. dollar checking or savings account facilities in
the United States. However, if requested by a prospective purchaser of Notes
denominated in a Specified Currency other than U.S. dollars, the Agent
soliciting the offer to purchase will arrange for the conversion of U.S. dollars
into such Specified Currency to enable the purchaser to pay for such Notes. Such
requests must be made on or before the fifth Business Day preceding the date of
delivery of the Notes, or by such other date as determined by the Agent which
presents the offer to the Company. Each such conversion will be made by the
relevant Agent on such terms and subject to such conditions, limitations and
charges as such Agent may from time to time establish in accordance with its
regular foreign exchange practice. All costs of exchange will be borne by the
relevant purchaser of the Notes.
 
                                 CURRENCY RISKS
 
EXCHANGE RATES AND EXCHANGE CONTROLS
 
     An investment in Notes that are denominated in, or the payment of which is
determined with reference to, a Specified Currency other than U.S. dollars
entails significant risks that are not associated with a similar investment in a
security denominated in U.S. dollars. Similarly, an investment in an Indexed
Note entails significant risks that are not associated with an investment in
non-Indexed Notes. Such risks include, without limitation, the possibility of
significant changes in rates of exchange between U.S. dollars and the Specified
Currency (or, in the case of each Indexed Note, the rate of exchange between the
Denominated Currency and the Indexed Currency for such Indexed Note), including
changes resulting from official redenomination with respect to such Specified
Currency (or, in the case of each Indexed Note, with respect to the Denominated
Currency or the Indexed Currency therefor) and the possibility of the imposition
or modification of foreign exchange controls with respect to the Specified
Currency. Such risks generally depend on factors over which the Company has no
control, such as economic and political events and the supply of and demand for
the relevant currencies. In recent years, rates of exchange between Specified
Currencies have been highly volatile, and such volatility may be expected in the
future. Fluctuations in any particular exchange rate that have occurred in the
past are not necessarily
 
                                      S-24
   25
 
indicative, however, of fluctuations in the rate that may occur during the term
of any Note. Depreciation of a foreign currency or units of a foreign composite
currency in which a Note is denominated against the U.S. dollar would result in
a decrease in the effective yield of such Note below its coupon rate, and in
certain circumstances could result in a loss to the investor on a U.S. dollar
basis. Similarly, depreciation of the Denominated Currency with respect to an
Indexed Note against the applicable Indexed Currency would result in the
principal amount payable with respect to such Indexed Note at the Stated
Maturity being less than the Face Amount of such Indexed Note which, in turn,
would decrease the effective yield of such Indexed Note below its applicable
interest rate and could also result in a loss to the investor.
 
     The Notes will provide that, in the event of an official redenomination of
a foreign currency (including, without limitation, an official redenomination of
a foreign currency that is a composite currency) the obligations of the Company
with respect to payments on Notes denominated in such currency shall, in all
cases, be deemed immediately following such redenomination to provide for the
payment of that amount of redenominated currency representing the amount of such
obligations immediately before such redenomination. The Notes do not provide for
any adjustment to any amount payable under the Notes as a result of (a) any
change in the value of a foreign currency relative to any other currency due
solely to fluctuations in exchange rates or (b) any redenomination of any
component currency of any composite currency (unless such composite currency is
itself officially redenominated).
 
     Governments have from time to time imposed, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a foreign currency for making payments with respect to a Note denominated in
such currency. There can be no assurances that exchange controls will not
restrict or prohibit payments of principal or interest in any currency or
currency unit. Even if there are not actual exchange controls, it is possible
that, with respect to any particular Note, the foreign currency for such Note
will not be available to the Company to make payments of interest and principal
then due because of circumstances beyond the control of the Company. In that
event, the Company will make such payment in the manner set forth below under
"Payment Currency."
 
     THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT, AND THE
APPLICABLE PRICING SUPPLEMENT WILL NOT, DESCRIBE ALL THE RISKS OF AN INVESTMENT
IN NOTES DENOMINATED IN, OR THE PAYMENT OF WHICH IS RELATED TO THE VALUE OF, A
CURRENCY (INCLUDING ANY COMPOSITE CURRENCY) OTHER THAN U.S. DOLLARS, AND THE
COMPANY DISCLAIMS ANY RESPONSIBILITY TO ADVISE PROSPECTIVE PURCHASERS OF SUCH
RISKS AS THEY EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT OR THE DATE OF THE
APPLICABLE PRICING SUPPLEMENT OR AS SUCH RISKS MAY CHANGE FROM TIME TO TIME.
PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS
TO THE RISKS ENTAILED IN AN INVESTMENT IN SUCH NOTES. SUCH AN INVESTMENT IS NOT
AN APPROPRIATE INVESTMENT FOR PERSONS WHO ARE UNSOPHISTICATED WITH RESPECT TO
FOREIGN CURRENCY TRANSACTIONS.
 
     The information set forth in this Prospectus Supplement is directed to
prospective purchasers of Notes who are U.S. Holders, as that term is defined
herein, and the Company disclaims any responsibility to advise prospective
purchasers who are residents of countries other than the United States with
respect to any matters that may affect the purchase or holding of, or receipt of
payments of principal, premium or interest in respect of, Notes. Such persons
should consult their own counsel with regard to such matters.
 
     The Pricing Supplement relating to Notes denominated in a Specified
Currency other than U.S. dollars or relating to Indexed Notes will contain
information concerning historical exchange rates for such Specified Currency or
Denominated Currency against the U.S. dollar or other relevant currency
(including, in the case of Indexed Notes, the applicable Indexed Currency), a
description of such currency or currencies and any exchange controls affecting
such currency or currencies.
 
                                      S-25
   26
 
Information concerning exchange rates is furnished as a matter of information
only and should not be regarded as indicative of the range of or trend in
fluctuations in currency exchange rates that may occur in the future.
 
PAYMENT CURRENCY
 
     Except as set forth in the applicable Pricing Supplement, if payment on a
Note is required to be made in a Specified Currency other than U.S. dollars and
such currency is unavailable due to the imposition of exchange controls or other
circumstances beyond the Company's control 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 any payments with respect to such Note shall be made in U.S.
dollars until such currency is again available or so used. The amount so payable
on any date in such foreign currency shall be converted into U.S. dollars on the
basis of the Market Exchange Rate on the last date such Specified Currency was
available. See "Description of Notes -- Payment of Principal and Interest."
 
     If the official unit of any component currency 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 component
currencies are consolidated into a single currency, the amounts of those
currencies as components shall be replaced by an amount in such single currency.
If any component currency is divided into two or more currencies, the amount of
that original component currency as a component shall be replaced by the amounts
of such two or more currencies having an aggregate value on the date of division
equal to the amount of the former component currency immediately before such
division.
 
FOREIGN CURRENCY JUDGMENTS
 
     The Notes will be governed by and construed in accordance with the laws of
the State of New York applicable to instruments made and to be performed wholly
within such jurisdiction. Courts in the United States customarily have not
rendered judgments for money damages denominated in any currency other than U.S.
dollars. If a Note is denominated in a Specified Currency other than U.S.
dollars, any judgment under New York law will be rendered in the foreign
currency of the underlying obligation and converted into U.S. dollars at a rate
of exchange prevailing on the date of entry of the judgment or decree.
 
                        CERTAIN FEDERAL TAX CONSEQUENCES
 
     The following summary of certain United States federal income tax
consequences of the purchase, ownership and disposition of the Notes is based on
laws, regulations, rulings and decisions now in effect, all of which are subject
to change. It deals only with Notes held as capital assets and does not deal
with persons in special tax situations, such as financial institutions,
insurance companies, dealers in securities or currencies, persons holding Notes
as a hedge against currency risks or as a position in a "straddle" for tax
purposes, or persons whose functional currency is not the U.S. dollar. It also
does not deal with holders other than original purchasers. As previously
indicated, in the event the Company intends to issue Currency Indexed Notes,
Indexed Notes or Dual Currency Notes, the applicable Pricing Supplement will
describe the material federal income tax consequences. Persons considering the
purchase of the Notes should consult their tax advisors concerning the
application of United States federal income tax laws to their particular
situations as well as any consequences arising under the laws of any other
taxing jurisdiction.
 
     As used herein, the term "U.S. Holder" means a beneficial owner of a Note
that is for United States federal income tax purposes (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, or (iii) an estate or trust the income of which is subject
to United States federal income taxation regardless of its source. As used
herein, the term "non-U.S. Holder" means
 
                                      S-26
   27
 
a holder of a Note that is not a U.S. Holder. For purposes of the following
discussion it is assumed that the functional currency of a U.S. Holder is the
U.S. dollar.
 
U.S. HOLDERS
 
     PAYMENTS OF INTEREST. Payments of interest on a Note generally will be
taxable to a U.S. Holder as ordinary interest income at the time such payments
are accrued or are received (in accordance with the U.S. Holder's method of
accounting for tax purposes).
 
     ORIGINAL ISSUE DISCOUNT. The following summary is a general discussion of
the United States federal income tax consequences to U.S. Holders of the
purchase, ownership and disposition of Notes issued with original issue discount
("Discount Notes"). The following summary is based upon temporary and final
Treasury regulations released by the Internal Revenue Service ("IRS") on January
27, 1994 (the "OID Regulations"). The OID Regulations apply to Notes issued on
or after April 4, 1994. In addition, taxpayers generally may rely on the OID
Regulations for Notes issued after December 2, 1992 and before April 4, 1994.
 
     A Note with a term greater than one year may be issued with original issue
discount for federal income tax purposes. Original issue discount will arise if
the stated principal amount at maturity of a Note exceeds its issue price by
more than a DE MINIMIS amount, or if it has certain interest payment
characteristics; E.G., some or all of the interest on the Note does not
constitute "qualified stated interest." The term "qualified stated interest"
generally means stated interest that is unconditionally payable in cash or
property (other than debt instruments of the issuer) at least annually at a
single fixed rate or at current values of (i) one or more qualified floating
rates, (ii) a single fixed rate and one or more qualified floating rates, (iii)
a single fixed rate and a single objective rate that is a qualified inverse
floating rate, or (iv) a single objective rate. Interest that is stated at an
initial fixed rate for not more than one year, followed by a qualified floating
rate or an objective rate, is treated as a single qualified floating rate or
objective rate if the value of the variable rate on the issue date is intended
to approximate the fixed rate. A "qualified floating rate" is any floating rate
where variations in the value of such rate can reasonably be expected to measure
contemporaneous variations in the cost of newly borrowed funds in the currency
in which the debt instrument is denominated (E.G., the Prime Rate or LIBOR). If
a debt instrument provides for two or more qualified floating rates that can
reasonably be expected to have approximately the same values throughout the term
of the instrument, the qualified floating rates together constitute a single
qualified floating rate. An "objective rate" is a rate that is not itself a
qualified floating rate but which is determined using a single formula that is
fixed throughout the term of the Note and which is based upon (i) one or more
qualified floating rates (E.G., a multiple of a qualified floating rate or an
inverse floater rate based upon a qualified floating rate), (ii) one or more
rates where each rate would be a qualified floating rate for a debt instrument
denominated in a currency other than the currency in which the Note is
denominated, (iii) the yield or change in the price of actively traded property,
or (iv) any combination of rates described in (i), (ii) or (iii). Under the OID
Regulations, the IRS may take the position that Notes which (i) bear interest at
a floating rate subject to a maximum or a minimum numerical interest rate
limitation that is not fixed throughout the term of the Note, where it is known
as of the issue date that such limitation is likely to cause the yield on the
Note to be significantly less or more, respectively, than the overall expected
yield without such limitation, (ii) bear interest for one or more accrual
periods at a rate below the rate applicable for the remaining term of such Note
(E.G., Notes with teaser rates or interest holidays), (iii) bear a floating rate
of interest where it is reasonably expected that the average value of such rate
during the first half of the Note's term will be either significantly less than
or significantly greater than the average value of such rate during the final
half of such term, (iv) bear interest at one or more variable rates that is not
qualified stated interest or (v) bear interest at the lesser of two or more
variable rates would be treated as issued with original issue discount or
treated as contingent payment obligations. In addition, the IRS has authority to
apply or depart from the OID Regulations if a principal purpose of structuring a
debt instrument, engaging in a transaction or applying the OID Regulations
 
                                      S-27
   28
 
is to achieve a result that is unreasonable (based on all facts and
circumstances) in light of the purposes of the applicable statutes. However, a
result will not be considered unreasonable in the absence of a substantial
effect on the present value of the taxpayer's tax liability.
 
     A U.S. Holder of a Discount Note must include original issue discount in
income for United States federal income tax purposes as it accrues under a
constant yield method in advance of receipt of cash payments attributable to
such income, regardless of such U.S. Holder's method of accounting for tax
purposes. The Company will report annually to the IRS and to holders of Notes
the original issue discount accrued with respect to each Note. Prospective
holders are advised to consult their tax advisers with respect to the particular
original issue discount characteristics of the Note that is being purchased.
 
     A U.S. Holder who purchases a Discount Note for an amount that is greater
than its adjusted issue price, and less than or equal to its stated redemption
price at maturity, as of the purchase date will be considered to have purchased
the Discount Note at an "acquisition premium." Under the acquisition premium
rules, the amount of original issue discount which such holder must include in
its gross income with respect to such Note for any taxable year (or portion
thereof in which the holder holds the Note) will be reduced (but not below zero)
by the portion of the acquisition premium properly allocable to the period.
 
     SHORT-TERM NOTES. Notes that have a fixed maturity of one year or less
("Short-Term Notes") may be issued with acquisition discount. In general, an
individual or other cash method U.S. Holder is not required to accrue
acquisition discount unless the holder elects to do so. A cash method holder who
makes such an election cannot revoke such election without the consent of the
IRS, and such election shall apply to all short-term obligations acquired by the
holder in the year the election is made and in all subsequent years. If such an
election is not made, any gain recognized by the U.S. Holder on the sale,
exchange or maturity of the Short-Term Note will be ordinary income to the
extent of the acquisition discount accrued on a straight-line basis, or upon
election under a constant yield method (based on daily compounding) through the
date of sale or maturity, and a portion of the deductions otherwise allowable to
the holder for interest on borrowings allocable to the Short-Term Note will be
deferred until a corresponding amount of income is realized. U.S. Holders who
report income for federal income tax purposes under the accrual method, cash
method U.S. Holders who make the election, and certain other holders including
banks and dealers in securities, are required to accrue acquisition discount on
a Short-Term Note on a straight-line basis unless an election is made to accrue
the acquisition discount under a constant yield method (based on daily
compounding).
 
     MARKET DISCOUNT. If a holder purchases a Note, other than a Discount Note,
for an amount that is less than its issue price or, in the case of a Discount
Note, its revised issue price as of the purchase date, the amount of the
difference will be treated as "market discount," unless such difference is less
than a specified DE MINIMIS amount.
 
     Under the market discount rules, a U.S. Holder will be required to treat
any partial principal payment (or, in the case of a Discount Note, any payment
that does not constitute qualified stated interest) on, or any gain realized on
the sale, exchange, retirement or other disposition of, a Note as ordinary
income to the extent of the lesser of (i) the amount of such payment or realized
gain or (ii) the market discount which has not previously been included in
income and is treated as having accrued on such Note at the time of such payment
or disposition. Market discount will be considered to accrue ratably during the
period from the date of acquisition to the maturity date of the Note, unless the
U.S. Holder elects to accrue market discount on the basis of semiannual
compounding.
 
     A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a Note with market discount until the maturity of the Note or
its earlier disposition in a taxable transaction. A U.S. Holder may elect to
include market discount in income currently as it accrues (on either a ratable
or semiannual compounding basis), in which case the rules described above
regarding the treatment
 
                                      S-28
   29
 
as ordinary income of gain upon the disposition of the Note and upon the receipt
of certain cash payments and regarding the deferral of interest deductions will
not apply. Generally, such currently included market discount is treated as
interest for federal income tax purposes.
 
     PREMIUM. If a U.S. Holder purchases a Note for an amount that is greater
than its stated redemption price at maturity, such holder will be considered to
have purchased the Note with "amortizable bond premium" equal in amount to such
excess. A holder may elect to amortize such premium using a constant yield
method over the remaining term of the Note and may offset interest otherwise
required to be included in respect of the Note during any taxable year by the
amortized amount of such excess for the taxable year. However, if the Note may
be optionally redeemed after the U.S. Holder acquires it at a price in excess of
its stated redemption price at maturity, special rules would apply which could
result in a deferral of the amortization of some bond premium until later in the
term of the Note.
 
     DISPOSITION OF A NOTE. Except as discussed above, upon the sale, exchange
or retirement of a Note, a U.S. Holder generally will recognize taxable gain or
loss equal to the difference between the amount realized on the sale, exchange
or retirement and such holder's adjusted tax basis in the Note. A U.S. Holder's
adjusted tax basis in a Note generally will be such holder's cost increased by
any original issue discount (or, in the case of a Short-Term Note, acquisition
discount) included in income (and accrued market discount, if any, if the holder
has included such market discount in income) and decreased by the amount of any
payments, other than qualified stated interest payments, received and
amortizable premium taken with respect to such Note. Such gain or loss generally
will be long-term capital gain or loss if the Note is held for more than one
year.
 
     EXTENDIBLE AND RESET NOTES. If so specified in the applicable Pricing
Supplement, the Company may have the option (i) to reset the interest rate in
the case of a Fixed Rate Note, or to reset the Spread and/or Spread Multiplier,
in the case of a Floating Rate Note, and/or (ii) to extend the Stated Maturity
of a Note. In addition, if so specified in the applicable Pricing Supplement,
holders may have the option to renew the term of a Renewable Note. See
"Description of Notes -- Interest Rate Reset" and "Description of Notes --
Extension of Maturity" and "Renewable Notes." The federal income tax
consequences to a U.S. Holder of a Note with respect to which such an option has
been exercised will be discussed in the applicable Pricing Supplement.
 
NOTES DENOMINATED IN OR ON WHICH INTEREST IS PAYABLE IN A FOREIGN CURRENCY
 
     As used herein, "Foreign Currency" means a currency or currency unit other
than U.S. dollars.
 
PAYMENTS OF INTEREST IN A FOREIGN CURRENCY
 
     CASH METHOD. A U.S. Holder who uses the cash method of accounting for
federal income tax purposes and who receives a payment of interest on a Note
(other than original issue discount or market discount) will be required to
include in income the U.S. dollar value of the Foreign Currency payment
(determined on the date such payment is received) regardless of whether the
payment is in fact converted to U.S. dollars at that time, and such U.S. dollar
value will be the U.S. Holder's tax basis in such Foreign Currency. No exchange
gain or loss will be recognized with respect to the receipt of such payment.
 
     ACCRUAL METHOD. A U.S. Holder who uses the accrual method of accounting for
federal income tax purposes, or who otherwise is required to accrue interest
prior to receipt, will be required to include in income the U.S. dollar value of
the amount of interest income (including original issue discount or market
discount and reduced by amortizable bond premium to the extent applicable) that
has accrued and is otherwise required to be taken into account with respect to a
Note during an accrual period. The U.S. dollar value of such accrued income will
be determined by translating such income at the average rate of exchange for the
accrual period or, with respect to an accrual period that spans two taxable
years, at the average rate for the partial period within the taxable year. A
U.S. Holder may elect, however, to translate such accrued interest income using
the rate of
 
                                      S-29
   30
 
exchange on the last day of the accrual period or, with respect to an accrual
period that spans two taxable years, using the rate of exchange on the last day
of the taxable year. If the last day of an accrual period is within five
business days of the date of receipt of the accrued interest, a U.S. Holder may
translate such interest using the rate of exchange on the date of receipt. The
above election will apply to other debt obligations held by the U.S. Holder and
may not be changed without the consent of the IRS. A U.S. Holder will recognize
exchange gain or loss (which will be treated as ordinary income or loss) with
respect to accrued interest income on the date such income is received. The
amount of ordinary income or loss recognized will equal the difference, if any,
between the U.S. dollar value of the Foreign Currency payment received
(determined on the date such payment is received) in respect of such accrual
period and the U.S. dollar value of interest income that has accrued during such
accrual period (as determined above).
 
     PURCHASE, SALE AND RETIREMENT OF NOTES. Except as discussed above with
respect to Short-Term Notes, upon the sale, exchange or retirement of a Note, a
U.S. Holder will recognize taxable gain or loss equal to the difference between
the amount realized on the sale, exchange or retirement and such holder's
adjusted tax basis in the Note. Such gain or loss generally will be capital gain
or loss (except to the extent of any accrued market discount not previously
included in the holder's income) and will be long-term capital gain or loss if
at the time of sale, exchange or retirement the Note has been held for more than
one year. To the extent the amount realized represents accrued but unpaid
interest, however, such amounts must be taken into account as interest income,
with exchange gain or loss computed as described in "Payments of Interest in a
Foreign Currency" above. If a holder receives Foreign Currency on such a sale,
exchange or retirement, the amount realized will be based on the U.S. dollar
value of the Foreign Currency on the date of disposition. A U.S. Holder's
adjusted tax basis in a Note will equal the U.S. dollar cost of the Note
(determined on the date of purchase) to such holder, increased by the amounts of
any market discount or original issue discount previously included in income by
the holder with respect to such Note and reduced by any amortized acquisition or
other premium and any principal payments received by the holder. If a U.S.
Holder purchases a Note with previously owned foreign currency, the holder will
recognize gain or loss in an amount equal to the difference, if any, between
such holder's tax basis in the Foreign Currency and the U.S. dollar fair market
value of the Foreign Currency used to purchase the Note, determined on the date
of purchase.
 
     Gain or loss realized upon the sale, exchange or retirement of a Note that
is attributable to fluctuations in currency exchange rates will be ordinary
income or loss which will not be treated as interest income or expense. Gain or
loss attributable to fluctuations in exchange rates will equal the difference
between the U.S. dollar value of the Foreign Currency principal amount of the
Note, determined on the date such payment is received or the Note is disposed
of, and the U.S. dollar value of the Foreign Currency principal amount of the
Note, determined on the date the U.S. Holder acquired the Note. Such Foreign
Currency gain or loss will be recognized only to the extent of the total gain or
loss realized by the U.S. Holder on the sale, exchange or retirement of the
Note.
 
     ORIGINAL ISSUE DISCOUNT. In the case of a Discount Note or Short-Term Note,
(i) original issue discount or acquisition discount is determined in units of
the Foreign Currency, (ii) such accrued discount is translated into U.S. dollars
as described in "Payments of Interest in a Foreign Currency -- Accrual Method"
above and (iii) the amount of Foreign Currency gain or loss on the accrued
discount is determined by comparing the amount of income received attributable
to the discount (either upon payment, maturity or an earlier disposition), as
translated into U.S. dollars at the rate of exchange on the date of such
receipt, with the amount of discount accrued, as translated above.
 
     MARKET DISCOUNT AND PREMIUM. In the case of a Note with market discount,
(i) market discount is determined in units of the Foreign Currency, (ii) accrued
market discount taken into account upon the receipt of any partial principal
payment or upon the sale, exchange, retirement or other disposition of the Note
(other than accrued market discount required to be taken into account currently)
is translated into U.S. dollars at the exchange rate on such disposition date
(and no part of such accrued market discount is treated as exchange gain or
loss) and (iii) accrued market
 
                                      S-30
   31
 
discount currently includible in income by a U.S. Holder for any accrual period
is translated into U.S. dollars on the basis of the average exchange rate in
effect during such accrual period, and the exchange gain or loss is determined
upon the receipt of any partial principal payment or upon the sale, exchange,
retirement or other disposition of the Note in the manner described in "Payments
of Interest in a Foreign Currency -- Accrual Method" above with respect to
computation of exchange gain or loss on accrued interest.
 
     With respect to a Note issued with amortizable bond premium, such premium
is determined in the relevant Foreign Currency and reduces interest income in
units of the Foreign Currency. Although not entirely clear, a U.S. Holder should
recognize exchange gain or loss equal to the difference between the U.S. dollar
value of the bond premium amortized with respect to a period, determined on the
date the interest attributable to such period is received, and the U.S. dollar
value of the bond premium determined on the date of the acquisition of the Note.
 
     EXCHANGE OF FOREIGN CURRENCIES. A U.S. Holder will have a tax basis in any
Foreign Currency received as interest or on the sale, exchange or retirement of
a Note equal to the U.S. dollar value of such Foreign Currency, determined at
the time the interest is received or at the time of the sale, exchange or
retirement. Any gain or loss realized by a U.S. Holder on a sale or other
disposition of Foreign Currency (including its exchange for U.S. dollars or its
use to purchase Notes) will be ordinary income or loss.
 
NON-U.S. HOLDERS
 
     Under present federal income and estate tax law, assuming certain
certification requirements are met (including identification of the beneficial
owner of the Note) and subject to the discussion of backup withholding below:
 
          (a) Payments of interest (including any original issue discount) on a
     Note to any Non-U.S. Holder will not be subject to federal income or
     withholding tax, provided that (1) the holder is not a direct or indirect
     10% or greater shareholder of the Company, (2) the holder is not (i) a
     foreign tax-exempt organization for federal income tax purposes, (ii) a
     controlled foreign corporation related to the Company, or (iii) a bank
     receiving interest described in section 881(c)(3)(A) of the Internal
     Revenue Code of 1986, as amended (the "Code"), (3) such interest payments
     are not effectively connected with a U.S. trade or business and (4) such
     interest is not "contingent interest" within the meaning of section
     871(h)(4) of the Code (which generally includes interest determined by
     reference to certain attributes or payments of the debtor or a related
     party, but not interest determined by reference to changes in the value of
     or yield on certain actively traded property or by reference to any other
     amount of non-contingent interest).
 
          (b) Generally, a non-U.S. Holder will not be subject to federal income
     taxes on any amount which constitutes capital gain upon retirement or
     disposition of a Note, unless (1) the gain is effectively connected with
     the conduct of a trade or business in the United States by the non-U.S.
     Holder or, if a treaty applies, generally attributable to the United States
     "permanent establishment" maintained by the holder, or (2) such holder is
     an individual who is present in the United States for 183 days or more
     during the taxable year and who has a tax home in the United States.
 
          (c) The Notes or any portion thereof will not be includible in the
     estate of a non-U.S. Holder unless (1) the individual is a direct or
     indirect 10% or greater shareholder of the Company, (2) at the time of such
     individual's death, payments in respect of the Notes would have been
     effectively connected with the conduct by such individual of a trade or
     business in the United States or (3) the Notes provide for contingent
     interest within the meaning of section 871(h)(4) of the Code.
 
                                      S-31
   32
 
BACKUP WITHHOLDING AND INFORMATION REPORTING
 
     Under current federal income tax law, information reporting and a 31%
backup withholding tax are required with respect to certain interest and
principal payments made to, and the proceeds of sales before maturity by,
certain holders if such persons fail to supply taxpayer identification numbers
and other information. Interest paid with respect to a Note, and payment of the
proceeds from a sale of a Note to or through the United States office of a
broker, received by a Non-U.S. Holder will not be subject to information
reporting and backup withholding if the payor has received the appropriate
certification statements (as described above). The appropriate certification
procedures require that the holder certify as to its status and provide its name
and address. In addition, payments of the proceeds from the sale of a Note to or
through a foreign office of a broker or the foreign office of a custodian,
nominee or other agent acting on behalf of the beneficial owner of a Note will
not be subject to information reporting or backup withholding, except that if
the broker, custodian, nominee or other agent is a United States person, a
controlled foreign corporation for federal income tax purposes or a foreign
person 50% or more of whose gross income is from a United States trade or
business, information reporting may be required with respect to payments made to
such owners.
 
     Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States federal income tax provided the required
information is furnished to the IRS.
 
                       SUPPLEMENTAL PLAN OF DISTRIBUTION
 
     The Notes are being offered on a continuing basis by the Company through
the Agents, each of which has agreed to use its reasonable best efforts to
solicit purchases of the Notes. The Company will pay each Agent a commission of
from 0.125% to 0.750% of the principal amount of each Note, depending upon its
Stated Maturity, sold through such Agent. The Company may appoint additional
agents to solicit sales of the Notes, PROVIDED that any such solicitation and
sale of the Notes shall be on the same terms and conditions as the Agents have
agreed to. The Company will have the sole right to accept offers to purchase
Notes and may reject any such offer in whole or in part. Each Agent will have
the right, in its discretion reasonably exercised, to reject in whole or in part
any offer to purchase Notes received by such Agent. The Company also may sell to
any Agent, acting as principal, at a discount to be agreed upon at the time of
sale, for resale to one or more investors or to one or more broker-dealers
(acting as principal for purposes of resale) at varying prices related to
prevailing market prices at the time of resale, as determined by such Agent, or,
if so agreed, at a fixed public offering price. Unless otherwise indicated in
the applicable Pricing Supplement, if any Note is resold by an Agent to any
broker-dealer at a discount, such discount will not be in excess of the discount
or commission received by such Agent from the Company. In addition, unless
otherwise indicated in the applicable Pricing Supplement, any Note purchased by
an Agent as principal will be purchased at 100% of the principal amount thereof
less a percentage equal to the commission applicable to an agency sale of a Note
having an identical Stated Maturity. After the initial public offering of the
Notes, the public offering price (in the case of Notes to be resold on a fixed
public offering price basis), the concession and the discount may be changed.
The Company also reserves the right to sell the Notes directly to investors on
its own behalf in those jurisdictions where it is authorized to do so or as
otherwise provided in the applicable Pricing Supplement. In such circumstances,
the Company will have the sole right to accept offers to purchase Notes and may
reject any proposed purchase of Notes in whole or in part. In the case of sales
made directly by the Company, no commission will be payable.
 
     The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Act"). The Company has agreed to
indemnify each Agent against certain liabilities, including liabilities under
the Act, or to contribute to payments each Agent may be required
 
                                      S-32
   33
 
to make in respect thereof. The Company has agreed to reimburse the Agents for
certain of the Agents' expenses, including, but not limited to, the fees and
expenses of counsel to the Agents.
 
     The Company has been advised by each Agent that it may from time to time
purchase and sell Notes in the secondary market, but that it is not obligated to
do so. There can be no assurance that there will be a secondary market for the
Notes or liquidity in the secondary market if one develops. From time to time,
each Agent may make a market in the Notes.
 
                                 LEGAL OPINIONS
 
     The legality of the Notes offered hereby will be passed upon for the
Company by Gordon H. Newman, Esq., Senior Vice President and General Counsel to
the Company and Skadden, Arps, Slate, Meagher and Flom, 333 West Wacker Drive,
Chicago, Illinois 60606. At January 1, 1994, Mr. Newman was the beneficial owner
of 323,480 shares of Common Stock of the Company and held options to purchase
130,560 additional Shares. The legality of the Notes will be passed upon for the
Agents by Sidley & Austin, One First National Plaza, Chicago, Illinois 60603.
Mr. Newton N. Minow is a director of the Company and of counsel to Sidley &
Austin. Sidley & Austin from time to time represents the Company in connection
with certain other matters.
 
                                      S-33
   34
 
PROSPECTUS
 
                              SARA LEE CORPORATION
                                  $400,000,000
 
                 DEBT SECURITIES, DEBT WARRANTS, COMMON STOCK,
             STOCK WARRANTS, PREFERRED STOCK AND CURRENCY WARRANTS
                           -------------------------
 
     Sara Lee Corporation (the "Company") may offer from time to time (i) debt
securities (the "Debt Securities"), (ii) warrants to purchase Debt Securities
(the "Debt Warrants"), (iii) shares of its common stock, par value $1.33 1/3 per
share (the "Common Stock"), (iv) warrants to purchase shares of its Common Stock
(the "Stock Warrants"), (v) shares of its preferred stock, no par value per
share (the "Preferred Stock"), and (vi) warrants to receive from the Company the
cash value in U.S. dollars of the right to purchase ("Currency Call Warrants")
or to sell ("Currency Put Warrants," and, together with the Currency Call
Warrants, the "Currency Warrants") such foreign currency or currency units as
shall be designated by the Company at the time of the offering. The Debt
Securities, Debt Warrants, Common Stock, Stock Warrants, Preferred Stock and
Currency Warrants (collectively, the "Securities"), may be offered either
together or separately and will be offered in amounts, at prices and on terms to
be determined at the time of offering. The Securities offered pursuant to this
Prospectus may be issued in one or more series or issuances and will be limited
to $400,000,000 aggregate public offering price (or the equivalent in foreign
currency or currency units).
 
     Certain specific terms of the particular Securities in respect of which
this Prospectus is being delivered (the "Offered Securities") are set forth in
the accompanying Prospectus Supplement (the "Prospectus Supplement"), including,
where applicable, the initial public offering price of the Securities, the
listing on any securities exchange, other special terms, and (i) in the case of
Debt Securities, the specific designation, aggregate principal amount, the
denomination, maturity, premium, if any, the rate (which may be fixed or
variable), time and method of calculating payment of interest, if any, the place
or places where principal of, premium, if any, and interest, if any, on such
Debt Securities will be payable, the currency in which principal of, premium, if
any, and interest, if any, on such Debt Securities will be payable, any terms of
redemption at the option of the Company or the holder, any sinking fund
provisions and any terms for conversion into Common Stock, (ii) in the case of
Debt Warrants and Stock Warrants, the Debt Securities and Common Stock,
respectively, for which each such Warrant is exercisable, the exercise price,
duration, detachability, and call provisions, (iii) in the case of Preferred
Stock, the specific title and stated value, any dividend, liquidation,
redemption, voting and other rights and any terms for exchange for Debt
Securities or conversion into Common Stock, and (iv) in the case of Currency
Warrants, the base foreign currency or currency units, the formula for
determining the cash settlement value, if any, the procedures and conditions
relating to exercise and any circumstances under which there will be deemed to
be an automatic exercise. If so specified in the applicable Prospectus
Supplement, Offered Securities may be issued in whole or in part in the form of
one or more temporary or permanent global securities.
                           -------------------------
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
   EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
     SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
       PASSED UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY
         REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
                           -------------------------
 
     The Company may sell the Securities to or through underwriters or dealers,
and also may sell Securities directly to other purchasers or through agents. See
"Plan of Distribution." The Prospectus Supplement sets forth the names of any
underwriters, dealers or agents involved in the sale of the Offered Securities
in respect of which this Prospectus is being delivered and any applicable fee,
commission or discount arrangement with them.
 
     This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
                           -------------------------
 
                The date of this Prospectus is January 14, 1994.
   35
 
     NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR BY ANY UNDERWRITER, AGENT OR DEALER. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR THE PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR
THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AT ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THEREOF. THIS PROSPECTUS AND THE PROSPECTUS
SUPPLEMENT DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
 
                             AVAILABLE INFORMATION
 
     The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
and at the following regional offices of the Commission: Seven World Trade
Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such materials may be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such documents may
also be inspected at the offices of The New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005; the Chicago Stock Exchange, Incorporated, 440
South LaSalle Street, Chicago, Illinois 60605; and The Pacific Stock Exchange,
Incorporated, 301 Pine Street, San Francisco, California 94104.
 
                                        2
   36
 
                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
 
     The following documents have been filed with the Commission pursuant to the
Exchange Act and are incorporated by reference into this Prospectus and made a
part hereof:
 
     (i)   the Company's Annual Report on Form 10-K for the fiscal year ended
           July 3, 1993;
 
     (ii)  the Company's Quarterly Report on Form 10-Q for the fiscal quarter
           ended October 2, 1993; and
 
     (iii) Registration Statement No. 33-18488 filed with the Commission on
           November 12, 1987, and Registration Statement on Form 8-A (File No.
           1-3344) filed with the Commission on May 11, 1988 (as amended by 
           Form 8 thereto filed with the Commission on November 15, 1989), as 
           to the description of the Common Stock of the Company only.
 
     All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus or any Prospectus Supplement and
to be a part hereof and thereof from the respective dates of filing of such
documents; PROVIDED, HOWEVER, that the Report of the Compensation Committee and
Employee Benefits Committee on Executive Compensation and the Performance Graph
contained in any Proxy Statement of the Company shall not be so deemed
incorporated by reference. Any statement contained in a document incorporated or
deemed incorporated by reference in this Prospectus or any Prospectus Supplement
shall be deemed to be modified or superseded for purposes of this Prospectus or
such Prospectus Supplement to the extent that a statement contained herein,
therein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference in this Prospectus or in such Prospectus
Supplement, modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus or any Prospectus Supplement.
 
     The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of any or all of
the foregoing documents incorporated herein by reference (other than exhibits to
such documents, unless such exhibits are specifically incorporated by reference
into such documents). Requests for such documents should be directed to Sara Lee
Corporation, Three First National Plaza, Chicago, Illinois 60602-4260,
Attention: Corporate Secretary (telephone (312) 726-2600).
 
                                        3
   37
 
                                  THE COMPANY
 
     The Company was founded in 1939 and is incorporated under the laws of the
state of Maryland. The Company is an international manufacturer and marketer of
food and consumer packaged goods. The Company's products and services include
frozen baked goods; processed meats; coffee and tea; beverage systems; food and
non-food products distributed to the foodservice industry; hosiery, underwear,
activewear, and other apparel and accessory items; and personal, household and
shoe care products. The principal executive offices of the Company are located
at Three First National Plaza, Chicago, Illinois 60602-4260, telephone number
(312) 726-2600.
 
                                USE OF PROCEEDS
 
     Unless otherwise indicated in an accompanying Prospectus Supplement, the
net proceeds to be received by the Company from the sale of the Securities will
be available for general corporate purposes of the Company and may be used for
repayment of short-term debt, future acquisitions, capital expenditures and
working capital.
 
           RISK FACTORS RELATING TO CURRENCIES AND CURRENCY WARRANTS
 
     Debt Securities and Debt Warrants denominated or payable in foreign
currencies and Currency Warrants may entail significant risks. These risks
include, without limitation, the possibility of significant fluctuations in
foreign currency exchange rates. These risks may vary depending upon the
currency or currencies involved, and in the case of any Currency Warrants, the
particular form of such Currency Warrants. These risks will be more fully
described in the Prospectus Supplement relating thereto.
 
                                     RATIOS
 
     The following table sets forth the consolidated ratios of earnings to fixed
charges and ratios of earnings to fixed charges and preferred stock dividends
for the periods indicated. Fixed charges consist of interest expense,
amortization of deferred debt charges and the portion of rent expense
representative of interest costs.
 


                                                FISCAL YEAR ENDED(1)                    THREE MONTHS ENDED
                                         -----------------------------------   ------------------------------------
                                         1989   1990   1991   1992(2)   1993   SEPTEMBER 26, 1992   OCTOBER 2, 1993
                                         ----   ----   ----   -------   ----   ------------------   ---------------
                                                                                     
Ratio of Earnings to Fixed Charges...... 3.6    3.4    3.8      5.8     5.7            4.5                4.8
Ratio of Earnings to Fixed Charges and
  Preferred Stock Dividends............. 3.3    2.9    3.2      4.9     4.8            3.8                4.2

 
- -------------------------
 
(1) The Company's fiscal year ends on the Saturday nearest June 30.
 
(2) During the first quarter of fiscal 1992, the Company sold its
    over-the-counter pharmaceutical business for a pre-tax gain of $412
    million. During the same quarter, the board of directors approved a series
    of plans to restructure principally the U.S. food operations. The
    restructuring included the sale of assets and reconfiguration of
    facilities, and certain employee costs. The provision for such
    restructuring was $190 million. The above transactions resulted in a net
    pre-tax gain of $222 million.
 
                         DESCRIPTION OF DEBT SECURITIES
 
     The Debt Securities may be issued in one or more series under an Indenture,
dated as of October 2, 1990 (the "Indenture"), between the Company and
Continental Bank, N.A., as Trustee (the "Trustee"). A copy of the Indenture is
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Indenture, including the definition
therein of certain capitalized terms not defined herein.
 
                                        4
   38
 
GENERAL
 
     The Indenture does not limit the aggregate principal amount of Debt
Securities which can be issued thereunder and provides that Debt Securities of
any series may be issued thereunder up to the aggregate principal amount which
may be authorized from time to time by the Company. The Indenture does not limit
the aggregate principal amount of other indebtedness or securities which may be
issued by the Company. All Debt Securities will be unsecured and will rank PARI
PASSU with all other unsecured and unsubordinated indebtedness of the Company,
provided that such other unsecured and unsubordinated indebtedness may contain
covenants, events of default and other provisions which are different from or
which are not contained in the Debt Securities.
 
     Reference is made to the Prospectus Supplement for the following terms of
each series of Debt Securities in respect of which this Prospectus is being
delivered: (1) designation and aggregate principal amount and authorized
denominations of such Debt Securities; (2) the purchase price of such Debt
Securities (expressed as a percentage of the principal amount thereof); (3) the
date or dates on which such Debt Securities will mature or the method of
determining such date or dates; (4) the rate or rates (which may be fixed or
variable) at which such Debt Securities will bear interest, if any, or the
method of calculating such rate or rates, and the date, dates, or the method of
determining such date or dates, from which such interest, if any, will accrue;
(5) the date or dates on which any such interest will be payable and the record
date or dates therefore; (6) the currency, currencies or composite currencies
for which such Debt Securities may be purchased and/or in which principal and
interest, premium, and Additional Amounts (as defined below), if any, will or
may be payable; (7) whether such Debt Securities may be issued in temporary or
permanent global form and, if so, the initial Depositary with respect to such
global Debt Security; (8) the person to whom any interest on a Registered
Security is payable, if other than the registered holder thereof, or the manner
in which any interest is payable on a Bearer Security if other than upon
presentation of the coupons pertaining thereto, as the case may be; (9) whether
and under what circumstances the Company will pay additional amounts
("Additional Amounts") in respect of such Debt Securities held by a person who
is not a United States Person (as defined in the Prospectus Supplement, as
applicable) in respect of specified taxes, assessments or other governmental
charges and whether the Company has the option to redeem the affected Debt
Securities rather than pay such Additional Amounts; (10) the terms of any
mandatory or optional redemption (including any sinking fund) and any
remarketing arrangements related thereto; (11) any addition to, or modification
or deletion of, any Event of Default or any covenant specified in the Indenture
with respect to such Debt Securities; (12) if other than the principal amount
thereof, the portion of the principal amount of such Debt Securities which will
be payable upon declaration of the acceleration of the maturity thereof or the
method by which such portion shall be determined; and (13) any other specified
terms of such Debt Securities.
 
     Principal, interest and premium and Additional Amounts, if any, will be
payable in the manner, at the places and subject to the restrictions set forth
in the Indenture, the Debt Securities and the Prospectus Supplement relating
thereto.
 
     Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities will be issued in fully registered form without coupons. Where Debt
Securities of any series are issued in bearer form, the special restrictions and
considerations, including special offering restrictions and special Federal
income tax considerations, applicable to any such Debt Securities and to payment
on and transfer and exchange of such Debt Securities will be described in the
applicable Prospectus Supplement.
 
     Debt Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. Certain Federal income tax consequences and
special considerations applicable to any such Debt Securities will be described
in the applicable Prospectus Supplement.
 
     If the purchase price of any Debt Securities is payable in one or more
foreign currencies or currency units or if any Debt Securities are denominated
in one or more foreign currencies or currency units or if the principal of,
premium, if any, or interest, if any, on any Debt Securities is payable in one
or more foreign currencies or currency units, the restrictions, elections,
certain Federal income tax considerations, specific
 
                                        5
   39
 
terms and other information with respect to such issue of Debt Securities and
such foreign currency or currency units will be set forth in the applicable
Prospectus Supplement.
 
     Debt Securities may be presented for exchange, and registered Debt
Securities may be presented for transfer, in the manner, at the places and
subject to the restrictions set forth in the Indenture, the Debt Securities and
the Prospectus Supplement relating thereto. Debt Securities in bearer form and
the coupons, if any, appertaining thereto will be transferable by delivery. No
service charge will be made for any transfer or exchange of Debt Securities, but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. (SECTION 2.9)
 
     Unless otherwise indicated in the applicable Prospectus Supplement, the
covenants contained in the Indenture and the Debt Securities would not
necessarily afford holders of the Debt Securities protection in the event of a
highly leveraged or other transaction involving the Company that may adversely
affect holders.
 
FORM, REGISTRATION, TRANSFER AND EXCHANGE
 
     The Debt Securities of a series may be issued solely as Registered
Securities, solely as Bearer Securities (with or without coupons attached) or as
both Registered Securities and Bearer Securities. Debt Securities of a series
may be issuable in whole or part in the form of one or more global Debt
Securities, as described below under "Global Securities."
 
     Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor. In addition, if Debt Securities of
any series are issuable as both Registered Securities and as Bearer Securities,
at the option of the holder, subject to the terms of the Indenture, Bearer
Securities (accompanied by all unmatured coupons, except as provided below, and
all matured coupons in default) of such series will be exchangeable for
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor. Unless otherwise indicated in the
applicable Prospectus Supplement, any Bearer Security surrendered in exchange
for a Registered Security between a record date or a special record date for
defaulted interest and the relevant date for payment of interest will be
surrendered without the coupon relating to such date for payment of interest and
interest will not be payable in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the holder of
such coupon when due in accordance with the terms of the Indenture. Bearer
Securities will not be issued in exchange for Registered Securities. (SECTION
2.9)
 
     Debt Securities may be presented for exchange as provided above, and unless
otherwise indicated in the applicable Prospectus Supplement, Registered
Securities may be presented for registration of transfer (duly endorsed, or
accompanied by a duly executed written instrument of transfer), at the office of
any transfer agent designated by the Company for such purpose with respect to
any series of Debt Securities and referred to in the applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. Such transfer or exchange
will be effected upon such transfer agent being satisfied with the documents of
title and identity of the person making the request. The Company may at any time
rescind the designation of any transfer agent except that the Company will be
required to maintain a transfer agent in New York, New York or Chicago, Illinois
for each series of Debt Securities. The Company may at any time designate
additional transfer agents with respect to any series of Debt Securities.
(SECTION 3.2)
 
     In the event of any redemption of Debt Securities of any series, the
Company will not be required to (i) register the transfer of or exchange Debt
Securities of that series during a period of 15 days next preceding the mailing
of the relevant notice of redemption or the first publication of the relevant
notice of redemption, as the case may be; (ii) register the transfer of or
exchange any Registered Security, or portion thereof, called for redemption,
except the unredeemed portion of any Registered Security being redeemed in part;
or (iii) exchange any Bearer Security called for redemption, except to exchange
such Bearer Security for a Registered Security of that series and of like tenor
and principal amount that is immediately surrendered for redemption. (SECTION
2.9)
 
                                        6
   40
 
PAYMENT AND PAYING AGENTS
 
     Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of and interest, if any, on Registered Securities will be made at
the office of such paying agent or paying agents as the Company may designate
from time to time, except that at the option of the Company payment of any
interest may be made (i) by check mailed to the address of the Person entitled
thereto as such address shall appear in the Debt Security register or (ii) by
wire transfer to an account maintained by the Person entitled thereto as
specified in the Debt Security register. Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any installment of interest on
Registered Securities will be made to the Person in whose name such Registered
Security is registered at the close of business on the record date for such
interest.
 
     Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of and interest, if any, on Bearer Securities will be payable,
subject to any applicable laws and regulations, at the offices of such paying
agents outside the United States as the Company may designate from time to time,
or by check or by transfer to an account maintained by the payee outside the
United States. Unless otherwise indicated in the applicable Prospectus
Supplement, any payment of interest on any Bearer Securities will be made only
against surrender of the coupon relating to such interest installment.
 
     Any paying agents in or outside the United States initially designated by
the Company for the Debt Securities will be named in the applicable Prospectus
Supplement. The Company may at any time designate additional paying agents or
rescind the designation of any paying agent except that, if Debt Securities of a
series are issuable only as Registered Securities, the Company will be required
to maintain a paying agent in New York, New York or Chicago, Illinois for such
series and, if Debt Securities of a series are issuable as Bearer Securities,
the Company will be required to maintain (i) a paying agent in New York, New
York, or Chicago, Illinois, for payments with respect to any Registered
Securities of the series (and for payments with respect to Bearer Securities of
the series in the circumstances described in the Indenture, but not otherwise),
and (ii) a paying agent in a city located outside the United States where Debt
Securities of such series and any related coupons may be presented and
surrendered for payment (including any city in which such agency is required to
be maintained under the rules of any stock exchange on which the Debt Securities
of such series are listed). (SECTION 3.2)
 
     All monies paid by the Company to a paying agent for the payment of
principal of or interest, if any, on any Debt Security which remain unclaimed at
the end of two years after such principal or interest shall have become due and
payable will be repaid to the Company and the holder of such Debt Security or
any coupon will thereafter look only to the Company for payment thereof.
(SECTION 10.5)
 
GLOBAL SECURITIES
 
     The Debt Securities of a series may be issued in whole or in part in global
form. A Debt Security in global form will be deposited with, or on behalf of, a
Depositary, which will be identified in the applicable Prospectus Supplement. A
global Debt Security may be issued in either registered or bearer form and in
either temporary or permanent form. A Debt Security in global form may not be
transferred except as a whole by the Depositary for such Debt Security to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor of such Depositary or a nominee of such successor. If any Debt
Securities of a series are issuable in global form, the applicable Prospectus
Supplement will describe the circumstances, if any, under which beneficial
owners of interests in any such global Debt Security may exchange such interests
for definitive Debt Securities of such series and of like tenor and principal
amount in any authorized form and denomination, the manner of payment of
principal of and interest, if any, on any such global Debt Security and the
specific terms of the depositary arrangement with respect to any such global
Debt Security. (SECTIONS 2.2 AND 2.9)
 
CERTAIN COVENANTS OF THE COMPANY
 
     RESTRICTIONS ON SECURED DEBT. Unless otherwise provided in the Prospectus
Supplement with respect to any series of the Debt Securities, if the Company or
any Domestic Subsidiary (as defined below) shall incur, assume or guarantee any
indebtedness for borrowed money secured by a mortgage, pledge or other lien on
any
 
                                        7
   41
 
Principal Domestic Property (as defined below) or on any shares of stock or debt
of any Domestic Subsidiary, the Company shall secure, or cause such Domestic
Subsidiary to secure, the Debt Securities equally and ratably, with (or prior
to) such indebtedness, unless after giving effect thereto the aggregate amount
of all such indebtedness so secured, together with all Attributable Debt (as
defined below) in respect of sale and leaseback transactions involving Principal
Domestic Properties, would not exceed 10% of the Consolidated Stockholders'
Equity (as defined below) of the Company. This restriction will not apply to,
and there shall be excluded in computing secured indebtedness for the purpose of
such restriction, indebtedness secured by (a) mortgages on property of, or on
any shares of stock or debt of, any corporation existing at the time such
corporation is merged or consolidated with the Company or a Domestic Subsidiary
or at the time of a sale, lease or other disposition of the properties of such
corporation (or a division thereof) as an entirety or substantially as an
entirety to the Company or a Domestic Subsidiary or at the time such corporation
becomes a Domestic Subsidiary, (b) mortgages securing indebtedness of a Domestic
Subsidiary to the Company or to another Domestic Subsidiary, (c) mortgages in
favor of U.S. governmental bodies to secure partial, progress, advance or other
payments, (d) mortgages on property, shares of stock or debt existing at the
time of acquisition thereof (including acquisition through merger or
consolidation), purchase money mortgages and construction cost mortgages, (e)
mortgages existing on the first date on which a Debt Security is authenticated
by the Trustee and (f) any extension, renewal or refunding of any mortgage
referred to in the foregoing clauses (a) through (e), inclusive. (SECTION 3.6)
 
     The term "Subsidiary" of the Company means a corporation a majority of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company and/or one or more subsidiaries of the Company. The term "Domestic
Subsidiary" means a Subsidiary of the Company except a Subsidiary which neither
transacts any substantial portion of its business nor regularly maintains any
substantial portion of its fixed assets within the United States or which is
engaged primarily in financing the operations of the Company and its
Subsidiaries. The term "Principal Domestic Property" means any facility
(together with the land on which it is erected and fixtures comprising a part
thereof) used primarily for manufacturing, processing, or distribution, located
in the United States, owned or leased by the Company or a Subsidiary of the
Company and having a gross book value in excess of 1% of Consolidated
Stockholders' Equity, other than any such facility or portion thereof which, in
the opinion of the Board of Directors of the Company, is not of material
importance to the total business conducted by the Company and its Subsidiaries
as an entirety. The term "Consolidated Stockholders' Equity" means common and
preferred stockholders' equity and minority interests as shown on the
consolidated balance sheet of the Company and its Subsidiaries contained in the
latest quarterly or annual report to the stockholders of the Company prepared in
accordance with generally accepted accounting principles. The term "Attributable
Debt" means the present value (discounted at the applicable rate per annum
compounded annually) of the obligations for rental payments required to be paid
during the remaining terms of any lease. The applicable rate is equal to the
yield to maturity of the U.S. Treasury constant maturity which most closely
approximates the weighted average of the remaining terms of all leases, plus
1.5%.
 
     RESTRICTIONS ON SALES AND LEASEBACKS. Unless otherwise provided in the
Prospectus Supplement with respect to any series of the Debt Securities, neither
the Company nor any Domestic Subsidiary may enter into any sale and leaseback
transaction involving any Principal Domestic Property, the completion of
construction and commencement of full operation of which has occurred more than
120 days prior thereto, unless (a) the Company or such Domestic Subsidiary could
incur a mortgage on such property under the restrictions described above under
"Restrictions on Secured Debt" in an amount equal to the Attributable Debt with
respect to the sale and leaseback transaction without equally ratably securing
the Debt Securities or (b) the Company, within 120 days, applies to the
retirement of its funded debt (defined as indebtedness for borrowed money having
a maturity of, or by its terms extendible or renewable for, a period of more
than 12 months after the date of determination of the amount thereof) an amount
not less than the greater of (i) the net proceeds of the sale of the Principal
Domestic Property leased pursuant to such arrangement or (ii) the fair value of
the Principal Domestic Property so leased (subject to credits for certain
voluntary retirements of funded debt). This restriction will not apply to any
sale and leaseback transaction (a) between the Company and a Domestic Subsidiary
or between Domestic Subsidiaries or (b) involving the taking back of a lease for
a period of less than five years. (SECTION 3.7)
 
                                        8
   42
 
EVENTS OF DEFAULT
 
     As to any series of Debt Securities, an Event of Default is defined in the
Indenture as being: (a) default for 30 days in payment of any interest or
Additional Amounts on the Debt Securities of such series; (b) default in payment
of principal or premium, if any, on the Debt Securities of such series when due
either at maturity, upon redemption, by declaration or otherwise (except a
failure to make payment resulting from mistake, oversight or transfer
difficulties not continuing for more than 3 Business Days beyond the date on
which such payment is due); (c) default in payment of any sinking fund
installment when due and payable (except a failure to make payment resulting
from mistake, oversight or transfer difficulties not continuing for more than 3
Business Days beyond the date on which such payment is due); (d) default by the
Company in the performance of any other covenant or warranty contained in the
Debt Securities of such series or in the Indenture for the benefit of such
series for a period of 90 days after notice thereof; or (e) certain events in
bankruptcy or insolvency of the Company. (SECTION 5.1)
 
     The Indenture provides that (1) if an Event of Default described in clause
(a), (b), (c) or, in the event of a default with respect to less than all
outstanding series, (d) above shall have occurred and be continuing with respect
to one or more series, either the Trustee or the holders of 25 percent in
principal amount of the Debt Securities of such series then outstanding (each
such series voting as a separate class) may declare the principal (or, in the
case of original issue discount Debt Securities, the portion thereof specified
in the terms thereof) of all outstanding Debt Securities of such series and the
interest accrued thereon and Additional Amounts payable in respect thereof, if
any, to be due and payable immediately and (2) if an Event of Default described
in clause (d) (in the event of a default with respect to all outstanding series)
or (e) above shall have occurred and be continuing, either the Trustee or the
holders of 25 percent in principal amount of all Debt Securities then
outstanding (voting as one class) may declare the principal (or, in the case of
original issue discount Debt Securities, the portion of the principal amount
thereof specified in the terms thereof) of all Debt Securities then outstanding
and the interest accrued thereon and Additional Amounts payable in respect
thereof, if any, to be due and payable immediately, but upon certain conditions
such declarations may be annulled and past defaults (except for defaults in the
payment of principal of, or premium, interest or Additional Amounts, if any, on
such Debt Securities) may be waived by the holders of a majority in principal
amount of the Debt Securities of such series (or of all series, as the case may
be) then outstanding. (SECTIONS 5.1 AND 5.10)
 
MODIFICATION OF THE INDENTURE
 
     The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than 50% in principal amount of the
Debt Securities at the time outstanding in each series affected by such
modifications, to modify the Indenture or any supplemental indenture or the
rights of the holders of such Debt Securities; provided that no such
modification shall (i) extend the final maturity of any Debt Security, or reduce
the principal amount thereof or any premium thereon, or reduce the rate or
extend the time of payment of any interest or Additional Amounts thereon, or
reduce any amount payable upon redemption thereof, or reduce the portion of the
principal amount of an original issue discount Debt Security due and payable
upon acceleration of the maturity thereof or the portion of the principal amount
thereof provable in bankruptcy or impair or affect the right of a holder to
institute suit for the payment thereof or the right of repayment, if any, at the
option of the holder of a Debt Security, or make the principal of, or interest,
premium or Additional Amounts, if any, on, any Debt Security payable in any
coin, currency or currency unit other than that provided in such Debt Security,
without the consent of the holder of each Debt Security so affected, or (ii)
reduce the aforesaid percentage of Debt Securities of any series, the consent of
the holders of which is required for any such modification, without the consent
of the holder of each Debt Security so affected. (SECTION 8.2)
 
     The Indenture also permits the Company and the Trustee to amend the
Indenture in certain circumstances without the consent of the holders of Debt
Securities to evidence the merger of the Company or the replacement of the
Trustee and for certain other purposes. (SECTION 8.1)
 
                                        9
   43
 
DEFEASANCE
 
     Unless otherwise specified in an applicable Prospectus Supplement, if the
Company deposits or causes to be deposited with the Trustee as trust funds in
trust an amount in money or the equivalent in securities of the government which
issued the currency in which the Debt Securities are denominated or government
agencies backed by the full faith and credit of such government sufficient to
pay the principal of, and premium, interest and Additional Amounts, if any, on
an outstanding series of Debt Securities on the dates which such payments are
due (which includes optional and mandatory redemption dates, but not dates upon
which a payment is due by reason of acceleration), then the Indenture will cease
to be of further effect with respect to such series (except for certain
obligations to register the transfer of or exchange Debt Securities, replace
stolen, lost or mutilated Debt Securities, maintain paying agencies and hold
monies for payment in trust and except for the Company's obligations to
compensate, reimburse and indemnify the Trustee pursuant to the Indenture with
respect to such series), and the Company will be deemed to have satisfied and
discharged the Indenture with respect to such series (SECTION 10.1). In the
event of any such defeasance, holders of such Debt Securities would be able to
look only to such trust fund for payment of principal of, and premium, interest
and Additional Amounts, if any, on their Debt Securities until maturity.
 
     Such defeasance could be treated as a redemption of the Debt Securities of
that series prior to maturity in exchange for the property deposited in trust.
In such event, each holder would generally recognize, at the time of defeasance,
gain or loss measured by the difference between the amount of any cash and the
fair market value of any property deemed received and the holder's tax basis in
the Debt Securities deemed surrendered. Thereafter, each holder would be treated
as if it held an undivided interest in the cash and the property held in trust.
Each holder would generally be subject to tax liability in respect of interest
income and would recognize any gain or loss upon any disposition, including
redemption, of the assets held in trust. Although tax might be owed, the holder
of a defeased Debt Security would not receive cash (except for current payments
of interest on the Debt Securities) until the maturity or earlier redemption of
the Debt Securities. Such tax treatment could affect the purchase price that a
holder would receive upon the sale of the Debt Securities.
 
CONCERNING THE TRUSTEE
 
     Continental Bank, N.A. is depositary for funds of, provides a bank line of
credit to, and performs other services for, the Company and its Subsidiaries in
the normal course of business.
 
                          DESCRIPTION OF DEBT WARRANTS
 
     The Company may issue, together with other Securities or separately, Debt
Warrants for the purchase of Debt Securities. The Debt Warrants are to be issued
under Debt Warrant Agreements (each a "Debt Warrant Agreement") to be entered
into between the Company and a bank or trust company, as Debt Warrant Agent (the
"Debt Warrant Agent"), all as set forth in the Prospectus Supplement relating to
Debt Warrants in respect of which this Prospectus is being delivered. A copy of
the form of Debt Warrant Agreement, including the form of Warrant Certificates
representing the Debt Warrants (the "Debt Warrant Certificates"), reflecting the
alternative provisions to be included in the Debt Warrant Agreements that will
be entered into with respect to particular offerings of Debt Warrants, is filed
as an exhibit to the Registration Statement. The following summaries of certain
provisions of the Debt Warrant Agreement and the Debt Warrant Certificates do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Debt Warrant Agreement and
the Debt Warrant Certificates, respectively, including the definitions therein
of certain capitalized terms not defined herein.
 
GENERAL
 
     Reference is made to the Prospectus Supplement for the terms of Debt
Warrants in respect of which this Prospectus is being delivered, the Debt
Warrant Agreement relating to such Debt Warrants and the Debt Warrant
Certificates representing such Debt Warrants, including the following: (1) the
designation, aggregate principal amount and terms of the Debt Securities
purchasable upon exercise of such Debt Warrants and the procedures and
conditions relating to the exercise of such Debt Warrants; (2) the designation
and terms of
 
                                       10
   44
 
any related Debt Securities with which such Debt Warrants are issued and the
number of such Debt Warrants issued with each such Debt Security; (3) the date,
if any, on and after which such Debt Warrants and the related Debt Securities
will be separately transferable; (4) the principal amount of Debt Securities
purchasable upon exercise of each Debt Warrant and the price at which such
principal amount of Debt Securities may be purchased upon such exercise; (5) the
date on which the right to exercise such Debt Warrants shall commence and the
date on which such right shall expire (the "Expiration Date"); (6) if the Debt
Securities purchasable upon exercise of such Debt Warrants are original issue
discount Debt Securities, a discussion of Federal income tax considerations
applicable thereto; and (7) whether the Debt Warrants represented by the Debt
Warrant Certificates will be issued in registered or bearer form, and, if
registered, where they may be transferred and registered.
 
     Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Debt Warrant Agent or any other office
indicated in the Prospectus Supplement. Prior to the exercise of their Debt
Warrants, holders of Debt Warrants will not have any of the rights of holders of
the Debt Securities purchasable upon such exercise and will not be entitled to
payments of principal of (and premium, if any) or interest, if any, on the Debt
Securities purchasable upon such exercise.
 
EXERCISE OF DEBT WARRANTS
 
     Each Debt Warrant will entitle the holder to purchase for cash such
principal amount of Debt Securities at such exercise price as shall in each case
be set forth in, or be determinable as set forth in, the Prospectus Supplement
relating to the Debt Warrants offered thereby. Debt Warrants may be exercised at
any time up to the close of business on the Expiration Date set forth in the
applicable Prospectus Supplement. After the close of business on the Expiration
Date, unexercised Debt Warrants will become void.
 
     Debt Warrants may be exercised as set forth in the Prospectus Supplement
relating to the Debt Warrants in respect of which this Prospectus is being
delivered. Upon receipt of payment and the Debt Warrant Certificate properly
completed and duly executed at the corporate trust office of the Debt Warrant
Agent or any other office indicated in the Prospectus Supplement, the Company
will, as soon as practicable, forward the Debt Securities purchasable upon such
exercise. If less than all of the Debt Warrants represented by such Debt Warrant
Certificate are exercised, a new Debt Warrant Certificate will be issued for the
remaining amount of Debt Warrants.
 
                DESCRIPTION OF COMMON STOCK AND PREFERRED STOCK
 
     The Company may issue, separately or together with or upon the conversion
of or exchange for other Securities, Common Stock and Preferred Stock, all as
set forth in the accompanying Prospectus Supplement relating to the Common Stock
or Preferred Stock in respect of which this Prospectus is being delivered. The
following summaries do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, the following documents: (i) the
Company's Articles of Restatement of Charter, as supplemented to date (the
"Articles"), (ii) the Company's By-Laws, as amended to date (the "By-Laws"),
(iii) the Rights Agreement, as amended, between the Company and First National
Bank of Chicago, as Rights Agent (the "Rights Agreement"), pursuant to which
shares of Series A Junior Participating Preferred Stock are issuable ("Junior
Participating Preferred Stock") and (iv) in the case of Preferred Stock, the
Articles Supplementary relating to such Preferred Stock. A copy of each of the
Articles, By-Laws and Rights Agreement is filed, and in the case of an offering
of Preferred Stock, the Articles Supplementary relating to such series of
Preferred Stock will be filed, as an exhibit to the Registration Statement.
 
     The authorized capital stock of the Company consists of (i) 600,000,000
shares of Common Stock, par value $1.33 1/3 per share, of which as of December
1, 1993, approximately 488,567,056 shares were outstanding, (ii) 1,500,000
shares of Convertible Adjustable Preferred Stock, without par value (the
"CAPS"), of which as of December 1, 1993, no shares were outstanding, and (iii)
12,000,000 shares of Unclassified Preferred Stock, of which as of December 1,
1993, (a) 3,000,000 shares were classified as Junior Participating Preferred
Stock, none of which were outstanding, (b) 4,717,064 shares were classified as
Series A ESOP Convertible
 
                                       11
   45
 
Preferred Stock (the "ESOP Preferred"), 4,717,064 shares of which were
outstanding, (c) 3,000 shares were classified as Auction Preferred Stock (the
"APS"), 3,000 shares of which were outstanding, and (d) 4,279,936 shares
remained unclassified.
 
COMMON STOCK
 
     GENERAL. Holders of shares of Common Stock are entitled to receive
dividends when, as and if declared by the Board of Directors out of funds
legally available therefore, subject to the rights of holders of any outstanding
shares of Preferred Stock. In the event of any liquidation, dissolution or
winding up of the Company, holders of shares of Common Stock are entitled to
receive ratably all assets of the Company remaining after satisfaction of all
preferences of any outstanding Preferred Stock and all other liabilities.
 
     Holders of Common Stock are entitled to one vote per share in the election
of directors and on any question arising at any stockholders' meeting. Holders
of Common Stock vote as a single class, provided that the ESOP Preferred does
vote, and certain other series of Preferred Stock may vote, together with the
Common Stock as a single class, and provided further that under certain
circumstances as provided by law, the Articles or the applicable Articles
Supplementary, certain series of Preferred Stock may vote as a separate class or
classes. The Common Stock does not have cumulative voting rights, and no holder
of Common Stock, solely by virtue of such holdings, has or will have, any
pre-emptive right to subscribe for or purchase any shares of any class of stock
which is now or may hereafter be authorized or issued. All of the outstanding
shares of Common Stock of the Company are fully paid and non-assessable.
 
     PREFERRED STOCK PURCHASE RIGHTS. One-fourth of a Preferred Stock Purchase
Right (a "Right") is associated and trades with each outstanding share of Common
Stock. As long as the Rights are associated with the Common Stock, each new
share of Common Stock issued by the Company, including any shares of Common
Stock offered hereby, will include one-fourth of a Right (subject to
adjustment). Upon the occurrence of certain events, each Right will entitle its
holder to purchase one one-hundredth of a share of Junior Participating
Preferred Stock for $140 (subject to antidilution provisions). The Rights will
become exercisable ten days after any person or group announces its beneficial
ownership of 20% or more of the Common Stock, or ten business days after a
person or group announces an offer for 25% or more of the Common Stock. If the
Rights become exercisable, each Right will entitle its holder (except the
acquiring party) to buy Common Stock of the Company having a market value of two
times the exercise price of the Right. If after the Rights become exercisable
the Company is involved in a merger or sells more than 50% of its assets, each
Right will entitle its holder to buy common stock of the surviving entity having
a market value of two times the exercise price of the Right. The Company has the
right to redeem the Rights for $.01 per Right prior to the time that they become
exercisable. The Rights expire on May 31, 1998.
 
PREFERRED STOCK
 
     GENERAL. Under the Company's Articles, the Board of Directors is authorized
to issue from time to time up to 1,500,000 shares of CAPS and 12,000,000 shares
of Unclassified Preferred Stock. Of such Unclassified Preferred Stock, 3,000,000
shares, approximately 4,717,064 shares and 3,000 shares are currently classified
as Junior Participating Preferred Stock, ESOP Preferred and APS, respectively.
The remaining approximately 4,279,936 shares of Unclassified Preferred Stock may
be classified and issued by the Company on such terms as the Board of Directors
or a duly authorized committee thereof may determine, all without further action
of the Company's stockholders, including the holders of outstanding Preferred
Stock. Reference is made to the applicable Prospectus Supplement for the terms
of any series of Preferred Stock and the Articles Supplementary establishing
such series of Preferred Stock in respect of which this Prospectus is being
delivered, including the specific title and stated value, dividend, liquidation,
redemption, voting and other rights with respect to such series of Preferred
Stock.
 
     No holder of Preferred Stock, solely by virtue of such holdings, has or
will have any pre-emptive right to subscribe for or purchase any shares of any
class of stock which is now or may hereafter be authorized or issued. All of the
outstanding shares of Preferred Stock of the Company are fully paid and
non-assessable.
 
                                       12
   46
 
     LIQUIDATION PREFERENCE. Unless otherwise specified in the applicable
Prospectus Supplement, upon any liquidation, dissolution or winding up of the
Company whether voluntary or involuntary, the holders of any series of Preferred
Stock in respect of which this Prospectus is being delivered will have
preference and priority over the Common Stock and any other class of stock or
series of a class of stock of the Company ranking on liquidation junior to such
series of Preferred Stock, for payment out of the assets of the Company or
proceeds thereof, whether from capital or surplus, in the amount set forth in
the applicable Prospectus Supplement. After such payment, the holders of such
series of Preferred Stock will be entitled to no other payments. If, in the case
of any such liquidation, dissolution or winding up of the Company the assets of
the Company or proceeds thereof shall be insufficient to make the full
liquidation payment in respect of such series of Preferred Stock and liquidating
payments on any other series of Preferred Stock ranking as to liquidation on a
parity with such series, then those assets and proceeds will be distributed
among the holders of such series of Preferred Stock and any such other series of
Preferred Stock ratably in accordance with the respective amounts which would be
payable on such shares of such series of Preferred Stock and such other series
of Preferred Stock if all amounts thereon were paid in full. A sale of all or
substantially all of the Company's assets or a consolidation or merger of the
Company with one or more corporations shall not be deemed to be a liquidation,
dissolution or winding up of the Company.
 
     RANKING. Unless otherwise specified in the applicable Prospectus
Supplement, the series of Preferred Stock in respect of which this Prospectus is
being delivered will rank as to dividends and upon liquidation on a parity with
the CAPS and APS, and senior to the ESOP Preferred Stock and the Junior
Participating Preferred Stock.
 
                         DESCRIPTION OF STOCK WARRANTS
 
     The Company may issue, together with other securities or separately, Stock
Warrants for the purchase of Common Stock. The Stock Warrants are to be issued
under Stock Warrant Agreements (each a "Stock Warrant Agreement") to be entered
into between the Company and a bank or trust company, as Stock Warrant Agent
(the "Stock Warrant Agent"), all as set forth in the Prospectus Supplement
relating to Stock Warrants in respect of which this Prospectus is being
delivered. A copy of the form of Stock Warrant Agreement, including the form of
Warrant Certificates representing the Stock Warrants (the "Stock Warrant
Certificates") reflecting the provisions to be included in the Stock Warrant
Agreements that will be entered into with respect to particular offerings of
Stock Warrants, is filed as an exhibit to the Registration Statement. The
following summaries of certain provisions of the Stock Warrant Agreement and the
Stock Warrant Certificates do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, all the provisions of the Stock
Warrant Agreement and the Stock Warrant Certificates, respectively, including
the definitions therein of certain capitalized terms not defined herein.
 
GENERAL
 
     Reference is made to the Prospectus Supplement for the terms of Stock
Warrants in respect of which this Prospectus is being delivered, the Stock
Warrant Agreement relating to such Stock Warrants and the Stock Warrant
Certificates representing such Stock Warrants, including the following: (1) the
offering price of such Stock Warrants, if any; (2) the procedures and conditions
relating to the exercise of such Stock Warrants; (3) the number of shares of
Common Stock purchasable upon exercise of each Stock Warrant and the initial
price at which such shares may be purchased upon exercise; (4) the date on which
the right to exercise such Stock Warrants shall commence and the date on which
such right shall expire (the "Expiration Date"); (5) a discussion of Federal
income tax considerations applicable to the exercise of Stock Warrants; (6) call
provisions of such Stock Warrants, if any; and (7) any other terms of the Stock
Warrants. The shares of Common Stock issuable upon the exercise of the Stock
Warrants will, when issued in accordance with the Stock Warrant Agreement, be
fully paid and nonassessable.
 
     Prior to the exercise of their Stock Warrants, holders of Stock Warrants
will not have any of the rights of holders of the Common Stock purchasable upon
such exercise, and will not be entitled to any dividend payments on the Common
Stock purchasable upon such exercise.
 
                                       13
   47
 
EXERCISE OF STOCK WARRANTS
 
     Each Stock Warrant will entitle the holder to purchase for cash such number
of shares of Common Stock at such exercise price as shall in each case be set
forth in, or be determinable as set forth in, the Prospectus Supplement relating
to the Stock Warrants offered thereby. Unless otherwise specified in the
applicable Prospectus Supplement, Stock Warrants may be exercised at any time up
to the close of business on the Expiration Date set forth in the applicable
Prospectus Supplement. After the close of business on the Expiration Date,
unexercised Stock Warrants will become void.
 
     Stock Warrants may be exercised as set forth in the Prospectus Supplement
relating to the Stock Warrants in respect of which this Prospectus is being
delivered. Upon receipt of payment and the Stock Warrant Certificates properly
completed and duly executed at the corporate trust office of the Stock Warrant
Agent or any other office indicated in the Prospectus Supplement, the Company
will, as soon as practicable, forward a certificate representing the number of
shares of Common Stock purchasable upon such exercise. If less than all of the
Stock Warrants represented by such Stock Warrant Certificate are exercised, a
new Stock Warrant Certificate will be issued for the remaining amount of Stock
Warrants.
 
ANTIDILUTION PROVISIONS
 
     Unless otherwise specified in the applicable Prospectus Supplement, the
exercise price payable and the number of shares purchasable upon the exercise of
each Stock Warrant will be subject to adjustment in certain events, including
(1) the issuance of a stock dividend to holders of Common Stock or a
combination, subdivision or reclassification of Common Stock; (2) the issuance
of rights, warrants or options to all holders of Common Stock entitling the
holders thereof to purchase Common Stock for an aggregate consideration per
share less than the current market price per share of the Common Stock; or (3)
any distribution by the Company to the holders of its Common Stock of evidences
of indebtedness of the Company or of assets (excluding cash dividends or
distributions payable out of capital surplus and dividends and distributions
referred to in (1) above). No fractional shares will be issued upon exercise of
Stock Warrants, but the Company will pay the cash value of any fractional shares
otherwise issuable.
 
                        DESCRIPTION OF CURRENCY WARRANTS
 
     The Company may issue, together with Debt Securities or Debt Warrants or
separately, Currency Warrants either in the form of Currency Put Warrants
entitling the holders thereof to receive from the Company the Cash Settlement
Value in U.S. dollars of the right to sell a specified amount of a specified
foreign currency or currency units for a specified amount of U.S. dollars, or in
the form of Currency Call Warrants entitling the holders thereof to receive from
the Company the Cash Settlement Value in U.S. dollars of the right to purchase a
specified amount of a specified foreign currency or currency units for a
specified amount of U.S. dollars. The spot exchange rate of the applicable Base
Currency, upon exercise, as compared to the U.S. dollar, will determine whether
the Currency Warrants have a Cash Settlement Value on any given day prior to
their expiration.
 
     The Currency Warrants are to be issued under a Currency Warrant Agreement
to be entered into between the Company and a bank or trust company, as Currency
Warrant Agent (the "Currency Warrant Agent"), all as set forth in the applicable
Prospectus Supplement. A copy of the form of Currency Warrant Agreement,
including the forms of global Warrant Certificates representing the Currency Put
Warrants and Currency Call Warrants (the "Currency Warrant Certificates"),
reflecting the provisions to be included in the Currency Warrant Agreement that
will be entered into with respect to particular offerings of Currency Warrants,
is filed as an exhibit to the Registration Statement. The description of the
Currency Warrants contained herein and the following summaries of certain
provisions of the Currency Warrant Agreement and the Currency Warrant
Certificates do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all the provisions of the Currency Warrant
Agreement and the Currency Warrant Certificates, respectively, including the
definitions therein of certain capitalized terms not defined herein.
 
                                       14
   48
 
GENERAL
 
     Reference is made to the Prospectus Supplement for the terms of Currency
Warrants in respect of which this Prospectus is being delivered, the Currency
Warrant Agreement relating to such Currency Warrants and the Currency Warrant
Certificates representing such Currency Warrants, including the following: (1)
whether such Currency Warrants will be Currency Put Warrants, Currency Call
Warrants, or both; (2) the formula for determining the Cash Settlement Value, if
any, of each Currency Warrant; (3) the procedures and conditions relating to the
exercise of such Currency Warrants; (4) the circumstances which will cause the
Currency Warrants to be deemed to be automatically exercised; (5) any minimum
number of Currency Warrants which must be exercised at any one time, other than
upon automatic exercise; and (6) the date on which the right to exercise such
Currency Warrants will commence and the date on which such right will expire
(the "Expiration Date").
 
BOOK-ENTRY PROCEDURES AND SETTLEMENT
 
     Except as may otherwise be provided in the applicable Prospectus
Supplement, the Currency Warrants will be issued in the form of global Currency
Warrant Certificates, registered in the name of a depositary or its nominee.
Holders will not be entitled to receive definitive certificates representing
Currency Warrants. A holder's ownership of a Currency Warrant will be recorded
on or through the records of the brokerage firm or other entity that maintains
such holder's account. In turn, the total number of Currency Warrants held by an
individual brokerage firm for its clients will be maintained on the records of
the depositary in the name of such brokerage firm or its agent. Transfer of
ownership of any Currency Warrant will be effected only through the selling
holder's brokerage firm.
 
EXERCISE OF CURRENCY WARRANTS
 
     Each Currency Warrant will entitle the holder to receive the Cash
Settlement Value of such Currency Warrant on the applicable Exercise Date, in
each case as such terms will be defined in the applicable Prospectus Supplement.
If not exercised prior to 3:00 P.M., New York City time, on the fifth New York
Business Day preceding the Expiration Date, Currency Warrants will be deemed
automatically exercised on the Expiration Date.
 
                              PLAN OF DISTRIBUTION
 
     The Company may sell Securities (i) to or through underwriters or dealers;
(ii) directly to one or more other purchasers; (iii) through agents; or (iv)
through a combination of any such methods of sale. The accompanying Prospectus
Supplement with respect to Offered Securities sets forth the terms of the
offering of such Offered Securities, including the name or names of any
underwriters, dealers or agents, the purchase price of the Offered Securities,
any initial public offering price, any applicable underwriting discounts and
sales agents' commissions and other items constituting underwriters' or agents'
compensation from the Company, any discounts, concessions or commissions allowed
or reallowed or paid by any underwriters to other dealers and any exchange on
which the Offered Securities may be listed. Any initial public offering price
and any discounts or concessions allowed or reallowed or price to dealers may be
changed from time to time. Any discounts or commissions received by underwriters
or agents and any profits on the resale of Securities by them may be deemed to
be underwriting discounts and commissions under the Securities Act of 1933, as
amended (the "Act"). Unless otherwise set forth in the Prospectus Supplement,
the obligations of underwriters to purchase Offered Securities of a particular
series will be subject to certain conditions precedent, and such underwriters
will be obligated to purchase all such Offered Securities, if any are purchased.
Unless otherwise indicated in the Prospectus Supplement, any agent will be
acting on a best efforts basis for the period of its appointment.
 
     Under certain circumstances, the Company may repurchase Offered Securities
and reoffer them to the public as set forth above. The Company may also arrange
for repurchases and resale of such Offered Securities by dealers.
 
                                       15
   49
 
     The Offered Securities may be sold from time to time in one or more
transactions at a fixed price or prices, which may be changed, or at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
 
     If so stated in the Prospectus Supplement, the Company may authorize
underwriters, dealers or other persons acting as the Company's agents to solicit
offers by certain institutions to purchase Debt Securities from the Company at
the offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a future date. Such
contracts will be subject only to those conditions set forth in the Prospectus
Supplement and the Prospectus Supplement will set forth the commission payable
for solicitation of such contracts.
 
     Underwriters and agents who participate in the distribution of the
Securities may be entitled under agreements which may be entered into by the
Company to indemnification from the Company against certain liabilities,
including liabilities under the Act, or to contribution with respect to payments
which the underwriters or agents may be required to make in respect thereof.
Such underwriters and agents may be customers of, engaged in transactions with,
or perform services for the Company in the ordinary course of business.
 
                                 LEGAL OPINIONS
 
     The legality of the Securities offered hereby will be passed upon for the
Company by Gordon H. Newman, Esq., Senior Vice President and General Counsel of
the Company. At November 30, 1993, Mr. Newman was the beneficial owner of
323,248 shares of Common Stock of the Company and held currently exercisable
options to purchase 130,560 additional shares.
 
                                    EXPERTS
 
     The audited consolidated financial statements and schedules of the Company
incorporated by reference in this Prospectus have been audited by Arthur
Andersen & Co., independent public accountants, to the extent and for the
periods indicated in their report with respect thereto, and have been
incorporated by reference in this Prospectus in reliance upon the authority of
said firm as experts in accounting and auditing in giving said reports.
 
                                       16
   50
 
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     NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE ISSUER, BY THE AGENTS OR BY ANY OTHER PERSON. THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON OR BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION MAY NOT
LAWFULLY BE MADE. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR ANY
PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAD BEEN NO CHANGE IN THE
AFFAIRS OF THE ISSUER SINCE THE DATE HEREOF.
 
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                               TABLE OF CONTENTS
 


                                       PAGE
                                       ----
                                    
         PROSPECTUS SUPPLEMENT
Description of Notes.................   S-3
Important Currency Information.......  S-24
Currency Risks.......................  S-24
Certain Federal Tax Consequences.....  S-26
Supplemental Plan of Distribution....  S-32
Legal Opinions.......................  S-33
               PROSPECTUS
Available Information................     2
Incorporation of Certain Documents by
  Reference..........................     3
The Company..........................     4
Use of Proceeds......................     4
Risk Factors Relating to Currencies
  and Currency Warrants..............     4
Ratios...............................     4
Description of Debt Securities.......     4
Description of Debt Warrants.........    10
Description of Common Stock and
  Preferred Stock....................    11
Description of Stock Warrants........    13
Description of Currency Warrants.....    14
Plan of Distribution.................    15
Legal Opinions.......................    16
Experts..............................    16

 
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                                U.S.$400,000,000
 
                                    SARA LEE
                                  CORPORATION
 
                               MEDIUM-TERM NOTES,
                                    SERIES B
 
                            WITH MATURITIES OF NINE
                              MONTHS OR MORE FROM
                                 DATE OF ISSUE
 
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                             PROSPECTUS SUPPLEMENT
 
                               ------------------
 
                              GOLDMAN, SACHS & CO.
                              LAZARD FRERES & CO.
                                LEHMAN BROTHERS
                              SALOMON BROTHERS INC
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