-----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, ZMKRHAuF/Son0znkQ+wySN8B89utCA28ubvs1NJb7gcQgcew5t2iBXMk7kYeTvIp cTKWKvQUe6hEmsEHbXC9Qg== 0000914760-94-000050.txt : 19940715 0000914760-94-000050.hdr.sgml : 19940715 ACCESSION NUMBER: 0000914760-94-000050 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19940714 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HELLER FINANCIAL INC CENTRAL INDEX KEY: 0000046738 STANDARD INDUSTRIAL CLASSIFICATION: 6153 IRS NUMBER: 361208070 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-58716 FILM NUMBER: 94538843 BUSINESS ADDRESS: STREET 1: 500 W MONROE ST CITY: CHICAGO STATE: IL ZIP: 60661 BUSINESS PHONE: 3124417000 MAIL ADDRESS: STREET 1: 500 W MONROE ST CITY: CHICAGO STATE: IL ZIP: 60661 FORMER COMPANY: FORMER CONFORMED NAME: HELLER WALTER E & CO /NEW/ DATE OF NAME CHANGE: 19850503 424B3 1 Rule 424(b)(3) File No. 33-58716 Pricing Supplement No. 13 Dated: July 8, 1994 (To Prospectus dated March 17, 1993 and Prospectus Supplement dated March 31, 1993) U.S.$2,500,000,000 HELLER FINANCIAL, INC. MEDIUM-TERM NOTES, SERIES F Principal Amount: $33,000,000 Issue Price: 100% Indexed Notes - Nikkei Stock Index 300 Original Issue Date: July 15, 1994 Stated Maturity Date: December 20, 1999 Form: [X] Book-Entry [ ] Certificated Depositary: The Depository Trust Company Specified Currency: U.S. Dollars Authorized Denominations: U.S. $1,000 or multiples thereof - Minimum Purchase $50,000 Payment Provisions: No periodic payment of interest will be made with respect to the Nikkei 300 Indexed Notes. At the Stated Maturity Date, a beneficial owner of a Note will be entitled to receive a Principal Redemption Amount in U.S. dollars equal to the product of the face amount of the Note multiplied by a percentage calculated as follows: ( Final Index Value - Initial Index Value ) 100% + ( --------------------------------------- x 115% ) ( Initial Index Value ) provided, however, that in no case will such amount be less than 100.0% or greater than 199.0% of the face amount of such Note. The "Initial Index Value" is 301.48, which is the market closing value of the Nikkei Stock Index 300 on July 8, 1994; and "Final Index Value" is the official market opening Special Quotation value of the Nikkei Stock Index 300 on December 10, 1999, subject to extension in the event of a Market Disruption Event as described in this Pricing Supplement. Notwithstanding the above, if the Closing Index Value ever exceeds 561.05, which is the product of (i) 186.1% and (ii) the Initial Index Value, on any Index Business Day prior to December 10, 1999, a beneficial owner of a Note will be entitled to receive at the Stated Maturity Date a Principal Redemption Amount in U.S. dollars equal to the product of the face amount of such Note and 199.0% regardless of the subsequent performance of the Nikkei Stock Index 300. The "Closing Index Value" is the value of the Nikkei Stock Index 300 at the close of business on the Tokyo Stock Exchange on any Index Business Day. See "Description of Notes - Principal Redemption" in this Pricing Supplement. Redemption at the Option of the Company: The Company may not redeem the Nikkei 300 Indexed Notes prior to the Stated Maturity Date. Repayment at the Option of the Beneficial Owner: A beneficial owner may not demand repayment of the Nikkei 300 Indexed Notes prior to the Stated Maturity Date. Discount Note: [X] Yes [ ] No Total Amount of OID: 31.35% of the Principal Amount of the Note Yield to Maturity: 7.04787% (calculated on the basis of a 360 day year consisting of twelve 30-day months) Initial Accrual Period OID: U.S. $20.7815 per U.S. $1000 of Notes (calculated from July 15, 1994 to December 20, 1994) Calculation Agent: Goldman, Sachs & Co. Discount or Commission: 0.50% Other Provisions: a) Amount Issued to Date, Prior to Pricing Supplement No.13 , Under MTN Series F Program: $319,000,000 b) CUSIP #: 42333HDU3 Agent: Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 -2- THE NIKKEI 300 INDEXED NOTES OFFERED HEREBY ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE NOT SOPHISTICATED WITH RESPECT TO EQUITY INDICES, OPTIONS AND OPTION TRANSACTIONS AND FOREIGN MARKETS. DESCRIPTION OF NOTES General Heller Financial, Inc.'s (the "Company") Nikkei 300 Indexed Notes (the "Notes") are being offered at an original issue price of 100% of the principal amount thereof, will provide for no periodic payments of interest and will mature on December 20, 1999 (the "Stated Maturity Date"). The Principal Redemption Amount (as defined) on the Stated Maturity Date will be determined by reference to the Nikkei Stock Index 300 or a Successor Index (together or as applicable the "Index" or the "Nikkei 300 Index"), subject to a minimum Principal Redemption Amount of 100.0% and a maximum Principal Redemption Amount of 199.0% of the face amount of the Notes. The minimum purchase will be $50,000. Upon issuance, all Notes will be represented by one or more Global Notes registered in the name of a nominee of DTC. References herein to the beneficial owner of a Note shall, so long as the Notes are held in global form by a Depository, be deemed to be to the owner of a beneficial interest in such Global Note, and, unless the context otherwise requires, references herein to Notes shall be deemed to be to beneficial interests in such Global Note. If Notes in certificated form are physically delivered to the owners of such beneficial interests, references herein to the beneficial owner of any such Note shall be deemed to be to the Holder of such Certificated Note and references to the Note shall be deemed to be to such Certificated Note. All terms used but not defined herein which are defined in the accompanying Prospectus or Prospectus Supplement shall have the meanings therein assigned to them. The Notes are not redeemable at the option of the Company or repayable at the option of the beneficial owner prior to maturity and do not provide for any sinking fund. Goldman, Sachs & Co. will act as Calculation Agent with respect to the Notes. Principal Redemption: Except as provided below, a beneficial owner of a Note will be entitled to receive, at the Stated Maturity Date, a principal -3- redemption amount (the "Principal Redemption Amount") in U.S. dollars equal to the product of the face amount of such Note multiplied by a percentage calculated as follows: ( Final Index Value - Initial Index Value ) 100% + ( --------------------------------------- x 115% ) ( Initial Index Value ) provided, however, that in no case will such Principal Redemption Amount be less than 100.0% or greater than 199.0% of the face amount of such Note. Notwithstanding the above, if the Closing Index Value ever exceeds 561.05, which is the product of (i) 186.1% and (ii) the Initial Index Value, on any Index Business Day prior to December 10, 1999, a beneficial owner of a Note will be entitled to receive at the Stated Maturity Date, a Principal Redemption Amount in U.S. dollars equal to the product of the face amount of such Note and 199.0%, regardless of the subsequent performance of the Index. "Index Business Day" is a day that is (or, but for the existence of a Market Disruption Event, would have been) a trading day on which the Tokyo Stock Exchange and the Osaka Securities Exchange are open for business, other than a day on which trading is scheduled to close prior to the regular weekday closing time. "Index Sponsor" is Nihon Keizai Shimbun, Inc. ("NKS") "Calculation Date" is December 10, 1999, or if December 10, 1999 is not an Index Business Day the next following Index Business Day, subject to extension in the event of a Market Disruption Event (as defined herein). "Initial Index Value" is equal to 301.48, which is the Closing Index Value on July 8, 1994. "Closing Index Value" is the value of the Index at the close of business on the Tokyo Stock Exchange on any Index Business Day as determined by the Calculation Agent. "Final Index Value" is the official market opening Special Quotation value of the Index on the Calculation Date as determined by the Calculation Agent, unless the Calculation Date is not December 10, 1999 or the Special Quotation is not officially announced, in which case the Final Index Value shall be the Closing Index Value on the Calculation Date. -4- Notwithstanding the foregoing, if the Calculation Agent determines that a Market Disruption Event has occurred on the Calculation Date, then the Final Index Value shall be the Closing Index Value on the first succeeding Index Business Day on which there is no Market Disruption Event (which day shall be deemed to be the Calculation Date), unless there is a Market Disruption Event on each of the five Index Business Days immediately following the original date that, but for the Market Disruption Event, would have been the Calculation Date. In that case, (i) that fifth Index Business Day shall be deemed to be the Calculation Date, notwithstanding the Market Disruption Event, and (ii) the Calculation Agent shall determine the Final Index Value as the market closing value of the Index on that fifth Index Business Day (subject to "Index Adjustment" described herein) in accordance with the method for calculating the Index last in effect prior to the commencement of the Market Disruption Event using the Tokyo Stock Exchange traded price (or, if trading in the relevant security has been materially suspended or materially limited, its good faith estimate of the Tokyo Stock Exchange traded price that would have prevailed but for that suspension or limitation) on that fifth Index Business Day of each security comprising the Index. Market Disruption Event Market Disruption Event means the occurrence or existence on any Index Business Day of: (i) Any suspension of or limitation imposed on trading (by reason of movement in price exceeding limits permitted by the relevant exchange or otherwise) on the Tokyo Stock Exchange in securities that comprise the Index or securities generally on the Osaka Securities Exchange in options and futures contracts in the Index if, in the determination of the Calculation Agent, such suspension or limitation is material, or (ii) There shall have occurred any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls, the effect of which is, in the judgment of the Calculation Agent, so material and adverse as to make it impracticable or inadvisable to proceed with calculation of the Principal Redemption Amount of the Note on the terms and in the manner contemplated herein. For the purpose of determining whether a Market Disruption Event exists at any time, if trading in a security included in the Index is materially suspended or materially limited at that time, -5- then the relevant percentage contribution of the security to the level of the Index shall be based on a comparison of (i) the portion of the level of the Index attributable to that security relative to (ii) the overall level of the Index, in each case immediately before that suspension or limitation. The Calculation Agent shall as soon as reasonably practicable under the circumstances notify the Paying Agent and the Company of the existence or occurrence of a Market Disruption Event on the day that but for the occurrence or existence of a Market Disruption Event would have been the Calculation Date. Index Adjustment If the Nikkei 300 Index is (i) not calculated and announced by the Index Sponsor but is calculated and announced by a successor sponsor acceptable to the Calculation Agent or (ii) replaced by a successor or substitute index (the "Successor Index") using, in the determination of the Calculation Agent, the same or a substantially similar formula for a method of calculation as used in the calculation of the Index, then the index so calculated and announced by that successor sponsor or that Successor Index, as the case may be, will be deemed to be the Index for purposes of computing the Principal Redemption Amount. If (i) on or prior to the Calculation Date the Index Sponsor makes a material change in the formula for or the method of calculating the Index or in any other way materially modifies the Index (other than a modification prescribed in that formula or method to maintain the Index in the event of changes in constituent stock and capitalization and other routine events) or (ii) on the Calculation Date the Index Sponsor fails to calculate and announce the Index, then the Calculation Agent shall calculate the Closing Index Value or Final Index Value, as the case may be, using, in lieu of a published level for the Index, the level for that Index as of the Calculation Date as determined by the Calculation Agent in accordance with the formula for and method of calculating the Index last in effect prior to that change or failure, but using only those securities that comprised the Index immediately prior to that change or failure (other than those securities that have since ceased to be listed on the Tokyo Stock Exchange). The following table illustrates for a range of hypothetical Final Index Values, the percentage change in the Nikkei 300 Index from July 8, 1994 to the Calculation Date, the corresponding Principal Redemption Amount of the Notes, and the pre-tax annualized rate of return to Investors. -6- Hypothetical Principal Pre-Tax Final Index Value Percentage Redemption Annualized Rate on Calculation Change in Amount of Note at of Return to Date Index (1) Maturity Maturity (2) 241.18 -20.00% 100.00% 0.00% 271.33 -10.00% 100.00% 0.00% 301.48 0.00% 100.00% 0.00% 331.63 10.00% 111.50% 2.02% 361.78 20.00% 123.00% 3.87% 391.92 30.00% 134.50% 5.59% 422.07 40.00% 146.00% 7.19% 452.22 50.00% 157.50% 8.69% 482.37 60.00% 169.00% 10.11% 512.52 70.00% 180.50% 11.44% 542.66 80.00% 192.00% 12.72% 561.05 86.10% 199.00% 13.46% 572.81 90.00% 199.00% 13.46% 602.96 100.00% 199.00% 13.46% 633.11 110.00% 199.00% 13.46% 663.26 120.00% 199.00% 13.46% _____________________ (1) Percentage change in Index from July 8, 1994 to the Calculation Date. (2) Pre-tax annualized rate of return from July 8, 1994 to the Stated Maturity Date is calculated on the basis of a 360 day year consisting of twelve 30 day months. NOTE: THE PRINCIPAL REDEMPTION AMOUNT OF THE NOTES MAY BE FIXED AND DETERMINED PRIOR TO STATED MATURITY DATE AT 199.0% OF THE FACE AMOUNT OF THE NOTES AS DESCRIBED IN "PRINCIPAL REDEMPTION." The above figures are for purposes of illustration only. The actual Principal Redemption Amount of the Notes and the pre-tax annualized rate of return represented thereby will depend entirely upon the actual Final Index Value determined by the Calculation Agent as provided herein. Events of Default and Acceleration In case an Event of Default with respect to the Notes shall have occurred and be continuing, the amount payable to a beneficial owner of a Note upon any acceleration permitted by the -7- Notes, will be equal to the amount that would be payable as though the Stated Maturity Date of the Notes was the date on which early repayment is due, and the Final Index Value was calculated based on the Closing Index Value of the Index on the date of early repayment, or the first succeeding Index Business Day in the event that the date of early repayment is not an Index Business Day, provided, however, that if prior to the date of such early repayment, the Closing Index Value exceeds 561.05, the product of (i) 186.1% and (ii) the Initial Index Value, the amount payable to a beneficial owner of a Note upon acceleration will be equal to the sum of (x) 100% of the face amount of the Note, plus (y) 99% of the face amount of such Note discounted from the Stated Maturity Date to the date of early repayment in accordance with generally accepted financial practices on a semiannual basis at a discount rate equal to the LIBOR rate, determined by the Calculation Agreement in accordance with the procedures set forth in the accompanying Prospectus Supplement for LIBOR Notes using the rate for an Index Maturity similar to the period from the date of early repayment to the Stated Maturity Date. If a bankruptcy proceeding is commenced in respect of the Company, the claim of the beneficial owner of a Note may be limited, under Section 502(b)(2) of Title 11 of the United States Code, to the amount of the Note that would be due if the Stated Maturity Date of the Notes were the date of the commencement of the proceeding. SPECIAL CONSIDERATIONS PAYMENT AT MATURITY Principal Redemption Amount of Notes. In all cases, except as provided below, if the Final Index Value is equal to or less than the Initial Index Value, the beneficial owners of the Notes will be entitled to receive only the face amount of the Notes at the Stated Maturity Date. This will be true even though the value of the Index as of some interim date or date prior to the Calculation Date may have exceeded the Initial Index Value because the Principal Redemption Amount payable on the Notes is calculated based on the Final Index Value only. However, if the Closing Index Value on any Index Business Day exceeds 561.05, -8- which is the product of (i) 186.1% and (ii) the Initial Index Value, the Principal Redemption Amount of the Note is fixed at 199.0% of the original face amount of the Note regardless of the subsequent performance of the Index. Capped Principal Redemption. Because the maximum Principal Redemption Amount of the Notes is capped at 199.0% of the original face amount of the Notes, the yield to maturity on the Notes may be lower than the yield provided by investing directly in the stocks underlying the Index over an identical period of time, particularly in the case that the Final Index Value exceeds 186.1% of the Initial Index Value. Time Value of Money. No interest payments will be made on the Notes. The minimum Principal Redemption Amount to be received by beneficial owners of the Notes at the Stated Maturity Date does not reflect any opportunity cost implied by inflation and other factors relating to the time value of money. Principal Redemption Amount of the Notes Does Not Reflect Dividends Paid on the Index. The Principal Redemption Amount is calculated based only on the price appreciation, if any, of the Index. Because the Principal Redemption Amount calculation does not account for the payment of dividends on the individual stocks comprising the Index, the yield to maturity of the Notes may produce a lower yield than if such stocks underlying the Index were purchased and held for a similar period. EFFECTIVE FIXED EXCHANGE RATE Because the Principal Redemption Amount of the Notes is calculated in U.S. dollars based on the percentage price appreciation of the Index, the Principal Redemption Amount of the Notes will not be directly affected by the actual Yen/US$ exchange rate prevailing at the Stated Maturity Date. Therefore, while the investor is protected against any decrease in value that would be realized by owning the stocks underlying the Index outright if the Yen depreciates against the U.S. dollar, the investor does not realize any benefit if the Yen appreciates against the U.S. dollar. -9- TRADING The Notes have not been approved for listing on any stock exchange and the Company has no intention of seeking a listing for the Notes in the future. Investors should be aware that securities similar to the Notes have not previously been publicly offered in the United States and that there is no U.S. precedent to indicate how the Notes will trade in the secondary market or whether such market will be liquid. Goldman, Sachs & Co. has advised the Company that it intends to make a market in the Notes. However, Goldman, Sachs & Co. is under no obligation to do so and may discontinue market making activities at any time. It is expected that the secondary market for the Notes will be affected by a number of factors independent of the creditworthiness of the Company. The trading values of the Notes may be affected by a number of interrelated factors, including, but not limited to, those listed below. The relationship among these factors is complex. Accordingly, investors should be aware that factors other than the level of the Index are likely to affect their trading value. The likely 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: Price Appreciation of Index. The trading value of the Notes will likely depend primarily on the extent of the appreciation, if any, of the Index over the Initial Index Value. If, however, the Notes are sold prior to the Stated Maturity Date at a time when the Index exceeds the Initial Index Value, the sale price may be at a discount from the amount which would be payable to the holder if such excess of the Index over the Initial Index Value were to prevail until the Calculation Date because of the possible fluctuations of the Index between the time of such sale and the Calculation Date. The Japanese equity market has been highly volatile during the recent past. Furthermore, the price at which a holder will be able to sell the Notes prior to the Stated Maturity Date may be at a discount, which could be substantial, from the principal amount thereof, if, at such time, the Index is below, equal to or not sufficiently above the Initial Index Value. -10- Principal Redemption Amount Cap. The trading performance of the Notes will be influenced by the maximum Principal Redemption Amount of the Notes which is capped at 199% of the initial investment amount in the event the Closing Index Value on any Index Business Day or the Final Index Value equals or exceeds 186.1% of the Initial Index Value. The value of the Notes will never exceed this cap. In the event the Closing Index Value on any Index Business Day equals or exceeds 561.05, the Principal Redemption Amount will be fixed at 199.0% of the face amount, but the price at which a holder will be able to sell the Notes prior to the Stated Maturity Date would likely be at a discount, which could be substantial, from that fixed Principal Redemption Amount to reflect the time value of money. Volatility of the Index. If the volatility of the Index increases, the trading value of the Notes would likely increase. If the volatility of the Index decreases, the trading value of the Notes would likely decrease. U.S. Dollar Interest Rates. If U.S. interest rates increase, the value of the Notes would likely decrease. If U.S. interest rates decrease, the value of the Notes would likely increase. Japanese Yen Interest Rates. If Japanese Yen interest rates increase, the value of the Notes would likely increase. If Japanese Yen interest rates decrease, the value of the Notes would likely decrease. Dividend Rates in Japan. If dividend rates on the stocks comprising the Index increase, the value of the Notes would likely decrease. If dividend rates on the stocks comprising the Index decrease, the value of the Notes would likely increase. Correlation Between Yen/US$ Foreign Exchange Rate and the Index. If the correlation between the Yen/US$ exchange rate and the Index becomes more positive (or less negative), the value of the Notes would likely increase. If the correlation becomes more negative (or less positive), the value of the Notes would likely decrease. Correlation refers to the statistical correlation of the Yes/US$ exchange rate (expressed in Yen per one U.S. dollar) and the price of the Index. -11- Time Remaining to Maturity. The Notes may trade at a value above that which may be inferred from the level of interest rates and the Index. This difference would reflect a "time premium" due to expectations concerning the value of the Index during the period prior to the Calculation Date of the Notes. As the time remaining to the Calculation Date of the Notes decreases, however, this time premium will likely decrease, thus decreasing the trading value of the Notes. GENERAL FACTORS AFFECTING THE U.S. AND JAPANESE ECONOMIES Investors should also consider factors affecting the U.S. and Japanese economies. Although the Principal Redemption Amount of the Notes will be calculated using a fixed Yen/US$ exchange rate, the Yen/US$ exchange rate may affect economic and political developments in Japan and other countries which, in turn, may affect the value of the Index. Exchange rates of most economically developed noncommunist nations, including Japan, are permitted to fluctuate in value relative to the U.S. dollar. National governments, however, may not allow their currencies to float freely in response to economic forces. Sovereign governments in fact use a variety of techniques, such as intervention by a country's central bank or imposition of regulatory controls or taxes, to affect the exchange rates of their currencies. Of particular importance are rates of inflation, interest rate levels, the balance of payments and the extent of governmental surpluses or deficits in Japan and the United States, all of which are in turn sensitive to the monetary, fiscal and trade policies pursued by the governments of Japan, the United States and other countries important to international trade and finance. Governments may also issue a new currency to replace an existing currency or alter the exchange rate or relative exchange characteristics by devaluation or revaluation of a currency. The likely effect of the foregoing factors on the trading value of the Notes is complex. The factors affect not only the value of the fixed-income component of the Note, but also the value of the embedded option which would generally be calculated using option pricing models. Each of the factors are interrelated. No single factor should be viewed in isolation and, in fact, changes -12- in one or more of the factors listed may have indirect effects on other factors. In addition, no assessment has been made as to the likely magnitude of any change in the trading value of the Notes resulting from a change in one or more of the factors. DISCRETION OF CALCULATION AGENT Goldman Sachs & Co., in its capacity as Calculation Agent, has been granted certain discretionary powers to determine the value of the Index, particularly in determining the market opening Special Quotation value of the Index on the Calculation Date, in the event of a Market Disruption Event or in the event that the Index Sponsor ceases to publish the Index. As such, the decisions of the Calculation Agent may influence the Principal Redemption Amount of the Notes, but in no event will the Principal Redemption Amount be less than 100% of the face amount of any Note. Goldman Sachs International, an affiliate of Goldman, Sachs & Co., has also provided a hedge to the Company against its exposure to price movements in the Index in connection with the Notes. Certain Federal Income Tax Considerations Prospective investors should also consider the tax consequences of investing in the Notes. Under proposed Treasury Regulations, the Company will take the position that a Note will be treated for United States federal income tax purposes as having been issued with original issue discount which a beneficial owner who is a United States person will be required to include in income over the term of the Note before the receipt of cash attributable to such income. See "Certain Federal Income Tax Considerations" in this Pricing Supplement. NIKKEI STOCK INDEX 300 Summary of the Index The Nikkei Stock Index 300 is an index calculated, published and disseminated by Nihon Keizai Shimbun, Inc., ("NKS") that measures the composite price performance of stocks of 300 Japanese companies. All 300 stocks are listed in the First Section of the -13- Tokyo Stock Exchange ("TSE"). Stocks listed in the First Section are among the most actively traded stocks on the TSE. Publication of the Nikkei 300 Index began on October 8, 1993. The Nikkei 300 Index is a market capitalization-weighted index which is calculated by (i) multiplying the per share price of each stock included in the Nikkei 300 Index by the number of outstanding shares (excluding shares held by the Japanese Government), (ii) calculating the sum of all these products (such sum being hereinafter referred to as the "Aggregate Market Price"), (iii) dividing the Aggregate Market Price by the Base Aggregate Market Price (i.e. the Aggregate Market Price as of October 1, 1982) and (iv) multiplying the result by 100. Larger companies' shares have a larger effect on moving the entire index than smaller companies' shares. Although the Nikkei 300 Index was first published in October 1993, NKS has calculated values for the Nikkei 300 Index for the period from October 1, 1982 through October 8, 1993. The stocks included in the Nikkei 300 Index (such stocks being hereinafter referred to as the "Underlying Stocks") were selected from a reference group of stocks which were selected by excluding stocks listed in the First Section of the TSE that have relatively low market liquidity or extremely poor financial results. The Underlying Stocks were selected from this reference group by (i) selecting from the remaining stocks in this reference group the stocks with the largest aggregate market value in each of 36 industrial sectors and (ii) selecting additional stocks (with priority within each industrial sector given to the stock with the largest aggregate market value) so that the selection ratios (i.e. the ratio of the aggregate market value of the included stocks to that of the stocks in the reference group) with respect to all 36 industry sectors will be as nearly equal as possible and the total number of companies with stocks included in the Nikkei 300 Index will be 300. In order to maintain continuity in the level of the Nikkei 300 Index, the Nikkei 300 Index will be reviewed annually at the beginning of October by NKS and the Underlying Stocks may be replaced, if necessary, in accordance with the "deletion/addition rule". The "deletion/addition" rule provides generally for the deletion of a stock from the Nikkei 300 Index if such stock is no -14- longer included in the reference group or if the aggregate market value of such stock is low relative to other stocks in the relevant industry sector. Stocks deleted pursuant to the "deletion/addition" rule will be replaced by stocks included in the reference group which have relatively high aggregate market values. In addition, stocks may be added or deleted from time to time for extraordinary reasons. The Index is computed once a day after the close of the market after October 12, 1993. The Index is calculated minute by minute by QUICK Corp. from January 31, 1994. The Index is published in the Nihon Keizai Shimbun morning and evening editions as well as through electronic services such as Nikkei Telecom. All rights, including copyright and intellectual property rights, in the name "Nikkei" and the "Nikkei 300 Index" belong to NKS. NKS has the right to amend the contents, and to suspend the publication of the Nikkei 300 Index. The information included herein with respect to the Nikkei 300 Index consists only of extracts from, or summaries of, information published by NKS. Goldman, Sachs & Co. and the Company only accept responsibility that such information has been correctly extracted or summarized but do not accept responsibility in respect of the accuracy or the completeness of the information set forth herein concerning the Index, or that there has not occurred any event which would affect the accuracy or completeness of such information. NKS does not intend by this document to offer or solicit to buy or sell any securities. NKS, its clients and officers may have a position or engage in transactions in any of the securities mentioned. All disclosure contained in this Pricing Supplement regarding the Nikkei 300 Index or its publisher, NKS is derived from publicly available information. NKS has no relationship with the Company or the Notes; it does not sponsor, endorse, authorize, sell or promote the Notes and has no obligation or liability in connection with the administration, marketing or trading of the Notes. -15- NKS makes no warranty expressly or impliedly as to the merchantability or fitness for a particular purpose of the Index or any product or securities described in this document ("the products") and is not responsible for the construction or operation of the products or for the performance of or for any error in the Index or the products nor is under any obligation to advise any person of any error in the Indices or the products. NKS does not give any assurance regarding the continued calculation or publication of the Index or any changes in the constituents or in the methodology used in its calculation. -16- LICENSE AGREEMENT NKS and Goldman, Sachs & Co. have entered into a license agreement providing for the license to Goldman, Sachs & Co., in exchange for a fee, of the right to use indices owned and published by NKS in connection with certain securities, including the Notes, and the Company is an authorized sublicensee thereof. CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS The following is a summary of certain United States federal tax considerations of the ownership and disposition of the Notes. It deals only with purchasers who acquired Notes at original issuance or pursuant to this offering, who hold Notes and who would hold the underlying stocks that comprise the Index as capital assets and does not deal with special classes of holders, such as life insurance companies, banks, tax-exempt organizations, dealers in securities, persons holding the Notes as a hedge or hedged against security price risks or as part of a "straddle", or United States Holders (as defined below) whose functional currency is not the U.S. dollar. Prospective purchasers of the Notes should consult their own tax advisors concerning the application of the United States federal tax laws in their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction. For purposes of this summary, "United States Holder" means a beneficial owner of a Note who or which is (i) a citizen or resident of the United States, (ii) a domestic corporation or (iii) a person otherwise subject to United States federal income taxation on a net income basis in respect of the Notes. There are no final regulations, published rulings or judicial decisions involving the characterization for U.S. federal income tax purposes of securities with terms similar to the Notes. The Notes should be treated as debt obligations of the Company for U.S. Federal income tax purposes. -17- General Under general principles of U.S. federal income tax law and the Internal Revenue Code of 1986, as amended (the "Code"), interest on a Note would be included in income when it is paid or accrued, depending on a United States Holder's method of accounting for tax purposes, and, in the case of accrual basis taxpayers, would not be accrued prior to the time it becomes fixed. Under this analysis, a United States Holder would not recognize income, gain or loss with respect to a Note prior to the Stated Maturity Date, or earlier disposition of the Note or, in the case of an accrual taxpayer, the date the Principal Redemption Amount of the Note becomes fixed at 199.0% in the event the Closing Index Value on any Index Business Day exceeds 561.05, if applicable. On February 28, 1991, the Treasury Department issued proposed regulations relating to debt instruments providing for contingent payments (the "Existing Proposed Regulations") that, if adopted, would by their terms apply to the Notes. Under the Existing Proposed Regulations, a Note would be "bifurcated" and treated as consisting of two separate instruments: (i) the fixed payment, consisting of the right to receive a payment at Stated Maturity equal to 100% of the face amount of the Note (the "Minimum Redemption Amount"), which would be treated as a zero coupon debt instrument for U.S. federal income tax purposes (the "Zero Coupon Debt"), and (ii) the contingent payment, consisting of the right to receive any amount in excess of the Minimum Redemption Amount, which would likely be treated as a cash settlement option on the value of the Index (the "Option"). In addition, in January 1993, the Treasury Department delivered to the Federal Register new proposed regulations (the "Suspended Proposed Regulations") that were to replace the Existing Proposed Regulations. However the Suspended Proposed Regulations were withdrawn for review prior to their official publication in connection with the change from the Bush to Clinton administrations. The Suspended Proposed Regulations were proposed to be effective for debt instruments issued at least 60 days after they were issued as final regulations. If the Suspended Proposed Regulations were applicable to the Notes, they would generally -18- have required that a United States Holder include interest during the term of the Note pursuant to one of several alternative computation methods. Thus, the Existing Proposed Regulations remain in effect as proposed regulations and, if finalized in their current form, would be applicable to the Notes. Based on the Suspended Proposed Regulations, however, it appears that the Existing Proposed Regulations may not be finalized in their current form. Moreover, because the Suspended Proposed Regulations had a prospective effective date, it is possible that no regulations will ultimately apply to the Notes, in which case general principles of U.S. federal income tax law and the Code would apply. The proper treatment of the Notes is therefore unclear. The Company intends to treat the Notes for tax reporting and other purposes in a manner consistent with the Existing Proposed Regulations unless future developments indicate that such treatment is incorrect or inadvisable. Existing Proposed Regulations Under the Existing Proposed Regulations, as indicated above, a Note would be "bifurcated" into the Zero Coupon Debt and an Option, and the issue price of the Note would be allocated between these two instruments. The Company intends to treat the Zero Coupon Debt as having an issue price equal to the present value of the Minimum Redemption Amount, discounted at the rate indicated on page 2 of the Notes. The remaining portion of issue price of the Note would be allocated to the Option (i.e., as premium deemed paid for the Option). On the foregoing basis, 68.65% of the issue price of the Note would be allocated to the Zero Coupon Debt and the remaining 31.35% of such issue price would be allocated to the Option. The Company currently intends to file information returns with the Internal Revenue Service utilizing this allocation. A United States Holder that wishes to use a different allocation will be required to disclose that it is doing so on its U.S. federal income tax return. -19- Under the Existing Proposed Regulations, the Zero Coupon Debt would be subject to the original issue discount rules of the Code, which generally require the accrual of original issue discount on a constant-yield method over the term of the Note. The Zero Coupon Debt would be treated as having been issued with original issue discount in an amount equal to the excess of the Minimum Redemption Amount over the issue price allocated to the Zero Coupon Debt. United States Holders, including those using the cash method of accounting for tax purposes, would have to include accrued original issue discount in income prior to the receipt of cash attributable to such income. Under the Existing Proposed Regulations, a United States Holder generally would recognize gain or loss with respect to the Option upon the Stated Maturity in an amount equal to the difference (gain if positive and loss if negative) between (i) the amount of payment of the Note in excess of the Minimum Redemption Amount, if any and (ii) the United States Holder's basis in the Option, which would generally be the portion of the issue price allocated to the Option, as described above. If, however, the Principal Redemption Amount of the Note is fixed at 199.0% by virtue of the Closing Index Value on any Index Business Date exceeding 561.05 prior to June 20, 1999, the United States Holder will recognize gain at that time to the extent the "amount realized" exceeds the basis in the Option. For this purpose, the "amount realized" equals the present value at that time of receiving 99.00% at maturity discounted at 7.04787%. (The difference between the "amount realized" and 99.00% will be additional original issue discount that is accrued as interest income over the remaining life of the Note). The United States Holder will increase his basis in the Note by the amount realized and by the original issue discount, thereon, as it accrues. The gain or loss recognized with respect to the Option would be capital gain or loss and generally would be long-term capital gain or loss if the Note has been held for more than one year. Purchasers at Other than the Initial Offering Price Although the matter is not entirely clear under the Existing Proposed Regulations, it is likely that a United States Holder who purchases a Note at other than the Initial Offering (a "subsequent purchaser") would be required to allocate the -20- purchase price of the Note between the Zero Coupon Debt and the Option and, except as discussed below in the next two paragraphs, account for income and loss with respect to these two instruments in the same manner as described above under "Existing Proposed Regulations". The allocation by a subsequent purchaser of its purchase price of the Note to the Zero Coupon Debt and the Option would likely be based on the relative fair market values of the two instruments at the time the purchaser acquires the Note. If the subsequent purchaser's purchase price allocated to the Zero Coupon Debt or Option (this and the following paragraph are relevant to the Option only if prior to the purchase, the Principal Redemption Amount of the Note is fixed at 199.0% prior to June 20, 1999) is greater than the adjusted issue price of the Zero Coupon Debt or Option (i.e., generally, the issue price allocated to the Zero Coupon Debt upon the initial issuance of the Notes and any original issue discount that has accrued thereon, or in the case of the Option, the amount realized when the Principal Redemption Amount became fixed, plus any original discount that has accrued thereon) on the purchase date, then such purchaser would be considered to have purchased the Zero Coupon Debt or Option at an acquisition premium. In this case, a subsequent purchaser would reduce the amount of original issue discount (but not below zero) includible in income for any taxable year (or part thereof in which it holds the Note) by the portion of the acquisition premium properly allocable to such period on a consistent yield to maturity basis. If the amount of the subsequent purchaser's purchase price allocated to the Zero Coupon Debt or Option is less than the adjusted issue price of the Zero Coupon Debt or Option and the difference is at least equal to 1/4 of 1% of such adjusted issue price multiplied by the remaining number of complete years to the Stated Maturity Date (after the acquisition of the Note), then such purchaser would be considered to have purchased the Zero Coupon Debt or Option with market discount. In this case, any gain recognized by the subsequent purchaser upon the Stated Maturity Date or disposition of a Note that is attributable to the Zero Coupon Debt or Option would be treated as ordinary income to the extent that such gain does not exceed the accrued market discount on the Zero Coupon Debt or Option. Alternatively, the subsequent purchaser may elect to include -21- market discount in income currently over the life of the Zero Coupon Debt or Option, generally on a straight-line basis unless the subsequent purchaser elects (on a debt instrument-by-debt instrument basis) to accrue such market discount on the constant yield to maturity basis. The election to include market discount currently in income applies to all debt instruments with market discount acquired by the electing subsequent purchaser on or after the first day of the first taxable year to which the election applies and may not be revoked without the consent of the Internal Revenue Service. A subsequent purchaser who does not elect to include market discount currently in income generally will be required to defer deductions for interest on borrowings allocable to the Zero Coupon Debt or Option in an amount not exceeding the accrued market discount on such Zero Coupon Debt or Option until the Stated Maturity Date or disposition of the Note. Sale or Exchange of Notes Upon the sale or exchange of a Note, a United States Holder would recognize gain or loss equal to the difference between the amount realized on such sale or exchange and the United States Holder's adjusted tax basis in the Note. A United States Holder's adjusted tax basis in a Note will generally be the amount paid for the Note, increased by the amount of original issue discount and market discount (if any) included in income with respect to the Zero Coupon Debt or Option during the period that the United States Holder held the Note plus the amount realized, if any, upon the Principal Redemption Amount becoming fixed at 199.0%. Except as discussed above under the heading "Purchasers at Other than the Initial Offering Price", assuming that a United States Holder has included original issue discount in income as described under the heading "Existing Proposed Regulations", gain or loss recognized by the United States Holder upon the sale or exchange of a Note would generally be capital gain or loss and would be long-term capital gain or loss if the Note had been held for more than one year. -22- LEGAL OPINIONS Certain legal matters in connection with the Notes will be passed upon for the Company by James B. Currie, Esq., General Counsel and Secretary of the Company, and for the Agent by McDermott, Will & Emery, Chicago, Illinois. McDermott, Will & Emery from time to time acts as counsel in certain matters for the Company and certain of its subsidiaries, including as special tax counsel to the Company with respect to the Notes. _______________________________________ IT IS SUGGESTED THAT PROSPECTIVE INVESTORS WHO CONSIDER PURCHASING THE NOTES SHOULD BE EXPERIENCED WITH RESPECT TO EQUITY INDICES, OPTIONS AND OPTION TRANSACTIONS AND FOREIGN MARKETS AND REACH AN INVESTMENT DECISION ONLY AFTER CAREFULLY CONSIDERING, WITH THEIR ADVISERS, THE SUITABILITY OF THE NOTES IN THE LIGHT OF THEIR PARTICULAR CIRCUMSTANCES. -23- -----END PRIVACY-ENHANCED MESSAGE-----