FILED PURSUANT TO RULE 424(b)(2)
                                                      REGISTRATION NO. 333-40405

 
          PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 24, 1997
 
                                 $400,000,000
                              [LOGO AMGEN, INC.]
 
                               MEDIUM-TERM NOTES
                  DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
 
                               ---------------
 
  Amgen Inc. (the "Company") may offer from time to time its Medium-Term Notes
(the "Notes") due from nine months or more from the date of issue, as selected
by the purchaser and agreed to by the Company. The aggregate initial public
offering price of the Notes offered hereby will not exceed $400,000,000 or its
equivalent in one or more foreign currencies or composite currencies, subject
to reduction as a result of the sale by the Company of other Debt Securities
described in the accompanying Prospectus.
 
  The Notes may be denominated in U.S. dollars or in such foreign currencies
or composite currencies as may be designated by the Company at the time of the
offering. The specific currency or composite currency, interest rate (if any),
issue price and maturity date of any Note will be set forth in the related
Pricing Supplement to this Prospectus Supplement. Unless otherwise specified
in the applicable Pricing Supplement, Notes denominated in other than U.S.
dollars or ECUs will not be sold in, or to residents of, the country issuing
the specified currency. See "Description of the Notes".
 
  Unless otherwise specified in the applicable Pricing Supplement, interest on
the Fixed Rate Notes will be payable on each June 1 and December 1 and at
maturity. Interest on the Floating Rate Notes will be payable on the dates
specified therein and in the applicable Pricing Supplement. The applicable
Pricing Supplement will specify whether a Floating Rate Note is a Regular
Floating Rate Note, a Floating Rate/Fixed Rate Note or an Inverse Floating
Rate Note and whether the rate of interest thereon is determined by reference
to one or more of the following: CD Rate, CMT Rate, Commercial Paper Rate,
Federal Funds Rate, LIBOR, Prime Rate or Treasury Rate, or any other interest
rate basis or formulas, as adjusted by any Spread and/or Spread Multiplier, if
any. Notes may also be issued that do not bear any interest currently or that
bear interest at a below market rate. See "Description of the Notes".
 
  Unless a Redemption Commencement Date is specified in the applicable Pricing
Supplement, the Notes will not be redeemable prior to their Stated Maturity.
If a Redemption Commencement Date is so specified, the Notes will be
redeemable at the option of the Company at any time after such date as
described herein. The Notes will be repayable by the Company at the option of
the Holders thereof prior to their Stated Maturity only if one or more
Optional Repayment Dates are specified in the applicable Pricing Supplement.
 
  The Notes offered hereby will be issued only in registered form in
denominations of $1,000 and integral multiples thereof or the approximate
equivalent thereof in the Specified Currency for each Note. See "Description
of the Notes".
 
                               ---------------
 
 THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
  EXCHANGE  COMMISSION  OR  ANY  STATE SECURITIES  COMMISSION  NOR  HAS  THE
   SECURITIES  AND EXCHANGE COMMISSION  OR ANY STATE SECURITIES  COMMISSION
    PASSED  UPON THE ACCURACY OR  ADEQUACY OF THIS PROSPECTUS  SUPPLEMENT,
      THE PROSPECTUS OR ANY SUPPLEMENT HERETO. ANY REPRESENTATION TO THE
       CONTRARY IS A CRIMINAL OFFENSE.
 
                               ---------------
 


                                              AGENTS' DISCOUNTS    PROCEEDS TO
                                  PRICE TO           AND               THE
                                 PUBLIC(1)    COMMISSIONS(1)(2)   COMPANY(1)(3)
                                ------------ ------------------- ---------------
                                                        
Per Note.......................     100%         .125%-.750%     99.250%-99.875%
Total(4)....................... $400,000,000 $500,000-$3,000,000  $397,000,000-
                                                                  $399,500,000

- -------
(1) Notes will be issued at 100% of their principal amount, unless otherwise
    specified in the applicable Pricing Supplement.
(2) The Company will pay the Agents a commission of from .125% to .750%,
    depending on Stated Maturity, of the principal amount of any Notes sold
    through them as agents (or sold to such Agents as principal in
    circumstances in which no other discount is agreed). For Notes with
    maturities of 30 years or more from their dates of issue, commissions will
    be negotiated at the time of sale and indicated in the applicable Pricing
    Supplement. The Company has agreed to indemnify the Agents against certain
    liabilities, including liabilities under the Securities Act of 1933, as
    amended. See "Supplemental Plan of Distribution".
(3) Before deducting estimated expenses of $400,000 payable by the Company.
(4) Or the equivalent thereof in one or more foreign currencies or composite
    currencies.
 
                               ---------------
 
  Offers to purchase the Notes are being solicited, on a reasonable best
efforts basis, from time to time by the Agents on behalf of the Company. Notes
may be sold to the Agents on their own behalf at negotiated discounts. The
Company reserves the right to sell the Notes directly on its own behalf. The
Company also reserves the right to withdraw, cancel or modify the offering
contemplated hereby without notice. The Company or the Agents may reject any
offer to purchase the Notes in whole or in part. See "Supplemental Plan of
Distribution".
 
GOLDMAN, SACHS & CO.                                   BEAR, STEARNS & CO. INC.
 
                               ---------------
 
          The date of this Prospectus Supplement is December 5, 1997.

 
  CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH NOTES, AND
THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "SUPPLEMENTAL PLAN OF DISTRIBUTION".
 
                           DESCRIPTION OF THE NOTES
 
  The Notes offered hereby will be issued as a series of Debt Securities under
an Indenture dated as of January 1, 1992, as supplemented by a First
Supplemental Indenture dated as of February 26, 1997 (the "Supplement") (such
Indenture and Supplement are collectively referred to herein as the
"Indenture"), between the Company and Citibank, N.A., as trustee (the
"Trustee"). The Indenture is subject to, and governed by, the Trust Indenture
Act of 1939, as amended. The following summary of certain provisions of the
Notes and the Indenture does not purport to be complete and is qualified in
its entirety by reference to the actual provisions of the Notes and the
Indenture. Capitalized terms used but not defined herein shall have the
meanings given to them in the accompanying Prospectus, the Notes or the
Indenture, as the case may be. The following description of certain terms of
the Notes offered hereby supplements and should be read in conjunction with
the description of the general terms and provisions of the Debt Securities set
forth in the accompanying Prospectus under the caption "Description of Debt
Securities" and with the applicable Pricing Supplement.
 
GENERAL
 
  All Notes issued and to be issued under the Indenture will be unsecured
obligations of the Company and will rank pari passu with all other unsecured
and unsubordinated indebtedness of the Company from time to time outstanding.
The Indenture does not limit the aggregate principal amount of Debt Securities
that may be issued thereunder and Debt Securities may be issued thereunder
from time to time in one or more series up to the aggregate principal amount
from time to time authorized by the Company for each series. The Company may,
from time to time, without the consent of the holders of the Notes (the
"Holders"), provide for the issuance of Notes or other Debt Securities under
the Indenture in addition to the $400,000,000 aggregate initial offering price
of Notes offered hereby.
 
  The Notes are currently limited to up to $400,000,000 aggregate initial
offering price or the equivalent thereof in one or more foreign or composite
currencies; however, such aggregate initial offering price will be reduced by
any sale by the Company of other Debt Securities described in the accompanying
Prospectus.
 
  The Notes will be offered on a continuous basis and will mature on any day
nine months or more from their dates of issue (each, a "Stated Maturity"), as
specified in the applicable pricing supplement to this Prospectus (each, a
"Pricing Supplement"). Unless otherwise specified in the applicable Pricing
Supplement, interest-bearing Notes will either be Fixed Rate Notes or Floating
Rate Notes, as specified in the applicable Pricing Supplement. Notes may also
be issued that do not bear any interest currently or that bear interest at a
below market rate.
 
  Unless otherwise specified in the applicable Pricing Supplement, the Notes
will be denominated in, and payments of principal, premium, if any, and/or
interest, if any, will be made in, United States dollars. The Notes also may
be denominated in, and payments of principal, premium, if any, and/or
interest, if any, may be made in, one or more foreign currencies or composite
currencies ("Foreign Currency Notes"). The currency or composite currency in
which a Note is denominated, whether United States dollars or otherwise, is
herein referred to as the "Specified Currency". References herein to "United
States dollars", "U.S. dollars" or "$" are to the lawful currency of the
United States of America (the "United States").
 
                                      S-2

 
  Unless otherwise specified in the applicable Pricing Supplement, purchasers
are required to pay for the Notes in the applicable Specified Currencies. At
the present time, there are limited facilities in the United States for the
conversion of United States dollars into foreign currencies or composite
currencies and vice versa, and commercial banks do not generally offer non-
United States dollar checking or savings account facilities in the United
States. Each Agent is prepared to arrange for the conversion of United States
dollars into the Specified Currency in which the related Foreign Currency Note
is denominated in order to enable the purchaser to pay for such Foreign
Currency Note, provided that a request is made to the applicable Agent on or
prior to the third Business Day (as defined below) preceding the date of
delivery of such Foreign Currency Note, or by such other day as determined by
the applicable Agent. Each such conversion will be made by the applicable
Agent on such terms and subject to such conditions, limitations and charges as
such Agent may from time to time establish in accordance with its regular
foreign exchange practices. All costs of exchange will be borne by the
purchaser of each such Foreign Currency Note.
 
  Interest rates offered by the Company with respect to the Notes may differ
depending upon, among other things, the aggregate principal amount of Notes
purchased in any single transaction. Interest rates or formulae and other
terms of the Notes are subject to change by the Company from time to time, but
no such change will affect any Note already issued or as to which an offer to
purchase had been accepted by the Company.
 
  Each Note will be issued in fully registered form as one or more global
securities (a "Global Security") registered in the name of the Depositary or a
nominee of the Depositary (each such Note represented by a Global Security
being herein referred to as a "Book-Entry Note") or a certificate in
definitive registered form (a "Certificated Note"). The authorized
denominations of each Note other than a Foreign Currency Note will be $1,000
and integral multiples thereof, unless otherwise specified in the applicable
Pricing Supplement, while the authorized denominations of each Foreign
Currency Note will be specified in the applicable Pricing Supplement.
 
  Payments of principal of, and premium, if any, and interest, if any, on,
Book-Entry Notes will be made by the Company through the Trustee to the
Depositary. See "Description of Debt Securities--Global Securities" in the
accompanying Prospectus. In the case of Certificated Notes, payment of
principal and premium, if any, due on the Stated Maturity or any prior date on
which the principal, or an installment of principal, of each Certificated Note
becomes due and payable, whether by the declaration of acceleration, notice of
redemption at the option of the Company, notice of the Holder's option to
elect repayment or otherwise (the Stated Maturity or such prior date, as the
case may be, is herein referred to as the "Maturity Date" with respect to the
principal repayable on such date) will be made in immediately available funds
upon presentation and surrender thereof at the (i) corporate trust office of
the Trustee currently located at Citibank, N.A., 111 Wall Street, 15th Floor,
New York, N.Y. 10043 or (ii) office or agency maintained by the Company for
such purpose in the Borough of Manhattan, The City of New York, currently the
offices of the Trustee located at Citibank, N.A., 111 Wall Street, 15th Floor,
New York, N.Y. 10043 (the "Corporate Trust Office"). Payment of interest, if
any, due on the Maturity Date of each Certificated Note will be made to the
person to whom payment of the principal and premium, if any, shall be made.
Payment of interest, if any, due on each Certificated Note on any Interest
Payment Date (as defined below) other than the Maturity Date will be made at
the office or agency referred to above maintained by the Company for such
purpose or, at the option of the Company, may be made by check mailed to the
address of the Holder entitled thereto as such address shall appear in the
security register of the Company or in such other manner as determined by the
Company or specified in such Note. Notwithstanding the foregoing, a Holder of
$10,000,000 (or, if the applicable Specified Currency is other than United
States dollars, the equivalent thereof in such Specified Currency) or more in
aggregate principal amount of the Notes (whether having identical or different
terms and provisions) will be entitled to receive interest payments, if any,
on any Interest Payment Date other than the Maturity Date by wire transfer of
immediately available funds if appropriate wire transfer instructions have
been received in writing by the Trustee not less than
 
                                      S-3

 
15 days prior to such Interest Payment Date. Any such wire transfer
instructions received by the Trustee shall remain in effect until revoked by
such Holder. For special payment terms applicable to Foreign Currency Notes,
see "Special Provisions Relating to Foreign Currency Notes--Payment of
Principal, Premium and Interest".
 
  As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking
institutions are authorized or required by law, regulation or executive order
to close in The City of New York; provided, however, that, with respect to
Foreign Currency Notes, such day is also not a day on which banking
institutions are authorized or required by law, regulation or executive order
to close in the Principal Financial Center (as defined below) of the country
issuing the Specified Currency (unless the Specified Currency is European
Currency Units ("ECU"), in which case such day is also not a day that appears
as an ECU non-settlement day on the display designated as "ISDE" on the Reuter
Monitor Money Rates Service (or is not a day designated as an ECU non-
settlement day by the ECU Banking Association) or, if ECU non-settlement days
do not appear on that page (and are not so designated), a day that is not a
day on which payments in ECU cannot be settled in the international interbank
market); provided, further, that, with respect to Notes as to which LIBOR is
an applicable Interest Rate Basis, such day is also a London Business Day (as
hereinafter defined).
 
  "London Business Day" means (i) if the Index Currency (as defined below) is
other than ECU, any day on which dealings in such Index Currency are
transacted in the London interbank market or (ii) if the Index Currency is
ECU, any day that does not appear as an ECU non-settlement day on the display
designated as "ISDE" on the Reuter Monitor Money Rates Service (or a day so
designated by the ECU Banking Association) or, if ECU non-settlement days do
not appear on that page (and are not so designated), is not a day on which
payments in ECU cannot be settled in the international interbank market.
 
  "Principal Financial Center" means (i) the capital city of the country
issuing the Specified Currency (except as described in the immediately
preceding paragraph with respect to ECU) or (ii) the capital city of the
country to which the Index Currency, if applicable, relates (or, in the case
of ECU, Luxembourg), except, in each case, that with respect to United States
dollars, Australian dollars, Canadian dollars, Deutsche marks, Dutch guilders,
Italian lire and Swiss francs, the "Principal Financial Center" shall be The
City of New York, Sydney, Toronto, Frankfurt, Amsterdam, Milan (solely in the
case of clause (i) above) and Zurich, respectively.
 
  Book-Entry Notes may be transferred or exchanged only through the
Depositary. See "Description of Debt Securities--Global Securities" in the
accompanying Prospectus. Registration of transfer or exchange of Certificated
Notes will be made at the office or agency maintained by the Company for such
purpose in the Borough of Manhattan, The City of New York. No service charge
will be made by the Company or the Trustee for any such registration of
transfer or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith (other than exchanges pursuant to the Indenture not
involving any transfer).
 
  The Company may from time to time offer Notes with the principal amount
payable at maturity, and/or the amount of interest payable on an interest
payment date, to be determined by reference to one or more currencies
(including baskets of currencies), one or more commodities (including baskets
of commodities), one or more securities (including baskets of securities)
and/or any other index as set forth in the applicable Pricing Supplement
("Indexed Notes"). Holders of Indexed Notes may receive a principal amount at
maturity that is greater than or less than the face amount (but not less than
zero) of such Notes depending upon the value at maturity of the applicable
index. With respect to any Indexed Note, information as to the methods for
determining the principal amount payable at maturity and/or the amount of
interest payable on an interest payment date, as the case may be, as to any
one
 
                                      S-4

 
or more currencies (including baskets of currencies), commodities (including
baskets of commodities), securities (including baskets of securities) or other
indices to which principal or interest is indexed, as to certain historical
information with respect to the specified indexed item, as to any additional
foreign exchange or other risks or as to any additional tax considerations may
be set forth in the applicable Pricing Supplement.
 
  The applicable Pricing Supplement will specify any redemption or repayment
terms applicable to the Notes. Unless otherwise specified in the applicable
Pricing Supplement, the Notes will not be subject to any sinking fund. See "--
Redemption and Repayment" below.
 
PAYMENT OF PRINCIPAL AND INTEREST
 
  Unless otherwise specified in the applicable Pricing Supplement, each
interest-bearing Note will bear interest from its date of issue at the rate
per annum, in the case of a Fixed Rate Note, or pursuant to the interest rate
formula, in the case of a Floating Rate Note, until the principal thereof is
paid or duly made available for payment. Unless otherwise specified in the
applicable Pricing Supplement, interest payments in respect of Fixed Rate
Notes and Floating Rate Notes will equal the amount of interest accrued from
and including the immediately preceding Interest Payment Date in respect of
which interest has been paid or duly made available for payment (or from and
including the date of issue, if no interest has been paid or duly made
available for payment) to but excluding the applicable Interest Payment Date
or the Maturity Date, as the case may be (each, an "Interest Period").
Interest on any overdue principal, premium and/or interest will be paid at the
Default Rate per annum specified in the applicable Pricing Supplement (to the
extent that the payment of such interest shall be legally enforceable).
 
  Interest on Fixed Rate Notes and Floating Rate Notes will be payable in
arrears on each Interest Payment Date and on the Maturity Date. Unless
otherwise specified in the applicable Pricing Supplement, the first payment of
interest on any such Note originally issued between a Record Date (as defined
below) and the related Interest Payment Date will be made on the Interest
Payment Date immediately following the next succeeding Record Date to the
Holder on such next succeeding Record Date.
 
 Fixed Rate Notes
 
  Unless otherwise specified in the applicable Pricing Supplement, interest on
Fixed Rate Notes will be payable on June 1 and December 1 of each year (each,
an "Interest Payment Date") and on the Maturity Date. Unless otherwise
specified in the applicable Pricing Supplement, interest on Fixed Rate Notes
will be computed on the basis of a 360-day year of twelve 30-day months.
Unless otherwise specified in the applicable Pricing Supplement, a "Record
Date" for Fixed Rate Notes shall be the fifteenth day (whether or not a
Business Day) immediately preceding the related Interest Payment Date.
 
  If any Interest Payment Date or the Maturity Date of a Fixed Rate Note falls
on a day that is not a Business Day, the required payment of principal,
premium, if any, and/or interest will be made on the next succeeding Business
Day as if made on the date such payment was due, and no interest will accrue
on such payment for the period from and after such Interest Payment Date or
the Maturity Date, as the case may be, to the date of such payment on the next
succeeding Business Day.
 
 Floating Rate Notes
 
  Unless otherwise specified in the applicable Pricing Supplement, Floating
Rate Notes will be issued as described below. The applicable Pricing
Supplement will specify certain terms with respect to which each Floating Rate
Note is being delivered, including: whether such Floating Rate Note is a
 
                                      S-5

 
"Regular Floating Rate Note", a "Floating Rate/Fixed Rate Note" or an "Inverse
Floating Rate Note", the Fixed Rate Commencement Date, if applicable, Fixed
Interest Rate, if applicable, Interest Rate Basis or Bases, Initial Interest
Rate, if any, Initial Interest Reset Date, Interest Reset Period and Dates,
Interest Payment Period and Dates, Index Maturity, Maximum Interest Rate
and/or Minimum Interest Rate, if any, and Spread and/or Spread Multiplier, if
any, as such terms are defined below. If one or more of the applicable
Interest Rate Bases is LIBOR or the CMT Rate, the applicable Pricing
Supplement will also specify the Index Currency and Designated LIBOR Page or
the Designated CMT Maturity Index and Designated CMT Telerate Page,
respectively, as such terms are defined below. Unless otherwise specified in
the applicable Pricing Supplement, a "Record Date" for Floating Rate Notes
shall be the fifteenth day (whether or not a Business Day) immediately
preceding the related Interest Payment Date.
 
  The interest rate borne by the Floating Rate Notes will be determined as
follows:
 
    (i) Unless such Floating Rate Note is designated as a "Floating
  Rate/Fixed Rate Note" or an "Inverse Floating Rate Note" or as having an
  Addendum attached or having "Other Provisions" apply, such Floating Rate
  Note will be designated as a "Regular Floating Rate Note" and, except as
  described below or in the applicable Pricing Supplement, will bear interest
  at the rate determined by reference to the applicable Interest Rate Basis
  or Bases (a) plus or minus the applicable Spread, if any, and/or (b)
  multiplied by the applicable Spread Multiplier, if any. Commencing on the
  Initial Interest Reset Date, the rate at which interest on such Regular
  Floating Rate Note shall be payable shall be reset as of each Interest
  Reset Date; provided, however, that the interest rate in effect for the
  period, if any, from the date of issue to the Initial Interest Reset Date
  will be the Initial Interest Rate.
 
    (ii) If such Floating Rate Note is designated as a "Floating Rate/Fixed
  Rate Note", then, except as described below or in the applicable Pricing
  Supplement, such Floating Rate Note will bear interest at the rate
  determined by reference to the applicable Interest Rate Basis or Bases (a)
  plus or minus the applicable Spread, if any, and/or (b) multiplied by the
  applicable Spread Multiplier, if any. Commencing on the Initial Interest
  Reset Date, the rate at which interest on such Floating Rate/Fixed Rate
  Note shall be payable shall be reset as of each Interest Reset Date;
  provided, however, that (y) the interest rate in effect for the period, if
  any, from the date of issue to the Initial Interest Reset Date will be the
  Initial Interest Rate and (z) the interest rate in effect for the period
  commencing on the Fixed Rate Commencement Date to the Maturity Date shall
  be the Fixed Interest Rate, if such rate is specified in the applicable
  Pricing Supplement or, if no such Fixed Interest Rate is specified, the
  interest rate in effect thereon on the day immediately preceding the Fixed
  Rate Commencement Date.
 
    (iii) If such Floating Rate Note is designated as an "Inverse Floating
  Rate Note", then, except as described below or in the applicable Pricing
  Supplement, such Floating Rate Note will bear interest at the Fixed
  Interest Rate specified in the applicable Pricing Supplement minus the rate
  determined by reference to the applicable Interest Rate Basis or Bases (a)
  plus or minus the applicable Spread, if any, and/or (b) multiplied by the
  applicable Spread Multiplier, if any; provided, however, that, unless
  otherwise specified in the applicable Pricing Supplement, the interest rate
  thereon will not be less than zero. Commencing on the Initial Interest
  Reset Date, the rate at which interest on such Inverse Floating Rate Note
  shall be payable shall be reset as of each Interest Reset Date; provided,
  however, that the interest rate in effect for the period, if any, from the
  date of issue to the Initial Interest Reset Date will be the Initial
  Interest Rate.
 
  The "Spread" is the number of basis points to be added to or subtracted from
the related Interest Rate Basis or Bases applicable to such Floating Rate
Note. The "Spread Multiplier" is the percentage of the related Interest Rate
Basis or Bases applicable to such Floating Rate Note by which such Interest
Rate Basis or Bases will be multiplied to determine the applicable interest
rate on such
 
                                      S-6

 
Floating Rate Note. The "Index Maturity" is the period to maturity of the
instrument or obligation with respect to which the related Interest Rate Basis
or Bases will be calculated.
 
  Notwithstanding the foregoing, if such Floating Rate Note is designated as
having an Addendum attached as specified on the face thereof, such Floating
Rate Note shall bear interest in accordance with the terms described in such
Addendum and the applicable Pricing Supplement.
 
  Unless otherwise specified in the applicable Pricing Supplement, the
interest rate with respect to each Interest Rate Basis will be determined in
accordance with the applicable provisions below. Except as set forth above or
in the applicable Pricing Supplement, the interest rate in effect on each day
shall be (i) if such day is an Interest Reset Date, the interest rate
determined as of the Interest Determination Date (as defined below)
immediately preceding such Interest Reset Date or (ii) if such day is not an
Interest Reset Date, the interest rate determined as of the Interest
Determination Date immediately preceding the most recent Interest Reset Date.
 
  Interest on Floating Rate Notes will be determined by reference to the
applicable Interest Rate Basis or Interest Rate Bases, which may, as described
below, include (i) the CD Rate, (ii) the CMT Rate, (iii) the Commercial Paper
Rate, (iv) the Federal Funds Rate, (v) LIBOR, (vi) the Prime Rate, (vii) the
Treasury Rate, or (viii) such other Interest Rate Basis or interest rate
formula as may be specified in the applicable Pricing Supplement; provided,
however, that the interest rate in effect on a Floating Rate Note for the
period, if any, from the date of issue to the Initial Interest Reset Date will
be the Initial Interest Rate; provided, further, that with respect to a
Floating Rate/Fixed Rate Note the interest rate in effect for the period
commencing on the Fixed Rate Commencement Date to the Maturity Date shall be
the Fixed Interest Rate, if such rate is specified in the applicable Pricing
Supplement or, if no such Fixed Interest Rate is specified, the interest rate
in effect thereon on the day immediately preceding the Fixed Rate Commencement
Date.
 
  The applicable Pricing Supplement will specify whether the rate of interest
on the related Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semiannually or annually or on such other specified basis (each, an
"Interest Reset Period") and the dates on which such rate of interest will be
reset (each, an "Interest Reset Date"). Unless otherwise specified in the
applicable Pricing Supplement, the Interest Reset Dates will be, in the case
of Floating Rate Notes which reset: (i) daily, each Business Day; (ii) weekly,
the Wednesday of each week (with the exception of weekly reset Floating Rate
Notes as to which the Treasury Rate is an applicable Interest Rate Basis,
which will reset the Tuesday of each week, except as described below); (iii)
monthly, the third Wednesday of each month; (iv) quarterly, the third
Wednesday of March, June, September and December of each year; (v)
semiannually, the third Wednesday of the two months specified in the
applicable Pricing Supplement; and (vi) annually, the third Wednesday of the
month specified in the applicable Pricing Supplement; provided, however, that,
with respect to Floating Rate/Fixed Rate Notes, the rate of interest thereon
will not reset after the applicable Fixed Rate Commencement Date. If any
Interest Reset Date for any Floating Rate Note would otherwise be a day that
is not a Business Day, such Interest Reset Date will be postponed to the next
succeeding Business Day, except that in the case of a Floating Rate Note as to
which LIBOR is an applicable Interest Rate Basis and such Business Day falls
in the next succeeding calendar month, such Interest Reset Date will be the
immediately preceding Business Day. In addition, in the case of a Floating
Rate Note as to which the Treasury Rate is an applicable Interest Rate Basis
and the Interest Determination Date would otherwise fall on an Interest Reset
Date, then such Interest Reset Date will be postponed to the next succeeding
Business Day.
 
  The interest rate applicable to each Interest Reset Period commencing on the
related Interest Reset Date will be the rate determined as of the applicable
Interest Determination Date on or prior to the Calculation Date (as defined
below). The "Interest Determination Date" with respect to the CD Rate, the CMT
Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime Rate
will
 
                                      S-7

 
be the second Business Day immediately preceding the applicable Interest Reset
Date; and the "Interest Determination Date" with respect to LIBOR will be the
second London Business Day immediately preceding the applicable Interest Reset
Date, unless the Index Currency is British pounds sterling, in which case the
"Interest Determination Date" will be the applicable Interest Reset Date. With
respect to the Treasury Rate, the "Interest Determination Date" will be the
day in the week in which the applicable Interest Reset Date falls on which day
Treasury Bills (as defined below) are normally auctioned (Treasury Bills are
normally sold at an auction held on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday);
provided, however, that if an auction is held on the Friday of the week
preceding the applicable Interest Reset Date, the Interest Determination Date
will be such preceding Friday. The "Interest Determination Date" pertaining to
a Floating Rate Note the interest rate of which is determined by reference to
two or more Interest Rate Bases will be the most recent Business Day which is
at least two Business Days prior to the applicable Interest Reset Date for
such Floating Rate Note on which each Interest Rate Basis is determinable.
Each Interest Rate Basis will be determined as of such date, and the
applicable interest rate will take effect on the applicable Interest Reset
Date.
 
  A Floating Rate Note may also have either or both of the following: (i) a
Maximum Interest Rate, or ceiling on the rate of interest, that may accrue
during any Interest Period and (ii) a Minimum Interest Rate, or floor on the
rate of interest, that may accrue during any Interest Period. In addition to
any Maximum Interest Rate that may apply to any Floating Rate Note, the
interest rate on Floating Rate Notes will in no event be higher than the
maximum rate permitted by New York law, as the same may be modified by United
States law of general application.
 
  Except as provided below or in the applicable Pricing Supplement, interest
will be payable, in the case of Floating Rate Notes which reset: (i) daily,
weekly or monthly, on the third Wednesday of each month or on the third
Wednesday of March, June, September and December of each year, as specified in
the applicable Pricing Supplement; (ii) quarterly, on the third Wednesday of
March, June, September and December of each year; (iii) semiannually, on the
third Wednesday of the two months of each year specified in the applicable
Pricing Supplement; and (iv) annually, on the third Wednesday of the month of
each year specified in the applicable Pricing Supplement (each, an "Interest
Payment Date") and in each case, on the Maturity Date. If any Interest Payment
Date other than the Maturity Date for any Floating Rate Note would otherwise
be a day that is not a Business Day, such Interest Payment Date will be
postponed to the next succeeding Business Day, except that in the case of a
Floating Rate Note as to which LIBOR is an applicable Interest Rate Basis and
such Business Day falls in the next succeeding calendar month, such Interest
Payment Date will be the immediately preceding Business Day. If the Maturity
Date of a Floating Rate Note falls on a day that is not a Business Day, the
required payment of principal, premium, if any, and interest will be made on
the next succeeding Business Day as if made on the date such payment was due,
and no interest will accrue on such payment for the period from and after the
Maturity Date to the date of such payment on the next succeeding Business Day.
 
  All percentages resulting from any calculation on Floating Rate Notes will
be rounded to the nearest one hundred-thousandth of a percentage point, with
five-one millionths of a percentage point rounded upwards (e.g., 9.876545% (or
 .09876545) would be rounded to 9.87655% (or .0987655)), and all amounts used
in or resulting from such calculation on Floating Rate Notes will be rounded,
in the case of United States dollars, to the nearest cent or, in the case of a
foreign currency or composite currency, to the nearest unit (with one-half
cent or unit being rounded upward).
 
  With respect to each Floating Rate Note, accrued interest is calculated by
multiplying its principal amount by an accrued interest factor. Such accrued
interest factor is computed by adding the interest factor calculated for each
day in the applicable Interest Period. Unless otherwise specified in the
applicable Pricing Supplement, the interest factor for each such day will be
computed by dividing the interest rate applicable to such day by 360, in the
case of Floating Rate Notes for which an applicable
 
                                      S-8

 
Interest Rate Basis is the CD Rate, the Commercial Paper Rate, the Federal
Funds Rate, LIBOR or the Prime Rate, or by the actual number of days in the
year in the case of Floating Rate Notes for which an applicable Interest Rate
Basis is the CMT Rate or the Treasury Rate. Unless otherwise specified in the
applicable Pricing Supplement, the interest factor for Floating Rate Notes for
which the interest rate is calculated with reference to two or more Interest
Rate Bases will be calculated in each period in the same manner as if only one
of the applicable Interest Rate Bases applied as specified in the applicable
Pricing Supplement.
 
  Unless otherwise specified in the applicable Pricing Supplement, Citibank,
N.A. will be the "Calculation Agent". Upon request of the Holder of any
Floating Rate Note, the Calculation Agent will disclose the interest rate then
in effect and, if determined, the interest rate that will become effective as
a result of a determination made for the next succeeding Interest Reset Date
with respect to such Floating Rate Note. Unless otherwise specified in the
applicable Pricing Supplement, the "Calculation Date", if applicable,
pertaining to any Interest Determination Date will be the earlier of (i) the
tenth calendar day after such Interest Determination Date, or, if such day is
not a Business Day, the next succeeding Business Day or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or the Maturity
Date, as the case may be.
 
  Unless otherwise specified in the applicable Pricing Supplement, the
Calculation Agent shall determine each Interest Rate Basis in accordance with
the following provisions.
 
  CD Rate. Unless otherwise specified in the applicable Pricing Supplement,
"CD Rate" means, with respect to any Interest Determination Date relating to a
Floating Rate Note for which the interest rate is determined with reference to
the CD Rate (a "CD Rate Interest Determination Date"), the rate on such date
for negotiable United States dollar certificates of deposit having the Index
Maturity specified in the applicable Pricing Supplement as published by the
Board of Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates" or any successor publication ("H.15(519)")
under the heading "CDs (Secondary Market)", or, if not published by 3:00 P.M.,
New York City time, on the related Calculation Date, the rate on such CD Rate
Interest Determination Date for negotiable United States dollar certificates
of deposit of the Index Maturity specified in the applicable Pricing
Supplement as published by the Federal Reserve Bank of New York in its daily
statistical release "Composite 3:30 P.M. Quotations for U.S. Government
Securities" or any successor publication ("Composite Quotations") under the
heading "Certificates of Deposit". If such rate is not yet published in either
H.15(519) or the Composite Quotations by 3:00 P.M., New York City time, on the
related Calculation Date, then the CD Rate on such CD Rate Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the secondary market offered rates as of 10:00 A.M., New
York City time, on such CD Rate Interest Determination Date, of three leading
nonbank dealers in negotiable United States dollar certificates of deposit in
The City of New York (which may include the Agents or their affiliates)
selected by the Calculation Agent for negotiable United States dollar
certificates of deposit of major United States money market banks with a
remaining maturity closest to the Index Maturity specified in the applicable
Pricing Supplement in an amount that is representative for a single
transaction in that market at that time; provided, however, that if the
dealers so selected by the Calculation Agent are not quoting as mentioned in
this sentence, the CD Rate determined as of such CD Rate Interest
Determination Date will be the CD Rate in effect on such CD Rate Interest
Determination Date.
 
  CMT Rate. Unless otherwise specified in the applicable Pricing Supplement,
"CMT Rate" means, with respect to any Interest Determination Date relating to
a Floating Rate Note for which the interest rate is determined with reference
to the CMT Rate (a "CMT Rate Interest Determination Date"), the rate displayed
on the Designated CMT Telerate Page under the caption "Treasury Constant
Maturities Federal Reserve Board Release H.15 Mondays Approximately 3:45
P.M.", under the column for the Designated CMT Maturity Index for (i) if the
Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the
week,
 
                                      S-9

 
or the month, as applicable, ended immediately preceding the week in which the
related CMT Rate Interest Determination Date occurs. If such rate is no longer
displayed on the relevant page or is not displayed by 3:00 P.M., New York City
time, on the related Calculation Date, then the CMT Rate for such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for
the Designated CMT Maturity Index (as defined below) as published in the
relevant H.15(519). If such rate is no longer published or is not published by
3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate on such CMT Rate Interest Determination Date will be such treasury
constant maturity rate for the Designated CMT Maturity Index (or other United
States Treasury rate for the Designated CMT Maturity Index) for the CMT Rate
Interest Determination Date with respect to such Interest Reset Date as may
then be published by either the Board of Governors of the Federal Reserve
System or the United States Department of the Treasury that the Calculation
Agent determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in the relevant H.15(519). If such
information is not provided by 3:00 P.M., New York City time, on the related
Calculation Date, then the CMT Rate on the CMT Rate Interest Determination
Date will be calculated by the Calculation Agent and will be a yield to
maturity, based on the arithmetic mean of the secondary market closing offer
side prices as of approximately 3:30 P.M., New York City time, on such CMT
Rate Interest Determination Date reported, according to their written records,
by three leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York (which may include the Agents or
their affiliates) selected by the Calculation Agent (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest
quotation (or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)), for the most
recently issued direct noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately the Designated
CMT Maturity Index and a remaining term to maturity of not less than such
Designated CMT Maturity Index minus one year. If the Calculation Agent is
unable to obtain three such Treasury Note quotations, the CMT Rate on such CMT
Rate Interest Determination Date will be calculated by the Calculation Agent
and will be a yield to maturity based on the arithmetic mean of the secondary
market offer side prices as of approximately 3:30 P.M., New York City time, on
such CMT Rate Interest Determination Date of three Reference Dealers in The
City of New York (from five such Reference Dealers selected by the Calculation
Agent and eliminating the highest quotation (or, in the event of equality, one
of the highest) and the lowest quotation (or, in the event of equality, one of
the lowest)), for Treasury Notes with an original maturity of the number of
years that is the next highest to the Designated CMT Maturity Index and a
remaining term to maturity closest to the Designated CMT Maturity Index and in
an amount of at least $100 million. If three or four (and not five) of such
Reference Dealers are quoting as described above, then the CMT Rate will be
based on the arithmetic mean of the offer prices obtained and neither the
highest nor the lowest of such quotes will be eliminated; provided, however,
that if fewer than three Reference Dealers so selected by the Calculation
Agent are quoting as mentioned herein, the CMT Rate determined as of such CMT
Rate Interest Determination Date will be the CMT Rate in effect on such CMT
Rate Interest Determination Date. If two Treasury Notes with an original
maturity as described in the second preceding sentence have remaining terms to
maturity equally close to the Designated CMT Maturity Index, the Calculation
Agent will obtain from five Reference Dealers quotations for the Treasury Note
with the shorter remaining term to maturity.
 
  "Designated CMT Telerate Page" means the display on the Dow Jones Markets
Service on the page specified in the applicable Pricing Supplement (or any
other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)). If no such
page is specified in the applicable Pricing Supplement, the Designated CMT
Telerate Page shall be 7052 for the most recent week.
 
  "Designated CMT Maturity Index" means the original period to maturity of the
U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years) specified
in the applicable Pricing Supplement with respect to which the CMT Rate will
be calculated. If no such maturity is specified in the applicable Pricing
Supplement, the Designated CMT Maturity Index shall be 2 years.
 
                                     S-10

 
  Commercial Paper Rate. Unless otherwise specified in the applicable Pricing
Supplement, "Commercial Paper Rate" means, with respect to any Interest
Determination Date relating to a Floating Rate Note for which the interest
rate is determined with reference to the Commercial Paper Rate (a "Commercial
Paper Rate Interest Determination Date"), the Money Market Yield (as defined
below) on such date of the rate for commercial paper having the Index Maturity
specified in the applicable Pricing Supplement as published in H.15(519), or
any successor publication, under the heading "Commercial Paper/Nonfinancial".
In the event that such rate is not published by 3:00 P.M., New York City time,
on the related Calculation Date, then the Commercial Paper Rate on such
Commercial Paper Rate Interest Determination Date will be the Money Market
Yield of the rate for commercial paper having the Index Maturity specified in
the applicable Pricing Supplement as published in Composite Quotations under
the heading "Commercial Paper" (with an Index Maturity of one month or three
months being deemed to be equivalent to an Index Maturity of 30 days or 90
days, respectively). If such rate is not yet published in either H.15(519) or
Composite Quotations by 3:00 P.M., New York City time, on the related
Calculation Date, then the Commercial Paper Rate on such Commercial Paper Rate
Interest Determination Date will be calculated by the Calculation Agent and
will be the Money Market Yield of the arithmetic mean of the offered rates at
approximately 11:00 A.M., New York City time, on such Commercial Paper Rate
Interest Determination Date of three leading dealers of commercial paper in
The City of New York (which may include the Agents or their affiliates)
selected by the Calculation Agent for commercial paper having the Index
Maturity specified in the applicable Pricing Supplement placed for an
industrial issuer whose bond rating is "Aa", or the equivalent, from a
nationally recognized statistical rating organization; provided, however, that
if the dealers so selected by the Calculation Agent are not quoting as
mentioned in this sentence, the Commercial Paper Rate determined as of such
Commercial Paper Rate Interest Determination Date will be the Commercial Paper
Rate in effect on such Commercial Paper Rate Interest Determination Date.
 
  "Money Market Yield" means a yield (expressed as a percentage) calculated in
accordance with the following formula:
 
                                   360 x D
                                 -----------
      Money Market Yield = 100 x 360-(D x M)
 
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the period for which interest is being calculated.
 
  Federal Funds Rate. Unless otherwise specified in the applicable Pricing
Supplement, "Federal Funds Rate" means, with respect to any Interest
Determination Date relating to a Floating Rate Note for which the interest
rate is determined with reference to the Federal Funds Rate (a "Federal Funds
Rate Interest Determination Date"), the rate on such date for United States
dollar federal funds as published in H.15(519) under the heading "Federal
Funds (Effective)" or, if not published by 3:00 P.M., New York City time, on
the related Calculation Date, the rate on such Federal Funds Rate Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate". If such rate is not published in either
H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on the
related Calculation Date, then the Federal Funds Rate on such Federal Funds
Rate Interest Determination Date will be calculated by the Calculation Agent
and will be the arithmetic mean of the rates for the last transaction in
overnight United States dollar federal funds arranged by three leading brokers
of federal funds transactions in The City of New York (which may include the
Agents or their affiliates) selected by the Calculation Agent prior to 9:00
A.M., New York City time, on such Federal Funds Rate Interest Determination
Date; provided, however, that if the brokers so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Federal Funds Rate
determined as of such Federal Funds Rate Interest Determination Date will be
the Federal Funds Rate in effect on such Federal Funds Rate Interest
Determination Date.
 
                                     S-11

 
  LIBOR. Unless otherwise specified in the applicable Pricing Supplement,
"LIBOR" means the rate determined in accordance with the following provisions:
 
    (i) With respect to any Interest Determination Date relating to a
  Floating Rate Note for which the interest rate is determined with reference
  to LIBOR (a "LIBOR Interest Determination Date"), LIBOR will be either: (a)
  if "LIBOR Reuters" is specified in the applicable Pricing Supplement, the
  arithmetic mean of the offered rates (unless the Designated LIBOR Page by
  its terms provides only for a single rate, in which case such single rate
  shall be used) for deposits in the Index Currency having the Index Maturity
  specified in such Pricing Supplement, commencing on the applicable Interest
  Reset Date, that appear (or, if only a single rate is required as
  aforesaid, appears) on the Designated LIBOR Page as of 11:00 A.M., London
  time, on such LIBOR Interest Determination Date, or (b) if "LIBOR Telerate"
  is specified in the applicable Pricing Supplement or if neither "LIBOR
  Reuters" nor "LIBOR Telerate" is specified in the applicable Pricing
  Supplement as the method for calculating LIBOR, the rate for deposits in
  the Index Currency having the Index Maturity specified in such Pricing
  Supplement, commencing on such Interest Reset Date, that appears on the
  Designated LIBOR Page as of 11:00 A.M., London time, on such LIBOR Interest
  Determination Date. If in (a) fewer than two such offered rates appear, or
  if in (b) no such rate appears, as applicable, LIBOR on such LIBOR Interest
  Determination Date will be determined in accordance with the provisions
  described in clause (ii) below.
 
    (ii) With respect to a LIBOR Interest Determination Date on which fewer
  than two offered rates appear, or no rate appears, as the case may be, on
  the Designated LIBOR Page as specified in clause (i) above, the Calculation
  Agent will request the principal London offices of each of four major
  reference banks in the London interbank market, as selected by the
  Calculation Agent, to provide the Calculation Agent with its offered
  quotation for deposits in the Index Currency for the period of the Index
  Maturity specified in the applicable Pricing Supplement, commencing on the
  applicable Interest Reset Date, to prime banks in the London interbank
  market at approximately 11:00 A.M., London time, on such LIBOR Interest
  Determination Date and in a principal amount that is representative for a
  single transaction in such Index Currency in such market at such time. If
  at least two such quotations are so provided, then LIBOR on such LIBOR
  Interest Determination Date will be the arithmetic mean of such quotations.
  If fewer than two such quotations are so provided, then LIBOR on such LIBOR
  Interest Determination Date will be the arithmetic mean of the rates quoted
  at approximately 11:00 A.M., in the applicable Principal Financial Center,
  on such LIBOR Interest Determination Date by three major banks in such
  Principal Financial Center selected by the Calculation Agent for loans in
  the Index Currency to leading European banks, having the Index Maturity
  specified in the applicable Pricing Supplement and in a principal amount
  that is representative for a single transaction in such Index Currency in
  such market at such time; provided, however, that if the banks so selected
  by the Calculation Agent are not quoting as mentioned in this sentence,
  LIBOR determined as of such LIBOR Interest Determination Date will be LIBOR
  in effect on such LIBOR Interest Determination Date.
 
  "Index Currency" means the currency or composite currency specified in the
applicable Pricing Supplement as to which LIBOR shall be calculated. If no
such currency or composite currency is specified in the applicable Pricing
Supplement, the Index Currency shall be United States dollars.
 
  "Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified in the
applicable Pricing Supplement, the display on the Reuter Monitor Money Rates
Service (or any successor service) for the purpose of displaying the London
interbank rates of major banks for the applicable Index Currency, or (b) if
"LIBOR Telerate" is specified in the applicable Pricing Supplement or neither
"LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable Pricing
Supplement as the method for calculating LIBOR, the display on the Dow Jones
Markets Service (or any successor service) for the purpose of displaying the
London interbank rates of major banks for the applicable Index Currency.
 
                                     S-12

 
  Prime Rate. Unless otherwise specified in the applicable Pricing Supplement,
"Prime Rate" means, with respect to any Interest Determination Date relating
to a Floating Rate Note for which the interest rate is determined with
reference to the Prime Rate (a "Prime Rate Interest Determination Date"), the
rate on such date as such rate is published in H.15(519) under the heading
"Bank Prime Loan". If such rate is not published prior to 3:00 P.M., New York
City time, on the related Calculation Date, then the Prime Rate shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen USPRIME1 (as defined below) as such bank's prime
rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates appear on the Reuters Screen
USPRIME1 for such Prime Rate Interest Determination Date, then the Prime Rate
will be determined by the Calculation Agent and shall be the arithmetic mean
of the prime rates quoted on the basis of the actual number of days in the
year divided by a 360-day year as of the close of business on such Prime Rate
Interest Determination Date by four major money center banks in The City of
New York selected by the Calculation Agent. If fewer than four such quotations
are so provided, then the Prime Rate shall be the arithmetic mean of four
prime rates quoted on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on such Prime Rate
Interest Determination Date as furnished in The City of New York by the major
money center banks, if any, that have provided such quotations and by as many
substitute banks or trust companies as necessary in order to obtain four such
prime rate quotations, provided such substitute banks or trust companies are
organized and doing business under the laws of the United States, or any State
thereof, each having total equity capital of at least $500 million and being
subject to supervision or examination by Federal or State authority, selected
by the Calculation Agent to provide such rate or rates; provided, however,
that if the banks or trust companies so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the Prime Rate determined as of
such Prime Rate Interest Determination Date will be the Prime Rate in effect
on such Prime Rate Interest Determination Date.
 
  "Reuters Screen USPRIME1" means the display designated as page "USPRIME1" on
the Reuter Monitor Money Rates Service (or such other page as may replace the
USPRIME1 page on that service for the purpose of displaying prime rates or
base lending rates of major United States banks).
 
  Treasury Rate. Unless otherwise specified in the applicable Pricing
Supplement, "Treasury Rate" means, with respect to any Interest Determination
Date relating to a Floating Rate Note for which the interest rate is
determined by reference to the Treasury Rate (a "Treasury Rate Interest
Determination Date"), the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the
United States ("Treasury Bills") having the Index Maturity specified in the
applicable Pricing Supplement, as such rate is published in H.15(519) under
the heading "Treasury Bills-auction average (investment)" or, if not published
by 3:00 P.M., New York City time, on the related Calculation Date, the auction
average rate of such Treasury Bills (expressed as a bond equivalent on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) as otherwise announced by the United States Department of the Treasury.
In the event that the results of the Auction of Treasury Bills having the
Index Maturity specified in the applicable Pricing Supplement are not reported
as provided by 3:00 P.M., New York City time, on the related Calculation Date,
or if no such Auction is held, then the Treasury Rate will be calculated by
the Calculation Agent and will be a yield to maturity (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such Treasury
Rate Interest Determination Date, of three leading primary United States
government securities dealers (which may include the Agent or its affiliates)
selected by the Calculation Agent, for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity specified in the applicable
Pricing Supplement; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Treasury
Rate determined as of such Treasury Rate Interest Determination Date will be
the Treasury Rate in effect on such Treasury Rate Interest Determination Date.
 
                                     S-13

 
REDEMPTION AND REPAYMENT
 
 Redemption at the Option of the Company
 
  The Notes will be redeemable at the option of the Company prior to the
Stated Maturity only if a Redemption Commencement Date is specified in the
applicable Pricing Supplement. If so specified, the Notes will be subject to
redemption at the option of the Company on any date on and after the
applicable Redemption Commencement Date in whole or from time to time in part
in increments of $1,000 or such other increments specified in such Pricing
Supplement (provided that any remaining principal amount thereof shall be at
least $1,000 or such other specified minimum denomination), at the applicable
Redemption Price (as defined below), together with unpaid interest accrued to
the date of redemption, on notice given not more than 60 nor less than 30
calendar days prior to the date of redemption and in accordance with the
provisions of the Indenture. "Redemption Price," with respect to a Note, means
an amount equal to the Initial Redemption Percentage specified in the
applicable Pricing Supplement (as adjusted by the Annual Redemption Percentage
Reduction, if applicable) multiplied by the unpaid principal amount to be
redeemed. The Initial Redemption Percentage, if any, applicable to a Note
shall decline at each anniversary of the Redemption Commencement Date by an
amount equal to the applicable Annual Redemption Percentage Reduction, if any,
until the Redemption Price is equal to 100% of the unpaid principal amount to
be redeemed. See also "--Original Issue Discount Notes".
 
  Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be subject to any sinking fund.
 
 Repayment at the Option of the Holder
 
  The Notes will be repayable by the Company at the option of the Holders
thereof prior to the Stated Maturity only if one or more Optional Repayment
Dates are specified in the applicable Pricing Supplement. If so specified, the
Notes will be subject to repayment at the option of the Holders thereof on any
Optional Repayment Date in whole or from time to time in part in increments of
$1,000 or such other increments specified in the applicable Pricing Supplement
(provided that any remaining principal amount thereof shall be at least $1,000
or such other specified minimum denomination), at a repayment price equal to
100% of the unpaid principal amount to be repaid, together with unpaid
interest accrued to the date of repayment. For any Note to be repaid, such
Note must be received, together with the election form thereon entitled
"Option to Elect Repayment" duly completed, by the Trustee at its Corporate
Trust Office (or such other address of which the Company shall from time to
time notify the Holders) not more than 60 nor less than 30 calendar days prior
to the date of repayment. Exercise of such repayment option by the Holder will
be irrevocable. See also "--Original Issue Discount Notes".
 
  Only the Depositary may exercise the repayment option in respect of Global
Securities representing Book-Entry Notes. Accordingly, owners of beneficial
interests ("Beneficial Owners") in Global Securities that desire to have all
or any portion of the Book-Entry Notes represented by such Global Securities
repaid must instruct the participant through which they own their interest to
direct the Depositary to exercise the repayment option on their behalf by
delivering the related Global Security and duly completed election form to the
Trustee as aforesaid. In order to ensure that such Global Security and
election form are received by the Trustee on a particular day, the applicable
Beneficial Owner must so instruct the participant through which it owns its
interest before such participant's deadline for accepting instructions for
that day. Different firms may have different deadlines for accepting
instructions from their customers. Accordingly, Beneficial Owners should
consult the participants through which they own their interest for the
respective deadlines for such participants. All instructions given to
participants from Beneficial Owners of Global Securities relating to the
option to elect repayment shall be irrevocable. In addition, at the time such
instructions are given, each such Beneficial Owner shall cause the participant
through which it owns its interest to transfer such
 
                                     S-14

 
Beneficial Owner's interest in the Global Security or Global Securities
representing the related Book-Entry Notes, on the Depositary's records, to the
Trustee. See "--Book-Entry Notes".
 
  If applicable, the Company will comply with the requirements of Rule 14e-1
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and any other securities laws or regulations in connection with any such
repayment.
 
  The Company may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Company may, at the
discretion of the Company, be held, resold or surrendered to the Trustee for
cancellation.
 
LIMITATION ON INDEBTEDNESS OF SUBSIDIARIES
 
  The covenant, "Limitation on Indebtedness of Subsidiaries" (described in the
accompanying Prospectus under "Description of Debt Securities--Certain
Covenants of the Company--Limitation on Indebtedness of Subsidiaries"), shall
not be applicable to the Notes.
 
ADDENDUM AND/OR OTHER PROVISIONS
 
  Any provisions with respect to the Notes, including the specification and
determination of one or more Interest Rate Bases, the calculation of the
interest rate applicable to a Floating Rate Note, the Interest Payment Dates,
the Maturity Date or any other term relating thereto, may be modified and/or
supplemented as specified under "Other Provisions" on the face thereof or in
an Addendum relating thereto, if so specified on the face thereof. Such
provisions will be described in the applicable Pricing Supplement.
 
AMORTIZING NOTES
 
  The Company may from time to time offer Notes with the amount of principal
thereof and interest thereon payable in installments over the term of such
Notes ("Amortizing Notes"). Unless otherwise specified in the applicable
Pricing Supplement, interest on each Amortizing Note will be computed on the
basis of a 360-day year of twelve 30-day months. Payments with respect to
Amortizing Notes will be applied first to interest due and payable thereon and
then to the reduction of the unpaid principal amount thereof. Further
information concerning additional terms and provisions of Amortizing Notes
will be specified in the applicable Pricing Supplement, including a table
setting forth repayment information for such Amortizing Notes.
 
ORIGINAL ISSUE DISCOUNT NOTES
 
  The Company may offer Notes from time to time that have an Issue Price (as
defined and specified in the applicable Pricing Supplement) that is less than
100% of the principal amount thereof (i.e. par) ("Original Issue Discount
Notes"). Original Issue Discount Notes may not bear any interest currently or
may bear interest at a rate that is below market rates at the time of
issuance. The difference between the Issue Price of an Original Issue Discount
Note and par is referred to herein as the "Discount". In the event of
redemption, repayment or acceleration of maturity of an Original Issue
Discount Note, the amount payable to the Holder of such Original Issue
Discount Note will be equal to the sum of (i) the Issue Price (increased by
any accruals of the Discount and, in the event of any redemption of such
Original Issue Discount Note (if applicable), multiplied by the Initial
Redemption Percentage specified in the applicable Pricing Supplement (as
adjusted by the Annual Redemption Percentage Reduction, if applicable)) and
(ii) any unpaid interest on such Original Issue Discount Note accrued from the
date of issue to the date of such redemption, repayment or acceleration of
maturity, as the case may be.
 
  Unless otherwise specified in the applicable Pricing Supplement, for
purposes of determining the amount of the Discount that has accrued as of any
date on which a redemption, repayment or acceleration of maturity occurs for
an Original Issue Discount Note, such Discount will be accrued using a
constant yield method. The constant yield will be calculated using a 30-day
month, 360-day year convention, a compounding period that, except for the
Initial Period (as defined below), corresponds to the shortest period between
Interest Payment Dates for the applicable Original Issue
 
                                     S-15

 
Discount Note (with ratable accruals within a compounding period), a coupon
rate equal to the initial coupon rate applicable to such Original Issue
Discount Note and an assumption that the maturity of such Original Issue
Discount Note will not be accelerated. If the period from the date of issue to
the initial Interest Payment Date for an Original Issue Discount Note (the
"Initial Period") is shorter than the compounding period for such Original
Issue Discount Note, a proportionate amount of the yield for an entire
compounding period will be accrued. If the Initial Period is longer than the
compounding period, then such period will be divided into a regular
compounding period and a short period with the short period being treated as
provided in the preceding sentence. The accrual of the applicable Discount may
differ from the accrual of original issue discount for purposes of the
Internal Revenue Code of 1986, as amended (the "Code"), certain Original Issue
Discount Notes may not be treated as having original issue discount within the
meaning of the Code, and Notes other than Original Issue Discount Notes may be
treated as issued with original issue discount for United States Federal
income tax purposes. See "Certain United States Federal Income Tax
Considerations" herein.
 
BOOK-ENTRY NOTES
 
  The Company has established a depository arrangement with The Depository
Trust Company (the "Depositary") with respect to the Book-Entry Notes, the
terms of which are summarized below. Any additional or differing terms of the
depository arrangement with respect to the Book-Entry Notes will be described
in the applicable Pricing Supplement.
 
  Upon issuance, all Book-Entry Notes up to $200,000,000 aggregate principal
amount bearing interest, if any, at the same rate or pursuant to the same
formula and having the same date of issue, currency of denomination and
payment, Interest Payment Dates, if any, Stated Maturity, redemption
provisions, if any, repayment provisions, if any, and other terms will be
represented by a single Global Security; all such Book-Entry Notes in excess
of $200,000,000 aggregate principal amount will be represented by two or more
Global Securities. Each Global Security representing Book-Entry Notes will be
deposited with, or on behalf of, the Depositary and will be registered in the
name of the Depositary or a nominee of the Depositary. No Global Security may
be transferred except as a whole by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or
such nominee to a successor of the Depositary or a nominee of such successor.
See "Description of Debt Securities--Global Securities" in the accompanying
Prospectus.
 
             SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
 
GENERAL
 
  Unless otherwise specified in the applicable Pricing Supplement, Foreign
Currency Notes will not be sold in, or to residents of, the country issuing
the Specified Currency. The information set forth in this Prospectus
Supplement is directed to prospective purchasers who are United States
residents and, with respect to Foreign Currency Notes, is by necessity
incomplete. The Company and the Agents disclaim any responsibility to advise
prospective purchasers who are residents of countries other than the United
States with respect to any matters that may affect the purchase, holding or
receipt of payments of principal of, and premium, if any, and interest, if
any, on, Foreign Currency Notes. Such persons should consult their own
financial and legal advisors with regard to such matters.
 
PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST
 
  Unless otherwise specified in the applicable Pricing Supplement, the Company
is obligated to make payments of principal of, and premium, if any, and
interest, if any, on, Foreign Currency Notes in the applicable Specified
Currency (or, if such Specified Currency is not at the time of such payment
legal tender for the payment of public and private debts, in such other coin
or currency of the country
 
                                     S-16

 
which issued such Specified Currency as at the time of such payment is legal
tender for the payment of such debts). Any such amounts payable by the Company
in a foreign currency or composite currency will, unless otherwise specified
in the applicable Pricing Supplement, be converted by the Exchange Rate Agent
named in the applicable Pricing Supplement into United States dollars for
payment to Holders. However, the Holder of a Foreign Currency Note may elect
to receive amounts payable in a foreign currency or composite currency in such
foreign currency or composite currency as hereinafter described.
 
  Any United States dollar amount to be received by a Holder of a Foreign
Currency Note will be based on the highest bid quotation in The City of New
York received by the Exchange Rate Agent at approximately 11:00 A.M., New York
City time, on the second Business Day preceding the applicable payment date
from three recognized foreign exchange dealers (one of whom may be the
Exchange Rate Agent) selected by the Exchange Rate Agent and approved by the
Company for the purchase by the quoting dealer of the applicable foreign
currency or composite currency for United States dollars for settlement on
such payment date in the aggregate amount of such currency or composite
currency payable to all Holders of Foreign Currency Notes scheduled to receive
United States dollar payments and at which the applicable dealer commits to
execute a contract. All currency exchange costs will be borne by the Holders
of such Foreign Currency Notes by deductions from such payments. If three such
bid quotations are not available, payments will be made in the applicable
foreign currency or composite currency.
 
  If the principal of, and premium, if any, and interest, if any, on, Foreign
Currency Notes are payable in a foreign currency or composite currency,
Holders of such Foreign Currency Notes may elect to receive all or a specified
portion of such payments in such foreign currency or composite currency by
submitting a written request for such payment to the Trustee at its Corporate
Trust Office on or prior to the applicable Record Date or at least fifteen
calendar days prior to the Maturity Date, as the case may be. Such written
request may be mailed or hand delivered or sent by cable, telex or other form
of facsimile transmission. Holders of such Foreign Currency Notes may elect to
receive all or a specified portion of all future payments in the applicable
foreign currency or composite currency in respect of such principal, premium,
if any, and/or interest, if any, and need not file a separate election for
each payment. Such election will remain in effect until revoked by written
notice to the Trustee, but written notice of any such revocation must be
received by the Trustee on or prior to the applicable Record Date or at least
fifteen calendar days prior to the Maturity Date, as the case may be. Holders
of such Foreign Currency Notes to be held in the name of a broker or nominee
should contact such broker or nominee to determine whether and how an election
to receive payments in the applicable foreign currency or composite currency
may be made.
 
  Payments of the principal of, and premium, if any, and/or interest, if any,
on, Foreign Currency Notes which are to be made in United States dollars will
be made in the manner specified herein with respect to Notes denominated in
United States dollars. See "Description of the Notes--General". Payments of
interest, if any, on Foreign Currency Notes which are to be made in the
applicable foreign currency or composite currency on an Interest Payment Date
other than the Maturity Date will be made by check mailed to the address of
the Holders of such Foreign Currency Notes as they appear in the security
register of the Company, subject to the right to receive such interest
payments by wire transfer of immediately available funds under the
circumstances described under "Description of the Notes--General". Payments of
principal of, and premium, if any, and/or interest, if any, on, Foreign
Currency Notes which are to be made in the applicable foreign currency or
composite currency on the Maturity Date will be made by wire transfer of
immediately available funds to an account with a bank designated at least
fifteen calendar days prior to the Maturity Date by each Holder thereof,
provided that such bank has appropriate facilities therefor and that the
applicable Foreign Currency Note is presented and surrendered at the Corporate
Trust Office of the Trustee in time for the Trustee to make such payments in
such funds in accordance with its normal procedures.
 
                                     S-17

 
  Unless otherwise specified in the applicable Pricing Supplement, a
Beneficial Owner of a Global Security or Global Securities representing Book-
Entry Notes payable in a currency or composite currency other than United
States dollars which elects to receive payments of principal, premium, if any,
and/or interest, if any, in such currency or composite currency must notify
the participant through which it owns its interest on or prior to the
applicable Record Date or at least fifteen calendar days prior to the Maturity
Date, as the case may be, of such Beneficial Owner's election. Such
participant must notify the Depositary of such election on or prior to the
third Business Day after such Record Date or at least twelve calendar days
prior to the Maturity Date, as the case may be, and the Depositary will notify
the Trustee of such election on or prior to the fifth Business Day after such
Record Date or at least ten calendar days prior to the Maturity Date, as the
case may be. If complete instructions are received by the participant from the
Beneficial Owner and forwarded by the participant to the Depositary, and by
the Depositary to the Trustee, on or prior to such dates, then such Beneficial
Owner will receive payments in the applicable foreign currency or composite
currency.
 
AVAILABILITY OF SPECIFIED CURRENCY
 
  Except as set forth below, if the principal of, premium, if any, and/or
interest, if any, on, any Note is payable in a Specified Currency other than
U.S. dollars and such Specified Currency is not available to the Company for
making payments thereof due to the imposition of exchange controls or other
circumstances beyond the control of the Company or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking
community, then the Company will be entitled to satisfy its obligations to
holders of the Notes by making such payments in U.S. dollars on the basis of
the Market Exchange Rate (as defined below) on the second Business Day prior
to such payment date or, if such Market Exchange Rate is not then available,
on the basis of the most recently available Market Exchange Rate; provided,
however, that if such Specified Currency is replaced by a single European
currency (expected to be named the Euro), the payment of principal of,
premium, if any, and interest, if any, on any Note denominated in such
currency shall be effected in the new single European currency in conformity
with legally applicable measures taken pursuant to, or by virtue of, the
treaty establishing the European Community, as amended by the treaty on
European Union.
 
  Unless otherwise specified in the applicable Pricing Supplement, if payment
in respect of a Foreign Currency Note is required to be made in any composite
currency, and such composite currency is unavailable due to the imposition of
exchange controls or other circumstances beyond the control of the Company,
the Company will be entitled to satisfy its obligations to the Holder of such
Foreign Currency Note by making such payment in United States dollars. The
amount of each payment in United States dollars shall be computed by the
Exchange Rate Agent on the basis of the equivalent of the composite currency
in United States dollars. The component currencies of the composite currency
for this purpose (collectively, the "Component Currencies" and each, a
"Component Currency") shall be the currency amounts that were components of
the composite currency as of the last day on which the composite currency was
used. The equivalent of the composite currency in United States dollars shall
be calculated by aggregating the United States dollar equivalents of the
Component Currencies. The United States dollar equivalent of each of the
Component Currencies shall be determined by the Exchange Rate Agent on the
basis of the most recently available Market Exchange Rate for each such
Component Currency, or as otherwise specified in the applicable Pricing
Supplement.
 
  If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in
such single currency equal to the sum of the amounts of the consolidated
Component Currencies expressed in such single currency. If any Component
Currency is divided into two or more currencies, the amount of the original
 
                                     S-18

 
Component Currency shall be replaced by the amounts of such two or more
currencies, the sum of which shall be equal to the amount of the original
Component Currency.
 
  The "Market Exchange Rate" for a currency or composite currency other than
United States dollars means the noon dollar buying rate in The City of New
York for cable transfers for such currency or composite currency as certified
for customs purposes by (or if not so certified, as otherwise determined by)
the Federal Reserve Bank of New York. Any payment made in United States
dollars or a new single European currency under the circumstances described
above where the required payment is in a currency or composite currency other
than United States dollars or such single European currency, respectively,
will not constitute an Event of Default under the Indenture with respect to
the Notes.
 
  All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion and shall, in the absence of error, be conclusive
for all purposes and binding on the Holders of the Foreign Currency Notes.
 
            CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
 
  The following is a summary of certain United States Federal tax
considerations of the acquisition, ownership, and disposition of the Notes by
original purchasers of the Notes who are U.S. Holders or non-U.S. Holders
(each as defined below). This summary is based on existing United States
Federal tax law, which is subject to change, possibly retroactively. This
discussion does not discuss all aspects of United States Federal taxation that
may be relevant to a particular holder in light of its personal investment
circumstances, such as holders who hold the Notes as a position in a
"straddle" or "hedge" for United States Federal income tax purposes, holders
who have a functional currency other than the U.S. dollar, or holders subject
to special treatment under the United States Federal income tax laws (for
example, financial institutions, insurance companies, tax exempt
organizations, and broker-dealers), and it does not discuss any aspects of
foreign, state, or local tax laws. This summary assumes that purchasers will
hold the Notes as "capital assets" (generally, property held for investment)
under the Internal Revenue Code of 1986, as amended (the "Code"). Because the
exact pricing and other terms of the Notes will vary, no assurance can be
given that the considerations described below will apply to a particular
issuance of Notes. Certain material United States Federal income tax
consequences relating to the ownership of particular Notes (where applicable)
will be summarized in the Pricing Supplement relating to such Notes.
Prospective investors are urged to consult their tax advisors regarding the
United States Federal tax consequences of acquiring, holding, and disposing of
the Notes in light of their individual circumstances, as well as any tax
consequences that may arise under the laws of any foreign, state, local, or
other taxing jurisdiction.
 
  For purposes of this summary, the term "U.S. Holder" means a beneficial
owner of a Note that is, for United States Federal income tax purposes, (i) a
citizen or resident of the United States, (ii) a corporation, partnership, or
other entity created or organized in the United States or under the laws of
the United States or of any political subdivision thereof, (iii) an estate
whose income is includible in gross income for United States Federal income
tax purposes regardless of its source, or (iv) a trust whose administration is
subject to the primary supervision of a United States court and which has one
or more United States persons who have the authority to control all
substantial decisions of the trust. As used herein, the term "non-U.S. Holder"
means a holder of a Note that is not a U.S. Holder.
 
U.S. HOLDERS
 
 Original Issue Discount
 
  The following summary is a general discussion of the United States Federal
income tax consequences to U.S. Holders of the purchase, ownership and
disposition of Notes issued with original issue discount.
 
                                     S-19

 
  Notes with a term greater than one year may be issued with original issue
discount for United States Federal income tax purposes. Original issue
discount will arise if the stated principal amount at maturity of a Note
exceeds its issue price by more than a de minimis amount, or if a Note has
certain interest payment characteristics (e.g., interest holidays, interest
payable in additional Notes, certain stepped rates, or certain rates based on
multiple indices). If a Note is issued with original issue discount, the
holder of the Note will be required to include amounts in gross income for
United States Federal income tax purposes in advance of the receipt of the
cash payment to which such income is attributable. The amount of original
issue discount to be included in income in any tax period will be determined
using a constant yield to maturity method, which will result in a greater
portion of such discount being included in income in the later part of the
term of the Notes. Any amounts included in income as original issue discount
will increase a holder's adjusted tax basis in the Note.
 
  The Company will report annually to the Internal Revenue Service (the
"Service") and to each holder of such Note the amount of original issue
discount accrued with respect to the Note. Prospective purchasers are advised
to consult their tax advisors with respect to the particular original issue
discount characteristics of the Note that is being purchased.
 
 Acquisition Discount
 
  Certain Notes that have a fixed maturity of one year or less may be issued
with acquisition discount. Acquisition discount may arise under the
circumstances set forth above with respect to original issue discount. Accrual
basis taxpayers, taxpayers in certain specified classes, and cash basis
taxpayers making an appropriate election to accrue acquisition discount under
the Code, would be required to include acquisition discount in income
currently in an amount and manner similar to that applicable to original issue
discount. A cash basis holder who makes such an election cannot revoke such
accrual election without the consent of the Service, and such election applies
to all short-term obligations acquired by the holder in the taxable year in
which the election is made and in all subsequent taxable years. Individuals
and other non-electing cash basis taxpayers holding Notes with acquisition
discount are not required to include accrued acquisition discount in income
until the cash payments attributable to such amounts are received, which
amounts will be treated as ordinary income. A holder who does not recognize
acquisition discount currently may also be subject to limitations on the
deductibility of interest on indebtedness incurred to purchase or, in certain
circumstances, carry such a Note.
 
 Bond Premium
 
  If a Note is issued at a premium, a U.S. Holder may be able to amortize such
premium. Prospective purchasers are advised to consult their tax advisors as
to the consequences of purchasing a Note issued at a premium.
 
 Disposition of Notes
 
  In general, except for Notes issued with acquisition discount (as discussed
above), or foreign currency Notes (as discussed below), a holder of a Note
will recognize gain or loss on the sale, redemption, exchange or other
disposition of the Note in an amount equal to the difference between the
amount realized (except to the extent attributable to accrued interest) and
the holder's adjusted tax basis in the Note.
 
  Under the recently enacted Taxpayer Relief Act of 1997, net capital gain
(i.e., generally, capital gain in excess of capital loss) recognized by an
individual from the sale of a capital asset that has been held for more than
18 months will be subject to tax at a rate not to exceed 20%, capital gain
from the sale of an asset held for more than 12 months but not more than 18
months will continue to be subject to tax at a rate not to exceed 28%, and
capital gain recognized from the sale of a capital asset that has been held
for 12 months or less will continue to be subject to tax at ordinary income
tax rates. In
 
                                     S-20

 
addition, capital gain recognized by a corporate taxpayer will continue to be
subject to tax at the ordinary income tax rates applicable to corporations.
 
 Foreign Currency Notes
 
  Interest Payments and Original Issue Discount
 
  Interest on Notes that are denominated in, or determined by reference to, a
foreign currency or currencies will generally be taxable to a U.S. Holder in
accordance with such holder's method of accounting for United States Federal
income tax purposes, and any original issue discount must be included in
income as it accrues. Regardless of whether an interest payment is in fact
converted into U.S. dollars, the amount of interest income (including any
original issue discount and reduced by any amortizable bond premium) required
to be included in income will generally be (i) in the case of a cash basis
taxpayer, the U.S. dollar value of the foreign currency interest payment based
on the exchange rate in effect on the date of receipt of the payment plus the
amount of any accrued original issue discount, and (ii) in the case of an
accrual basis taxpayer, the average U.S. dollar value of the accrued amounts
based on the average exchange rate in effect during the interest accrual
period (unless an election is made pursuant to Treasury Regulations to use a
different exchange rate). Such U.S. dollar value will be the holder's tax
basis in the foreign currency. The amount of original issue discount on a
foreign currency Note required to be included in income will be computed for
each accrual period in the relevant foreign currency and then translated into
a U.S. dollar value based on the average exchange rate in effect during such
accrual period.
 
  An accrual basis taxpayer will be required to recognize gain or loss upon
the receipt of interest payments in a foreign currency on a foreign currency
Note as a result of fluctuations in currency exchange rates between the dates
of accrual and receipt ("Currency Gain or Loss"), which gain or loss will be
equal to the U.S. dollar value of the foreign currency payment based on the
exchange rate in effect on the date of receipt of such payment less the
interest income required to be included in income (as described above).
Similarly, upon the sale, exchange or retirement of a foreign currency Note, a
holder who receives proceeds in a foreign currency which are attributable to
original issue discount or, in the case of an accrual basis taxpayer, accrued
but unpaid interest, will be required to recognize Currency Gain or Loss. Any
such Currency Gain or Loss will be treated as ordinary income or loss.
 
  Purchase and Disposition of the Foreign Currency Notes
 
  A U.S. Holder's tax basis in a foreign currency Note will be the U.S. dollar
value of the foreign currency amount paid for such foreign currency Note based
on the exchange rate in effect on the date of purchase of the foreign currency
Note, plus the U.S. dollar value of any accrued original issue discount on the
foreign currency Note that the holder has included in gross income. A holder
who converts U.S. dollars to a foreign currency and immediately uses that
currency to purchase a foreign currency Note denominated in the same currency
will ordinarily not recognize Currency Gain or Loss in connection with such
conversion and purchase. If a holder purchases a foreign currency Note with
previously owned foreign currency, the holder will recognize Currency Gain or
Loss in an amount equal to the difference, if any, between such holder's tax
basis in the foreign currency and the U.S. dollar fair market value of the
foreign currency Note based on the exchange rate in effect on the date of
purchase. Gain or loss will be recognized upon the sale, redemption, exchange
or other disposition of a foreign currency Note equal to the U.S. dollar value
of the foreign currency received upon such disposition less the U.S. dollar
tax basis in the foreign currency Note. Such gain or loss that is recognized
will be ordinary income or loss to the extent it is Currency Gain or Loss. Any
gain or loss recognized in excess of the Currency Gain or Loss will be treated
as capital gain or loss.
 
                                     S-21

 
  Exchange of the Foreign Currency
 
  Foreign currency received or accrued as interest on a foreign currency Note
or on the sale, redemption, exchange, or other disposition of a foreign
currency Note will have a tax basis equal to its U.S. dollar value based on
the exchange rate in effect at the time such interest is received or accrued
or at the time of such disposition. Any gain or loss recognized on a sale or
other disposition of the foreign currency (including its exchange for U.S.
dollars or its use to purchase Notes) will be ordinary income or loss.
 
NON-U.S. HOLDERS
 
  Under present United States Federal income and estate tax law, assuming
certain certification requirements are satisfied (which include, among other
things, identification of the beneficial owner of the instrument), and subject
to the discussion of backup withholding below:
 
    (a) payments of interest, including any original issue discount, on the
  Notes to any non-U.S. Holder will not be subject to United States Federal
  income or withholding tax, provided that (1) the holder does not actually
  or constructively own 10% or more of the total combined voting power of all
  classes of stock of the Company entitled to vote, (2) the holder is not (i)
  a foreign tax exempt organization or a foreign private foundation for
  United States Federal income tax purposes, (ii) a bank receiving interest
  pursuant to a loan agreement entered into in the ordinary course of its
  trade or business, or (iii) a controlled foreign corporation that is
  related to the Company through stock ownership, and (3) such interest
  payments are not effectively connected with the conduct of a United States
  trade or business of the holder;
 
    (b) a holder of a Note who is a non-U.S. Holder will not be subject to
  United States Federal income tax on gain realized on the sale, exchange,
  retirement, or other disposition of a Note, unless (1) such holder is an
  individual who is present in the United States for 183 days or more during
  the taxable year and certain other requirements are met, or (2) the gain is
  effectively connected with the conduct of a United States trade or business
  of the holder;
 
    (c) if interest on the Notes is exempt from United States Federal income
  tax under the rules described above, the Notes will not be included in the
  estate of a non-U.S. Holder for United States Federal estate tax purposes.
 
  The certification referred to above may be made on a Service Form W-8 or
substantially similar substitute form.
 
 Backup Withholding and Information Reporting
 
  The Company must report to the holders of Notes and to the Service the
amount of any interest, or original issue discount accrued, in each calendar
year and the amounts of tax withheld, if any, with respect to such payments.
That information may also be made available to the tax authorities of the
country in which a non-U.S. Holder resides.
 
  Under temporary United States Treasury regulations, United States
information reporting requirements and backup withholding tax will generally
not apply to interest paid on the Notes to a non-U.S. Holder. Payments by a
United States office of a broker of the proceeds of a sale of the Notes is
subject to both backup withholding at a rate of 31% and information reporting
unless the holder certifies its non-U.S. Holder status under penalties of
perjury ("Owner's Statement") or otherwise establishes an exemption.
Information reporting requirements (but not backup withholding) will also
apply to payments of the proceeds of sales of the Notes where the transaction
is effected outside the United States through foreign offices of the United
States brokers, or foreign brokers with certain types of relationships to the
United States, unless the broker has documentary evidence in its records that
the holder is a non-U.S. Holder and certain other conditions are met, or the
holder otherwise establishes an exemption.
 
                                     S-22

 
  On October 7, 1997, the Treasury Department released new Treasury
Regulations governing the backup withholding and information reporting
requirements described above. The new regulations would not generally alter
the treatment of non-U.S. Holders who furnish an Owner's Statement to the
payor. The new regulations may change certain procedures applicable to United
States connected brokers. The new regulations are generally effective for
payments made after December 31, 1998.
 
  Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules will be refunded or credited against the Non-United
States Holder's United States Federal income tax liability, provided that the
required information is furnished to the Service.
 
                       SUPPLEMENTAL PLAN OF DISTRIBUTION
 
  Subject to the terms and conditions set forth in the Distribution Agreement
dated December 5, 1997 among the Company and Goldman, Sachs & Co. and Bear,
Stearns & Co. Inc. (collectively, the "Agents"), the Notes are being offered
on a continuous basis by the Company through the Agents, who have agreed to
use reasonable best efforts to solicit purchases of the Notes. The Company
will have the sole right to accept offers to purchase Notes and may reject any
proposed purchase of Notes in whole or in part. The Agents shall have the
right, in their discretion reasonably exercised, to reject any offer to
purchase Notes, in whole or in part. The Company will pay the Agents a
commission of from 0.125% to 0.750% of the principal amount of Notes,
depending upon maturity, for sales made through them as Agents. For Notes with
maturities of 30 years or more from their dates of issue, commissions will be
negotiated at the time of sale and indicated in the applicable Pricing
Supplement.
 
  The Company may also sell Notes to the Agents as principals for their own
accounts at a discount to be agreed upon at the time of sale, or the
purchasing Agents may receive from the Company a commission or discount
equivalent to that set forth on the cover page hereof in the case of any such
principal transaction in which no other discount is agreed. Such Notes may be
resold at prevailing market prices, or at prices related thereto, at the time
of such resale, as determined by the Agents.
 
  In addition, the Agents may offer the Notes they have purchased as principal
to other dealers. The Agents may sell Notes to any dealer at a discount and,
unless otherwise specified in the applicable Pricing Supplement, such discount
allowed to any dealer may be up to 66 2/3% of the discount to be received by
such Agent from the Company. Unless otherwise indicated in the applicable
Pricing Supplement, any Note sold to an Agent as principal will be purchased
by such Agent at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to any agency sale of a Note of
identical maturity. After the initial public offering of Notes to be resold to
investors and other purchasers on a fixed public offering price basis, the
public offering price, concession and discount may be changed.
 
  In connection with the offering, the Agents may purchase and sell the Notes
in the open market. These transactions may include over-allotment and
stabilizing transactions and purchases to cover short positions created by the
Agents in connection with the offering. Stabilizing transactions consist of
certain bids or purchases for the purpose of preventing or retarding a decline
in the market price of the Notes, and short positions created by the Agents
involve the sale by the Agents of a greater aggregate principal amount of
Notes than they are required to purchase from the Company in the offering. The
Agents also may impose a penalty bid, whereby selling concessions allowed to
broker-dealers in respect of the Notes sold in the offering may be reclaimed
by the Agents if such Notes are repurchased by the Agents in stabilizing or
covering transactions. These activities may stabilize, maintain or otherwise
affect the market price of the Notes, which may be higher than the price that
might otherwise prevail in the open market; and these activities, if
commenced, may be discontinued at any time. These transactions may be effected
in the over-the-counter market or otherwise.
 
                                     S-23

 
  The Company reserves the right to sell Notes through one or more additional
agents or directly to certain investment banking firms as underwriters for
resale to the public. No commission will be payable to the Agents on any Notes
sold through other agents or directly by the Company to underwriters. The
Company has additionally reserved the right to sell Notes directly to
investors, and may solicit and accept offers to purchase Notes directly from
investors from time to time on its own behalf in those jurisdictions where it
is authorized to do so.
 
  The Agents, as agents or principals, may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"). The Company has agreed to indemnify the Agents against certain
liabilities, including liabilities under the Securities Act. The Company has
agreed to reimburse the Agents for certain expenses.
 
  The Agents may sell to or through dealers who may resell to investors, and
the Agents may pay up to 66 2/3% of their discount or commission to such
dealers. Such dealers may be deemed to be "underwriters" within the meaning of
the Securities Act.
 
  Unless otherwise indicated in the applicable Pricing Supplement, payment of
the purchase price of Notes will be required to be made in immediately
available funds in The City of New York.
 
  From time to time the Agents have provided, and continue to provide,
commercial or investment banking services to the Company for which they
receive customary fees.
 
  The Notes are a new issue of securities with no established trading market
and will not be listed on any securities exchange. No assurance can be given
as to the existence or liquidity of the secondary market for the Notes.
 
                             CERTAIN LEGAL MATTERS
 
  The validity of the Notes offered hereby will be passed upon for the Company
by Latham & Watkins, Los Angeles, California. Certain legal matters in
connection with the offering of Notes hereby will be passed upon for the
Company by George A. Vandeman, Esq., Senior Vice President, General Counsel
and Secretary of the Company, and for the Agents by Skadden, Arps, Slate,
Meagher & Flom LLP, Los Angeles, California.
 
                                     S-24

 
PROSPECTUS
 
                                  $500,000,000
 
                             [LOGO OF AMGEN, INC.]
 
                                DEBT SECURITIES
 
                               ----------------
 
  The Company may offer and issue from time to time in one or more series debt
securities (the "Debt Securities") with an initial aggregate offering price not 
to exceed U.S. $500,000,000 (or the equivalent in foreign denominated currency 
or units based on or relating to currencies, including European Currency 
Units). The Company will offer Debt Securities to the public on terms
determined by market conditions. Debt Securities may be issuable in registered
form without coupons or in bearer form with or without coupons attached. Debt
Securities may be sold for U.S. dollars, foreign denominated currency or
currency units; principal of, premium, if any, and any interest on Debt
Securities may likewise be payable in U.S. dollars, foreign denominated
currency or currency units in each case, as the Company specifically
designates.
 
  The accompanying Prospectus Supplement sets forth the specific designation,
aggregate principal amount, purchase price, maturity, interest rate (or manner
of calculation thereof), time of payment of interest (if any), listing (if any) 
on a securities exchange and any other specific terms of the Debt Securities 
and the name of and compensation to each dealer, underwriter or agent (if any) 
involved in the sale of such Debt Securities. The managing underwriters with 
respect to each series sold to or through underwriters will be named in the 
accompanying Prospectus Supplement.
 
                               ----------------
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
    EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
  SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
      PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.  ANY
         REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
                               ----------------
 
  Debt Securities may be offered through dealers, underwriters or agents
designated from time to time, as set forth in the accompanying Prospectus
Supplement. Net proceeds to the Company will be the purchase price in the case
of a dealer, the public offering price less discount in the case of an
underwriter or the purchase price less commission in the case of an agent--in
each case, less other expenses attributable to issuance and distribution. The
Company may also sell Debt Securities directly to investors on its own behalf.
In the case of sales made directly by the Company, no commission will be
payable. See "Plan of Distribution" for possible indemnification arrangements
for dealers, underwriters and agents.
 
 
November 24, 1997

 
  NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, DEALER OR AGENT. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION.
 
                             AVAILABLE INFORMATION
 
  The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549 or at its Regional Offices located
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and Seven World Trade Center, Suite 1300, New York, New York 10048,
and copies of such material can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants,
including the Company, that file electronically with the Commission at
http://www.sec.gov. The common stock, par value $0.0001 per share, of the
Company is listed on The Nasdaq National Market. Reports, proxy information
and other information concerning the Company can also be inspected at the
offices of Nasdaq at 1735 K Street, N.W., Washington, D.C. 20006.
 
  The Prospectus constitutes a part of a Registration Statement on Form S-3
filed by the Company with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement in accordance with the
rules and regulations of the Commission. Reference is hereby made to the
Registration Statement and related exhibits for further information with
respect to the Company and the Debt Securities. Statements contained herein
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
 
                    INCORPORATION OF DOCUMENTS BY REFERENCE
 
  The following documents have been filed by the Company with the Commission
(File No. 0-12477) and are incorporated herein by reference:
 
    (1) the Company's Annual Report on Form 10-K for the year ended December
     31, 1996;
 
    (2) the Company's Quarterly Reports on Form 10-Q for the quarters ended
  March 31, 1997, June 30, 1997 and September 30, 1997; and
 
    (3) the Company's Current Reports on Form 8-K as filed with the
  Commission on February 26, 1997, February 28, 1997, March 14, 1997, April
  8, 1997 and June 13, 1997.
 
                                       2

 
  All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act, subsequent to the date of this Prospectus and prior
to the termination of the offering of any series of Debt Securities, shall be
deemed to be incorporated by reference in this Prospectus and be a part hereof
from the date of filing of such documents. Any statement contained herein or
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus
to the extent that a statement contained herein, or in any subsequently filed
document that also is or is deemed to be incorporated by reference, modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
 
  Copies of the above documents (excluding exhibits, unless such exhibits are
specifically incorporated by reference in such documents) may be obtained
without charge upon request by persons (including beneficial owners) to whom
this Prospectus is delivered from the Manager of Investor Relations of the
Company, 1840 DeHavilland Drive, Thousand Oaks, California 91320-1789
(telephone number 805-499-5725, extension 3352).
 
                                  AMGEN INC.
 
GENERAL
 
  Amgen Inc. ("Amgen" or the "Company") is a global biotechnology company that
discovers, develops, manufactures and markets human therapeutics based on
advances in cellular and molecular biology.
 
  The Company manufactures and markets three human therapeutic products,
NEUPOGEN(R) (Filgrastim), EPOGEN(R) (Epoetin alfa) and INFERGEN(R) (Interferon
alfacon-1). NEUPOGEN(R) selectively stimulates the production of neutrophils,
one type of white blood cell. The Company markets NEUPOGEN(R) in the United
States, countries of the European Union ("EU"), Canada and Australia for use
in decreasing the incidence of infection in patients undergoing
myelosuppressive chemotherapy. In addition, NEUPOGEN(R) is marketed in most of
these countries for use in reducing the duration of neutropenia for patients
undergoing myeloablative therapy followed by bone marrow transplantation, for
treating patients with severe chronic neutropenia and to support peripheral
blood progenitor cell ("PBPC") transplantations. EPOGEN(R) stimulates the
production of red blood cells and is marketed by Amgen in the United States
for the treatment of anemia associated with chronic renal failure in patients
on dialysis. INFERGEN(R) is a non-naturally occurring recombinant type-I
interferon for the treatment of chronic hepatitis C viral infection.
 
  The Company focuses its research on biological cell/tissue events and its
development efforts on human therapeutics in the areas of hematopoiesis,
neurobiology, endocrinology, inflammation and soft tissue repair and
regeneration. The Company has research facilities in the United States and
Canada and has clinical development staff in the United States, the EU,
Canada, Australia, Japan and Hong Kong. To augment internal research and
development efforts, the Company has established external research
collaborations and has acquired certain product and technology rights.
 
  Amgen operates commercial manufacturing facilities located in the United
States and Puerto Rico. A sales and marketing force is maintained in the
United States, the EU, Canada and Australia. In addition, Amgen has entered
into licensing and co-promotion agreements to market NEUPOGEN(R), EPOGEN(R)
and INFERGEN(R) in certain geographic areas.
 
  The Company was incorporated in California in 1980 and was merged into a
Delaware corporation in 1987. Amgen's principal executive offices are located
at 1840 DeHavilland Drive, Thousand Oaks, California 91320-1789 and its
telephone number is (805) 447-1000.
 
 
                                       3

 
RATIO OF EARNINGS TO FIXED CHARGES
 
  The Company's consolidated ratio of earnings to fixed charges for the fiscal
years ended December 31, 1992, 1993, 1994, 1995 and 1996 and for the nine
months ended September 30, 1997 were 55.7x, 46.0x, 31.1x, 33.2x, 62.4x and
49.5x, respectively. For the purposes of calculating the ratio of earnings to
fixed charges, earnings consist of income before income taxes adjusted for the
equity in earnings and losses of and cash distributions from less than 50%-
owned companies accounted for under the equity method, the Company's share of
the provision for income taxes of a 50%-owned company and fixed charges
(excluding capitalized interest). Fixed charges consist of net interest
expense (including amortization of debt issuance costs and Amgen's applicable
share of interest expense of a 50%-owned company), capitalized interest and
the interest portion of operating lease expense.
 
                                USE OF PROCEEDS
 
  Unless otherwise set forth in the applicable Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be used for general
corporate purposes, which may include additions to working capital, capital
expenditures, stock repurchases, repayment of indebtedness and acquisitions.
 
                        DESCRIPTION OF DEBT SECURITIES
 
  The Debt Securities will be issued under an Indenture dated as of January 1,
1992, as supplemented by a First Supplemental Indenture dated as of February
26, 1997 (the "Supplement") (such Indenture and Supplement are collectively
referred to herein as the "Indenture"), between the Company and Citibank,
N.A., as trustee (the "Trustee"). The following summaries of certain
provisions of the Indenture and the Debt Securities do not purport to be
complete and such summaries are subject to the detailed provisions of the
Indenture to which reference is hereby made for a full description of such
provisions, including the definition of certain terms used herein, and for
other information regarding the Debt Securities. The Indenture has been
incorporated by reference as an exhibit to the Registration Statement of which
this Prospectus is a part. Numerical references in parentheses below are to
sections in the Indenture. Wherever particular sections or defined terms of
the Indenture are referred to, such sections or defined terms are incorporated
herein by reference as part of the statement made, and the statement is
qualified in its entirety by such reference. The Debt Securities offered by
this Prospectus and the accompanying Prospectus Supplement are referred to
herein as the "Offered Debt Securities."
 
GENERAL
 
  The Indenture does not limit the amount of additional indebtedness that the
Company may incur. The Debt Securities will be unsecured and will rank pari
passu with all other unsecured and unsubordinated indebtedness of the Company.
 
  The Indenture provides that Debt Securities may be issued from time to time
in one or more series and may be denominated and payable in foreign currencies
or units based on or relating to foreign currencies, including European
Currency Units ("ECUs"). Special United States federal income tax
considerations applicable to any Debt Securities so denominated are described
in the relevant Prospectus Supplement.
 
  Reference is made to the Prospectus Supplement for the following terms of
and information relating to the Offered Debt Securities (to the extent such
terms are applicable to such Offered Debt Securities): (i) the specific
designation, aggregate principal amount, purchase price and denomination;
 
                                       4

 
(ii) currency or units based on or relating to currencies in which such
Offered Debt Securities are denominated and/or in which principal of, premium,
if any, and/or any interest on such Offered Debt Securities will or may be
payable; (iii) any date of maturity; (iv) interest rate or rates (or the
method by which such rate will be determined), if any; (v) the dates on which
any such interest will be payable; (vi) the place or places where the
principal of, premium, if any, and any interest on the Offered Debt Securities
will be payable; (vii) any redemption, repayment or sinking fund provisions;
(viii) whether the Offered Debt Securities will be issuable in registered form
or bearer form ("Bearer Debt Securities") or both and, if Bearer Debt
Securities are issuable, any restrictions applicable to the exchange of one
form for another and to the offer, sale and delivery of Bearer Debt
Securities; (ix) any applicable United States federal income tax consequences,
including whether and under what circumstances the Company will pay additional
amounts on Offered Debt Securities held by a person who is not a U.S. person
(as defined in the Prospectus Supplement) in respect of any tax, assessment or
governmental charge withheld or deducted and, if so, whether the Company will
have the option to redeem such Offered Debt Securities rather than pay such
additional amounts; and (x) any other specific terms of the Offered Debt
Securities, including any additional events of default or covenants provided
for with respect to such Offered Debt Securities, and any terms which may be
required by or be advisable under applicable laws or regulations.
 
  Debt Securities may be presented for exchange and registered Debt Securities
may be presented for transfer in the manner, at the places and subject to the
restrictions set forth in the Debt Securities and the Prospectus Supplement.
Subject to the limitations provided in the Indenture, such services will be
provided without charge, other than any tax or other governmental charge
payable in connection therewith. Debt Securities in bearer form and the
coupons, if any, appertaining thereto will be transferable by delivery.
 
  Debt Securities will bear interest at a fixed rate (a "Fixed Rate Security")
or a floating rate (a "Floating Rate Security"). Debt Securities bearing no
interest or interest at a rate that at the time of issuance is below the
prevailing market rate will be sold at a discount below their stated principal
amount. Special United States federal income tax considerations applicable to
any such discounted Debt Securities or to certain Debt Securities issued at
par which are treated as having been issued at a discount for United States
federal income tax purposes are described in the relevant Prospectus
Supplement.
 
GLOBAL SECURITIES
 
  The registered Debt Securities of a series may be issued in the form of one
or more fully registered global Debt Securities (a "Registered Global
Security") that will be deposited with a depositary (a "Depositary") or with a
nominee for a Depositary identified in the Prospectus Supplement relating to
such series and registered in the name of the Depositary or a nominee thereof.
In such case, one or more Registered Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding registered Debt Securities of the series to be
represented by such Registered Global Security or Registered Global
Securities. Unless and until it is exchanged in whole for Debt Securities in
definitive registered form, a Registered Global Security may not be
transferred except as a whole by the Depositary for such Registered Global
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor of such Depositary or a nominee of such
successor. The Depositary currently accepts only Debt Securities that are
denominated in U.S. dollars.
 
  The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Registered Global
Security will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will apply to
all depositary arrangements.
 
                                       5

 
  Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Registered Global Security, the
Depositary for such Registered Global Security will credit, on its book-entry
registration and transfer system, the participants' accounts with the
respective principal amounts of the Debt Securities represented by such
Registered Global Security beneficially owned by such participants. The
accounts to be credited shall be designated by any dealers, underwriters or
agents participating in the distribution of such Debt Securities. Ownership of
beneficial interests in such Registered Global Security will be shown on, and
the transfer of such ownership interests will be effected only through,
records maintained by the Depositary for such Registered Global Security (with
respect to interests of participants) and on the records of participants (with
respect to interests of persons holding through participants). The laws of
some states may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to own, transfer or pledge beneficial interests in
Registered Global Securities.
 
  So long as the Depositary for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder
of the Debt Securities represented by such Registered Global Security for all
purposes under the Indenture. Except as set forth below, owners of beneficial
interests in a Registered Global Security will not be entitled to have the
Debt Securities represented by such Registered Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
such Debt Securities in definitive form and will not be considered the owners
or holders thereof under the Indenture. Accordingly, each person owning a
beneficial interest in a Registered Global Security must rely on the
procedures of the Depositary for such Registered Global Security and, if such
person is not a participant, on the procedures of the participant through
which such person owns its interest, to exercise any rights of a holder under
the Indenture. The Company understands that under existing industry practices,
if the Company requests any action of holders or if an owner of a beneficial
interest in a Registered Global Security desires to give or take any action
which a holder is entitled to give or take under the Indenture, the Depositary
for such Registered Global Security would authorize the participants holding
the relevant beneficial interests to give or take such action, and such
participants would authorize beneficial owners owning through such
participants to give or take such action or would otherwise act upon the
instructions of beneficial owners holding through them.
 
  Payments of principal of, premium, if any, and any interest on Debt
Securities represented by a Registered Global Security registered in the name
of a Depositary or its nominee will be made to such Depositary or its nominee,
as the case may be, as the registered owner of such Registered Global
Security. None of the Company, the Trustee or any other agent of the Company
or agent of the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in such Registered Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
 
  The Company expects that the Depositary for any Debt Securities represented
by a Registered Global Security, upon receipt of any payment of principal,
premium, if any, or any interest in respect of such Registered Global
Security, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in such
Registered Global Security as shown on the records of such Depositary. The
Company also expects that payments by participants to owners of beneficial
interests in such Registered Global Security held through such participants
will be governed by standing customer instructions and customary practices, as
is now the case with securities held for the accounts of customers in bearer
form or registered in "street name," and will be the responsibility of such
participants.
 
                                       6

 
  If the Depositary for any Debt Securities represented by a Registered Global
Security is at any time unwilling or unable to continue as Depositary or
ceases to be a clearing agency registered under the Exchange Act, and a
successor Depositary registered as a clearing agency under the Exchange Act is
not appointed by the Company within 90 days, the Company will issue such Debt
Securities in definitive form in exchange for such Registered Global Security.
In addition, the Company may at any time and in its sole discretion determine
not to have any of the Debt Securities of a series represented by one or more
Registered Global Securities and, in such event, will issue Debt Securities of
such series in definitive form in exchange for all of the Registered Global
Security or Registered Global Securities representing such Debt Securities.
Any Debt Securities issued in definitive form in exchange for a Registered
Global Security will be registered in such name or names as the Depositary
shall instruct the Trustee. It is expected that such instructions will be
based upon directions received by the Depositary from participants with
respect to ownership of beneficial interests in such Registered Global
Security. The Debt Securities of a series may also be issued in the form of
one or more bearer global Securities (a "Bearer Global Security") that will be
deposited with a common depositary for Euroclear and CEDEL, or with a nominee
for such depositary identified in the Prospectus Supplement relating to such
series. The specific terms and procedures, including the specific terms of the
depositary arrangement, with respect to any portion of a series of Debt
Securities to be represented by a Bearer Global Security will be described in
the Prospectus Supplement relating to such series.
 
CERTAIN COVENANTS OF THE COMPANY
 
  Limitation on Liens. The Indenture provides with respect to each series of
Debt Securities that, unless the terms of such series of Debt Securities
provide otherwise, the Company covenants not to create or assume, or permit
any Restricted Subsidiary to create or assume, any mortgage, pledge or lien
("Mortgage") upon any Principal Property or any shares of capital stock or
indebtedness of any Restricted Subsidiary owned or acquired, unless the Debt
Securities of such series are secured by such Mortgage equally and ratably
with all other indebtedness thereby secured. Such covenant does not apply to
(a) Mortgages on any Principal Property, shares of stock or indebtedness of
any corporation existing at the time such corporation becomes a Restricted
Subsidiary, (b) Mortgages on any Principal Property acquired, constructed or
improved by the Company or any Restricted Subsidiary after the date of the
Indenture which are created or assumed contemporaneously with such
acquisition, construction or improvement or within 120 days after the latest
of the acquisition, completion of construction (including any improvement on
an existing property) or commencement of commercial operation of such
property, to secure or provide for payment of all or any substantial part of
the purchase price of such property or the cost of such construction or
improvement incurred after the date of the Indenture, (c) Mortgages on any
Principal Property or shares of stock or indebtedness acquired from a
corporation merged with or into the Company or a Restricted Subsidiary and
Mortgages on any Principal Property existing at the time of acquisition, (d)
Mortgages on any Principal Property to secure indebtedness of a Restricted
Subsidiary to the Company or another Restricted Subsidiary, (e) Mortgages on
any Principal Property in favor of the United States of America or any State
thereof or The Commonwealth of Puerto Rico or any political subdivision
thereof, to secure progress or other payments or to secure indebtedness
incurred for the purpose of financing the cost of acquiring, constructing or
improving such Principal Property (including Mortgages incurred in connection
with pollution control, industrial revenue, Title XI maritime financings or
similar financings), (f) Mortgages existing as of the date of the Indenture,
(g) Mortgages for taxes, assessments, government charges or claims which are
being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted and if a reserve or other appropriate provision, if
any, as shall be required in conformity with generally accepted accounting
principles shall have been made therefor, (h) Mortgages created or deposits
made to secure the performance of tenders, bids, leases, statutory
obligations, surety and appeal bonds, government contracts, performance and
return-of-money bonds and other obligations of a like nature incurred in the
ordinary course of business (exclusive of obligations for the payment of
borrowed money), and (i) any extension, renewal or replacement (or successive
 
                                       7

 
extensions, renewals or replacements), in whole or in part, of any Mortgage
referred to in the foregoing clauses (a) to (h), inclusive. (Section 3.6)
 
  Notwithstanding the foregoing, the Company and its Restricted Subsidiaries
may, without securing the Debt Securities of any series, create or assume
Mortgages (which would otherwise be subject to the foregoing restrictions)
securing indebtedness in an aggregate amount which, together with all other
Exempted Debt (as defined herein) of the Company and its Restricted
Subsidiaries, does not at the time exceed 10% of Consolidated Adjusted Net
Tangible Assets (defined in the Indenture as total assets less current
liabilities and intangible assets on the consolidated balance sheet contained
in the latest report on Form 10-Q or on Form 10-K, of the Company and its
subsidiaries). (Section 3.6)
 
  Limitation on Sale and Lease-Back Transactions. The Indenture provides with
respect to each series of Debt Securities that, unless the terms of such
series of Debt Securities provides otherwise, a Sale and Lease-Back
Transaction (as defined herein) is prohibited except in the event that (a) the
Company or such Restricted Subsidiary would be entitled to incur indebtedness
secured by a Mortgage on the property to be leased in an amount equal to the
Attributable Debt (as defined herein) with respect to such Sale and Lease-Back
Transaction without equally and ratably securing the Debt Securities of such
series pursuant to the first paragraph of "Limitation on Liens" above; or (b)
the Company applies an amount equal to the fair value of the property sold to
the purchase of Principal Property or to the retirement of Long-Term
Indebtedness (as defined herein) within 120 days of the effective date of any
such Sale and Lease-Back Transaction. In lieu of applying such amount to such
retirement the Company may deliver Debt Securities to the Trustee for
cancellation, such Debt Securities to be credited at the cost thereof to the
Company. (Section 3.7)
 
  Notwithstanding the foregoing, the Company or any Restricted Subsidiary may
enter into any Sale and Lease-Back Transaction (which would otherwise be
subject to the foregoing restrictions) as long as the Attributable Debt
resulting from such Sale and Lease-Back Transaction, together with all other
Exempted Debt of the Company and its Restricted Subsidiaries, does not at any
time exceed 10% of Consolidated Adjusted Net Tangible Assets. (Section 3.7)
 
  Limitation on Indebtedness of Subsidiaries. The Indenture provides with
respect to each series of Debt Securities that, unless the terms of such
series of Debt Securities provide otherwise, the Company will not permit any
Subsidiary to create or assume any Indebtedness if such Indebtedness together
with all other aggregate Indebtedness of its Subsidiaries exceeds 20% of
Consolidated Adjusted Net Tangible Assets. (Section 3.8)
 
CERTAIN DEFINITIONS
 
  The term "Attributable Debt," when used in connection with a Sale and Lease-
Back Transaction, means, as of any particular time, the lesser of (a) the fair
value of the property subject to such arrangement and (b) the then present
value (computed by discounting at the Composite Rate (as defined in the
Indenture)) of the obligation of a lessee for net rental payments during the
remaining term of any lease (including any period for which such lease has
been extended or may, at the option of the lessor, be extended). The term "net
rental payments" under any lease for any period means the sum of the rental
and other payments required to be paid in such period by the lessee
thereunder, not including, however, any amounts required to be paid by such
lessee (whether or not designated as rental or additional rental) on account
of maintenance and repairs, insurance, taxes, assessments, water rates or
similar charges required to be paid by such lessee thereunder or any amounts
required to be paid by such lessee thereunder contingent upon the amount of
sales, maintenance and repairs, insurance, taxes, assessments, water rates or
similar charges. (Section 1.1)
 
                                       8

 
  The term "Exempted Debt" means the sum of the following items outstanding as
of the date Exempted Debt is being determined: (a) indebtedness of the Company
and its Restricted Subsidiaries incurred after the date of the Indenture and
secured by mortgages created or assumed pursuant to the final paragraph of
"Limitation on Liens" and (b) Attributable Debt of the Company and its
Restricted Subsidiaries in respect of every Sale and Lease-Back Transaction
entered into after the date of the Indenture and pursuant to the second
paragraph of "Limitation on Sale and Lease-Back Transactions." (Section 1.1)
 
  The term "Long Term Indebtedness" means all Indebtedness of the Company and
its Restricted Subsidiaries maturing by its terms more than one year after, or
which is renewable or extendible at the option of the Company for a period
ending more than one year after, the date as of which Long-Term Indebtedness
is being determined. (Section 1.1) The term "Indebtedness" means obligations
(other than non-recourse obligations, or any series of Debt Securities when
determining whether an Event of Default has occurred with respect to such
series of Debt Securities) of, or guaranteed or assumed by, the Company for
borrowed money or evidenced by bonds, debentures, notes or other similar
instruments. (Section 5.1)
 
  The term "Principal Property" means the Company's principal office buildings
and each manufacturing plant or research facility located within the
territorial limits of the States of the United States of America or The
Commonwealth of Puerto Rico (including any other territorial possession of the
United States of America) of the Company or a Subsidiary except such as the
Board of Directors by resolution reasonably determines (taking into account,
among other things, the importance of such property to the business, financial
condition and earnings of the Company and its consolidated subsidiaries taken
as a whole) not to be a Principal Property. (Section 1.1)
 
  The term "Sale and Lease-Back Transaction" means any arrangement with any
person (other than the Company or any Restricted Subsidiary) providing for the
leasing by the Company or a Restricted Subsidiary of any Principal Property
for a term of more than three years, which property has been or is to be sold
or transferred by the Company or such Restricted Subsidiary to such person.
(Section 3.7)
 
  The term "Subsidiary" means any corporation the outstanding securities of
which having ordinary voting power to elect a majority of the board of
directors of such corporation (whether or not any other class of securities
has or might have voting power by reason of the happening of a contingency)
are at the time owned or controlled directly or indirectly by the Company or
by one or more Subsidiaries or by the Company and one or more Subsidiaries;
provided, however, that the term "Subsidiary" shall not mean any corporation
engaged primarily in financing receivables, making loans, extending credit,
providing financing from foreign sources or other activities of a character
conducted by a finance company. The term "Restricted Subsidiary" means any
Subsidiary that owns a Principal Property. (Section 1.1)
 
  Unless otherwise indicated in the applicable Prospectus Supplement, neither
the Debt Securities nor the Indenture contain covenants specifically designed
to protect holders of Debt Securities in the event of a highly leveraged
transaction involving the Company.
 
LIMITATION ON MERGERS AND SALE OF ASSETS
 
  The Company may not consolidate with, merge into or be merged into, or
transfer or lease its property and assets substantially as an entirety to
another entity unless the successor entity assumes all the obligations of the
Company under the Indenture and the Debt Securities and after giving effect
thereto, no default or Event of Default (as defined below) shall have occurred
and be continuing and such successor entity shall be a United States
corporation. Thereafter, except in the case of a lease, all such obligations
of the Company shall terminate. (Section 9.1) The Indenture further provides
with
 
                                       9

 
respect to each series of Debt Securities that, unless the terms of such
series of Debt Securities provide otherwise, the Company will not, and will
not permit any Restricted Subsidiary to, merge or consolidate with another
corporation, or sell all or substantially all of its assets to another
corporation for a consideration other than the fair value thereof in cash, if
such other corporation has outstanding obligations secured by a Mortgage
which, after such transaction, would extend to any Principal Property owned by
the Company or such Restricted Subsidiary prior to such transaction, unless
the Company or such Restricted Subsidiary shall have effectively provided that
the Debt Securities of such series will be secured by a Mortgage which, upon
completion of the aforesaid transaction, will rank prior to such Mortgage of
such other corporation on any Principal Property. (Section 3.6)
 
EVENTS OF DEFAULT
 
  An Event of Default with respect to any series of Debt Securities is defined
under the Indenture as being: (a) default in payment of any principal of the
Debt Securities of such series, either at maturity (or upon any redemption),
by declaration or otherwise; (b) default for 30 days in payment of any
interest on any Debt Securities of such series; (c) default for 90 days after
written notice in the observance or performance of any other covenant or
agreement in the Debt Securities of such series or the Indenture other than a
covenant included in such Indenture solely for the benefit of a series of Debt
Securities other than such series; (d) certain events of bankruptcy,
insolvency or reorganization; (e) failure by the Company to make any payment
at maturity, including any applicable grace period, in respect of Indebtedness
in an amount in excess of $10,000,000 and continuance of such failure for a
period of 30 days after written notice thereof to the Company by the Trustee,
or to the Company and the Trustee by the holders of not less than 25% in
principal amount of the outstanding Debt Securities (treated as one class)
issued under the Indenture; (f) a default with respect to any Indebtedness,
which default results in the acceleration of Indebtedness in an amount in
excess of $10,000,000 without such Indebtedness having been discharged or such
acceleration having been cured, waived, rescinded, or annulled for a period of
30 days after written notice thereof to the Company by the Trustee, or to the
Company and the Trustee by the holders of not less than 25% in principal
amount of the outstanding Debt Securities (treated as one class) issued under
the Indenture; or (g) default in the payment of any sinking fund installment
of the Debt Securities of such series as and when the same shall become due
and payable; provided, however, that if any such failure, default or
acceleration referred to in clause (e) or (f) above shall cease or be cured,
waived, rescinded or annulled, then the Event of Default by reason thereof
shall be deemed likewise to have been thereupon cured. (Section 5.1)
 
  The Indenture provides that (a) if an Event of Default due to the default in
payment of principal of, premium, if any, or any interest on, any series of
Debt Securities or due to the default in the performance or breach of any
other covenant or warranty of the Company applicable to the Debt Securities of
such series but not applicable to all outstanding Debt Securities or due to
the default in the payment of any sinking fund installment of the Debt
Securities of such series shall have occurred and be continuing, either the
Trustee or the holders of not less than 25% in principal amount of the Debt
Securities of each affected series (treated as one class) then outstanding may
then declare the principal of all Debt Securities of each such affected series
and interest accrued thereon to be due and payable immediately; and (b) if an
Event of Default due to a default in the performance of any other of the
covenants or agreements in the Indenture applicable to all outstanding Debt
Securities or due to certain events of bankruptcy, insolvency and
reorganization of the Company or due to a default described in clauses (e) or
(f) of the preceding paragraph shall have occurred and be continuing, either
the Trustee or the holders of not less than 25% in principal amount of all
Debt Securities then outstanding (treated as one class) may declare the
principal of all such Debt Securities and interest accrued thereon to be due
and payable immediately, but upon certain conditions such declarations may be
annulled and past defaults may be waived (except a continuing default in
payment of principal of, premium, if any, or any interest on such Debt
Securities) by the holders of a majority in principal amount of the Debt
Securities of all such affected series then outstanding. (Section 5.1)
 
 
                                      10

 
  The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during a default to act with the required standard of
care, to be indemnified by the holders of Debt Securities (treated as one
class) before proceeding to exercise any right or power under the Indenture at
the request of such holders. (Section 5.6) Subject to such provisions in the
Indenture for the indemnification of the Trustee and certain other
limitations, the holders of a majority in principal amount of the outstanding
Debt Securities of each affected series (treated as one class) may direct the
time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred on the Trustee.
(Section 5.9)
 
  The Indenture provides that no holder of Debt Securities may institute any
action against the Company under the Indenture (except actions for payment of
overdue principal or interest) unless such holder previously shall have given
to the Trustee written notice of default and continuance thereof and unless
the holders of not less than 25% in principal amount of the Debt Securities of
each affected series (treated as one class) then outstanding shall have
requested the Trustee to institute such action and shall have offered the
Trustee reasonable indemnity, the Trustee shall not have instituted such
action within 60 days of such request and the Trustee shall not have received
direction inconsistent with such written request by the holders of a majority
in principal amount of the outstanding Debt Securities of each affected series
(treated as one class). (Section 5.6 and Section 5.7)
 
  The Indenture contains a covenant that the Company will file annually,
commencing March 31, 1992, with the Trustee a certificate that no default
existed or a certificate specifying any default that existed, each as of the
preceding December 31. (Section 3.5)
 
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
 
  The Indenture provides with respect to each series of Debt Securities that
the Company may elect either (a) except to the extent the terms of such series
of Debt Securities provide otherwise, to defease and be discharged from any
and all obligations with respect to the Debt Securities of such series (except
for the obligations to register the transfer or exchange of the Debt
Securities of such series, to replace temporary or mutilated, destroyed, lost
or stolen Debt Securities of such series, to maintain an office or agency in
respect of the Debt Securities of such series and to hold moneys for payment
in trust) ("legal defeasance") or (b) to be released from its obligations with
respect to the Debt Securities of such series under Sections 3.6, 3.7, 3.8 and
9.1 of the Indenture (being the restrictions described under "Certain
Covenants of the Company") ("covenant defeasance"), upon the deposit with the
Trustee (or other qualifying trustee), in trust for such purpose, of money or,
in the case of Debt Securities payable in U.S. dollars, U.S. Government
Obligations (as defined in the Indenture) which through the payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient to pay the principal of, premium, if any, and any interest
on the Debt Securities of such series, and any mandatory sinking fund or
analogous payments thereon, on the due date thereof. Such a trust may (except
to the extent the terms of the Debt Securities of such series otherwise
provide) only be established if, among other things, the Company has delivered
to the Trustee an opinion of counsel (as specified in the Indenture) to the
effect that the Holders of the Debt Securities of such series will not
recognize income, gain or loss for Federal income tax purposes as a result of
such legal defeasance or covenant defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such legal defeasance or covenant defeasance had
not occurred. Such opinion, in the case of legal defeasance under clause (a)
above, must (except to the extent the terms of the Debt Securities of the
relevant series otherwise provide) refer to and be based upon a ruling of the
Internal Revenue Service or a change in applicable Federal income tax law
occurring after the date of the Indenture. The Prospectus Supplement may
further describe the provisions, if any, permitting such legal defeasance or
covenant defeasance with respect to the Offered Debt Securities of the series
to which such Prospectus Supplement relates. (Section 10.1)
 
 
                                      11

 
MODIFICATION OF THE INDENTURE
 
  The Indenture provides that the Company and the Trustee may enter into
supplemental indentures without the consent of the holders of Debt Securities
to: (a) secure any Debt Securities, (b) evidence the assumption by a successor
corporation of the obligations of the Company, (c) add covenants for the
protection of the holders of Debt Securities, (d) cure any ambiguity or
correct any inconsistency in the Indenture or make any other provisions as the
Company may deem necessary or desirable; provided that no such action shall
adversely affect the interests of the holders of Debt Securities, (e)
establish the forms or terms of Debt Securities of any series and (f) evidence
the acceptance of appointment by a successor trustee. (Section 8.1)
 
  The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a 66 2/3% in
principal amount of Debt Securities of each series then outstanding and
affected (voting as one class), to (i) add any provisions to the Indenture,
(ii) change in any manner or eliminate any of the provisions of the Indenture,
or (iii) modify in any manner the rights of the holders of the Debt Securities
of each series so affected; provided that the Company and the Trustee may not,
without the consent of the holder of each outstanding Debt Security affected
thereby, (a) extend the stated maturity of the principal of any Debt Security,
or reduce the principal amount thereof or reduce the rate or extend the time
of payment of interest thereon, or reduce any amount payable on the redemption
thereof or change the currency in which the principal thereof (including any
amount in respect of original issue discount), premium, if any, or any
interest thereon is payable or reduce the amount of any original issue
discount security payable upon acceleration or provable in bankruptcy or alter
certain provisions of the Indenture relating to the Debt Securities issued
thereunder not denominated in U.S. dollars or impair the right of any holder
to institute suit for the enforcement of any payment on any Debt Security when
due or (b) reduce the aforesaid percentage in principal amount of Debt
Securities of any series, the consent of the holders of which is required for
any such modification. (Section 8.2)
 
  At such time as the Debt Securities issued after February 26, 1997 are the
only Debt Securities then outstanding under the Indenture, then, without any
further action on the part of the Company or the Trustee, the Indenture shall
automatically reduce the principal amount of Debt Securities of each series
then outstanding and affected (voting as one class) necessary to consent to
the actions referred to in clauses (i) through (iii) of the foregoing
paragraph from 66 2/3% to a majority in principal amount of such Debt
Securities.
 
CONCERNING THE TRUSTEE
 
  The Company and its subsidiaries maintain ordinary banking relationships
with Citibank, N.A. and its affiliates and a number of other banks. Citibank,
N.A. and its affiliates along with a number of other banks have extended
credit facilities to the Company and its subsidiaries.
 
                             PLAN OF DISTRIBUTION
 
  The Company may sell the Debt Securities being offered hereby in four ways:
(i) directly to purchasers, (ii) through agents, (iii) through underwriters
and (iv) through dealers.
 
  Offers to purchase Debt Securities may be solicited directly by the Company.
Offers to purchase Debt Securities may also be solicited by agents designated
by the Company from time to time. Any such agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act, involved in the
offer or sale of the Debt Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the Company to such
agent set forth, in the Prospectus Supplement. Unless otherwise indicated in
the Prospectus Supplement, any such agent will be acting
 
                                      12

 
on a best efforts basis for the period of its appointment. Agents may be
entitled under agreements which may be entered into with the Company to
indemnification by the Company against certain civil liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary course
of business.
 
  If any underwriters are utilized in the sale, the Company will enter into an
underwriting agreement with such underwriters at the time of sale to them and
the names of the underwriters and the terms of the transaction will be set
forth in the Prospectus Supplement, which will be used by the underwriters to
make resales of the Debt Securities in respect of which this Prospectus is
delivered to the public. The underwriters may be entitled, under the relevant
underwriting agreement, to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act, and may be
customers of, engage in transactions with or perform services for the Company
in the ordinary course of business.
 
  If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealer, as principal. The dealer may then resell such Debt Securities
to the public at varying prices to be determined by such dealer at the time of
resale. Dealers may be entitled to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, and may
be customers of, engage in transactions with or perform services for the
Company in the ordinary course of business.
 
  If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters or dealers to solicit offers by certain purchasers to
purchase Offered Debt Securities from the Company at the public offering price
set forth in the Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. Such
contracts will be subject to only those conditions set forth in the Prospectus
Supplement, and the Prospectus Supplement will set forth the commission
payable for solicitation of such offers.
 
                                 LEGAL MATTERS
 
  The validity of the Offered Debt Securities offered hereby will be passed
upon for the Company by Latham & Watkins, Los Angeles, California. Certain
legal matters with respect to the Offered Debt Securities will be passed upon
for the Company by George A. Vandeman, Esq., Senior Vice President, General
Counsel and Secretary of the Company. Certain legal matters in connection with
offerings made by this Prospectus may be passed on for any underwriters,
agents or dealers by counsel named in the Prospectus Supplement.
 
                                    EXPERTS
 
  The consolidated financial statements and related schedule of the Company
for the year ended December 31, 1996, appearing in the Company's Annual Report
on Form 10-K have been audited by Ernst & Young LLP, independent auditors, as
set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
 
 
                                      13

 
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 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT, THE
PROSPECTUS OR ANY PRICING SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS SUPPLEMENT, THE PROSPECTUS AND PRICING SUPPLEMENT DO NOT CONSTITUTE
AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER
THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT AND THE RELATED
PRICING SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
 
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                               TABLE OF CONTENTS
 
                             PROSPECTUS SUPPLEMENT


                                                                            PAGE
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Description of the Notes...................................................  S-2
Special Provisions Relating to Foreign Currency Notes...................... S-16
Certain United States Federal Income Tax Considerations.................... S-19
Supplemental Plan of Distribution.......................................... S-23
Certain Legal Matters...................................................... S-24
                                   PROSPECTUS

                                                                            PAGE
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Available Information......................................................    2
Incorporation of Documents by Reference....................................    2
Amgen Inc. ................................................................    3
Use of Proceeds............................................................    4
Description of Debt Securities.............................................    4
Plan of Distribution.......................................................   12
Legal Matters..............................................................   13
Experts....................................................................   13

 
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                                  $400,000,000
 
                             [LOGO OF AMGEN, INC.]
 
                               MEDIUM-TERM NOTES
 
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                             PROSPECTUS SUPPLEMENT
 
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                              GOLDMAN, SACHS & CO.
 
                            BEAR, STEARNS & CO. INC.
 
 
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