Filed Pursuant to Rule 424(b)(3)
File No. 333-123085
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MAY 17, 2005)
GENERAL ELECTRIC CAPITAL CORPORATION
$14,651,734,000
GE CAPITAL* INTERNOTES(R)
DUE FROM 9 MONTHS TO 60 YEARS FROM DATE OF ISSUE
We may offer to sell our GE Capital* InterNotes(R) from time to time. The
specific terms of the notes will be set prior to the time of sale and described
in a pricing supplement. You should read this prospectus supplement, the
accompanying prospectus and the applicable pricing supplement carefully before
you invest.
We may offer the notes to or through agents for resale. The amount we
expect to receive if all of the notes are sold to or through the agents is from
$14,622,430,532 to $14,212,182,000, after paying agent discounts and commissions
of between $29,303,468 and $439,552,020. We also may offer the notes directly.
We have not set a date for termination of our offering.
The agents have advised us that from time to time they may purchase and
sell notes in the secondary market, but they are not obligated to make a market
in the notes and may suspend or completely stop that activity without notice and
at any time. Unless otherwise specified in the applicable pricing supplement, we
do not intend to list the notes on any stock exchange.
--------------------
INVESTING IN THE NOTES INVOLVES CERTAIN RISKS, INCLUDING THOSE DESCRIBED
IN THE "RISK FACTORS" SECTION BEGINNING ON PAGE S-4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these notes or passed on the adequacy
or accuracy of this prospectus supplement, the accompanying prospectus or any
pricing supplement. Any representation to the contrary is a criminal offense.
--------------------
JOINT LEAD MANAGERS AND LEAD AGENTS
BANC OF AMERICA SECURITIES LLC INCAPITAL LLC
AGENTS
A.G. EDWARDS AND SONS, INC. CHARLES SCHWAB & CO., INC.
CITIGROUP EDWARD D. JONES & CO., L.P.
MERRILL LYNCH & CO. MORGAN STANLEY
UBS FINANCIAL SERVICES, INC. WACHOVIA SECURITIES
Prospectus Supplement dated May 17, 2005
* GE Capital is a registered trademark of General Electric Company
InterNotes(R) is a registered servicemark of Incapital Holdings LLC
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
Summary .................................................................. S-1
Risk Factors ............................................................. S-4
Where You Can Get More Information on GECC ............................... S-5
The Company .............................................................. S-6
Description of Notes ..................................................... S-7
Registration and Settlement .............................................. S-13
United States Federal Income Tax Considerations .......................... S-16
Employee Retirement Income Security Act .................................. S-18
Plan of Distribution ..................................................... S-18
Legal Opinions ........................................................... S-20
PROSPECTUS
PAGE
----
About This Prospectus .................................................... 2
Where You Can Get More Information on GECC ............................... 2
The Company .............................................................. 4
Use of Proceeds .......................................................... 4
Plan of Distribution ..................................................... 5
Securities Offered ....................................................... 7
Description of Debt Securities ........................................... 7
Description of Warrants .................................................. 14
Description of the Preferred Stock ....................................... 15
Description of Support Obligations and Interests Therein ................. 19
Legal Opinions ........................................................... 23
Experts .................................................................. 23
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND ANY
PRICING SUPPLEMENT. WE HAVE NOT AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH
DIFFERENT OR ADDITIONAL INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR
ADDITIONAL INFORMATION, YOU SHOULD NOT RELY ON IT. WE ARE NOT MAKING AN OFFER TO
SELL THESE SECURITIES OR SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. YOU SHOULD ASSUME THAT
THE INFORMATION APPEARING IN THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING
PROSPECTUS AND ANY PRICING SUPPLEMENT, AS WELL AS INFORMATION FILED BY US WITH
THE SECURITIES AND EXCHANGE COMMISSION AND INCORPORATED BY REFERENCE IN THESE
DOCUMENTS, IS ACCURATE ONLY AS OF THEIR RESPECTIVE DATES. OUR BUSINESS,
FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS MAY HAVE CHANGED SINCE
THEN.
UNLESS OTHERWISE INDICATED OR THE CONTEXT REQUIRES OTHERWISE, REFERENCES IN
THIS PROSPECTUS SUPPLEMENT TO "WE," "US," "OUR" AND "GECC" ARE TO GENERAL
ELECTRIC CAPITAL CORPORATION.
i
SUMMARY
THIS SECTION SUMMARIZES THE LEGAL AND FINANCIAL TERMS OF THE NOTES THAT ARE
DESCRIBED IN MORE DETAIL IN "DESCRIPTION OF NOTES" BEGINNING ON PAGE S-7. FINAL
TERMS OF ANY PARTICULAR NOTES WILL BE DETERMINED AT THE TIME OF SALE AND WILL BE
CONTAINED IN THE PRICING SUPPLEMENT RELATING TO THOSE NOTES. THE TERMS IN THAT
PRICING SUPPLEMENT MAY VARY FROM AND SUPERSEDE THE TERMS CONTAINED IN THIS
SUMMARY AND IN "DESCRIPTION OF NOTES." IN ADDITION, YOU SHOULD READ THE MORE
DETAILED INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS SUPPLEMENT, THE
ACCOMPANYING PROSPECTUS AND IN THAT PRICING SUPPLEMENT.
Issuer ...................... General Electric Capital Corporation
Purchasing Agent ............ Incapital LLC
Joint Lead Managers and
Lead Agents ................. Banc of America Securities LLC and Incapital LLC
Agents ...................... A.G. Edwards & Sons, Inc.
Charles Schwab & Co., Inc.
Citigroup Global Markets Inc.
Edward D. Jones & Co., L.P.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
UBS Financial Services, Inc.
Wachovia Securities, LLC
Title of Notes .............. GE Capital* InterNotes(R)
Amount ...................... We may issue up to $14,651,734,000 of notes under
this Prospectus Supplement. Additional notes may
be issued in the future without the consent of
note holders. The notes will not contain any
limitations on our ability to issue additional
indebtedness in the form of these notes or
otherwise.
Denominations ............... The notes will be issued and sold in denominations
of $1,000 and multiples of $1,000 (unless
otherwise stated in the pricing supplement).
Status ...................... The notes will be our direct unsecured senior
obligations and will rank equally with all of our
other unsecured senior indebtedness from time to
time outstanding.
Maturities .................. Each note will mature nine months or more from its
date of original issuance.
S-1
Interest .................... Each note will bear interest from its date of
original issuance at a fixed rate per year.
Interest on each note will be payable either
monthly, quarterly, semiannually or annually on
each interest payment date and on the stated
maturity date. Interest also will be paid on the
date of redemption or repayment if a note is
redeemed or repurchased prior to its stated
maturity in accordance with its terms.
Interest on the notes will be computed on the
basis of a 360-day year of twelve 30-day months.
Principal ................... The principal amount of each note will be payable
on its stated maturity date or upon earlier
redemption or repayment at the corporate trust
office of the paying agent or at any other place
we may designate.
Redemption and Repayment .... Unless otherwise stated in the applicable pricing
supplement, a note will not be redeemable at our
option or be repayable at the option of the holder
prior to its stated maturity date. The notes will
not be subject to any sinking fund.
Survivor's Option ........... Specific notes may contain a provision permitting
the optional repayment of those notes prior to
stated maturity, if requested by the authorized
representative of the beneficial owner of those
notes, following the death of the beneficial owner
of the notes, so long as the notes were owned by
the beneficial owner or his or her estate at least
six months prior to the request. This feature is
referred to as a "Survivor's Option." Your notes
will not be repaid in this manner unless the
pricing supplement for your notes provides for the
Survivor's Option. The right to exercise the
Survivor's Option is subject to limits set by us
on (1) the permitted dollar amount of total
exercises by all holders of notes in any calendar
year, and (2) the permitted dollar amount of an
individual exercise by a holder of a note in any
calendar year. Additional details on the
Survivor's Option are described in the section
entitled "Description of Notes--Survivor's Option"
on page S-10.
S-2
Sale and Clearance .......... We will sell notes in the United States only.
Notes will be issued in book-entry only form and
will clear through The Depository Trust Company.
We do not intend to issue notes in certificated
form.
Trustee ..................... The trustee for the notes is JPMorgan Chase Bank,
N.A., under an indenture dated as of February 27,
1997, as supplemented.
Selling Group ............... The agents and dealers comprising the selling
group are broker-dealers and securities firms. The
agents, including the Purchasing Agent, have
entered into a Selling Agent Agreement with us
dated November 22, 2002, as amended. Dealers who
are members of the selling group have executed a
Master Selected Dealer Agreement with the
Purchasing Agent. The agents and the dealers have
agreed to market and sell the notes in accordance
with the terms of those respective agreements and
all other applicable laws and regulations. You may
contact the Purchasing Agent at info@incapital.com
for a list of selling group members.
S-3
RISK FACTORS
YOUR INVESTMENT IN THE NOTES WILL INVOLVE CERTAIN RISKS. THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT DESCRIBE ALL OF THOSE RISKS.
IN ADDITION TO THE INFORMATION RELATING TO THE BUSINESSES OF GECC, WHICH IS
INCORPORATED BY REFERENCE IN THE ACCOMPANYING PROSPECTUS, YOU SHOULD, IN
CONSULTATION WITH YOUR OWN FINANCIAL AND LEGAL ADVISORS, CAREFULLY CONSIDER THE
FOLLOWING DISCUSSION OF RISKS BEFORE DECIDING WHETHER AN INVESTMENT IN THE NOTES
IS SUITABLE FOR YOU. THE NOTES WILL NOT BE AN APPROPRIATE INVESTMENT FOR YOU IF
YOU ARE NOT KNOWLEDGEABLE ABOUT SIGNIFICANT FEATURES OF THE NOTES OR FINANCIAL
MATTERS IN GENERAL. YOU SHOULD NOT PURCHASE THE NOTES UNLESS YOU UNDERSTAND, AND
KNOW THAT YOU CAN BEAR, THESE INVESTMENT RISKS.
THE MARKET VALUE OF THE NOTES MAY BE AFFECTED BY FACTORS IN ADDITION TO CREDIT
RATINGS.
The credit ratings assigned to the notes reflect the rating agencies'
opinion of our ability to make payments on the notes when such payments are due.
However, the ratings do not take into account fluctuations in the market value
of the notes as a result of changes in prevailing interest rates or other
factors.
WE MAY CHOOSE TO REDEEM NOTES WHEN PREVAILING INTEREST RATES ARE RELATIVELY LOW.
If your notes will be redeemable at our option, we may choose to redeem
your notes from time to time, especially when prevailing interest rates are
lower than the rate borne by the notes. If prevailing rates are lower at the
time of redemption, you would not be able to reinvest the redemption proceeds in
a comparable security at an effective interest rate as high as the interest rate
on the notes being redeemed. Our redemption right also may adversely impact your
ability to sell your notes as the optional redemption date or period approaches.
SURVIVOR'S OPTION MAY BE LIMITED IN AMOUNT.
We will have a discretionary right to limit the aggregate principal amount
of notes subject to the Survivor's Option that may be exercised in any calendar
year to an amount equal to the greater of $2,000,000 or 2% of the outstanding
principal amount of all the notes of this series outstanding as of the end of
the most recent calendar year. We also have the discretionary right to limit to
$250,000 in any calendar year the aggregate principal amount of notes subject to
the Survivor's Option that may be exercised in such calendar year on behalf of
any individual deceased beneficial owner of notes. Accordingly, no assurance can
be given that exercise of the Survivor's Option for the desired amount will be
permitted in any single calendar year.
WE CANNOT ASSURE THAT A TRADING MARKET FOR YOUR NOTES WILL EVER DEVELOP OR BE
MAINTAINED.
In evaluating the notes, you should assume that you will be holding the
notes until their stated maturity. The notes are a new issue of securities. We
cannot assure you that a trading market for your notes will ever develop, be
liquid or be maintained. Many factors independent of our creditworthiness affect
any trading market for and market value of your notes. Those factors include,
without limitation:
o the method of calculating the principal and interest for the notes;
o the time remaining to the stated maturity of the notes;
o the outstanding amount of the notes;
o the redemption or repayment features of the notes; and
o the level, direction and volatility of interest rates generally.
There may be a limited number of buyers when you decide to sell your notes.
This may affect the price you receive for your notes or your ability to sell
your notes at all.
S-4
WHERE YOU CAN GET MORE
INFORMATION ON GECC
GECC files annual, quarterly and current reports with the SEC. You may
obtain any document we file with the SEC at the SEC's Public Reference Room in
Washington, D.C. You may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also
accessible through the Internet at the SEC's Web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus the
information in documents we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus, and information that we file later with the SEC will automatically
update and supersede information contained in documents filed earlier with the
SEC or contained in this prospectus. We incorporate by reference in this
prospectus the documents listed below and any future filings that we make with
the SEC under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act
of 1934, as amended, until we sell all the securities that may be offered by
this prospectus supplement and the accompanying prospectus; provided, however,
that we are not incorporating any information furnished under either Item 2.02
or Item 7.01 of any Current Report on Form 8-K unless, and except to the extent,
specified in any such Current Report on Form 8-K:
(i) GECC's Annual Report on Form 10-K, as amended by amendment No. 1
on Form 10-K/A, for the year ended December 31, 2004;
(ii) GECC's Quarterly Report on Form 10-Q for the quarter ended March
31, 2005; and
(iii) GECC's Current Report on Form 8-K filed on May 6, 2005.
You may request a copy of these filings at no cost. Requests should be
directed to David P. Russell, Senior Counsel, Corporate Treasury and Assistant
Secretary, General Electric Capital Corporation, 260 Long Ridge Road, Stamford,
Connecticut 06927, Telephone No. (203) 357-4000.
S-5
THE COMPANY
General Electric Capital Corporation was incorporated in 1943 in the
State of New York, under the provisions of the New York Banking Law relating to
investment companies, as successor to General Electric Contracts Corporation,
which was formed in 1932. Until November 1987, our name was General Electric
Credit Corporation. As of July 2001, General Electric Capital Corporation
completed its reincorporation as a Delaware corporation. All of our outstanding
common stock is owned by General Electric Capital Services, Inc. ("GE Capital
Services") formerly General Electric Financial Services, Inc., the common stock
of which is in turn wholly owned directly or indirectly by General Electric
Company ("GE Company"). Financing and services offered by us are diversified, a
significant change from the original business of GECC, that is, financing
distribution and sale of consumer and other GE Company products. GE Company
manufactures few of the products financed by us.
We operate in four separate financial services businesses: GE Commercial
Finance, GE Consumer Finance, GE Insurance and GE Equipment and Other Services.
Our operations are subject to a variety of regulations in their respective
jurisdictions.
We offer our services primarily throughout the United States, Canada,
Europe and the Pacific Basin. Our principal executive offices are located at 260
Long Ridge Road, Stamford, Connecticut 06927 (telephone number (203) 357-4000).
At December 31, 2004, our employment totaled approximately 76,300.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
YEAR ENDED DECEMBER 31,
THREE MONTHS
2001 2002 2003 2004 ENDED
2000 (RESTATED) (RESTATED) (RESTATED) (RESTATED) MARCH 31, 2005
----- ----- ----- ----- ----- ---------
1.52 1.73 1.66 1.86 1.89 1.74
CONSOLIDATED RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
YEAR ENDED DECEMBER 31,
THREE MONTHS
2001 2002 2003 2004 ENDED
2000 (RESTATED) (RESTATED) (RESTATED) (RESTATED) MARCH 31, 2005
----- ----- ----- ----- ----- ---------
1.50 1.71 1.65 1.85 1.88 1.73
For purposes of computing the consolidated ratios of earnings to fixed
charges and earnings to combined fixed charges and preferred stock dividends,
earnings consist of net earnings adjusted for the provision for income taxes,
minority interest, interest capitalized (net of amortization) and fixed charges.
Fixed charges consist of interest on all indebtedness and one-third of rentals,
which we believe is a reasonable approximation of the interest factor of such
rentals.
S-6
DESCRIPTION OF NOTES
THE FOLLOWING DESCRIPTION OF THE PARTICULAR TERMS OF THE NOTES BEING
OFFERED SUPPLEMENTS AND, TO THE EXTENT INCONSISTENT WITH OR TO THE EXTENT
OTHERWISE SPECIFIED IN AN APPLICABLE PRICING SUPPLEMENT, REPLACES THE
DESCRIPTION OF THE GENERAL TERMS AND PROVISIONS OF THE DEBT SECURITIES SET FORTH
UNDER THE HEADINGS "DESCRIPTION OF DEBT SECURITIES" IN THE ACCOMPANYING
PROSPECTUS. UNLESS OTHERWISE SPECIFIED IN AN APPLICABLE PRICING SUPPLEMENT, THE
NOTES WILL HAVE THE TERMS DESCRIBED BELOW. CAPITALIZED TERMS USED BUT NOT
DEFINED BELOW HAVE THE MEANINGS GIVEN TO THEM IN THE ACCOMPANYING PROSPECTUS AND
IN THE INDENTURE RELATING TO THE NOTES.
The notes being offered by this prospectus supplement, the accompanying
prospectus and the applicable pricing supplement will be issued under an Amended
and Restated Indenture between us and JPMorgan Chase Bank, N.A., as successor
trustee (the "trustee"), dated as of February 27, 1997, as supplemented by a
First Supplemental Indenture dated as of May 3, 1999, a Second Supplemental
Indenture dated as of July 2, 2001 and a Third Supplemental Indenture dated as
of November 22, 2002 (collectively, the "indenture"). The indenture is more
fully described in the accompanying prospectus. The indenture does not limit the
aggregate amount of debt securities that may be issued under it and provides
that the debt securities may be issued under it from time to time in one or more
series. The following statements are summaries of the material provisions of the
indenture and the notes. These summaries do not purport to be complete and are
qualified in their entirety by reference to the indenture, including for the
definitions of certain terms. The notes constitute a single series of debt
securities for purposes of the indenture and are limited to an aggregate
principal amount of up to $20,000,000,000. We have issued $5,348,266,000 of
these Notes as of May 17, 2005; therefore the amount of additional Notes of this
series that we may offer with this Prospectus Supplement is $14,651,734,000. We
may increase the foregoing limit, however, without the consent of any holders of
the notes, by appropriate corporate action if in the future we wish to sell
additional notes.
Notes issued in accordance with this prospectus supplement, the
accompanying prospectus and the applicable pricing supplement will have the
following general characteristics:
o the notes will be our direct unsecured senior obligations and will
rank equally with all of our other unsecured senior indebtedness from
time to time outstanding;
o the notes may be offered from time to time by us through the
Purchasing Agent and each note will mature on a day that is at least
nine months from its date of original issuance;
o each note will bear interest from its date of original issuance at a
fixed rate per year;
o the notes will not be subject to any sinking fund; and
o the minimum denomination of the notes will be $1,000 (unless otherwise
stated in the pricing supplement).
In addition, the pricing supplement relating to each offering of notes
will describe specific terms of the notes, including:
o the price, which may be expressed as a percentage of the aggregate
initial public offering price of the notes, at which the notes will be
issued to the public;
o the date on which the notes will be issued to the public;
o the stated maturity date of the notes;
o the rate per year at which the notes will bear interest;
o the interest payment frequency;
o the purchase price, Purchasing Agent's discount and net proceeds to
us;
S-7
o whether the authorized representative of the holder of a beneficial
interest in the note will have the right to seek repayment upon the
death of the holder as described under "--Survivor's Option" on page
S-10;
o if the notes may be redeemed at our option or repaid at the option of
the holder prior to its stated maturity date, the provisions relating
to any such redemption or repayment; and
o any other significant terms of the notes not inconsistent with the
provisions of the indenture.
We may at any time purchase notes at any price or prices in the open
market or otherwise. Notes so purchased by us may, at our discretion, be held,
resold or surrendered to the trustee for cancellation.
PAYMENT OF PRINCIPAL AND INTEREST
Payment of principal of and interest on beneficial interests in the notes
will be made in accordance with the arrangements then in place between the
paying agent and The Depository Trust Company (referred to as "DTC") and its
participants as described under "Registration and Settlement--The Depository
Trust Company" on page S-13. Payments in respect of any notes in certificated
form will be made as described under "Registration and Settlement--Registration,
Transfer and Payment of Certificated Notes" on page S-15.
Interest on each note will be payable either monthly, quarterly,
semi-annually or annually on each interest payment date and at the note's stated
maturity or on the date of redemption or repayment if a note is redeemed or
repaid prior to maturity. Interest is payable to the person in whose name a note
is registered at the close of business on the regular record date before each
interest payment date. Interest due at a note's stated maturity or on a date of
redemption or repayment will be payable to the person to whom principal is
payable.
We will pay any administrative costs imposed by banks in connection with
making payments in immediately available funds, but any tax, assessment or
governmental charge imposed upon any payments on a note, including, without
limitation, any withholding tax, is the responsibility of the holders of
beneficial interests in the note in respect of which such payments are made.
INTEREST AND INTEREST RATES
Each note will accrue interest from its date of original issuance until
its stated maturity or earlier redemption or repayment. The applicable pricing
supplement will specify a fixed interest rate per year payable monthly,
quarterly, semi-annually or annually. Interest on the notes will be computed on
the basis of a 360-day year of twelve 30-day months. If the stated maturity
date, date of earlier redemption or repayment or interest payment date for any
note is not a business day, principal and interest for that note will be paid on
the next business day, and no interest will accrue on the amount payable from,
and after, the stated maturity date, date of earlier redemption or repayment or
interest payment date.
S-8
PAYMENT OF INTEREST
Interest on the notes will be paid as follows:
INTEREST PAYMENT FREQUENCY INTEREST PAYMENT DATES
Monthly ..................... Fifteenth day of each calendar month, beginning in
the first calendar month following the month the
note was issued.
Quarterly ................... Fifteenth day of every third month, beginning in
the third calendar month following the month the
note was issued.
Semi-annually ............... Fifteenth day of every sixth month, beginning in
the sixth calendar month following the month the
note was issued.
Annually .................... Fifteenth day of every twelfth month, beginning in
the twelfth calendar month following the month the
note was issued.
The regular record date for any interest payment date will be the first
day of the calendar month in which the interest payment date occurs (whether or
not a business day), except that the regular record date for interest due on any
note's stated maturity date or date of earlier redemption or repayment will be
that particular date.
Interest on a note will generally be payable beginning on the first
interest payment date after its date of original issuance to holders of record
on the corresponding regular record date. However, if the date of original
issuance of a note is between a regular record date and the corresponding
interest payment date, the first interest payment will be made on the next
succeeding interest payment date. Unless the applicable pricing supplement
specifies otherwise, interest on the notes will be computed on the basis of a
360-day year of twelve 30-day months.
"Business day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New York.
REDEMPTION AND REPAYMENT
Unless we otherwise provide in the applicable pricing supplement, a note
will not be redeemable or repayable prior to its stated maturity date.
If the pricing supplement states that the note will be redeemable at our
option prior to its stated maturity date, then on such date or dates specified
in the pricing supplement, we may redeem those notes at our option either in
whole or from time to time in part, upon not less than 30 nor more than 60 days'
written notice to the holder of those notes.
If the pricing supplement states that your note will be repayable at your
option prior to its stated maturity date, we will require receipt of notice of
the request for repayment at least 30 but not more than 60 days prior to the
date or dates specified in the pricing supplement. We also must receive the
completed form entitled "Option to Elect Repayment." Exercise of the repayment
option by the holder of a note is irrevocable. In addition, we will not permit
you to exercise the repayment option except in principal amounts of $1,000 and
multiples of $1,000.
S-9
Since the notes will be represented by a global note, DTC or its nominee
will be treated as the holder of the notes; therefore DTC or its nominee will be
the only entity that receives notices of redemption of notes from us, in the
case of our redemption of notes, and will be the only entity that can exercise
the right to repayment of notes, in the case of optional repayment. See
"Registration and Settlement" on page S-13.
To ensure that DTC or its nominee will timely exercise a right to
repayment with respect to a particular beneficial interest in a note, the
beneficial owner of the interest in that note must instruct the broker or other
direct or indirect participant through which it holds the beneficial interest to
notify DTC or its nominee of its desire to exercise a right to repayment.
Because different firms have different cut-off times for accepting instructions
from their customers, each beneficial owner should consult the broker or other
direct or indirect participant through which it holds an interest in a note to
determine the cut-off time by which the instruction must be given for timely
notice to be delivered to DTC or its nominee. Conveyance of notices and other
communications by DTC or its nominee to participants, by participants to
indirect participants and by participants and indirect participants to
beneficial owners of the notes will be governed by agreements among them and any
applicable statutory or regulatory requirements.
The redemption or repayment of a note normally will occur on the interest
payment date or dates following receipt of a valid notice. Unless otherwise
specified in the pricing supplement, the redemption or repayment price will
equal 100% of the principal amount of the note plus unpaid interest accrued to
the date or dates of redemption or repayment.
We may at any time purchase notes at any price or prices in the open
market or otherwise. We may also purchase notes otherwise tendered for repayment
by a holder or tendered by a holder's duly authorized representative through
exercise of the Survivor's Option described below. If we purchase the notes in
this manner, we have the discretion to either hold, resell or surrender the
notes to the trustee for cancellation.
SURVIVOR'S OPTION
The "Survivor's Option" is a provision in a note pursuant to which we
agree to repay that note, if requested by the authorized representative of the
beneficial owner of that note, following the death of the beneficial owner of
the note, so long as the note was owned by that beneficial owner or the estate
of that beneficial owner at least six months prior to the request. The pricing
supplement relating to each offering of notes will state whether the Survivor's
Option applies to those notes.
If a note is entitled to a Survivor's Option, upon the valid exercise of
the Survivor's Option and the proper tender of that note for repayment, we will
repay that note, in whole or in part, at a price equal to 100% of the principal
amount of the deceased beneficial owner's interest in that note plus unpaid
interest accrued to the date of repayment.
To be valid, the Survivor's Option must be exercised by or on behalf of
the person who has authority to act on behalf of the deceased beneficial owner
of the note (including, without limitation, the personal representative or
executor of the deceased beneficial owner or the surviving joint owner with the
deceased beneficial owner) under the laws of the applicable jurisdiction.
The death of a person holding a beneficial ownership interest in a note
as a joint tenant or tenant by the entirety with another person, or as a tenant
in common with the deceased holder's spouse, will be deemed the death of a
beneficial owner of that note, and the entire principal amount of the note so
held will be subject to repayment by us upon request. However, the death of a
person holding a beneficial ownership interest in a note as tenant in common
with a person other than such deceased holder's spouse will be deemed the death
of a beneficial owner only with respect to such deceased person's interest in
the note.
S-10
The death of a person who, during his or her lifetime, was entitled to
substantially all of the beneficial ownership interests in a note will be deemed
the death of the beneficial owner of that note for purposes of the Survivor's
Option, regardless of whether that beneficial owner was the registered holder of
that note, if entitlement to those interests can be established to the
satisfaction of the trustee and us. A beneficial ownership interest will be
deemed to exist in typical cases of nominee ownership, ownership under the
Uniform Transfers to Minors Act or Uniform Gifts to Minors Act, community
property or other joint ownership arrangements between a husband and wife. In
addition, a beneficial ownership interest will be deemed to exist in custodial
and trust arrangements where one person has all of the beneficial ownership
interests in the applicable note during his or her lifetime.
We have the discretionary right to limit the aggregate principal amount
of notes as to which exercises of the Survivor's Option shall be accepted by us
from authorized representatives of all deceased beneficial owners in any
calendar year to an amount equal to the greater of $2,000,000 or 2% of the
principal amount of all of the notes of this series outstanding as of the end of
the most recent calendar year. We also have the discretionary right to limit to
$250,000 in any calendar year the aggregate principal amount of notes as to
which exercises of the Survivor's Option shall be accepted by us from the
authorized representative of any individual deceased beneficial owner of notes
in such calendar year. In addition, we will not permit the exercise of the
Survivor's Option except in principal amounts of $1,000 and multiples of $1,000.
An otherwise valid election to exercise the Survivor's Option may not be
withdrawn. Each election to exercise the Survivor's Option will be accepted in
the order that elections are received by the trustee, except for any note the
acceptance of which would contravene any of the limitations described in the
preceding paragraph. Notes accepted for repayment through the exercise of the
Survivor's Option normally will be repaid on the first interest payment date
that occurs 20 or more calendar days after the date of the acceptance. Each
tendered note that is not accepted in any calendar year due to the application
of any of the limitations described in the preceding paragraph will be deemed to
be tendered in the following calendar year in the order in which all such notes
were originally tendered. If a note tendered through a valid exercise of the
Survivor's Option is not accepted, the trustee will deliver a notice by
first-class mail to the authorized representative of the deceased beneficial
owner that states the reason that note has not been accepted for repayment.
With respect to notes represented by a global note, DTC or its nominee is
treated as the holder of the notes and will be the only entity that can exercise
the Survivor's Option for such notes. To obtain repayment pursuant to exercise
of the Survivor's Option for a note, the deceased beneficial owner's authorized
representative must provide the following items to the broker or other entity
through which the beneficial interest in the note is held by the deceased
beneficial owner:
o a written instruction to such broker or other entity to notify DTC of
the authorized representative's desire to obtain repayment pursuant to
exercise of the Survivor's Option;
o appropriate evidence satisfactory to the trustee and us (a) that the
deceased was the beneficial owner of the note at the time of death and
his or her interest in the note was owned by the deceased beneficial
owner or his or her estate at least six months prior to the request
for repayment, (b) that the death of the beneficial owner has
occurred, (c) of the date of death of the beneficial owner, and (d)
that the representative has authority to act on behalf of the
beneficial owner;
o if the interest in the note is held by a nominee of the deceased
beneficial owner, a certificate or letter satisfactory to the trustee
and us from the nominee attesting to the deceased's beneficial
ownership of such note;
o a written request for repayment signed by the authorized
representative of the deceased beneficial owner with the signature
guaranteed by a member firm of a registered national securities
exchange or of the
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National Association of Securities Dealers, Inc. or a commercial bank
or trust company having an office or correspondent in the United
States;
o if applicable, a properly executed assignment or endorsement;
o tax waivers and any other instruments or documents that the trustee
and we reasonably require in order to establish the validity of the
beneficial ownership of the note and the claimant's entitlement to
payment; and
o any additional information the trustee or we reasonably require to
evidence satisfaction of any conditions to the exercise of the
Survivor's Option or to document beneficial ownership or authority to
make the election and to cause the repayment of the note.
In turn, the broker or other entity will deliver each of these items to
the trustee, together with evidence satisfactory to the trustee from the broker
or other entity stating that it represents the deceased beneficial owner.
We retain the right to limit the aggregate principal amount of notes as
to which exercises of the Survivor's Option applicable to the notes will be
accepted in any one calendar year as described above. All other questions
regarding the eligibility or validity of any exercise of the Survivor's Option
will be determined by us, in our sole discretion, which determination will be
final and binding on all parties.
The broker or other entity will be responsible for disbursing payments
received from the trustee to the authorized representative. See "Registration
and Settlement" on page S-13.
If applicable, we will comply with the requirements of Section 14(e) of
the Securities Exchange Act of 1934, and the rules promulgated thereunder, and
any other securities laws or regulations in connection with any repayment of
notes at the option of the registered holders or beneficial owners thereof.
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REGISTRATION AND SETTLEMENT
THE DEPOSITORY TRUST COMPANY
All of the notes we offer will be issued in book-entry only form. This
means that we will not issue certificates for notes, except in the limited case
described below. Instead, we will issue global notes in registered form. Each
global note will be held through DTC and will be registered in the name of Cede
& Co., as nominee of DTC. Accordingly, Cede & Co. will be the holder of record
of the notes. Each note represented by a global note evidences a beneficial
interest in that global note.
Beneficial interests in a global note will be shown on, and transfers are
effected through, records maintained by DTC or its participants. In order to own
a beneficial interest in a note, you must be an institution that has an account
with DTC or have a direct or indirect account with such an institution.
Transfers of ownership interests in the notes will be accomplished by making
entries in DTC participants' books acting on behalf of beneficial owners.
So long as DTC or its nominee is the registered holder of a global note,
DTC or its nominee, as the case may be, will be the sole holder and owner of the
notes represented thereby for all purposes, including payment of principal and
interest, under the indenture. Except as otherwise provided below, you will not
be entitled to receive physical delivery of certificated notes and will not be
considered the holder of the notes for any purpose under the indenture.
Accordingly, you must rely on the procedures of DTC and the procedures of the
DTC participant through which you own your note in order to exercise any rights
of a holder of a note under the indenture. The laws of some jurisdictions
require that certain purchasers of notes take physical delivery of such notes in
certificated form. Those limits and laws may impair the ability to transfer
beneficial interests in the notes.
Each global note representing notes will be exchangeable for certificated
notes of like tenor and terms and of differing authorized denominations in a
like aggregate principal amount, only if (1) DTC notifies us that it is
unwilling or unable to continue as depositary for the global notes or we become
aware that DTC has ceased to be a clearing agency registered under the
Securities Exchange Act of 1934 and, in any such case we fail to appoint a
successor to DTC within 90 calendar days or (2) we determine at any time that
the notes shall no longer be represented by global notes, in which case we will
inform DTC of such determination, who will, in turn, notify participants of
their right to withdraw their notes from DTC. Upon any such exchange, the
certificated notes shall be registered in the names of the beneficial owners of
the global note representing the notes.
The following is based on information furnished by DTC:
DTC will act as securities depositary for the notes. The notes will be
issued as fully-registered notes registered in the name of Cede & Co. (DTC's
partnership nominee) or such other name as may be requested by an authorized
representative of DTC. Generally, one fully registered global note will be
issued for all of the principal amount of the notes. If, however, the aggregate
principal amount of the notes exceeds $500 million, one certificate will be
issued with respect to each $500 million of principal amount, and an additional
certificate will be issued with respect to any remaining principal amount of
such note.
DTC, the world's largest 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. DTC holds and provides asset
servicing for over 2 million issues of U.S. and non-U.S. equity issues,
corporate and municipal debt issues and money market instruments from over 85
countries that DTC's direct participants deposit with DTC.
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DTC also facilitates the post-trade settlement among direct participants
of sales and other securities transactions in deposited securities, through
electronic computerized book-entry transfers and pledges between direct
participants' accounts. This eliminates the need for physical movement of
securities certificates. Direct participants include both U.S. and non U.S.
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations. DTC is a wholly-owned subsidiary of The
Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a
number of direct participants of DTC and members of the National Securities
Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing
Corporation, and Emerging Markets Clearing Corporation, as well as by The New
York Stock Exchange, Inc., the American Stock Exchange LLC, and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as both U.S. and non-U.S. securities brokers and
dealers, banks, trust companies and clearing corporations that clear through or
maintain a custodial relationship with a direct participant, either directly or
indirectly. DTC has Standard & Poor's highest rating: AAA. The DTC rules
applicable to its participants are on file with the SEC. More information about
DTC can be found at www.dtcc.com.
Purchases of the notes under the DTC system must be made by or through
direct participants, which will receive a credit for the notes on DTC's records.
The beneficial interest of each actual purchaser of each note is in turn to be
recorded on the direct and indirect participants' records. Beneficial owners
will not receive written confirmation from DTC of their purchase. Beneficial
owners are, however, expected to receive written confirmations providing details
of the transaction, as well as periodic statements of their holdings, from the
direct or indirect participant through which the beneficial owner entered into
the transaction. Transfers of beneficial interests in the notes are to be
accomplished by entries made on the books of direct and indirect participants
acting on behalf of beneficial owners. Beneficial owners will not receive
certificates representing their beneficial interests in notes, except in the
event that use of the book-entry system for the notes is discontinued.
To facilitate subsequent transfers, all notes deposited by direct
participants with DTC will be registered in the name of DTC's partnership
nominee, Cede & Co. or such other name as may be requested by an authorized
representative of DTC. The deposit of the notes with DTC and their registration
in the name of Cede & Co. or such other nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual beneficial owners of
the notes; DTC's records reflect only the identity of the direct participants to
whose accounts such notes will be credited, which may or may not be the
beneficial owners. The direct and indirect participants will remain responsible
for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time. Beneficial owners of the notes may wish to
take certain steps to augment the transmission to them of notices of significant
events with respect to the notes, such as redemption, tenders, defaults, and
proposed amendments to the security documents. For example, beneficial owners of
the notes may wish to ascertain that the nominee holding the notes for their
benefit has agreed to obtain and transmit notices to beneficial owners. In the
alternative, beneficial owners may wish to provide their names and addresses to
the registrar of the notes and request that copies of the notices be provided to
them directly. Any such request may or may not be successful.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or
vote with respect to the notes unless authorized by a direct participant in
accordance with DTC's procedures. Under its usual procedures, DTC mails an
Omnibus Proxy to us as soon as possible after the regular record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those direct
participants to whose accounts the notes are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
We will pay principal and or interest payments on the notes in same-day
funds directly to Cede & Co., or such other nominee as may be requested by an
authorized representative of DTC. DTC's practice is to credit direct
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participants' accounts on the applicable payment date in accordance with their
respective holdings shown on DTC's records upon DTC's receipt of funds and
corresponding detail information. Payments by participants to beneficial owners
will be governed by standing instructions and customary practices, as is the
case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of these
participants and not of DTC or any other party, subject to any statutory or
regulatory requirements that may be in effect from time to time. Payment of
principal and interest to Cede & Co., or such other nominee as may be requested
by an authorized representative of DTC, is our responsibility, disbursement of
such payments to direct participants is the responsibility of DTC, and
disbursement of such payments to the beneficial owners is the responsibility of
the direct or indirect participant.
We will send any redemption notices to DTC. If less than all of the notes
are being redeemed, DTC's practice is to determine by lot the amount of the
interest of each direct participant in such issue to be redeemed.
A beneficial owner, or its authorized representative, shall give notice
to elect to have its notes repaid by us, through its direct or indirect
participant, to the trustee, and shall effect delivery of such notes by causing
the direct participant to transfer that participant's interest in the global
note representing such notes, on DTC's records, to the trustee. The requirement
for physical delivery of notes in connection with a demand for repayment will be
deemed satisfied when the ownership rights in the global note representing such
notes are transferred by the direct participants on DTC's records.
DTC may discontinue providing its services as securities depository for
the notes at any time by giving us reasonable notice. Under such circumstances,
if a successor securities depositary is not obtained, we will print and deliver
certificated notes. We may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event, we
will print and deliver certificated notes.
The information in this section concerning DTC and DTC's system has been
obtained from sources that we believe to be reliable, but neither we, the
Purchasing Agent nor any agent takes any responsibility for its accuracy.
REGISTRATION, TRANSFER AND PAYMENT OF CERTIFICATED NOTES
If we ever issue notes in certificated form, those notes may be presented
for registration, transfer and payment at the office of the registrar or at the
office of any transfer agent designated and maintained by us. We have initially
designated JPMorgan Chase Bank, N.A., to act in those capacities for the notes.
The registrar or transfer agent will make the transfer or registration only if
it is satisfied with the documents of title and identity of the person making
the request. There will not be a service charge for any exchange or registration
of transfer of the notes, but we may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with the exchange. At any time, we may change transfer agents or approve a
change in the location through which any transfer agent acts. We also may
designate additional transfer agents for any notes at any time.
We will not be required to: (1) issue, register the transfer of or
exchange any note to be redeemed for a period of 15 calendar days preceding the
first publication of the relevant notice of redemption, or if registered notes
are outstanding and there is no publication, the mailing of the relevant notice
of redemption; (2) exchange or register the transfer of any note that was
selected for redemption, in whole or in part, except the unredeemed portion of
any such notes being redeemed in part; (3) exchange any unregistered notes
selected for redemption except that such unregistered notes may be exchanged for
registered notes of like tenor, provided that such registered notes shall be
simultaneously surrendered for redemption; or (4) register the transfer of or
exchange any notes surrendered for optional repayment, in whole or in part.
We will pay principal of and interest on any certificated notes at the
offices of the paying agents we may designate from time to time. Generally, we
will pay interest on a note by check on any interest payment date other than at
stated maturity or upon earlier redemption or repayment to the person in whose
name the note is registered at the
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close of business on the regular record date for that payment. We will pay
principal and interest at stated maturity or upon earlier redemption or
repayment in same-day funds against presentation and surrender of the applicable
notes.
UNITED STATES FEDERAL TAX CONSIDERATIONS
The following discussion summarizes certain U.S. federal income tax
considerations that may be relevant to you if you invest in notes. Except as
discussed under "Non-U.S. Holders" and "Information Reporting and Backup
Withholding", the discussion generally applies to you only if you are an
individual who is a citizen or resident of the United States that is a cash
basis taxpayer (a "U.S. holder"). This summary deals only with U.S. holders that
hold notes as capital assets and purchase notes as part of the initial
distribution at their issue price. It does not address considerations that may
be relevant to you if you are an investor that is subject to special tax rules,
such as a person that: (i) is not an individual; (ii) uses the accrual method of
tax accounting; (iii) elects mark to market treatment; (iv) holds notes as a
hedge or as a position in a "straddle," conversion or other integrated
transaction; (v) is a former citizen or resident; or (vi) has a "functional
currency" other than the U.S. dollar.
This summary is based on laws, regulations, rulings and decisions now in
effect, all of which may change. Any change could apply retroactively and could
affect the continued validity of this summary.
You should consult your tax adviser about the tax consequences of
purchasing, holding or disposing of notes, including the relevance to your
particular situation of the considerations discussed below, as well as the
relevance to your particular situation of state, local or other tax laws.
PAYMENTS OF INTEREST
Payments of interest on a note will be taxable to you as ordinary
interest income at the time that you receive such amounts.
Notes that pay interest annually that are issued between a regular record
date and the corresponding interest payment date will have an initial payment
period that is longer than one year. Such notes will have original issue
discount for U.S. federal income tax purposes. Additional tax considerations
relating to any such notes, or any other notes that have original issue
discount, will be set forth in the applicable pricing supplement.
SALE AND RETIREMENT OF NOTES
When you sell or exchange a note, or if a note that you hold is retired,
you generally will recognize gain or loss equal to the difference between the
amount you realize on the transaction (less any accrued interest, which will be
taxable to you as ordinary interest income) and your tax basis in the note. Your
tax basis in a note generally will equal the cost of the note to you.
Except as discussed below with respect to short-term notes, the gain or
loss that you recognize on the sale, exchange or retirement of a note generally
will be capital gain or loss. The gain or loss on the sale, exchange or
retirement of a note will be long-term capital gain or loss if you have held the
note for more than one year on the date of disposition. Net long-term capital
gain recognized by you generally will be subject to tax at a lower rate than net
short-term capital gain or ordinary income. The ability of U.S. holders to
offset capital losses against ordinary income is limited.
SHORT-TERM NOTES
Special U.S. federal income tax rules will apply to notes with maturities
of one year or less ("short-term notes"). Those rules provide that payments on a
short term note give rise to "original issue discount" that generally
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is not required to be included in income prior to the maturity or disposition of
a short-term note. Thus, if a short-term note provides for a single interest
payment at maturity, you will be required to include that payment as ordinary
income upon maturity of the note. In addition, you will be required to treat any
gain realized on a sale, exchange or retirement of a short-term note as ordinary
income to the extent such gain does not exceed the interest accrued during the
period you held the note. The treatment of interest payments received on a
short-term note prior to maturity is not entirely clear under these special
rules, however, and it is possible that you would be required to include such
payments as ordinary income at the time received rather than upon a subsequent
disposition of the note.
You may not be allowed to deduct all of the interest paid or accrued on
any indebtedness incurred or maintained to purchase or carry a short-term note
until the note matures or upon an earlier disposition in a taxable transaction.
However, you may elect to accrue interest in gross income on a current basis and
avoid the limitation on the deductibility of interest described above.
NON-U.S. HOLDERS
If you are a non-resident alien individual or a foreign corporation (a
"non-U.S. holder"), the interest income that you derive in respect of the notes
generally will be exempt from United States federal withholding tax. This
exemption will apply to you provided that
o you do not actually or constructively own 10 percent or more of the
combined voting power of all classes of our stock and you are not a
controlled foreign corporation that is related, directly or indirectly
to us through stock ownership, and
o the beneficial owner provides a statement (generally, an Internal
Revenue Service Form W-8BEN) signed under penalties of perjury that
includes its name and address and certifies that it is a non-U.S.
person in compliance with applicable requirements (or satisfies
certain documentary evidence requirements for establishing that it is
a non-U.S. person).
If you are a non-U.S. holder, any gain you realize on a sale, exchange or
other disposition of notes generally will be exempt from United States federal
income tax, including withholding tax. This exemption will not apply to you if
your gain is effectively connected with your conduct of a trade or business in
the United States or you are an individual holder and are present in the United
States for 183 days or more in the taxable year of the disposition and either
your gain is attributable to an office or other fixed place of business that you
maintain in the United States or you have a tax home in the United States.
U.S. federal estate tax will not apply to a note held by you if at the
time of death you were not a citizen or resident of the United States, you did
not actually or constructively own 10 percent or more of the combined voting
power of all classes of our stock and payments of interest on the note would not
have been effectively connected with the conduct by you of a trade or business
in the United States.
For purposes of applying the rules set forth under this heading "Non-U.S.
Holders" to a note held by an entity that is treated as fiscally transparent
(for example, a partnership) for U.S. federal income tax purposes, the
beneficial owner means each of the ultimate beneficial owners of the entity.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The paying agent must file information returns with the Internal Revenue
Service in connection with payments made on the notes to certain U.S. holders.
If you are a U.S. holder, you generally will not be subject to United States
backup withholding tax on such payments if you provide your taxpayer
identification number to the paying agent. You may also be subject to
information reporting and backup withholding tax requirements with
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respect to the proceeds from a sale of the notes. If you are a non-U.S. holder,
you may have to comply with certification procedures to establish your non-U.S.
status in order to avoid information reporting and backup withholding tax
requirements. The certification procedures required to claim the exemption from
withholding tax on interest income described above will satisfy these
requirements. The amount of any backup withholding from a payment to a holder
may be allowed as a credit against the holder's U.S. federal income tax
liability and may entitle the holder to a refund, provided that the required
information is furnished to the Internal Revenue Service.
EMPLOYEE RETIREMENT INCOME SECURITY ACT
A fiduciary of a pension plan or other employee benefit plan (including a
governmental plan, an individual retirement account or a Keogh plan) proposing
to invest in the notes should consider this section carefully.
A fiduciary of an employee benefit plan subject to the Employee
Retirement Income Security Act of 1974, as amended (commonly referred to as
"ERISA") should consider fiduciary standards under ERISA in the context of the
particular circumstances of such plan before authorizing an investment in the
notes. Such fiduciary should consider whether the investment is in accordance
with the documents and instruments governing the plan.
In addition, ERISA and the Internal Revenue Code of 1986, as amended (the
"Code") prohibit certain transactions (referred to as "prohibited transactions")
involving the assets of a plan subject to ERISA or the assets of an individual
retirement account or plan subject to Section 4975 of the Code (referred to as
an "ERISA plan"), on the one hand, and persons who have certain specified
relationships to the plan ("parties in interest" within the meaning of ERISA or
"disqualified persons" within the meaning of the Code), on the other. If we (or
an affiliate) are considered a party in interest or disqualified person with
respect to an ERISA plan, then the investment in notes by the ERISA plan may
give rise to a prohibited transaction. Governmental employee benefit plans may
be subject to transaction or investment prohibitions or limitations under the
rules applicable to such plans.
By purchasing and holding the notes, the person making the decision to
invest on behalf of (or with plan assets of) an ERISA plan or a governmental
employee benefit plan is representing that the purchase and holding of the notes
will not result in a prohibited transaction under ERISA or the Code or other
transaction or investment prohibitions or limitations under rules applicable to
the plan. Therefore, an ERISA plan should not invest in the notes unless the
plan fiduciary or other person acquiring securities on behalf of the ERISA plan
determines that neither we nor an affiliate is a party in interest or a
disqualified person or, alternatively, that an exemption from the prohibited
transaction rules is available. If an ERISA plan engages in a prohibited
transaction, the transaction may require "correction" and may cause the ERISA
plan fiduciary to incur certain liabilities and the parties in interest or
disqualified persons to be subject to excise taxes.
If you are the fiduciary of an ERISA plan, governmental plan or an
insurance company or other party that is providing investment advice or other
features to such a plan, and you propose to invest in the notes with the assets
of the plan, you should consult your own legal counsel for further guidance.
Each investor bears sole responsibility for ensuring that their purchase and
holding of the notes complies with ERISA, the Code and any similar roles
applicable to the investor.
PLAN OF DISTRIBUTION
Under the terms of a Selling Agent Agreement dated November 22, 2002, as
amended, the notes will be offered from time to time by us to the Purchasing
Agent for subsequent resale to the agents and other dealers who are
broker-dealers and securities firms. The agents, including the Purchasing Agent,
are parties to the Selling Agent Agreement. The notes will be offered for sale
in the United States only. Dealers who are members of the selling group have
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executed a Master Selected Dealer Agreement with the Purchasing Agent. We also
may appoint additional agents to sell the notes. Any sale of the notes through
those additional agents, however, will be on the same terms and conditions to
which the original agents have agreed. The Purchasing Agent will purchase the
notes at a discount ranging from 0.2% to 3.0% of the non-discounted price for
each note sold. However, we also may sell the notes to the Purchasing Agent at a
discount greater than or less than the range specified above. The discount at
which we sell the notes to the Purchasing Agent will be set forth in the
applicable pricing supplement. The Purchasing Agent also may sell notes to
dealers at a concession not in excess of the discount it received from us. In
certain cases, the Purchasing Agent and the other agents and dealers may agree
that the Purchasing Agent will retain the entire discount. We will disclose any
particular arrangements in the applicable pricing supplement.
Following the solicitation of orders, each of the agents, severally and
not jointly, may purchase notes as principal for its own account from the
Purchasing Agent. Unless otherwise set forth in the applicable pricing
supplement, these notes will be purchased by the agents and resold by them to
one or more investors at a fixed public offering price. 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), discount and concession may be changed.
We have the sole right to accept offers to purchase notes and may reject
any proposed offer to purchase notes in whole or in part. Each agent also has
the right, in its discretion reasonably exercised, to reject any proposed offer
to purchase notes in whole or in part. We reserve the right to withdraw, cancel
or modify any offer without notice. We also may change the terms, including the
interest rate we will pay on the notes, at any time prior to our acceptance of
an offer to purchase.
Each agent, including the Purchasing Agent, may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933. We have agreed
to indemnify the agents against certain liabilities, including liabilities under
the Securities Act of 1933, or to contribute to any payments they may be
required to make in respect of such liabilities. We also have agreed to
reimburse the agents for certain expenses.
No note will have an established trading market when issued. We do not
intend to apply for the listing of the notes on any securities exchange.
However, we have been advised by the agents that they may purchase and sell
notes in the secondary market as permitted by applicable laws and regulations.
The agents are not obligated to make a market in the notes, and they may
discontinue making a market in the notes at any time without notice. Neither we
nor the agents can provide any assurance regarding the development, liquidity or
maintenance of any trading market for any notes. All secondary trading in the
notes will settle in same-day funds. See "Registration and Settlement" on page
S-13.
In connection with certain offerings of notes, the rules of the SEC
permit the Purchasing Agent to engage in transactions that may stabilize the
price of the notes. The Purchasing Agent will conduct these activities for the
agents. These transactions may consist of short sales, stabilizing transactions
and purchases to cover positions created by short sales. A short sale is the
sale by the Purchasing Agent of a greater amount of notes than the amount the
Purchasing Agent has agreed to purchase in connection with a specific offering
of notes. Stabilizing transactions consist of certain bids or purchases made by
the Purchasing Agent to prevent or retard a decline in the price of the notes
while an offering of notes is in process. In general, these purchases or bids
for the notes for the purpose of stabilization or to reduce a syndicate short
position could cause the price of the notes to be higher than it might otherwise
be in the absence of those purchases or bids. Neither we nor the Purchasing
Agent makes any representation or prediction as to the direction or magnitude of
any effect that these transactions may have on the price of any notes. In
addition, neither we nor the Purchasing Agent makes any representation that,
once commenced, these transactions will not be discontinued without notice. The
Purchasing Agent is not required to engage in these activities and may end any
of these activities at any time.
S-19
We may offer certain of these notes to entities, including statutory or
common law trusts, that are not affiliated with us and that offer pass-through
or similar securities to investors, in public offerings that will occur at or
around the same time as the offering of the notes. We will utilize the services
of one or more broker-dealers as our agents in the offerings of notes to these
entities. These broker-dealers will be considered statutory underwriters, within
the meaning of the Securities Act of 1933, with respect to the notes offered to
those entities.
The agents or dealers to or through which we may sell notes may engage in
transactions with us and perform services for us in the ordinary course of
business.
LEGAL OPINIONS
Alan M. Green, our General Counsel, Corporate Treasury, will issue an
opinion about the legality of the notes for us. Davis Polk & Wardwell, New York,
New York will issue an opinion for the agents. Cleary, Gottlieb, Steen &
Hamilton, New York, New York will issue an opinion regarding the "United States
Tax Considerations" section of this prospectus supplement. Mr. Green
beneficially owns or has rights to acquire an aggregate of less than 0.01% of
General Electric Company's common stock.
S-20
PROSPECTUS
GENERAL ELECTRIC CAPITAL CORPORATION
DEBT SECURITIES
WARRANTS TO PURCHASE DEBT SECURITIES
PREFERRED STOCK
GUARANTEES, LETTERS OF CREDIT AND
PROMISSORY NOTES OR LOAN
OBLIGATIONS,
INCLUDING INTERESTS THEREIN
General Electric Capital Corporation may offer from time to time:
o unsecured debt securities;
o warrants to purchase any of the debt securities;
o variable cumulative preferred stock, par value $100 per share, which may be
issued in the form of depositary shares evidenced by depositary receipts;
o preferred stock, par value $.01 per share, which may be issued in the form of
depositary shares evidenced by depositary receipts; and
o unsecured guarantees, direct-pay letters of credit and indebtedness evidenced
by promissory notes or loan obligations, including in each case interests
therein.
WE WILL PROVIDE SPECIFIC TERMS OF THESE SECURITIES IN SUPPLEMENTS TO THIS
PROSPECTUS. YOU SHOULD READ THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT
CAREFULLY BEFORE YOU INVEST.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE
SECURITIES COMMISSION, NOR HAVE THESE ORGANIZATIONS DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------
May 17, 2005
ABOUT THIS PROSPECTUS
This prospectus is part of a "shelf" registration statement that we have
filed with the Securities and Exchange Commission (the "SEC"). By using a shelf
registration statement, we may sell, from time to time, in one or more
offerings, any combination of the securities described in this prospectus in a
U.S. dollar amount that does not exceed the amount registered. For further
information about our business and the securities, you should refer to the
registration statement and its exhibits. The exhibits to our registration
statement contain the full text of certain contracts and other important
documents we have summarized in this prospectus. Since these summaries may not
contain all the information that you may find important in deciding whether to
purchase the securities we offer, you should review the full text of these
documents. The registration statement can be obtained from the SEC as indicated
under the heading "Where You Can Get More Information on GECC."
This prospectus only provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that contains specific information about the terms of
those securities. The prospectus supplement may also add, update or change
information contained in this prospectus.
YOU SHOULD READ BOTH THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT
TOGETHER WITH THE ADDITIONAL INFORMATION DESCRIBED BELOW UNDER THE HEADING
"WHERE YOU CAN GET MORE INFORMATION ON GECC." YOU SHOULD RELY ONLY ON THE
INFORMATION INCORPORATED BY REFERENCE OR PROVIDED IN THIS PROSPECTUS AND THE
PROSPECTUS SUPPLEMENT. WE HAVE AUTHORIZED NO ONE TO PROVIDE YOU WITH DIFFERENT
INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE
THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS
PROSPECTUS OR THE PROSPECTUS SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN
THE DATE ON THE FRONT OF THE DOCUMENT.
REFERENCES IN THIS PROSPECTUS TO "GECC", "WE", "US" AND "OUR" ARE TO
GENERAL ELECTRIC CAPITAL CORPORATION.
--------------------
WHERE YOU CAN GET MORE
INFORMATION ON GECC
GECC files annual, quarterly and current reports with the SEC. You may
obtain any document we file with the SEC at the SEC's Public Reference Room in
Washington, D.C. You may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also
accessible through the Internet at the SEC's Web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus the
information in documents we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus, and information that we file later with the SEC will automatically
update and supersede information contained in documents filed earlier with the
SEC or contained in this prospectus. We incorporate by reference in this
prospectus the documents listed below and any future filings that we make with
the SEC under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act
of 1934, as amended, until we sell all the securities that may be offered by
this prospectus (including, without limitation, filings made after the date of
this Amendment No. 1 and before the effectiveness of the registration
statement); provided, however, that we are
2
not incorporating any information furnished under either Item 2.02 or Item 7.01
of any Current Report on Form 8-K unless, and except to the extent, specified in
any such Current Report on Form 8-K:
(i) GECC's Annual Report on Form 10-K, as amended by amendment no. 1
on Form 10-K/A, for the year ended December 31, 2004;
(ii) GECC's Quarterly Report on Form 10-Q for the quarter ended March
31, 2005; and
(iii) GECC's Current Report on Form 8-K filed on May 6, 2005. You may
request a copy of these filings at no cost. Requests should be
directed to David P. Russell, Senior Counsel, Corporate Treasury
and Assistant Secretary, General Electric Capital Corporation, 260
Long Ridge Road, Stamford, Connecticut 06927, Telephone No. (203)
357-4000.
3
THE COMPANY
General Electric Capital Corporation was incorporated in 1943 in the
State of New York under the provisions of the New York Banking Law relating to
investment companies, as successor to General Electric Contracts Corporation,
which was formed in 1932. Until November 1987, our name was General Electric
Credit Corporation. On July 2, 2001, we changed our state of incorporation to
Delaware. All of our outstanding common stock is owned by General Electric
Capital Services, Inc. ("GE Capital Services"), formerly General Electric
Financial Services, Inc., the common stock of which is in turn wholly owned
directly or indirectly by General Electric Company ("GE Company"). Financing and
services offered by us are diversified, a significant change from the original
business of GECC, that is, financing distribution and sale of consumer and other
GE Company products. GE Company manufactures few of the products financed by us.
We operate in four key operating segments: GE Commercial Finance, GE
Consumer Finance, GE Insurance and GE Equipment and Other Services. These
operations are subject to a variety of regulations in their respective
jurisdictions.
Our services are offered primarily within the United States, Canada,
Europe and the Pacific Basin. GECC's principal executive offices are at 260 Long
Ridge Road, Stamford, Connecticut 06927-1600 (telephone number (203) 357-4000).
At December 31, 2004, our employment totaled approximately 76,300.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31, 2005
------------------------------------------------------- --------------
2001 2002 2003 2004
2000 (RESTATED) (RESTATED) (RESTATED) (RESTATED)
---- ---- ---- ---- ----
1.52 1.73 1.66 1.86 1.89 1.74
CONSOLIDATED RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31, 2005
------------------------------------------------------- --------------
2001 2002 2003 2004
2000 (RESTATED) (RESTATED) (RESTATED) (RESTATED)
---- ---- ---- ---- ----
1.50 1.71 1.65 1.85 1.88 1.73
For purposes of computing the consolidated ratios of earnings to fixed
charges and earnings to combined fixed charges and preferred stock dividends,
earnings consist of net earnings adjusted for the provision for income taxes,
minority interest, interest capitalized (net of amortization) and fixed charges.
Fixed charges consist of interest on all indebtedness and one-third of rentals,
which we believe is a reasonable approximation of the interest factor of such
rentals.
USE OF PROCEEDS
Unless otherwise specified in the prospectus supplement accompanying this
prospectus, we will add the net proceeds from the sale of the securities to
which this prospectus and the prospectus supplement relate to our general funds,
which we will use for financing our operations. We can conduct additional
financings at any time.
4
PLAN OF DISTRIBUTION
We may sell our securities through agents, underwriters, dealers or
directly to purchasers.
We may designate agents to solicit offers to purchase our securities. We
will name any agent involved in offering or selling our securities, and any
commissions that we will
o pay to the agent, in our prospectus supplement.
o Unless we indicate otherwise in our prospectus supplement, our agents
will act on a best efforts basis for the period of their appointment.
o Our agents may be deemed to be underwriters under the Securities Act
of 1933 of any of our securities that they offer or sell.
We may use an underwriter or underwriters in the offer or sale of our
securities.
o If we use an underwriter or underwriters, we will execute an
underwriting agreement with the underwriter or underwriters at the
time that we reach an agreement for the sale of our securities.
o We will include the names of the specific managing underwriter or
underwriters, as well as any other underwriters, and the terms of the
transactions, including the compensation the underwriters and dealers
will receive, in our prospectus supplement.
o The underwriters will use our prospectus supplement to sell our
securities.
We may use a dealer to sell our securities.
o If we use a dealer, we, as principal, will sell our securities to the
dealer.
o The dealer will then sell our securities to the public at varying
prices that the dealer will determine at the time it sells our
securities.
o We will include the name of the dealer and the terms of our
transactions with the dealer in our prospectus supplement.
We may solicit directly offers to purchase our securities, and we may
directly sell our securities to institutional or other investors. We will
describe the terms of our direct sales in our prospectus supplement.
We may indemnify agents, underwriters, and dealers against certain
liabilities, including liabilities under the Securities Act of 1933. Our agents,
underwriters, and dealers, or their affiliates, may be customers of, engage in
transactions with or perform services for us, in the ordinary course of
business.
We may authorize our agents and underwriters to solicit offers by certain
institutions to purchase our securities at the public offering price under
delayed delivery contracts.
o If we used delayed delivery contracts, we will disclose that we are
using them in the prospectus supplement and will tell you when we will
demand payment and delivery of the securities under the delayed
delivery contracts.
o These delayed delivery contracts will be subject only to the
conditions that we set forth in the prospectus supplement.
5
o We will indicate in our prospectus supplement the commission that
underwriters and agents soliciting purchases of our securities under
delayed contracts will be entitled to receive.
Unless otherwise provided in the prospectus supplement accompanying this
prospectus, neither the support obligations nor the interests therein will be
offered or sold separately from the underlying securities to which they relate.
The underlying securities will be offered and sold under a separate offering
document.
NASD REGULATIONS
GECC Markets Group, Inc. is an affiliate of GECC and may participate as
an underwriter in the distribution of securities issued pursuant to this
prospectus. Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. imposes certain requirements when an NASD member such
as GECC Capital Markets Group, Inc. distributes an affiliated company's
securities. As a result, we will conduct any offering in which GECC Capital
Markets Group, Inc. acts as an underwriter in compliance with the applicable
requirements of Rule 2720.
The maximum compensation we will pay to underwriters in connection with
any offering of the securities will not exceed 8% of the maximum proceeds of
such offering. All post-effective amendments or prospectus supplements
disclosing the actual price and selling terms of each offering of the securities
will be submitted to the NASD Corporate Financing Department at the same time
they are filed with the SEC. The NASD Corporate Financing Department will be
advised if, subsequent to the filing of any offering of the securities, any of
our 5% or greater shareholders is or becomes an affiliate or associated person
of an NASD member participating in the distribution of such securities. All NASD
members participating in offerings of the securities understand the requirements
that have to be met in connection with SEC Rule 415 and Notice to Members
88-101.
6
SECURITIES OFFERED
Using this prospectus, we may offer senior or subordinated debt
securities (collectively, the "debt securities"), warrants to purchase debt
securities, variable cumulative preferred stock and preferred stock. In
addition, we may issue guarantees, direct-pay letters of credit and indebtedness
evidenced by promissory notes or loan obligations, including interests therein.
We registered these securities with the SEC using a "shelf" registration
statement. This "shelf" registration statement allows us to offer any
combination of these securities. Each time we offer securities, we must provide
a prospectus supplement that describes the specific terms of the securities. The
prospectus supplement may also provide new information or update the information
in the prospectus.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The description below of the general terms of the debt securities issued
under this prospectus will be supplemented by the more specific terms in the
applicable prospectus supplement.
The senior debt securities will be issued pursuant to an Amended and
Restated Indenture, between us and JPMorgan Chase Bank, N.A. (formerly known as
The Chase Manhattan Bank), dated as of February 27, 1997, as supplemented by a
Supplemental Indenture dated as of May 3, 1999, a Second Supplemental Indenture
dated as of July 2, 2001 and a Third Supplemental Indenture dated November 22,
2002 and pursuant to an Amended and Restated Indenture, between us and JPMorgan
Chase Bank, N.A., dated as of February 28, 1997, as supplemented by a First
Supplemental Indenture dated as of July 2, 2001 (collectively, the "senior
indentures"). The subordinated debt securities will be issued pursuant to a
Subordinated Debt Indenture to be entered into between us and JPMorgan Chase
Bank, N.A. (the "subordinated indenture" and, together with the senior
indentures, the "indentures"). None of the indentures limits the amount of debt
securities or other unsecured debt which we may issue.
In addition to the following description of the debt securities, you
should refer to the detailed provisions of each indenture, copies of which are
led as exhibits to the registration statement.
The prospectus supplement will specify the following terms of such issue
of debt securities:
o the designation, the aggregate principal amount and the authorized
denominations if other than the denominations set forth in the
applicable indenture;
o the percentage of their principal amount at which the debt securities
will be issued;
o the date or dates on which the debt securities will mature;
o whether the debt securities will be senior or subordinated
obligations;
o if the debt securities are subordinated debt securities, whether the
subordination provisions summarized below or different subordination
provisions will apply;
o any deletions or modifications of or additions to the Events of
Default described below or the covenants of GECC set forth in the
applicable indenture;
7
o the currency, currencies or currency units in which we will make
payments on the debt securities;
o the rate or rates at which the debt securities will bear interest, if
any, or the method of determination of such rate or rates;
o the date or dates from which such interest, if any, shall accrue, the
dates on which such interest, if any, will be payable and the method
of determining holders to whom interest shall be payable;
o the prices, if any, at which, and the dates at or after which, we may
or must repay, repurchase or redeem the debt securities;
o the exchanges, if any, on which the debt securities may be listed;
o the trustee under the indenture pursuant to which the debt securities
are to be issued. (Sections 2.02 and 2.02A. Section references refer
to the sections in the applicable indenture.); and
o any other terms of the debt securities not inconsistent with the
provisions of the applicable indenture.
Unless otherwise specified in the prospectus supplement, we will compute
interest payments on the basis of a 360-day year consisting of twelve 30-day
months. (Section 2.10).
Some of the debt securities may be issued as discounted debt securities
to be sold at a substantial discount below their stated principal amount. The
prospectus supplement will contain any Federal income tax consequences and other
special considerations applicable to discounted debt securities.
The indentures do not contain any provisions that:
o limit our ability to incur indebtedness, or
o provide protection in the event GE Company, as sole indirect
stockholder of GECC, causes GECC to engage in a highly leveraged
transaction, reorganization, restructuring, merger or similar
transaction.
Claims of our subsidiaries' creditors generally will have priority with
respect to the assets and earnings of the subsidiaries over the claims of our
creditors, including holders of the debt securities. The debt securities,
therefore, will be effectively subordinated to creditors, including trade
creditors of our subsidiaries.
PAYMENT AND TRANSFER
Unless we otherwise state in a prospectus supplement, we will issue debt
securities only as registered securities, which means that the name of the
holder will be entered in a register which will be kept by the Trustee or
another agent of GECC. Unless we state otherwise in a prospectus supplement, we
will make principal and interest payments at the office of the paying agent or
agents we name in the prospectus supplement or by mailing a check to such holder
at the address specified in the register.
Unless we describe other procedures in a prospectus supplement, a
registered holder will be able to transfer registered debt securities at the
office of the transfer agent or agents we name in the prospectus supplement. The
registered holder may also exchange registered debt securities at the office of
the transfer agent for an equal aggregate principal amount of registered debt
securities of the same series having the same maturity date, interest rate and
other terms as long as the debt securities are issued in authorized
denominations.
8
Neither GECC nor the Trustee will impose any service charge for any such
transfer or exchange of a debt security, however, a registered holder may be
required to pay any taxes or other governmental charges in connection with a
transfer or exchange of debt securities.
GLOBAL NOTES, DELIVERY AND FORM
We may issue some or all of the debt securities in the form of one or
more Global Notes representing an entire issuance in book-entry form. We will
deposit each Global Note with a depositary (a "Depositary") or with a nominee
for a Depositary identified in the applicable prospectus supplement. We will
register each Global Note in the name of such Depositary or nominee. Unless and
until it is exchanged in whole or in part for debt securities in definitive
registered form, a Global Note may not be transferred, except as a whole by the
Depositary for such Global Note 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. For purposes of this Prospectus, "Global Note" refers
to the Global Note or Global Notes representing an entire issue of debt
securities.
The specific terms of the depositary arrangement with respect to any debt
securities to be represented by a Global Note will be described in the
prospectus supplement.
MODIFICATION OF THE INDENTURES
In general, our rights and obligations and the rights of the holders
under the above-referenced indentures may be modified if the holders of not less
than 66 2/3% in aggregate principal amount of the outstanding debt securities of
each series affected by the modification consent to it. However, Section 10.02
of each indenture provides that, unless each affected holder agrees, we cannot
o make any adverse change to any payment term of a debt security such
as:
o extending the maturity date;
o extending the date on which we have to pay interest or make a sinking
fund payment;
o reducing the interest rate;
o reducing the amount of principal we have to repay;
o changing the currency in which we have to make any payment of
principal premium or interest;
o modifying any redemption or repurchase right to the detriment of the
holder; and
o impairing any right of a holder to bring suit for payment;
o reduce the percentage of the aggregate principal amount of debt securities
needed to make any amendment to the indenture or to waive any covenant or
default;
o make any change to the section of the indenture relating to waivers of any
past default; and
o make any change to Section 10.02.
However, if we and the Trustee agree, we can amend the indentures without
notifying any holders or seeking their consent if the amendment does not
materially and adversely affect any holder.
9
EVENTS OF DEFAULT
Each indenture defines an "Event of Default" with respect to any series
of debt securities as any of the following:
o default in any payment of principal or premium, if any, on any debt
security of such series;
o default for 30 days in payment of any interest, if any, on any debt
security of such series;
o default in the making or satisfaction of any sinking fund payment or
analogous obligation on the debt securities of such series;
o default for 60 days after written notice to GECC in performance of any
other covenant in respect of the debt securities of such series
contained in such indenture;
o a default, as defined, with respect to any other series of debt
securities outstanding under the relevant Indenture or as defined in
any other indenture or instrument evidencing or under which GECC has
outstanding any indebtedness for borrowed money, as a result of which
such other series or such other indebtedness of GECC shall have been
accelerated and such acceleration shall not have been annulled within
10 days after written notice thereof (provided, that the resulting
Event of Default with respect to such series of debt securities may be
remedied, cured or waived by the remedying, curing or waiving of such
other default under such other series or such other indebtedness); or
o certain events involving bankruptcy, insolvency or reorganization.
(Section 6.01).
Each indenture requires us to deliver to the Trustee annually a written
statement as to the presence or absence of certain defaults under the terms
thereof. (Section 4.05). An Event of Default under one series of debt securities
does not necessarily constitute an Event of Default under any other series of
debt securities. Each indenture provides that the Trustee may withhold notice to
the holders of any series of debt securities issued thereunder of any default if
the Trustee considers it in the interest of such noteholders to do so provided
the Trustee may not withhold notice of default in the payment of principal,
premium, if any, or interest, if any, on any of the debt securities of such
series or in the making of any sinking fund installment or analogous obligation
with respect to such series. (Section 6.08).
The senior indentures provide that if any Event of Default occurs and is
continuing with respect to any series of senior debt securities, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
outstanding senior debt securities of such series may declare the principal, or
in the case of discounted debt securities, a portion of the principal amount, of
all such senior debt securities to be due and payable immediately. The
subordinated indenture provides that (i) if an Event of Default arising from a
breach of our covenants and agreements with respect to merger, sale or
conveyance or certain events involving bankruptcy, insolvency or reorganization
occurs and is continuing with respect to any series of subordinated debt
securities or (ii) when no "senior indebtedness" as defined below under
"Subordinated Debt Securities" is outstanding, if an Event of Default specified
in (i) above or any other Event of Default occurs with respect to a series of
subordinated debt securities, then, in either case, the Trustee or the holders
of not less than 25% in aggregate principal amount of the outstanding
subordinated debt securities of such series may declare the principal, or in the
case of discounted debt securities, a portion of the principal amount, of all
such subordinated debt securities to be due and payable immediately. Under
certain conditions such declaration may be annulled by the holders of a majority
in principal amount of such debt securities then outstanding. The
10
holders of a majority in aggregate principal amount of such debt securities then
outstanding may also waive on behalf of all holders past defaults with respect
to a particular series of debt securities except, unless previously cured, a
default in payment of principal, premium, if any, or interest, if any, on any of
the debt securities of such series, or the payment of any sinking fund
installment or analogous obligation on the debt securities of such series.
(Sections 6.01 and 6.07).
Other than the duties of a trustee during a default, the Trustee is not
obligated to exercise any of its rights or powers under the indenture at the
request, order or direction of any holders of debt securities of any series
issued thereunder unless such holders shall have offered to the Trustee
reasonable indemnity. (Sections 7.01 and 7.02). Subject to such indemnification
provision, each indenture provides that the holders of a majority in aggregate
principal amount of the debt securities of any series issued thereunder at the
time outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee thereunder, or
exercising any trust or power conferred on such Trustee with respect to the debt
securities of such series. However, the Trustee may decline to act if it
determines that the proceedings so directed would be illegal or involve it in
any personal liability. (Section 6.07).
SENIOR DEBT SECURITIES
The senior debt securities will be unsecured and will rank equally with
all of our other unsecured and unsubordinated indebtedness.
SUBORDINATED DEBT SECURITIES
The subordinated debt securities will be unsecured. The subordinated debt
securities will be subordinate in right of payment to all senior indebtedness.
(Section 14.01 of subordinated indenture).
The subordinated indenture defines "senior indebtedness" to mean:
o the principal of, premium, if any, and interest on all indebtedness
for money borrowed other than the subordinated debt securities and any
deferrals, renewals or extensions thereof;
o obligations arising from any guaranty, letter of credit or similar
credit enhancement; and
o obligations associated with derivative products such as interest rate
and foreign exchange rate swaps, forward sales of interests in
commodities, and similar arrangements.
However, the term "senior indebtedness" will not include:
o any liability for Federal, state, local or other taxes owed or owing
by us;
o any accounts payable or other liability to trade creditors (other than
those obligations referenced in the last two bullet points under the
definition of "senior indebtedness" above) arising in the ordinary
course of business, including instruments evidencing those
liabilities;
o any indebtedness, guarantee or obligation of ours which is expressly
subordinate or junior in right of payment in any respect to any other
indebtedness, guarantee or obligation of ours; or
o any obligations with respect to any capital stock.
11
We use the term "indebtedness for money borrowed" to include, without
limitation, any obligation of ours for the repayment of borrowed money, whether
or not evidenced by bonds, debentures, notes, or other written instruments, and
any deferred obligation for the payment of the purchase price of property or
assets.
There is no limitation on our ability to issue additional senior
indebtedness. The senior debt securities constitute senior indebtedness under
the subordinated indenture.
Under the subordinated indenture, no payment may be made on the
subordinated debt securities and no purchase, redemption or retirement of any
subordinated debt securities may be made in the event:
o any senior indebtedness is not paid when due, or
o the maturity of any senior indebtedness is accelerated as a result of
a default, unless the default has been cured or waived and the
acceleration has been rescinded or that senior indebtedness has been
paid in full.
In addition, while any senior indebtedness is outstanding, subordinated
debt securities can only be accelerated in the event of an Event of Default
arising from a breach of our covenants and agreements with respect to merger,
sale or conveyance and certain events involving bankruptcy, insolvency or
reorganization, and the right to receive payment through an acceleration will
not be available for any other Events of Default including, without limitation,
failure to pay principal, interest or premium on the subordinated debt
securities. (Section 6.01 of the subordinated indenture).
In the event we pay or distribute our assets to creditors upon a total or
partial liquidation, dissolution or reorganization of us or our property, the
holders of senior indebtedness will be entitled to receive payment in full of
the senior indebtedness before the holders of subordinated debt securities are
entitled to receive any payment and until the senior indebtedness is paid in
full, any payment or distribution to which holders of subordinated debt
securities would be entitled but for the subordination provisions of the
subordinated indenture will be made to holders of the senior indebtedness.
(Section 14.02 of subordinated indenture).
If a distribution is made to holders of subordinated debt securities
that, due to the subordinated provisions, should not have been made to them,
those holders of subordinated debt securities are required to hold it in trust
for the holders of senior indebtedness, and pay it over to them as their
interests may appear. (Section 14.05 of subordinated indenture).
As a result of the subordination provisions contained in the subordinated
indenture, in the event of default or insolvency, our creditors who are holders
of senior indebtedness are likely to recover more, ratably, than the holders of
subordinated debt securities. It is important to keep this in mind if you decide
to hold our subordinated debt securities.
CONCERNING THE TRUSTEE
JPMorgan Chase Bank, N.A. acts, or will act, as the case may be, as
Trustee under (i) an Amended and Restated Indenture with us dated as of February
27, 1997, as supplemented by a Supplemental Indenture with us dated as of May 3,
1999, a Second Supplemental Indenture with us dated as of July 2, 2001, and a
Third Supplemental Indenture with us dated November 22, 2002, (ii) an Amended
and Restated Indenture with us dated as of February 28, 1997, as supplemented by
a First Supplemental Indenture with us dated as of July 2, 2001, (iii) a
Subordinated Debt Indenture to be entered into with us, (iv) an Indenture with
us dated as of June 3, 1994,
12
as amended and supplemented, and (v) an Indenture with us dated as of October 1,
1991, as amended and supplemented. JPMorgan Chase Bank, N.A. also acts as
Trustee under certain other indentures with us. A number of our series of senior
unsecured notes are presently outstanding under each of the indentures referred
to in clauses (i), (ii), (iv) and (v) above. Debt securities may be issued under
any of the indentures referred to in clauses (i), (ii) and (iii) above.
GECC, GE Company and other affiliates of GE Company maintain various
commercial and investment banking relationships with JPMorgan Chase Bank, N.A.
and its affiliates in their ordinary course of business.
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DESCRIPTION OF WARRANTS
GENERAL
We may issue warrants to purchase debt securities under this prospectus
either alone or together with debt securities. In addition to this summary, you
should refer to the detailed provisions of the specific warrant agreement for
complete terms of the warrants and the warrant agreement. Each warrant agreement
will be between GECC and a banking institution organized under the laws of the
United States or a state. A form of warrant agreement was filed as an exhibit to
the Registration Statement.
The warrants will be evidenced by warrant certificates. Unless otherwise
specified in the prospectus supplement, the warrant certificates may be traded
separately from the debt securities, if any, with which the warrant certificates
were issued. Warrant certificates may be exchanged for new warrant certificates
of different denominations at the office of an agent that we will appoint. Until
a warrant is exercised, the holder of a warrant does not have any of the rights
of a debtholder and is not entitled to any payments on any debt securities
issuable upon exercise of the warrants.
We may issue warrants in one or more series. The prospectus supplement
accompanying this prospectus relating to the particular series of warrants will
contain terms of the warrants, including:
o the title and the aggregate number of warrants;
o the debt securities for which each warrant is exercisable;
o the date or dates on which such warrants will expire;
o the price or prices at which such warrants are exercisable;
o the currency or currencies in which such warrants are exercisable;
o the periods during which and places at which such warrants are
exercisable;
o the terms of any mandatory or optional call provisions;
o the price or prices, if any, at which the warrants may be redeemed at
the option of the holder or will be redeemed upon expiration;
o the identity of the warrant agent; and
o the exchanges, if any, on which such warrants may be listed.
EXERCISE OF WARRANTS
You may exercise warrants by payment to our warrant agent of the exercise
price, in each case in such currency or currencies as are specified in the
warrant, and giving your identity and the number of warrants to be exercised.
Once you pay our warrant agent and deliver the properly completed and executed
warrant certificate to our warrant agent at the specified office, our warrant
agent will, as soon as practicable, forward notes to you in authorized
denominations. If you exercise less than all of the warrants evidenced by your
warrant certificate, you will be issued a new warrant certificate for the
remaining amount of warrants.
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DESCRIPTION OF THE PREFERRED STOCK
GENERAL
Our Board of Directors has authorized the issuance of preferred stock.
The terms of the preferred stock will be stated and expressed in a resolution or
resolutions to be adopted by our Board of Directors (or any duly authorized
committee of the Board of Directors) consistent with our restated certificate of
incorporation. The preferred stock, when issued and sold, will be fully paid and
non-assessable and will have no pre-emptive rights.
As of the date of this prospectus, our capital stock as authorized by our
sole common stockholder consists of:
o 4,166,000 shares of Common Stock, par value $14.00 per share,
o 33,000 shares of Variable Cumulative Preferred Stock, par value $100
per share, and
o 750,000 shares of Preferred Stock, par value $.01 per share.
IN ORDER TO DISTINGUISH BETWEEN OUR TWO CLASSES OF PREFERRED STOCK, WE
WILL REFER TO THE FIRST CLASS OF OUR PREFERRED STOCK AS "VARIABLE CUMULATIVE
PREFERRED STOCK" AND TO THE SECOND CLASS AS OUR "SECOND CLASS OF PREFERRED
STOCK". WHEN WE REFER TO BOTH CLASSES WE USE THE PHRASE "PREFERRED STOCK."
3,985,403 shares of Common Stock and 26,000 shares of Variable Cumulative
Preferred Stock are presently outstanding. There are no shares of our second
class of preferred stock currently outstanding. Each Series of Variable
Cumulative Preferred Stock ranks equally with each other Series of Variable
Cumulative Preferred Stock as to dividend and liquidation preference.
We will describe the particular terms of any series of preferred stock
being offered by use of this prospectus in the prospectus supplement relating to
that series of preferred stock. Those terms may include:
o the designation, number of shares and stated value per share;
o the amount of liquidation preference;
o the initial public offering price at which shares of such series of
preferred stock will be sold;
o the dividend rate or rates (or method of determining the dividend
rate);
o the dates on which dividends shall be payable, the date from which
dividends shall accrue and the record dates for determining the
holders entitled to such dividends;
o any redemption or sinking fund provisions;
o any voting rights;
o any conversion or exchange provisions;
o any provisions to issue the shares of such series as depositary shares
evidenced by depositary receipts; and
o any additional dividend, redemption, liquidation or other preferences
or rights and qualifications, limitations or restrictions thereof.
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If the terms of any series of preferred stock being offered differ from
the terms set forth below, we will also disclose those terms in the prospectus
supplement relating to that series of preferred stock. In addition to this
summary, you should refer to our restated certificate of incorporation for the
complete terms of preferred stock being offered.
We will specify the transfer agent, registrar, dividend disbursing agent
and redemption agent for each series of preferred stock in the prospectus
supplement relating to that series.
DIVIDEND RIGHTS
If you purchase preferred stock being offered by this prospectus, you
will be entitled to receive, when, and as declared by our board of directors,
cash or other dividends at the rates, or as determined by the method described
in, and on the dates set forth in, the prospectus supplement. Dividend rates may
be fixed or variable or both. Different series of preferred stock may be
entitled to dividends at different dividend rates or based upon different
methods of determination. We will pay each dividend to the holders of record as
they appear on our stock books on record dates determined by the board of
directors. Dividends on any series of the preferred stock may be cumulative or
noncumulative, as specified in the prospectus supplement. If the board of
directors fails to declare a dividend on any series of preferred stock for which
dividends are noncumulative, then your right to receive that dividend will be
lost, and we will have no obligation to pay the dividend for that dividend
period, whether or not we declare dividends for any future dividend period.
Dividends on the shares of preferred stock will accrue from the date on which we
initially issue such series of preferred stock or as otherwise set forth in the
prospectus supplement relating to such series. The prospectus supplement
relating to a series of preferred stock will describe any adjustments to be
made, if any, to the dividend rate in the event of certain amendments to the
Internal Revenue Code of 1986, as amended, with respect to the
dividends-received deduction.
In particular, the dividend payment dates on the Variable Cumulative
Preferred Stock will be the last day of each dividend period, regardless of its
length, and, in the case of dividend periods of more than 99 days, on the
following additional dates:
o if such Dividend Period is from 100 to 190 days, on the 91st day;
o if such Dividend Period is from 191 to 281 days, on the 91st and 182nd
days;
o if such Dividend Period is from 282 to 364 days, on the 91st, 182nd
and 273rd days; and
o if such Dividend Period is from two to 30 years, on January 15, April
15, July 15 and October 15 of each year.
In the event a dividend payment date falls on a day that is not a
business day, then the dividend payment date shall be the business day next
succeeding such date. After the initial dividend period, each subsequent
dividend period will begin on a dividend payment date and will end 49 days
later. However, we may elect subsequent dividend periods that are longer than 49
days. We will notify you of any such election and follow the procedures that
will be set forth in a prospectus supplement for the series of Variable
Cumulative Preferred Stock. After the initial dividend period, the dividend
rates on the Variable Cumulative Preferred Stock will be determined pursuant to
an auction method, subject to any maximum or minimum interest rate, which will
be described in the prospectus supplement relating to such series of Variable
Cumulative Preferred Stock.
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The dividend payment dates and the dividend periods with respect to our
second class of preferred stock will be described in the prospectus supplement
relating to such series of our second class of preferred stock.
We may not declare any dividends on any shares of common stock, or make
any payment on account of, or set apart money for, a sinking or other analogous
fund for the purchase, redemption or other retirement of any shares of common
stock or make any distribution in respect thereof, whether in cash or property
or in obligations or our stock, other than common stock unless
o full cumulative dividends shall have been paid or declared and set
apart for payment on all outstanding shares of preferred stock and
other classes and series of our preferred stock and
o we are not in default or in arrears with respect to any sinking or
other analogous fund or other agreement for the purchase, redemption
or other retirement of any shares of our preferred stock.
In the event we have outstanding shares of more than one series of our
preferred stock ranking equally as to dividends and dividends on one or more of
such series of preferred stock are in arrears, we are required to make dividend
payments ratably on all outstanding shares of such preferred stock in proportion
to the respective amounts of dividends in arrears on all such preferred stock to
the date of such dividend payment. You will not be entitled to any dividend,
whether payable in cash, property or stock, in excess of full cumulative
dividends on shares of the preferred stock you own. No interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend payment or
payments which may be in arrears.
LIQUIDATION RIGHTS
In the event of our liquidation, either voluntary or involuntary,
dissolution or winding-up, we will be required to pay the liquidation preference
specified in the prospectus supplement relating to those shares of preferred
stock, plus accrued and unpaid dividends, before we make any payments to holders
of our common stock or any other class of our stock ranking junior to that
preferred stock. If we do not have sufficient assets to pay the liquidation
preference, plus accrued and unpaid dividends, on all classes of preferred stock
that rank equally upon liquidation, we will pay holders of the preferred stock
proportionately based on the full amount to which they are entitled. Other than
their claims to the liquidation preference and accrued and unpaid dividends,
holders of preferred stock will have no claim to any of our other remaining
assets. Neither the sale of all or substantially all our property or business
nor a merger or consolidation by us with any other corporation will be
considered a dissolution, liquidation or winding-up of our business or affairs,
if that transaction does not impair the voting power, preferences or special
rights of the holders of shares of preferred stock.
VOTING RIGHTS
Holders of our common stock are entitled to one vote per share on all
matters which arise at any meeting of shareholders. Holders of preferred stock
being offered by this prospectus will not be entitled to vote, except as set
forth below, in a prospectus supplement or as otherwise required by law.
The holders of Variable Cumulative Preferred Stock are not entitled to
vote except as required by law or as set forth in a prospectus supplement.
However, we may not alter any of the preferences, privileges, voting powers or
other restrictions or qualifications of a series of Variable Cumulative
Preferred Stock in a manner
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substantially prejudicial to the holders thereof without the consent of the
holders of at least 66 2/3% of the total number of shares of such series.
With respect to our second class of preferred stock, in the event that
six quarterly dividends (whether or not consecutive) payable on any series of
our second class of preferred stock shall be in arrears, the holders of each
series of our second class of preferred stock, voting separately as a class with
all other holders of preferred stock with equal voting rights, shall be entitled
at our next annual meeting of stockholders (and at each subsequent annual
meeting of stockholders), to vote for the election of two of our directors, with
the remaining directors to be elected by the holders of shares of any other
class or classes or series of stock entitled to vote therefor. Until the arrears
in payments of all dividends which permitted the election of such directors
shall cease to exist, any director who has been so elected may be removed at any
time, either with or without cause, only by the affirmative vote of the holders
of the preferred stock at the time entitled to cast a majority of the votes
entitled to be cast for the election of any such director at a special meeting
of such holders called for that purpose, and any vacancy thereby created may be
filled by the vote of such holders. The holders of shares of our second class of
preferred stock shall no longer be entitled to vote for directors once the past
due dividends have all been paid unless dividends later become in arrears again.
Once the past due dividends have all been paid, then the directors elected by
the preferred stockholders will no longer be directors.
We may not take certain actions without the consent of at least 66 2/3%
of the shares of our second class of preferred stock, voting together as a
single class without regard to series. We need such 66 2/3% consent to:
o create any class or series of stock with preference as to dividends or
distributions of assets over any outstanding series of our second
class of preferred stock (other than a series which has no right to
object to such creation); or
o alter or change the provisions of our restated certificate of
incorporation so as to adversely affect the voting power, preferences
or special rights of the holders of shares of our second class of
preferred stock; provided, however, that if such creation or such
alteration or change would adversely affect the voting power,
preferences or special rights of one or more, but not all, series of
our second class of preferred stock at the time outstanding, consent
of the holders of shares entitled to cast at least two-thirds of the
votes entitled to be cast by the holders of all of the shares of all
such series so affected, voting as a class, shall be required in lieu
of the consent of all holders of two-thirds of our second class of
preferred stock at the time outstanding.
The prospectus supplement relating to a series of preferred stock will
further describe the voting rights, if any, including the number of or
proportional votes per share.
REDEMPTION
The applicable prospectus supplement will indicate whether the series of
preferred stock being offered is subject to redemption, in whole or in part,
whether at our option or mandatorily or otherwise and whether or not pursuant to
a sinking fund. The redemption provisions that may apply to a series of
preferred stock being offered, including the redemption dates and the redemption
prices for that series will be set forth in the prospectus supplement.
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If we fail to pay dividends on any series of preferred stock we may not
redeem that series in part and we may not purchase or otherwise acquire any
shares of such series other than by a purchase or exchange offer made on the
same terms to holders of all outstanding shares of such series.
We may redeem the shares of any series of Variable Cumulative Preferred
Stock out of legally available funds therefore, as a whole or from time to time
in part:
o on the last day of any dividend period at a redemption price of
$100,000 per share, plus accumulated and unpaid dividends to the date
fixed for redemption; and
o in the case of shares of Variable Cumulative Preferred Stock with a
dividend period equal to or more than two years, on any dividend
payment date for such shares at redemption prices (but not less than
$100,000 per share) determined by us prior to the commencement of such
dividend period plus accumulated and unpaid dividends to the date set
forth for redemption.
CONVERSION RIGHTS
No series of preferred stock will be convertible into our common stock.
DESCRIPTION OF SUPPORT OBLIGATIONS AND INTERESTS THEREIN
GENERAL
Support obligations issued under this prospectus may include guarantees,
letters of credit and promissory notes or loan obligations that are issued in
connection with, and as a means of underlying credit support for, any part of a
fixed or contingent payment obligation of primary securities issued by third
parties. The issuers of the primary securities may or may not be affiliated with
us. A holder of a primary security will also hold uncertificated interests in
the related support obligation, representing the credit enhancement of the
holder's primary security afforded by the related support obligation.
The terms and conditions of any support obligations and related interests
will be determined by the terms and conditions of the related underlying
securities, and may vary from the general descriptions set forth below. A
complete description of the terms and conditions of any support obligations and
related interests issued pursuant to this prospectus will be set forth in the
accompanying prospectus supplement.
Unless otherwise specified in the applicable prospectus supplement, any
support obligations and related interests will be unsecured and will rank
equally and ratably with all of our other unsecured and unsubordinated
indebtedness. The terms of a particular support obligation may provide that a
different support obligation may be substituted therefor, upon terms and
conditions described in the applicable prospectus supplement, provided that such
substitution is carried out in conformity with the Securities Act of 1933 and
the rules and regulations thereunder. Unless otherwise specified in the
accompanying prospectus supplement, each support obligation will be governed by
the laws of the State of New York. Neither the Support Indenture (as defined
hereinafter) (with respect to promissory notes and loan obligations) nor any
other document or instrument (with respect to other forms of support
obligations) will (i) limit the amount of support obligations or interests that
may be issued, or (ii) contain any provisions that limit our ability to incur
indebtedness or that afford holders of support obligations or interests
protection in the event GE Company, as our ultimate
19
stockholder, causes us to engage in a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction.
GUARANTEES
Any guarantees that we issue from time to time under this prospectus for
the benefit of holders of specified underlying securities will include the
following terms and conditions, plus any additional terms specified in the
accompanying prospectus supplement.
The guarantee will provide that we unconditionally guarantee the due and
punctual payment of the principal, interest (if any), premium (if any) and all
other amounts due under the applicable underlying securities when the same shall
become due and payable, whether at maturity, pursuant to mandatory or optional
prepayments, by acceleration or otherwise, in each case after any applicable
grace periods or notice requirements, according to the terms of the applicable
underlying securities. Any guarantee shall be unconditional irrespective of the
validity or enforceability of the applicable underlying security, any change or
amendment thereto or any other circumstances that may otherwise constitute a
legal or equitable discharge or defense of a guarantor. However, we will not
waive presentment or demand of payment or notice with respect to the applicable
underlying security unless otherwise provided in the accompanying prospectus
supplement.
We shall be subrogated to all rights of the issuer of the applicable
underlying securities in respect of any amounts paid by us pursuant to the
provisions of a guarantee. The guarantee shall continue to be effective or
reinstated, as the case may be, if at any time any payment made by the issuer of
the applicable underlying security is rescinded or must otherwise be returned
upon the insolvency, bankruptcy or reorganization of GECC, the issuer of the
applicable underlying security or otherwise.
LETTERS OF CREDIT
The direct-pay letters of credit we issue from time to time under this
prospectus relating to specified underlying securities shall include the
following terms and conditions, plus any additional terms specified in the
accompanying prospectus supplement.
Any letter of credit will be our direct-pay obligation issued for the
account of the holders of the applicable underlying securities or, in certain
cases, an agent acting on behalf of the issuer of the applicable underlying
securities or a trustee acting on behalf of the holders. The letter of credit
will be issued in an amount that corresponds to principal and, if applicable,
interest and other payments payable with respect to the applicable underlying
securities. Drawings under the letter of credit will reduce the amount available
under the letter of credit, but drawings of a recurring nature (such as
interest) will automatically be reinstated following the date of repayment
provided that the letter of credit has not otherwise expired.
The letter of credit will expire at a date and time specified in the
accompanying prospectus supplement, and will also expire upon the earlier
occurrence of certain events, as described in the accompanying prospectus
supplement.
PROMISSORY NOTES OR LOAN OBLIGATIONS
We may incur underlying indebtedness from time to time to an issuer of
primary securities, such indebtedness to be evidenced by promissory notes, loan
agreements or other evidences of indebtedness. The
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purpose of issuing any such promissory note, loan agreement or other
indebtedness will be to enable us, directly or indirectly, to provide funds for
payment of the primary securities by means of our repayment obligation as
evidenced by the promissory note, loan agreement or other indebtedness. The
promissory notes, loan agreements or other indebtedness will provide that only
the issuer of the primary securities to which such promissory notes, loan
agreements or other indebtedness relate or the issuer's assignee will be
entitled to enforce such promissory notes, loan agreements or other indebtedness
against us. Holders of the relevant primary securities will not have any third
party beneficiary or other rights under, or be entitled to enforce, the relevant
promissory notes, loan agreements or other indebtedness. The terms and
provisions of any such note, loan agreement or other indebtedness, including
principal amount, provisions or interest and premium, if applicable, maturity,
prepayment provisions, if any, and identity of obligee, will be described in the
applicable prospectus supplement.
INDENTURE FOR CERTAIN SUPPORT OBLIGATIONS
Obligations that are issued in the form of promissory notes or loan
obligations, and the related interests, may be issued under an indenture, dated
as of June 3, 1994, between us and JPMorgan Chase Bank, N.A. as successor
trustee (the "Support Obligation Trustee"), as supplemented by a First
Supplemental Indenture dated as of February 1, 1997 and a Second Supplemental
Indenture dated as of July 2, 2001 (the "Support Indenture"). To the extent that
the following disclosure summarizes certain provisions of the indenture, such
summaries do not purport to be complete, and are subject to, and are qualified
in their entirety by reference to, all the provisions of the Support Indenture,
a form of which is filed as an exhibit to the registration statement of which
this prospectus is a part.
The following is a summary of certain provisions which will apply to any
promissory notes or loan obligations issued pursuant to the Support Indenture.
MODIFICATION: In general, our rights and obligations and the rights of
the holders under the indenture may be modified if the holders of not less than
66 2/3% in aggregate principal amount of the outstanding support obligations of
each series affected by the modification consent to it. However, Section 10.2 of
the Support Indenture provides that, unless each affected holder agrees, we
cannot:
o change the character of any support obligation from being payable
other than as provided in any related support obligation agreement;
o reduce the principal amount of a support obligation;
o change the currency in which we have to make payment on a support
obligation to a currency other than United States dollars; or
o reduce the percentage of the aggregate principal amount of support
obligations needed to make any amendment to the indenture.
However, if we and the Support Obligation Trustee agree, we can amend the
Support Indenture without notifying any holders or seeking their consent if the
amendment does not materially and adversely affect any holder.
EVENT OF DEFAULT: Any event of default with respect to any series of
support obligations issued pursuant to the Support Indenture is defined in the
Support Indenture as being (a) a default in any payment of
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principal or premium, if any, or interest on any support obligation of such
series in accordance with the terms of the related credit support agreement or
(b) any other event of default as defined in the related credit support
agreement to the extent specifically identified pursuant to Section 2.2 of the
Support Indenture. (Section 6.1). The Support Indenture requires us to deliver
to the Support Obligation Trustee annually a written statement as to the
presence or absence of certain Defaults under the terms thereof. (Section 4.4).
No event of default with respect to a particular series of support obligations
under the Support Indenture necessarily constitutes an event of default with
respect to any other series of support obligations issued thereunder or other
series of support obligations not entitled to the benefits of the Support
Indenture.
The Support Indenture provides that during the continuance of an event of
default with respect to any series of support obligations issued pursuant to the
Support Indenture, either the Support Obligation Trustee or the holders of 25%
in aggregate principal amount of the outstanding support obligations of such
series and the interests of such series (voting together as a single class) may
declare the principal of all such support obligations to be due and payable
immediately, but under certain conditions such declaration may be annulled by
the holders of a majority in principal amount of such support obligations then
outstanding. The Support Indenture provides that past defaults with respect to a
particular series of support obligations issued under the Support Indenture
(except, unless theretofore cured, a default in payment of principal of, or
interest on any of the support obligations of such series) may be waived on
behalf of the holders of all support obligations of such series by the holders
of a majority in principal amount of such support obligations then outstanding.
(Sections 6.1 and 6.7).
Subject to the provisions of the Support Indenture relating to the duties
of the Support Obligation Trustee in case an event of default with respect to
any series of support obligations issued pursuant to the Support Indenture shall
occur and be continuing, the Support Obligation Trustee shall be under no
obligation to exercise any of its rights or powers under the Support Indenture
at the request, order or direction of any holders of support obligations of any
series issued thereunder unless such holders shall have offered to the Support
Obligation Trustee reasonable indemnity. (Section 6.4). Subject to such
indemnification provision, the Support Indenture provides that the holders of a
majority in principal amount of the support obligations of any series issued
pursuant to the Support Indenture and the interests of such series (voting
together as a single class) thereunder at the time outstanding shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Support Obligation Trustee, or exercising any trust or
power conferred on the Support Obligation Trustee with respect to the support
obligations of such series, provided that the Support Obligation Trustee may
decline to follow any such direction if it has not been offered reasonable
indemnity therefor or if it determines that the proceedings so directed would be
illegal or involve it in any personal liability. (Section 6.7).
CONCERNING THE SUPPORT OBLIGATION TRUSTEE
JPMorgan Chase Bank, N.A., as successor to Mercantile-Safe Deposit and
Trust Company, acts as Support Obligation Trustee under the Support Indenture.
JPMorgan Chase Bank, N.A., also acts as Trustee under several other indentures
with us, pursuant to which a number of series of unsecured notes of ours are
presently outstanding.
GECC, GE Company and other affiliates of GE Company maintain various
commercial and investment banking relationships with JPMorgan Chase Bank, N.A.,
and its affiliates in their ordinary course of business.
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LEGAL OPINIONS
Unless otherwise specified in the prospectus supplement accompanying this
prospectus, Alan M. Green, General Counsel, Corporate Treasury and Assistant
Secretary of GECC will provide an opinion for us regarding the validity of the
securities and Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York
10017 will provide an opinion for the underwriters, agents or dealers. Mr. Green
beneficially owns or has rights to acquire an aggregate of less than 0.01% of GE
Company's common stock.
EXPERTS
The consolidated financial statements and schedule of GECC as of December
31, 2004 and 2003, and for each of the years in the three-year period ended
December 31, 2004, and management's assessment of the effectiveness of internal
control over financial reporting as of December 31, 2004 incorporated herein by
reference from GECC's Annual Report on Form 10-K/A for the year ended December
31, 2004 have been so incorporated by reference herein in reliance upon the
reports, also incorporated by reference herein, of KPMG LLP, an independent
registered public accounting firm, and upon the authority of said firm as
experts in accounting and auditing.
The report of KPMG LLP on the financial statements and schedule dated
February 11, 2005, except as to the restatement discussed in note 1 to the
consolidated financial statements which is as of May 5, 2005, refers to a
restatement of the consolidated financial statements.
The report of KPMG LLP on the financial statements and schedule refers to
a change in 2004 and 2003 in the method of accounting for variable interest
entities and a change in 2002 in the method of accounting for goodwill and other
intangible assets.
The report of KPMG LLP on management's assessment of the effectiveness of
internal control over financial reporting and the effectiveness of internal
control over financial reporting as of December 31, 2004, which is dated
February 11, 2005, except as to the fourth paragraph of Management's Annual
Report on Internal Control over Financial Reporting (as restated), which is as
of May 5, 2005, expresses an opinion that General Electric Capital Corporation
did not maintain effective internal control over financial reporting as of
December 31, 2004 because of the effect of a material weakness on the
achievement of the objectives of the control criteria and contains an
explanatory paragraph that states that management has identified and included in
its revised assessment the following material weakness as of December 31, 2004:
a failure to ensure the correct application of Statement of Financial Accounting
Standards No. 133 when certain derivative transactions were entered into at
General Electric Capital Corporation prior to August 2003 and failure to correct
that error subsequently.
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GE CAPITAL
$14,651,734,000
INTERNOTES
Prospectus Supplement
May 17, 2005
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