-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, bs+RRyr4nKrp8yTpvkSbQddRO0nNn4f0Ew9EuqNrZkMB5okmBOvhBtgBOOUQIh7s Rstl9wEH27X14PSu4AHAUA== 0000950123-94-000840.txt : 19940503 0000950123-94-000840.hdr.sgml : 19940503 ACCESSION NUMBER: 0000950123-94-000840 CONFORMED SUBMISSION TYPE: 8-A12B PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19940502 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL ELECTRIC CAPITAL CORP CENTRAL INDEX KEY: 0000040554 STANDARD INDUSTRIAL CLASSIFICATION: 6172 IRS NUMBER: 131500700 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-A12B SEC ACT: 1934 Act SEC FILE NUMBER: 001-06461 FILM NUMBER: 94525677 BUSINESS ADDRESS: STREET 1: 260 LONG RIDGE RD CITY: STAMFORD STATE: CT ZIP: 06927 BUSINESS PHONE: 2033574000 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL ELECTRIC CREDIT CORP DATE OF NAME CHANGE: 19871216 8-A12B 1 FORM 8-A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________ FORM 8-A FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 General Electric Capital Corporation ------------------------------------------------------ (Exact name of registrant as specified in its charter) New York 13-1500700 -------------- ---------------- (State of incorporation or organization) (I.R.S. Employer Identification No.)
777 Long Ridge Road Stamford, Connecticut 06927 --------------------- --------- (Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which to be so registered each class is to be registered - ------------------- ------------------------------ S&P 500 Indexed Notes New York Stock Exchange due May __, 1996 Series A (Bearish Notes) and Series B (Bullish Notes)
Securities to be registered pursuant to Section 12(g) of the Act: None ---------------- (Title of class) 2 Item 1. Description of Registrant's Notes to be Registered. The description of the general terms and provisions of the S&P 500 Indexed Notes due May __, 1996, Series A (Bearish Notes) and Series B (Bullish Notes) (the "Bearish Notes" and the "Bullish Notes," respectively) to be issued by General Electric Capital Corporation (the "Company") set forth in the Preliminary Prospectus Supplement dated April 15, 1994, and the Prospectus dated April 1, 1994, attached hereto as Exhibit 1, is hereby incorporated by reference and contains certain proposed terms and provisions. The description of the Bearish Notes and the Bullish Notes contained in the Prospectus Supplement to be filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended, under Registration Statement Number 33-50909, which will contain the final terms and provisions of the Bearish Notes and the Bullish Notes, is hereby deemed to be incorporated by reference into this Registration Statement and to be a part hereof. Item 2. Exhibits. 1. Preliminary Prospectus Supplement dated April 15, 1994 and Prospectus dated April 1, 1994. 2. (a) Form of S&P Indexed Notes due May __, 1996 (Series A) (b) Form of S&P Indexed Notes due May __, 1996 (Series B. 3. Copy of Indenture between General Electric Capital Corporation and The Mercantile Safe- Deposit and Trust Company, dated as of March 15, 1986, which is incorporated by reference from Exhibit 4(e) to the Company's Registration Statement on Form S-3 filed on October 26, 1987 (Registration No. 33-18118), as supplemented by the First Supplemental Indenture, dated as of December 15, 1987, which is incorporated by reference from Exhibit 4(m) to the Company's Registration Statement on Form S-3 filed on March 21, 1988 (Registration No. 33-20654). Other securities issued by General Electric Capital Corporation are listed on the New York Stock Exchange. 2 3 SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized. GENERAL ELECTRIC CAPITAL CORPORATION By: /s/ James Tremante ---------------------------- James Tremante Vice President Date: May 2, 1994 3 4 EXHIBIT INDEX EXHIBIT DESCRIPTION ------- ----------- 1. Preliminary Prospectus Supplement dated April 15, 1994 and Prospectus dated April 1, 1994. 2. (a) Form of S&P Indexed Notes due May __, 1996 (Series A) (b) Form of S&P Indexed Notes due May __, 1996 (Series B. 3. Copy of Indenture between General Electric Capital Corporation and The Mercantile Safe- Deposit and Trust Company, dated as of March 15, 1986, which is incorporated by reference from Exhibit 4(e) to the Company's Registration Statement on Form S-3 filed on October 26, 1987 (Registration No. 33-18118), as supplemented by the First Supplemental Indenture, dated as of December 15, 1987, which is incorporated by reference from Exhibit 4(m) to the Company's Registration Statement on Form S-3 filed on March 21, 1988 (Registration No. 33-20654). EX-99.1 2 PRELIM. PROS. SUPP AND BASE PROS. 1 Exhibit 1. 2 PRELIMINARY AND SUBJECT TO COMPLETION AND AMENDMENT ISSUE DATE: APRIL 15, 1994 PROSPECTUS SUPPLEMENT - --------------------- (TO PROSPECTUS DATED APRIL 1, 1994) $25,000,000 GENERAL ELECTRIC CAPITAL CORPORATION S&P 500 INDEXED NOTES DUE MAY , 1996 SERIES A (BEARISH NOTES) AND SERIES B (BULLISH NOTES) ------------------------ S&P 500 Indexed Notes Series A (Bearish Notes) due May , 1996 (the "Bearish Notes") and S&P 500 Indexed Notes Series B (Bullish Notes) due May , 1996 (the "Bullish Notes" and, together with the Bearish Notes, the "Notes") are being offered hereby. The Notes will mature and be repayable at 100% of the principal amount thereof on May , 1996. The Notes are not subject to redemption or repayment prior to maturity. The amount of each series of Notes to be issued will be determined by the Underwriters on the date the Notes are priced for initial offering to the public, provided that in order for any Notes of a series to be issued, the aggregate principal amount of such series to be issued will not be less than $10,000,000. General Electric Capital Corporation (the "Company") will make annual interest payments on the Bearish Notes based on the decrease, if any, in the S&P 500 Composite Stock Price Index (the "S&P 500 Index") and on the Bullish Notes based on the increase, if any, in the S&P 500 Index from the date the Notes are priced for initial offering to the public to a date approximately one year from the date the Notes are issued, as further described herein; provided, however, that the total interest paid during the term of the Bearish Notes will not exceed $ per $1,000 principal amount of Bearish Notes (the "Bearish Maximum Total Interest") and $ per $1,000 principal amount of Bullish Notes (the "Bullish Maximum Total Interest" and, together with the Bearish Maximum Total Interest, the "Maximum Total Interest"). The total interest payable on a Note from the date of issuance of the Notes through the maturity date (the "Total Interest") will equal the product of (a) the principal of the applicable Note, and (b) the applicable Participation Rate (as defined below), and (c) (i) in the case of the Bearish Notes, the percentage decrease, if any, in the value of the S&P 500 Index from the Initial Index Value (as defined below) to the 1995 Index Value (as defined below), or (ii) in the case of the Bullish Notes, the percentage increase, if any, in the value of the S&P 500 Index from the Initial Index Value to the 1995 Index Value; provided, however, that the Total Interest on any Note will not exceed the relevant Maximum Total Interest. The "Initial Index Value" will equal the closing value of the S&P 500 Index on the date that the Notes are priced for initial offering to the public (expected to be on or about April 28, 1994, although subject to change). The "1995 Index Value" will equal the closing value of the S&P 500 Index on the seventh scheduled Trading Day (as defined below) preceding the date which is one year from the date that the Notes are issued (the "Determination Date"), subject to adjustment as more fully described herein. The period between the dates on which the Initial Index Value and the 1995 Index Value are determined is referred to herein as the "Measurement Period." The "Bearish Participation Rate" is equal to % and the "Bullish Participation Rate" is equal to %. The Participation Rates will be set by the Company on the date the Notes are priced for initial offering to the public. The Company will pay half of the Total Interest on May , 1995 and will pay the remaining half at maturity. Total Interest cannot be less than zero. If the 1995 Index Value is not less than the Initial Index Value (i.e., the S&P 500 Index does not decline in value during the Measurement Period), the Total Interest payable on the Bearish Notes will equal zero and beneficial owners of the Bearish Notes will receive no interest payments with respect to the Bearish Notes. If the 1995 Index Value is not greater than the Initial Index Value (i.e., the S&P 500 Index does not increase in value during the Measurement Period), the Total Interest payable on the Bullish Notes will equal zero and beneficial owners of the Bullish Notes will receive no interest payments with respect to the Bullish Notes. For information as to the calculation of the Total Interest, if any, the calculation and the composition of the S&P 500 Index and certain tax consequences to beneficial owners of the Notes, see "Description of the Notes," "The Standard & Poor's 500 Index," and "Certain United States Federal Income Tax Considerations" in this Prospectus Supplement. FOR OTHER INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE "SPECIAL CONSIDERATIONS WITH RESPECT TO THE NOTES" IN THIS PROSPECTUS SUPPLEMENT. Ownership of the Notes will be maintained in book-entry form by or through the Securities Depository. Beneficial owners of the Notes will not have the right to receive physical certificates evidencing their ownership except under limited circumstances described in the accompanying Prospectus. The Notes are to be issued in denominations of $5,000 and integral multiples thereof. Application will be made to list the Notes on the New York Stock Exchange. ------------------------ 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 OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------- PRICE TO UNDERWRITING PROCEEDS TO PUBLIC DISCOUNT THE COMPANY(1) - --------------------------------------------------------------------------------------------------------------------- Per Bearish Note............................. 100% % % - --------------------------------------------------------------------------------------------------------------------- Total........................................ $ $ $ - --------------------------------------------------------------------------------------------------------------------- Per Bullish Note............................. 100% % % - --------------------------------------------------------------------------------------------------------------------- Total........................................ $ $ $ - --------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------
(1) Before deduction of expenses payable by the Company. ------------------------ The Notes are offered by the Underwriters, subject to prior sale, when, as and if issued by the Company and accepted by the Underwriters and subject to certain other conditions. The Underwriters reserve the right to reject orders in whole or in part. It is expected that delivery of the Notes will be made in New York, New York on or about May , 1994. ------------------------ MERRILL LYNCH & CO. KIDDER, PEABODY & CO. INCORPORATED ------------------------ The date of this Prospectus Supplement is April , 1994. 3 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. STANDARD & POOR'S CORPORATION ("S&P") DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, KIDDER, PEABODY & CO. INCORPORATED, HOLDERS OF THE NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED UNDER THE LICENSE AGREEMENT DESCRIBED HEREIN OR FOR ANY OTHER USE. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. S-2 4 SUMMARY The following summary does not purport to be complete and is qualified in its entirety by the more detailed information appearing elsewhere in this Prospectus Supplement and the accompanying Prospectus. Issuer..................... General Electric Capital Corporation Securities Offered......... $ aggregate principal amount of S&P 500 Indexed Notes Series A (Bearish Notes) due May , 1996 and $ aggregate principal amount of Series B (Bullish Notes) due May , 1996. The Notes are to be issued as two series of Senior Debt Securities under the Indenture described herein. Denominations.............. The Notes are to be issued in denominations of $5,000 and integral multiples thereof. Original Issue Price....... 100%. Maturity................... May , 1996. Interest Payments on Bearish Notes.............. The Company will pay interest on the Bearish Notes from the issuance of the Bearish Notes through the maturity date equal to the Total Interest for Bearish Notes, if any. Such Total Interest, if any, on the Bearish Notes will be paid in two equal installments on the Interest Payment Dates and will be equal to the following for each $1,000 principal amount of Bearish Notes: $1,000 X S&P 500 PERCENT X BEARISH DECLINE PARTICIPATION RATE provided, however, that Total Interest on the Bearish Notes will not exceed $ per $1,000 principal amount of Bearish Notes (the "Bearish Maximum Total Interest"). The foregoing formula produces a fixed dollar amount (which will be paid in two equal annual installments), not a per annum percentage amount. Total Interest on the Bearish Notes cannot be less than zero. S&P 500 Percent Decline.... The "S&P 500 Percent Decline" will equal the following (expressed as a percentage): Initial Index Value - 1995 Index Value -------------------------------------- Initial Index Value If the 1995 Index Value is not less than the Initial Index Value (i.e., the S&P 500 Index does not decline in value during the Measurement Period), a beneficial owner of a Bearish Note will receive only the principal amount thereof at maturity and will receive no interest payments on the Interest Payment Dates. Interest Payments on Bullish Notes.............. The Company will pay interest on the Bullish Notes from the issuance of the Bullish Notes through the maturity date equal to the Total Interest for Bullish Notes, if any. Such Total Interest, if any, on the Bullish Notes will be paid in two equal installments on the Interest Payment Dates and will be equal to the following for each $1,000 principal amount of Bullish Notes: $1,000 X S&P 500 PERCENT X BULLISH INCREASE PARTICIPATION RATE provided, however, that Total Interest on the Bullish Notes will not exceed $ per $1,000 principal amount of Bullish Notes (the "Bullish Maximum Total Interest"). The foregoing formula produces a fixed dollar amount (which will be paid in two equal annual installments), not a per annum percentage amount. Total Interest on the Bullish Notes cannot be less than zero. S-3 5 S&P 500 Percent Increase... The "S&P 500 Percent Increase" will equal the following (expressed as a percentage): 1995 Index Value - Initial Index Value -------------------------------------- Initial Index Value If the 1995 Index Value is not greater than the Initial Index Value (i.e., the S&P 500 Index does not increase in value during the Measurement Period), a beneficial owner of a Bullish Note will receive only the principal amount thereof at maturity and will receive no interest payments on the Interest Payment Dates. Initial Index Value........ The "Initial Index Value" will equal the closing value of the S&P 500 Index on the date that the Notes are priced for initial offering to the public (expected to be on or about April 28, 1994, although subject to change). 1995 Index Value........... The "1995 Index Value" will equal the closing value of the S&P 500 Index on the seventh scheduled Trading Day preceding the date which is one year from the date that the Notes are issued (the "Determination Date"), subject to adjustment as more fully described herein. Participation Rates........ The Bearish Participation Rate is equal to %. The Bullish Participation Rate is equal to %. The percent change in the S&P 500 Index during the Measurement Period will be multiplied by the relevant Participation Rate to calculate the Total Interest, if any, for each series of Notes. The Bearish Participation Rate is anticipated to be higher than the Bullish Participation Rate. The Participation Rates will be set by the Company on the date the Notes are priced for initial offering to the public. Interest Payment Dates..... The Company will pay half the Total Interest, if any, on each series of Notes on May , 1995 and will pay the remaining half at maturity. S&P 500 Index.............. The S&P 500 Index is published by Standard & Poor's Corporation ("S&P") and is intended to provide an indication of the pattern of common stock price movement. The calculation of the value of the S&P 500 Index is based on the relative value of the aggregate market value of the common stocks of 500 companies at a particular time as compared to the aggregate average market value of the common stocks of 500 similar companies during the base period from the years 1941 through 1943. S&P may from time to time, in its sole discretion, add companies to, or delete companies from, the S&P 500 Index to fulfill the above-stated intention of providing an indication of common stock price movement. "Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", and "Standard & Poor's 500" are service marks of Standard & Poor's Corporation and have been licensed for use by Merrill Lynch Capital Services, Inc. The Company is an authorized sublicensee thereof. See "The Standard & Poor's 500 Index" in this Prospectus Supplement. Special Considerations with Respect to the Notes..... The Securities are subject to certain special considerations. If the 1995 Index Value is not less than the Initial Index Value (i.e., the S&P 500 Index does not decline in value during the Measurement Period), the Total Interest payable on the Bearish Notes will equal zero and beneficial owners of the Bearish Notes will receive no interest payments with respect to the Bearish Notes. If the 1995 Index Value is not greater than the Initial Index Value (i.e. the S&P 500 Index does not increase in value during the Measurement Period), the Total Interest payable on the Bullish Notes will equal zero and beneficial owners of the Bullish Notes will receive no interest payments with respect to the Bullish Notes. This will be true even though the value of the S&P 500 Index as of some S-4 6 interim period or periods prior to the Determination Date may have been less than or greater than, respectively, the Initial Index Value because the Total Interest payable on the Notes is calculated on the basis of the 1995 Index Value only. Beneficial owners of the Notes will receive the principal amount of such Notes at maturity. The repayment of the principal of the Notes does not reflect any opportunity cost implied by inflation and other factors relating to the time value of money. An investment in the Notes is substantially different than an investment in the stocks underlying the S&P 500 Index. The return on an investment in the stocks underlying the S&P 500 Index for a certain period will not necessarily equal the percentage change in the S&P 500 Index for such period, because, among other reasons, the S&P 500 Index does not reflect the payment of dividends on the stocks underlying it. In addition, a percentage change in the value of the S&P 500 Index will not produce the same change in the Total Interest payable on the series of Notes which have Total Interest payable. Although the Notes will mature on May , 1996, the Total Interest payable on the Notes is calculated from the date the Notes are priced for initial offering to the public through a date approximately one year from the date the Notes are issued. The term of the Notes is thus two years while the relevant period for measuring the percentage change, if any, in the S&P 500 Index to determine the Total Interest payable on each series of the Notes is only approximately one year from the date the Notes are issued. Even though the Total Interest payable, if any, on each series of Notes will be determined approximately one year from the date the Notes are issued, half of such interest, if any, will not be paid to a beneficial owner of the Notes until the maturity date, and such payment of interest at maturity will not be adjusted to reflect any opportunity cost implied by inflation and other factors relating to the time value of money. There can be no assurance as to how the Notes will trade in the secondary market or whether such market will be liquid. It is expected that the secondary market for the Notes will be affected by a number of factors other than the creditworthiness of the Company. Some of the factors which may affect the trading value of the Notes prior to the Determination Date include the current level of the S&P 500 Index at the time of the trade, the status of U.S. interest rates, the volatility of the S&P 500 Index, the amount of time remaining until the Determination Date, and the dividend rates on the stocks comprising the S&P 500 Index. The trading value after the Determination Date is expected to depend primarily on the value of the Total Interest payable on the Notes, if any, and the scheduled repayment of principal at maturity. It is suggested that prospective investors who consider purchasing the Notes should reach an investment decision only after carefully considering the suitability of the Notes in the light of their particular circumstances. See "Special Considerations With Respect to the Notes" in this Prospectus Supplement. Investors should also consider the tax consequences of investing in the Notes. See "Certain United States Federal Income Tax Considerations" in the Prospectus Supplement. Certain United States Federal Income Tax Considerations........... There are no regulations (except for the OID Regulations and the 1991 Proposed Regulations described below), published rulings or judicial decisions involving the characterization, for United States Federal income tax purposes, of securities with terms substantially the same as the S-5 7 Notes. However, tax counsel to the Company has advised the Company that, although the matter is not free from doubt, under current law, each Note should be treated as a debt instrument of the Company for United States Federal income tax purposes. Under general principles of current United States Federal income tax law, payments of interest on a Note generally would be taxable to a U.S. Holder (as defined in "Certain United States Federal Income Tax Considerations" herein) as ordinary interest income at the time such payments are accrued or are received (in accordance with the U.S. Holder's regular method of tax accounting). Final Treasury regulations issued on January 27, 1994 (the "OID Regulations") would by their terms apply to the Notes, because the OID Regulations are effective for debt instruments issued on or after April 4, 1994. Under the OID Regulations, each Note should qualify as a "variable rate debt instrument" and, under such circumstances, a U.S. Holder would include in income all interest payments, if any, on a Note as ordinary interest income at the time such payments are accrued or are received (in accordance with the U.S. Holder's regular method of tax accounting). Alternatively, if the Notes were treated as contingent payment debt obligations, then proposed Treasury regulations issued in 1991 (the "1991 Proposed Regulations"), which contain a proposed retroactive effective date of February 20, 1991, would apply to the Notes if such regulations are ultimately adopted in their current form. Such application of the 1991 Proposed Regulations would require a U.S. Holder to separate a Note into several different instruments, one consisting of the fixed payments on the Note and the others consisting of the contingent payments on the Note based upon the S&P 500 Index. Such treatment would require a U.S. Holder to include in income, as ordinary interest, original issue discount with respect to the fixed payments and one of the contingent payments and to recognize capital gain or loss with respect to all of the contingent payments. It should be noted, however, that proposed Treasury regulations are not binding upon either the Internal Revenue Service or taxpayers prior to becoming effective as temporary or final regulations. An investor should carefully consider the United States Federal income tax consequences of investing in the Notes and consult their tax advisor before making such an investment. See "Certain United States Federal Income Tax Considerations" in this Prospectus Supplement. S-6 8 SPECIAL CONSIDERATIONS WITH RESPECT TO THE NOTES INTEREST PAYMENTS GENERAL If the 1995 Index Value is not less than the Initial Index Value (i.e., the S&P 500 Index does not decline in value during the Measurement Period), the Total Interest payable on the Bearish Notes will equal zero and beneficial owners of the Bearish Notes will receive no interest payments with respect to the Bearish Notes. If the 1995 Index Value is not greater than the Initial Index Value (i.e., the S&P 500 Index does not increase in value during the Measurement Period), the Total Interest payable on the Bullish Notes will equal zero and beneficial owners of the Bullish Notes will receive no interest payments with respect to the Bullish Notes. The above will be true even though the value of the S&P 500 Index as of some interim period or periods prior to the Determination Date (i.e., prior to the end of the Measurement Period) may have been less than or greater than, respectively, the Initial Index Value because the Total Interest payable on the Notes is calculated on the basis of the 1995 Index Value only. Beneficial owners of the Notes will receive the principal amount of such Notes at maturity. The repayment of the principal of the Notes does not reflect any opportunity cost implied by inflation and other factors relating to the time value of money. THE RELATIONSHIP OF THE S&P 500 INDEX AND THE STOCKS UNDERLYING THE S&P 500 INDEX TO THE TOTAL INTEREST PAYABLE An investment in the Notes is substantially different than an investment in the stocks underlying the S&P 500 Index. The return on an investment in the stocks underlying the S&P 500 Index for a certain period will not necessarily equal the percentage change in the S&P 500 Index for such period, because, among other reasons, the S&P 500 Index does not reflect the payment of dividends on the stocks underlying it. In addition, a percentage change in the value of the S&P 500 Index during the Measurement Period will not produce the same change in the Total Interest payable on the series of Notes which has Total Interest payable because (i) the percentage change in the S&P 500 Index is multiplied by the Participation Rate for the relevant series of Notes, and (ii) the Total Interest payment is subject to the Maximum Total Interest of the relevant series. INDEX MEASUREMENT PERIOD Although the Notes will mature on May , 1996, the Total Interest payable on the Notes is based on the percentage decrease (in the case of Bearish Notes) or increase (in the case of Bullish Notes), if any, in the S&P 500 Index from the date the Notes are priced for initial offering to the public through a date approximately one year from the date the Notes are issued, i.e. the "Determination Date". The term of the Notes is thus two years while the relevant period for measuring the percentage change, if any, in the S&P 500 Index to determine the Total Interest payable on each series of Notes is only approximately one year from the date the Notes are issued. Even though the Total Interest payable, if any, on each series of Notes will be determined approximately one year from the date the Notes are issued, half of such interest, if any, will not be paid to a beneficial owner of the Notes until the maturity date, and such payment of interest at maturity will not be adjusted to reflect any opportunity cost implied by inflation and other factors relating to the time value of money. Although the Notes are intended to participate in the potential depreciation (in the case of Bearish Notes) or appreciation (in the case of Bullish Notes), if any, in the S&P 500 Index, any decline (in the case of Bearish Notes) or increase (in the case of Bullish Notes) in the S&P 500 Index after the Determination Date in 1995 until the maturity date will not affect the Total Interest payable to beneficial owners of the Notes. In addition, the 1995 Index Value measures only the closing value of the S&P 500 Index on one particular Trading Day, the Determination Date, and will not reflect the S&P 500 Index on any other day (or the average over any number of days) during or after the Measurement Period. S-7 9 HISTORICAL PERFORMANCE OF THE S&P 500 INDEX The Notes are intended to benefit from the potential decline or increase in the value of the S&P 500 Index, depending on whether the Notes are Bearish Notes or Bullish Notes, from the date the Notes are priced for initial offering to the public through a date approximately one year from the date the Notes are issued. Any increase in the value of the S&P 500 Index as of the end of such period would result in the Total Interest payable with respect to the Bearish Notes equalling zero. Conversely, any decline in the value of the S&P 500 Index as of the end of such period would result in the Total Interest payable with respect to the Bullish Notes equalling zero. Historically, the S&P 500 Index has increased in 34 of the 46 calendar years from 1948 through 1993. In addition, the average annual percentage increase (which reflects percentage increases and decreases in the S&P 500 Index from year to year) in the S&P 500 Index for the period from 1948 through 1993 was 8.85% and the average annual percentage increase (which reflects percentage increases and decreases in the S&P 500 Index from year to year) for the five-year period from 1989 through 1993 was 11.70%. On December 31, 1993 the closing value of the S&P 500 Index was 466.45 and on April 13, 1994 the closing value of the S&P 500 Index was 446.26. See "The Standard & Poor's 500 Index -- Historical Data on the S&P 500 Index" below. TRADING GENERAL Application will be made to list the Notes on the New York Stock Exchange. However, there can be no assurance as to how the Notes will trade in the secondary market or whether such market will be liquid. It is expected that the secondary market for the Notes will be affected by a number of factors other than the creditworthiness of the Company. TRADING IN FIRST YEAR The trading value of the Notes prior to the Determination Date may be affected by a number of interrelated factors, including those factors described below. Investors should be aware that factors other than the level of the S&P 500 Index are likely to affect the trading value of the Notes. The expected theoretical effect on the trading value of the Notes of each of the factors listed below, assuming in each case that all other factors are held constant, is as follows: Relative level of the S&P 500 Index. Bearish Notes. The trading value of the Bearish Notes prior to the Determination Date is expected to depend primarily on the extent of the depreciation, if any, of the S&P 500 Index relative to the Initial Index Value. If the S&P 500 Index increases relative to the level of the Initial Index Value, the value of the Bearish Notes is expected to decrease. If the S&P 500 Index decreases relative to the level of the Initial Index Value, the value of the Bearish Notes is expected to increase; provided, however, that such increase may be limited by the Bearish Maximum Total Interest payable. If, however, Bearish Notes are sold prior to the Determination Date at a time when the S&P 500 Index is less than the Initial Index Value, the sale price may be lower than that which may be expected to be realized if such decrease in the S&P 500 Index relative to the Initial Index Value were to prevail until the Determination Date because of the possible fluctuation of the S&P 500 Index between the time of such sale and the Determination Date (see "The Standard & Poor's 500 Index-Historical Data on the S&P 500 Index"). Furthermore, the price at which a beneficial owner will be able to sell Bearish Notes prior to the Determination Date may be at a discount, which could be substantial, from the principal amount thereof, if, at such time, the S&P 500 Index is above, equal to or not sufficiently below the Initial Index Value. Bullish Notes. The trading value of the Bullish Notes prior to the Determination Date is expected to depend primarily on the extent of the appreciation, if any, of the S&P 500 Index relative to the Initial Index Value. If the S&P 500 Index decreases relative to the level of the Initial Index Value, the value of the Bullish Notes is expected to decrease. If the S&P 500 Index increases relative to the level of the Initial Index Value, the value of the Bullish Notes is expected to increase; provided, however, that such increase may be limited by the Bullish Maximum Total Interest. If, however, Bullish Notes are sold prior to the Determination Date at a time when the S&P 500 Index is greater than the Initial Index Value, the sale price may be lower than that which may be expected to be realized if such increase in the S&P 500 Index relative to the Initial Index Value were to prevail until the Determination Date because of the possible fluctuation of the S&P 500 Index S-8 10 between the time of such sale and the Determination Date. (See "The Standard & Poor's 500 Index-Historical Data on the S&P 500 Index.") Furthermore, the price at which a beneficial owner will be able to sell Bullish Notes prior to the Determination Date may be at a discount, which could be substantial, from the principal amount thereof, if, at such time, the S&P 500 Index is below, equal to or not sufficiently above the Initial Index Value. Interest Rates. In general, if U.S. interest rates increase, the value of both the Bearish Notes and the Bullish Notes is expected to decrease. If U.S. interest rates decrease, the value of both the Bearish Notes and the Bullish Notes is expected to increase. Interest rates may also affect the U.S. economy, and, in turn, the value of the S&P 500 Index. Falling interest rates may increase the value of the S&P 500 Index and, thus, may decrease the value of the Bearish Notes and increase the value of the Bullish Notes. Rising interest rates may lower the value of the S&P 500 Index and, thus, may decrease the value of the Bullish Notes and increase the value of the Bearish Notes. Volatility of the S&P 500 Index. If the volatility of the S&P 500 Index increases, the trading value of the Notes is expected to increase. If the volatility of the S&P 500 Index decreases, the trading value of the Notes is expected to decrease. Time Remaining to Determination Date. The Notes may trade at a value above that which may be inferred from the level of interest rates and the S&P 500 Index. This difference will reflect a "time premium" due to expectations concerning the value of the S&P 500 Index during the period prior to the Determination Date. As the time remaining to the Determination Date decreases, however, this time premium is expected to decrease, thus decreasing the trading value of the Notes. Dividend Rates in the United States. Bearish Notes. If dividend rates on the stocks comprising the S&P 500 Index increase, the value of the Bearish Notes is expected to increase. Conversely, if dividend rates on the stocks comprising the S&P 500 Index decrease, the value of the Bearish Notes is expected to decrease. However, in general, rising U.S. corporate dividend rates may increase the S&P 500 Index and, in turn, decrease the value of the Bearish Notes. Conversely, falling U.S. dividend rates may decrease the S&P 500 Index and, in turn, increase the value of the Bearish Notes. Bullish Notes. If dividend rates on the stocks comprising the S&P 500 Index increase, the value of the Bullish Notes is expected to decrease. Conversely, if dividend rates on the stocks comprising the S&P 500 Index decrease, the value of the Bullish Notes is expected to increase. However, in general, rising U.S. corporate dividend rates may increase the S&P 500 Index and, in turn, increase the value of the Bullish Notes. Conversely, falling U.S. dividend rates may decrease the S&P 500 Index and, in turn, decrease the value of the Bullish Notes. TRADING IN SECOND YEAR The trading value of the Notes after the Determination Date is expected to depend primarily on the value of the Total Interest payable on the Notes, if any, and the scheduled repayment of principal at maturity. Once the Total Interest payable on the Notes, if any, is determined, it is expected that the secondary market for the Notes will be similar to that of other debt securities of the same or similar credit rating and maturity with a fixed coupon paid on an annual basis with the value of any unpaid installments of the Total Interest payable on the Notes, if any, substituting for such fixed coupon. If the Total Interest payable on the Notes is equal to zero, it is expected that the value of the Notes in the secondary market will be similar to a zero coupon debt security which repays its principal amount at the maturity date of the Notes. Zero coupon debt securities will generally trade at a discount from their principal amounts. OTHER CONSIDERATIONS It is suggested that prospective investors who consider purchasing the Notes should reach an investment decision only after carefully considering the suitability of the Notes in the light of their particular circumstances. Prospective investors should consult their advisors prior to making any investment in the Notes. Investors should also consider the tax consequences of investing in the Notes. See "Certain United States Federal Income Tax Considerations" in this Prospectus Supplement. S-9 11 DESCRIPTION OF NOTES The following description of the particular terms of the Notes offered hereby (which are included in the reference in the Prospectus to the "Securities") supplements, and to the extent inconsistent therewith replaces, insofar as such description relates to the Notes, the description of the general terms and provisions of the Securities set forth in the Prospectus, to which description reference is hereby made. GENERAL The Notes are to be issued as two series of Senior Debt Securities under the Indenture, dated as of September 1, 1982 between the Company and The Chase Manhattan Bank (National Association), as trustee (as to which Mercantile Safe Deposit and Trust Company (the "Trustee") is successor trustee), as supplemented (as so supplemented, the "Indenture"), which is more fully described in the accompanying Prospectus. The Notes will mature on May , 1996. The amount of each series of Notes to be issued will be determined by the Underwriters on the date the Notes are priced for initial offering to the public, provided that in order for any series of Notes to be issued, the aggregate principal amount of each series to be issued will not be less than $10,000,000. At maturity, a Holder of a Note will be entitled to receive the principal amount thereof plus interest, if any, as described under "Interest Payments" below. The Notes are not subject to redemption by the Company or repayment at the option of any Holder prior to maturity. The Notes are to be issued in denominations of $5,000 and integral multiples thereof. The Notes will be issued in book-entry form and beneficial owners will not be able to receive Notes in definitive form except in certain limited circumstances (see "Description of Notes -- Securities Depository"). INTEREST PAYMENTS BEARISH NOTES The Company will pay interest on the Bearish Notes from the issuance of the Bearish Notes through the maturity date equal to the Total Interest payable on the Bearish Notes, if any. The Total Interest on the Bearish Notes will be paid in two equal annual installments on the Interest Payment Dates (as defined below) and will be equal to the following for each $1,000 principal amount of Bearish Notes: $1,000 X S&P 500 PERCENT DECLINE X BEARISH PARTICIPATION RATE provided, however, that Total Interest on the Bearish Notes will not exceed $ per $1,000 principal amount of Bearish Notes (the "Bearish Maximum Total Interest"). The foregoing formula produces a fixed dollar amount (which will be paid as interest in two equal annual installments), not a per annum percentage amount. Total Interest payable on the Bearish Notes cannot be less than zero. The Bearish Participation Rate is equal to % and will be determined by the Company on the date the Bearish Notes are priced for initial offering to the public. The "S&P 500 Percent Decline" will equal the following (expressed as a percentage): Initial Index Value - 1995 Index Value -------------------------------------- Initial Index Value If the 1995 Index Value is not less than the Initial Index Value, a beneficial owner of a Bearish Note will receive only the principal amount thereof at maturity and no interest payments on the Interest Payment Dates. BULLISH NOTES The Company will pay interest on the Bullish Notes from the issuance of the Bullish Notes through the maturity date equal to the Total Interest payable on the Bullish Notes, if any. The Total Interest on the S-10 12 Bullish Notes will be paid in two equal annual installments on the Interest Payment Dates and will be equal to the following for each $1,000 principal amount of Bullish Notes: $1,000 X S&P 500 PERCENT INCREASE X BULLISH PARTICIPATION RATE provided, however, that Total Interest will not exceed $ per $1,000 principal amount of Bullish Notes (the "Bullish Maximum Total Interest"). The foregoing formula produces a fixed dollar amount (which will be paid as interest in two equal annual installments), not a per annum percentage amount. Total Interest payable on the Bullish Notes cannot be less than zero. The Bullish Participation Rate is equal to % and will be determined by the Company on the date the Bullish Notes are priced for initial offering to the public. The "S&P 500 Percent Increase" will equal the following (expressed as a percentage): 1995 Index Value - Initial Index Value -------------------------------------- Initial Index Value If the 1995 Index Value is not greater than the Initial Index Value, a beneficial owner of a Bullish Note will receive only the principal amount thereof at maturity and no interest payments on the Interest Payment Dates. INTEREST PAYMENT DATES The Company will pay half of the Total Interest, if any, with respect to each series of Notes on May , 1995, to the persons in whose names the Notes are registered on May , 1995, and will pay the remaining half at maturity, to the person to whom the principal is payable (such dates of payment are hereafter referred to as the "Interest Payment Dates"). DEFINITIONS The "Initial Index Value" will equal the closing value of the S&P 500 Index on the date that the Notes are priced for initial offering to the public. The "1995 Index Value" will be determined by Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Calculation Agent") and will equal the closing value of the S&P 500 Index on the seventh scheduled Trading Day preceding the Anniversary Date. The "Anniversary Date" is the date which is one year from the date that the Notes are issued, whether or not a Trading Day. In the event that a Market Disruption Event has occurred on such seventh scheduled Trading Day, the "1995 Index Value" will equal the closing value of the S&P 500 Index on the sixth scheduled Trading Day preceding the Anniversary Date regardless of whether such day is a Trading Day or a Market Disruption Event occurs on such day. The date on which the 1995 Index Value is determined is hereinafter referred to as the "Determination Date". The Calculation Agent will determine the seventh scheduled Trading Day, and, if necessary, the sixth scheduled Trading Day prior to the Anniversary Date. For purposes of determining the 1995 Index Value, a "Trading Day" is a day on which The New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers Automated Quotations System National Market System, the Chicago Mercantile Exchange, the New York Futures Exchange and the Chicago Board Options Exchange are open for trading. All determinations made by the Calculation Agent shall be at the sole discretion of the Calculation Agent and, in the absence of manifest error, shall be conclusive for all purposes and binding on the Company and Holders of the Notes. All percentages resulting from any calculation on the 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 dollar amounts used in or resulting from such calculation will be rounded to the nearest cent with one-half cent being rounded upwards. "Market Disruption Event" means either of the following events, as determined by the Calculation Agent: (i) the suspension or material limitation (limitations pursuant to New York Stock Exchange Rule 80A or any applicable rule or regulation enacted or promulgated by The New York Stock Exchange, the S-11 13 American Stock Exchange, the National Association of Securities Dealers, or the Securities and Exchange Commission of similar scope as determined by the Calculation Agent on trading during significant market fluctuations shall be considered "material" for purposes of this definition) for more than two hours of trading or during the period one-half hour prior to the determination of the closing value of the S&P 500 Index in 100 or more of the securities included in the S&P 500 Index, or (ii) the suspension or material limitation (whether by reason of movements in price otherwise exceeding levels permitted by the relevant exchange or otherwise) in (A) futures contracts related to the S&P 500 Index which are traded on the Chicago Mercantile Exchange or (B) option contracts related to the S&P 500 Index which are traded on the Chicago Board Options Exchange, Inc., in each case for more than two hours of trading or during the period one-half hour prior to the determination of the closing value of the S&P 500 Index. For purposes of this definition, a limitation on the hours in a trading day and/or number of days of trading will not constitute a Market Disruption Event if it results from an announced change in the regular business hours of the relevant exchange. DISCONTINUANCE OR MODIFICATION OF THE S&P 500 INDEX AND SUCCESSOR INDEX If S&P discontinues publication of the S&P 500 Index and S&P or another entity publishes a successor or substitute index that the Calculation Agent determines, in its sole discretion, to be comparable to the S&P 500 Index (any such index being referred to hereinafter as a "Successor Index"), then, upon the Calculation Agent's notification of such determination to the Trustee and the Company, the Calculation Agent will substitute the Successor Index as calculated by S&P or such other entity for the S&P 500 Index and calculate the Total Interest as described above. Upon any selection by the Calculation Agent of a Successor Index, the Company shall cause notice thereof to be published in the Wall Street Journal (or another newspaper of general circulation) within three Business Days of such selection. If S&P discontinues publication of the S&P 500 Index and a Successor Index is not selected by the Calculation Agent or is no longer published on the Determination Date, the value to be substituted for the S&P 500 Index on the Determination Date used to calculate the Total Interest, if any, will be a value computed by the Calculation Agent for the Determination Date in accordance with the procedures last used to calculate the S&P 500 Index prior to any such discontinuance. If S&P discontinues publication of the S&P 500 Index prior to the Determination Date and the Calculation Agent determines that no Successor Index is available at such time or a Successor Index is not selected, then on each Business Day until the earlier to occur of (i) the Determination Date and (ii) a determination by the Calculation Agent that a Successor Index is available, the Calculation Agent shall determine the value that would be used in computing the Total Interest by reference to the method set forth in the preceding paragraph above. The Calculation Agent will cause notice of each such value to be published not less often than once each month in the Wall Street Journal (or another newspaper of general circulation), and arrange for information with respect to such values to be made available by telephone. Notwithstanding these alternative arrangements, discontinuance of the publication of the S&P 500 Index may adversely affect trading in the Notes prior to the Determination Date. If a Successor Index is selected or the Calculation Agent calculates a value as a substitute for the S&P 500 Index as described in the second preceding paragraph, such Successor Index or value shall be substituted for the S&P 500 Index for all purposes, including for purposes of determining whether a Market Disruption Event exists. If at any time the method of calculating the S&P 500 Index, or the value thereof, is changed in a material respect, or if the S&P 500 Index is in any other way modified so that such Index does not, in the opinion of the Calculation Agent, fairly represent the value of the S&P 500 Index had such changes or modifications not been made, then, from and after such time, the Calculation Agent shall make such adjustments to the closing value of the S&P 500 Index on the Determination Date as, in the good faith judgment of the Calculation Agent, may be necessary in order to arrive at a calculation of a value of a stock index comparable to the S-12 14 S&P 500 Index as if such changes or modifications had not been made, and calculate such closing value with reference to the S&P 500 Index, as adjusted. Accordingly, if the method of calculating the S&P 500 Index is modified so that the value of such Index is a fraction or a multiple of what it would have been if it had not been modified (e.g., due to a split in the Index), then the Calculation Agent shall adjust such Index in order to arrive at a value of the S&P 500 Index as if it had not been modified (e.g., as if such split had not occurred). EVENTS OF DEFAULT AND ACCELERATION In case an Event of Default with respect to any of the Notes shall have occurred and be continuing, the amount payable to a Holder of a Note upon any acceleration permitted by the Notes, with respect to each $1000 principal amount thereof, will be equal to: (i) the initial issue price ($1,000), plus (ii) an additional amount, if any, of contingent interest equal to (a) if the date of acceleration is prior to the Determination Date, an amount, if any, calculated in the same manner as the applicable Total Interest assuming the date of acceleration were the Determination Date, and (b) if the date of acceleration is on or after the Determination Date, an amount equal to the applicable Total Interest, if any, less the portion of the applicable Total Interest previously paid. See "Description of Notes-Interest Payments" in this Prospectus Supplement. If a bankruptcy proceeding is commenced in respect of the Company, the claim of the Holder of a Note may be limited, under Section 502(b)(2) of Title 11 of the United States Code, to the principal amount of the Note plus an additional amount, if any, of contingent interest calculated as though the date of the commencement of the proceeding were the maturity date of the Notes. SECURITIES DEPOSITORY Upon issuance, all Notes of each series of Notes will be represented by one or more fully registered global securities (the "Global Securities"). Each such Global Security will be deposited with, or on behalf of, The Depository Trust Company, as Securities Depository, registered in the name of the Securities Depository or a nominee thereof. Unless and until it is exchanged in whole or in part for Notes in definitive form, no Global Security may be transferred except as a whole by the Securities Depository to a nominee of such Securities Depository or by a nominee of such Securities Depository to such Securities Depository or another nominee of such Securities Depository or by such Securities Depository or any such nominee to a successor of such Securities Depository or a nominee of such successor. The circumstances under which the Global Securities may be exchanged for Notes in definitive form are limited. See "Description of Securities Global Notes, Delivery and Form" in the accompanying Prospectus. THE STANDARD & POOR'S 500 INDEX All disclosure contained in this Prospectus Supplement regarding the S&P 500 Index, including, without limitation, its make-up, method of calculation and changes in its components, is derived from publicly available information prepared by S&P. Neither the Company nor the Underwriter takes any responsibility for the accuracy or completeness of such information. GENERAL The S&P 500 Index is published by S&P and is intended to provide an indication of the pattern of common stock price movement. The calculation of the value of the S&P 500 Index (discussed below in further detail) is based on the relative value of the aggregate product of the market price per share and the number of then outstanding shares (the "Market Value") of the common stocks of 500 companies as of a particular time as compared to the aggregate average Market Value of the common stocks of 500 similar companies during the base period of the years 1941 through 1943. As of March 31, 1994, the 500 companies included in the S&P 500 Index represented approximately 74% of the aggregate Market Value of common stocks traded on The New York Stock Exchange; however, the 500 companies are not the 500 largest companies listed on The New York Stock Exchange and not all 500 companies are listed on such exchange. As of March 31, 1994, the aggregate market value of the 500 companies included in the S&P 500 Index represented approximately 68% of the aggregate market value of United States domestic, public companies. S-13 15 S&P chooses companies for inclusion in the S&P 500 Index with the aim of achieving a distribution by broad industry groupings that approximates the distribution of these groupings in the common stock population of The New York Stock Exchange, which S&P uses as an assumed model for the composition of the total market. Relevant criteria employed by S&P include the viability of the particular company, the extent to which that company represents the industry group to which it is assigned, the extent to which the market price of that company's common stock is generally responsive to changes in the affairs of the respective industry and the Market Value and trading activity of the common stock of that company. As of March 31, 1994, the 500 companies included in the Index were divided into 89 individual groups. These individual groups comprised the following four main groups of companies (with the number of companies currently included in each group indicated in parentheses): Industrials (380), Utilities (47), Transportation (16) and Financial (57). S&P may from time to time, in its sole discretion, add companies to, or delete companies from, the S&P 500 Index to achieve the objectives stated above. COMPUTATION OF THE S&P 500 INDEX S&P currently computes the S&P 500 Index as of a particular time as follows: (1) the Market Value of each component stock is determined as of such time; (2) the Market Value of all component stocks as of such time (as determined under clause (1) above) are aggregated; (3) the mean average of the Market Values as of each week in the base period of the years 1941 through 1943 of the common stock of each company in a group of 500 substantially similar companies is determined; (4) the mean average Market Values of all such common stocks over such base period (as determined under clause (3) above) are aggregated (such aggregate amount being referred to as the "Base Value"); (5) the aggregate Market Value of all component stocks as of such time (as determined under clause (2) above) is divided by the Base Value; and (6) the resulting quotient (expressed in decimals) is multiplied by ten. While S&P currently employs the above methodology to calculate the S&P 500 Index, no assurance can be given that S&P will not modify or change such methodology in a manner that may affect the Total Interest, if any, payable to Holders of Notes upon maturity or otherwise. S&P adjusts the foregoing formula to negate the effect of changes in the Market Value of a component stock that are determined by S&P to be arbitrary or not due to true market fluctuations. Such changes may result from such causes as the issuance of stock dividends, the granting to shareholders of rights to purchase additional shares of such stock, the purchase thereof by employees pursuant to employee benefit plans, certain consolidations and acquisitions, the granting to shareholders of rights to purchase other securities of the company, the substitution by S&P of particular component stocks in the S&P 500 Index, and other reasons. In all such cases, S&P first recalculates the aggregate Market Value of all component stocks (after taking account of the new market price per share of the particular component stock or the new number of outstanding shares thereof or both, as the case may be) and then determines the New Base Value in accordance with the following formula: Old Base Value X New Market Value = New Base Value ---------------- Old Market Value
The result is that the Base Value is adjusted in proportion to any change in the aggregate Market Value of all component stocks resulting from the causes referred to above to the extent necessary to negate the effects of such causes upon the S&P 500 Index. S-14 16 ILLUSTRATIVE TOTAL INTEREST PAYMENTS The following tables illustrate, for a range of hypothetical percentage changes in the S&P 500 Index from the date the Notes are initially priced for initial offering to the public to the Determination Date, the Total Interest payable per $1,000 principal amount of each series of Notes, and the pretax annualized rate of return to beneficial owners of each series of Notes. The following table assumes a Participation Rate equal to 240% in the case of Bearish Notes and a Participation Rate equal to 165% in the case of the Bullish Notes, and Maximum Total Interest equal to $240 per $1,000 principal amount of the Bearish Notes and $165 per $1,000 principal amount of the Bullish Notes. The actual Participation Rate with respect to each series of Notes will be determined on the date the Notes are priced for initial offering to the public. Half of the Total Interest, if any, on a series of Notes will be payable on the Interest Payment Date in May 1995, with the remaining half being payable at maturity. BEARISH NOTES
S&P 500 INDEX TOTAL INTEREST PAYABLE PRETAX ANNUALIZED PERCENTAGE DECLINE PER $1,000 PRINCIPAL RATE OF RETURN(1)(2) - ------------------ ----------------------- -------------------- -10.00% or less $240.00 11.66% - 9.00% 216.00 10.52% - 8.00% 192.00 9.38% - 7.00% 168.00 8.23% - 6.00% 144.00 7.07% - 5.00% 120.00 5.91% - 4.00% 96.00 4.74% - 3.00% 72.00 3.57% - 2.00% 48.00 2.39% - 1.00% 24.00 1.20% 0.00% or more 0.00 0.00%
BULLISH NOTES
S&P 500 INDEX TOTAL INTEREST PAYABLE PRETAX ANNUALIZED PERCENTAGE INCREASE PER $1,000 PRINCIPAL RATE OF RETURN(1)(2) - ------------------- ----------------------- -------------------- 0.00% or less $ 0.00 0.00% 1.00% 16.50 0.82% 2.00% 33.00 1.64% 3.00% 49.50 2.46% 4.00% 66.00 3.27% 5.00% 82.50 4.08% 6.00% 99.00 4.89% 7.00% 115.50 5.69% 8.00% 132.00 6.49% 9.00% 148.50 7.29% 10.00% or more 165.00 8.09%
- --------------- (1) The annualized rates of return specified in the table are calculated on a semiannual bond equivalent basis. (2) This rate of return assumes a two year maturity for the Notes and no transaction fees or expenses. The above figures are for purposes of illustration only. The actual Total Interest payable on each series of the Notes and the pretax annualized rate of return resulting therefrom will depend entirely on the actual Initial Index Value, and on the actual 1995 Index Value determined by the Calculation Agent as provided herein, which in turn are dependent on the level of the S&P 500 Index. S-15 17 HISTORICAL DATA ON THE S&P 500 INDEX The following tables set forth the closing values of the S&P 500 Index on the last business day of each year from 1948 through 1993, as published by S&P. The table also sets forth (i) the percent change in the S&P 500 Index values between such values for each year, (ii) the hypothetical Total Interest that would have been determined for each series of Notes given the percent change in the S&P 500 Index in a year, and (iii) the hypothetical pretax annualized rate of return given the percent change in a year. The historical experience of the S&P 500 Index should not be taken as an indication of future performance and no assurance can be given that the value of the S&P 500 Index will not increase and thereby cause the Total Interest payable on the Bearish Notes to equal zero or that the value of the S&P 500 Index will not decrease and thereby cause the Total Interest payable on the Bullish Notes to equal zero. In addition, there can be no assurance that changes in the S&P 500 Index for the period from the last business day in a year to the last business day in the next succeeding year is representative of changes which could occur in the S&P 500 Index during the Measurement Period. S-16 18 HYPOTHETICAL HISTORICAL NOTE PAYMENTS BASED ON ACTUAL S&P 500 INDEX CHANGES 1948 - 1993(1)
BEARISH NOTES BULLISH NOTES ---------------------------------------- --------------------------------------- S&P 500 HYPOTHETICAL TOTAL HYPOTHETICAL TOTAL INDEX VALUE PERCENTAGE CHANGE INTEREST PAYABLE HYPOTHETICAL INTEREST PAYABLE HYPOTHETICAL ON LAST BUSINESS IN INDEX FROM PER $1,000 PRINCIPAL PRETAX ANNUALIZED PER $1,000 PRINCIPAL PRETAX ANNUALIZED YEAR DAY OF YEAR PRIOR YEAR CLOSE AMOUNT OF NOTES RATE OF RETURN AMOUNT OF NOTES RATE OF RETURN - ----- ---------------- ----------------- -------------------- ----------------- -------------------- ----------------- 1948 15.20 -0.65% $ 15.69 0.78% $ 0.00 0.00% 1949 16.76 10.26% $ 0.00 0.00% $ 165.00 8.09% 1950 20.41 21.78% $ 0.00 0.00% $ 165.00 8.09% 1951 23.77 16.46% $ 0.00 0.00% $ 165.00 8.09% 1952 26.57 11.78% $ 0.00 0.00% $ 165.00 8.09% 1953 24.81 -6.62% $ 158.98 7.80% $ 0.00 0.00% 1954 35.98 45.02% $ 0.00 0.00% $ 165.00 8.09% 1955 45.48 26.40% $ 0.00 0.00% $ 165.00 8.09% 1956 46.67 2.62% $ 0.00 0.00% $ 43.17 2.15% 1957 39.99 -14.31% $ 240.00 11.66% $ 0.00 0.00% 1958 55.21 38.06% $ 0.00 0.00% $ 165.00 8.09% 1959 59.89 8.48% $ 0.00 0.00% $ 139.87 6.88% 1960 58.11 -2.97% $ 71.33 3.54% $ 0.00 0.00% 1961 71.55 23.13% $ 0.00 0.00% $ 165.00 8.09% 1962 63.10 -11.81% $ 240.00 11.66% $ 0.00 0.00% 1963 75.02 18.89% $ 0.00 0.00% $ 165.00 8.09% 1964 84.75 12.97% $ 0.00 0.00% $ 165.00 8.09% 1965 92.43 9.06% $ 0.00 0.00% $ 149.52 7.34% 1966 80.33 -13.09% $ 240.00 11.66% $ 0.00 0.00% 1967 96.47 20.09% $ 0.00 0.00% $ 165.00 8.09% 1968 103.86 7.66% $ 0.00 0.00% $ 126.40 6.22% 1969 92.06 11.36% $ 240.00 11.66% $ 0.00 0.00% 1970 92.15 0.10% $ 0.00 0.00% $ 1.61 0.08% 1971 102.09 10.79% $ 0.00 0.00% $ 165.00 8.09% 1972 118.05 15.63% $ 0.00 0.00% $ 165.00 8.09% 1973 97.55 -17.37% $ 240.00 11.66% $ 0.00 0.00% 1974 68.56 -29.72% $ 240.00 11.66% $ 0.00 0.00% 1975 90.19 31.55% $ 0.00 0.00% $ 165.00 8.09% 1976 107.46 19.15% $ 0.00 0.00% $ 165.00 8.09% 1977 95.10 -11.50% $ 240.00 11.66% $ 0.00 0.00% 1978 96.11 1.06% $ 0.00 0.00% $ 17.52 0.87% 1979 107.94 12.31% $ 0.00 0.00% $ 165.00 8.09% 1980 135.76 25.77% $ 0.00 0.00% $ 165.00 8.09% 1981 122.55 -9.73% $ 233.53 11.35% $ 0.00 0.00% 1982 140.64 14.76% $ 0.00 0.00% $ 165.00 8.09% 1983 164.93 17.27% $ 0.00 0.00% $ 165.00 8.09% 1984 167.24 1.40% $ 0.00 0.00% $ 23.11 1.15% 1985 211.28 26.33% $ 0.00 0.00% $ 165.00 8.09% 1986 242.17 14.62% $ 0.00 0.00% $ 165.00 8.09% 1987 247.08 2.03% $ 0.00 0.00% $ 33.45 1.67% 1988 277.72 12.40% $ 0.00 0.00% $ 165.00 8.09% 1989 353.40 27.25% $ 0.00 0.00% $ 165.00 8.09% 1990 330.22 -6.56% $ 157.42 7.72% $ 0.00 0.00% 1991 417.09 26.31% $ 0.00 0.00% $ 165.00 8.09% 1992 435.71 4.46% $ 0.00 0.00% $ 73.66 3.65% 1993 466.45 7.06% $ 0.00 0.00% $ 116.41 5.74%
- --------------- (1) The preceding table is based on the following assumptions: For the Bearish Notes, the Participation Rate is assumed to be 240% and the Maximum Total Interest is assumed to be $240 per $1,000 principal amount of the Bearish Notes. For the Bullish Notes, the Participation Rate is assumed to be 165% and the Maximum Total Interest is assumed to be $165 per $1,000 principal amount of the Bullish Notes. The hypothetical pretax annualized rates of return are calculated on a semi-annual bond equivalent basis and assume the Notes are held until maturity. The percentage change in the S&P 500 Index above for each year was calculated from the last business day of the prior year to the last business day of such year. The S&P 500 Percent Increase and Decrease will be calculated as described above under "Description of Notes -- Interest Payment Dates". S-17 19 The following graph sets forth the percentage change in the S&P 500 Index in each year from the closing value in the prior year to the closing value in each such year from 1948 through 1993. Past movements of the S&P 500 Index and the percentage change in the S&P 500 Index in each calendar year that have occurred are not necessarily indicative of future values of the S&P 500 Index or future percentage changes in the S&P 500 Index in each calendar year. [GRAPHIC NO.1 APPEARS HERE] The closing value of the S&P 500 Index on April 13, 1994 was 446.26, as quoted by S&P. S-18 20 LICENSE AGREEMENT S&P and Merrill Lynch Capital Services, Inc. have entered into a non-exclusive license agreement providing for the license to Merrill Lynch Capital Services, Inc., in exchange for a fee, of the right to use indices owned and published by S&P in connection with certain securities, including the Securities, and the Company is an authorized sublicensee thereof. The license agreement between S&P and Merrill Lynch Capital Services, Inc. provides that the following language must be stated in this Prospectus Supplement: The Securities are not sponsored, endorsed, sold or promoted by S&P. S&P makes no representation or warranty, express or implied, to the Holders of the Securities or any member of the public regarding the advisability of investing in securities generally or in the Securities particularly or the ability of the S&P 500 Index to track general stock market performance. S&P's only relationship to Merrill Lynch Capital Services, Inc. and the Company (other then transactions entered into in the ordinary course of business) is the licensing of certain servicemarks and trade names of S&P and of the S&P 500 Index which is determined, composed and calculated by S&P without regard to the Company or the Securities. S&P has no obligation to take the needs of the Company or the Holders of the Securities into consideration in determining, composing or calculating the S&P 500 Index. S&P is not responsible for and has not participated in the determination of the timing of the sale of the Securities, prices at which the Securities are to initially be sold, or quantities of the Securities to be issued or in the determination or calculation of the equation by which the Securities are to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the Securities. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS In the opinion of James M. Kalashian, General Tax Counsel of General Electric Capital Corporation, tax counsel to the Company ("Tax Counsel"), the following summary describes certain of the principal United States Federal income tax consequences of the purchase, ownership and disposition of the Notes and is based upon laws, regulations, rulings and decisions now in effect (or, in the case of certain regulations, in proposed form) all of which are subject to change (including changes in effective dates) or possible differing interpretations. The discussion below deals only with Notes held as capital assets and does not purport to deal with persons in special tax situations (such as tax-exempt investors, insurance companies, regulated investment companies, dealers in securities, foreign persons, and investors holding Notes as part of a hedging transaction or as a position in a "straddle" for tax purposes). It also does not deal with holders other than original purchasers who acquire the Notes for an amount equal to 100% of the principal amount thereof. Persons considering the purchase of the Notes should consult their own tax advisors concerning the application of United States Federal, state, local and any other income or estate tax laws to their particular situations as well as any consequences of the purchase, ownership and disposition of the Notes arising under the laws of any other taxing jurisdiction. As used herein, the term "U.S. Holder" means a beneficial owner of a Note that is for United States Federal income tax purposes (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States or of any political subdivision thereof, (iii) an estate or trust the income of which is subject to United States Federal income taxation regardless of its source, or (iv) any other person whose income or gain in respect of a Note is effectively connected with the conduct of a United States trade or business. As used herein, the term "non-U.S. Holder" means a holder of a Note that is not a U.S. Holder. GENERAL There are no regulations (except the Treasury Regulations as described below), published rulings or judicial decisions involving the characterization, for United States Federal income tax purposes, of securities with terms substantially the same as the Notes. Although the matter is not free from doubt, the Company believes, based upon the advice of Tax Counsel, that, under current law, each Note should be treated as a debt S-19 21 instrument of the Company for United States Federal income tax purposes. The discussion below is based upon the assumption that each Note will be treated as a debt instrument of the Company for United States Federal income tax purposes. U.S. HOLDERS Under general principles of current United States Federal income tax law, payments of interest on a debt instrument generally will be taxable to a U.S. Holder as ordinary interest income at the time such payments are accrued or are received (in accordance with the U.S. Holder's regular method of tax accounting). Under these principles, the amounts payable with respect to a Note on the Interest Payment Dates based upon the S&P 500 Index (the "Interest Payments"), if any, would be treated as contingent interest and generally would be includible in income by a U.S. Holder as ordinary interest on the respective dates that the Interest Payments are accrued or are received (in accordance with the U.S. Holder's regular method of tax accounting). Upon the sale, exchange or retirement of a Note, a U.S. Holder generally would recognize taxable gain or loss in an amount equal to the difference between the amount realized on the sale, exchange or retirement (other than amounts representing accrued and unpaid interest) and such U.S. Holder's tax basis in the Note. A U.S. Holder's tax basis in a Note generally will equal such U.S. Holder's initial investment in the Note. Such gain or loss generally would be capital gain or loss and would be long-term capital gain or loss if the Note were held by the U.S. Holder for more than one year. On January 27, 1994, the Internal Revenue Service ("IRS") issued final Treasury regulations (the "OID Regulations") under the original issue discount provisions of the Internal Revenue Code of 1986, as amended (the "Code"). The OID Regulations, which replaced certain proposed original issue discount regulations that were issued on December 21, 1992, generally apply to debt instruments issued on or after April 4, 1994 and, therefore, by their terms they would apply to the Notes. Under the OID Regulations, if a debt instrument qualifies as a "variable rate debt instrument", then a special set of rules will apply to the debt instrument whereby all "qualified stated interest" payments on the debt instrument generally will be taxable to a U.S. Holder as ordinary interest income in accordance with the U.S. Holder's regular method of tax accounting. In general, a debt instrument will qualify as a "variable rate debt instrument" under the OID Regulations (and would therefore not be treated as a contingent payment debt obligation) if (a) its issue price does not exceed the total noncontingent principal payments provided for under the terms of the debt instrument by more than a specified de minimis amount and (b) it provides for stated interest, paid or compounded at least annually, at current values of a single objective rate. In general, an "objective rate" is a rate which is determined using a single fixed formula and which is based upon either the yield or changes in the price of one or more items of actively traded personal property (other than stock or debt of the issuer or a related party). If a debt instrument qualifies as a "variable rate debt instrument" under the OID Regulations and if the debt instrument provides for stated interest at a single objective rate throughout the term thereof, then any stated interest on the debt instrument which is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually will constitute "qualified stated interest" and will be taxed accordingly. Although the OID Regulations do not specifically address the proper treatment of instruments such as the Notes and therefore the matter is not free from doubt, the Company believes, based upon the advice of Tax Counsel, that the Notes should qualify as "variable rate debt instruments" under the OID Regulations. Accordingly, assuming that the Notes qualify as "variable rate debt instruments" under the OID Regulations, the Interest Payments will constitute "qualified stated interest" and will be taxable to a U.S. Holder as ordinary interest income on the respective dates that the Interest Payments are accrued or are received (in accordance with the U.S. Holder's regular method of tax accounting). If the Notes do not qualify as "variable rate debt instruments" under the OID Regulations, then the Notes would be treated as contingent payment debt obligations. It is not entirely clear under current law how the Notes would be taxed if they were treated as contingent payment debt obligations. As discussed above, under general principles of current United States Federal income tax law, the Interest Payments would be treated as contingent interest and generally would be includible in income by a U.S. Holder as ordinary S-20 22 interest on the respective dates that the Interest Payments are accrued or are received (in accordance with the U.S. Holder's regular method of tax accounting). However, in 1991, the Treasury Department issued proposed regulations (the "1991 Proposed Regulations" and, together with the OID Regulations, the "Treasury Regulations") under the original issue discount provisions of the Code concerning contingent payment debt obligations which, if applicable to the Notes, would separate a Note into a debt instrument and a series of rights based upon the value of the S&P 500 Index. The 1991 Proposed Regulations contain a retroactive effective date of February 20, 1991. Thus, if the Notes are treated as contingent payment debt obligations and if the 1991 Proposed Regulations are ultimately adopted in their current form, such regulations would apply to the Notes and such application of the 1991 Proposed Regulations to the Notes would cause the timing and character of income, gain or loss reported on a Note to differ from the timing and character of income, gain or loss reported on a Note had the 1991 Proposed Regulations not applied to the Notes. The 1991 Proposed Regulations would treat a Note as consisting of two separate components: (i) the fixed payment (i.e., the debt instrument), consisting of the right to receive the Note's principal amount (the "Fixed Payment"), and (ii) the contingent payments, consisting of the right to receive the Interest Payments (the "Contingent Payments"). A Note's original issue price would be allocated between the Fixed Payment and the Contingent Payments in accordance with their relative fair market values as of the Note's issue date. Under the 1991 Proposed Regulations, the Fixed Payment would be treated, for United States Federal income tax purposes, as a separate debt obligation issued at an original issue discount. A U.S. Holder (whether a cash or accrual method taxpayer) would be required to include the original issue discount on a Note in gross income (using a constant yield method) over the Note's term in advance of receipt of the cash payment attributable to such income. The original issue discount required to be included in income with respect to a Note would be equal to the difference between the Note's principal amount and the amount of the Note's original issue price allocated to the Fixed Payment. If the Notes are treated as contingent payment debt obligations and if the 1991 Proposed Regulations are ultimately adopted in their current form and, thus, are applied to the Notes, then the amount of original issue discount with respect to a Bearish Note would be $ and with respect to a Bullish Note would be $ per $1,000 principal amount. Under the 1991 Proposed Regulations, a U.S. Holder that disposes of a Note prior to its maturity would generally be required to recognize taxable gain or loss, with respect to the Fixed Payment, in an amount equal to the difference (if any) between the portion of the sales proceeds allocated to such Fixed Payment (in accordance with the relative fair market values of the Fixed Payment and the Contingent Payments as determined on the disposition date) and such U.S. Holder's adjusted tax basis in the Fixed Payment. A U.S. Holder's adjusted tax basis in the Fixed Payment generally would equal the portion of such U.S. Holder's initial investment in the Note that is allocated to the Fixed Payment (in accordance with the relative fair market values of the Fixed Payment and the Contingent Payments as of the Note's issue date), increased by the amount of original issue discount previously included in income by such U.S. Holder with respect to the Fixed Payment. Under the 1991 Proposed Regulations, the Contingent Payments would be treated separately from the Fixed Payment and taxed "in accordance with their economic substance." Although the matter is not free from doubt, if the 1991 Proposed Regulations were applied to the Notes, under an "economic substance" analysis, the Contingent Payments would most likely be treated as a series of two separate cash settlement options on the S&P 500 Index (each an "S&P Right") (as opposed to being treated as a single option), each maturing on the related Interest Payment Date. The United States Federal income tax treatment of the S&P Rights under the 1991 Proposed Regulations would depend upon whether they were treated as "listed" (i.e., options traded on a qualified board or exchange) or "unlisted" nonequity options under Code section 1256. Although the matter is not free from doubt, and subject to the discussion below, Tax Counsel has advised the Company that the better view would be to treat the S&P Rights as "unlisted" nonequity options and there is a reasonable basis for such position. If the S&P Rights were treated as "listed" nonequity options under the 1991 Proposed Regulations, however, the S&P Rights would be subject to the Code's mark-to-market rules discussed below. S-21 23 Assuming that the S&P Rights were treated as "unlisted" nonequity options in the event that the 1991 Proposed Regulations are applied to the Notes, a U.S. Holder would generally be required to recognize taxable gain or loss with respect to the S&P Rights only upon their sale, exchange, expiration or payment on the relevant Interest Payment Date. The amount of gain or loss recognized with respect to each S&P Right would generally be measured by the difference between the amount realized with respect to the S&P Right and the U.S. Holder's tax basis in the S&P Right. A U.S. Holder's aggregate tax basis in the S&P Rights generally would equal the portion of the U.S. Holder's initial investment in the Note that is allocated to the Contingent Payments (in accordance with the relative fair market values of the Fixed Payment and the Contingent Payments as of the Note's issue date) and, although the matter is not free from doubt, it is likely that the U.S. Holder's aggregate tax basis in the S&P Rights would be allocated among the individual S&P Rights (in accordance with their relative fair market values as of the Note's issue date) in order to determine the U.S. Holder's tax basis in each S&P Right. The amount realized with respect to the S&P Right that matures on the first Interest Payment Date would equal the Interest Payment due on such Interest Payment Date. However, under the 1991 Proposed Regulations, in the case of the S&P Right that matures on the second Interest Payment Date, because the Determination Date does not occur within six months of the second Interest Payment Date, the amount realized with respect to such S&P Right would be deemed to equal an amount equal to the present value (determined by using a discount rate equal to the short-term applicable federal rate in effect as of the Note's issue date) of the Interest Payment due on the second Interest Payment Date. The excess of the Interest Payment due on the second Interest Payment Date over the present value of such amount (as determined in the manner described above) would be treated as original issue discount for United States Federal income tax purposes. Such original issue discount would generally be includible in income by a U.S. Holder as ordinary interest as it accrues over the remaining term of the Note (commencing on the Determination Date) under a constant yield method, regardless of the U.S. Holder's regular method of tax accounting. Any gain or loss realized with respect to an S&P Right pursuant to the foregoing rules would generally be short-term or long-term capital gain or loss depending upon whether the Note had been held by the U.S. Holder for more than one year. Although Tax Counsel has advised the Company that in the event that the 1991 Proposed Regulations are applied to the Notes the better view would be to treat each S&P Right as an "unlisted" nonequity option and that there is a reasonable basis for such position, it is possible that the IRS may assert that each S&P Right should be treated as a "listed" nonequity option. The IRS may take this position based on the fact that the S&P Rights are part of a Note which is "listed" or, alternatively, because there are listed options and futures based on the S&P 500 Index. Although it is possible that each S&P Right may be treated as a listed nonequity option, it is not clear that Code section 1256 and the 1991 Proposed Regulations contemplate such a result. Moreover, while the Notes are listed on the NYSE, each S&P Right cannot be separately traded and is not separately listed. In addition, even though options and futures on the S&P 500 Index are listed and traded as of the date on which the Notes are issued, there are no comparable S&P 500 Index options or futures with similar terms to the S&P Rights which are traded on a qualified board or exchange and, therefore, there is no accurate market price to separately value the S&P Rights for purposes of marking the S&P Rights to market. If the S&P Rights were treated as "listed nonequity options", such S&P Rights would generally be marked-to-market under Code section 1256, i.e., treated as if they were sold for their fair market values on the last day of the U.S. Holder's taxable year. Any resulting gain or loss would be treated as sixty percent long-term and forty percent short-term capital gain or loss. Additionally, gain or loss realized with respect to the S&P Rights upon their sale, exchange, expiration or payment on the relevant Interest Payment Date would be sixty percent long-term and forty percent short-term capital gain or loss. Prospective investors in the Notes should consult their own tax advisors as to the proper treatment of the S&P Rights under the 1991 Proposed Regulations in the event that the 1991 Proposed Regulations are applied to the Notes. There is no assurance that the 1991 Proposed Regulations will be adopted or, if adopted, adopted in their current form. In addition, on January 19, 1993, the Treasury Department issued proposed regulations (the "1993 Proposed Regulations"), concerning contingent payment debt obligations, which would have replaced the 1991 Proposed Regulations and which would have provided for a set of rules with respect to the timing and character of income recognition on contingent payment debt obligations that differs from the rules contained S-22 24 in the 1991 Proposed Regulations with respect to the timing and character of income recognition on contingent payment debt obligations. The 1993 Proposed Regulations, which would have applied to debt instruments issued 60 days or more after the date the 1993 Proposed Regulations became final, generally provided for several alternative timing methods which would have required annual interest accruals to reflect either a market yield for the debt instrument, determined as of the issue date, or a reasonable estimate of the performance of contingencies. The amount of interest deemed to accrue in a taxable year pursuant to such methods would have been currently includible in income by a U.S. Holder, with subsequent adjustments to the extent that the estimate of income was incorrect. In addition, under the 1993 Proposed Regulations, any gain recognized by a U.S. Holder on the sale, exchange or retirement of a contingent payment debt obligation would have been treated entirely as ordinary interest income and any loss recognized on the sale, exchange or retirement of a contingent payment obligation would have been treated entirely as a capital loss. However, on January 22, 1993, the United States Government's Office of Management and Budget announced that certain proposed regulations which had not yet been published in the Federal Register, including the 1993 Proposed Regulations, had been withdrawn. It is unclear whether the 1993 Proposed Regulations will be reproposed or, if reproposed, what effect, if any, such regulations would have on the Notes. Based upon the foregoing, the continued viability of the 1991 Proposed Regulations is uncertain. It should also be noted that proposed Treasury regulations are not binding upon either the IRS or taxpayers prior to becoming effective as temporary or final regulations. Prospective investors in the Notes are urged to consult their own tax advisors regarding the application of the Treasury Regulations to their investment in the Notes and the effect of possible changes to the Treasury Regulations. NON-U.S. HOLDERS A non-U.S. Holder will not be subject to United States Federal income or withholding taxes on payments of principal, premium (if any) or interest (including original issue discount, if any) on a Note, unless such non-U.S. Holder is a direct or indirect 10% or greater shareholder of the Company, a controlled foreign corporation related to the Company or a bank receiving interest described in section 881(c)(3)(A) of the Code. To qualify for the exemption from taxation, the last United States payor in the chain of payment prior to payment to a non-U.S. Holder (the "Withholding Agent") must have received in the year in which a payment of interest or principal occurs, or in either of the two preceding calendar years, a statement that (i) is signed by the beneficial owner of the Note under penalties of perjury, (ii) certifies that such owner is not a U.S. Holder and (iii) provides the name and address of the beneficial owner. The statement may be made on an IRS Form W-8 or a substantially similar form, and the beneficial owner must inform the Withholding Agent of any change in the information on the statement within 30 days of such change. If a Note is held through a securities clearing organization or certain other financial institutions, the organization or institution may provide a signed statement to the Withholding Agent. However, in such case, the signed statement must be accompanied by a copy of the IRS Form W-8 or the substitute form provided by the beneficial owner to the organization or institution. The Treasury Department is considering implementation of further certification requirements aimed at determining whether the issuer of a debt obligation is related to holders thereof. Generally, a non-U.S. Holder will not be subject to United States Federal income taxes on any amount which constitutes capital gain upon retirement or disposition of a Note, provided the gain is not effectively connected with the conduct of a trade or business in the United States by the non-U.S. Holder. Certain other exceptions may be applicable, and a non-U.S. Holder should consult its tax advisor in this regard. Under current law, the Notes will not be subject to United States Federal estate tax unless an individual non-U.S. Holder is a direct or indirect 10% or greater shareholder of the Company or, at the time of such individual's death, payments in respect of the Notes would have been effectively connected with the conduct by such individual of a trade or business in the United States. Under the 1991 Proposed Regulations, however, a portion of a Note equal to the fair market value of the Contingent Payments may be includible in the gross estate of a nonresident alien individual for United States Federal estate tax purposes if the 1991 Proposed Regulations were applied to the Notes. S-23 25 BACKUP WITHHOLDING Backup withholding of United States Federal income tax at a rate of 31% may apply to payments made in respect of the Notes to registered owners who are not "exempt recipients" and who fail to provide certain identifying information (such as the registered owner's taxpayer identification number) in the required manner. Generally, individuals are not exempt recipients, whereas corporations and certain other entities generally are exempt recipients. Payments made in respect of the Notes to a U.S. Holder must be reported to the IRS, unless the U.S. Holder is an exempt recipient or establishes an exemption. Compliance with the identification procedures described in the preceding section would establish an exemption from backup withholding for those non-U.S. Holders who are not exempt recipients. In addition, upon the sale of a Note to (or through) a broker, the broker must withhold 31% of the entire purchase price, unless either (i) the broker determines that the seller is a corporation or other exempt recipient or (ii) the seller provides, in the required manner, certain identifying information and, in the case of a non-U.S. Holder, certifies that such seller is a non-U.S. Holder (and certain other conditions are met). Such a sale must also be reported by the broker to the IRS, unless either (i) the broker determines that the seller is an exempt recipient or (ii) the seller certifies its non-U.S. status (and certain other conditions are met). Certification of the registered owner's non-U.S. status would be made normally on an IRS Form W-8 under penalties of perjury, although in certain cases it may be possible to submit other documentary evidence. Any amounts withheld under the backup withholding rules from a payment to a beneficial owner would be allowed as a refund or a credit against such beneficial owner's United States Federal income tax provided the required information is furnished to the IRS. UNDERWRITING Subject to the terms and conditions set forth in an underwriting agreement (the "Underwriting Agreement") among the Company, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Kidder, Peabody & Co. Incorporated (the "Underwriters"), the Company has agreed to sell to the Underwriters, and the Underwriters have severally agreed to purchase, the respective principal amounts of the Notes set forth after their names below. The Underwriting Agreement provides that the obligations of the Underwriters are subject to certain conditions precedent and that the Underwriters will be obligated to purchase all of the Notes if any are purchased.
PRINCIPAL AMOUNT ---------------------------- BEARISH BULLISH UNDERWRITER NOTES NOTES ----------- ----------- Merrill Lynch, Pierce, Fenner & Smith Incorporated..................................... $ $ Kidder, Peabody & Co. Incorporated............................. $ $ ----------- ----------- Total........................................... $ $ ----------- ----------- ----------- -----------
The Underwriters have advised the Company that they propose initially to offer all or part of the Notes directly to the public at the offering price set forth on the cover page of this Prospectus Supplement. The Underwriters may sell Notes to any dealer at a discount and such discount allowed to any dealer will not be in excess of 80% of the discount to be received by the Underwriters. After the initial public offering, the public offering price and discount may be changed. On the date the Notes are priced for initial offering to the public, the Underwriters will designate the aggregate principal amount of Notes of each series to be issued, provided that in order for any Notes of a series to be issued, the aggregate principal amount of such series to be issued will not be less than $10,000,000. All Notes may, therefore, be issued as Bearish Notes or Bullish Notes. The Underwriters are not obligated to make a market in the Notes and, if the Underwriters should do so, the Underwriters may discontinue any market making at any time without notice. No assurance can be given as to the liquidity of the trading market, if any. S-24 26 LEGAL OPINIONS The legality of the Notes will be passed upon for the Company by Bruce C. Bennett, Associate General Counsel, Treasury Operations and Assistant Secretary of the Company. Certain matters relating to the offering of the Notes will be passed upon for the Underwriters by Brown & Wood, One World Trade Center, New York, New York 10048. Brown & Wood acts as counsel for the Company and certain of its subsidiaries from time to time in various matters. Messrs. Bennett and Kalashian (who is referred to under "Certain United States Federal Income Tax Considerations"), together with members of their families, each owns, has options to purchase and has other interests in shares of common stock of General Electric Company. S-25 27 GLOSSARY "Anniversary Date" means the date which is one year from the date that the Notes are issued. "Base Value" is defined as the mean average Market Values of all common stocks comprising the S&P 500 over the base period of the years ranging from 1941 through 1943. "Bearish Maximum Total Interest" shall mean the highest total amount of interest which is to be paid on the Bearish Notes, set at $ per $1,000 principal amount of Bearish Notes over their entire term. "Bearish Notes" shall mean S&P 500 Indexed Notes Series A (Bearish Notes) due May , 1996. "Bearish Participation Rate" means a rate equal to %. "Bullish Maximum Total Interest" shall mean the highest total amount of interest which is to be paid on the Bullish Notes, set at $ per $1,000 principal amount of Bullish Notes over their entire term. "Bullish Notes" shall mean S&P 500 Indexed Notes Series B (Bullish Notes) due May , 1996. "Bullish Participation Rate" means a rate equal to %. "Calculation Agent" means Merrill Lynch, Pierce, Fenner & Smith Incorporated. "Code" means the Internal Revenue Code of 1986, as amended. "Company" shall mean General Electric Capital Corporation. "Determination Date" means the seventh scheduled Trading Day preceding the date which is one year from the date that the Notes are issued. "Global Securities" means one or more fully registered global securities which is deposited with, or on behalf of, The Depository Trust Company. "Indenture" means the Indenture dated as of September 1, 1982 between the Company and The Chase Manhattan Bank (National Association), as trustee (as to which Mercantile Safe Deposit and Trust Company is successor trustee), as supplemented. "Initial Index Value" shall mean the closing value of the S&P 500 Index on the date that the Notes are priced for initial offering to the public. "Interest Payment Dates" shall mean May , 1995 and the maturity date, the dates on which the initial payment of half of the Total Interest with respect to such series of Notes will be paid and on which the payment of the remaining half of the Total Interest with respect to each series of Notes will be paid, respectively. "Interest Payments" mean the amounts payable with respect to a Note on the Interest Payment Dates. "IRS" means the Internal Revenue Service. "Market Disruption Event" means either of the following events, as determined by the Calculation Agent: (i) the suspension or material limitation (limitations pursuant to New York Stock Exchange Rule 80A or any applicable rule or regulation enacted or promulgated by The New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers or the Securities and Exchange Commission of similar scope as determined by the Calculation Agent on trading during significant market fluctuations shall be considered "material" for purposes of this definition) for more than two hours of trading or during the period one-half hour prior to the determination of the closing value of the S&P 500 Index in 100 or more of the securities included in the S&P 500 Index, or (ii) the suspension or material limitation (whether by reason of movements in price otherwise exceeding levels permitted by the relevant exchange or otherwise) in (A) futures contracts related to the S&P 500 Index which are traded on the Chicago Mercantile Exchange or (B) option contracts related to G-1 28 the S&P 500 Index which are traded on the Chicago Board Options Exchange, Inc., in each case for more than two hours of trading or during the period one-half hour prior to the determination of the closing value of the S&P 500 Index. A Market Disruption Event on the originally scheduled Determination Date (the seventh Trading Day prior to the date one year after the issuance date of the Notes) will cause the Determination Date to become the sixth Trading Day prior to the date one year after the issuance of the Notes. "Market Value" means the relative value of the aggregate product of the market price per share and the number of then outstanding shares for stocks comprising the S&P 500 Index. "Maximum Total Interest" refers to either the Bearish Maximum Total Interest or the Bullish Maximum Total Interest. "Non-U.S. Holder" means a holder of a Note that is not a U.S. Holder. "OID Regulations" means the final Treasury regulations issued on January 27, 1994 governing original issue discount notes. "Notes" shall mean both the Bearish Notes and the Bullish Notes. "Standard & Poor's 500" means the service mark of The Standard & Poor's Corporation which has been licensed for use by Merrill Lynch Capital Services, Inc. "Standard & Poor's(R)" means the service mark of The Standard & Poor's Corporation which has been licensed for use by Merrill Lynch Capital Services, Inc. "Successor Index" means a successor or substitute index for the S&P 500 Index. "S&P" means The Standard & Poor's Corporation. "S&P(R)" means the service mark of The Standard & Poor's Corporation which has been licensed for use by Merrill Lynch Capital Services, Inc. "S&P 500(R)" means the service mark of The Standard & Poor's Corporation which has been licensed for use by Merrill Lynch Capital Services, Inc. "S&P 500 Index" shall mean S&P 500 Composite Stock Price Index. "S&P 500 Percent Decline" means the Initial Index Value minus the 1995 Index Value, the result of which is divided by the Initial Index Value. "S&P 500 Percent Increase" means the 1995 Index Value minus the Initial Index Value, the result of which is divided by the Initial Index Value. "Total Interest" shall mean the total interest payable on a Note from the date of issuance through the maturity date. "Trading Day" means a day on which The New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers Automated Quotations System National Market System, the Chicago Mercantile Exchange, the New York Futures Exchange and the Chicago Board Options Exchange are open for trading. "Trustee" shall mean The Mercantile Safe Deposit and Trust Company, the successor trustee to The Chase Manhattan Bank (National Association). "Underwriters" means Merrill Lynch, Pierce, Fenner & Smith Incorporated and Kidder, Peabody & Co. Incorporated. "U.S. Holder" means a beneficial owner of a Note that is for United States Federal income tax purposes (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States or of any political subdivision thereof, (iii) an estate or trust the income of which is subject to United States Federal income taxation regardless of its source, or G-2 29 (iv) any other person whose income or gain in respect of a Note is effectively connected with the conduct of a United States trade or business. "1991 Proposed Regulations" means the proposed Treasury regulations issued in 1991 concerning contingent payment debt obligations. "1993 Proposed Regulations" means the proposed Treasury Regulations issued in 1993 concerning contingent payment debt obligations. "1995 Index Value" shall mean the closing value of the S&P 500 Index on the seventh scheduled Trading Day preceding the date which is one year from the date that the Notes are issued. G-3 30 PROSPECTUS GENERAL ELECTRIC CAPITAL CORPORATION DEBT SECURITIES WARRANTS TO PURCHASE DEBT SECURITIES General Electric Capital Corporation (the "Company") may offer from time to time its senior, unsecured debt securities ("Debt Securities") and its warrants ("Warrants") to purchase any of the Debt Securities (the Debt Securities and the Warrants being herein collectively called the "Securities"). The Debt Securities are hereinafter in this Prospectus referred to as the "Notes," although any series of Debt Securities to which the accompanying Prospectus Supplement relates may bear a different title. The term "Prospectus Supplement" as used herein includes any Pricing Supplement that accompanies any Prospectus Supplement that accompanies this Prospectus. The Securities will be offered on terms determined at the time of sale. The accompanying Prospectus Supplement sets forth specifically (a) with regard to the Notes in respect of which this Prospectus is being delivered: --the title of the Notes, --the aggregate principal amount offered, --the currency, currencies or currency units in which payments on the Notes are payable, --the rate or method of calculation, and the dates of payment, of interest, if any, --the date or dates from which such interest shall accrue, --the method of determining holders to whom any such interest shall be payable, --the authorized denominations, if other than as provided herein, --the maturity, --the offering price or terms, --the terms of any sinking fund, purchase fund or mandatory redemption, and of any redemption or repayment at the option of the Company or the holder, --the Trustee acting under the Indenture pursuant to which the Notes are to be issued, --the underwriter or underwriters or agent or agents, if any, for the Notes, their compensation or the basis of determining the same and the net proceeds to the Company, and --the exchanges, if any, on which the Notes may be listed; and (b) with regard to the Warrants, if any, in respect of which this Prospectus is being delivered: --the offering price or terms, --a description of the Notes for which each Warrant is exercisable, --the aggregate number, exercise price, exercise period and expiration date of the Warrants, --the currency or currencies in which the exercise price is payable, --the terms of any mandatory or optional call provisions, --the price or prices, if any, at which the Warrants may be redeemed at the option of the holder or will be redeemed upon expiration, --the Warrant Agent acting under the Warrant Agreement pursuant to which the Warrants are to be issued, and --the exchanges, if any, on which the Warrants may be listed. The Securities will be sold either through underwriters or dealers, through agents designed from time to time, or directly by the Company. ---------------------- 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. April 1, 1994 31 No dealer, salesperson or other individual has been authorized to give any information or to make any representations other than those contained or incorporated by reference in this Prospectus and the accompanying Prospectus Supplement in connection with the offer contained in this Prospectus and the accompanying Prospectus Supplement and, if given or made, such information or representations must not be relied upon as having been authorized by the Company or by any agent, underwriter or dealer. Neither the delivery of this Prospectus and the accompanying Prospectus Supplement, nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the dates as of which information is given in this Prospectus and in the accompanying Prospectus Supplement. This Prospectus and the accompanying Prospectus Supplement do not constitute an offer or solicitation by anyone in any state 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 (the "1934 Act") and in accordance therewith files reports and other information with the Securities and Exchange Commission. Such reports and other information can be inspected and copied at the public reference facilities maintained by the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as the Regional Offices of the Commission at 500 West Madison Street, Chicago, Illinois 60661 and 7 World Trade Center, New York, New York 10048 and copies can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Reports and other information concerning the Company can also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which certain of the Company's securities are listed. ------------------------ DOCUMENTS INCORPORATED BY REFERENCE There is hereby incorporated in this Prospectus by reference the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1993 heretofore filed with the Securities and Exchange Commission pursuant to the 1934 Act, to which reference is hereby made. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this Prospectus and prior to the termination of the offering of the Securities offered by the accompanying Prospectus Supplement shall be deemed to be incorporated in this Prospectus by reference and to be a part hereof from the date of filing of such documents. The Company hereby undertakes to provide without charge to each person, including any beneficial owner, to whom a copy of this Prospectus has been delivered, on the written or oral request of such person, a copy of any or all of the documents referred to above which have been or may be incorporated in this Prospectus by reference, other than exhibits to such documents, unless such exhibits are specifically incorporated by reference into such documents. Requests for such copies should be directed to Bruce C. Bennett, Associate General Counsel -- Treasury Operations and Assistant Secretary, General Electric Capital Corporation, 260 Long Ridge Road, Stamford, Connecticut 06927, Telephone No. (203) 357-4000. ------------------------ 2 32 THE COMPANY General Electric Capital Corporation was incorporated in 1943 in the State of New York, under the provisions of the New York Banking Law relating to investment companies, as successor to General Electric Contracts Corporation, formed in 1932. Until November 1987, the name of the Company was General Electric Credit Corporation. All outstanding common stock of the Company is owned by General Electric Capital Services, Inc., ("GE Capital Services") formerly General Electric Financial Services, Inc., which is in turn wholly owned by General Electric Company ("GE Company"). The business of the Company (which term, as used hereinafter under the above caption "The Company," means the Company and its consolidated affiliates) originally related principally to financing the distribution and sale of consumer and other products of GE Company. Currently, however, the type and brand of products financed and the financial services offered are significantly more diversified. Very little of the financing provided by the Company involves products that are manufactured by GE Company. The Company operates in four finance industry segments and in a specialty insurance industry segment. The Company's financing activities include a full range of leasing, loan, equipment management services and annuities. The Company's specialty insurance activities include providing private mortgage insurance, financial (primarily municipal) guarantee insurance, creditor insurance, reinsurance and, for financing customers, credit life and property and casualty insurance. The Company is an equity investor in a retail organization and certain other financial services organizations. The Company's operations are subject to a variety of regulations in their respective jurisdictions. Services of the Company are offered primarily in the United States, Canada and Europe. Computerized accounting and service centers, including those located in Connecticut, Ohio, Georgia and England, provide financing offices and other service locations with data processing, accounting, collection, reporting and other administrative support. The Company's principal executive offices are located at 260 Long Ridge Road, Stamford, Connecticut 06927 (telephone number (203) 357-4000). At December 31, 1993, the Company employed approximately 27,000 persons. CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
YEAR ENDED DECEMBER 31, - ----------------------------------------- 1989 1990 1991 1992 1993 - ----- ----- ----- ----- ----- 1.30 1.31 1.34 1.44 1.62
For purposes of computing the consolidated ratio of earnings to fixed charges, earnings consist of net earnings adjusted for the provision for income taxes, minority interest and fixed charges. Fixed charges consist of interest and discount on all indebtedness and one-third of annual rentals, which the Company believes is a reasonable approximation of the interest factor of such rentals. USE OF PROCEEDS Except as may be otherwise set forth in the Prospectus Supplement accompanying this Prospectus, the net proceeds from the sale of the Securities to which such Prospectus Supplement relates will be added to the general funds of the Company and will be available for financing its operations. Additional short-and long-term financing, as required, will be undertaken at such times, and through such means, as may be appropriate. PLAN OF DISTRIBUTION The Company may sell any issue of the Securities in any one or more of the following ways: (i) through one or more underwriters or dealers; (ii) directly to one or more purchasers; or (iii) through one or more agents. From time to time, the Company may receive, and may solicit, offers from underwriters to purchase all or a part of the Securities, to be reoffered to the public through underwriting syndicates led by one or more 3 33 managing underwriters or through one or more underwriters acting alone or otherwise. The managing underwriter or underwriters, if any, with respect to the offer and sale of the Securities to which the Prospectus Supplement accompanying this Prospectus relates are set forth in such Prospectus Supplement and the members of the underwriting syndicate, if any, are named in such Prospectus Supplement. The Company will execute an underwriting agreement (the "Underwriting Agreement") with any such underwriters 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 Securities in respect of which this Prospectus is delivered to the public. Such Prospectus Supplement also states the discounts and commissions, if any, to be allowed or paid to the underwriters by the Company, and describes all other items, if any, constituting underwriting compensation and the discounts and commissions to be allowed or paid to dealers, if any. If underwriters or dealers are used in the sale, the Securities will be acquired by the underwriters or dealers for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined by the underwriter or dealer at the time of sale. The relevant Underwriting Agreement will provide that the obligations of the underwriters are subject to certain conditions precedent, and the Company will agree, under the Underwriting Agreement, to indemnify the underwriters against certain civil liabilities, including liabilities under the Securities Act of 1933. Any agent involved in the offer or sale of the Securities in respect of which this Prospectus is delivered will be named, and any commissions payable by the Company to such agent will be set forth, in the Prospectus Supplement accompanying this Prospectus. Unless otherwise indicated in the Prospectus Supplement, any such agent will be acting on a best efforts basis for the period of its appointment. Agents and dealers may be entitled under agreements entered into with the Company to indemnification by the Company against certain civil liabilities, including liabilities under the Securities Act of 1933. If so indicated in the Prospectus Supplement accompanying this Prospectus, the Company will authorize agents, underwriters or dealers to solicit offers by certain institutions to purchase Securities from the Company at the offering price set forth in the Prospectus Supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. The Company anticipates that delayed delivery contracts would be used to facilitate the marketing of the Securities by accommodating institutions that wish to invest in the Securities but will not have funds available for the purchase until some date following the anticipated closing date. GE Capital Services, which owns all of the outstanding common stock of the Company, owns 100% of the common stock of Kidder, Peabody Group Inc. which in turn owns 100% of the common stock of Kidder, Peabody & Co. Incorporated ("Kidder"). As a result, any offering of Securities is required to be made in compliance with the applicable provisions of Schedule E to the By-Laws of the National Association of Securities Dealers, Inc. ("NASD"), which Schedule applies to offerings of securities of issuers affiliated with NASD members. In accordance therewith, no underwriter or dealer may confirm sales of Securities to accounts over which they exercise discretionary authority. For further information with respect to the terms of the offering of Securities in respect of which this Prospectus is being delivered, see the Prospectus Supplement accompanying this Prospectus. DESCRIPTION OF NOTES GENERAL The Notes are to be issued under one or more separate Indentures (each an "Indenture"), in each case between the Company and a banking institution organized under the laws of the United States or one of the states thereof (each a "Trustee"). None of the Indentures limits the amount of Notes or other unsecured, senior debt which may be issued thereunder or limits the amount of other debt, secured or unsecured, which may be issued by the Company. 4 34 The statements under this heading are subject to the detailed provisions of each Indenture, a copy of each of which is filed as an exhibit to the Registration Statement. Wherever particular provisions of the Indentures or terms defined therein are referred to, such provisions or definitions are incorporated by reference as a part of the statements made and the statements are qualified in their entirety by such reference. Reference is made to the Prospectus Supplement accompanying this Prospectus for the terms specified by the Company pursuant to the Indenture of, and other information with respect to, the Notes being offered thereby, including: (1) the designation, the aggregate principal amount and, if other than as provided herein, the authorized denominations of such Notes; (2) the percentage of their principal amount at which such Notes will be issued; (3) the date or dates on which such Notes will mature; (4) the currency, currencies or currency units in which the payments on such Notes will be payable; (5) the rate or rates at which such Notes will bear interest, if any, or the method of determination of such rate or rates; (6) the date or dates from which such interest, if any, shall accrue, the dates on which such interest, if any, will be payable and the method of determining holders to whom any such interest shall be payable; (7) the prices, if any, at which, and the dates at or after which, such Notes must or may be repaid, repurchased or redeemed; (8) the exchanges, if any, on which the Notes may be listed; and (9) the Trustee under the Indenture pursuant to which the Notes are to be issued. (Sections 2.02 and 2.02A.) Interest, if any, is to be payable to the persons, and in the manner, specified in the Prospectus Supplement accompanying this Prospectus and, unless otherwise specified in such Prospectus Supplement, will be computed on the basis of a 360-day year consisting of twelve 30-day months. (Section 2.10.) The Notes will be unsecured and will rank pari passu (equally and ratably) with all other unsecured and unsubordinated indebtedness of the Company. Some of the Notes may be issued as discounted Notes to be sold at a substantial discount below their stated principal amount. Federal income tax consequences and other special considerations applicable to any such discounted Notes will be described in the Prospectus Supplement with respect to any such Notes. The Indentures do not contain any provisions (other than as described below under "Certain Covenants of the Company") that limit the ability of the Company to incur indebtedness or that afford holders of Securities protection in the event GE Company, as sole indirect stockholder of the Company, causes the Company to engage in a highly leveraged transaction, reorganization, restructuring, merger or similar transaction. GLOBAL NOTES, DELIVERY AND FORM Except as otherwise set forth in the Prospectus Supplement accompanying this Prospectus, the Notes will be issued in the form of one or more fully registered Global Notes that will be deposited with, or on behalf of, The Depository Trust Company, New York, New York (the "Depository") and registered in the name of the Depository's nominee. The Depository currently limits the maximum denomination of any single Global Note to $150,000,000. For purposes of this Prospectus, "Global Note" refers to the Global Note or Global Notes representing an entire issue of Notes. Except as set forth below, a Global Note may be transferred, in whole and not in part, only to another nominee of the Depository or to a successor of the Depository or its nominee. The Depository has advised as follows: it is a limited-purpose trust company which was created to hold securities for its participating organizations (the "Participants") and to facilitate the clearance and settlement of securities transactions in such securities between Participants through electronic book-entry charges in accounts of its Participants. Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to the Depository's system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly ("indirect participants"). Persons who are not Participants may beneficially own securities held by the Depository only through Participants or indirect participants. 5 35 The Depository advises that pursuant to procedures established by it (i) upon issuance of a Global Note by the Company in connection with the sale thereof to an underwriter or underwriters, the Depository will credit the accounts of Participants designated by such underwriter or underwriters with the principal amount of the Notes purchased by such underwriter or underwriters, and (ii) ownership of beneficial interests in a Global Note will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depository (with respect to Participants), by the Participants (with respect to indirect participants and certain beneficial owners) and by the indirect participants (with respect to all other beneficial owners). The laws of some states require that certain persons take physical delivery in definitive form of securities which they own. Consequently, the ability to transfer beneficial interests in a Global Note is limited to such extent. So long as a nominee of the Depository is the registered owner of a Global Note, such nominee for all purposes will be considered the sole owner or holder of such Notes under the Indenture. Except as provided below, owners of beneficial interests in a Global Note will not be entitled to have Notes registered in their names, will not receive or be entitled to receive physical delivery of Notes in definitive form, and will not be considered the owners or holders thereof under the Indenture. Neither the Company, the Trustee, any paying agent nor any registrar of the Notes will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Note, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Payments of principal and interest, if any, on the Notes registered in the name of the Depository's nominee will be made by or on behalf of the Company in immediately available funds to the Depository's nominee as the registered owner of the Global Note. Under the terms of the Indenture, the Company and the Trustee will treat the persons in whose names the Notes are registered as the owners of such Notes for the purpose of receiving payment of principal and interest, if any, on such Notes and for all other purposes whatsoever. Therefore, neither the Company, the Trustee nor any paying agent has any direct responsibility or liability for the payment of principal or interest, if any, on the Notes to owners of beneficial interests in a Global Note. The Depository has advised the Company and the Trustee that its current practice is, upon receipt of any payment of principal or interest, to immediately credit the accounts of the Participants with such payment in amounts proportionate to their respective holdings in principal amount of beneficial interests in a Global Note as shown in the records of the Depository. The Depository's current practice is to credit such accounts, as to interest, in next-day funds and, as to principal, in same-day funds. Payments by Participants and indirect participants to owners of beneficial interests in a Global Note will be governed by standing 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 the Participants or indirect participants. If the Depository is at any time unwilling or unable to continue as depository and a successor depository is not appointed by the Company within 90 days, the Company will issue Notes in definitive form in exchange for a Global note. In addition, the Company may at any time determine not to have the Notes represented by a Global Note and, in such event, will issue Notes in definitive form in exchange for a Global Note. In either instance, an owner of a beneficial interest in a Global Note will be entitled to have Notes equal in principal amount to such beneficial interest registered in its name and will be entitled to physical delivery of such Notes in definitive form. Notes so issued in definitive form will be issued in denominations of $1,000 and integral multiples thereof and will be issued in registered form only, without coupons, and the Company will maintain in the Borough of Manhattan, The City of New York, one or more offices or agencies where such Notes may be presented for payment and may be transferred or exchanged. No service charge will be made for any transfer or exchange of such Notes, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. SAME-DAY SETTLEMENT IN RESPECT OF GLOBAL NOTES Secondary trading in definitive long-term notes and debentures of corporate issuers is generally settled in clearing-house or next-day funds. In contrast, Global Notes held by the Depository will trade in the 6 36 Depository's Same-Day Funds Settlement System until maturity, and secondary market trading activity in the Notes will therefore be required by the Depository to settle in immediately available funds. No assurance can be given as to the effect, if any, of settlement in immediately available funds on trading activity in the Notes. CERTAIN COVENANTS OF THE COMPANY The Company covenants that neither it nor any Finance Subsidiary will subject any of its property or assets to any lien unless the Notes are secured equally and ratably with other indebtedness thereby secured. There are excepted from this covenant liens created to secure obligations for the purchase price of real estate, equipment or other physical property and certain liens existing at the time any such property is acquired; liens, existing at the time of acquisition, on acquired receivables or other nonphysical property if the gross amount of such receivables and the fair market value of such other property, in the aggregate, do not exceed 5% of net receivables of the Company and its Finance Subsidiaries taken on a consolidated basis; liens created to secure the borrowing of money by a Finance Subsidiary from the Company or another Finance Subsidiary; and certain other liens not related to the borrowing of money. (Section 4.03.) As used in the preceding paragraph, the term "Finance Subsidiary" means any Subsidiary (as defined below) engaged within the United States in the business of purchasing notes, accounts receivable (whether or not payable in installments), conditional sale contracts or other paper originating in sales at wholesale or retail, or of leasing new or used products or of making installment loans, and the term "Subsidiary" means any corporation of which the Company directly or indirectly owns or controls at the time at least a majority of the outstanding stock having under ordinary circumstances (not dependent upon the happening of a contingency) voting power to elect a majority of the board of directors of such corporation. (Section 1.01.) If upon any consolidation or merger of the Company with any other corporation, or upon any sale, conveyance or lease of substantially all its assets, any of the property of the Company or of any Subsidiary owned immediately prior thereto would thereupon become subject to any mortgage, pledge, lien or encumbrance, the Company prior to or simultaneously with such event will secure the Notes equally and ratably with any other obligations of the Company then entitled thereto, by a direct lien on such property prior to all liens other than any theretofore existing thereon. (Section 11.02.) MODIFICATION OF THE INDENTURES Each Indenture permits the Company and the Trustee thereunder, with the consent of the holders of not less than 66 2/3% in aggregate principal amount of the Notes of each series affected outstanding, to add any provisions to or change in any manner or eliminate any of the provisions of such Indenture or modify in any manner the rights of the holders of Notes of each such series, provided that no such addition or modification shall (i) among other things, extend the fixed maturity of any Notes or reduce the principal amount thereof (including in the case of a discounted Note the amount payable upon acceleration of the maturity thereof), reduce the redemption premium thereon or reduce the rate or extend the time of payment of interest, if any, thereon, or (ii) reduce the aforesaid percentage of principal amount of such Notes of any series, the consent of the holders of which is required for any addition or modification, without in each case the consent of the holder of each such Note so affected. (Section 10.02.) EVENTS OF DEFAULT An Event of Default with respect to any series of Notes is defined in each Indenture as being: (a) default in any payment of principal or premium, if any, on any Note of such series; (b) default of 30 days in payment of any interest on any Note of such series; (c) default in the making or satisfaction of any sinking fund payment or analogous obligation on the Notes of such series; (d) default for 60 days after written notice to the Company in performance of any other covenant in respect of the Notes of such series contained in such Indenture; (e) a default, as defined, with respect to any other series of Notes outstanding under the relevant Indenture or as defined in any other indenture or instrument evidencing or under which the Company has outstanding any indebtedness for borrowed money, as a result of which such other series or such other indebtedness of the Company shall have been accelerated and such acceleration shall not have been annulled 7 37 within 10 days after written notice thereof (provided, that the resulting Event of Default with respect to such series of Notes may be remedied, cured or waived by the remedying, curing or waiving of such other default under such other series or such other indebtedness); or (f) certain events in bankruptcy, insolvency or reorganization. (Section 6.01.) Each Indenture requires the Company to deliver to the Trustee annually a written statement as to the presence or absence of certain defaults under the terms thereof. (Section 4.06.) No Event of Default with respect to a particular series of Notes under any Indenture necessarily constitutes an Event of Default with respect to any other series of Notes issued thereunder. Each Indenture provides that the Trustee may withhold notice to the holders of any series of Notes issued thereunder of any default (except in the payment of principal, premium, if any, or interest, if any, on any of the Notes of such series or in the making of any sinking fund instalment or analogous obligation with respect to such series) if the Trustee considers it in the interest of such Noteholders to do so. (Section 6.08.) Each Indenture provides that during the continuance of an Event of Default with respect to any series of Notes, either the Trustee thereunder or the holders of 25% in aggregate principal amount of the outstanding Notes of such series may declare the principal, or in the case of discounted Notes, such portion thereof as may be described in the Prospectus Supplement accompanying this Prospectus, of all such Notes to be due and payable immediately, but under certain conditions such declaration may be annulled by the holders of a majority in principal amount of such Notes then outstanding. Each Indenture provides that past defaults with respect to a particular series of Notes (except, unless theretofore cured, a default in payment of principal of, premium, if any, or interest, if any, on any of the Notes of such series, or the payment of any sinking fund instalment or analogous obligation on the Notes of such series) may be waived on behalf of the holders of all Notes of such series by the holders of a majority in principal amount of such Notes then outstanding. (Sections 6.01 and 6.07.) Subject to the provisions of each Indenture relating to the duties of the Trustee thereunder in case an Event of Default with respect to any series of Notes shall occur and be continuing, such Trustee shall be under no obligation to exercise any of its rights or powers under such Indenture at the request, order or direction of any holders of Notes of any series issued thereunder unless such holders shall have offered to the Trustee reasonable indemnity. (Sections 7.01 and 7.02.) Subject to such indemnification provision, each Indenture provides that the holders of a majority in principal amount of the Notes of any series issued thereunder at the time outstanding shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee thereunder, or exercising any trust or power conferred on such Trustee with respect to the Notes of such series, provided that such Trustee may decline to follow any such direction if it has not been offered reasonable indemnity therefor or if it determines that the proceedings so directed would be illegal or involve it in any personal liability. (Section 6.07.) CONCERNING THE TRUSTEE Mercantile-Safe Deposit and Trust Company acts as trustee under (i) an Indenture with the Company dated as of September 1, 1982, as amended and supplemented, (ii) an Indenture with the Company dated as of March 15, 1986, as amended and supplemented, and (iii) an Indenture with the Company dated as of October 1, 1991. A number of series of senior, unsecured notes of the Company are presently outstanding under each of such indentures, and any of the Notes may be issued under either of the indentures referred to in clauses (i) and (ii) above. Any material business and other relationships (including additional trusteeships), other than the present and prospective trusteeships referred to in the foregoing paragraph, between, on the one hand, the Company, GE Company and other affiliates of GE Company and, on the other hand, each Trustee under any Indenture pursuant to which any of the Notes to which the Prospectus Supplement accompanying this Prospectus relates are to be issued, are described in such Prospectus Supplement. 8 38 DESCRIPTION OF WARRANTS GENERAL The following statements with respect to the Warrants are summaries of the detailed provisions of one or more separate Warrant Agreements (each a "Warrant Agreement") between the Company and a banking institution organized under the laws of the United States or one of the states thereof (each a "Warrant Agent"), a form of which is filed as an exhibit to the Registration Statement. Wherever particular provisions of the Warrant Agreement or terms defined therein are referred to, such provisions or definitions are incorporated by reference as a part of the statements made, and the statements are qualified in their entirety by such reference. The Warrants will be evidenced by Warrant Certificates (the "Warrant Certificates") and, except as otherwise specified in the Prospectus Supplement accompanying this Prospectus, may be traded separately from any Notes with which they may be issued. Warrant Certificates may be exchanged for new Warrant Certificates of different denominations at the office of the Warrant Agent. The holder of a Warrant does not have any of the rights of a Noteholder in respect of, and is not entitled to any payments on, any Note issuable (but not yet issued) upon exercise of the Warrants. The Warrants may be issued in one or more series, and reference is made to the Prospectus Supplement accompanying this Prospectus relating to the particular series of Warrants, if any, offered thereby for the terms of, and other information with respect to, such Warrants including: (1) the title and the aggregate number of Warrants; (2) the Notes for which each Warrant is exercisable; (3) the date or dates on which such Warrants will expire; (4) the price or prices at which such Warrants are exercisable; (5) the currency or currencies in which such Warrants are exercisable; (6) the periods during which and places at which such Warrants are exercisable; (7) the terms of any mandatory or optional call provisions; (8) the price or prices, if any, at which the Warrants may be redeemed at the option of the holder or will be redeemed upon expiration; (9) the identity of the Warrant Agent; and (10) the exchanges, if any, on which such Warrants may be listed. EXERCISE OF WARRANTS Warrants may be exercised by payment to the Warrant Agent of the exercise price, in each case in such currency or currencies as are specified in the Warrant, and communicating the identity of the Warrantholder and the number of Warrants to be exercised. Upon receipt of payment and the Warrant Certificate properly completed and duly executed, at the office of the Warrant Agent, the Warrant Agent will, as soon as practicable, forward Notes in authorized denominations. If less than all of the Warrants evidenced by the Warrant Certificate are exercised, a new Warrant Certificate will be issued for the remaining amount of Warrants. LEGAL OPINIONS Except as may be otherwise specified in the Prospectus Supplement accompanying this Prospectus, the legality of the Securities will be passed upon for the Company by one of Burton J. Kloster, Jr., a director and Senior Vice President, General Counsel and Secretary of the Company or Bruce C. Bennett, Associate General Counsel -- Treasury Operations and Assistant Secretary of the Company, and for the underwriters, agents or dealers by Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017. Messrs. Kloster and Bennett, together with members of their families, own, have options to purchase and have other interests in shares of common stock of GE Company. EXPERTS The financial statements and schedules of General Electric Capital Corporation and consolidated affiliates as of December 31, 1993 and 1992 and for each of the years in the three-year period ended December 31, 1993, appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 1993, incorporated by reference herein, have been incorporated herein in reliance upon the report of KPMG Peat Marwick, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. 9 39 - ------------------------------------------------------ - ------------------------------------------------------ NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. ------------------------ TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE ---- Summary............................... S-3 Special Considerations With Respect to the Notes........................... S-7 Description of Notes.................. S-10 The Standard & Poor's 500 Index....... S-13 Certain United States Federal Income Tax Considerations.................. S-19 Underwriting.......................... S-24 Legal Opinions........................ S-25 Glossary.............................. G-1 PROSPECTUS Available Information................. 2 Documents Incorporated by Reference... 2 The Company........................... 3 Use of Proceeds....................... 3 Plan of Distribution.................. 3 Description of Notes.................. 4 Description of Warrants............... 9 Legal Opinions........................ 9 Experts............................... 9
- ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ $25,000,000 GENERAL ELECTRIC CAPITAL CORPORATION S&P 500 INDEXED NOTES DUE MAY , 1996 SERIES A (BEARISH NOTES) AND SERIES B (BULLISH NOTES) ------------------------ PROSPECTUS SUPPLEMENT ------------------------ MERRILL LYNCH & CO. KIDDER, PEABODY & CO. INCORPORATED APRIL , 1994 - ------------------------------------------------------ - ------------------------------------------------------ 40 GRAPHICS APPENDIX LIST DESCRIPTION OF GRAPHIC - ------------------------------------------------------------------------------- Graphic No. 1 The Graph is entitled "Historical Annual Percentage Changes in the S&P 500 Index." The graph sets forth the percentage change in the S&P 500 Index in each year from the closing value in the prior year to the closing value in each such years from 1948 through 1993. EX-99.2A 3 FORM OF S&P INDEXED NOTES (SERIES A) 1 Exhibit 2(a). 2 UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC") TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. Registered No. 1 CUSIP ____________ GENERAL ELECTRIC CAPITAL CORPORATION S&P 500 INDEXED NOTES DUE MAY __, 1996 (SERIES A) $___________ GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation (the "Company"), for value received, hereby promises to pay to CEDE & CO. or registered assigns at the office or agency of the Company in the Borough of Manhattan, The City of New York, the principal sum of __________________________________($___________) on May __, 1996 (the "Maturity Date"), in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest from May __, 1994 (the "Issue Date") through the Maturity Date equal to the Total Interest (as defined below), if any. One half of the Total Interest, if any, shall be payable on May __, 1995 to the person in whose name this Note is registered on May __, 1995 and the remaining one half of the Total Interest shall be payable on the Maturity Date to the person to whom the principal is payable (such dates of payment are hereinafter referred to as the "Interest Payment Dates"). This Note shall not be valid or become obligatory for any purpose until the certificate of authentication herein shall have been signed by or on behalf of the Trustee under the Indenture referred to below. This Note is one of a duly authorized series of notes of the Company designated as the S&P 500 Indexed Notes Due May __, 1996 (Series A) of the Company (hereinafter called the "Notes"), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $______________. The Notes are one of an indefinite number of series of notes of the Company (hereinafter collectively called the "Securities" and each a "Security") issued or issuable under and pursuant to an Indenture dated as of March 3 15, 1986, as amended to the date hereof (as so amended, hereinafter called the "Indenture"), duly executed and delivered by the Company to Mercantile-Safe Deposit and Trust Company, Trustee (hereinafter called the "Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Securities. The separate series of Securities may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions (if any), may be subject to different sinking, purchase or analogous funds (if any), may be subject to different covenants and Events of Default and may otherwise vary as in the Indenture provided. The Company shall pay interest on this Note from the Issue Date through the Maturity Date equal to the Total Interest, if any. The Total Interest, if any, on the Notes shall be paid in two equal annual installments on the Interest Payment Dates set forth above. "Total Interest" means the total dollar amount of interest payable on the Notes, if any, and shall be computed based on the following formula: Face Amount X S&P 500 Percent Decline X Participation Rate provided, however, that Total Interest on this Note shall not exceed $___________ (___% of the principal amount of this Note). Total Interest payable on the Notes shall not be less than zero. For the purpose of determining the Total Interest payable on this Note, the following terms shall have the following meanings: "Face Amount" means the principal amount of this Note set forth above. "Participation Rate" means _____%. "S&P Percent Decline" means the percentage resulting from the following formula: Initial Index Value - 1995 Index Value -------------------------------------- Initial Index Value "Initial Index Value" equals ___ (the closing value of the S&P 500 Index (as defined below) on April __, 1994). "1995 Index Value" shall be determined by the Calculation Agent (as defined below) and shall be equal to the closing value of the S&P 500 Index on the seventh scheduled Trading Day (as defined below) preceding the Anniversary Date. The "Anniversary Date" shall be the date that is one year from the Issue Date of the Notes, whether or not a Trading Day. In the event that a Market Disruption Event (as defined below) has occurred on such seventh scheduled Trading Day, the "1995 Index Value" shall equal the closing value of the S&P 500 Index on the sixth scheduled Trading Day preceding the Anniversary Date regardless of whether such day is a Trading Day or a Market Disruption Event occurs on such day. The date on which the 1995 Index Value is determined is hereinafter referred to as the "Determination Date". The Calculation Agent shall determine the seventh scheduled Trading Day, and, if necessary, the sixth scheduled Trading Day prior to the Anniversary Date. For purposes of determining the 1995 Index Value, a "Trading Day" means a day on 4 which The New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers Automated Quotations System National Market System, the Chicago Mercantile Exchange, the New York Futures Exchange and the Chicago Board Options Exchange are open for trading. For purposes of determining the 1995 Index Value, a "Market Disruption Event" means either of the following events, as determined by the Calculation Agent: (i) the suspension or material limitation (limitations pursuant to New York Stock Exchange Rule 80A or any applicable rule or regulation enacted or promulgated by The New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, or the Securities and Exchange Commission of similar scope as determined by the Calculation Agent on trading during significant market fluctuations shall be considered "material" for purposes of this definition) for more than two hours of trading or during the period one-half hour prior to the determination of the closing value of the S&P 500 Index in 100 or more of the securities included in the S&P 500 Index, or (ii) the suspension or material limitation (whether by reason of movements in price otherwise exceeding levels permitted by the relevant exchange or otherwise) in (A) futures contracts related to the S&P 500 Index which are traded on the Chicago Mercantile Exchange or (B) option contracts related to the S&P 500 Index which are traded on the Chicago Board Options Exchange, Inc., in each case for more than two hours of trading or during the period one-half hour prior to the determination of the closing value of the S&P 500 Index; provided however, for purposes of this definition, a limitation on the hours in a trading day and/or number of days of trading will not constitute a Market Disruption Event if it results from an announced change in the regular business hours of the relevant exchange. "S&P 500 Index" means the S&P 500 Composite Stock Price Index as published by Standard & Poor's Corporation ("S&P"). In the event S&P discontinues publication of the S&P 500 Index and S&P or anther entity publishes a successor or substitute index that the Calculation Agent determines, in its sole discretion, to be comparable to the S&P 500 Index (any such index being referred to hereinafter as a "Successor Index"), then, upon the Calculation Agent's notification of such determination to the Trustee and the Company, the Calculation Agent shall substitute the Successor Index as calculated by S&P or such other entity for the S&P 500 Index and calculate the Total Interest as described above. Upon any selection by the Calculation Agent of a Successor Index, the Company shall cause notice thereof to be published in the Wall Street Journal (or another newspaper of general circulation) within three Business Days of such selection. If S&P discontinues publication of the S&P 500 Index and a Successor Index is not selected by the Calculation Agent or is no longer published on the Determination Date, the value to be substituted for the S&P 500 Index on the Determination Date used to calculate the Total Interest, if any, shall be a value computed by the Calculation Agent for the Determination Date in accordance with the procedures last used to calculate the S&P 500 Index prior to any such discontinuance. If S&P discontinues publication of the S&P 500 Index prior to the Determination Date and the Calculation Agent determines that no Successor Index is available at such time or a Successor Index is not selected, then on each Business Day until the earlier to occur of (i) the Determination Date and (ii) a determination by the Calculation Agent that a Successor Index is available, the Calculation Agent shall determine the value that would be used in computing the Total Interest by reference to the method set forth in the preceding sentence. The Calculation Agent shall cause notice of each such value to be published not less often than once each month in the Wall Street Journal (or another newspaper of general circulation), and arrange for information with respect to such values to be made available by telephone. 5 If a Successor Index is selected or the Calculation Agent calculates a value as a substitute for the S&P 500 Index as described in the third preceding sentence, such Successor Index or value shall be substituted for the S&P 500 Index for all purposes, including for purposes of determining whether a Market Disruption Event exists. If at any time the method of calculating the S&P 500 Index, or the value thereof, is changed in a material respect, or if the S&P 500 Index is in any other way modified so that such Index does not, in the opinion of the Calculation Agent, fairly represent the value of the S&P 500 Index had such changes or modification not been made, then, from and after such time, the Calculation Agent shall make such adjustments to the closing value of the S&P 500 Index on the Determination Date as, in the good faith judgment of the Calculation Agent, may be necessary in order to arrive at a calculation of a value of a stock index comparable to the S&P 500 Index as if such changes or modification had not been made, and calculating such closing value with reference to the S&P 500 Index, as adjusted. Accordingly, if the method of calculating the S&P 500 Index is modified so that the value of such Index is a fraction or a multiple of what it would have been if it had not been modified, then the Calculation Agent shall adjust such Index in order to arrive at a value of the S&P 500 Index as if it had not been modified. "Calculation Agent" means Merrill Lynch, Pierce, Fenner & Smith Incorporated. All determinations made by the Calculation Agent shall be at the sole discretion of the Calculation Agent and, in the absence of manifest error, shall be conclusive for all purposes and binding on the Company and the holder hereof. All percentages resulting from any calculation will be rounded to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards, and all dollar amounts used in or resulting from such calculation shall be rounded to the nearest cent with one-half cent being rounded upwards. In case an Event of Default with respect to the Notes, as defined in the Indenture, shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. In the event the principal amount hereof is accelerated as provided in the preceding sentence, the amount payable to the holder hereof shall be equal to: (i) the aggregate principal amount hereof, plus (ii) an additional amount, if any, of contingent interest equal to (a) if the date of acceleration is prior to the Determination Date, an amount, if any, calculated in the same manner as the applicable Total Interest assuming the date of acceleration were the Determination Date, or (b) if the date of acceleration is on or after the Determination Date, an amount equal to the applicable Total Interest, if any, less the portion of the applicable Total Interest previously paid as provided herein. If a bankruptcy proceeding is commenced in respect of the Company, the holder hereof may be limited, under Section 502(b)(2) of Title 11 of the United States Code, to the principal amount of the Note plus an additional amount, if any, of contingent interest calculated as though the date of the commencement of the proceeding were the maturity date of the Notes. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 66 2/3% in aggregate principal amount of each series of the Securities at the time outstanding (as defined in the Indenture) to be affected (each series voting as a class), evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the 6 holders of the Securities of all such series; PROVIDED, HOWEVER, that no such supplemental indenture shall, among other things, (i) extend the fixed maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable on redemption, or make the principal thereof, or premium, if any, or interest thereon payable in any coin or currency other than that hereinabove provided, without the consent of the holder of each Security so affected, or (ii) reduce the aforesaid percentage of Securities the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. The Indenture also provides that, prior to any declaration accelerating the maturity of any series of Securities, the holders of a majority in aggregate principal amount outstanding (as defined in the Indenture) of the Securities of such series may on behalf of the holders of all the Securities of such series waive any past default or Event of Default under the Indenture with respect to such series and its consequences except a default in the payment of interest on or the principal of, or premium, if any, on any of the Securities of such series, or in the payment of any sinking fund installment or analogous obligation with respect to Securities of such series. Any such consent or waiver by the holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such holder and upon all future holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the place, at the respective times, at the rate, and in the coin or currency herein prescribed. The Notes are issuable only in registered form without coupons in denominations of $5,000 and integral multiples thereof. At the option of the holders thereof, either at the office or agency to be designated and maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, pursuant to the provisions of the Indenture or at any of such other offices or agencies as may be designated and maintained by the Company for such purpose pursuant to the provisions of the Indenture, and in the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, except for any tax or other governmental charges imposed in connection therewith, Notes may be exchanged for an equal aggregate principal amount of Notes of other authorized denominations. The Notes are not subject to redemption at the option of the Company or repayment at the option of the holder prior to the Maturity Date. Upon due presentation for registration of transfer of this Note, at the option of the holder hereof, either at the office or agency to be designated and maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, pursuant to the provisions of the Indenture or at any such other offices or agencies as may be designated and maintained by the Company for such purpose pursuant to the provisions of the Indenture, a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange herefor, subject to the limitations provided in the 7 Indenture, without charge except for any tax or other governmental charge imposed in connection therewith. The Company, the Trustee, and any agent of the Company or of the Trustee may deem and treat the registered holder hereof as the absolute owner of this Note (whether or not this Note shall be overdue and notwithstanding any notation of ownership or other writing hereon), for the purpose of receiving payment hereof, or on account hereof, and for all other purposes, and neither the Company nor the Trustee nor any agent of the Company or of the Trustee shall be affected by any notice to the contrary. All such payments made to or upon the order of such registered holder shall, to the extent of the sum or sums paid, satisfy and discharge liability for moneys payable on this Note. No recourse for the payment of the principal of or interest, if any, on this Note, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. 8 All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. IN WITNESS WHEREOF, the Company has caused this Note to be duly executed. Dated: May __, 1996 GENERAL ELECTRIC CAPITAL CORPORATION By:_________________________________ President By:_________________________________ Senior Vice President - Corporate Treasury and Global Funding Operation CERTIFICATE OF AUTHENTICATION This is one of the Notes described in the within-mentioned Indenture. MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, as Trustee By: THE CHASE MANHATTAN BANK, N.A., as Authenticating Agent By:_____________________________________________ Authorized Signatory EX-99.2B 4 FORM OF S&P INDEXED NOTES (SERIES B) 1 Exhibit 2(b). 2 UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC") TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. Registered No. 1 CUSIP ____________ GENERAL ELECTRIC CAPITAL CORPORATION S&P 500 INDEXED NOTES DUE MAY __, 1996 (SERIES B) $___________ GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation (the "Company"), for value received, hereby promises to pay to CEDE & CO. or registered assigns at the office or agency of the Company in the Borough of Manhattan, The City of New York, the principal sum of __________________________________($___________) on May __, 1996 (the "Maturity Date"), in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest from May __, 1994 (the "Issue Date") through the Maturity Date equal to the Total Interest (as defined below), if any. One half of the Total Interest, if any, shall be payable on May __, 1995 to the person in whose name this Note is registered on May __, 1995 and the remaining one half of the Total Interest shall be payable on the Maturity Date to the person to whom the principal is payable (such dates of payment are hereinafter referred to as the "Interest Payment Dates"). This Note shall not be valid or become obligatory for any purpose until the certificate of authentication herein shall have been signed by or on behalf of the Trustee under the Indenture referred to below. This Note is one of a duly authorized series of notes of the Company designated as the S&P 500 Indexed Notes Due May __, 1996 (Series B) of the Company (hereinafter called the "Notes"), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $______________. The Notes are one of an indefinite number of series of notes of the Company (hereinafter collectively called the "Securities" and each a "Security") issued or issuable under and pursuant to an Indenture dated as of March 15, 3 1986, as amended to the date hereof (as so amended, hereinafter called the "Indenture"), duly executed and delivered by the Company to Mercantile-Safe Deposit and Trust Company, Trustee (hereinafter called the "Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Securities. The separate series of Securities may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions (if any), may be subject to different sinking, purchase or analogous funds (if any), may be subject to different covenants and Events of Default and may otherwise vary as in the Indenture provided. The Company shall pay interest on this Note from the Issue Date through the Maturity Date equal to the Total Interest, if any. The Total Interest, if any, on the Notes shall be paid in two equal annual installments on the Interest Payment Dates set forth above. "Total Interest" means the total dollar amount of interest payable on the Notes, if any, and shall be computed based on the following formula: Face Amount X S&P 500 Percent Increase X Participation Rate provided, however, that Total Interest on this Note shall not exceed $___________ (___% of the principal amount of this Note). Total Interest payable on the Notes shall not be less than zero. For the purpose of determining the Total Interest payable on this Note, the following terms shall have the following meanings: "Face Amount" means the principal amount of this Note set forth above. "Participation Rate" means _____%. "S&P Percent Increase" means the percentage resulting from the following formula: 1995 Index Value - Initial Index Value -------------------------------------- Initial Index Value "Initial Index Value" equals ___ (the closing value of the S&P 500 Index (as defined below) on April __, 1994). "1995 Index Value" shall be determined by the Calculation Agent (as defined below) and shall be equal to the closing value of the S&P 500 Index on the seventh scheduled Trading Day (as defined below) preceding the Anniversary Date. The "Anniversary Date" shall be the date that is one year from the Issue Date of the Notes, whether or not a Trading Day. In the event that a Market Disruption Event (as defined below) has occurred on such seventh scheduled Trading Day, the "1995 Index Value" shall equal the closing value of the S&P 500 Index on the sixth scheduled Trading Day preceding the Anniversary Date regardless of whether such day is a Trading Day or a Market Disruption Event occurs on such day. The date on which the 1995 Index Value is determined is hereinafter referred to as the "Determination Date". The Calculation Agent shall determine the seventh scheduled Trading Day, and, if necessary, the sixth scheduled Trading Day prior to the Anniversary Date. For purposes of determining the 1995 Index Value, a "Trading Day" means a day on 4 which The New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers Automated Quotations System National Market System, the Chicago Mercantile Exchange, the New York Futures Exchange and the Chicago Board Options Exchange are open for trading. For purposes of determining the 1995 Index Value, a "Market Disruption Event" means either of the following events, as determined by the Calculation Agent: (i) the suspension or material limitation (limitations pursuant to New York Stock Exchange Rule 80A or any applicable rule or regulation enacted or promulgated by The New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, or the Securities and Exchange Commission of similar scope as determined by the Calculation Agent on trading during significant market fluctuations shall be considered "material" for purposes of this definition) for more than two hours of trading or during the period one-half hour prior to the determination of the closing value of the S&P 500 Index in 100 or more of the securities included in the S&P 500 Index, or (ii) the suspension or material limitation (whether by reason of movements in price otherwise exceeding levels permitted by the relevant exchange or otherwise) in (A) futures contracts related to the S&P 500 Index which are traded on the Chicago Mercantile Exchange or (B) option contracts related to the S&P 500 Index which are traded on the Chicago Board Options Exchange, Inc., in each case for more than two hours of trading or during the period one-half hour prior to the determination of the closing value of the S&P 500 Index; provided however, for purposes of this definition, a limitation on the hours in a trading day and/or number of days of trading will not constitute a Market Disruption Event if it results from an announced change in the regular business hours of the relevant exchange. "S&P 500 Index" means the S&P 500 Composite Stock Price Index as published by Standard & Poor's Corporation ("S&P"). In the event S&P discontinues publication of the S&P 500 Index and S&P or anther entity publishes a successor or substitute index that the Calculation Agent determines, in its sole discretion, to be comparable to the S&P 500 Index (any such index being referred to hereinafter as a "Successor Index"), then, upon the Calculation Agent's notification of such determination to the Trustee and the Company, the Calculation Agent shall substitute the Successor Index as calculated by S&P or such other entity for the S&P 500 Index and calculate the Total Interest as described above. Upon any selection by the Calculation Agent of a Successor Index, the Company shall cause notice thereof to be published in the Wall Street Journal (or another newspaper of general circulation) within three Business Days of such selection. If S&P discontinues publication of the S&P 500 Index and a Successor Index is not selected by the Calculation Agent or is no longer published on the Determination Date, the value to be substituted for the S&P 500 Index on the Determination Date used to calculate the Total Interest, if any, shall be a value computed by the Calculation Agent for the Determination Date in accordance with the procedures last used to calculate the S&P 500 Index prior to any such discontinuance. If S&P discontinues publication of the S&P 500 Index prior to the Determination Date and the Calculation Agent determines that no Successor Index is available at such time or a Successor Index is not selected, then on each Business Day until the earlier to occur of (i) the Determination Date and (ii) a determination by the Calculation Agent that a Successor Index is available, the Calculation Agent shall determine the value that would be used in computing the Total Interest by reference to the method set forth in the preceding sentence. The Calculation Agent shall cause notice of each such value to be published not less often than once each month in the Wall Street Journal (or another newspaper of general circulation), and arrange for information with respect to such values to be made available by telephone. 5 If a Successor Index is selected or the Calculation Agent calculates a value as a substitute for the S&P 500 Index as described in the third preceding sentence, such Successor Index or value shall be substituted for the S&P 500 Index for all purposes, including for purposes of determining whether a Market Disruption Event exists. If at any time the method of calculating the S&P 500 Index, or the value thereof, is changed in a material respect, or if the S&P 500 Index is in any other way modified so that such Index does not, in the opinion of the Calculation Agent, fairly represent the value of the S&P 500 Index had such changes or modification not been made, then, from and after such time, the Calculation Agent shall make such adjustments to the closing value of the S&P 500 Index on the Determination Date as, in the good faith judgment of the Calculation Agent, may be necessary in order to arrive at a calculation of a value of a stock index comparable to the S&P 500 Index as if such changes or modification had not been made, and calculating such closing value with reference to the S&P 500 Index, as adjusted. Accordingly, if the method of calculating the S&P 500 Index is modified so that the value of such Index is a fraction or a multiple of what it would have been if it had not been modified, then the Calculation Agent shall adjust such Index in order to arrive at a value of the S&P 500 Index as if it had not been modified. "Calculation Agent" means Merrill Lynch, Pierce, Fenner & Smith Incorporated. All determinations made by the Calculation Agent shall be at the sole discretion of the Calculation Agent and, in the absence of manifest error, shall be conclusive for all purposes and binding on the Company and the holder hereof. All percentages resulting from any calculation will be rounded to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards, and all dollar amounts used in or resulting from such calculation shall be rounded to the nearest cent with one-half cent being rounded upwards. In case an Event of Default with respect to the Notes, as defined in the Indenture, shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. In the event the principal amount hereof is accelerated as provided in the preceding sentence, the amount payable to the holder hereof shall be equal to: (i) the aggregate principal amount hereof, plus (ii) an additional amount, if any, of contingent interest equal to (a) if the date of acceleration is prior to the Determination Date, an amount, if any, calculated in the same manner as the applicable Total Interest assuming the date of acceleration were the Determination Date, or (b) if the date of acceleration is on or after the Determination Date, an amount equal to the applicable Total Interest, if any, less the portion of the applicable Total Interest previously paid as provided herein. If a bankruptcy proceeding is commenced in respect of the Company, the holder hereof may be limited, under Section 502(b)(2) of Title 11 of the United States Code, to the principal amount of the Note plus an additional amount, if any, of contingent interest calculated as though the date of the commencement of the proceeding were the maturity date of the Notes. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 66 2/3% in aggregate principal amount of each series of the Securities at the time outstanding (as defined in the Indenture) to be affected (each series voting as a class), evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the 6 holders of the Securities of all such series; PROVIDED, HOWEVER, that no such supplemental indenture shall, among other things, (i) extend the fixed maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable on redemption, or make the principal thereof, or premium, if any, or interest thereon payable in any coin or currency other than that hereinabove provided, without the consent of the holder of each Security so affected, or (ii) reduce the aforesaid percentage of Securities the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. The Indenture also provides that, prior to any declaration accelerating the maturity of any series of Securities, the holders of a majority in aggregate principal amount outstanding (as defined in the Indenture) of the Securities of such series may on behalf of the holders of all the Securities of such series waive any past default or Event of Default under the Indenture with respect to such series and its consequences except a default in the payment of interest on or the principal of, or premium, if any, on any of the Securities of such series, or in the payment of any sinking fund installment or analogous obligation with respect to Securities of such series. Any such consent or waiver by the holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such holder and upon all future holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the place, at the respective times, at the rate, and in the coin or currency herein prescribed. The Notes are issuable only in registered form without coupons in denominations of $5,000 and integral multiples thereof. At the option of the holders thereof, either at the office or agency to be designated and maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, pursuant to the provisions of the Indenture or at any of such other offices or agencies as may be designated and maintained by the Company for such purpose pursuant to the provisions of the Indenture, and in the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, except for any tax or other governmental charges imposed in connection therewith, Notes may be exchanged for an equal aggregate principal amount of Notes of other authorized denominations. The Notes are not subject to redemption at the option of the Company or repayment at the option of the holder prior to the Maturity Date. Upon due presentation for registration of transfer of this Note, at the option of the holder hereof, either at the office or agency to be designated and maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, pursuant to the provisions of the Indenture or at any such other offices or agencies as may be designated and maintained by the Company for such purpose pursuant to the provisions of the Indenture, a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange herefor, subject to the limitations provided in the 7 Indenture, without charge except for any tax or other governmental charge imposed in connection therewith. The Company, the Trustee, and any agent of the Company or of the Trustee may deem and treat the registered holder hereof as the absolute owner of this Note (whether or not this Note shall be overdue and notwithstanding any notation of ownership or other writing hereon), for the purpose of receiving payment hereof, or on account hereof, and for all other purposes, and neither the Company nor the Trustee nor any agent of the Company or of the Trustee shall be affected by any notice to the contrary. All such payments made to or upon the order of such registered holder shall, to the extent of the sum or sums paid, satisfy and discharge liability for moneys payable on this Note. No recourse for the payment of the principal of or interest, if any, on this Note, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. 8 All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. IN WITNESS WHEREOF, the Company has caused this Note to be duly executed. Dated: May __, 1996 GENERAL ELECTRIC CAPITAL CORPORATION By:_____________________________________ President By:_____________________________________ Senior Vice President - Corporate Treasury and Global Funding Operation CERTIFICATE OF AUTHENTICATION This is one of the Notes described in the within-mentioned Indenture. MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, as Trustee By: THE CHASE MANHATTAN BANK, N.A., as Authenticating Agent By:_____________________________________________ Authorized Signatory -----END PRIVACY-ENHANCED MESSAGE-----