0000912057-01-535682.txt : 20011019
0000912057-01-535682.hdr.sgml : 20011019
ACCESSION NUMBER: 0000912057-01-535682
CONFORMED SUBMISSION TYPE: 424B2
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 20011017
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: DEERE JOHN CAPITAL CORP
CENTRAL INDEX KEY: 0000027673
STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153]
IRS NUMBER: 362386361
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1031
FILING VALUES:
FORM TYPE: 424B2
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-62622
FILM NUMBER: 1760657
BUSINESS ADDRESS:
STREET 1: FIRST INTERSTATE BANK BUILDING
STREET 2: 1 EAST FIRST STREET, SUITE 600
CITY: RENO
STATE: NV
ZIP: 89501
BUSINESS PHONE: (702) 786-5527
MAIL ADDRESS:
STREET 1: ONE JOHN DEERE PLACE
CITY: MOLINE
STATE: IL
ZIP: 61265-8098
FORMER COMPANY:
FORMER CONFORMED NAME: DEERE JOHN CREDIT CO
DATE OF NAME CHANGE: 19890130
424B2
1
a2061320z424b2.txt
424B2
PROSPECTUS SUPPLEMENT
OCTOBER 16, 2001
(TO PROSPECTUS DATED JULY 10, 2001)
$600,000,000
[JOHN DEERE CREDIT LOGO]
JOHN DEERE CAPITAL CORPORATION
5 1/8% NOTES DUE OCTOBER 19, 2006
MATURITY
- The Notes will mature on October 19, 2006.
INTEREST
- Interest on the Notes is payable on April 19 and October 19 of each year,
beginning April 19, 2002.
- Interest will accrue from October 19, 2001.
REDEMPTION
- We cannot redeem the Notes prior to maturity.
- There is no sinking fund.
DELIVERY
- The Notes will be delivered to you in global form through the book-entry
delivery system of The Depository Trust Company on October 19, 2001.
LISTING
- We do not intend to list the Notes on any securities exchange.
RANKING
- The Notes are unsecured. The Notes rank equally with all of John Deere
Capital Corporation (parent company only) existing and future senior debt.
THE COMPANY
- Our principal office is located at 1 East First Street, Reno, Nevada 89501.
Our telephone number is (775) 786-5527.
UNDERWRITERS
- The Underwriters listed below will purchase the Notes from us on a firm
commitment basis and offer them to you, subject to certain conditions.
----------------------------------------------------------------------
PER NOTE TOTAL
-------- -----
Public offering price (1)................................... 99.804% $598,824,000
Underwriting discount....................................... .600% $3,600,000
Our proceeds before expenses................................ 99.204% $595,224,000
------------------------
(1) Plus accrued interest from October 19, 2001, if settlement occurs after that
date
----------------------------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the Notes or determined that this
prospectus supplement or the attached prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
----------------------------------------------------------------------
JOINT BOOK-RUNNING MANAGERS
JPMORGAN MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
CREDIT SUISSE FIRST BOSTON
SALOMON SMITH BARNEY
In making your investment decision, you should rely only on the information
contained or incorporated by reference in this prospectus supplement and the
attached prospectus. We have not authorized anyone to provide you with any other
information. If you receive any unauthorized information, you must not rely on
it.
We are offering to sell the Notes only in places where sales are permitted.
You should not assume that the information contained or incorporated by
reference in this prospectus supplement or the attached prospectus is accurate
as of any date other than its respective date.
TABLE OF CONTENTS
PAGE
PROSPECTUS SUPPLEMENT --------
Use of Proceeds...................... S-3
Description of the Notes............. S-3
Underwriting......................... S-4
Legal Opinions....................... S-5
PROSPECTUS PAGE
----
Where You Can Find More Information.. 2
The Capital Corporation.............. 3
Use of Proceeds...................... 4
Prospectus........................... 4
Prospectus Supplement................ 4
Description of Debt Securities....... 5
Description of Debt Warrants......... 19
Description of Preferred Stock....... 21
Plan of Distribution................. 25
Legal Opinions....................... 26
Experts.............................. 26
S-2
USE OF PROCEEDS
We expect to use the net proceeds from the sale of the Notes to reduce the
amount of our U.S. commercial paper. Before then, we may invest proceeds in
short-term securities. On September 30, 2001, we had outstanding
$1,620.2 million of U.S. commercial paper. This commercial paper bore interest
at discount rates ranging from 2.20% to 4.30% per annum and had a weighted
average maturity of 25 days. We will continue to incur short-term debt,
primarily by issuing commercial paper, to finance our current operations. See
"Use of Proceeds" in the prospectus.
DESCRIPTION OF THE NOTES
The Notes will be senior debt issued under the Indenture dated as of
March 15, 1997 (the "Senior Indenture") between us and The Chase Manhattan Bank,
Senior Trustee. Information about the Senior Indenture and the general terms and
provisions of the Notes is in the prospectus under "Description of Debt
Securities."
We may, without the consent of the Note holders, issue additional Notes
having the same ranking and the same interest rate, maturity and other terms as
the Notes. Any additional Notes and the Notes will constitute a single series
under the Senior Indenture. No additional Notes may be issued if an Event of
Default has occurred and is continuing with respect to the Notes.
In the prospectus, there is a section called "Description of Debt
Securities--Defeasance." This section has provisions on the defeasance and
covenant defeasance of securities issued under the Senior Indenture. These
provisions will apply to the Notes.
The Notes will be issued in book-entry form as one or more Notes registered
in the name of the nominee of The Depository Trust Company ("DTC"), which will
act as a depository. Beneficial interests in book-entry Notes will be shown on,
and transfers of the Notes will be made only through, records maintained by DTC
and its participants. For a more complete description of book-entry debt
securities, see "Description of Debt Securities--Global Securities" in the
prospectus.
PAYMENT OF PRINCIPAL AND INTEREST
The Notes will mature on October 19, 2006 (the "Maturity Date").
The interest rate on the Notes will be 5 1/8% per annum. We will pay
interest in arrears on April 19 and October 19, beginning April 19, 2002.
Interest will accrue from October 19, 2001 or from the most recent interest
payment date to which we have paid or provided for the payment of interest to
the next interest payment date or the scheduled maturity date, as the case may
be. We wil pay interest computed on the basis of a 360-day year of twelve 30-day
months.
We will pay interest on the Notes in immediately available funds to the
persons in whose names the Notes are registered at the close of business on the
April 4 or October 4 preceding the respective interest payment date. At
maturity, we will pay the principal of the Notes in immediately available funds
upon delivery of the Notes to the Senior Trustee.
If an interest payment date or the maturity date is not a "Business Day", we
will pay interest or principal, as the case may be, on the next succeeding
Business Day, but will not pay additional interest. The term "Business Day"
means any day other than a Saturday or Sunday or a day on which applicable law
authorizes or requires banking institutions in The City of New York to close.
REDEMPTION
We will not have the right to redeem the Notes before their scheduled
maturity, and the Note holders will not have the right to require us to redeem
the Notes before their scheduled maturity. We will not make any sinking fund
payments.
S-3
SAME-DAY SETTLEMENT AND PAYMENT
The Notes will trade in DTC's same-day funds settlement system until
maturity or until we issue the Notes in definitive form. DTC will therefore
require trades in the secondary market to settle in immediately available funds.
GOVERNING LAW
The Notes will be governed by and construed in accordance with the laws of
the State of New York.
UNDERWRITING
We and the Underwriters have entered into an Underwriting Agreement relating
to the offering and sale of the Notes. In the Underwriting Agreement, we have
agreed to sell to each Underwriter, and each Underwriter has agreed to purchase
from us, the principal amount of Notes that appears opposite its name in the
table below. The obligations of the Underwriters under the Underwriting
Agreement, including their agreement to purchase Notes from us, are several and
not joint. Those obligations are also subject to the satisfaction of certain
conditions contained in the Underwriting Agreement. The Underwriters have agreed
to purchase all of the Notes if any of them are purchased.
PRINCIPAL
AMOUNT
UNDERWRITER ---------
J.P. Morgan Securities Inc.......................... $210,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................. 210,000,000
Banc of America Securities LLC...................... 72,000,000
Banc One Capital Markets, Inc. ..................... 36,000,000
Credit Suisse First Boston Corporation.............. 36,000,000
Salomon Smith Barney Inc. .......................... 36,000,000
------------
Total..................................... $600,000,000
============
The Underwriters have advised us that they propose to offer the Notes to the
public initially at the public offering price that appears on the cover page of
this prospectus supplement. The Underwriters may offer the Notes to selected
dealers at the public offering price minus a selling concession of up to 0.35%
of the principal amount. In addition, the Underwriters may allow, and those
selected dealers may reallow, a selling concession of up to 0.25% of the
principal amount to certain other dealers. After the initial public offering,
the Underwriters may change the public offering price and any other selling
terms.
In the Underwriting Agreement, we have agreed that:
- we will pay the printing, rating agency, trustee, legal and other expenses
related to this offering, which we estimate will be $350,000; and
- we will indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933.
The Notes are a new issue of securities, and there is currently no
established trading market for the Notes. In addition, we do not intend to apply
for the Notes to be listed on any securities exchange or to arrange for the
Notes to be quoted on any quotation system. The Underwriters have advised us
that they intend to make a market in the Notes, but they are not obligated to do
so. The Underwriters may discontinue any market making in the Notes at any time
in their sole discretion.
S-4
Accordingly, we cannot assure you that a liquid trading market will develop for
the Notes, that you will be able to sell your Notes at a particular time or that
the prices that you receive when you sell will be favorable.
In connection with the offering of the Notes, the Underwriters may engage in
overallotment, stabilizing transactions and syndicate covering transactions in
accordance with Regulation M under the Securities Exchange Act of 1934.
Overallotment involves sales in excess of the offering size, which creates a
short position for the Underwriters. Stabilizing transactions involve bids to
purchase the Notes in the open market for the purpose of pegging, fixing or
maintaining the price of the Notes. Syndicate covering transactions involve
purchases of the Notes in the open market after the distribution has been
completed in order to cover short positions. Stabilizing transactions and
syndicate covering transactions may cause the price of the Notes to be higher
than it would otherwise be in the absence of those transactions. If the
Underwriters engage in stabilizing or syndicate covering transactions, they may
discontinue them at any time.
We and the Underwriters make no representation or prediction as to the
direction or magnitude of any effect that the transactions described in the
preceding two paragraphs may have on the price of the Notes. In addition, we and
the Underwriters make no representation that the Underwriters will engage in
those types of transactions or that those transactions, once commenced, will not
be discontinued without notice.
In the ordinary course of their respective businesses, the Underwriters and
their affiliates have engaged, and may in the future engage, in commercial
banking and/or investment banking transactions with us and our affiliates. They
have received customary fees and commissions for these transactions. Thomas H.
Patrick, a director of Deere & Company, is an Executive Vice President and Chief
Financial Officer of Merrill Lynch & Co., Inc., which is an affiliate of Merrill
Lynch, Pierce, Fenner & Smith Incorporated. John R. Stafford, a director of
Deere & Company, is a director of The Chase Manhattan Corporation and The Chase
Manhattan Bank (the Senior Trustee), which are affiliates of J.P. Morgan
Securities Inc. Antonio Madero B., a director of Deere & Company, is a member of
the International Advisory Council of The Chase Manhattan Corporation.
LEGAL OPINIONS
The validity of the Notes will be passed upon for us by Shearman & Sterling,
599 Lexington Avenue, New York, New York 10022 and for the Underwriters by
Sidley Austin Brown & Wood LLP, 875 Third Avenue, New York, New York 10022.
S-5
JOHN DEERE CAPITAL CORPORATION
-------------------------------
By this prospectus, we offer up to
$3,850,850,000 of--
DEBT SECURITIES
WARRANTS TO PURCHASE DEBT SECURITIES
PREFERRED STOCK
---------------------------------
We will provide the specific terms of these securities in supplements to this
prospectus. You should read this prospectus and the supplements carefully before
you invest.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
------------------------------------------------
[JOHN DEERE CREDIT LOGO]
The date of this prospectus is July 10, 2001
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with the
SEC. You may read and copy any document we file at the SEC's public reference
rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 and in New York, New
York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available to
the public from the SEC's web site at http://www.sec.gov. Some of our debt
securities are listed on the New York Stock Exchange and information about us
also is available at this location.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents that are considered part of this prospectus. Later
information that we file with the SEC will automatically update and supersede
this information. We incorporate by reference the documents listed below and any
future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 until the offering of the particular
securities covered by a prospectus supplement has been completed. This
prospectus is part of a registration statement filed with the SEC.
- Annual Report on Form 10-K for the year ended October 31, 2000.
- Quarterly Reports on Form 10-Q for the quarters ended January 31, 2001 and
April 30, 2001.
- Current Reports on Form 8-K dated November 21, 2000, February 13, 2001 and
May 15, 2001.
You may obtain a copy of these filings at no cost, by writing or telephoning
us at the following address:
John Deere Capital Corporation
1 East First Street, Suite 600
Reno, Nevada 89501
Attn: Manager
(775) 786-5527
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different or additional information. This prospectus is
an offer to sell or to buy only the securities referred to herein, but only
under circumstances and in jurisdictions where it is lawful to do so. The
information contained in this prospectus is current only as of the date hereof.
2
THE CAPITAL CORPORATION
The principal business of John Deere Capital Corporation (Capital
Corporation) and its subsidiaries is providing and administering financing for
retail purchases of new and used equipment manufactured by Deere & Company's
agricultural, commercial and consumer, and construction and forestry equipment
divisions. We purchase retail installment sales and loan contracts (retail
notes) from Deere & Company and its wholly-owned subsidiaries (collectively
called John Deere). John Deere acquires these retail notes through John Deere
retail dealers. We also purchase and finance certain agricultural, construction,
and lawn and grounds care retail notes unrelated to John Deere. In addition, we
purchase and finance recreational product retail notes acquired from dealers. We
also lease equipment to retail customers, finance and service revolving charge
accounts and operating loans acquired from and offered through merchants or farm
input providers in the agricultural, construction, and lawn and grounds care
markets as well as insured international export financing products, and provide
wholesale financing for inventories of John Deere engines and John Deere
agricultural and John Deere construction equipment owned by dealers of those
products.
The Capital Corporation was incorporated under the laws of Delaware and
commenced operations in 1958. At January 1, 2001, we had 1,364 full-time and
part-time employees.
BUSINESS OF JOHN DEERE
John Deere's operations are categorized into four major business segments:
John Deere's worldwide AGRICULTURAL EQUIPMENT segment manufactures and
distributes a full line of farm equipment--including tractors; combine, cotton,
and sugarcane harvesters; tillage, seeding and soil preparation machinery;
sprayers; hay and forage equipment; materials handling equipment; and integrated
precision farming technology.
John Deere's worldwide COMMERCIAL AND CONSUMER EQUIPMENT segment
manufactures and distributes equipment for commercial and residential
uses--including small tractors for lawn, garden, commercial and utility
purposes; riding and walk-behind mowers; golf course equipment; snowblowers;
handheld products such as chain saws, string trimmers and leaf blowers;
skid-steer loaders; utility vehicles; and other outdoor power products.
John Deere's worldwide CONSTRUCTION AND FORESTRY EQUIPMENT segment
manufactures and distributes a broad range of machines used in construction,
earthmoving, material handling and timber harvesting--including backhoe loaders;
crawler dozers and loaders; four-wheel-drive loaders; excavators; motor graders;
articulated dump trucks; forklifts; landscape loaders; and log skidders, feller
bunchers, loaders, forwarders, harvesters and related attachments.
The products produced by the equipment segments are marketed primarily
through retail dealer networks and major retail outlets.
John Deere's CREDIT segment primarily includes the operations of the Capital
Corporation, John Deere Credit Company and John Deere Credit Inc. (Canada), and
primarily finances sales and leases by John Deere dealers of new and used
equipment and sales by non-Deere dealers of recreational products. In addition,
it provides wholesale financing to dealers of the foregoing equipment, provides
operating loans and finances retail revolving charge accounts.
3
USE OF PROCEEDS
Except as may be described otherwise in a prospectus supplement, we will add
the net proceeds from the sale of the securities under this prospectus to our
general funds and will use them for working capital and other general corporate
purposes, including, among other things, the purchase of receivables or other
assets. The net proceeds may be applied initially to the reduction of short-term
indebtedness.
PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process, we may
sell any combination of the following securities in one or more offerings up to
a total dollar amount of $3,850,850,000, or the equivalent thereof if any of the
securities are denominated in a currency, currency unit or composite currency
("currency") other than the U.S. dollar:
- unsecured debt securities ("debt securities"), which may be either senior
(the "senior securities") or subordinated (the "subordinated securities");
- warrants to purchase debt securities ("debt warrants"); or
- shares of our preferred stock ("preferred stock").
The terms of the securities will be determined at the time of offering.
We will refer to the debt securities, debt warrants and preferred stock, or
any combination of those securities, proposed to be sold under this prospectus
and the applicable prospectus supplement as the "offered securities". The
offered securities, together with any debt securities and preferred stock
issuable upon exercise of debt warrants or conversion or exchange of other
offered securities, as applicable, will be referred to as the "securities".
PROSPECTUS SUPPLEMENT
This prospectus provides you with a general description of the debt
securities, warrants to purchase debt securities and preferred stock we may
offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement may also add to, update or change information contained in
this prospectus and, accordingly, to the extent inconsistent, information in
this prospectus is superseded by the information in the prospectus supplement.
You should read both this prospectus and any prospectus supplement together with
the additional information described under the heading "Where You Can Find More
Information".
The prospectus supplement to be attached to the front of this prospectus
will describe: the terms of the securities offered, any initial public offering
price, the price paid to us for the securities, the net proceeds to us, the
manner of distribution and any underwriting compensation and the other specific
material terms related to the offering of these securities.
For more detail on the terms of the securities, you should read the exhibits
filed with or incorporated by reference in our registration statement.
4
DESCRIPTION OF DEBT SECURITIES
We may issue debt securities in one or more distinct series. This section
summarizes the material terms of the debt securities that are common to all
series. Most of the financial terms and other specific material terms of any
series of debt securities that we offer will be described in a prospectus
supplement to be attached to the front of this prospectus. Furthermore, since
the terms of specific debt securities may differ from the general information we
have provided below, you should rely on information in the prospectus supplement
that contradicts different information below.
As required by federal law for all bonds and notes of companies that are
publicly offered, the debt securities are governed by a document called an
"indenture". An indenture is a contract between us and a financial institution
acting as trustee on your behalf. The trustee has two main roles. First, the
trustee can enforce your rights against us if we default. There are some
limitations on the extent to which the trustee acts on your behalf, described in
the second paragraph under "Events of Default--Remedies if an Event of Default
Occurs". Second, the trustee performs certain administrative duties for us.
Senior securities will be issued under an indenture dated as of March 15,
1997, as supplemented from time to time (the "senior indenture"), between us and
The Chase Manhattan Bank, trustee (the "senior trustee"), and subordinated
securities will be issued under an indenture dated as of March 15, 1997, as
supplemented from time to time (the "subordinated indenture"), between us and
Bank One Trust Company, National Association (as successor in interest to The
First National Bank of Chicago), trustee (the "subordinated trustee").
The term "trustee" refers to the senior trustee or the subordinated trustee,
as appropriate. We will refer to the senior indenture and the subordinated
indenture together as the "indentures" and each as an "indenture". The
indentures are subject to and governed by the Trust Indenture Act of 1939, as
amended.
Because this section is a summary, it does not describe every aspect of the
debt securities and the indentures. We urge you to read the indenture that
governs your debt securities because it, and not this description, defines your
rights as a holder of debt securities. For example, in this section, we use
capitalized words to signify terms that are specifically defined in the
indentures. Some of the definitions are repeated in this prospectus, but for the
rest you will need to read the indentures. We have filed the form of each
indenture as an exhibit to a registration statement that we have filed with the
SEC. See "Where You Can Find More Information" on page 2 for information on how
to obtain a copy of the indentures.
GENERAL
The debt securities will be our unsecured obligations. The senior securities
will rank equally with all our other unsecured and unsubordinated indebtedness.
The subordinated securities will be subordinated in right of payment to the
prior payment in full of our Senior Indebtedness as described below under
"Subordinated Indenture Provisions--Subordination".
Each indenture provides that any debt securities proposed to be sold under
this prospectus and the attached prospectus supplement ("offered debt
securities") and any debt securities issuable upon the exercise of debt warrants
or upon conversion or exchange of other offered securities ("underlying debt
securities"), as well as other unsecured debt securities, may be issued under
that indenture in one or more series.
5
You should read the prospectus supplement for the material terms of the
offered debt securities and any underlying debt securities, including the
following:
- The title of the debt securities and whether the debt securities will
be senior securities or subordinated securities.
- The total principal amount of the debt securities and any limit on the
total principal amount of debt securities of the series.
- If not the principal amount of the debt securities, the portion of the
principal amount payable upon acceleration of the maturity of the debt
securities or how this portion will be determined.
- The date or dates, or how the date or dates will be determined or
extended, when the principal of the debt securities will be payable.
- The interest rate or rates, which may be fixed or variable, that the
debt securities will bear, if any, or how the rate or rates will be
determined, the date or dates from which any interest will accrue or
how the date or dates will be determined, the interest payment dates,
any record dates for these payments and the basis upon which interest
will be calculated if other than that of a 360-day year of twelve
30-day months.
- Any optional redemption provisions.
- Any sinking fund or other provisions that would obligate us to
repurchase or otherwise redeem the debt securities.
- The form in which we will issue the debt securities; whether we will
have the option of issuing debt securities in "certificated" form;
whether we will have the option of issuing certificated debt securities
in bearer form if we issue the securities outside the United States to
non-U.S. persons; any restrictions on the offer, sale or delivery of
bearer securities and the terms, if any, upon which bearer securities
of the series may be exchanged for registered securities of the series
and VICE VERSA (if permitted by applicable laws and regulations).
- If other than U.S. dollars, the currency or currencies in which the
debt securities are denominated and/or payable.
- Whether the amount of payments of principal, premium or interest, if
any, on the debt securities will be determined with reference to an
index, formula or other method (which could be based on one or more
currencies, commodities, equity indices or other indices) and how these
amounts will be determined.
- The place or places, if any, other than or in addition to The City of
New York, of payment, transfer, conversion and/or exchange of the debt
securities.
- If other than denominations of $1,000 or any integral multiple in the
case of registered securities issued in certificated form and $5,000 in
the case of bearer securities, the denominations in which the offered
debt securities will be issued.
- The applicability of the provisions of the applicable indenture
described under "defeasance" and any provisions in modification of, in
addition to or in lieu of any of these provisions.
6
- Whether and under what circumstances we will pay additional amounts in
respect of any tax, assessment or governmental charge and, if so,
whether we will have the option to redeem the debt securities rather
than pay the additional amounts (and the terms of this option).
- Any provisions granting special rights to the holders of the debt
securities upon the occurrence of specified events.
- Any changes or additions to the Events of Default or covenants
contained in the applicable indenture.
- Whether the debt securities will be convertible into or exchangeable
for any other securities and the applicable terms and conditions.
- Any other material terms of the debt securities.
For purposes of this prospectus, any reference to the payment of principal
of or premium or interest, if any, on debt securities will include additional
amounts if required by the terms of the debt securities.
Neither indenture limits the amount of debt securities that may be issued
thereunder from time to time. Debt securities issued under an indenture, when a
single trustee is acting for all debt securities issued under the indenture, are
called the "indenture securities". Each indenture also provides that there may
be more than one trustee thereunder, each with respect to one or more different
series of indenture securities. See "Resignation of Trustee" below. At a time
when two or more trustees are acting under either indenture, each with respect
to only certain series, the term "indenture securities" means the one or more
series of debt securities with respect to which each respective trustee is
acting. In the event that there is more than one trustee under either indenture,
the powers and trust obligations of each trustee described in this prospectus
will extend only to the one or more series of indenture securities for which it
is trustee. If two or more trustees are acting under either indenture, then the
indenture securities for which each trustee is acting would be treated as if
issued under separate indentures.
The indentures do not contain any provisions that give you protection in the
event we issue a large amount of debt or we are acquired by another entity.
We refer you to the prospectus supplement for information with respect to
any deletions from, modifications of or additions to the Events of Default or
our covenants that are described below, including any addition of a covenant or
other provision providing event risk or similar protection.
We have the ability to issue indenture securities with terms different from
those of indenture securities previously issued and, without the consent of the
holders thereof, to reopen a previous issue of a series of indenture securities
and issue additional indenture securities of that series unless the reopening
was restricted when that series was created.
CONVERSION AND EXCHANGE
If any debt securities are convertible into or exchangeable for other
securities, the prospectus supplement will explain the terms and conditions of
the conversion or exchange, including the conversion price or exchange ratio (or
the calculation method), the conversion or exchange period (or how the period
will be determined), if conversion or exchange will be mandatory or at the
option of the holder or us, provisions for adjusting the conversion price or the
exchange ratio and provisions affecting conversion or exchange in the event of
the redemption of the underlying debt securities. These terms may also include
provisions under
7
which the number or amount of other securities to be received by the holders of
the debt securities upon conversion or exchange would be calculated according to
the market price of the other securities as of a time stated in the prospectus
supplement.
ISSUANCE OF SECURITIES IN REGISTERED FORM
We may issue the debt securities in registered form, in which case we may
issue them either in book-entry form only or in "certificated" form. Debt
securities issued in book-entry form will be represented by global securities.
We expect that we will usually issue debt securities in book-entry only form
represented by global securities.
We also will have the option of issuing debt securities in non-registered
form as bearer securities if we issue the securities outside the United States
to non-U.S. persons. In that case, the prospectus supplement will set forth the
mechanics for holding the bearer securities, including the procedures for
receiving payments, for exchanging the bearer securities for registered
securities of the same series, and for receiving notices. The prospectus
supplement will also describe the requirements with respect to our maintenance
of offices or agencies outside the United States and the applicable U.S. federal
tax law requirements.
BOOK-ENTRY HOLDERS. We will issue registered debt securities in book-entry
form only, unless we specify otherwise in the applicable prospectus supplement.
This means debt securities will be represented by one or more global securities
registered in the name of a depositary that will hold them on behalf of
financial institutions that participate in the depositary's book-entry system.
These participating institutions, in turn, hold beneficial interests in the debt
securities held by the depositary or its nominee. These institutions may hold
these interests on behalf of themselves or customers.
Under each indenture, only the person in whose name a debt security is
registered is recognized as the holder of that debt security. Consequently, for
debt securities issued in book-entry form, we will recognize only the depositary
as the holder of the debt securities and we will make all payments on the debt
securities to the depositary. The depositary will then pass along the payments
it receives to its participants, which in turn will pass the payments along to
their customers who are the beneficial owners. The depositary and its
participants do so under agreements they have made with one another or with
their customers; they are not obligated to do so under the terms of the debt
securities.
As a result, investors will not own debt securities directly. Instead, they
will own beneficial interests in a global security, through a bank, broker or
other financial institution that participates in the depositary's book-entry
system or holds an interest through a participant. As long as the debt
securities are represented by one or more global securities, investors will be
indirect holders, and not holders, of the debt securities.
STREET NAME HOLDERS. In the future, we may issue debt securities in
certificated form or terminate a global security. In these cases, investors may
choose to hold their debt securities in their own names or in "street name".
Debt securities held in street name are registered in the name of a bank, broker
or other financial institution chosen by the investor, and the investor would
hold a beneficial interest in those debt securities through the account he or
she maintains at that institution.
For debt securities held in street name, we will recognize only the
intermediary banks, brokers and other financial institutions in whose names the
debt securities are registered as the holders of those debt securities and we
will make all payments on those debt securities to them. These institutions will
pass along the payments they receive to their customers who are the beneficial
owners, but only because they agree to do so in their customer agreements or
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because they are legally required to do so. Investors who hold debt securities
in street name will be indirect holders, and not holders, of the debt
securities.
LEGAL HOLDERS. Our obligations, as well as the obligations of the
applicable trustee and those of any third parties employed by us or the
applicable trustee, run only to the legal holders of the debt securities. We do
not have obligations to investors who hold beneficial interests in global
securities, in street name or by any other indirect means. This will be the case
whether an investor chooses to be an indirect holder of a debt security or has
no choice because we are issuing the debt securities only in book-entry form.
For example, once we make a payment or give a notice to the holder, we have
no further responsibility for the payment or notice even if that holder is
required, under agreements with depositary participants or customers or by law,
to pass it along to the indirect holders but does not do so. Similarly, if we
want to obtain the approval of the holders for any purpose (for example, to
amend an indenture or to relieve us of the consequences of a default or of our
obligation to comply with a particular provision of an indenture), we would seek
the approval only from the holders, and not the indirect holders, of the debt
securities. Whether and how the holders contact the indirect holders is up to
the holders.
When we refer to you, we mean those who invest in the debt securities being
offered by this prospectus, whether they are the holders or only indirect
holders of those debt securities. When we refer to your debt securities, we mean
the debt securities in which you hold a direct or indirect interest.
SPECIAL CONSIDERATIONS FOR INDIRECT HOLDERS. If you hold debt securities
through a bank, broker or other financial institution, either in book-entry form
or in street name, we urge you to check with that institution to find out:
- how it handles securities payments and notices,
- whether it imposes fees or charges,
- how it would handle a request for the holders' consent, if ever required,
- whether and how you can instruct it to send you debt securities registered
in your own name so you can be a holder, if that is permitted in the
future for a particular series of debt securities,
- how it would exercise rights under the debt securities if there were a
default or other event triggering the need for holders to act to protect
their interests, and
- if the debt securities are in book-entry form, how the depositary's rules
and procedures will affect these matters.
GLOBAL SECURITIES
WHAT IS A GLOBAL SECURITY? As noted above, we usually will issue debt
securities as registered securities in book-entry form only. A global security
represents one or any other number of individual debt securities. Generally, all
debt securities represented by the same global securities will have the same
terms.
Each debt security issued in book-entry form will be represented by a global
security that we deposit with and register in the name of a financial
institution or its nominee that we select. The financial institution that we
select for this purpose is called the depositary. Unless we specify otherwise in
the applicable prospectus supplement, The Depository Trust Company, New York,
New York, known as DTC, will be the depositary for all debt securities issued in
book-entry form.
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A global security may not be transferred to or registered in the name of
anyone other than the depositary or its nominee, unless special termination
situations arise. We describe those situations below under "Special Situations
when a Global Security Will Be Terminated". As a result of these arrangements,
the depositary, or its nominee, will be the sole registered owner and holder of
all debt securities represented by a global security, and investors will be
permitted to own only beneficial interests in a global security. Beneficial
interests must be held by means of an account with a broker, bank or other
financial institution that in turn has an account with the depositary or with
another institution that has an account with the depositary. Thus, an investor
whose security is represented by a global security will not be a holder of the
debt security, but only an indirect holder of a beneficial interest in the
global security.
SPECIAL CONSIDERATIONS FOR GLOBAL SECURITIES. As an indirect holder, an
investor's rights relating to a global security will be governed by the account
rules of the investor's financial institution and of the depositary, as well as
general laws relating to securities transfers. The depositary that holds the
global security will be considered the holder of the debt securities represented
by the global security.
If debt securities are issued only in the form of a global security, an
investor should be aware of the following:
- An investor cannot cause the debt securities to be registered in his or
her name, and cannot obtain certificates for his or her interest in the
debt securities, except in the special situations we describe below.
- An investor will be an indirect holder and must look to his or her own
bank or broker for payments on the debt securities and protection of his
or her legal rights relating to the debt securities, as we describe under
"Issuance of Securities in Registered Form" above.
- An investor may not be able to sell interests in the debt securities to
some insurance companies and other institutions that are required by law
to own their securities in non-book-entry form.
- An investor may not be able to pledge his or her interest in a global
security in circumstances where certificates representing the debt
securities must be delivered to the lender or other beneficiary of the
pledge in order for the pledge to be effective.
- The depositary's policies, which may change from time to time, will govern
payments, transfers, exchanges and other matters relating to an investor's
interest in a global security. We and the trustee have no responsibility
for any aspect of the depositary's actions or for its records of ownership
interests in a global security. We and the trustee also do not supervise
the depositary in any way.
- If we redeem less than all the debt securities of a particular series
being redeemed, DTC's practice is to determine by lot the amount to be
redeemed from each of its participants holding that series.
- An investor is required to give notice of exercise of any option to elect
repayment of its debt securities, through its participant, to the
applicable trustee and to deliver the related debt securities by causing
its participant to transfer its interest in those debt securities, on
DTC's records, to the applicable trustee.
- DTC requires that those who purchase and sell interests in a global
security deposited in its book-entry system use immediately available
funds. Your broker or bank may also require you to use immediately
available funds when purchasing or selling interests in a global security.
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- Financial institutions that participate in the depositary's book-entry
system, and through which an investor holds its interest in a global
security, may also have their own policies affecting payments, notices and
other matters relating to the debt security. There may be more than one
financial intermediary in the chain of ownership for an investor. We do
not monitor and are not responsible for the actions of any of those
intermediaries.
SPECIAL SITUATIONS WHEN A GLOBAL SECURITY WILL BE TERMINATED. In a few
special situations described below, a global security will be terminated and
interests in it will be exchanged for certificates in non-book-entry form
(certificated securities). After that exchange, the choice of whether to hold
the certificated debt securities directly or in street name will be up to the
investor. Investors must consult their own banks or brokers to find out how to
have their interests in a global security transferred on termination to their
own names, so that they will be holders. We have described the rights of holders
and street name investors under "Holders of Registered Debt Securities" above.
The special situations for termination of a global security are as follows:
- if the depositary notifies us that it is unwilling, unable or no longer
qualified to continue as depositary for that global security, and we do
not appoint another institution to act as depositary within 60 days,
- if we notify the trustee that we wish to terminate that global security,
or
- if an event of default has occurred with regard to the debt securities
represented by that global security and has not been cured or waived; we
discuss defaults later under "Events of Default".
The prospectus supplement may list situations for terminating a global
security that would apply only to the particular series of debt securities
covered by the prospectus supplement. If a global security is terminated, only
the depositary, and not we or the applicable trustee, is responsible for
deciding the names of the institutions in whose names the debt securities
represented by the global security will be registered and, therefore, who will
be the holders of those debt securities.
PAYMENT AND PAYING AGENTS
We will pay interest to the person listed in the applicable trustee's
records as the owner of the debt security at the close of business on a
particular day in advance of each due date for interest, even if that person no
longer owns the debt security on the interest due date. That day, usually about
two weeks in advance of the interest due date, is called the "record date".
Because we will pay all the interest for an interest period to the holders on
the record date, holders buying and selling debt securities must work out
between themselves the appropriate purchase price. The most common manner is to
adjust the sales price of the debt securities to prorate interest fairly between
buyer and seller based on their respective ownership periods within the
particular interest period. This prorated interest amount is called "accrued
interest".
PAYMENTS ON GLOBAL SECURITIES. We will make payments on a global security
in accordance with the applicable policies of the depositary as in effect from
time to time. Under those policies, we will make payments directly to the
depositary, or its nominee, and not to any indirect holders who own beneficial
interests in the global security. An indirect holder's right to those payments
will be governed by the rules and practices of the depositary and its
participants, as described under "What Is a Global Security?".
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PAYMENTS ON CERTIFICATED SECURITIES. We will make payments on a
certificated debt security as follows. We will pay interest that is due on an
interest payment date by check mailed on the interest payment date to the holder
at his or her address shown on the trustee's records as of the close of business
on the regular record date. We will make all payments of principal and premium,
if any, by check at the office of the applicable trustee in New York, NY and/or
at other offices that may be specified in the prospectus supplement or in a
notice to holders, against surrender of the debt security.
Alternatively, if the holder asks us to do so, we will pay any amount that
becomes due on the debt security by wire transfer of immediately available funds
to an account at a bank in New York City, on the due date. To request payment by
wire, the holder must give the applicable trustee or other paying agent
appropriate transfer instructions at least 15 business days before the requested
wire payment is due. In the case of any interest payment due on an interest
payment date, the instructions must be given by the person who is the holder on
the relevant regular record date. Any wire instructions, once properly given,
will remain in effect unless and until new instructions are given in the manner
described above.
PAYMENT WHEN OFFICES ARE CLOSED. If any payment is due on a debt security
on a day that is not a business day, we will make the payment on the next day
that is a business day. Payments made on the next business day in this situation
will be treated under the indentures as if they were made on the original due
date, except as otherwise indicated in the attached prospectus supplement. Such
payment will not result in a default under any debt security or either
indenture, and no interest will accrue on the payment amount from the original
due date to the next day that is a business day.
BOOK-ENTRY AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS
FOR INFORMATION ON HOW THEY WILL RECEIVE PAYMENTS ON THEIR DEBT SECURITIES.
EVENTS OF DEFAULT
You will have rights if an Event of Default occurs in respect of the debt
securities of your series and is not cured, as described later in this
subsection.
WHAT IS AN EVENT OF DEFAULT? The term "Event of Default" in respect of the
debt securities of your series means any of the following:
- We do not pay the principal of, or any premium on, a debt security of the
series on its due date.
- We do not pay interest on a debt security of the series within 30 days of
its due date.
- We do not deposit any sinking fund payment in respect of debt securities
of the series on its due date.
- We remain in breach of a covenant in respect of debt securities of the
series for 60 days after we receive a written notice of default stating we
are in breach. The notice must be sent by either the trustee or holders of
at least 25% of the principal amount of debt securities of the series.
- We file for bankruptcy or certain other events of bankruptcy, insolvency
or reorganization occur.
- Any other Event of Default in respect of debt securities of the series
described in the prospectus supplement occurs.
An Event of Default for a particular series of debt securities does not
necessarily constitute an Event of Default for any other series of debt
securities issued under the same or any other indenture. The trustee may
withhold notice to the holders of debt securities of any
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default, except in the payment of principal, premium or interest, if it
considers the withholding of notice to be in the best interests of the holders.
REMEDIES IF AN EVENT OF DEFAULT OCCURS. If an Event of Default has occurred
and has not been cured, the trustee or the holders of at least 25% in principal
amount of the debt securities of the affected series may declare the entire
principal amount of all the debt securities of that series to be due and
immediately payable. This is called a declaration of acceleration of maturity. A
declaration of acceleration of maturity may be canceled by the holders of a
majority in principal amount of the debt securities of the affected series.
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the applicable indenture at the
request of any holders unless the holders offer the trustee reasonable
protection from expenses and liability (called an "indemnity"). If reasonable
indemnity is provided, the holders of a majority in principal amount of the
outstanding debt securities of the relevant series may direct the time, method
and place of conducting any lawsuit or other formal legal action seeking any
remedy available to the trustee. The trustee may refuse to follow those
directions in certain circumstances. No delay or omission in exercising any
right or remedy will be treated as a waiver of that right, remedy or Event of
Default.
Before you are allowed to bypass your trustee and bring your own lawsuit or
other formal legal action or take other steps to enforce your rights or protect
your interests relating to the debt securities, the following must occur:
- You must give your trustee written notice that an Event of Default has
occurred and remains uncured.
- The holders of at least 25% in principal amount of all outstanding debt
securities of the relevant series must make a written request that the
trustee take action because of the default and must offer reasonable
indemnity to the trustee against the cost and other liabilities of taking
that action.
- The trustee must not have taken action for 60 days after receipt of the
above notice and offer of indemnity.
- The holders of a majority in principal amount of the debt securities must
not have given the trustee a direction inconsistent with the above notice.
However, you are entitled at any time to bring a lawsuit for the payment of
money due on your debt securities on or after the due date.
Holders of a majority in principal amount of the debt securities of the
affected series may waive any past defaults other than
- the payment of principal, any premium or interest or
- in respect of a covenant that cannot be modified or amended without the
consent of each holder.
BOOK-ENTRY AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS
FOR INFORMATION ON HOW TO GIVE NOTICE OR DIRECTION TO OR MAKE A REQUEST OF THE
TRUSTEE AND HOW TO DECLARE OR CANCEL AN ACCELERATION.
Each year, we will furnish to each trustee a written statement of certain of
our officers certifying that to their knowledge we are in compliance with the
applicable indenture and the debt securities, or else specifying any default.
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MERGER OR CONSOLIDATION
Under the terms of the indentures, we are generally permitted to consolidate
or merge with another entity. We are also permitted to sell all or substantially
all of our assets to another entity. However, we may not take any of these
actions unless all the following conditions are met:
- Where we merge out of existence or sell our assets, the resulting entity
must agree to be legally responsible for our obligations under the debt
securities.
- The merger or sale of assets must not cause a default on the debt
securities and we must not already be in default (unless the merger or
sale would cure the default). For purposes of this no-default test, a
default would include an Event of Default that has occurred and has not
been cured, as described under "What Is an Event of Default?" above. A
default for this purpose would also include any event that would be an
Event of Default if the requirements for giving us a notice of default or
our default having to exist for a specific period of time were
disregarded.
- Under the senior indenture, no merger or sale of assets may be made if as
a result any of our property or assets or any property or assets of one of
our Subsidiaries would become subject to any mortgage, lien or other
encumbrance unless either (i) the mortgage, lien or other encumbrance
could be created pursuant to the limitation on liens covenant in the
senior indenture (see "Senior Indenture Provisions--Limitation on Liens"
below) without equally and ratably securing the senior indenture
securities or (ii) the senior indenture securities are secured equally and
ratably with or prior to the debt secured by the mortgage, lien or other
encumbrance.
- We must deliver certain certificates and documents to the trustee.
- We must satisfy any other requirements specified in the prospectus
supplement relating to a particular series of debt securities.
MODIFICATION OR WAIVER
There are three types of changes we can make to either indenture and the
debt securities issued thereunder.
CHANGES REQUIRING YOUR APPROVAL. First, there are changes that we cannot
make to your debt securities without your specific approval. Following is a list
of those types of changes:
- change the stated maturity of the principal of or interest on a debt
security;
- reduce any amounts due on a debt security;
- reduce the amount of principal payable upon acceleration of the maturity
of a security following a default;
- adversely affect any right of repayment at the holder's option;
- change the place (except as otherwise described in the prospectus or
prospectus supplement) or currency of payment on a debt security;
- impair your right to sue for payment;
- adversely affect any right to convert or exchange a debt security in
accordance with its terms;
- modify the subordination provisions in the subordinated indenture in a
manner that is adverse to holders of the subordinated securities;
- reduce the percentage of holders of debt securities whose consent is
needed to modify or amend the applicable indenture;
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- reduce the percentage of holders of debt securities whose consent is
needed to waive compliance with certain provisions of the applicable
indenture or to waive certain defaults;
- modify any other aspect of the provisions of either indenture dealing with
modification and waiver of past defaults, changes to the quorum or voting
requirements or the waiver of certain covenants; and
- change any obligation we have to pay additional amounts.
CHANGES NOT REQUIRING APPROVAL. The second type of change does not require
any vote by the holders of the debt securities. This type is limited to
clarifications and certain other changes that would not adversely affect holders
of the outstanding debt securities in any material respect. We also do not need
any approval to make any change that affects only debt securities to be issued
under either indenture after the change takes effect.
CHANGES REQUIRING MAJORITY APPROVAL. Any other change to either indenture
and the debt securities would require the following approval:
- If the change affects only one series of debt securities, it must be
approved by the holders of a majority in principal amount of that series.
- If the change affects more than one series of debt securities issued under
the same indenture, it must be approved by the holders of a majority in
principal amount of all of the series affected by the change, with all
affected series voting together as one class for this purpose.
In each case, the required approval must be given by written consent.
The holders of a majority in principal amount of all of the series of debt
securities issued under an indenture, voting together as one class for this
purpose, may waive our compliance with some of our covenants in that indenture.
However, we cannot obtain a waiver of a payment default or of any of the matters
covered by the bullet points included above under "--Changes Requiring Your
Approval".
FURTHER DETAILS CONCERNING VOTING. When taking a vote, we will use the
following rules to decide how much principal to attribute to a debt security:
- For original issue discount securities, we will use the principal amount
that would be due and payable on the voting date if the maturity of these
debt securities were accelerated to that date because of a default.
- For debt securities whose principal amount is not known (for example,
because it is based on an index), we will use a special rule for that debt
security described in the prospectus supplement.
- For debt securities denominated in one or more foreign currencies, we will
use the U.S. dollar equivalent.
Debt securities will not be considered outstanding, and therefore not
eligible to vote, if we have deposited or set aside in trust money for their
payment or redemption. Debt securities will also not be eligible to vote if they
have been fully defeased as described later under "Defeasance--Full Defeasance".
We will generally be entitled to set any day as a record date for the
purpose of determining the holders of outstanding indenture securities that are
entitled to vote or take other action under the indentures. If we set a record
date for a vote or other action to be taken by holders of one or more series,
that vote or action may be taken only by persons who are holders of outstanding
indenture securities of those series on the record date and must be taken within
eleven months following the record date.
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BOOK-ENTRY AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS
FOR INFORMATION ON HOW APPROVAL MAY BE GRANTED OR DENIED IF WE SEEK TO CHANGE
THE APPLICABLE INDENTURE OR THE DEBT SECURITIES OR REQUEST A WAIVER.
DEFEASANCE
The following provisions will be applicable to each series of debt
securities unless we state in the applicable prospectus supplement that the
provisions of covenant defeasance and full defeasance will not be applicable to
that series.
COVENANT DEFEASANCE. Under current United States federal tax law, we can
make the deposit described below and be released from some of the restrictive
covenants in the indenture under which the particular series was issued. This is
called "covenant defeasance". In that event, you would lose the protection of
those restrictive covenants but would gain the protection of having money and
government securities set aside in trust to repay your debt securities. If you
hold subordinated securities, you also would be released from the subordination
provisions described under "Subordinated Indenture Provisions--Subordination"
below. In order to achieve covenant defeasance, we must do the following:
- We must deposit in trust for the benefit of all holders of the debt
securities of the particular series a combination of money and United
States government or United States government agency notes or bonds that
will generate enough cash to make interest, principal and any other
payments on the debt securities on their various due dates.
- We must deliver to the trustee a legal opinion of our counsel confirming
that, under current United States federal income tax law, we may make the
above deposit without causing you to be taxed on the debt securities any
differently than if we did not make the deposit and just repaid the debt
securities ourselves at maturity.
- We must deliver to the trustee a legal opinion of our counsel stating that
the above deposit does not require registration by us under the Investment
Company Act of 1940, as amended.
If we accomplish covenant defeasance, you can still look to us for repayment
of the debt securities if there were a shortfall in the trust deposit or the
trustee is prevented from making payment. In fact, if one of the remaining
Events of Default occurred (such as our bankruptcy) and the debt securities
became immediately due and payable, there might be a shortfall. Depending on the
event causing the default, you may not be able to obtain payment of the
shortfall.
FULL DEFEASANCE. If there is a change in United States federal tax law, as
described below, we can legally release ourselves from all payment and other
obligations on the debt securities of a particular series (called "full
defeasance") if we put in place the following other arrangements for you to be
repaid:
- We must deposit in trust for the benefit of all holders of the debt
securities of the particular series a combination of money and United
States government or United States government agency notes or bonds that
will generate enough cash to make interest, principal and any other
payments on the debt securities on their various due dates.
- We must deliver to the trustee a legal opinion confirming that there has
been a change in current United States federal tax law or an Internal
Revenue Service ruling that allows us to make the above deposit without
causing you to be taxed on the debt
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securities any differently than if we did not make the deposit and just
repaid the debt securities ourselves at maturity. Under current United
States federal tax law, the deposit and our legal release from the debt
securities would be treated as though we paid you your share of the cash
and notes or bonds at the time the cash and notes or bonds were deposited
in trust in exchange for your debt securities and you would recognize gain
or loss on the debt securities at the time of the deposit.
- We must deliver to the trustee a legal opinion of our counsel stating that
the above deposit does not require registration by us under the Investment
Company Act of 1940, as amended.
If we ever did accomplish full defeasance, as described above, you would
have to rely solely on the trust deposit for repayment of the debt securities.
You could not look to us for repayment in the unlikely event of any shortfall.
Conversely, the trust deposit would most likely be protected from claims of our
lenders and other creditors if we ever became bankrupt or insolvent. If you hold
subordinated securities, you would also be released from the subordination
provisions described later under "Subordinated Indenture Provisions--
Subordination".
FORM, EXCHANGE AND TRANSFER OF CERTIFICATED REGISTERED SECURITIES
If registered debt securities cease to be issued in book-entry form, they
will be issued:
- only in fully registered certificated form,
- without interest coupons, and
- unless we indicate otherwise in the prospectus supplement, in
denominations of $1,000 and amounts that are multiples of $1,000.
Holders may exchange their certificated securities for debt securities of
smaller denominations or combined into fewer debt securities of larger
denominations, as long as the total principal amount is not changed.
Holders may exchange or transfer their certificated securities at the office
of their trustee. We have appointed the trustee to act as our agent for
registering debt securities in the names of holders transferring debt
securities. We may appoint another entity to perform these functions or perform
them ourselves.
Holders will not be required to pay a service charge to transfer or exchange
their certificated securities, but they may be required to pay any tax or other
governmental charge associated with the transfer or exchange. The transfer or
exchange will be made only if our transfer agent is satisfied with the holder's
proof of legal ownership.
If we have designated additional transfer agents for your debt security,
they will be named in your prospectus supplement. We may appoint additional
transfer agents or cancel the appointment of any particular transfer agent. We
may also approve a change in the office through which any transfer agent acts.
If any certificated securities of a particular series are redeemable and we
redeem less than all the debt securities of that series, we may block the
transfer or exchange of those debt securities during the period beginning 15
days before the day we mail the notice of redemption and ending on the day of
that mailing, in order to freeze the list of holders to prepare the mailing. We
may also refuse to register transfers or exchanges of any certificated
securities selected for redemption, except that we will continue to permit
transfers and exchanges of the unredeemed portion of any debt security that will
be partially redeemed.
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If a registered debt security is issued in book-entry form, only the
depositary will be entitled to transfer and exchange the debt security as
described in this subsection, since it will be the sole holder of the debt
security.
RESIGNATION OF TRUSTEE
Each trustee may resign or be removed with respect to one or more series of
indenture securities provided that a successor trustee is appointed to act with
respect to these series. In the event that two or more persons are acting as
trustee with respect to different series of indenture securities under one of
the indentures, each of the trustees will be a trustee of a trust separate and
apart from the trust administered by any other trustee.
SENIOR INDENTURE PROVISIONS--LIMITATION ON LIENS
We covenant in the senior indenture that neither we nor any of our
subsidiaries will pledge or subject to any lien any of our or their property or
assets unless the indenture securities issued under that indenture are secured
by this pledge or lien equally and ratably with other indebtedness thereby
secured. There are excluded from this covenant liens created to secure
obligations for the purchase price of physical property, liens of a Subsidiary
securing indebtedness owed to us, liens existing on property acquired upon
exercise of rights arising out of defaults on receivables acquired in the
ordinary course of business, sales of receivables accounted for as secured
indebtedness in accordance with generally accepted accounting principles,
certain liens not related to the borrowing of money and other liens not securing
borrowed money aggregating less than $500,000.
SUBORDINATED INDENTURE PROVISIONS--SUBORDINATION
Upon any distribution of our assets upon our dissolution, winding up,
liquidation or reorganization, the payment of the principal of (and premium, if
any) and interest, if any, on the subordinated securities is to be subordinated
to the extent provided in the subordinated indenture in right of payment to the
prior payment in full of all Senior Indebtedness, but our obligation to you to
make payment of the principal of (and premium, if any) and interest, if any, on
the subordinated securities will not otherwise be affected. In addition, no
payment on account of principal (or premium, if any), sinking fund or interest,
if any, may be made on the subordinated securities at any time unless full
payment of all amounts due in respect of the principal (and premium, if any),
sinking fund and interest on Senior Indebtedness has been made or duly provided
for in money or money's worth.
In the event that, notwithstanding the foregoing, any payment by us is
received by the subordinated trustee or the holders of any of the subordinated
securities before all Senior Indebtedness is paid in full, the payment or
distribution must be paid over to the holders of the Senior Indebtedness or on
their behalf for application to the payment of all the Senior Indebtedness
remaining unpaid until all the Senior Indebtedness has been paid in full, after
giving effect to any concurrent payment or distribution to the holders of the
Senior Indebtedness. Subject to the payment in full of all Senior Indebtedness
upon this distribution by us, the holders of the subordinated securities will be
subrogated to the rights of the holders of the Senior Indebtedness to the extent
of payments made to the holders of the Senior Indebtedness out of the
distributive share of the subordinated securities.
By reason of this subordination, in the event of a distribution of our
assets upon our insolvency, certain of our senior creditors may recover more,
ratably, than holders of the subordinated securities. The subordinated indenture
provides that these subordination
18
provisions will not apply to money and securities held in trust under the
defeasance provisions of the subordinated indenture.
Senior Indebtedness is defined in the subordinated indenture as the
principal of (and premium, if any) and unpaid interest on:
- our indebtedness (including indebtedness of others guaranteed by us),
whenever created, incurred, assumed or guaranteed, for money borrowed
(other than the indenture securities issued under the subordinated
indenture and our 8 5/8% Subordinated Debentures due 2019), unless in the
instrument creating or evidencing the same or under which the same is
outstanding it is provided that this indebtedness is not senior or prior
in right of payment to the subordinated securities, and
- renewals, extensions, modifications and refundings of any of this
indebtedness.
If this prospectus is being delivered in connection with the offering of a
series of subordinated securities, the accompanying prospectus supplement will
set forth the approximate amount of our Senior Indebtedness outstanding as of a
recent date.
THE TRUSTEES UNDER THE INDENTURES
The Chase Manhattan Bank and Bank One N.A., an affiliate of Bank One Trust
Company, National Association, are two of a number of banks with which we and
Deere & Company maintain ordinary banking relationships and from which we and
Deere & Company have obtained credit facilities and lines of credit. The Chase
Manhattan Bank also serves as trustee under other indentures under which we or
Deere & Company are the obligor. John R. Stafford, a director of Deere &
Company, is a director of J.P. Morgan Chase & Co., the parent of The Chase
Manhattan Bank. Antonio Madero B., a director of Deere & Company, is a member of
the International Advisory Council of J.P. Morgan Chase & Co.
CERTAIN CONSIDERATIONS RELATING TO FOREIGN CURRENCIES
Debt securities denominated or payable in foreign currencies may entail
significant risks. These risks include the possibility of significant
fluctuations in the foreign currency markets, the imposition or modification of
foreign exchange controls and potential illiquidity in the secondary market.
These risks will vary depending upon the currency or currencies involved and
will be more fully described in the applicable prospectus supplement.
DESCRIPTION OF DEBT WARRANTS
We may issue (either separately or together with other offered securities)
debt warrants to purchase underlying debt securities issued by us ("offered debt
warrants"). We will issue the debt warrants under warrant agreements (each a
"debt warrant agreement") to be entered into between us and a bank or trust
company, as warrant agent (the "debt warrant agent"), identified in the
prospectus supplement.
Because this section is a summary, it does not describe every aspect of the
debt warrants and the debt warrant agreement. We urge you to read the debt
warrant agreement because it, and not this description, defines your rights as a
holder of debt warrants. We have filed the form of debt warrant agreement as an
exhibit to the registration statement that we have filed with the SEC. See
"Where You Can Find More Information" on page 2 for information on how to obtain
a copy of the debt warrant agreement.
19
GENERAL
You should read the prospectus supplement for the material terms of the
offered debt warrants, including the following:
- The title and aggregate number of the debt warrants.
- The title, rank, aggregate principal amount and terms of the underlying
debt securities purchasable upon exercise of the debt warrants.
- The principal amount of underlying debt securities that may be purchased
upon exercise of each debt warrant, and the price or the manner of
determining the price at which this principal amount may be purchased upon
exercise.
- The time or times at which, or the period or periods during which, the
debt warrants may be exercised and the expiration date of the debt
warrants.
- Any optional redemption terms.
- Whether certificates evidencing the debt warrants will be issued in
registered or bearer form and, if registered, where they may be
transferred and exchanged.
- Whether the debt warrants are to be issued with any debt securities or any
other securities and, if so, the amount and terms of these debt securities
or other securities.
- The date, if any, on and after which the debt warrants and these debt
securities or other securities will be separately transferable.
- Any other material terms of the debt warrants.
The prospectus supplement will also contain a discussion of the United
States federal income tax considerations relevant to the offering.
Debt warrant certificates will be exchangeable for new debt warrant
certificates of different denominations. No service charge will be imposed for
any permitted transfer or exchange of debt warrant certificates, but we may
require payment of any tax or other governmental charge payable in connection
therewith. Debt warrants may be exercised and exchanged and debt warrants in
registered form may be presented for registration of transfer at the corporate
trust office of the debt warrant agent or any other office indicated in the
prospectus supplement.
EXERCISE OF DEBT WARRANTS
Each offered debt warrant will entitle the holder thereof to purchase the
amount of underlying debt securities at the exercise price set forth in, or
calculable from, the prospectus supplement relating to the offered debt
warrants. After the close of business on the expiration date, unexercised debt
warrants will be void.
Debt warrants may be exercised by payment to the debt warrant agent of the
applicable exercise price and by delivery to the debt warrant agent of the
related debt warrant certificate, properly completed. Debt warrants will be
deemed to have been exercised upon receipt of the exercise price and the debt
warrant certificate or certificates. Upon receipt of this payment and the
properly completed debt warrant certificates, we will, as soon as practicable,
deliver the amount of underlying debt securities purchased upon exercise.
If fewer than all of the debt warrants represented by any debt warrant
certificate are exercised, a new debt warrant certificate will be issued for the
unexercised debt warrants. The holder of a debt warrant will be required to pay
any tax or other governmental charge that
20
may be imposed in connection with any transfer involved in the issuance of
underlying debt securities purchased upon exercise.
MODIFICATIONS
There are three types of changes we can make to a debt warrant agreement and
the debt warrants issued thereunder.
CHANGES REQUIRING YOUR APPROVAL. First, there are changes that cannot be
made to your debt warrants without your specific approval. Those types of
changes include modifications and amendments that:
- accelerate the expiration date;
- reduce the number of outstanding debt warrants, the consent of the holders
of which is required for a modification or amendment; or
- otherwise materially and adversely affect the rights of the holders of the
debt warrants.
CHANGES NOT REQUIRING APPROVAL. The second type of change does not require
any vote by holders of the debt warrants. This type of change is limited to
clarifications and other changes that would not materially adversely affect the
interests of holders of the debt warrants.
CHANGES REQUIRING A MAJORITY VOTE. Any other change to the debt warrant
agreement and the debt warrants requires a vote in favor by holders of a
majority in number of the then outstanding unexercised debt warrants affected
thereby. Most changes fall into this category.
NO RIGHTS AS HOLDERS OF UNDERLYING DEBT SECURITIES
Before the warrants are exercised, holders of the debt warrants are not
entitled to payments of principal, premium or interest, if any, on the related
underlying debt securities or to exercise any rights whatsoever as holders of
the underlying debt securities.
DESCRIPTION OF PREFERRED STOCK
Under our certificate of incorporation (the "certificate of incorporation"),
we are authorized to adopt resolutions providing for the issuance, in one or
more series, of up to 10,000 shares of preferred stock, $1.00 par value, with
the powers, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions thereof adopted by our
Board of Directors or a duly authorized committee thereof.
Because this section is a summary, it does not describe every aspect of our
preferred stock. We urge you to read our certificate of incorporation and the
certificate of designations creating your preferred stock because they, and not
this description, define your rights as a holder of preferred stock. We have
filed our certificate of incorporation and will file the certificate of
designations with the SEC. See "Where You Can Find More Information" on page 2
for information on how to obtain copies of these documents.
The specific material terms of any preferred stock proposed to be sold under
this prospectus and an attached prospectus supplement will be described in the
prospectus supplement. If so indicated in the prospectus supplement, the terms
of the offered preferred stock may differ from the terms set forth below.
21
GENERAL
Unless otherwise specified in the prospectus supplement relating to the
offered preferred stock, each series of preferred stock will rank on a parity as
to dividends and distribution of assets upon liquidation and in all other
respects with all other series of preferred stock. The preferred stock will,
when issued, be fully paid and nonassessable and holders thereof will have no
preemptive rights.
You should read the prospectus supplement for the material terms of the
preferred stock offered thereby, including the following:
- The title and stated value of the preferred stock.
- The number of shares of the preferred stock offered, the liquidation
preference per share and the offering price of the preferred stock.
- The dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to the preferred stock.
- The date from which dividends on the preferred stock will accumulate, if
applicable.
- The liquidation rights of the preferred stock.
- The procedures for any auction and remarketing, if any, of the preferred
stock.
- The sinking fund provisions, if applicable, for the preferred stock.
- The redemption provisions, if applicable, for the preferred stock.
- Whether the preferred stock will be convertible into or exchangeable for
other securities and, if so, the terms and conditions of conversion or
exchange, including the conversion price or exchange ratio and the
conversion or exchange period (or the method of determining the same).
- Whether the preferred stock will have voting rights and the terms thereof,
if any.
- Whether the preferred stock will be listed on any securities exchange.
- Whether the preferred stock will be issued with any other securities and,
if so, the amount and terms of these other securities.
- Any other specific material terms, preferences or rights of, or
limitations or restrictions on, the preferred stock.
Subject to our certificate of incorporation and to any limitations contained
in our outstanding preferred stock, we may issue additional series of preferred
stock, at any time or from time to time, with the powers, preferences and
relative, participating, optional or other special rights and qualifications,
limitations or restrictions thereof, as our Board of Directors or any duly
authorized committee thereof may determine, all without further action of our
stockholders, including holders of our then outstanding preferred stock.
If applicable, the prospectus supplement will also contain a discussion of
the material United States federal income tax considerations relevant to the
offering.
DIVIDENDS
Holders of preferred stock will be entitled to receive cash dividends, when,
as and if declared by our Board of Directors, out of our assets legally
available for payment, at the rate and on the dates set forth in the prospectus
supplement. Each dividend will be payable to holders of record as they appear on
our stock books on the record date fixed by our Board of
22
Directors. Dividends, if cumulative, will be cumulative from and after the date
set forth in the applicable prospectus supplement.
We may not:
- declare or pay dividends (except in our stock that is junior as to
dividends and liquidation rights to the preferred stock ("junior stock"))
or make any other distributions on junior stock, or
- purchase, redeem or otherwise acquire junior stock or set aside funds for
that purpose (except in a reclassification or exchange of junior stock
through the issuance of other junior stock or with the proceeds of a
reasonably contemporaneous sale of junior stock),
if there are arrearages in dividends or failure in the payment of our sinking
fund or redemption obligations on any of our preferred stock and, in the case of
the first bullet point above, if dividends in full for the current quarterly
dividend period have not been paid or declared on any of our preferred stock.
Dividends in full may not be declared or paid or set apart for payment on
any series of preferred stock unless:
- there are no arrearages in dividends for any past dividend periods on any
series of preferred stock, and
- to the extent that the dividends are cumulative, dividends in full for the
current dividend period have been declared or paid on all preferred stock.
Any dividends declared or paid when dividends are not so declared, paid or set
apart in full will be shared ratably by the holders of all series of preferred
stock in proportion to the respective arrearages and undeclared and unpaid
current cumulative dividends. No interest, or sum of money in lieu of interest,
will be payable in respect of any dividend payment or payments that may be in
arrears.
CONVERSION AND EXCHANGE
If the preferred stock will be convertible into or exchangeable for common
stock or other securities, the prospectus supplement will set forth the terms
and conditions of that conversion or exchange, including the conversion price or
exchange ratio (or the method of calculating the same), the conversion or
exchange period (or the method of determining the same), whether conversion or
exchange will be mandatory or at the option of the holder or us, the events
requiring an adjustment of the conversion price or the exchange ratio and
provisions affecting conversion or exchange in the event of the redemption of
that preferred stock. These terms may also include provisions under which the
number of shares of common stock or the number or amount of other securities to
be received by the holders of that preferred stock upon conversion or exchange
would be calculated according to the market price of the common stock or those
other securities as of a time stated in the prospectus supplement.
LIQUIDATION RIGHTS
In the event of our voluntary or involuntary liquidation, dissolution or
winding up, the holders of each series of the preferred stock will be entitled
to receive out of our assets that are available for distribution to
stockholders, before any distribution of assets is made to holders of any junior
stock, liquidating distributions in the amount set forth in the applicable
prospectus supplement plus all accrued and unpaid dividends. If, upon our any
voluntary or
23
involuntary liquidation, dissolution or winding up, the amounts payable with
respect to the preferred stock are not paid in full, the holders of preferred
stock of each series will share ratably in the distribution of our assets in
proportion to the full respective preferential amounts to which they are
entitled. After payment of the full amount of the liquidating distribution to
which they are entitled, the holders of the preferred stock will not be entitled
to any further participation in any distribution of our assets. Our
consolidation or merger with or into any other corporation or corporations or a
sale of all or substantially all of our assets will not be deemed to be a
liquidation, dissolution or winding up of us for purposes of these provisions.
REDEMPTION
If so provided in the prospectus supplement, the offered preferred stock may
be redeemable in whole or in part at our option at the times and at the
redemption prices set forth therein.
If dividends on any series of preferred stock are in arrears or we have
failed to fulfill our sinking fund or redemption obligations with respect to any
series of preferred stock, we may not purchase or redeem shares of preferred
stock or any other capital stock ranking on a parity with or junior to the
preferred stock as to dividends or upon liquidation, nor permit any subsidiary
to do so, without in either case the consent of the holders of at least
two-thirds of each series of preferred stock then outstanding; provided,
however, that:
- to meet our purchase, retirement or sinking fund obligations with respect
to any series of preferred stock, we may use shares of that preferred
stock acquired prior to the arrearages or failure of payment and then held
as treasury stock, and
- we may complete the purchase or redemption of shares of preferred stock
for which a contract was entered into for any purchase, retirement or
sinking fund purposes prior to the arrearages or failure of payment.
VOTING RIGHTS
Except as indicated below or in the prospectus supplement, or except as
expressly required by applicable law, the holders of the preferred stock will
not be entitled to vote. As used herein, the term "applicable preferred stock"
means those series of preferred stock to which the provisions described herein
are expressly made applicable by resolutions of our Board of Directors.
If the equivalent of six quarterly dividends payable on any shares of any
series of applicable preferred stock are in default (whether or not the
dividends have been declared or the defaulted dividends are consecutive), the
number of our directors will be increased by two and the holders of all
outstanding series of applicable preferred stock, voting as a single class
without regard to series, will be entitled to elect the two additional directors
until four consecutive quarterly dividends are paid or declared and set apart
for payment, if the shares are cumulative, or until all arrearages in dividends
and dividends in full for the current quarterly period are paid or declared and
set apart for payment, if the shares are non-cumulative, whereupon all voting
rights described herein will be divested from the applicable preferred stock.
The holders of applicable preferred stock may exercise their special class
voting rights at meetings of the stockholders for the election of directors or
at special meetings for the purpose of electing directors, in either case at
which the holders of not less than one-third of the aggregate number of shares
of applicable preferred stock are present in person or by proxy.
24
The affirmative vote of the holders of at least two-thirds of the
outstanding shares of any series of preferred stock will be required:
- for any amendment of our certificate of incorporation (or the related
certificate of designations) that will adversely affect the powers,
preferences or rights of the holders of the preferred stock of that
series, or
- to create any class of stock (or increase the authorized number of shares
of any class of stock) that will have preference as to dividends or upon
liquidation over the preferred stock of that series or create any stock or
other security convertible into or exchangeable for or evidencing the
right to purchase any stock of that class.
In addition, the affirmative vote of the holders of a majority of all the
then outstanding shares of our preferred stock will be required to increase the
authorized amount of our preferred stock.
PLAN OF DISTRIBUTION
We may sell the offered securities:
- through agents;
- to or through underwriters; or
- directly to other purchasers.
Any underwriters or agents will be identified and their compensation
described in the applicable prospectus supplement.
We (directly or through agents) may sell, and the underwriters may resell,
the offered securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or prices, which may be changed,
or at market prices prevailing at the time of sale, at prices related to
prevailing market prices or at negotiated prices.
In connection with the sale of offered securities, the underwriters or
agents may receive compensation from us or from purchasers of the offered
securities for whom they may act as agents. The underwriters may sell offered
securities to or through dealers, who may also receive compensation from
purchasers of the offered securities for whom they may act as agents.
Compensation may be in the form of discounts, concessions or commissions.
Underwriters, dealers and agents that participate in the distribution of the
offered securities may be underwriters as defined in the Securities Act of 1933
(the "Act"), and any discounts or commissions received by them from us and any
profit on the resale of the offered securities by them may be treated as
underwriting discounts and commissions under the Act.
We will indemnify the underwriters and agents against certain civil
liabilities, including liabilities under the Act, or contribute to payments they
may be required to make in respect of such liabilities.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, us or our affiliates in the ordinary course of their businesses.
If so indicated in the prospectus supplement relating to a particular series
or issue of offered securities, we will authorize underwriters, dealers or
agents to solicit offers by certain institutions to purchase the offered
securities from us under delayed delivery contracts providing for payment and
delivery at a future date. These 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 these contracts.
25
LEGAL OPINIONS
The validity of the securities will be passed upon for us by Shearman &
Sterling, 599 Lexington Avenue, New York, New York 10022, and for any
underwriters, dealers or agents by Sidley Austin Brown & Wood LLP, One World
Trade Center, New York, New York 10048.
EXPERTS
The financial statements incorporated in this prospectus by reference from
our Annual Report on Form 10-K have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of that
firm given upon their authority as experts in accounting and auditing.
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$600,000,000
[John Deere Credit Logo]
JOHN DEERE CAPITAL CORPORATION
5 1/8% NOTES DUE OCTOBER 19, 2006
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PROSPECTUS SUPPLEMENT
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JPMORGAN
MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
CREDIT SUISSE FIRST BOSTON
SALOMON SMITH BARNEY
OCTOBER 16, 2001
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