1
                                                Filed Pursuant to Rule 424(b)(3)
                                                Registration No. 333-05701



 
PROSPECTUS SUPPLEMENT
(To Prospectus dated July 8, 1996)
$500,000,000
 
[LOGO]
Corp.
MEDIUM-TERM NOTES, SERIES D
DUE NINE MONTHS TO 40 YEARS FROM DATE OF ISSUE
 
Advanta Corp. (the "Company") may offer from time to time up to $500,000,000
aggregate principal amount, or the equivalent thereof in one or more foreign
currencies or currency units, of its Medium-Term Notes, Series D (the "Notes").
Such aggregate principal amount is subject to reduction as a result of the sale
by the Company of certain other debt securities. Each Note will mature on any
day nine months to 40 years from the date of issue, as specified in the
applicable pricing supplement hereto (each, a "Pricing Supplement"), and may be
subject to redemption by the Company or repayment at the option of the holder
thereof, in each case, in whole or in part, prior to its Stated Maturity Date,
as set forth therein and specified in the applicable Pricing Supplement.
 
The interest rate, if any, or the formula for the determination of any such
interest rate, applicable to each Note and other variable terms of the Notes as
described herein will be established by the Company on the date of issue of such
Note and will be set forth therein and specified in a Pricing Supplement.
Interest rates, interest rate formulae and such other variable terms are subject
to change by the Company, but no change will affect any Note already issued or
as to which an offer to purchase has been accepted by the Company. Each Note
will be issued in fully registered book-entry form (a "Book-Entry Note") or in
definitive form (a "Definitive Note"), as set forth in the applicable Pricing
Supplement, in denominations of $100,000 and integral multiples of $1,000 in
excess thereof, unless otherwise specified in the applicable Pricing Supplement.
Each Book-Entry Note will be represented by one or more fully registered global
securities deposited with or on behalf of The Depository Trust Company (or such
other depositary as is identified in an applicable Pricing Supplement) (the
"Depositary") and registered in the name of the Depositary or the Depositary's
nominee. Interests in Book-Entry Notes will be shown on, and transfers thereof
will be effected only through, records maintained by the Depositary (with
respect to its participants) and the Depositary's participants (with respect to
beneficial owners).
                                                          continued on next page
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, THE PROSPECTUS OR ANY
SUPPLEMENT HERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 


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                              PRICE TO               AGENTS' DISCOUNTS             PROCEEDS TO
                              PUBLIC(1)              AND COMMISSIONS(1)            COMPANY(1)(2)(3)
                                                                          
Per Note..................... 100%                   .100% -- .825%                99.900% -- 99.175%
Total(4)..................... $500,000,000           $500,000 -- $4,125,000        $499,500,000 -- $495,875,000
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(1) Salomon Brothers Inc, Bear, Stearns & Co. Inc., CS First Boston Corporation,
    Donaldson, Lufkin & Jenrette Securities Corporation or Merrill Lynch & Co.,
    Merrill Lynch, Pierce, Fenner & Smith Incorporated (each, an "Agent" and
    collectively, the "Agents"), may purchase the Notes, as principal, from the
    Company, for resale to investors and other purchasers at varying prices
    relating to prevailing market prices at the time of resale as determined by
    the Agent, or, if so specified in an applicable Pricing Supplement, for
    resale at a fixed public offering price. Unless otherwise specified in an
    applicable Pricing Supplement, any Note sold to an Agent as principal will
    be purchased by the Agent at a price equal to 100% of the principal amount
    thereof less a percentage of the principal amount equal to the commission
    applicable to an agency sale (as described below) of a Note of identical
    maturity. If agreed to by the Company and an Agent, the Agent may utilize
    its reasonable efforts on an agency basis to solicit offers to purchase the
    Notes at 100% of the principal amount thereof, unless otherwise specified in
    an applicable Pricing Supplement. The Company will pay a commission to each
    Agent, ranging from .100% to .825% of the principal amount of a Note,
    depending upon its stated maturity, sold through the Agent. See "Plan of
    Distribution."
 
(2) The Company has agreed to indemnify the Agents against, and to provide
    contribution with respect to, certain liabilities, including liabilities
    under the Securities Act of 1933, as amended. See "Plan of Distribution."
 
(3) Before deducting expenses payable by the Company estimated at $250,000.
 
(4) Or the equivalent thereof in one or more foreign currencies or currency
    units.
 
The Notes are being offered on a continuing basis by the Company through the
Agents. Unless otherwise specified in an applicable Pricing Supplement, the
Notes will not be listed on any securities exchange and there can be no
assurance that the Notes offered by this Prospectus Supplement will be sold or
that there will be a secondary market for the Notes. The Company reserves the
right to cancel or modify the offer made hereby without notice. The Company or
the Agents, if they solicit the offer on an agency basis, may reject any offer
to purchase Notes in whole or in part. See "Plan of Distribution."
 
SALOMON BROTHERS INC
              BEAR, STEARNS & CO. INC.
                             CS FIRST BOSTON
                                         DONALDSON, LUFKIN & JENRETTE
                                              SECURITIES CORPORATION
 
                                                             MERRILL LYNCH & CO.
 
          The date of this Prospectus Supplement is October 30, 1996.
   2
 
continued from previous page
 
Unless otherwise specified in an applicable Pricing Supplement, the Notes will
bear interest at fixed rates (the "Fixed Rate Notes") or at floating rates (the
"Floating Rate Notes"). The applicable Pricing Supplement will specify whether a
Floating Rate Note is a Regular Floating Rate Note, Floating Rate/ Fixed Rate
Note or Inverse Floating Rate Note and whether its rate of interest is
determined by reference to one or more of the CD Rate, the Commercial Paper
Rate, the Eleventh District Cost of Funds Rate, the Federal Funds Rate, LIBOR,
the Prime Rate, the Treasury Rate or the CMT Rate (each, an "Interest Rate
Basis"), or any other interest rate basis or formula, as adjusted by any Spread
and/or Spread Multiplier and will specify other terms applicable to such Note.
Notes may also be issued as Foreign Currency Notes, Indexed Notes or Amortizing
Notes. See "Description of the Notes." Interest on Fixed Rate Notes will accrue
from their date of issue and, unless otherwise specified in the applicable
Pricing Supplement, will be payable semiannually in arrears on June 15 and
December 15 of each year and at Maturity. Unless otherwise specified in an
applicable Pricing Supplement, the rate of interest on each Floating Rate Note
will be reset daily, weekly, monthly, quarterly, semiannually or annually, as
set forth therein and specified in the applicable Pricing Supplement, and
interest on each Floating Rate Note will accrue from its date of issue and will
be payable in arrears monthly, quarterly, semiannually or annually, as specified
in the applicable Pricing Supplement, and at Maturity. Notes may also be issued
with original issue discount, and such Notes may or may not pay any interest.
   3
 
     IN CONNECTION WITH THE OFFERING OF NOTES ON A FIXED PRICE BASIS, THE AGENTS
MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICE OF THE NOTES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
 
                            DESCRIPTION OF THE NOTES
 
     The Notes will be issued as a series of debt securities under an Indenture,
dated as of November 15, 1993 (the "Indenture"), between the Company and The
Chase Manhattan Bank (successor by merger to The Chase Manhattan Bank (National
Association)), as trustee (the "Trustee"). The following summary of certain
provisions of the Notes and of the Indenture does not purport to be complete and
is qualified in its entirety by reference to the Indenture, a copy of which has
been filed as an exhibit to the Registration Statement of which this Prospectus
Supplement and the accompanying Prospectus are a part. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture or
the Notes, as the case may be. The term "Debt Securities," as used in this
Prospectus Supplement, refers to all securities issued and issuable from time to
time under the Indenture and includes the Notes. The following description of
the Notes will apply unless otherwise specified in an applicable Pricing
Supplement.
 
GENERAL
 
     All Debt Securities, including the Notes, issued and to be issued under the
Indenture will be unsecured general obligations of the Company and will rank
pari passu with all other unsecured and unsubordinated indebtedness of the
Company from time to time outstanding. The Indenture does not limit the
aggregate principal amount of Debt Securities which may be issued thereunder and
Debt Securities may be issued thereunder from time to time in one or more series
up to the aggregate principal amount from time to time authorized by the Company
for each series.
 
     The Notes are currently limited to $500,000,000 aggregate principal amount,
or the equivalent thereof in one or more foreign or composite currencies. The
foregoing limit, however, may be increased by the Company if, in the future, it
determines that it may wish to sell additional Notes. The Notes will be offered
on a continuing basis and will mature on any day nine months to 40 years from
the date of issue, as specified in an applicable Pricing Supplement. Unless
otherwise specified in an applicable Pricing Supplement, interest-bearing Notes
will either be Fixed Rate Notes or Floating Rate Notes as specified in the
applicable Pricing Supplement. Notes may be issued at significant discounts from
their principal amount payable at the Stated Maturity Date (or on any prior date
on which the principal or an installment of principal of a Note becomes due and
payable, whether by the declaration of acceleration, call for redemption at the
option of the Company, repayment at the option of the holder or otherwise) (each
such date, a "Maturity"), and some Notes may not bear interest.
 
     Each Note will be denominated in a currency or currency unit (the
"Specified Currency") as specified on the face thereof and in the applicable
Pricing Supplement. Unless otherwise indicated in a Note or in an applicable
Pricing Supplement, the Notes will be denominated in United States dollars and
payments of principal of, and premium, if any, and interest on, the Notes will
be made in United States dollars. Unless otherwise specified in an applicable
Pricing Supplement, purchasers are required to pay for Foreign Currency Notes
(as defined below) in the Specified Currency. At the present time there are
limited facilities in the United States for the conversion of United States
dollars into foreign currencies or currency units and vice versa, and commercial
banks do not generally offer non-United States dollar checking or savings
account facilities in the United States. If requested on or prior to the fifth
Business Day (as defined below) preceding the date of delivery of the Notes, or
by such other day as determined by the Agent who presented such offer to
purchase Notes to the Company, such Agent may be prepared to arrange for the
conversion of United States dollars into the Specified Currency to enable the
 
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purchasers to pay for the Notes. If agreed to by such Agent, each such
conversion will be made by such Agent on such terms and subject to such
conditions, limitations and charges as such Agent may from time to time
establish in accordance with its regular foreign exchange practices. All costs
of exchange will be borne by the purchasers of Foreign Currency Notes. See
"Special Provisions and Risks Relating to Foreign Currency Notes."
 
     Interest rates, interest rate formulae and other variable terms of the
Notes are subject to change by the Company from time to time, but no such change
will affect any Note already issued or as to which an offer to purchase has been
accepted by the Company.
 
     Each Note, other than a Foreign Currency Note, will be issued in fully
registered form as a Book-Entry Note or a Definitive Note, in denominations of
$100,000 and integral multiples of $1,000 in excess thereof, unless otherwise
specified in the applicable Pricing Supplement. The authorized denominations of
Foreign Currency Notes will be indicated in the applicable Pricing Supplement.
Interest rates offered by the Company with respect to the Notes may differ
depending upon, among other factors, the aggregate principal amount of Notes
subject to purchase in any single transaction.
 
     Book-Entry Notes may be transferred or exchanged only through the
Depositary. See "Book-Entry Notes." Registration of transfer or exchange of
Definitive Notes will be made at the office or agency of the Company maintained
by the Company for such purpose in The City of New York. No service charge will
be made by the Company or the Trustee for any such registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith (other than exchanges pursuant to the Indenture not involving any
transfer).
 
     Payments of principal of, and premium and interest, if any, on Book-Entry
Notes will be made by the Company through the Trustee to the Depositary. See
"Book-Entry Notes." In the case of Definitive Notes, payment of principal or
premium, if any, at the Maturity of each Definitive Note will be made in
immediately available funds upon presentation of the Definitive Note at the
office or agency of the Company maintained by the Company for such purpose in
The City of New York, or at such other place as the Company may designate (or,
in the case of any repayment on an Optional Repayment Date, upon presentation of
the Definitive Note in accordance with the provisions thereon as described
below). Payment of interest due at Maturity will be made to the person to whom
payment of the principal shall be made. Payment of interest due on Definitive
Notes (other than at Maturity) will be made at the office or agency of the
Company maintained by the Company for such purpose or, at the option of the
Company, may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the registry books of the Company at the
close of business on the Record Date (as defined below) immediately preceding
the applicable Interest Payment Date. Notwithstanding the foregoing, a holder of
$10,000,000 or more (or the equivalent thereof with respect to a Specified
Currency applicable to a Foreign Currency Note) in aggregate principal amount of
Notes (whether having identical or different terms and provisions) will be
entitled to receive interest payments by wire transfer of immediately available
funds if appropriate wire transfer instructions have been received in writing by
the Trustee at least 16 days prior to the applicable Interest Payment Date. Such
wire instructions, upon receipt by the Trustee, shall remain in effect until
revoked by such holder.
 
     For special payment terms applicable to Foreign Currency Notes, see
"Special Provisions and Risks Relating to Foreign Currency Notes."
 
REDEMPTION AT THE OPTION OF THE COMPANY
 
     Unless otherwise indicated in an applicable Pricing Supplement, Notes will
not be subject to any sinking fund. The Notes will be redeemable at the option
of the Company prior to the Stated Maturity Date only if an Initial Redemption
Date is specified therein and in the applicable Pricing Supplement. If so
indicated in the applicable Pricing Supplement, Notes will be subject to
redemption at the option of the Company on any date on and after the applicable
Initial Redemption Date specified in such Pricing
 
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Supplement. On or after the Initial Redemption Date, if any, the related Note
may be redeemed at any time in whole or from time to time in part in increments
of $1,000 (provided that any remaining principal amount of such Note will be an
authorized denomination of such Note) at the option of the Company at the
applicable Redemption Price, together with interest thereon payable to the date
of redemption, on notice given not more than 60 nor less than 30 days prior to
the date of redemption and in accordance with the provisions of the Indenture.
"Redemption Price," with respect to a Note, will initially mean a percentage
(the "Initial Redemption Percentage") of the principal amount of such Note to be
redeemed specified in the applicable Pricing Supplement and shall decline at
each anniversary of the Initial Redemption Date by a percentage (the "Annual
Redemption Percentage Reduction"), if any, specified in the applicable Pricing
Supplement, of the principal amount to be redeemed until the Redemption Price is
100% of such principal amount.
 
REPAYMENT AT THE OPTION OF THE HOLDER
 
     If so indicated in an applicable Pricing Supplement, Notes will be payable
by the Company in whole or in part at the option of the holders thereof on their
respective Optional Repayment Dates specified in such Pricing Supplement. If no
Optional Repayment Date is indicated with respect to a Note, such Note will not
be repayable at the option of the holder prior to the Stated Maturity Date. Any
repayment in part will be in increments of $1,000 provided that any remaining
principal amount of such Note will be an authorized denomination of such Note.
Unless otherwise provided in an applicable Pricing Supplement, the repayment
price for any Note so repaid will be 100% of the principal amount to be repaid,
together with accrued interest thereon payable to the date of repayment. For any
Note to be so repaid, the Note must be received, together with the form thereon
entitled "Option to Elect Repayment" duly completed, by the Trustee at the
Corporate Trust Office (or such other address of which the Company shall from
time to time notify the holders) not more than 60 nor less than 30 days prior to
the Optional Repayment Date. Exercise of such repayment option by the holder
will be irrevocable.
 
     While the Book-Entry Notes are represented by global securities held by or
on behalf of the Depositary, and registered in the name of the Depositary or the
Depositary's nominee, the Depositary or its nominee will be the holder of such
Book-Entry Note and therefore will be the only entity that can exercise a right
to repayment. In order to ensure that the Depositary or its nominee will timely
exercise a right to repayment with respect to a particular Book-Entry Note, the
beneficial owner of such Book-Entry Note must instruct the participant through
which it holds an interest in such Book-Entry Note to notify the Depositary of
its desire to exercise a right of repayment. Different firms may have different
deadlines for accepting instructions from their customers. Accordingly,
beneficial owners of Book-Entry Notes should consult the participants through
which they own their interest in the Book-Entry Notes for the respective
deadlines for such participants. All notices shall be executed by a duly
authorized officer of such participant (with signature guaranteed) and shall be
irrevocable. In addition, such beneficial owners of Book-Entry Notes shall
effect delivery of such Book-Entry Notes at the time such notices of election
are given to the Depositary by causing the participant to transfer such
beneficial owner's interest in the Book-Entry Notes, on the Depositary's
records, to the Trustee. Conveyance of notices and other communications by the
Depositary to participants, by participants to indirect participants and by
participants and indirect participants to beneficial owners of the Book-Entry
Notes will be governed by agreements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
 
     If applicable, the Company will comply with the requirements of Rule 14e-1
under the Securities Exchange Act of 1934, as amended, and any other securities
laws or regulations in connection with any such repayment.
 
     The Company may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Company may be held or
resold or, at the discretion of the Company, may be surrendered to the Trustee
for cancellation.
 
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INTEREST
 
  General
 
     Unless otherwise specified in an applicable Pricing Supplement, each Note
will bear interest from the date of issue at the rate per annum or, in the case
of a Floating Rate Note, pursuant to the interest rate formula, stated therein
and in the applicable Pricing Supplement until the principal thereof is paid or
made available for payment. Interest will be payable in arrears on each Interest
Payment Date specified in the applicable Pricing Supplement on which an
installment of interest is due and payable and at Maturity. Unless otherwise
specified in an applicable Pricing Supplement, the first payment of interest on
any Note originally issued between a Record Date and the related Interest
Payment Date will be made on the Interest Payment Date immediately following the
next succeeding Record Date to the registered holder on such next succeeding
Record Date. Unless otherwise specified in an applicable Pricing Supplement, a
"Record Date" shall be the fifteenth calendar day (whether or not a Business
Day) immediately preceding the related Interest Payment Date.
 
  Fixed Rate Notes
 
     Unless otherwise specified in an applicable Pricing Supplement, each Fixed
Rate Note will bear interest from and including the Original Issue Date, at the
rate per annum stated on the face thereof until the principal amount thereof is
paid or made available for payment. Interest payments on Fixed Rate Notes will
equal the amount of interest accrued from and including the next preceding
Interest Payment Date in respect of which interest has been paid (or from and
including the Original Issue Date, if no interest has been paid with respect to
such Fixed Rate Notes) to but excluding the related Interest Payment Date or
Maturity, as the case may be. Unless otherwise specified in an applicable
Pricing Supplement, interest on Fixed Rate Notes will be computed on the basis
of a 360-day year of twelve 30-day months.
 
     Unless otherwise specified in an applicable Pricing Supplement, interest on
Fixed Rate Notes will be payable semiannually on June 15 and December 15 of each
year and at Maturity. If any Interest Payment Date or the Maturity of a Fixed
Rate Note falls on a day that is not a Business Day, the related payment of
principal, premium, if any, or interest will be made on the next succeeding
Business Day as if made on the date such payment was due, and no interest will
accrue on the amount so payable for the period from and after such Interest
Payment Date or Maturity, as the case may be.
 
  Floating Rate Notes
 
     Unless otherwise specified in an applicable Pricing Supplement, Floating
Rate Notes will be issued as described below. Each applicable Pricing Supplement
will specify certain terms with respect to which such Floating Rate Note is
being delivered, including: whether such Floating Rate Note is a "Regular
Floating Rate Note," a "Floating Rate/Fixed Rate Note" or an "Inverse Floating
Rate Note," the Interest Rate Basis or Bases, Initial Interest Rate, Interest
Reset Date, Record Dates, Interest Payment Dates, Index Maturity, maximum
interest rate and minimum interest rate, if any, and the Spread and/or Spread
Multiplier, if any, and if one or more of the specified Interest Rate Bases is
LIBOR, the Index Currency and the Designated LIBOR Page, as described below.
 
     The interest rate borne by the Floating Rate Notes will be determined as
follows:
 
          (i) Unless such Floating Rate Note is designated as a "Floating
     Rate/Fixed Rate Note," an "Inverse Floating Rate Note" or as having an
     Addendum attached or having "Other Provisions" apply, in each case relating
     to a different interest rate formula, such Floating Rate Note will be
     designated a "Regular Floating Rate Note" and, except as described below or
     in any applicable Pricing Supplement, bear interest at the rate determined
     by reference to the applicable Interest Rate Basis or Bases (i) plus or
     minus the applicable Spread, if any, and/or (ii) multiplied by the
     applicable Spread Multiplier, if any. Commencing on the first Interest
     Reset Date, the rate at which interest on such Regular Floating Rate Note
     shall be payable shall be reset as of each Interest Reset
 
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     Date; provided, however, that the interest rate in effect for the period
     from the Original Issue Date to the first Interest Reset Date will be the
     Initial Interest Rate.
 
          (ii) If such Floating Rate Note is designated as a "Floating
     Rate/Fixed Rate Note," then, except as described below or in an applicable
     Pricing Supplement, such Floating Rate Note will bear interest at the rate
     determined by reference to the applicable Interest Rate Basis or Bases (i)
     plus or minus the applicable Spread, if any, and/or (ii) multiplied by the
     applicable Spread Multiplier, if any. Commencing on the first Interest
     Reset Date, the rate at which interest on such Floating Rate/Fixed Rate
     Note shall be payable shall be reset as of each Interest Reset Date;
     provided, however, that (i) the interest rate in effect for the period from
     the Original Issue Date to the first Interest Reset Date will be the
     Initial Interest Rate; and (ii) the interest rate in effect commencing on,
     and including, the Fixed Rate Commencement Date to Maturity shall be the
     Fixed Interest Rate, if such rate is specified in the applicable Pricing
     Supplement, or if no such Fixed Interest Rate is so specified, the interest
     rate in effect thereon on the Business Day immediately preceding the Fixed
     Rate Commencement Date.
 
          (iii) If such Floating Rate Note is designated as an "Inverse Floating
     Rate Note," then, except as described below or in an applicable Pricing
     Supplement, such Floating Rate Note will bear interest equal to the Fixed
     Interest Rate specified in the applicable Pricing Supplement minus the rate
     determined by reference to the Interest Rate Basis or Bases (i) plus or
     minus the applicable Spread, if any, and/or (ii) multiplied by the
     applicable Spread Multiplier, if any; provided, however, that, unless
     otherwise specified in the applicable Pricing Supplement, the interest rate
     thereon will not be less than zero. Commencing on the first Interest Reset
     Date, the rate at which interest on such Inverse Floating Rate Note is
     payable shall be reset as of each Interest Reset Date; provided, however,
     that the interest rate in effect for the period from the Original Issue
     Date to the first Interest Reset Date will be the Initial Interest Rate.
 
     Notwithstanding the foregoing, if such Floating Rate Note is designated as
having an Addendum attached or "Other Provisions" apply, such Floating Rate Note
shall bear interest in accordance with the terms specified in such Addendum or
"Other Provisions" and in the applicable Pricing Supplement.
 
     Unless otherwise provided in the applicable Pricing Supplement, the
interest rate with respect to each Interest Rate Basis will be determined in
accordance with the applicable provisions below. Except as set forth above or in
an applicable Pricing Supplement, the interest rate in effect on each day shall
be (a) if such day is an Interest Reset Date, the interest rate determined as of
the Interest Determination Date immediately preceding such Interest Reset Date
or (b) if such day is not an Interest Reset Date, the interest rate determined
as of the Interest Determination Date immediately preceding the next preceding
Interest Reset Date.
 
     Interest on Floating Rate Notes will be determined by reference to an
"Interest Rate Basis," which may be one or more of (i) the "CD Rate," (ii) the
"Commercial Paper Rate," (iii) the "Eleventh District Cost of Funds Rate," (iv)
the "Federal Funds Rate," (v) "LIBOR," (vi) the "Prime Rate," (vii) the
"Treasury Rate," (viii) the "CMT Rate" or (ix) such other Interest Rate Basis or
interest rate formula as may be set forth in the applicable Pricing Supplement;
provided, however, that with respect to a Floating Rate/Fixed Rate Note, the
interest rate commencing on the Fixed Rate Commencement Date and continuing
until Maturity shall be the Fixed Interest Rate, if such rate is specified in
the applicable Pricing Supplement, or if no such Fixed Interest Rate is so
specified, the interest rate in effect thereon on the Business Day immediately
preceding the Fixed Rate Commencement Date.
 
     The "Spread" is the number of basis points to be added to or subtracted
from the related Interest Rate Basis or Bases applicable to such Floating Rate
Note. The "Spread Multiplier" is the percentage of the related Interest Rate
Basis or Bases applicable to such Floating Rate Note by which such Interest Rate
Basis or Bases will be multiplied to determine the applicable interest rate on
such Floating Rate Note. The "Index Maturity" is the period to maturity of the
instrument or obligation with respect to which the Interest Rate Basis or Bases
will be calculated. The Spread, Spread Multiplier, Index Maturity and other
variable terms of the Floating Rate Notes are subject to change by the Company
from time to time,
 
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but no such change will affect any Floating Rate Note previously issued or as to
which an offer has been accepted by the Company.
 
     Each applicable Pricing Supplement will specify whether the rate of
interest on the related Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semiannually, annually or any other specified period (each, an
"Interest Reset Period") and the dates on which such Interest Rate will be reset
(each, an "Interest Reset Date"). Unless otherwise specified in the applicable
Pricing Supplement, the Interest Reset Date will be, in the case of Floating
Rate Notes which reset: (i) daily, each Business Day; (ii) weekly, the Wednesday
of each week (with the exception of weekly reset Treasury Rate Notes which will
reset the Tuesday of each week, except as specified below); (iii) monthly, the
third Wednesday of each month (with the exception of monthly reset Eleventh
District Cost of Funds Rate Notes, which will reset on the first calendar day of
the month); (iv) quarterly, the third Wednesday of March, June, September and
December of each year; (v) semiannually, the third Wednesday of the two months
specified in the applicable Pricing Supplement; and (vi) annually, the third
Wednesday of the month specified in the applicable Pricing Supplement; provided
however, that, with respect to Floating Rate/Fixed Rate Notes, the fixed rate of
interest in effect for the period from the Fixed Rate Commencement Date until
Maturity shall be the Fixed Interest Rate or the interest rate in effect on the
Business Day immediately preceding the Fixed Rate Commencement Date, as
specified in the applicable Pricing Supplement. If any Interest Reset Date for
any Floating Rate Note would otherwise be a day that is not a Business Day, such
Interest Reset Date will be postponed to the next succeeding day that is a
Business Day, except that in the case of a Floating Rate Note as to which LIBOR
is an applicable Interest Rate Basis, if such Business Day falls in the next
succeeding calendar month, such Interest Reset Date will be the immediately
preceding Business Day. As used herein, "Business Day" means, unless otherwise
specified in the applicable Pricing Supplement, any day that in The City of New
York is not a day on which banking institutions are authorized or required by
law or regulation to close and, with respect to Notes as to which LIBOR is an
applicable Interest Rate Basis, is also a London Business Day. As used herein,
"London Business Day" means any day (a) if the Index Currency is other than the
European Currency Unit ("ECU"), on which dealings in deposits in such Index
Currency are transacted in the London interbank market or (b) if the Index
Currency is the ECU, that is not designated as an ECU Non-Settlement Day by the
ECU Banking Association in Paris or otherwise generally regarded in the ECU
interbank market as a day on which payments on ECUs shall not be made.
 
     A Floating Rate Note may also have either or both of the following: (i) a
maximum numerical limitation, or ceiling, on the rate at which interest may
accrue during any interest period; and (ii) a minimum numerical limitation, or
floor, on the rate at which interest may accrue during any interest period. In
addition to any maximum interest rate that may be applicable to any Floating
Rate Note pursuant to the above provisions, the interest rate on Floating Rate
Notes will in no event be higher than the maximum rate permitted by New York
law, as the same may be modified by United States law of general application.
 
     Each Floating Rate Note will bear interest from the date of issue at the
rates specified therein until the principal thereof is paid or otherwise made
available for payment. Except as provided below or in an applicable Pricing
Supplement, the Interest Payment Dates will be, in the case of Floating Rate
Notes which reset: (i) daily, weekly or monthly, the third Wednesday of each
month or on the third Wednesday of March, June, September and December of each
year, as specified in the applicable Pricing Supplement; (ii) quarterly, the
third Wednesday of March, June, September and December of each year; (iii)
semiannually, the third Wednesday of the two months of each year specified in
the applicable Pricing Supplement; and (iv) annually, the third Wednesday of the
month of each year specified in the applicable Pricing Supplement and, in each
case, interest will be payable at Maturity. If any Interest Payment Date for any
Floating Rate Note (other than an Interest Payment Date at Maturity) would
otherwise be a day that is not a Business Day, such Interest Payment Date will
be postponed to the next succeeding day that is a Business Day except that in
the case of a Floating Rate Note as to which LIBOR is an applicable Interest
Rate Basis, if such Business Day falls in the next succeeding calendar month,
such Interest Payment Date will be the immediately preceding Business Day. If
the Maturity of a Floating
 
                                       S-7
   9
 
Rate Note falls on a day that is not a Business Day, the payment of principal,
premium, if any, and interest will be made on the next succeeding Business Day,
and no interest on such payment shall accrue for the period from and after such
Maturity.
 
     All percentages resulting from any calculation on Floating Rate Notes will
be rounded to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or
 .09876545) would be rounded to 9.87655% (or .0987655)), and all dollar amounts
used in or resulting from such calculation on Floating Rate Notes will be
rounded to the nearest cent or, in the case of Notes denominated other than in
United States dollars, the nearest unit (with one-half cent or unit being
rounded upward).
 
     Interest payments on Floating Rate Notes will equal the amount of interest
accrued from and including the next preceding Interest Payment Date in respect
of which interest has been paid (or from and including the Original Issue Date,
if no interest has been paid with respect to such Floating Rate Notes) to but
excluding the related Interest Payment Date or Maturity, as the case may be.
 
     With respect to each Floating Rate Note, accrued interest is calculated by
multiplying its principal amount by an accrued interest factor. Such accrued
interest factor is computed by adding the interest factor calculated for each
day in the period for which interest is being calculated. Unless otherwise
specified in the applicable Pricing Supplement, the interest factor for each
such day will be computed by dividing the interest rate applicable to such day
by 360, in the case of Notes for which the Interest Rate Basis is the CD Rate,
the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal
Funds Rate, LIBOR or the Prime Rate, or by the actual number of days in the year
in the case of Notes for which the Interest Rate Basis is the Treasury Rate or
the CMT Rate. Unless otherwise specified in an applicable Pricing Supplement,
the interest factor for Notes for which the interest rate is calculated with
reference to two or more Interest Rate Bases will be calculated in each period
in the same manner as if only one of the applicable Interest Rate Bases applied
as specified in the applicable Pricing Supplement and the Notes.
 
     The interest rate applicable to each Interest Rate Reset Period commencing
on the Interest Reset Date with respect to such Interest Rate Reset Period will
be the rate determined as of the applicable Interest Determination Date. The
Interest Determination Date with respect to the CD Rate, the Commercial Paper
Rate, the Federal Funds Rate, the Prime Rate and the CMT Rate will be the second
Business Day preceding each Interest Reset Date; the Interest Determination Date
with respect to the Eleventh District Cost of Funds Rate will be the last
working day of the month immediately preceding each Interest Reset Date on which
the Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco")
publishes the Index; the Interest Determination Date with respect to LIBOR will
be the second London Business Day immediately preceding each Interest Reset
Date, unless the Index Currency is British pounds sterling, in which case the
Interest Determination Date will be the applicable Interest Reset Date. With
respect to the Treasury Rate, the Interest Determination Date will be the day in
the week in which the related Interest Reset Date falls on which day Treasury
Bills (as defined below) are normally auctioned (Treasury Bills are normally
sold at auction on Monday of each week, unless the day is a legal holiday, in
which case the auction is normally held on the following Tuesday, except that
such auction may be held on the preceding Friday); provided, however, that if an
auction is held on the Friday of the week preceding the related Interest Reset
Date, the related Interest Determination Date will be such preceding Friday; and
provided, further, that if an auction falls on any Interest Reset Date, then the
related Interest Reset Date will instead be the first Business Day following
such auction. The Interest Determination Date pertaining to a Floating Rate Note
the interest rate of which is determined with reference to two or more Interest
Rate Bases will be the latest Business Day which is at least two Business Days
prior to such Interest Reset Date for such Floating Rate Note on which each
Interest Rate Basis is determinable. Each Interest Rate Basis will be determined
on such date, and the applicable interest rate will take effect on the related
Interest Reset Date.
 
     Unless otherwise provided in the applicable Pricing Supplement, the Trustee
will be the "Calculation Agent." Upon request of the holder of any Floating Rate
Note, the Calculation Agent will provide the
 
                                       S-8
   10
 
interest rate then in effect and, if determined, the interest rate that will
become effective as a result of a determination made for the next Interest Reset
Date with respect to such Floating Rate Note. Unless otherwise specified in the
applicable Pricing Supplement, the "Calculation Date," if applicable, pertaining
to any Interest Determination Date will be the earlier of (i) the tenth calendar
day after such Interest Determination Date, or, if such day is not a Business
Day, the next succeeding Business Day or (ii) the Business Day immediately
preceding the applicable Interest Payment Date or Maturity, as the case may be.
 
     CD Rate. CD Rate Notes will bear interest at the rates (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any)
specified in such CD Rate Notes and in any applicable Pricing Supplement.
 
     Unless otherwise specified in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Determination Date relating to a CD Rate
Note or any Floating Rate Note for which the interest rate is determined with
reference to the CD Rate (a "CD Rate Interest Determination Date"), the rate on
such date for negotiable certificates of deposit having the Index Maturity
specified in the applicable Pricing Supplement as published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication ("H.15(519)") under the
heading "CDs (Secondary Market)," or, if such rate is not so published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on such CD
Rate Interest Determination Date for negotiable certificates of deposit of the
Index Maturity specified in the applicable Pricing Supplement as published by
the Federal Reserve Bank of New York in its daily statistical release "Composite
3:30 P.M. Quotations for U.S. Government Securities" or any successor
publication ("Composite Quotations") under the heading "Certificates of
Deposit." If such rate is not yet published in either H.15(519) or Composite
Quotations by 3:00 P.M., New York City time, on the related Calculation Date,
then the CD Rate on such CD Rate Interest Determination Date will be calculated
by the Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on such CD Rate Interest
Determination Date, of three leading non-bank dealers in negotiable United
States dollar certificates of deposit in The City of New York (which may include
one or more of the Agents or their respective affiliates) selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money market banks in the market for negotiable certificates of deposit with a
remaining maturity closest to the Index Maturity designated in the applicable
Pricing Supplement in an amount that is representative for a single transaction
in that market at that time; provided, however, that if any of the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the CD Rate determined as of such CD Rate Interest Determination
Date shall be the CD Rate in effect on such CD Rate Interest Determination Date.
 
     Commercial Paper Rate. Commercial Paper Rate Notes will bear interest at
the rates (calculated with reference to the Commercial Paper Rate and the Spread
and/or Spread Multiplier, if any) specified in such Commercial Paper Rate Notes
and in any applicable Pricing Supplement.
 
     Unless otherwise specified in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to any Interest Determination Date
relating to a Commercial Paper Rate Note or any Floating Rate Note for which the
interest rate is determined with reference to the Commercial Paper Rate (a
"Commercial Paper Rate Interest Determination Date"), the Money Market Yield (as
defined below) on such date of the rate for commercial paper having the Index
Maturity specified in the applicable Pricing Supplement as published in
H.15(519) under the heading "Commercial Paper." In the event that such rate is
not published by 3:00 P.M., New York City time, on the related Calculation Date,
then the Commercial Paper Rate will be the Money Market Yield on such Commercial
Paper Rate Interest Determination Date of the rate for commercial paper having
the Index Maturity specified in the applicable Pricing Supplement as published
in Composite Quotations under the heading "Commercial Paper" (with an Index
Maturity of one month or three months being deemed to be equivalent to an Index
Maturity of 30 days or 90 days, respectively). If by 3:00 P.M., New York City
time, on the related Calculation Date such rate is not yet published in either
H.15(519) or Composite Quotations, then the Commercial Paper Rate on such
Commercial Paper Rate Interest Determination Date will be calculated by the
Calculation Agent
 
                                       S-9
   11
 
and will be the Money Market Yield of the arithmetic mean of the offered rates
at approximately 11:00 A.M., New York City time, on such Commercial Paper Rate
Interest Determination Date of three leading dealers of commercial paper in The
City of New York (which may include one or more of the Agents or their
respective affiliates) selected by the Calculation Agent for commercial paper
having the Index Maturity designated in the applicable Pricing Supplement placed
for an industrial issuer whose bond rating is "AA," or the equivalent, from a
nationally recognized securities rating agency; provided, however, that if any
of the dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Commercial Paper Rate determined as of such
Commercial Paper Rate Interest Determination Date shall be the Commercial Paper
Rate in effect on such Commercial Paper Rate Interest Determination Date.
 
     "Money Market Yield" means a yield (expressed as a percentage) calculated
in accordance with the following formula:
 
                                      D X 360
                 Money Market Yield = ------------- X 100
                                      360 - (D X M)
 
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
 
     Eleventh District Cost of Funds Rate. Eleventh District Cost of Funds Rate
Notes will bear interest at the rates (calculated with reference to the Eleventh
District Cost of Funds Rate and the Spread and/or Spread Multiplier, if any)
specified in such Eleventh District Cost of Funds Rate Notes and in any
applicable Pricing Supplement.
 
     Unless otherwise specified in the applicable Pricing Supplement, "Eleventh
District Cost of Funds Rate" means, with respect to any Interest Determination
Date relating to an Eleventh District Cost of Funds Rate Note or any Floating
Rate Note for which the interest rate is determined with reference to the
Eleventh District Cost of Funds Rate (an "Eleventh District Cost of Funds Rate
Interest Determination Date"), the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District" on Telerate Page 7058 (as defined
below) as of 11:00 A.M., San Francisco time, on such Eleventh District Cost of
Funds Rate Interest Determination Date. If such rate does not appear on Telerate
Page 7058 on any related Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate for such Eleventh
District Cost of Funds Rate Interest Determination Date shall be the monthly
weighted average cost of funds paid by member institutions of the Eleventh
Federal Home Loan Bank District that was most recently announced (the "Index")
by the FHLB of San Francisco as such cost of funds for the calendar month
immediately preceding the date of such announcement. If the FHLB of San
Francisco fails to announce such rate for the calendar month immediately
preceding such Eleventh District Cost of Funds Rate Interest Determination Date,
then the Eleventh District Cost of Funds Rate determined as of such Eleventh
District Cost of Funds Rate Interest Determination Date shall be the Eleventh
District Cost of Funds Rate in effect on such Eleventh District Cost of Funds
Rate Interest Determination Date.
 
     "Telerate Page 7058" means the display designated as page "7058" on the Dow
Jones Telerate Service (or such other page as may replace the 7058 page on that
service for the purpose of displaying the monthly weighted average cost of funds
paid by member institutions of the Eleventh Federal Home Loan Bank District).
 
     Federal Funds Rate. Federal Funds Rate Notes will bear interest at the
rates (calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any) specified in such Federal Funds Rate Notes and in any
applicable Pricing Supplement.
 
     Unless otherwise specified in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Interest Determination Date relating to a
Federal Funds Rate Note or any Floating Rate Note for which the interest rate is
determined with reference to the Federal Funds Rate (a "Federal
 
                                      S-10
   12
 
Funds Rate Interest Determination Date"), the rate on such date for federal
funds as published in H.15(519) under the heading "Federal Funds (Effective)"
or, if not so published by 3:00 P.M., New York City time, on the related
Calculation Date, the rate on such Federal Funds Rate Interest Determination
Date as published in Composite Quotations under the heading "Federal
Funds/Effective Rate." If by 3:00 P.M., New York City time, on the related
Calculation Date such rate is not published in either H.15(519) or Composite
Quotations, then the Federal Funds Rate on such Federal Funds Rate Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the rates for the last transaction in overnight United States
dollar federal funds arranged by three leading brokers of federal funds
transactions in The City of New York (which may include one or more of the
Agents or their respective affiliates) selected by the Calculation Agent prior
to 9:00 A.M., New York City time, on such Federal Funds Rate Interest
Determination Date; provided, however that if any of the brokers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Rate determined as of such Federal Funds Rate
Interest Determination Date shall be the Federal Funds Rate in effect on such
Federal Funds Rate Interest Determination Date.
 
     LIBOR. LIBOR Notes will bear interest at the rates (calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any) specified in
such LIBOR Notes and in any applicable Pricing Supplement.
 
     Unless otherwise specified in the applicable Pricing Supplement, "LIBOR"
means the rate determined by the Calculation Agent in accordance with the
following provisions:
 
          (i) With respect to an Interest Determination Date relating to a LIBOR
     Note or any Floating Rate Note for which the interest rate is determined
     with reference to LIBOR (a "LIBOR Interest Determination Date"), LIBOR will
     be either: (a) if "LIBOR Reuters" is specified in the applicable Pricing
     Supplement, the arithmetic mean of the offered rates (unless the specified
     Designated LIBOR Page by its terms provides only for a single rate, in
     which case such single rate shall be used) for deposits in the Index
     Currency having the Index Maturity designated in the applicable Pricing
     Supplement, commencing on the second London Business Day immediately
     following such LIBOR Interest Determination Date, that appear on the
     Designated LIBOR Page specified in the applicable Pricing Supplement as of
     11:00 A.M., London time, on such LIBOR Interest Determination Date, if at
     least two such offered rates appear (unless, as aforesaid, only a single
     rate is required) on such Designated LIBOR Page, or (b) if "LIBOR Telerate"
     is specified in the applicable Pricing Supplement, or if no other method is
     specified in the applicable Pricing Supplement as the method of determining
     LIBOR, the rate for deposits in the Index Currency having the Index
     Maturity designated in the applicable Pricing Supplement, commencing on the
     second London Business Day immediately following such LIBOR Interest
     Determination Date, that appears on the Designated LIBOR Page specified in
     the applicable Pricing Supplement as of 11:00 A.M., London time, on such
     LIBOR Interest Determination Date. If fewer than two such offered rates
     appear (unless the specified Designated LIBOR Page by its terms provides
     for a single rate), or if no rate appears, as applicable, LIBOR in respect
     of the related LIBOR Interest Determination Date shall be determined in
     accordance with the provisions described in clause (ii) below.
 
          (ii) With respect to a LIBOR Interest Determination Date on which
     fewer than two offered rates appear, or if no rate appears, as the case may
     be, on the applicable Designated LIBOR Page as specified in clause (i)
     above, the Calculation Agent will request the principal London offices of
     each of four major reference banks in the London interbank market, as
     selected by the Calculation Agent, to provide the Calculation Agent with
     its offered quotation for deposits in the Index Currency for the period of
     the Index Maturity designated in the applicable Pricing Supplement,
     commencing on the second London Business Day immediately following such
     LIBOR Interest Determination Date, to prime banks in the London interbank
     market at approximately 11:00 A.M., London time, on such LIBOR Interest
     Determination Date and in a principal amount that is representative for a
     single transaction in such Index Currency in such market at such time. If
     at least two such quotations are provided, LIBOR determined on such LIBOR
     Interest Determination Date will be the arithmetic mean of such quotations.
     If fewer than two quotations are provided, LIBOR determined on such LIBOR
 
                                      S-11
   13
 
     Interest Determination Date will be the arithmetic mean of the rates quoted
     at approximately 11:00 A.M., in the applicable Principal Financial Center,
     on such LIBOR Interest Determination Date by three major banks in such
     Principal Financial Center (which may include affiliates of certain of the
     Agents) selected by the Calculation Agent for loans in the Index Currency
     to leading European banks, having the Index Maturity designated in the
     applicable Pricing Supplement and in a principal amount that is
     representative for a single transaction in such Index Currency in such
     market at such time; provided, however, that if the banks so selected by
     the Calculation Agent are not quoting as mentioned in this sentence, LIBOR
     determined as of such LIBOR Interest Determination Date shall be LIBOR in
     effect on such LIBOR Interest Determination Date.
 
     "Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for which LIBOR
shall be calculated. If no such currency is specified in the applicable Pricing
Supplement, the Index Currency shall be United States dollars.
 
     "Designated LIBOR Page" means either (a) if "LIBOR Reuters" is designated
in the applicable Pricing Supplement, the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank offered rates
of major banks for the applicable Index Currency, or (b) if "LIBOR Telerate" is
designated in the applicable Pricing Supplement or neither "LIBOR Reuters" nor
"LIBOR Telerate" is specified as the method for calculating LIBOR, (i) if the
applicable Index Currency is United States dollars, the display page designated
as page "3750" on the Dow Jones Telerate Service (or such other page as may
replace 3750 on that service for the purpose of displaying London interbank
offered rates for United States dollar deposits), or (ii) if the applicable
Index Currency is other than United States dollars, the display on the Dow Jones
Telerate Service for the purpose of displaying the London interbank offered
rates of major banks for the applicable Index Currency.
 
     "Principal Financial Center" will generally be the capital city of the
country of the specified Index Currency, except that with respect to United
States dollars, Australian Dollars, Canadian Dollars, Deutsche Marks, Dutch
Guilders, Italian Lire, Swiss Francs and ECUs, the Principal Financial Center
shall be The City of New York, Sydney, Toronto, Frankfurt, Amsterdam, Milan,
Zurich and Luxembourg, respectively.
 
     Prime Rate. Prime Rate Notes will bear interest at the rates (calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any) specified in such Prime Rate Notes and any applicable Pricing Supplement.
 
     Unless otherwise specified in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Interest Determination Date relating to a Prime
Rate Note or any Floating Rate Note for which the interest rate is determined
with reference to the Prime Rate (a "Prime Rate Interest Determination Date"),
the rate on such date as such rate is published in H.15(519) under the heading
"Bank Prime Loan." If such rate is not published prior to 3:00 P.M., New York
City time, on the related Calculation Date, then the Prime Rate shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen USPRIME1 (as defined below) as such bank's prime
rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates but more than one such rate
appear on the Reuters Screen USPRIME1 for such Prime Rate Interest Determination
Date, the Prime Rate shall be the arithmetic mean of the prime rates quoted on
the basis of the actual number of days in the year divided by a 360-day year as
of the close of business on such Prime Rate Interest Determination Date by
three, or two if only two such rates are quoted, major money center banks in The
City of New York (which may include affiliates of certain of the Agents)
selected by the Calculation Agent. If fewer than two such rates appear on the
Reuters Screen USPRIME1, the Prime Rate will be determined by the Calculation
Agent on the basis of the rates furnished in The City of New York by three, or
two if only two such rates are quoted, substitute banks or trust companies
organized and doing business under the laws of the United States, or any state
thereof, having total equity capital of at least U.S. $500 million and being
subject to supervision or examination by Federal or state authority, selected by
the Calculation Agent to provide such rate or rates; provided, however, that if
fewer than two such substitute banks or trust companies selected as aforesaid
are quoting as mentioned in this sentence, the
 
                                      S-12
   14
 
Prime Rate determined as of such Prime Rate Interest Determination Date shall be
the Prime Rate in effect on such Prime Rate Interest Determination Date.
 
     "Reuters Screen USPRIME1" means the display designated as page "USPRIME1"
on the Reuters Monitor Money Rates Service (or such other page as may replace
the USPRIME1 page on that service for the purpose of displaying prime rates or
base lending rates of major United States banks).
 
     Treasury Rate. Treasury Rate Notes will bear interest at the rates
(calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any) specified in such Treasury Rate Notes and in any applicable
Pricing Supplement.
 
     Unless otherwise specified in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Interest Determination Date relating to a
Treasury Rate Note or any Floating Rate Note for which the interest rate is
determined by reference to the Treasury Rate (a "Treasury Rate Interest
Determination Date"), the rate applicable to the most recent auction of direct
obligations of the United States ("Treasury Bills") having the Index Maturity
specified in the applicable Pricing Supplement, as such rate is published in
H.15(519) under the heading "Treasury Bills-auction average (investment)" or, if
not published by 3:00 P.M., New York City time, on the related Calculation Date,
the auction average rate (expressed as a bond equivalent on the basis of a year
of 365 or 366 days, as applicable, and applied on a daily basis) as otherwise
announced by the United States Department of the Treasury. In the event that the
results of the auction of Treasury Bills having the Index Maturity designated in
the applicable Pricing Supplement are not reported as provided by 3:00 P.M., New
York City time, on such Calculation Date, or if no such auction is held in a
particular week, then the Treasury Rate will be calculated by the Calculation
Agent and will be a yield to maturity (expressed as a bond equivalent on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily basis)
of the arithmetic mean of the secondary market bid rates, as of approximately
3:30 P.M., New York City time, on such Treasury Rate Interest Determination
Date, of three leading primary United States government securities dealers
(which may include one or more of the Agents or their respective affiliates)
selected by the Calculation Agent, for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity designated in the applicable
Pricing Supplement; provided, however, that if any of the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Treasury Rate determined as of such Treasury Rate Interest
Determination Date shall be the Treasury Rate in effect on such Treasury Rate
Interest Determination Date.
 
     CMT Rate. CMT Rate Notes will bear interest at the rates (calculated with
reference to the CMT Rate and the Spread and/or Spread Multiplier, if any)
specified in such CMT Rate Notes and in any applicable Pricing Supplement.
 
     Unless otherwise specified in the applicable Pricing Supplement, "CMT Rate"
means, with respect to any Interest Determination Date relating to a CMT Rate
Note or any Floating Rate Note for which the interest rate is determined with
reference to the CMT Rate (a "CMT Rate Interest Determination Date"), the rate
displayed on the Designated CMT Telerate Page under the caption "... Treasury
Constant Maturities ... Federal Reserve Board Release H.15 ... Mondays
approximately 3:45 P.M.," under the column for the Designated CMT Maturity Index
(as defined below) for (i) if the Designated CMT Telerate Page is 7055, the rate
on such CMT Rate Interest Determination Date and (ii) if the Designated CMT
Telerate Page is 7052, the week, or the month, as applicable, ended immediately
preceding the week in which the related CMT Rate Interest Determination Date
occurs. If such rate is no longer displayed on the relevant page, or if not
displayed by 3:00 P.M., New York City time, on the related Calculation Date,
then the CMT Rate for such CMT Rate Interest Determination Date will be such
treasury constant maturity rate for the Designated CMT Maturity Index as
published in H.15(519). If such rate is no longer published, or if not published
by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for such CMT Rate Interest Determination Date will be such treasury
constant maturity rate for the Designated CMT Maturity Index (or other United
States Treasury rate for the Designated CMT Maturity Index) for the CMT Rate
Interest Determination Date with respect to such Interest Reset Date as may then
be published by either the Board of Governors of the Federal Reserve System or
the United States
 
                                      S-13
   15
 
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519). If such information is not provided by
3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for the CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity, based on the arithmetic mean
of the secondary market closing offer side prices as of approximately 3:30 P.M.,
New York City time, on the CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in The City of New
York selected by the Calculation Agent (from five such Reference Dealers
selected by the Calculation Agent and eliminating the highest quotation (or, in
the event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes") with
an original maturity of approximately the Designated CMT Maturity Index and a
remaining term to maturity of not less than such Designated CMT Maturity Index
minus one year. If the Calculation Agent cannot obtain three such Treasury Note
quotations, the CMT Rate for such CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity based on the
arithmetic mean of the secondary market offer side prices as of approximately
3:30 P.M., New York City time, on the CMT Rate Interest Determination Date of
three Reference Dealers in The City of New York (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest)), for Treasury Notes with an
original maturity of the number of years that is the next highest to the
Designated CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index and in an amount of at least U.S. $100 million. If
three or four (and not five) of such Reference Dealers are quoting as described
above, then the CMT Rate will be based on the arithmetic mean of the offer
prices obtained and neither the highest nor the lowest of such quotes will be
eliminated; provided however, that if fewer than three Reference Dealers
selected by the Calculation Agent are quoting as described herein, the CMT Rate
will be the CMT Rate in effect on such CMT Rate Interest Determination Date. If
two Treasury Notes with an original maturity as described in the third preceding
sentence have remaining terms to maturity equally close to the Designated CMT
Maturity Index, the quotes for the CMT Rate Note with the shorter remaining term
to maturity will be used.
 
     "Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service designated in the applicable Pricing Supplement (or any other page as
may replace such page on that service for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519)), for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no such page is
specified in the applicable Pricing Supplement, the Designated CMT Telerate Page
shall be 7052 for the most recent week.
 
     "Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30 years)
specified in the applicable Pricing Supplement with respect to which the CMT
Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.
 
OTHER PROVISIONS; ADDENDA
 
     Any provisions with respect to Notes, including the determination of an
Interest Rate Basis, the specification of an Interest Rate Basis, calculation of
the interest rate applicable to a Floating Rate Note, its Interest Payment Dates
or any other matter relating thereto may be modified by the terms as specified
under "Other Provisions" on the face thereof or in an Addendum relating thereto,
if so specified on the face thereof and in the applicable Pricing Supplement.
 
AMORTIZING NOTES
 
     The Company may from time to time offer amortizing Notes ("Amortizing
Notes"). Unless otherwise specified in the applicable Pricing Supplement,
interest on each Amortizing Note will be computed on the
 
                                      S-14
   16
 
basis of a 360-day year of twelve 30-day months. Payments with respect to
Amortizing Notes will be applied first to interest due and payable thereon and
then to the reduction of the unpaid principal amount thereof. Further
information concerning additional terms and conditions of any issue of
Amortizing Notes will be provided in the applicable Pricing Supplement. A table
setting forth repayment information in respect of each Amortizing Note will be
included in the applicable Pricing Supplement and set forth in such Notes.
 
ORIGINAL ISSUE DISCOUNT NOTES
 
     Notes may be issued at a price less than their redemption price at
Maturity, resulting in such Notes being treated as if they were issued with
original issue discount for Federal income tax purposes ("Original Issue
Discount Notes"). Such Original Issue Discount Notes may currently pay no
interest or interest at a rate which at the time of issuance is below market
rates. See "United States Taxation." Certain additional considerations relating
to any Original Issue Discount Notes may be described in the Pricing Supplement
relating thereto.
 
INDEXED NOTES
 
     Notes may be issued with the amount of principal, premium and/or interest
payable in respect thereof to be determined with reference to the price or
prices of specified commodities or stocks, the exchange rate of one or more
specified currencies (including a composite currency such as the ECU) relative
to an indexed currency, or other price or exchange rate ("Indexed Notes"), as
set forth in an applicable Pricing Supplement. In certain cases, holders of
Indexed Notes may receive a principal amount at Maturity that is greater than or
less than the face amount of the Notes depending upon the relative value at
Maturity of the specified indexed item. Information as to the method for
determining the amount of principal, premium and/or interest payable in respect
of Indexed Notes, certain historical information with respect to the specified
indexed item and tax considerations associated with an investment in such
Indexed Notes will be set forth in the applicable Pricing Supplement.
 
     An investment in Notes indexed, as to principal, premium and/or interest,
to one or more values of currencies (including exchange rates between
currencies), commodities or interest rate indices entails significant risks that
are not associated with similar investments in a conventional fixed-rate debt
security. If the interest rate of an Indexed Note is so indexed, it may result
in an interest rate that is less than that payable on a conventional fixed-rate
debt security issued at the same time, including the possibility that no
interest will be paid, and, if the principal of and/or premium on an Indexed
Note is so indexed, the amount of principal payable in respect thereof may be
less than the original purchase price of such Indexed Note if allowed pursuant
to the terms thereof, including the possibility that no such amount will be
paid. The secondary market for Indexed Notes will be affected by a number of
factors, independent of the creditworthiness of the Company and the value of the
applicable currency, commodity or interest rate index, including the volatility
of the applicable currency, commodity or interest rate index, the time remaining
to the maturity of such Notes, the amount outstanding of such Notes and the
market interest rates. The value of the applicable currency, commodity or
interest rate index depends on a number of interrelated factors, including
economic, financial and political events, over which the Company has no control.
Additionally, if the formula used to determine the amount of principal, premium
and/or interest payable with respect to Indexed Notes contains a multiple or
leverage factor, the effect of any change in the applicable currency, commodity
or interest rate index will be increased. The historical experience of the
relevant currencies, commodities or interest rate indices should not be taken as
an indication of future performance of such currencies, commodities or interest
rate indices during the term of any Indexed Note. The credit ratings assigned to
the Company's medium-term note program are a reflection of the Company's credit
status and do not, in any way, reflect the potential impact of the factors
discussed above or any other factors on the value of the Notes. Accordingly,
prospective investors should consult their own financial and legal advisors as
to the risks entailed by an investment in Indexed Notes and the suitability of
Indexed Notes in light of their particular circumstances.
 
                                      S-15
   17
 
BOOK-ENTRY NOTES
 
     Upon issuance, all Book-Entry Notes of the same series and bearing interest
(if any) at the same rate or pursuant to the same formula and having the same
date of issuance, redemption provisions (if any), repayment provisions (if any),
Stated Maturity Date and other terms will be represented by a single global
security (each a "Global Security"). Each Global Security representing
Book-Entry Notes will be deposited with, or on behalf of, the Depositary and
will be registered in the name of the Depositary or a nominee of the Depositary.
 
     Upon the issuance of a Global Security, the Depositary will credit accounts
held with it with the respective principal or face amounts of the Book-Entry
Notes represented by such Global Security. The accounts to be credited shall be
designated initially by the Agent through which the Notes were sold or, to the
extent that such Notes are offered and sold directly, by the Company. Ownership
of beneficial interests by participants in a Global Security will be shown on,
and the transfer of that ownership interest will be effected only through,
records maintained by the Depositary for such Global Security. Ownership of
beneficial interest in such Global Security by persons that hold through
participants will be shown on, and the transfer of that ownership interest
within such participant will be effected only through, records maintained by
such participant.
 
     Payment of principal of, premium (if any) and interest (if any) on
Book-Entry Notes represented by any such Global Security will be made in
immediately available funds to the Depositary or its nominee, as the case may
be, as the sole registered holder of the Book-Entry Notes represented thereby
for all purposes under the Indenture. None of the Company, the Trustee, the
Paying Agent or any agent of the Company or the Trustee will have any
responsibility or liability for any aspect of the Depositary's records relating
to or payments made on account of beneficial ownership interests in a Global
Security representing any Book-Entry Notes or any other aspect of the
relationship between the Depositary and its participants or the relationship
between such participants and the owners of beneficial interests in a Global
Security owning through such participants or for maintaining, supervising or
reviewing any of the Depositary's records relating to such beneficial ownership
interests.
 
     The Company has been advised by the Depositary that upon receipt of any
payment of principal of, premium (if any) or interest (if any) on any such
Global Security, the Depositary will immediately credit, on its book-entry
registration and transfer system, the accounts of participants with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of the Depositary.
Payments by participants to owners of beneficial interests in a Global Security
held through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held by such
participants for customer accounts registered in "street name," and will be the
sole responsibility of such participants.
 
     No Global Security may be transferred except as a whole by a nominee of the
Depositary to the Depositary or to another nominee of the Depositary, or by the
Depositary or any such nominee to a successor of the Depositary or such
successor.
 
     Unless otherwise specified in the applicable Pricing Supplement, a Global
Security representing Book-Entry Notes is exchangeable for Definitive Notes of
the same series and bearing interest (if any) at the same rate or pursuant to
the same formula, having the same date of issuance, redemption provisions (if
any) repayment provisions (if any), Stated Maturity and other terms and of
differing authorized denominations aggregating a like amount, only if (x) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security and a successor depositary is not appointed
by the Company within 60 days or if it at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (y) the Company in its sole discretion determines that
such Global Security shall be exchangeable for Definitive Notes or (z) there
shall have occurred and be continuing an Event of Default with respect to the
Notes. Notes so issued in certificated form will be issued in denominations of
$100,000 and integral multiples of $1,000 in excess thereof, and will be issued
in registered form only, without coupons. Such
 
                                      S-16
   18
 
Definitive Notes shall be registered in the names of the owners of the
beneficial interests in such Global Security as provided by the Depositary's
relevant participants (as identified by the Depositary).
 
     Except as provided above, owners of beneficial interests in a Global
Security will not be entitled to receive physical delivery of Notes in
certificated form and will not be considered the registered holders thereof for
any purpose under the Indenture, and no Global Security representing Book-Entry
Notes shall be exchangeable or transferrable. Accordingly, each person owning a
beneficial interest in such a Global Security must rely on the procedures of the
Depositary and, if such person is not a participant, on the procedures of the
participant through which such person owns its interest, to exercise any rights
of a registered holder under the Indenture.
 
     The Depositary, as the registered holder of each Global Security, may
appoint agents and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a registered holder is entitled to give or take under the Indenture. The Company
understands that under existing industry practices, in the event that the
Company requests any action of registered holders or that an owner of a
beneficial interest in such a Global Security desires to give or take any action
which a registered holder is entitled to give or take under the Indenture, the
Depositary would authorize the participants holding the relevant beneficial
interests to give or take such action, and such participants would authorize
beneficial owners owning through such participants to give or take such action
or would otherwise act upon the instructions of beneficial owners owning through
them.
 
     The Depositary has advised the Company that the Depositary is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered pursuant
to the provisions of Section 17A of the Securities Exchange Act of 1934, as
amended. The Depositary holds securities that its participants deposit with the
Depositary. The Depositary also facilitates the settlement among participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Participants who maintain accounts directly with the Depositary include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations ("direct participants"). The Depositary is owned
by a number of its direct participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the Depositary system is also available to others such
as securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a direct participant, either directly
or indirectly. The rules applicable to the Depositary and its participants are
on file with the Commission.
 
        SPECIAL PROVISIONS AND RISKS RELATING TO FOREIGN CURRENCY NOTES
 
GENERAL
 
     Unless otherwise specified in an applicable Pricing Supplement, Notes
denominated in other than United States dollars or ECUs will not be sold in, or
to residents of, the country issuing the Specified Currency in which particular
Notes are denominated. The information set forth in this Prospectus Supplement
is directed to prospective purchasers who are United States residents, and the
Company disclaims any responsibility to advise prospective purchasers who are
residents of countries other than the United States with respect to any matters
that may affect the purchase, holding or receipt of payments of principal of and
any interest on the Notes. Such persons should consult their own financial and
legal advisors with regard to such matters.
 
     THIS PROSPECTUS SUPPLEMENT DOES NOT DESCRIBE ALL RISKS OF AN INVESTMENT IN
FOREIGN CURRENCY NOTES THAT RESULT FROM SUCH NOTES BEING DENOMINATED OR PAYABLE
IN A FOREIGN CURRENCY OR CURRENCY UNIT, EITHER AS SUCH RISKS EXIST AT
 
                                      S-17
   19
 
THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS SUCH RISKS MAY CHANGE FROM TIME TO
TIME. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL
ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN FOREIGN CURRENCY NOTES.
FOREIGN CURRENCY NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE
UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
 
     The information set forth below is by necessity incomplete and prospective
purchasers of Foreign Currency Notes should consult their own financial and
legal advisors with respect to any matters that may affect the purchase or
holding of a Foreign Currency Note or the receipt of payments of principal of
and any premium and interest on a Foreign Currency Note in a Specified Currency.
 
EXCHANGE RATES AND EXCHANGE CONTROLS
 
     An investment in Foreign Currency Notes entails significant risks that are
not associated with a similar investment in a security denominated and payable
in United States dollars. Such risks include, without limitation, the
possibility of significant changes in the rate of exchange between the United
States dollar and the Specified Currency and the possibility of the imposition
or modification of foreign exchange controls by either the United States or
foreign governments. Such risks generally depend on events over which the
Company has no control, such as economic and political events and the supply and
demand for the relevant currencies. In recent years, rates of exchange between
the United States dollar and certain foreign currencies have been highly
volatile and such volatility may be expected in the future. Fluctuations in any
particular exchange rate that have occurred in the past are not necessarily
indicative, however, of fluctuations in the rate that may occur during the term
of any Foreign Currency Notes. Depreciation of the Specified Currency applicable
to a Foreign Currency Note against the United States dollar would result in a
decrease in the United States dollar-equivalent yield of such Note, in the
United States dollar-equivalent value of the principal payable at Maturity of
such Note, and, generally, in the United States dollar-equivalent market value
of such Note.
 
     Governments have imposed from time to time exchange controls and may in the
future impose or revise exchange controls at or prior to a Foreign Currency
Note's Maturity which could affect exchange rates as well as the availability of
the Specified Currency at a Foreign Currency Note's Maturity. Even if there are
no exchange controls, it is possible that the Specified Currency for any
particular Foreign Currency Note would not be available at such Note's Maturity
due to other circumstances beyond the control of the Company. In that event, the
Company will repay in United States dollars on the basis of the most recently
available exchange rate.
 
JUDGMENTS
 
     The Notes will be governed by and construed in accordance with the laws of
the State of New York. If an action based on Foreign Currency Notes were
commenced in a court of the United States, it is likely that such court would
grant judgment relating to such Notes only in United States dollars. It is not
clear, however, whether, in granting such judgment, the rate of conversion into
United States dollars would be determined with reference to the date of default,
the date judgment is rendered or some other date. Under current New York law, a
state court in the State of New York rendering a judgment on a Foreign Currency
Note would be required to render such judgment in the Specified Currency in
which such Foreign Currency Note is denominated, and such judgment would be
converted into United States dollars at the exchange rate prevailing on the date
of entry of the judgment. Holders of Foreign Currency Notes would bear the risk
of exchange rate fluctuations between the time the amount of the judgment is
calculated and the time such judgment is paid in United States dollars and
converted to the Specified Currency.
 
PAYMENT OF PRINCIPAL AND ANY PREMIUM AND INTEREST
 
     The Company is obligated to make payments of principal of and any premium
and interest on Foreign Currency Notes in the Specified Currency (or, if such
Specified Currency is not at the time of
 
                                      S-18
   20
 
such payment legal tender for the payment of public and private debts, in such
other coin or currency of the country which issued such Specified Currency as at
the time of such payment is legal tender for the payment of such debts). Any
such amounts paid by the Company will, unless otherwise specified in the
applicable Pricing Supplement, be converted by the Exchange Rate Agent named in
the applicable Pricing Supplement to United States dollars for payment to
holders. However, unless otherwise indicated in the applicable Pricing
Supplement, the holder of a Foreign Currency Note may elect to receive such
payments in the Specified Currency as hereinafter described.
 
     Any United States dollar amount to be received by a holder of a Foreign
Currency Note will be based on the highest bid quotation in The City of New York
received by the Exchange Rate Agent at approximately 11:00 a.m., New York City
time, on the second Business Day preceding the applicable payment date from
three recognized foreign exchange dealers (one of which may be the Exchange Rate
Agent) selected by the Exchange Rate Agent and approved by the Company for the
purchase by the quoting dealer of the Specified Currency for United States
dollars for settlement on such payment date in the aggregate amount of the
Specified Currency payable to all holders of Foreign Currency Notes scheduled to
receive United States dollar payments and at which the applicable dealer commits
to execute a contract. If such bid quotations are not available, payments will
be made in the Specified Currency. All currency exchange costs will be borne by
the holder of the Foreign Currency Note by deductions from such payments.
 
     Unless otherwise specified in the applicable Pricing Supplement, a holder
of a Foreign Currency Note may elect to receive payment of the principal of and
any premium and interest on such Note in the Specified Currency by submitting a
written request for such payment to the Paying Agent at its corporate trust
office in The City of New York, New York on or prior to the Record Date or at
least sixteen calendar days prior to Maturity, as the case may be. Such written
request may be mailed or hand delivered or sent by cable, telex or other form of
facsimile transmission. A holder of a Foreign Currency Note may elect to receive
payment in the Specified Currency for all principal and any premium and interest
payments and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Paying Agent, but
written notice of any such revocation must be received by the Paying Agent on or
prior to the relevant Record Date or at least the sixteenth calendar day prior
to Maturity, as the case may be. Holders of Foreign Currency Notes whose Notes
are to be held in the name of a broker or nominee should contact such broker or
nominee to determine whether and how an election to receive payments in the
Specified Currency may be made.
 
     Principal of, and any premium and interest on, a Foreign Currency Note paid
in United States dollars will be paid in the manner specified in the Prospectus
and this Prospectus Supplement for interest on Notes denominated in United
States dollars. Interest on a Foreign Currency Note paid in the Specified
Currency will be paid by check mailed to the address of the person entitled
thereto as it appears in the Security Register. All checks payable in a
Specified Currency will be drawn on a bank office located outside the United
States. Payments of principal of and any premium and interest on Foreign
Currency Notes paid in the Specified Currency at Maturity will be made by wire
transfer of immediately available funds to an account with a bank located in the
country of the Specified Currency, as shall have been designated at least
sixteen calendar days prior to Maturity by the holder, provided that such bank
has appropriate facilities therefor and that the Note is presented at the
principal corporate trust office of the Trustee or the Paying Agent in time for
the Trustee or the Paying Agent to make such payments in such funds in
accordance with its normal procedures.
 
     Unless otherwise specified in the applicable Pricing Supplement, a
beneficial owner of Book-Entry Notes denominated in a Specified Currency
electing to receive payments of principal or any premium or interest in a
currency other than United States dollars must notify the participant through
which its interest is held on or prior to the applicable Record Date, in the
case of a payment of interest, and on or prior to the sixteenth calendar day
prior to Maturity, in the case of principal or premium, of such beneficial
owner's election to receive all or a portion of such payment in a Specified
Currency. Such participant must notify the Depositary of such election on or
prior to the third Business Day after such Record Date. If complete instructions
are received by the participant and forwarded by the participant to the
Depositary,
 
                                      S-19
   21
 
and by the Depositary to the Paying Agent, on or prior to such dates, the
beneficial owner will receive payments in the Specified Currency.
 
PAYMENT CURRENCY
 
     If a Specified Currency is not available for the payment of principal or
any premium or interest with respect to a Foreign Currency Note due to the
imposition of exchange controls or other circumstances beyond the control of the
Company, the Company will be entitled to satisfy its obligations to holders of
Foreign Currency Notes by making such payment in United States dollars on the
basis of the Market Exchange Rate on the second Business Day prior to such
payment, or if such Market Exchange Rate is not then available, on the basis of
the most recently available Market Exchange Rate or as otherwise indicated in
the applicable Pricing Supplement. The "Market Exchange Rate" for any Specified
Currency means the noon buying rate in The City of New York for cable transfers
for such Specified Currency as certified for customs purposes by (or if not so
certified, as otherwise determined by) the Federal Reserve Bank of New York. Any
payment made under such circumstances in United States dollars where the
required payment is in other than United States dollars will not constitute an
Event of Default under the Indenture.
 
     If payment in respect of a Note is required to be made in any currency unit
(e.g., ECU), and such currency unit is unavailable due to the imposition of
exchange controls or other circumstances beyond the Company's control, then the
Company will be entitled, but not required, to make any payments in respect of
such Note in United States dollars until such currency unit is again available.
The amount of each payment in United States dollars shall be computed on the
basis of the equivalent of the currency unit in United States dollars, which
shall be determined by the Company or its agent on the following basis. The
component currencies of the currency unit for this purpose (the "Component
Currencies" or, individually, a "Component Currency") shall be the currency
amounts that were components of the currency unit as of the last day on which
the currency unit was used. The equivalent of the currency unit in United States
dollars shall be calculated by aggregating the United States dollar equivalents
of the Component Currencies. The United States dollar equivalent of each of the
Component Currencies shall be determined by the Company or such agent on the
basis of the most recently available Market Exchange Rate for each such
Component Currency, or as otherwise indicated in the applicable Pricing
Supplement.
 
     If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
 
     All determinations referred to above made by the Company or its agent
(including the Exchange Rate Agent), shall be at its sole discretion and shall,
in the absence of manifest error, be conclusive for all purposes and binding on
the holders of the Notes.
 
             CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
 
     The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the Notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change (including changes in effective dates) or possible differing
interpretations. It deals only with Notes held as capital assets and does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, dealers in
securities or currencies, persons holding Notes as a hedge against currency
risks or as a position in a "straddle" for tax purposes, or persons whose
functional currency is not the United
 
                                      S-20
   22
 
States dollar. It also does not deal with holders other than original purchasers
(except where otherwise specifically noted). Persons considering the purchase of
the Notes should consult their own tax advisors concerning the application of
United States Federal income 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. Special United States Federal
income tax considerations, not otherwise discussed herein, which are applicable
to a particular issue of Notes will be discussed in the applicable Pricing
Supplement.
 
     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 beneficial owner of a Note that is not a U.S. Holder.
 
U.S. HOLDERS
 
  Payments of Interest
 
     Payments of interest on a Note generally will be taxable to a U.S. Holder
as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting).
 
  Original Issue Discount
 
     The following summary is a general discussion of the United States Federal
income tax consequences to U.S. Holders of the purchase, ownership and
disposition of Notes issued with original issue discount ("Original Issue
Discount Notes"). It is based upon final Treasury regulations (the "OID
Regulations") released by the Internal Revenue Service ("IRS") on January 27,
1994, as amended on June 11, 1996, under the original issue discount provisions
of the Internal Revenue Code of 1986, as amended (the "Code").
 
     For United States Federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a Note over its issue
price, if such excess equals or exceeds a de minimis amount (generally 1/4 of 1%
of the Note's stated redemption price at maturity multiplied by (i) the number
of complete years to its maturity from its issue date or (ii) the weighted
average maturity of such Note, in the case of a Note providing for the payment
of any amount other than qualified stated interest (as hereinafter defined)
prior to maturity). The issue price of each Note in an issue of Notes equals the
first price at which a substantial amount of such Notes has been sold (ignoring
sales to bond houses, brokers, or similar persons or organizations acting in the
capacity of underwriters, placement agents, or wholesalers). The stated
redemption price at maturity of a Note is the sum of all payments provided by
the Note other than "qualified stated interest" payments. The term "qualified
stated interest" generally means stated interest that is unconditionally payable
in cash or property (other than debt instruments of the issuer) at least
annually at a single fixed rate. In addition, under the OID Regulations, if a
Note bears interest for one or more accrual periods at a rate below the rate
applicable for the remaining term of such Note (e.g., Notes with teaser rates or
interest holidays), and if the greater of either the resulting foregone interest
on such Note or any "true" discount on such Note (i.e., the excess of the Note's
stated principal amount over its issue price) equals or exceeds a specified de
minimis amount, then the stated interest on the Note would be treated as
original issue discount rather than qualified stated interest.
 
     Payments of qualified stated interest on a Note are 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). A U.S. Holder of an Original Issue Discount Note must include
original issue discount in income as ordinary interest for United States Federal
income tax purposes as it accrues under a constant yield method in advance of
receipt of the cash payments attributable to such income,
 
                                      S-21
   23
 
regardless of such U.S. Holder's regular method of tax accounting. In general,
the amount of original issue discount included in income by the initial U.S.
Holder of an Original Issue Discount Note is the sum of the daily portions of
original issue discount with respect to such Original Issue Discount Note for
each day during the taxable year (or portion of the taxable year) on which such
U.S. Holder held such Original Issue Discount Note. The "daily portion" of
original issue discount on any Original Issue Discount Note is determined by
allocating to each day in any accrual period a ratable portion of the original
issue discount allocable to that accrual period. An "accrual period" may be of
any length and the accrual periods may vary in length over the term of the
Original Issue Discount Note, provided that each accrual period is no longer
than one year and each scheduled payment of principal or interest occurs either
on the final day of an accrual period or on the first day of an accrual period.
The amount of original issue discount allocable to each accrual period is
generally equal to the difference between (i) the product of the Original Issue
Discount Note's adjusted issue price at the beginning of such accrual period and
its yield to maturity (determined on the basis of compounding at the close of
each accrual period and appropriately adjusted to take into account the length
of the particular accrual period) and (ii) the amount of any qualified stated
interest payments allocable to such accrual period. The "adjusted issue price"
of an Original Issue Discount Note at the beginning of any accrual period is the
sum of the issue price of the Original Issue Discount Note plus the amount of
original issue discount allocable to all prior accrual periods minus the amount
of any prior payments on the Original Issue Discount Note that were not
qualified stated interest payments. Under these rules, U.S. Holders generally
will have to include in income increasingly greater amounts of original issue
discount in successive accrual periods.
 
     A U.S. Holder who purchases an Original Issue Discount Note for an amount
that is greater than its adjusted issue price as of the purchase date and less
than or equal to the sum of all amounts payable on the Original Issue Discount
Note after the purchase date other than payments of qualified stated interest,
will be considered to have purchased the Original Issue Discount Note at an
"acquisition premium." Under the acquisition premium rules, the amount of
original issue discount which such U.S. Holder must include in its gross income
with respect to such Original Issue Discount Note for any taxable year (or
portion thereof in which the U.S. Holder holds the Original Issue Discount Note)
will be reduced (but not below zero) by the portion of the acquisition premium
properly allocable to the period.
 
     Under the OID Regulations, Floating Rate Notes and Indexed Notes ("Variable
Notes") are subject to special rules whereby a Variable Note will qualify as a
"variable rate debt instrument" if (a) its issue price does not exceed the total
noncontingent principal payments due under the Variable Note 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 (i) one or more qualified
floating rates, (ii) a single fixed rate and one or more qualified floating
rates, (iii) a single objective rate, or (iv) a single fixed rate and a single
objective rate that is a qualified inverse floating rate.
 
     A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Variable Note is denominated. Although a multiple of a qualified floating rate
will generally not itself constitute a qualified floating rate, a variable rate
equal to the product of a qualified floating rate and a fixed multiple that is
greater than .65 but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualified floating rate and a
fixed multiple that is greater than .65 but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, under the OID Regulations, two or more qualified floating rates that
can reasonably be expected to have approximately the same values throughout the
term of the Variable Note (e.g., two or more qualified floating rates with
values within 25 basis points of each other as determined on the Variable Note's
issue date) will be treated as a single qualified floating rate. Notwithstanding
the foregoing, a variable rate that would otherwise constitute a qualified
floating rate but which is subject to one or more restrictions such as a maximum
numerical limitation (i.e., a cap) or a minimum numerical limitation (i.e., a
floor) may, under certain circumstances, fail to be treated as a qualified
floating rate under the OID Regulations unless such cap or floor is fixed
throughout the term of the Note. An "objective rate" is a rate that is not
itself a qualified floating rate but which is determined using a single fixed
formula
 
                                      S-22
   24
 
and which is based upon objective financial or economic information. A rate will
not qualify as an objective rate if it is based on information that is within
the control of the issuer (or a related party) or that is unique to the
circumstances of the issuer (or a related party), such as dividends, profits or
the value of the issuer's stock (although a rate does not fail to be an
objective rate merely because it is based on the credit quality of the issuer).
A "qualified inverse floating rate" is any objective rate where such rate is
equal to a fixed rate minus a qualified floating rate, as long as variations in
the rate can reasonably be expected to inversely reflect contemporaneous
variations in the qualified floating rate. The OID Regulations also provide that
if a Variable Note provides for stated interest at a fixed rate for an initial
period of one year or less followed by a variable rate that is either a
qualified floating rate or an objective rate and if the variable rate on the
Variable Note's issue date is intended to approximate the fixed rate (e.g., the
value of the variable rate on the issue date does not differ from the value of
the fixed rate by more than 25 basis points), then the fixed rate and the
variable rate together will constitute either a single qualified floating rate
or objective rate, as the case may be.
 
     If a Variable Note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
qualifies as a "variable rate debt instrument" under the OID Regulations and if
interest on such Note is unconditionally payable in cash or property (other than
debt instruments of the issuer) at least annually, then all stated interest on
such Note will constitute qualified stated interest and will be taxed
accordingly. Thus, a Variable Note that provides for stated interest at either a
single qualified floating rate or a single objective rate throughout the term
thereof and that qualifies as a "variable rate debt instrument" under the OID
Regulations will generally not be treated as having been issued with original
issue discount unless the Variable Note is issued at a "true" discount (i.e., at
a price below the Note's stated principal amount) in excess of a specified de
minimis amount. The amount of qualified stated interest and the amount of
original issue discount, if any, that accrues during an accrual period on such
Variable Note is determined under the rules applicable to fixed rate debt
instruments by assuming that the variable rate is a fixed rate equal to (i) in
the case of a qualified floating rate or qualified inverse floating rate, the
value as of the issue date, of the qualified floating rate or qualified inverse
floating rate, or (ii) in the case of an objective rate (other than a qualified
inverse floating rate), a fixed rate that reflects the yield that is reasonably
expected for the Variable Note. The qualified stated interest allocable to an
accrual period is increased (or decreased) if the interest actually paid during
an accrual period exceeds (or is less than) the interest assumed to be paid
during the accrual period pursuant to the foregoing rules.
 
     In general, any other Variable Note that qualifies as a "variable rate debt
instrument" will be converted into an "equivalent" fixed rate debt instrument
for purposes of determining the amount and accrual of original issue discount
and qualified stated interest on the Variable Note. The OID Regulations
generally require that such a Variable Note be converted into an "equivalent"
fixed rate debt instrument by substituting any qualified floating rate or
qualified inverse floating rate provided for under the terms of the Variable
Note with a fixed rate equal to the value of the qualified floating rate or
qualified inverse floating rate, as the case may be, as of the Variable Note's
issue date. Any objective rate (other than a qualified inverse floating rate)
provided for under the terms of the Variable Note is converted into a fixed rate
that reflects the yield that is reasonably expected for the Variable Note. In
the case of a Variable Note that qualifies as a "variable rate debt instrument"
and provides for stated interest at a fixed rate in addition to either one or
more qualified floating rates or a qualified inverse floating rate, the fixed
rate is initially converted into a qualified floating rate (or a qualified
inverse floating rate, if the Variable Note provides for a qualified inverse
floating rate). Under such circumstances, the qualified floating rate or
qualified inverse floating rate that replaces the fixed rate must be such that
the fair market value of the Variable Note as of the Variable Note's issue date
is approximately the same as the fair market value of an otherwise identical
debt instrument that provides for either the qualified floating rate or
qualified inverse floating rate rather than the fixed rate. Subsequent to
converting the fixed rate into either a qualified floating rate or a qualified
inverse floating rate, the Variable Note is then converted into an "equivalent"
fixed rate debt instrument in the manner described above.
 
                                      S-23
   25
 
     Once the Variable Note is converted into an "equivalent" fixed rate debt
instrument pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, are determined for the
"equivalent" fixed rate debt instrument by applying the general original issue
discount rules to the "equivalent" fixed rate debt instrument and a U.S. Holder
of the Variable Note will account for such original issue discount and qualified
stated interest as if the U.S. Holder held the "equivalent" fixed rate debt
instrument. In each accrual period appropriate adjustments will be made to the
amount of qualified stated interest or original issue discount assumed to have
been accrued or paid with respect to the "equivalent" fixed rate debt instrument
in the event that such amounts differ from the actual amount of interest accrued
or paid on the Variable Note during the accrual period.
 
     If a Variable Note does not qualify as a "variable rate debt instrument"
under the OID Regulations, then the Variable Note would be treated as a
contingent payment debt obligation. On June 11, 1996 the Treasury Department
issued final regulations (the "CPDI Regulations") concerning the proper United
States Federal income tax treatment of contingent payment debt instruments. The
CPDI Regulations generally require a U.S. Holder of such an instrument to
include future contingent and noncontingent interest payments in income as such
interest accrues based upon a projected payment schedule. Moreover, in general,
under the CPDI Regulations, any gain recognized by a U.S. Holder on the sale,
exchange, or retirement of a contingent payment debt instrument will be treated
as ordinary income and all or a portion of any loss realized could be treated as
ordinary loss as opposed to capital loss (depending upon the circumstances). The
CPDI Regulations apply to debt instruments issued on or after August 13, 1996.
The proper United States Federal income tax treatment of Variable Notes that are
treated as contingent payment debt obligations will be more fully described in
the applicable Pricing Supplement.
 
     Certain of the Notes (i) may be redeemable at the option of the Company
prior to their stated maturity (a "call option") and/or (ii) may be repayable at
the option of the holder prior to their stated maturity (a "put option"). Notes
containing such features may be subject to rules that differ from the general
rules discussed above. Investors intending to purchase Notes with such features
should consult their own tax advisors, since the original issue discount
consequences will depend, in part, on the particular terms and features of the
purchased Notes.
 
     U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, de
minimis original issue discount, market discount, de minimis market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions.
 
  Short-Term Notes
 
     Notes that have a fixed maturity of one year or less ("Short-Term Notes")
will be treated as having been issued with original issue discount. In general,
an individual or other cash method U.S. Holder is not required to accrue such
original issue discount unless the U.S. Holder elects to do so. If such an
election is not made, any gain recognized by the U.S. Holder on the sale,
exchange or maturity of the Short-Term Note will be ordinary income to the
extent of the original issue discount accrued on a straight-line basis, or upon
election under the constant yield method (based on daily compounding), through
the date of sale or maturity, and a portion of the deductions otherwise
allowable to the U.S. Holder for interest on borrowings allocable to the
Short-Term Note will be deferred until a corresponding amount of income is
realized. U.S. Holders who report income for United States Federal income tax
purposes under the accrual method, and certain other holders including banks and
dealers in securities, are required to accrue original issue discount on a
Short-Term Note on a straight-line basis unless an election is made to accrue
the original issue discount under a constant yield method (based on daily
compounding).
 
                                      S-24
   26
 
  Market Discount
 
     If a U.S. Holder purchases a Note, other than an Original Issue Discount
Note, for an amount that is less than its issue price (or, in the case of a
subsequent purchaser, its stated redemption price at maturity) or, in the case
of an Original Issue Discount Note, for an amount that is less than its adjusted
issue price as of the purchase date, such U.S. Holder will be treated as having
purchased such Note at a "market discount," unless such market discount is less
than a specified de minimis amount.
 
     Under the market discount rules, a U.S. Holder will be required to treat
any partial principal payment (or, in the case of an Original Issue Discount
Note, any payment that does not constitute qualified stated interest) on, or any
gain realized on the sale, exchange, retirement or other disposition of, a Note
as ordinary income to the extent of the lesser of (i) the amount of such payment
or realized gain or (ii) the market discount which has not previously been
included in income and is treated as having accrued on such Note at the time of
such payment or disposition. Market discount will be considered to accrue
ratably during the period from the date of acquisition to the maturity date of
the Note, unless the U.S. Holder elects to accrue market discount on the basis
of semiannual compounding.
 
     A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a Note with market discount until the maturity of the Note or
certain earlier dispositions, because a current deduction is only allowed to the
extent the interest expense exceeds an allocable portion of market discount. A
U.S. Holder may elect to include market discount in income currently as it
accrues (on either a ratable or semiannual compounding basis), in which case the
rules described above regarding the treatment as ordinary income of gain upon
the disposition of the Note and upon the receipt of certain cash payments and
regarding the deferral of interest deductions will not apply. Generally, such
currently included market discount is treated as ordinary interest for United
States Federal income tax purposes. Such an election will apply to all debt
instruments acquired by the U.S. Holder on or after the first day of the first
taxable year to which such election applies and may be revoked only with the
consent of the IRS.
 
  Premium
 
     If a U.S. Holder purchases a Note for an amount that is greater than the
sum of all amounts payable on the Note after the purchase date other than
payments of qualified stated interest, such U.S. Holder will be considered to
have purchased the Note with "amortizable bond premium" equal in amount to such
excess. A U.S. Holder may elect to amortize such premium using a constant yield
method over the remaining term of the Note and may offset interest otherwise
required to be included in respect of the Note during any taxable year by the
amortized amount of such excess for the taxable year. However, if the Note may
be optionally redeemed after the U.S. Holder acquires it at a price in excess of
its stated redemption price at maturity, special rules would apply which could
result in a deferral of the amortization of some bond premium until later in the
term of the Note. Any election to amortize bond premium applies to all taxable
debt instruments then owned and thereafter acquired by the U.S. Holder on or
after the first day of the first taxable year to which such election applies and
may be revoked only with the consent of the IRS.
 
  Disposition of a Note
 
     Except as discussed above, upon the sale, exchange or retirement of a Note,
a U.S. Holder generally will recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or retirement
(other than amounts representing accrued and unpaid interest) and such U.S.
Holder's adjusted tax basis in the Note. A U.S. Holder's adjusted tax basis in a
Note generally will equal such U.S. Holder's initial investment in the Note
increased by any original issue discount included in income (and accrued market
discount, if any, if the U.S. Holder has included such market discount in
income) and decreased by the amount of any payments, other than qualified stated
interest payments, received and amortizable bond premium taken with respect to
such Note. Such gain or loss generally will be long-term capital gain or loss if
the Note were held for more than one year.
 
                                      S-25
   27
 
NOTES DENOMINATED, OR IN RESPECT OF WHICH INTEREST IS PAYABLE, IN A FOREIGN
CURRENCY
 
     As used herein, "Foreign Currency" means a currency or composite currency
other than U.S. dollars.
 
  Payments of Interest in a Foreign Currency
 
     Cash Method.  A U.S. Holder who uses the cash method of accounting for
United States Federal income tax purposes and who receives a payment of interest
on a Note (other than original issue discount or market discount) will be
required to include in income the U.S. dollar value of the Foreign Currency
payment (determined on the date such payment is received) regardless of whether
the payment is in fact converted to U.S. dollars at that time, and such U.S.
dollar value will be the U.S. Holder's tax basis in such Foreign Currency.
 
     Accrual Method.  A U.S. Holder who uses the accrual method of accounting
for United States Federal income tax purposes, or who otherwise is required to
accrue interest prior to receipt, will be required to include in income the U.S.
dollar value of the amount of interest income (including original issue discount
or market discount and reduced by amortizable bond premium to the extent
applicable) that has accrued and is otherwise required to be taken into account
with respect to a Note during an accrual period. The U.S. dollar value of such
accrued income will be determined by translating such income at the average rate
of exchange for the accrual period or, with respect to an accrual period that
spans two taxable years, at the average rate for the partial period within the
taxable year. A U.S. Holder may elect, however, to translate such accrued
interest income using the rate of exchange on the last day of the accrual period
or, with respect to an accrual period that spans two taxable years, using the
rate of exchange on the last day of the taxable year. If the last day of an
accrual period is within five business days of the date of receipt of the
accrued interest, a U.S. Holder may translate such interest using the rate of
exchange on the date of receipt. The above election will apply to all debt
obligations held by the U.S. Holder and may not be changed without the consent
of the IRS. A U.S. Holder should consult a tax advisor before making the above
election. A U.S. Holder will recognize exchange gain or loss (which will be
treated as ordinary income or loss) with respect to accrued interest income on
the date such income is received. The amount of ordinary income or loss
recognized will equal the difference, if any, between the U.S. dollar value of
the Foreign Currency payment received (determined on the date such payment is
received) in respect of such accrual period and the U.S. dollar value of
interest income that has accrued during such accrual period (as determined
above).
 
  Purchase, Sale and Retirement of Notes
 
     A U.S. Holder who purchases a Note with previously owned Foreign Currency
will recognize ordinary income or loss in an amount equal to the difference, if
any, between such U.S. Holder's tax basis in the Foreign Currency and the U.S.
dollar fair market value of the Foreign Currency used to purchase the Note,
determined on the date of purchase.
 
     Except as discussed above with respect to Short-Term Notes, upon the sale,
exchange or retirement of a Note, a U.S. Holder will recognize taxable gain or
loss equal to the difference between the amount realized on the sale, exchange
or retirement and such U.S. Holder's adjusted tax basis in the Note. Such gain
or loss generally will be capital gain or loss (except to the extent of any
accrued market discount not previously included in the U.S. Holder's income) and
will be long-term capital gain or loss if at the time of sale, exchange or
retirement the Note has been held by such U.S. Holder for more than one year. To
the extent the amount realized represents accrued but unpaid interest, however,
such amounts must be taken into account as interest income, with exchange gain
or loss computed as described in "Payments of Interest in a Foreign Currency"
above. If a U.S. Holder receives Foreign Currency on such a sale, exchange or
retirement the amount realized will be based on the U.S. dollar value of the
Foreign Currency on the date the payment is received or the Note is disposed of
(or deemed disposed of as a result of a material change in the terms of such
Note). In the case of a Note that is denominated in Foreign Currency and is
traded on an established securities market, a cash basis U.S. Holder (or, upon
election, an accrual basis U.S. Holder) will determine the U.S. dollar value of
the amount realized by translating the Foreign
 
                                      S-26
   28
 
Currency payment at the spot rate of exchange on the settlement date of the
sale. A U.S. Holder's adjusted tax basis in a Note will equal the cost of the
Note to such holder, increased by the amounts of any market discount or original
issue discount previously included in income by the holder with respect to such
Note and reduced by any amortized acquisition or other premium and any principal
payments received by the holder. A U.S. Holder's tax basis in a Note, and the
amount of any subsequent adjustments to such holder's tax basis, will be the
U.S. dollar value of the Foreign Currency amount paid for such Note, or of the
Foreign Currency amount of the adjustment, determined on the date of such
purchase or adjustment.
 
     Gain or loss realized upon the sale, exchange or retirement of a Note that
is attributable to fluctuations in currency exchange rates will be ordinary
income or loss which will not be treated as interest income or expense. Gain or
loss attributable to fluctuations in exchange rates will equal the difference
between the U.S. dollar value of the Foreign Currency principal amount of the
Note, determined on the date such payment is received or the Note is disposed
of, and the U.S. dollar value of the Foreign Currency principal amount of the
Note, determined on the date the U.S. Holder acquired the Note. Such Foreign
Currency gain or loss will be recognized only to the extent of the total gain or
loss realized by the U.S. Holder on the sale, exchange or retirement of the
Note.
 
  Original Issue Discount
 
     In the case of an Original Issue Discount Note or Short-Term Note, (i)
original issue discount is determined in units of the Foreign Currency, (ii)
accrued original issue discount is translated into U.S. dollars as described in
"Payments of Interest in a Foreign Currency -- Accrual Method" above and (iii)
the amount of Foreign Currency gain or loss on the accrued original issue
discount is determined by comparing the amount of income received attributable
to the discount (either upon payment, maturity or an earlier disposition), as
translated into U.S. dollars at the rate of exchange on the date of such
receipt, with the amount of original issue discount accrued, as translated
above.
 
  Premium and Market Discount
 
     In the case of a Note with market discount, (i) market discount is
determined in units of the Foreign Currency, (ii) accrued market discount taken
into account upon the receipt of any partial principal payment or upon the sale,
exchange, retirement or other disposition of the Note (other than accrued market
discount required to be taken into account currently) is translated into U.S.
dollars at the exchange rate on such disposition date (and no part of such
accrued market discount is treated as exchange gain or loss) and (iii) accrued
market discount currently includible in income by a U.S. Holder for any accrual
period is translated into U.S. dollars on the basis of the average exchange rate
in effect during such accrual period, and the exchange gain or loss is
determined upon the receipt of any partial principal payment or upon the sale,
exchange, retirement or other disposition of the Note in the manner described in
"Payments of Interest in a Foreign Currency -- Accrual Method" above with
respect to computation of exchange gain or loss on accrued interest.
 
     With respect to a Note issued with amortizable bond premium, such premium
is determined in the relevant Foreign Currency and reduces interest income in
units of the Foreign Currency. A U.S. Holder will recognize exchange gain or
loss equal to the difference between the U.S. dollar value of the bond premium
amortized with respect to a period, determined on the date the interest
attributable to such period is includible in income by the U.S. Holder, and the
U.S. dollar value of the bond premium determined on the date of the acquisition
of the Note.
 
  Exchange of Foreign Currencies
 
     A U.S. Holder will have a tax basis in any Foreign Currency received as
interest or on the sale, exchange or retirement of a Note equal to the U.S.
dollar value of such Foreign Currency, determined at the time the interest is
received or at the time of the sale, exchange or retirement. Any gain or loss
 
                                      S-27
   29
 
realized by a U.S. Holder on a sale or other disposition of Foreign Currency
(including its exchange for U.S. dollars or its use to purchase Notes) will be
ordinary income or loss.
 
NON-U.S. HOLDERS
 
     A non-U.S. Holder will not be subject to United States Federal income 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 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.
 
     The Notes will not be includible in the estate of a non-U.S. Holder unless
the individual 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.
 
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.
 
                                      S-28
   30
 
     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.
 
                              PLAN OF DISTRIBUTION
 
     The Notes are being offered on a continuing basis for sale by the Company
through Salomon Brothers Inc, Bear, Stearns & Co. Inc., CS First Boston
Corporation, Donaldson, Lufkin & Jenrette Securities Corporation, or Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Agents"),
who may purchase the Notes, as principal, from the Company, for resale to
investors and other purchasers at varying prices relating to prevailing market
prices at the time of resale as determined by the Agents, or, if so specified in
an applicable Pricing Supplement, for resale at a fixed public offering price.
Unless otherwise specified in an applicable Pricing Supplement, any Note sold to
an Agent as principal will be purchased by the Agent at a price equal to 100% of
the principal amount thereof less a percentage of the principal amount equal to
the commission applicable to an agency sale (as described below) of a Note of
identical maturity. If agreed to by the Company and an Agent, the Agent may
utilize its reasonable efforts on an agency basis to solicit offers to purchase
the Notes at 100% of the principal amount thereof, unless otherwise specified in
an applicable Pricing Supplement. The Company will pay a commission to each
Agent, ranging from .100% to .825% of the principal amount of each Note,
depending upon its stated maturity, sold through the Agent.
 
     The Agents may sell Notes they have purchased from the Company as principal
to other dealers for resale to investors and other purchasers, and may allow all
or any portion of the discount received in connection with such purchase from
the Company to such dealers. After the initial public offering of Notes, the
public offering price (in the case of Notes to be resold at a fixed public
offering price), the concession and the discount may be changed.
 
     The Company reserves the right to withdraw, cancel or modify the offer made
hereby without notice and may reject orders in whole or in part (whether placed
directly with the Company or through the Agents). The Agents will have the
right, in their discretion reasonably exercised, to reject in whole or in part
any offer to purchase Notes received by them on an agency basis.
 
     Unless otherwise specified in an applicable Pricing Supplement, payment of
the purchase price of the Notes will be required to be made in immediately
available funds in the Specified Currency in The City of New York on the date of
settlement.
 
     No Note will have an established trading market when issued. Unless
otherwise specified in an applicable Pricing Supplement, the Notes will not be
listed on any securities exchange. The Agents may from time to time purchase and
sell Notes in the secondary market, but the Agents are not obligated to do so,
and there can be no assurance that there will be a secondary market for the
Notes or liquidity in the secondary market if one develops. From time to time,
the Agents may make a market in the Notes, but the Agents are not obligated to
do so and may discontinue any market-making activity at any time.
 
     The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). The Company has
agreed to indemnify the Agents against certain liabilities, including
liabilities under the Securities Act, or to contribute to payments the Agents
may be required to make in respect thereof. The Company has agreed to reimburse
the Agents for certain other expenses.
 
     Concurrently with the offering of Notes through the Agents as described
herein, the Company may from time to time sell Notes directly to purchasers and
may issue other Debt Securities described in the accompanying Prospectus
pursuant to the Indenture referred to herein.
 
                                      S-29
   31
 
                                 LEGAL OPINIONS
 
     Certain legal matters relating to the Notes offered hereby will be passed
upon for the Company by Gene S. Schneyer, Esquire, Vice President, Secretary and
General Counsel of the Company and for the agents and underwriters, if any, by
Brown & Wood LLP, New York, New York. Mr. Schneyer owns or has the right to
acquire a number of shares of Class A and Class B Common Stock of the Company
which is well below 1% of the outstanding common stock of the Company.
 
                                      S-30
   32
 
PROSPECTUS
 
                                      [LOGO]
                                       Corp.
                                DEBT SECURITIES
                            ------------------------
 
     Advanta Corp. (the "Company") may from time to time issue its debt
securities (the "Debt Securities") up to an aggregate initial public offering
price of $1,604,919,500 or the equivalent thereof denominated in foreign
currencies or units of two or more foreign currencies, such as European Currency
Units, at prices and on terms determined by market conditions at the time of
sale.
 
     When a particular series of Debt Securities is offered, a supplement to
this Prospectus will be delivered (the "Prospectus Supplement") together with
this Prospectus setting forth the terms of such Debt Securities, including,
where applicable, the specific designation, aggregate principal amount, currency
or currencies in which the principal, premium, if any, and interest are payable,
denominations, maturity, rate (which may be fixed or variable) and time of
payment of interest, any terms for redemption, any terms for repayment at the
option of the holder, any terms for sinking fund payments, the initial public
offering price, whether such Debt Securities are issuable in individual
registered form without coupons, in the form of one or more global securities,
or in bearer form with or without coupons, and any listing of the Debt
Securities on a securities exchange. The Prospectus Supplement will also contain
information, where applicable, about certain U.S. federal income tax, accounting
and other considerations relating to the Debt Securities covered by it.
 
     The Company may sell the Debt Securities to or through dealers or
underwriters, directly to other purchasers or through agents. If an agent of the
Company or a dealer or an underwriter is involved in the sale of the Debt
Securities in respect of which this Prospectus is being delivered, the agent's
commission or dealer's purchase price or underwriter's discount will be set
forth in, or may be calculated from, the Prospectus Supplement. Any
underwriters, dealers or agents participating in the offering of Debt Securities
may be deemed "underwriters" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"). See "Plan of Distribution" for possible
indemnification arrangements for any agents, dealers or underwriters.
 
     The Debt Securities will be unsecured obligations of the Company and will
not be savings accounts, deposits or other obligations of any bank or non-bank
subsidiary of the Company, and are not insured by the Federal Deposit Insurance
Corporation or any other federal or state agency.
 
                            ------------------------
 
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.
 
                            ------------------------
 
                  The date of this Prospectus is July 8, 1996.
   33
 
                             AVAILABLE INFORMATION
 
     The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: Seven World Trade Center, 13th Floor, New York, N.Y. 10048; and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material may also be obtained at prescribed rates from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission maintains a Web site at
http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants, including the Company, that file
electronically with the Commission.
 
     The Company has filed with the Commission Registration Statement Nos.
33-50883 and 333-05701 (herein, together with all amendments and exhibits
thereto, called the "Registration Statement") under the Securities Act with
respect to the Debt Securities offered hereby. This Prospectus does not contain
all of the information set forth in the Registration Statement. For further
information with respect to the Company and the Debt Securities offered hereby,
reference is made to the Registration Statement. Statements contained herein
concerning any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement. Each such statement is qualified in its entirety by such
reference. Copies of all or any part of the Registration Statement, including
exhibits thereto, may be obtained, upon payment of the prescribed fees, at the
offices of the Commission as set forth above.
 
               INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
 
     As required by the Commission, the Company hereby incorporates by
reference:
 
     1. The Company's Annual Report on Form 10-K for the fiscal year ended
        December 31, 1995;
 
     2. The Company's Quarterly Report on Form 10-Q for the quarter ended March
        31, 1996; and
 
     3. The Company's Current Reports on Form 8-K dated January 23, April 18,
        and April 22, 1996.
 
     All documents filed by the Company pursuant to Section 13(a), 13(c), 14 and
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering described herein shall be deemed to be
incorporated by reference in the Registration Statement and to be a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes hereof to the extent that a statement
contained herein or any subsequently filed document which is deemed to be
incorporated by reference herein modifies or supersedes such document. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part hereof.
 
     The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request, a copy of any
document incorporated herein by reference (other than exhibits to such document
which are not specifically incorporated by reference in such document). Requests
for such documents should be directed to: Investor Relations, Advanta Corp.,
Five Horsham Business Center, Horsham, Pennsylvania 19044-2209, telephone (215)
784-5335.
 
                                        2
   34
 
                                  THE COMPANY
 
GENERAL
 
     The Company serves consumers and small businesses through innovative
products and services primarily via direct, cost effective delivery systems. The
Company primarily originates and services credit cards and mortgages. Other
products include small-ticket equipment leasing, credit insurance and deposit
products. The Company utilizes customer information attributes including credit
assessments, usage patterns and other characteristics enhanced by proprietary
information to match customer profiles with appropriate products. At year end
1995 assets under management totaled $14 billion.
 
     Approximately 73% of total revenues are derived from credit cards marketed
through carefully targeted direct mail campaigns. For the past several years,
the Company's strategy has been to market this product in the form of a no
annual fee, low variable-rate gold card. The Company has successfully grown to
one of the ten largest issuers of gold cards in the United States and ranks
among the top 15 bankcard issuers worldwide. Mortgage services contributes 9% of
total revenues with a managed loan portfolio of $1.8 billion. Mortgage loans are
originated directly with consumers, as well as through conduit relationships and
wholesale purchases from brokers and other financial institutions.
 
     The Company was incorporated in Delaware in 1974 as Teachers Service
Organization, Inc., the successor to a business originally founded in 1951. In
January 1988, the Company's name was changed from TSO Financial Corp. to Advanta
Corp. The Company's principal executive office is located at Five Horsham
Business Center, 300 Welsh Road, Horsham, Pennsylvania 19044-9808. The Company's
telephone number at its principal executive office is (215) 657-4000.
 
ADVANTA PERSONAL PAYMENT SERVICES
 
     During 1995, the Company's consumer credit card unit adopted the name
Advanta Personal Payment Services, which more appropriately captures the unit's
mission and its goal of expansion into new delivery systems as described below.
 
     The Company, which has been in the credit card business since 1983, issues
gold (i.e., premium) and standard MasterCard(R)* and VISA(R)* credit cards
nationwide. The Company has built a substantial cardholder base which, as of
December 31, 1995, totaled 4.8 million accounts and $10.0 billion in managed
receivables. At March 31, 1996, the cardholder base had grown to 5.5 million
accounts and $11.7 billion in managed receivables. As of December 31, 1995, the
gold card strategy had produced a portfolio with 82% of its balances derived
from gold cards. This contrasts with the bankcard industry as a whole, which is
composed of 43% gold (versus standard) cards. Both gold and standard accounts
undergo the same credit analysis, but gold accounts have higher initial credit
limits because of the cardholders' better credit quality. In addition, gold
accounts generally offer a wider variety of services to cardholders. The primary
method of account acquisition is direct mail solicitation. The Company generally
uses credit scoring by independent third parties and a proprietary market
segmentation and targeting model to target its mailings to profitable segments
of the market.
 
     In 1982, the Company acquired Advanta National Bank USA ("Advanta National
USA"), formerly known as Colonial National Bank USA. As a national bank, Advanta
National USA has the ability to make loans to consumers without many of the
restrictions found in various state usury and licensing laws, to negotiate
variable rate loans, to generate funds economically in the form of deposits
insured by the Federal Deposit Insurance Corporation ("FDIC") and to include in
its product mix a MasterCard(R) and VISA(R) credit card program. In 1995, the
Company chartered Advanta National Bank ("ANB") to complement the credit card
activities of Advanta National USA. ANB is a type of limited purpose national
bank known as a "credit card bank" whose lending activities are limited to
consumer credit card lending.
 
- ---------------
 
* MasterCard(R) is a federally registered servicemark of MasterCard
  International, Inc. ("MasterCard"); VISA(R) is a federally registered
  servicemark of VISA, U.S.A., Inc. ("VISA").
 
                                        3
   35
 
See "Government Regulation -- Advanta National Bank USA and Advanta National
Bank." Prior to the establishment of ANB, substantially all of the Company's
credit card receivables and bank deposits were originated by Advanta National
USA. However, at December 31, 1995, ANB accounted for $1.7 billion of the
Company's total of $10.0 billion of managed credit card assets, and $684 million
of the total $1.9 billion of bank deposits; and at March 31, 1996, ANB had grown
to represent $3.5 billion of the Company's total of $11.7 billion of managed
credit card assets, and $930 million of the total of $2.0 billion of bank
deposits.
 
     Most of the Company's MasterCard(R) and VISA(R) credit cards carry no
annual fee, and those credit cards which do include an annual fee generally have
lower fees than those charged by many of the Company's competitors. The Company
believes that this characteristic of no or low annual fee credit cards has
appealed to consumers, and that the Company's credit cards have also appealed to
consumers because of their competitive interest rates, credit lines, quality
service and payment terms.
 
     While the Company believes that its credit card offers will continue to
appeal to consumers for the reasons stated, the Company also notes that for
several years competition has been increasing in the credit card industry. At
the same time, the U.S. consumer has become a generally more sophisticated and
demanding user of credit. These forces are likely to produce significant changes
in the industry. The Company is devoting substantial resources to meeting the
challenges and taking advantage of the opportunities which management sees
emerging in the industry. In 1994 and 1995, this included significant focus on
balance transfer initiatives, in which the Company encouraged new and existing
customers to transfer account balances they were maintaining with other credit
card issuers to an Advanta National USA or ANB account with a lower interest
rate. Approximately 35% of the new credit card sales generated in 1995 resulted
from balance transfer business. In addition, as part of the strategy to broaden
and deepen its relationship with the consumer, the Company has launched some
proprietary branded credit card products. These products were crafted to meet an
identified long-term consumer need and are expected to establish relationships
with consumers that will be lasting. The Company intends to continue exploring
new approaches to the credit card market.
 
     The interest rates on the majority of the Company's credit card receivables
are variable, tied either to the prime rate or the London interbank offered rate
("LIBOR"). This variable rate structure helps the Company maintain net interest
margins in both rising and declining interest rate environments.
 
     The Company believes that its targeted marketing strategy and its emphasis
on satisfying customers have enabled it to attract and retain a portfolio of
credit card accounts with a loss ratio which, based on reports published by
MasterCard and VISA, has been below industry averages for the past three years.
The Company's net credit losses on average managed credit card receivables
outstanding for the year ended December 31, 1995 and the quarter ended March 31,
1996 were 2.5% and 3.2%, respectively. The Company's percentage of managed
credit card receivables that were delinquent 30 or more days for the year ended
December 31, 1995 and the quarter ended March 31, 1996 was 2.6% and 2.7%,
respectively. With customers in all 50 states, the Company's credit card
portfolio is geographically diversified. At December 31, 1995, the states with
the highest aggregate managed loans outstanding were California, New York,
Texas, Florida and Illinois, with approximately 15.9%, 7.6%, 6.5%, 5.8% and
4.4%, respectively, of the Company's total managed credit card receivables.
 
     Since 1988, Advanta National USA has been active in the credit card
securitization market, and since its inception in 1995 ANB has likewise become
active, together securitizing $3.4 billion of credit card receivables in 1995.
 
ADVANTA PERSONAL FINANCE SERVICES
 
     Formerly known as Advanta Mortgage, Advanta Personal Finance Services
("APFS") has been renamed to reflect the growing diversification and product
array of this business unit, which expanded to include both Advanta Mortgage and
Advanta Finance in 1995, and an automobile financing business (Advanta Auto
Finance) in 1996.
 
                                        4
   36
 
     Advanta Mortgage Corp. USA originates, purchases, securitizes and services
non-conforming credit first and second mortgage loans directly, through its
subsidiaries, and for Advanta National USA's "Advanta Mortgage USA" Division
(collectively, "Advanta Mortgage"). Loan production is generated through
multiple distribution channels including two centralized direct to consumer
origination centers (each one dedicated to a specific product), a broker network
serviced by selected sales locations, correspondent relationships and purchases
from other financial institutions. In 1995, Advanta Mortgage developed and
tested a Home Equity Line of Credit product. Loan production volume relating to
this product was not material in 1995 but is expected to grow significantly in
1996.
 
     Advanta Mortgage originates and purchases loans, generally funding those
loans through sales or securitizations which have been structured to qualify as
real estate mortgage investment conduits ("REMICs") under the Internal Revenue
Code.
 
     Advanta Mortgage's managed portfolio of receivables includes owned loans
(generally held for sale) as well as loans it services in which it retains an
interest in the excess spread. At December 31, 1995, owned mortgage loan
receivables totaled $322 million while total managed receivables were $1,798
million. Loans serviced under contract for a fee are not included in the
Company's "managed portfolio" as the performance of such loans does not have a
material impact on the Company's credit risk profile. In contrast, the
performance of the managed portfolio, including loans sold by the Company, can
materially impact ongoing mortgage banking income. Total loans serviced at
December 31, 1995, including loans serviced for others for a fee, were $2,421
million.
 
     Approximately 78% of the managed portfolio is secured by first mortgages
and the balance is secured by second mortgages. Approximately 81% of the managed
portfolio is comprised of fixed rate loans while the remainder represents
adjustable rate loans. At December 31, 1995, the states with the highest
aggregate managed loans outstanding were California, New York, New Jersey,
Maryland and Pennsylvania, with approximately 21.6%, 10.2%, 10.0%, 8.8% and
7.2%, respectively.
 
     During 1995 a new business channel, "Advanta Finance," was launched,
offering loans directly to the consumer through a branch office system. Through
December 31, 1995, eighteen branches were opened offering first and second
mortgage loans similar to those offered by Advanta Mortgage. Production activity
for the year was not material but is expected to become significant in 1996. At
March 31, 1996, the number of Advanta Finance offices had grown to 34, and the
first quarter loan production was $21.5 million. The combined origination volume
for APFS for 1995 and the first quarter of 1996 was $773 million and $240
million, respectively. In the second quarter of 1996, Advanta Auto Finance began
purchasing installment sale contracts made with sub-prime customers secured by
automobiles through correspondent relationships.
 
ADVANTA BUSINESS SERVICES
 
     In late 1994, the Company's subsidiary, Advanta Leasing Corp., changed its
name to Advanta Business Services Corp. ("ABS"), reflecting the Company's
intention to expand its offerings to small business customers. The name change
followed the Company's introduction, in July 1994, of a business-purpose
MasterCard(R) credit card as a supplement to its commercial equipment leasing
business. Both lines of business continue to expand.
 
     The commercial equipment leasing business is generated primarily through
third party referrals from manufacturers or distributors of equipment as well as
independent brokers. Most contact with these referral sources is made from the
Company's ABS headquarters in Voorhees, New Jersey, using extensive direct
marketing operations.
 
     Leasing originations volume, measured by the cost of the equipment included
in new lease contracts, continues to grow, from a total of $190 million in 1994
to $251 million in 1995. While much of this growth is due to increased
penetration of existing markets, such as office machinery, security systems and
computers, some has been the result of expansion into additional market
segments. The
 
                                        5
   37
 
most significant of those are leasing programs for certain industrial and
agricultural equipment and programs for leasing equipment to agencies of state
and local governments.
 
     The business-purpose credit card operation also continues to grow, with
over 23,000 accounts as of December 31, 1995. Again, direct marketing
techniques, primarily direct mail to prospective customers, are the source of
new accounts. The "Advanta business card" is marketed by ABS and issued by its
affiliate, Advanta Financial Corp. ("AFC"), an FDIC-insured industrial loan
corporation organized under the laws of the State of Utah. See "Government
Regulation -- Advanta Financial Corp."
 
ADVANTA INSURANCE COMPANIES
 
     The Company mainly offers specialty credit related insurance products and
services to its existing customer base. The focus of these products is on the
customers' ability to repay their debt in the event of certain circumstances.
Enrollment in these programs is achieved through the utilization of either
direct mail or telemarketing distribution channels.
 
     Through unaffiliated insurance carriers, the Company generally offers a
combined credit life, disability and unemployment product to the Company's
lending customers. The Company's insurance subsidiaries reinsure 100% of these
risks from the insurance carriers on a coinsurance basis. In consideration for
assumption of these risks the insurance subsidiaries receive reinsurance
premiums equal to 100% of the net premiums collected by the insurance carriers,
less a ceding fee as defined by the reinsurance treaties, and all acquisition
expenses, premium taxes and loss payments made by the carriers on these risks.
Under the terms of certain reinsurance treaties the subsidiaries are either
obligated to maintain in trust for the benefit of an insurance carrier an amount
equal to 100% of the unearned premiums and all statutory reserves for future
incurred loss payments or have certain of these loss reserves, as defined,
withheld by an insurance carrier.
 
     Approximately 90% of the Company's total insurance revenues are derived
from the offering of insurance products to credit card customers of Advanta
National USA and ANB.
 
ADVANTA PARTNERS
 
     Advanta Partners LP is a private venture capital equity investment firm
formed in 1994. The firm focuses primarily on growth capital financing,
restructuring and management buyouts in the financial services and information
services industries. The investment objective of Advanta Partners is to earn
attractive returns by building the long-term values of the businesses in which
it invests. Advanta Partners combines transaction expertise, management skills
and a broad contact base with strong industry-specific knowledge which is
further enhanced by its relationship with the Company.
 
DEVELOPMENTAL INITIATIVES
 
     The Company has initiated a number of new programs focused on creating new
products, entering new markets and expanding the Company's channels of delivery.
As part of the Company's expansion into new markets, in 1995 the Company formed
a joint venture with The Royal Bank of Scotland to market, issue and service
bankcards in the United Kingdom. While initial test mailings have generated
positive response, this effort was not material to the Company in 1995. The
Company believes that the results of the joint venture will not be material to
earnings in 1996. Additionally, the Company has developed and launched several
branded credit card products. The Company is continuing to explore new product
concepts and expects to introduce new products in 1996. Simultaneously, the
Company is exploring new technologies and delivery systems related to payment
services. The Company continues to engage in research and development activities
with respect to products and services outside the financial services sector.
 
                                        6
   38
 
                       RATIO OF EARNINGS TO FIXED CHARGES
 
     The following table sets forth the ratio of earnings to fixed charges of
the Company and its subsidiaries for the periods indicated:
 


                                                       THREE
                                                      MONTHS
                                                    ENDED MARCH
                                                        31,           YEAR ENDED DECEMBER 31,
                                                    -----------   --------------------------------
                                                    1996   1995   1995   1994   1993   1992   1991
                                                    ----   ----   ----   ----   ----   ----   ----
                                                                         
Ratio of Earnings to Fixed Charges(A).............  2.10   2.26   2.26   2.71   2.52   1.81   1.36

 
- ---------------
(A) For purposes of computing these ratios, "earnings" represent income before
    income taxes plus fixed charges, and "fixed charges" consist of interest
    expense and one-third (the proportion deemed representative of the interest
    factor) of rental expense on operating leases.
 
                             GOVERNMENT REGULATION
 
THE COMPANY
 
     The Company is not required to register as a bank holding company under the
Bank Holding Company Act of 1956, as amended (the "BHCA"). The Company owns
Advanta National USA, which is a "bank" as defined under the BHCA as amended by
the Competitive Equality Banking Act of 1987 ("CEBA"). However, under certain
grandfathering provisions of CEBA, the Company is not required to register as a
bank holding company under the BHCA, because Advanta National USA, which takes
demand deposits but does not make commercial loans, did not come within the
BHCA's definition of the term "bank" prior to the enactment of CEBA and it
complies with certain restrictions set forth in CEBA, such as limiting its
activities to those in which it was engaged prior to March 5, 1987 and limiting
its growth rate to not more than 7% per annum. Such restrictions also prohibit
Advanta National USA from cross-marketing products or services of an affiliate
that are not permissible for bank holding companies under the BHCA. In addition,
the Company complies with certain other restrictions set forth in CEBA, such as
not acquiring control of more than 5% of the stock or assets of an additional
"bank" or "savings association" as defined for these purposes under the BHCA.
Consequently, the Company is not subject to examination by the Federal Reserve
Board (other than for purposes of assuring continued compliance with the CEBA
restrictions referenced in this paragraph). Should the Company or Advanta
National USA cease complying with the restrictions set forth in CEBA,
registration as a bank holding company under the BHCA would be required.
 
     Registration as a bank holding company is not automatic. The Federal
Reserve Board may deny an application if it determines that control of a bank by
a particular company will cause undue interference with competition or that such
company lacks the financial or managerial resources to serve as a source of
strength to its subsidiary bank. While the Company believes that it meets the
Federal Reserve Board's managerial standards and that its ownership of Advanta
National USA has improved the bank's competitiveness, should the Company be
required to apply to become a bank holding company the outcome of any such
application cannot be certain.
 
     Registration as a bank holding company would subject the Company and its
subsidiaries to inspection and regulation by the Federal Reserve Board. Although
the Company has no plans to register as a bank holding company at this time, the
Company believes that registration would not restrict, curtail or eliminate any
of its activities at current levels, except that some portions of the current
business operations of the Company's insurance subsidiaries would have to be
discontinued, the effects of which would not be material. However, the Company
is actively exploring additional lines of business, some of which the Company
might not be able to pursue as a registered bank holding company under the BHCA.
 
     Under CEBA, neither ANB nor AFC is considered a "bank" for purposes of the
BHCA, and so the Company's ownership of these institutions does not impact the
Company's exempt status under the
 
                                        7
   39
 
BHCA. ANB is a "credit card bank" under CEBA, and as such is subject to certain
restrictions, including that it may only engage in credit card operations, it
may not offer checking or transaction accounts and it may only accept time
deposits in amounts of $100,000 or more. However, unlike Advanta National USA,
ANB's growth is not limited to 7% per annum.
 
ADVANTA NATIONAL BANK USA AND ADVANTA NATIONAL BANK (THE "BANKS")
 
     The Company acquired Advanta National USA (formerly known as Colonial
National Bank USA) in 1982 and organized ANB in 1995. Both of the Banks are
national banking associations organized under the laws of the United States of
America. Advanta National USA's headquarters (which is also its sole branch) and
ANB's only office, its headquarters, are located in Delaware. ANB was chartered
to complement the credit card activities of Advanta National USA. ANB is a
"credit card bank," a class of FDIC-insured depository institution created under
CEBA, which can only engage in credit card operations, can only accept deposits
in denominations of $100,000 or more, may not offer transaction (e.g., checking)
accounts, may only maintain one office for the collection of deposits, and may
not engage in commercial lending activities. The Company conducts all of its
consumer credit card lending business through the Banks, and conducts a large
portion of its mortgage lending business through Advanta National USA.
 
     The Banks are subject primarily to regulation and periodic examination by
the Office of the Comptroller of the Currency (the "Comptroller"). Such
regulation relates to the maintenance of reserves for certain types of deposits,
the maintenance of certain financial ratios, transactions with affiliates and a
broad range of other banking practices. As national banks, the Banks are subject
to provisions of federal law which restrict their ability to extend credit to
their affiliates or pay dividends to its parent company. See "Dividends and
Transfers of Funds."
 
     The Banks are subject to capital adequacy guidelines approved by the
Comptroller. These guidelines make regulatory capital requirements more
sensitive to differences in risk profiles among banking organizations and
consider off-balance sheet exposures in determining capital adequacy. As of
December 31, 1995, the minimum required ratio of total capital to risk-weighted
assets (including certain off-balance sheet items) was 8%. At least half of the
total capital is to be comprised of common equity, retained earnings and a
limited amount of non-cumulative perpetual preferred stock ("Tier 1 capital").
The remainder may consist of other preferred stock, certain hybrid debt/equity
instruments, a limited amount of term subordinated debt or a limited amount of
the reserve for possible credit losses ("Tier 2 capital"). In addition, the
Comptroller has also adopted a minimum leverage ratio (Tier 1 capital divided by
total average assets) of 3% for national banks that meet certain specified
criteria, including that they have the highest regulatory rating. Under this
guideline, the minimum leverage ratio would be at least 1 or 2 percentage points
higher for national banks that do not have the highest regulatory rating, for
national banks undertaking major expansion programs and for other national banks
in certain circumstances. As of December 31, 1995, Advanta National USA's Tier 1
capital ratio was 7.30%, its combined Tier 1 and Tier 2 capital ratio was 11.56%
and its leverage ratio was 6.79%. At December 31, 1995, ANB's Tier 1 capital
ratio was 8.04%, its combined Tier 1 and Tier 2 capital ratio was 12.28% and its
leverage ratio was 7.87%.
 
     Recognizing that the risk-based capital standards address only credit risk
(and not interest rate, liquidity, operational or other risks), the Comptroller
has indicated that many national banks will be expected to maintain capital in
excess of the minimum standards. As indicated above, both of the Banks'
respective capital levels currently exceed the minimum standards. To date, the
Comptroller has not required either of the Banks to maintain capital in excess
of the minimum standards. However, there can be no assurance that such a
requirement will not be imposed in the future, or if it is, what higher standard
will be applicable.
 
     In addition, pursuant to certain provisions of the FDIC Improvement Act of
1991 ("FDICIA") and regulations promulgated thereunder, FDIC-insured
institutions such as the Banks may only accept brokered deposits without FDIC
permission if they meet certain capital standards, and are subject to
 
                                        8
   40
 
restrictions with respect to the interest they may pay on deposits unless they
are "well-capitalized." To be "well-capitalized," a bank must have a ratio of
total capital to risk-weighted assets of not less than 10%, Tier 1 capital to
risk-weighted assets of not less than 6% and a Tier 1 leverage ratio of not less
than 5%. Based on the applicable standards under these regulations, both of the
Banks are currently "well-capitalized," and the Company intends to maintain both
Banks as "well-capitalized" institutions.
 
     Under Federal law, the Banks may "export" (i.e., charge their customers
resident in other states) the finance charges permissible under the law of their
state of domicile, Delaware, which state has no usury statute applicable to
banks. Consistent with prevailing industry practice, the Banks also export
credit card fees (including, for example, annual fees, late charges, returned
payment check fees and fees for exceeding credit limits) permitted under
Delaware law. Litigation regarding the issue of whether the exportation of such
credit card fees is permissible has been initiated against various credit card
issuers in various states, including one such lawsuit filed against Advanta
National USA in the Court of Common Pleas, Philadelphia County, Pennsylvania on
June 28, 1995. The courts that had ruled on this issue reached conflicting
opinions, and on January 19, 1996, the United States Supreme Court agreed to
review a California Supreme Court decision regarding exportation of credit card
late fees. On June 3, 1996, the United States Supreme Court ruled that the
exportation of fees that are allowed by the state in which a bank is located is
permissible under Federal law. As a result of this decision, the Company
anticipates that the lawsuit filed against Advanta National USA will be
dismissed.
 
ADVANTA FINANCIAL CORP.
 
     In January 1992, AFC opened for business and began taking deposits. AFC is
an FDIC-insured industrial loan corporation organized under the laws of the
State of Utah and is subject to examination and regulation by both the FDIC and
the Utah Department of Financial Institutions. At December 31, 1995, AFC had
deposits of $38 million and total assets of $78 million. Currently, AFC's
principal activities consist of small ticket equipment lease financing and
issuance of the "Advanta business card" credit card marketed by ABS. The Company
anticipates that AFC's managed receivables base of Advanta business card loans
will grow significantly in 1996.
 
LENDING AND LEASING ACTIVITIES
 
     The Company's activities as a lender are also subject to regulation under
various federal and state laws including the Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Home Mortgage Disclosure Act, the Community
Reinvestment Act, the Electronic Funds Transfer Act and the Fair Credit
Reporting Act. Provisions of those statutes, and related regulations, among
other matters, require disclosure to borrowers of finance charges in terms of an
annual percentage rate, prohibit certain discriminatory practices in extending
credit, require the Company's FDIC-insured depository institutions to serve the
banking needs of their local communities and regulate the dissemination and use
of information relating to a borrower's creditworthiness. Certain of these
statutes and regulations also apply to the Company's leasing activities. In
addition, Advanta Mortgage, Advanta Finance and their respective subsidiaries
are subject to licensure and regulation in various states as mortgage bankers,
mortgage brokers, and originators, sellers and servicers of mortgage loans.
 
DIVIDENDS AND TRANSFERS OF FUNDS
 
     There are various legal limitations on the extent to which Advanta National
USA, AFC or ANB can finance or otherwise supply funds through dividends, loans
or otherwise to the Company and its affiliates. The prior approval of the
Comptroller is required if the total of all dividends declared by either of the
Banks in any calendar year exceeds that institution's net profits (as defined)
for that year combined with its retained net profits for the preceding two
years, less any required transfers to surplus accounts. In addition, neither
Advanta National USA nor ANB may pay a dividend in an amount greater than its
undivided profits then on hand after deducting its losses and bad debts. The
Comptroller also has authority under the Financial Institutions Supervisory Act
to prohibit a national bank from engaging in any unsafe or unsound practice in
conducting its business. It is possible, depending upon the financial
 
                                        9
   41
 
condition of the bank in question and other factors, that the Comptroller could
claim that a dividend payment might under some circumstances be an unsafe or
unsound practice.
 
     Advanta National USA, AFC and ANB are also subject to restrictions under
Sections 23A and 23B of the Federal Reserve Act. These restrictions limit the
transfer of funds by the depository institution to the Company and certain other
affiliates, as defined in that Act, in the form of loans, extensions of credit,
investments or purchases of assets, and they require generally that the
depository institution's transactions with its affiliates be on terms no less
favorable to the bank than comparable transactions with unrelated third parties.
These transfers by any one institution to the Company or any single affiliate
are limited in amount to 10% of the depository institution's capital and surplus
and transfers to all affiliates are limited in the aggregate to 20% of the
depository institution's capital and surplus. Furthermore, such loans and
extensions of credit are also subject to various collateral requirements. In
addition, in order for the Company to maintain its grandfathered exemption under
CEBA, neither Advanta National USA nor ANB may make any loans to the Company or
any of its subsidiaries.
 
REGULATION OF INSURANCE
 
     The insurance subsidiaries are subject to the laws and regulations of and
supervision by the states in which they are domiciled or have obtained authority
to transact insurance business. These states have adopted laws and regulations
which govern all marketing, administration and financial operations of an
insurance company, including dividend payments and financial solvency. In
addition, pursuant to Arizona laws and regulations, each of the insurance
subsidiaries is required to register as part of an Arizona holding company
structure which, among other things, requires approval of transactions between
all affiliated entities.
 
     The maximum dividend that any of the insurance subsidiaries can distribute
to its parent in any twelve month period without prior approval of the State of
Arizona Department of Insurance is the lesser of 10% of the subsidiary's
statutory surplus or its net income for any given twelve month period (if a life
insurance company) or net investment income (if a property and casualty
insurance company).
 
     The State of Arizona has adopted minimum risk-based capital standards as
developed by the National Association of Insurance Commissioners. Risk-based
capital is the quantification of an insurer's surplus requirements based on
financial balances and underwriting activity risks. The ratio of an insurer's
total adjusted capital and surplus, as defined, is compared to various levels of
risk-based capital to determine what intervention, if any, is required by either
the insurance company or an insurance department. All of the insurance companies
currently meet all risk-based capital standards and require no action by any
party.
 
     The Company's insurance subsidiaries reinsure risks whose underwriting
insurance practices and rates are regulated in part or fully by state insurance
departments. These rates are continually being reviewed and modified by the
state insurance departments based on prior historical experience. Any
modifications may impact the future profitability of the Company's insurance
subsidiaries.
 
GENERAL
 
     Because the banking and finance businesses in general are the subject of
such extensive regulation at both the state and federal levels, and because
numerous legislative and regulatory proposals are advanced each year which, if
adopted, could affect the Company's profitability or the manner in which the
Company conducts its activities, the Company cannot now predict the extent of
the impact of any such new laws or regulations.
 
     Various legislative proposals have been introduced in Congress in recent
years, including, among others, proposals relating to imposing a statutory cap
on credit card interest rates, permitting affiliations between banks and
commercial or securities firms, and proposals which would place new restrictions
on a lender's ability to utilize prescreening of consumers' credit reports
through credit reporting agencies (credit bureaus) in connection with the
lender's direct marketing efforts. It is impossible to determine whether any of
these proposals will become law and, if so, what impact they will have on the
Company.
 
                                       10
   42
 
     In 1994, Congress adopted the Interstate Banking and Branching Efficiency
Act, which statute permits nationwide interstate bank acquisitions beginning in
1995, and interstate bank branching in 1997 (or earlier at a state's option).
The Company does not currently believe that the changes in the country's banking
system wrought by this statute will materially impact the Company's business.
 
                                USE OF PROCEEDS
 
     Unless otherwise provided in the Prospectus Supplement, the net proceeds
from the sale of the Debt Securities will be used: for general corporate
purposes, including the purchase of assets from, investments in and extensions
of credit to, subsidiaries and affiliates of the Company, which will use the
proceeds for general corporate purposes; and, possibly, for financing future
acquisitions by the Company, including without limitation, acquisitions of
credit card and home equity loan portfolios. At the date hereof, no specific
proposed acquisitions have been identified as probable. The precise amounts and
timing of the application of proceeds will depend upon funding requirements of
the Company and its subsidiaries and affiliates and the amount of Debt
Securities offered from time to time pursuant to this Prospectus. If the Company
elects at the time of issuance of Debt Securities to make different or more
specific use of proceeds other than as set forth herein, such use will be
described in the Prospectus Supplement.
 
     In view of its anticipated requirements, the Company expects to engage, on
a recurring basis, in additional private or public financings of a character and
amount to be determined as the need arises.
 
                         DESCRIPTION OF DEBT SECURITIES
 
     The Debt Securities are to be issued under an Indenture (the "Indenture")
dated as of November 15, 1993 entered into between the Company and The Chase
Manhattan Bank (National Association), as Trustee (the "Trustee"), a copy of
which is filed as an exhibit to the Registration Statement. The following
summaries of certain provisions of the Indenture do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
provisions of the Indenture, including the definitions therein of certain terms.
Wherever particular Sections or defined terms of the Indenture are referred to,
it is intended that such Sections or defined terms (including, unless otherwise
indicated herein, definitions of terms capitalized in these summaries) shall be
incorporated herein by reference. The following sets forth certain general terms
and provisions of the Debt Securities to which any Prospectus Supplement may
relate. The particular terms of the Debt Securities offered by any Prospectus
Supplement and the extent, if any, to which such general provisions may apply to
the Debt Securities so offered, will be described in the Prospectus Supplement
relating to such Debt Securities.
 
     The Company's rights and the rights of its creditors, including the holders
of the Debt Securities offered hereby, to participate in the assets of any
subsidiary upon the latter's liquidation or recapitalization will be subject to
the prior claims of the subsidiary's creditors except to the extent that the
Company may itself be a creditor with recognized claims against the subsidiary.
 
GENERAL
 
     The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued from time to time in one or more series. The Debt Securities will be
unsecured obligations of the Company. Neither the Indenture nor the Debt
Securities will limit or otherwise restrict the amount of other indebtedness
which may be incurred or other securities which may be issued by the Company or
any of its subsidiaries. The Debt Securities will rank on a parity with all
other unsecured unsubordinated indebtedness of the Company.
 
     Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the following terms: (1) the title
of such Debt Securities; (2) any limit on the aggregate principal amount of such
Debt Securities; (3) the price or prices (expressed as a percentage of the
aggregate principal amount thereof) at which such Debt Securities will be
issued; (4) the date or dates, or the method or methods, if any, by which such
date or dates shall be determined, on which such
 
                                       11
   43
 
Debt Securities will mature; (5) the rate or rates (which may be fixed or
variable) per annum at which such Debt Securities will bear interest, if any, or
the method or methods, if any, by which such rate or rates are to be determined;
(6) the date or dates from which such interest, if any, on such Debt Securities
will accrue or the method or methods, if any, by which such date or dates are to
be determined, the dates on which such interest, if any, will be payable, the
date on which payment of such interest, if any, will commence and the Regular
Record Dates for such Interest Payment Dates, if any; (7) the dates, if any, on
which and the price or prices at which the Debt Securities will, pursuant to any
mandatory sinking fund provisions, or may, pursuant to any optional sinking fund
or to any purchase fund provisions, be redeemed by the Company, and the other
detailed terms and provisions of such sinking and/or purchase funds; (8) the
date, if any, after which and the price or prices at which the Debt Securities
may, pursuant to any optional redemption provisions, be redeemed at the option
of the Company or of the holder thereof and the other detailed terms and
provisions of such optional redemption; (9) the extent to which any of the Debt
Securities will be issuable in temporary or permanent global form and, if so,
the identity of the depositary for such global Debt Security, or the manner in
which any interest payable on a temporary or permanent global Debt Security will
be paid; (10) the denomination or denominations in which such Debt Securities
are authorized to be issued; (11) whether any of the Debt Securities will be
issued in bearer form and, if so, any limitations on issuance of such bearer
Debt Securities (including exchange for registered Debt Securities of the same
series); (12) information with respect to book-entry procedures; (13) whether
any of the Debt Securities will be issued as Original Issue Discount Securities;
(14) each office or agency where, subject to the terms of the Indenture, such
Debt Securities may be presented for registration of transfer or exchange; (15)
the currencies or currency units in which such Debt Securities are issued and in
which the principal of, interest on and additional amounts, if any, in respect
of such Debt Securities will be payable; (16) whether the amount of payments of
principal of, and interest and additional amounts, if any, on such Debt
Securities may be determined with reference to an index, formula or other method
(which index, formula or method may, but need not be, based on one or more
currencies, currency units or composite currencies, commodities, equity indices
or other indices) and the manner in which such amounts shall be determined; (17)
whether the Company or a holder may elect payment of the principal of or
interest on such Debt Securities in a currency, currencies, currency unit or
units or composite currency or currencies other than that in which such Debt
Securities are denominated or stated to be payable, the period or periods within
which, and the terms and conditions upon which, such election may be made, and
the time and manner of determining the exchange rate between the currency,
currencies, currency unit or units or composite currency or currencies in which
such Debt Securities are denominated or stated to be payable and the currency,
currencies, currency unit or units or composite currency or currencies in which
such Debt Securities are to be so payable; (18) if other than the Trustee, the
identity of each Security Registrar, Paying Agent and Authenticating Agent and
the designation of the initial Exchange Rate Agent; (19) if applicable, the
defeasance of certain obligations by the Company pertaining to Debt Securities
of the series; (20) the person to whom any interest on any registered Debt
Security of the series shall be payable, if other than the person in whose name
that Debt Security (or one or more predecessor Debt Securities) is registered at
the close of business on the Regular Record Date for such interest, the manner
in which, or the person to whom, any interest on any bearer Debt Security of the
series shall be payable, if otherwise than upon presentation and surrender of
the coupons appertaining thereto as they severally mature, and the extent to
which, or the manner in which, any interest payable on a temporary global Debt
Security on an Interest Payment Date will be paid if other than in the manner
provided in the Indenture; (21) whether and under what circumstances the Company
will pay additional amounts as contemplated by Section 1004 of the Indenture
(the term "interest," as used in this Prospectus, shall include such additional
amounts) on such Debt Securities to any holder who is not a United States person
(including any modification to the definition of such term as contained in the
Indenture as originally executed) in respect of any tax, assessment or
governmental charge and, if so, whether the Company will have the option to
redeem such Debt Securities rather than pay such additional amounts (and the
terms of any such option); (22) any deletions from, modifications of or
additions to the Events of Default or covenants of the Company with respect to
any of such Debt
 
                                       12
   44
 
Securities; and (23) any other terms of the series (which will not be
inconsistent with the provisions of the Indenture).
 
     Debt Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount below their principal amount. In the event of an
acceleration of the maturity of any Original Issue Discount Security, the amount
payable to the holder of such Original Issue Discount Security upon such
acceleration will be determined in accordance with the applicable Prospectus
Supplement, the terms of such Debt Security and the Indenture, but will be an
amount less than the amount payable at the maturity of the principal of such
Original Issue Discount Security. Special federal income tax and other
considerations applicable thereto will be described in the Prospectus Supplement
relating thereto.
 
     The provisions of the Indenture described below under "Restrictive
Covenants" are the only provisions which would afford holders of Debt Securities
protection in the event of a highly leveraged transaction involving the Company.
 
REGISTRATION, TRANSFER, PAYMENT AND PAYING AGENT
 
     Unless otherwise indicated in the applicable Prospectus Supplement, each
series of Debt Securities will be issued in registered form only, without
coupons. The Indenture, however, provides that the Company may also issue Debt
Securities in bearer form only, or in both registered and bearer form. Debt
Securities issued in bearer form shall have interest coupons attached, unless
issued as Original Issue Discount Securities. Debt Securities in bearer form
shall not be offered, sold, resold or delivered in connection with their
original issuance in the United States or to any United States person (as
defined below) other than offices located outside the United States of certain
United States financial institutions. As used herein, "United States person"
means any citizen or resident of the United States, any corporation, partnership
or other entity created or organized in or under the laws of the United States,
or any estate or trust, the income of which is subject to United States federal
income taxation regardless of its source, and "United States" means the United
States of America (including the States and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction.
Purchasers of Debt Securities in bearer form will be subject to certification
procedures and may be affected by certain limitations under United States tax
laws. Such procedures and limitations will be described in the Prospectus
Supplement relating to the offering of the Debt Securities in bearer form.
 
     Unless otherwise indicated in the applicable Prospectus Supplement, Debt
Securities will be issued in denominations of $1,000 or any integral multiple
thereof. No service charge will be made for any transfer or exchange of the Debt
Securities but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
 
     Unless otherwise described in the Prospectus Supplement relating thereto,
the principal, premium, if any, and interest, if any, of or on the Debt
Securities will be payable, and transfer of the Debt Securities will be
registrable, at the corporate trust office of The Chase Manhattan Bank (National
Association), as Paying Agent and Security Registrar under the Indenture, in The
City of New York, New York, provided that payments of interest may be made at
the option of the Company by check mailed to the address appearing in the
Security Register of the person in whose name such registered Debt Security is
registered at the close of business on the Regular Record Date (Sections 305 and
307).
 
     Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest, if any, on Debt Securities in
bearer form will be made payable, subject to any applicable laws and
regulations, at such office outside the United States as specified in the
Prospectus Supplement and as the Company may designate from time to time, at the
option of the holder, by check or by transfer to an account maintained by the
payee with a bank located outside the United States. Unless otherwise indicated
in the applicable Prospectus Supplement, payment of interest and certain
additional amounts on Debt Securities in bearer form will be made only against
surrender of the coupon relating to such Interest Payment Date. No payment with
respect to any Debt Security in bearer form will be made at any office or agency
of the Company in the United States or by check mailed
 
                                       13
   45
 
to any address in the United States or by transfer to an account maintained with
a bank located in the United States.
 
GLOBAL SECURITIES
 
     The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities ("Global Debt Securities") that will be
deposited with, or on behalf of, a depositary (the "Depositary") identified in
the Prospectus Supplement relating to such series. Global Debt Securities may be
issued in either registered or bearer form and in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for individual
certificates evidencing Debt Securities in definitive form represented thereby,
a Global Debt Security may not be transferred except as a whole by the
Depositary for such Global Debt Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor.
 
     The specific terms of the depositary arrangement with respect to a series
of Global Debt Securities and certain limitations and restrictions relating to a
series of bearer Global Debt Securities, will be described in the Prospectus
Supplement relating to such series.
 
RESTRICTIVE COVENANTS
 
     The Indenture contains a covenant by the Company limiting its ability to
dispose of the Voting Stock of a Significant Subsidiary. A"Significant
Subsidiary" is defined to mean any Subsidiary of the Company the Consolidated
Assets of which constitute 20% or more of the Company's Consolidated Assets.
Such covenant provides that, subject to certain exceptions, so long as any of
the Debt Securities are outstanding, the Company: (a) will not, nor will it
permit any Subsidiary to, sell, assign, transfer or otherwise dispose of any
shares of, or securities convertible into, or options, warrants or rights to
subscribe for or purchase shares of, Voting Stock of a Significant Subsidiary,
nor will the Company permit a Significant Subsidiary to issue any shares of, or
securities convertible into, or options, warrants or rights to subscribe for or
purchase shares of, Voting Stock of a Significant Subsidiary, unless the Company
will own, directly or indirectly, at least 80% of the issued and outstanding
Voting Stock of such Subsidiary after giving effect to such transaction; or (b)
will not permit a Significant Subsidiary to either (i) merge or consolidate with
or into any corporation (other than the Company), unless at least 80% of the
surviving corporation's Voting Stock is, or upon consummation of the merger or
consolidation will be, owned, directly or indirectly, by the Company, or (ii)
lease, sell or transfer all or substantially all of its properties or assets to
any corporation or other person (other than the Company), unless 80% of the
Voting Stock of such corporation or other person is owned, or will be owned,
upon such lease, sale or transfer, directly or indirectly, by the Company
(Section 1005).
 
     In addition, the Indenture contains a covenant prohibiting the Company from
creating or permitting, or permitting any Subsidiary to create or permit, any
liens upon 20% or more of the Voting Stock of any Significant Subsidiary to
secure any indebtedness without securing the Debt Securities equally and ratably
with all indebtedness secured thereby (Section 1006).
 
EVENTS OF DEFAULT
 
     The following are Events of Default under the Indenture with respect to
Debt Securities of any series: (a) failure to pay principal of or any premium on
any Debt Security of that series when due; (b) failure to pay any interest on
any Debt Security of that series when due, continued for 30 days; (c) failure to
deposit any sinking fund payment, when due, in respect of any Debt Security of
that series; (d) breach of any other covenant or warranty of the Company in the
Indenture (other than a covenant or warranty included in the Indenture solely
for the benefit of series of Debt Securities other than that series), continued
for 60 days after written notice as provided in the Indenture; (e) certain
events in bankruptcy, insolvency or reorganization involving the Company or any
Significant Subsidiary; (f) acceleration of indebtedness in a principal amount
in excess of $10,000,000 for money borrowed by the Company or any
 
                                       14
   46
 
Significant Subsidiary under the terms of the instrument under which such
indebtedness was issued or secured, if such acceleration is not annulled within
30 days after written notice as provided in the Indenture; and (g) any other
Event of Default provided with respect to Debt Securities of that series
(Section 501). If an Event of Default with respect to Debt Securities of any
series at the time outstanding occurs and is continuing, either the Trustee or
the holders of at least 25% in aggregate principal amount of the Outstanding
Debt Securities of that series may declare the principal amount of all the Debt
Securities of that series to be due and payable immediately. At any time after a
declaration of acceleration with respect to Debt Securities of any series has
been made, but before a judgment or decree based on acceleration has been
obtained, the holders of a majority in aggregate principal amount of Outstanding
Debt Securities of that series may rescind and annul such acceleration, provided
that, among other things, all Events of Default with respect to such series,
other than payment defaults caused by such acceleration, have been cured or
waived as provided in the Indenture (Section 502).
 
ADDITIONAL PROVISIONS
 
     The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders, unless such holders shall have
offered to the Trustee reasonable indemnity (Section 601). Subject to such
provisions for the indemnification of the Trustee and certain other conditions,
the holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the Debt
Securities of that series (Section 512).
 
     No holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless: (i) such holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to Debt Securities
of that series; (ii) the holders of not less than 25% in aggregate principal
amount of the Outstanding Debt Securities of that series shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee; (iii) the Trustee shall have failed to institute such
proceeding within 60 days after receipt of such written request; and (iv) the
Trustee shall not have received from the holders of a majority in principal
amount of the Outstanding Debt Securities of that series a direction
inconsistent with such request (Section 507). However, the holder of any Debt
Security will have an absolute right to receive payment of the principal of (and
premium, if any) and interest on such Debt Security on or after the due dates
expressed in such Debt Security and to institute suit for the enforcement of any
such payment (Section 508).
 
     The Company is required to furnish to the Trustee annually a statement as
to performance by the Company of certain of its obligations under the Indenture
and as to any default in such performance. The Company is also required to
deliver to the Trustee, within five days after the occurrence thereof, written
notice of any event which after notice or lapse of time or both would constitute
an Event or Default (Section 1009).
 
OUTSTANDING DEBT SECURITIES
 
     In determining whether the holders of the requisite principal amount of
Outstanding Debt Securities have given any request, demand, authorization,
direction, notice, consent or waiver under the Indenture, (i) the portion of the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding for such purposes shall be that portion of the principal amount
thereof that could be declared to be due and payable pursuant to the terms of
such Original Issue Discount Security as of the date of such determination, (ii)
the principal amount of any Indexed Security shall be the principal face amount
of such Indexed Security determined on the date of its original issuance and
(iii) any Debt Security owned by the Company or any obligor on such Debt
Security or any Affiliate of the Company or such other obligor, shall be deemed
not to be outstanding (Section 101).
 
                                       15
   47
 
MODIFICATION AND WAIVER
 
     Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of 66 2/3% in aggregate
principal amount of the Outstanding Debt Securities of each series affected by
such modification or amendment: provided, however, that no such modification or
amendment may, without the consent of the holder of each Outstanding Debt
Security affected thereby: (a) change the stated maturity date of the principal
of, or any installment of principal or interest on, any Debt Security; (b)
reduce the principal amount of, or any premium or interest on, any Debt
Security; (c) reduce the amount of principal of an Original Issue Discount
Security payable upon acceleration of the maturity thereof or the amount thereof
provable in bankruptcy; (d) adversely affect the right of repayment at the
option of any holder; (e) change the place of payment of, currency of payment of
principal of, or any premium or interest on, any Debt Security; (f) impair the
right to institute suit for the enforcement of any payment on or with respect to
any Debt Security; or (g) reduce the percentage in principal amount of
Outstanding Debt Securities of any series the consent of whose holders is
required for modification or amendment of the Indenture or for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults (Section 902).
 
     The holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of each series may, on behalf of all holders of Debt Securities
of that series, waive, insofar as that series is concerned, compliance by the
Company with certain restrictive provisions of the Indenture (Section 1008). The
holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of each series may, on behalf of all holders of Debt Securities of
that series, waive any past default under the Indenture with respect to Debt
Securities of that series, except a default in the payment of principal or any
premium or interest, or a default in respect of a provision which under the
Indenture cannot be modified or amended without the consent of the holder of
each affected Outstanding Debt Security of that series (Section 513).
 
     Modification and amendment of the Indenture may be made by the Company and
the Trustee without the consent of any holder for any of the following purposes:
(i) to evidence the succession of another corporation to the Company; (ii) to
add to the covenants of the Company for the benefit of the holders of all or any
series of Debt Securities; (iii) to add Events of Default; (iv) to add or change
any provisions of the Indenture to facilitate the issuance of bearer Debt
Securities; (v) to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Debt Securities; (vi) to establish the form or
terms of Debt Securities of any series and any related coupons; (vii) to provide
for the acceptance of appointment by a successor Trustee; (viii) to cure any
ambiguity, defect or inconsistency in the Indenture, provided such action does
not adversely affect the interests of holders of Debt Securities of any series
or any related coupons in any material respect; (ix) to supplement any of the
provisions of the Indenture to such extent as shall be necessary to permit or
facilitate the defeasance and discharge of any series of Debt Securities,
provided such action does not adversely affect the interests of holders of Debt
Securities of such series or any related coupons in any material respect; (x) to
secure the Debt Securities; and (xi) to amend or supplement any provision
contained in the Indenture or in any supplemental indenture, provided that such
amendment or supplement does not materially adversely affect the interests of
the holders of any Debt Securities then Outstanding (Section 901).
 
CONSOLIDATION, MERGER AND SALE OF ASSETS
 
     The Company may consolidate or merge with or into, or transfer its assets
substantially as an entirety to, any corporation organized under the laws of any
domestic jurisdiction, provided that the successor corporation assumes the
Company's obligations on the Debt Securities and under the Indenture, that after
giving effect to the transaction no Event of Default, and no event which, after
notice or lapse of time, would become an Event of Default, shall have occurred
and be continuing, and that certain other conditions are met (Section 801).
 
                                       16
   48
 
CONCERNING THE TRUSTEE
 
     The Company and certain of its subsidiaries maintain banking relationships
with the Trustee in the ordinary course of their businesses.
 
                              PLAN OF DISTRIBUTION
 
     The Company may sell the Debt Securities being offered hereby: (i) directly
to purchasers; (ii) through agents; (iii) through underwriters; (iv) through
dealers; or (v) through a combination of any such methods of sale.
 
     The distribution of the Debt Securities may be effected from time to time
in one or more transactions: (i) at a fixed price or prices, which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
 
     Offers to purchase Debt Securities may be solicited directly by the Company
or by agents designated by the Company from time to time. Any such agent, which
may be deemed to be an underwriter as that term is defined in the Securities
Act, involved in the offer or sale of the Debt Securities in respect of which
this Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be acting
on a reasonable efforts basis.
 
     If an underwriter or underwriters are utilized in the sale, the Company
will execute an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transaction
will be set forth in the Prospectus Supplement, which will be used by the
underwriters to make resales of the Debt Securities in respect of which this
Prospectus is delivered to the public.
 
     If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company may sell such Debt Securities to
the dealer, as principal. The dealer may then resell such Debt Securities to the
public at varying prices to be determined by such dealer at the time of resale.
 
     Certain of the underwriters, dealers or agents may be customers of,
including borrowers from, engage in transactions with, and perform services for,
the Company or one or more of its affiliates in the ordinary course of business.
Underwriters, dealers, agents and other persons may be entitled, under
agreements which may be entered into with the Company, to indemnification
against certain civil liabilities, including liabilities under the Securities
Act.
 
     If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain institutions to purchase
Debt Securities from the Company at the public offering price set forth in the
Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on the date stated in the Prospectus
Supplement. Each Contract will be for an amount not less than, and, unless the
Company otherwise agrees, the aggregate principal amount of Debt Securities sold
pursuant to Contracts shall be not less nor more than, the respective amounts
stated in the Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions, but shall in all cases be subject to the
approval of the Company. Contracts will not be subject to any conditions except
that the purchase by an institution of the Debt Securities covered by its
Contract shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject. A
commission indicated in the Prospectus Supplement will be paid to underwriters
and agents soliciting purchases of Debt Securities pursuant to Contracts
accepted by the Company.
 
                                       17
   49
 
                                 LEGAL OPINIONS
 
     Certain legal matters relating to the Debt Securities offered hereby will
be passed upon for the Company by Gene S. Schneyer, Esquire, Vice President,
Secretary and General Counsel of the Company and for the agents and
underwriters, if any, by Brown & Wood, New York, New York. Mr. Schneyer owns or
has the right to acquire a number of shares of Class A and Class B Common Stock
of the Company which is well below l% of the outstanding common stock of the
Company.
 
                                    EXPERTS
 
     The consolidated financial statements and schedules incorporated by
reference in this Prospectus and elsewhere in the Registration Statement to the
extent and for the periods indicated in their reports have been audited by
Arthur Andersen LLP, independent public accountants, and are incorporated herein
in reliance upon the authority of said firm as experts in giving said reports.
 
                                       18
   50
 
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL
HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT
CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT, THE
APPLICABLE PRICING SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFER
MADE BY THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING 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 THE AGENTS. NEITHER
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING SUPPLEMENT OR
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT, THE
APPLICABLE PRICING 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 AN OFFER IS NOT QUALIFIED
TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
 
                            ------------------------
 
                               TABLE OF CONTENTS
 


                                        PAGE
                                        ----
                                     
           PROSPECTUS SUPPLEMENT
Description of the Notes..............   S-2
Special Provisions and Risks Relating
  to Foreign Currency Notes...........  S-17
Certain United States Federal Income
  Tax Consequences....................  S-20
Plan of Distribution..................  S-29
Legal Opinions........................  S-30
                 PROSPECTUS
Available Information.................     2
Incorporation of Certain Information
  By Reference........................     2
The Company...........................     3
Ratio of Earnings to Fixed Charges....     7
Government Regulation.................     7
Use of Proceeds.......................    11
Description of Debt Securities........    11
Plan of Distribution..................    17
Legal Opinions........................    18
Experts...............................    18

 
$500,000,000
LOGO
Corp.
MEDIUM-TERM NOTES,
 
SERIES D
SALOMON BROTHERS INC
 
BEAR, STEARNS & CO. INC.
CS FIRST BOSTON
DONALDSON, LUFKIN & JENRETTE
            SECURITIES CORPORATION
 
MERRILL LYNCH & CO.
 
PROSPECTUS SUPPLEMENT
OCTOBER 30, 1996
 
         (LOGO)K  This document is printed entirely on recycled paper.