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TABLE OF CONTENTS
Table of Contents
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As filed with the Securities and Exchange Commission on October 2, 2015 |
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Registration No. 333- |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
American Express Company
(Exact name of registrant as specified in its charter)
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New York
(State or other jurisdiction of
incorporation or organization) |
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13-4922250
(I.R.S. Employer
Identification Number) |
200 Vesey Street,
New York, New York 10285
(212) 640-2000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices) |
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LAUREEN E. SEEGER, Esq.
Executive Vice President and General Counsel
American Express Company
200 Vesey Street
New York, New York 10285
(212) 640-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to: |
DAVID S. CARROLL, Esq.
Senior Counsel
American Express Company
200 Vesey Street
New York, New York 10285
(212) 640-2000 |
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LESLIE N. SILVERMAN, Esq.
CRAIG B. BROD, Esq.
KIMBERLY B. BLACKLOW, Esq.
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, New York 10006
(212) 225-2000 |
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this registration statement, as determined in light of market conditions.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following
box. o
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. ý
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. o
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing
with the Commission pursuant to Rule 462(e) under the Securities Act of 1933, check the following box. ý
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities
pursuant to Rule 413(b) under the Securities Act of 1933, check the following box. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
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Large accelerated filer ý |
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Accelerated filer o |
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Non-accelerated filer o (Do not check if a
smaller reporting company) |
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Smaller reporting company o |
CALCULATION OF REGISTRATION FEE
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Title of each class of Securities
to be Registered
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Amount to be Registered/Proposed Maximum Offering
Price per Unit/Proposed Maximum Aggregate
Offering Price/Amount of Registration Fee
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Debt Securities |
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Preferred Shares, par value $1.662/3 per share |
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(1)(2) |
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Depositary Shares |
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Common Shares, par value $0.20 per share |
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Warrants |
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- (1)
- An
indeterminate aggregate initial offering price and number of the securities of each identified class is being registered and may from time to time be
offered at indeterminate prices. Separate consideration may or may not be received for securities that are issuable on exercise, conversion or exchange of other securities.
- (2)
- In
accordance with Rules 456(b) and 457(r) under the Securities Act of 1933, as amended, the Registrant is deferring payment of the entire
registration fee. In connection with the securities offered hereby, the Registrant will pay "pay-as-you-go registration fees" in accordance with Rule 456(b).
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PROSPECTUS
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American Express Company Debt Securities
Preferred Shares
Depositary Shares
Common Shares
Warrants |
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American
Express Company may offer from time to time in one or more series:
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- unsecured debt securities,
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- preferred shares, par value $1.662/3 per share,
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- depositary shares,
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- common shares, par value $0.20 per share,
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- warrants to purchase debt securities, preferred shares, common shares or equity securities issued by one of our affiliated or
unaffiliated corporations or other entity,
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- currency warrants entitling the holder to receive the cash value in U.S. dollars of the right to purchase or the right to sell foreign
currencies or composite currencies or
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- warrants relating to other items or indices.
We
may offer any combination of these securities at prices and on terms to be determined at or prior to the time of sale.
We
may offer and sell securities to or through one or more underwriters, dealers and agents, or directly to purchasers. The names and compensation of any underwriters or agents involved
in the sale of securities will be described in a supplement to this prospectus.
We
will provide the specific terms of any offering in a supplement to this prospectus. This prospectus may not be used to consummate a sale of these securities unless accompanied by a
supplement to this prospectus.
Our
common stock is listed on the New York Stock Exchange under the symbol "AXP."
Investing in the securities involves risks. You should carefully consider the information under "Risk Factors" beginning on page 2 of this prospectus as
well as the risk factors contained in other documents incorporated by reference into this prospectus and contained in any accompanying prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is October 2, 2015.
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We are responsible only for the information contained in or incorporated by reference in this prospectus, in the applicable prospectus supplement, and in the
other offering material, if any, provided by us or any underwriter, dealer or agent that we may from time to time retain. We and any underwriter, dealer and agent have not authorized anyone to provide
you with different or additional information. We take no responsibility for any other information or representations that others may give you. This prospectus is an offer to sell only the securities
it describes, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in or incorporated by reference in this prospectus, the applicable prospectus
supplement or other offering material may only be accurate on the date of the relevant document.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3, to which we refer as the registration statement, filed with the
Securities and Exchange Commission, to which we refer as the SEC, under the Securities Act of 1933, as amended, to which we refer as the Securities
Act, using a shelf registration process. Under this process, we may sell from time to time any combination of the securities described in this prospectus.
This
prospectus describes the general terms of these securities and the general manner in which we will offer the securities. Each time these securities are sold, this prospectus will be
accompanied by a prospectus supplement that describes the specific terms of these securities and the specific manner in which they may be offered. You should read the prospectus supplement and this
prospectus, along with the documents incorporated by reference and described under the headings "Incorporation of certain documents by reference" and "Where you can find more information" before
making your investment decision.
References
in this prospectus to the "Company," "American Express," "we," "us" and "our" are to American Express Company.
We
have filed or incorporated by reference exhibits to the registration statement of which this prospectus forms a part. You should read the exhibits carefully for provisions that
may be important to you.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information with the SEC. Our SEC filings are available to the public from the
SEC's website at http://www.sec.gov. You may also read and copy any document we file, including the registration statement, at the SEC's public reference facilities at 100 F Street,
N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information about the operation of the public reference room.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the information we file with the SEC, which means that we can disclose important
information to you by referring you to those documents. The information we incorporate by reference is considered to be part of this prospectus.
Any
reports filed by us with the SEC after the date of this prospectus and before the date that the offering of the securities by means of this prospectus is terminated will
automatically update and, where
applicable, supersede any information contained in this prospectus or incorporated by reference in this prospectus. This means that you must look at all of the SEC filings that we incorporate by
reference to determine if any of the statements in this prospectus or in any documents previously incorporated by reference have been modified or superseded. We incorporate by reference into this
prospectus the following documents filed with the SEC (other than, in each case, documents or information deemed
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furnished
and not filed in accordance with the SEC rules, including pursuant to Item 2.02 or Item 7.01 of Form 8-K, and no such information shall be deemed specifically
incorporated by reference hereby or in any accompanying prospectus supplement):
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- Annual Report on Form 10-K for the year ended December 31, 2014.
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- Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.
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- Quarterly Report on Form 10-Q for the quarter ended June 30, 2015.
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- Current Reports on Form 8-K filed on March 2, 2015 and May 12, 2015.All documents filed by us under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, on or after the date of this prospectus and before the date that the offering of the securities by means
of this prospectus is terminated.
You
may request a copy of these filings at no cost, by writing or telephoning us at the following address or number:
American
Express Company
200 Vesey Street
New York, New York 10285
Attention: Secretary
(212) 640-2000
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FORWARD-LOOKING STATEMENTS
We have made various statements in this prospectus that may constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements may also be made in any prospectus supplement and the documents that are or will be incorporated by reference in this prospectus.
Forward-looking statements are subject to risks and uncertainties, including those identified in the documents that are or will be incorporated by reference in this prospectus, which could cause
actual results to differ materially from such statements. The words "believe," "expect," "estimate," "anticipate," "optimistic," "intend," "plan," "aim," "will," "may," "should," "could," "would,"
"likely" and similar expressions are intended to identify forward-looking statements. We caution you that any risk factors described in any prospectus supplement or in any document incorporated by
reference herein are not exclusive. There may also be other risks we are unable to predict at this time that may cause actual results to differ materially from those in forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise
any forward-looking statements.
Information
concerning important factors that could cause actual events or results to be materially different from the forward-looking statements can be found in the "Risk Factors"
section of the documents that are or will be incorporated by reference in this prospectus and any accompanying prospectus supplement. Although we believe the expectations reflected in our
forward-looking statements are based upon reasonable assumptions, it is not possible to foresee or identify all factors that could have a material and negative impact on our future performance. The
forward-looking statements contained or incorporated by reference in this prospectus or any accompanying prospectus supplement are made on the basis of management's assumptions and analyses, as of the
time the statements are made, in light of their experience and perception of historical conditions, expected future developments and other factors believed to be appropriate under the circumstances.
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THE COMPANY
American Express is a global services company that provides customers with access to products, insights and experiences that enrich
lives and build business success. Our principal products and services are charge and credit payment card products and travel-related services offered to consumers and businesses around the world. We
and our principal operating subsidiary, American Express Travel Related Services Company, Inc., are bank holding companies under the Bank Holding Company Act of 1956, as amended, subject to
supervision and examination by the Board of Governors of the Federal Reserve System ("the Federal Reserve").
Our
range of products and services includes:
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- Charge and credit card products
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- Expense management products and services
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- Travel-related services
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- Stored value/prepaid products
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- Network services
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- Merchant acquisition and processing, servicing and settlement, and point-of-sale, marketing and information products and services for
merchants
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- Fee services, including fraud prevention services, and the design of customized customer loyalty and rewards programs
Our
products and services are sold globally to diverse customer groups, including consumers, small businesses, mid-sized companies and large corporations. These products and services are
sold through various channels, including direct mail, online applications, in-house and third-party sales forces and direct response advertising. Business travel-related services are offered through
American Express Global Business Travel, a non-consolidated joint venture.
Our
general-purpose card network, card-issuing and merchant-acquiring and processing businesses are global in scope. We are a world leader in providing charge and credit cards to
consumers, small businesses and corporations. These cards include cards issued by American Express as well as cards issued by third-party banks and other institutions that are accepted by merchants on
the American Express network. American Express® cards permit Card Members to charge purchases of goods and services in most countries around the world at the millions of merchants that
accept cards bearing our logo. At December 31, 2014, we had total worldwide cards-in-force of 112.2 million (including cards issued by third parties). In 2014, our worldwide billed
business (spending on American Express cards, including cards issued by third parties) was $1,022.8 billion.
Our
executive offices are located at 200 Vesey Street, New York, New York 10285 (telephone number: 212-640-2000).
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RISK FACTORS
Investing in the securities involves risks. Descriptions of the securities are contained below under
"Description of Debt Securities," "Description of Preferred Shares" and "Description of Common Shares," as well as in the accompanying prospectus supplement for each type of security we issue. Please
see the "Risk Factors" section in our most recent Annual Report on Form 10-K, and in each of our subsequent Quarterly Reports on Form 10-Q, all of which are incorporated by reference in
this prospectus. Before making an investing decision, you should carefully consider these risks as well as other information we include or incorporate by reference in this prospectus and any
accompanying prospectus supplement, including information contained in our filings with the SEC after the date of this prospectus. The prospectus supplement applicable to each type or series of
securities we offer may contain a discussion of additional risks applicable to an investment in us and the particular type of securities we are offering under that prospectus supplement. Although we
discuss key risks in our risk factor descriptions, new risks may emerge in the future, which may prove to be important. Our subsequent filings with the SEC may contain amended and updated discussion
of significant risks. We cannot predict future risks or estimate the extent to which they may affect our financial performance.
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RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED SHARE DIVIDENDS
The following table shows our historical ratios of earnings to fixed charges and preferred share dividends for the periods indicated:
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Six Months
Ended at
June 30,
2015 |
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Years Ended December 31, |
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2014 |
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2013 |
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2012 |
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2011 |
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2010 |
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Ratio of earnings to fixed charges |
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6.40x |
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6.22x |
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4.87x |
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3.78x |
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3.89x |
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3.39x |
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Ratio of earnings to fixed charges and preferred share dividends |
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6.25x |
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6.22x |
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4.87x |
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3.78x |
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3.89x |
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3.39x |
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In
computing the ratio of earnings to fixed charges and the ratio of earnings to fixed charges and preferred share dividends, "earnings" consist of pretax income from continuing
operations, interest expense and other adjustments. For purposes of computing "earnings," other adjustments include adding the amortization of capitalized interest, the net loss of affiliates
accounted for under the equity method whose debt is not guaranteed by us, the non-controlling interest in the earnings of majority-owned subsidiaries with fixed charges, and the interest component of
rental expense, and subtracting undistributed net income of affiliates accounted for under the equity method.
"Fixed
charges" consist of interest expense and other adjustments, including capitalized interest costs and the interest component of rental expense. Interest expense includes interest
expense related to the
Card Member lending activities, international banking operations, and charge card and other activities in our consolidated statements of income included in the documents incorporated by reference in
this prospectus and an accompanying prospectus supplement. Interest expense does not include interest on liabilities recorded in accordance with U.S. generally accepted accounting principles governing
accounting for uncertainty in income taxes. Our policy is to classify such interest in income tax provision in the consolidated statements of income.
We
did not have any outstanding preferred shares in the years ended December 31 2013, 2012, 2011 and 2010. We issued the Series B Preferred Stock (as defined below) in
November 2014 and the Series C Preferred Stock (as defined below) in March 2015. We did not pay any dividends thereon in the year ended December 31, 2014 and paid dividends on the
Series B Preferred Stock only in the six months ended June 30, 2015. As a result, our ratios of earnings to fixed charges and preferred share dividends for the years ended
December 31, 2014, 2013, 2012, 2011 and 2010 are the same as our ratios of earnings to fixed charges for those respective periods.
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USE OF PROCEEDS
Except as may be otherwise set forth in the prospectus supplement accompanying this prospectus, we will use the net proceeds we receive
from sales of these securities for general corporate purposes.
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DESCRIPTION OF DEBT SECURITIES
The debt securities covered by this prospectus will be our direct unsecured obligations. The debt securities will be either senior debt
securities that rank on an equal basis with all of our other senior unsecured and unsubordinated debt, or subordinated debt securities that rank junior to all of our senior unsecured debt.
The
following description briefly sets forth certain general terms and provisions of the debt securities. The prospectus supplement for a particular series of debt securities will
describe the particular terms of the debt securities we offer and the extent to which these general provisions may apply to that particular series of debt securities.
We
will issue our senior debt securities under a senior debt indenture, dated as of August 1, 2007, between us and The Bank of New York Mellon (formerly known as The Bank of New
York), as trustee. We will issue our subordinated debt securities under a subordinated debt indenture, dated as of August 1, 2007, between us and The Bank of New York Mellon (formerly known as
The Bank of New York), as trustee. The senior debt indenture and the subordinated debt indenture are sometimes referred to in this prospectus individually as an "indenture" and collectively as the
"indentures." When we refer to the indentures in this prospectus, we mean the indentures as they have been supplemented.
The
indentures, together with a form of supplemental indenture, have been filed with the SEC as exhibits to the registration statement of which this prospectus forms a part.
The
following summaries of certain provisions of the indentures are not complete and are qualified in their entirety by reference to the indentures. You should read the indentures for
further information. If we make no distinction in the following summaries between the senior debt securities and the subordinated debt securities or between the indentures, such summaries refer to any
debt securities and either indenture. Any reference to particular sections or defined terms of the applicable indenture in any statement under this heading qualifies the entire statement and
incorporates by reference the applicable definition into that statement.
Provisions Applicable to Both Senior and Subordinated Debt Securities
Issuances in Series
The indentures allow us to issue debt securities from time to time under either indenture without limitation as to amount. We may issue
the debt securities in one or more series with the same or different terms. We need not issue all debt securities of the same series at the same time (provided that any further securities issued as
part of a single series with any outstanding securities of any series will have a separate CUSIP number unless the further securities either (i) have no more than a de minimis amount of
original issue discount for U.S. federal income tax purposes or (ii) are issued in a qualified reopening for U.S. federal income tax purposes). All debt securities of the same series need not
bear interest at the same rate or mature on the same date. Each indenture permits the appointment of a different trustee for each series of debt securities. If there is at any time more than one
trustee under the indentures, the term "trustee" means each such trustee and will apply to each such trustee only with respect to those series of debt securities for which it is serving as trustee.
We
may sell debt securities at a substantial discount below their stated principal amount that bear no interest or below market rates of interest. The accompanying prospectus supplement
will describe the material federal income tax consequences and special investment considerations applicable to any such series of debt securities.
Unless
otherwise specified for the debt securities denominated in a currency other than U.S. dollars or as otherwise specified in an accompanying prospectus supplement, we will issue
debt securities only in fully registered form in denominations of $1,000 and integral multiples thereof in
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excess
of that amount. The debt securities will be denominated in U.S. dollars and payments of principal of and premium, if any, and interest on the debt securities will be made in U.S. dollars unless
we provide otherwise in an accompanying prospectus supplement. If any of the debt securities are to be denominated in a foreign currency or currency unit, or if the principal of and premium, if any,
and any interest on any of the debt securities is to be payable at your option or at our option in a currency, including a currency unit, other than that in which such debt securities are denominated,
we will provide additional information pertaining to such debt securities in an accompanying prospectus supplement.
The
prospectus supplement relating to any series of debt securities being offered will contain the specific terms relating to the offering. These terms will include some or all of the
following (to the extent not otherwise described in this prospectus):
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- the designation, aggregate principal amount and authorized denominations of the debt securities;
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- the percentage of the principal amount at which we will sell the debt securities and whether the debt securities will be "original
issue discount" securities for U.S. federal income tax purposes;
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- the maturity date or the method for determining the maturity date;
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- the terms for exchange, if any, of the debt securities;
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- the interest rate or rates, if any, or the method for computing such rate or rates;
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- the interest payment dates or the method for determining such dates;
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- if other than U.S. dollars, the currency or currencies in which debt securities may be denominated and purchased and the currency or
currencies (including composite currencies) in which principal, premium, if any, and any interest may be payable;
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- if the currency for which debt securities may be purchased or in which principal, premium, if any, and any interest may be payable is
at the election of us or the purchaser, the manner in which such an election may be made and the terms of such election;
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- if other than denominations of $1,000 and integral multiples thereof in excess of that amount, the denominations in which the debt
securities shall be issuable;
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- if other than cash, the type and amount of securities or other property, or the method by which such amount shall be determined, in
which principal, premium, if any, and any interest may be payable at the election of us or the purchaser;
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- any mandatory or optional sinking fund, redemption or other similar terms;
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- any index or other method used to determine the amount of principal, premium, if any, and interest, if any, on the debt securities;
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- whether the debt securities are to be issued as individual certificates to each holder or in the form of global certificates held by a
depositary on behalf of holders;
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- information describing any book-entry features;
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- if a trustee other than The Bank of New York Mellon is named for the debt securities, the name and corporate trust office of such
trustee;
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- any material federal income tax consequences;
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- any material provisions of the indentures that do not apply to the debt securities; and
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- any other specific terms of the debt securities.
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Interest and Interest Rates
Each debt security will bear interest from its date of issue or from the most recent date to which interest on that series of debt
securities has been paid or duly provided for, at the annual rate or at a rate determined according to an interest rate formula, stated in the debt security and in an accompanying prospectus
supplement, until the principal of the debt security is paid or made available for payment. We will pay interest, if any, on each interest payment date and at maturity or upon redemption or repayment,
if any. Interest payment date means the date on which payments of interest on a debt security (other than payments on maturity) are to be made. Maturity means the date on which the principal of a debt
security becomes due and payable, whether at the stated maturity or by declaration of acceleration or otherwise. Stated maturity means the date specified in a debt security as the date on which
principal of the debt security is due and payable. Any debt security that has a specified currency of pounds sterling will mature in compliance with the regulations the Bank of England may promulgate
from time to time.
We
will pay interest to the person in whose name a debt security is registered at the close of business on the regular record date next preceding the applicable interest payment date.
Regular record date means the date on which a debt security must be held in order for the holder to receive an interest payment on the next interest payment date. However, we will pay interest at
maturity or upon redemption or repayment to the person to whom we pay the principal. The first payment of interest on any debt security originally issued between a regular record date and an interest
payment date will be made on the interest payment date following the next succeeding regular record date to the registered owner on such next regular record date.
The
interest payment dates for fixed rate debt securities will be as indicated in an accompanying prospectus supplement, and unless we specify otherwise in an accompanying prospectus
supplement, each regular record date for a fixed rate debt security will be the fifteenth day (whether or not a
business day) next preceding each interest payment date. The interest payment dates for floating rate debt securities shall be as indicated in an accompanying prospectus supplement, and unless we
specify otherwise in an accompanying prospectus supplement, each regular record date for a floating rate debt security will be the fifteenth day (whether or not a business day) next preceding each
interest payment date.
Each
debt security will bear interest either at a fixed rate or a floating rate determined by reference to an interest rate formula that may be adjusted by a spread or spread multiplier,
if any. Spread means the number of basis points, if any, to be added or subtracted to the Commercial Paper Rate, the Federal Funds Rate, LIBOR, EURIBOR, the Prime Rate, the Treasury Rate or any other
interest rate index in effect from time to time with respect to a debt security, which amount will be set forth in such debt security and the related accompanying prospectus supplement. Spread
multiplier means the percentage by which the Commercial Paper Rate, the Federal Funds Rate, LIBOR, EURIBOR, the Prime Rate, the Treasury Rate or any other interest rate index in effect from time to
time with respect to a debt security is to be multiplied, which amount will be set forth in such debt security and the related accompanying prospectus supplement. Any floating rate debt security may
also have either or both of the following: (1) a maximum numerical interest rate limitation, or ceiling, on the rate of interest that may accrue during any interest period; and (2) a
minimum numerical interest rate limitation, or floor, on the rate of interest that may accrue during any interest period.
The
accompanying prospectus supplement will designate one of the following interest rate bases as applicable to each debt security:
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- a fixed rate per year, in which case the debt security will be a fixed rate debt security;
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- the Commercial Paper Rate, in which case the debt security will be a Commercial Paper Rate debt security;
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- the Federal Funds Rate, in which case the debt security will be a Federal Funds Rate debt security;
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- LIBOR, in which case the debt security will be a LIBOR debt security;
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- EURIBOR, in which case the debt security will be a EURIBOR debt security;
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- the Prime Rate, in which case the debt security will be a Prime Rate debt security;
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- the Treasury Rate, in which case the debt security will be a Treasury Rate debt security; or
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- such other interest rate formula as is set forth in an accompanying prospectus supplement.
We
will specify in the accompanying prospectus supplement for each floating rate debt security the applicable index maturity for the debt security. Index maturity means the period of
time designated by us as the representative maturity of the instrument or obligation with respect to which the interest rate basis or bases will be calculated as set forth in a floating rate debt
security bearing interest at one of those rates and in the accompanying prospectus supplement.
Fixed Rate Debt Securities
Each fixed rate debt security will bear interest from its date of issue at the annual rate stated on the debt security. Interest on
each fixed rate debt security will be paid on the interest payment dates specified in an accompanying prospectus supplement and on the maturity date, or, if the debt security is redeemable and is
redeemed prior to maturity, the date of redemption. Unless we specify otherwise in an accompanying prospectus supplement, interest on fixed rate debt securities will be computed and paid on the basis
of a 360-day year of twelve 30-day months.
Floating Rate Debt Securities
The interest rate on each floating rate debt security will be equal to either (1) the interest rate calculated by reference to
the specified interest rate formula (as specified in an accompanying prospectus supplement) plus or minus the spread, if any, or (2) the interest rate calculated by reference to the specified
interest rate formula multiplied by the spread multiplier, if any. We will specify in an accompanying prospectus supplement the interest rate basis and the spread or spread multiplier, if any, and the
maximum or minimum interest rate limitation, if any, applicable to each floating rate debt security. In addition, such accompanying prospectus supplement may contain particulars as to the calculation
agent, calculation dates, index maturity, initial interest rate, interest determination dates, interest payment dates, regular record dates and interest reset dates with respect to such debt security.
Interest
on each floating rate debt security will be paid on the interest payment dates specified in an accompanying prospectus supplement and on the maturity date, or, if the debt
security is redeemable and is redeemed prior to maturity, the date of redemption.
If
any interest payment date for any floating rate debt security would otherwise be a day that is not a business day for that floating rate debt security, the interest payment date for
that floating rate debt security shall be postponed to the next day that is a business day for that floating rate debt security, except that in the case of a LIBOR debt security or a EURIBOR debt
security, if such day falls in the next calendar month, the interest payment date shall be the immediately preceding day that is a business day. If the maturity date of a floating rate debt security
falls on a day that is not a business day, the payment of principal, premium, if any, and interest, if any, will be made on the next succeeding business day, and we will not pay any additional
interest for the period from and after the maturity date.
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As
used in this prospectus, and unless otherwise specified in an accompanying prospectus supplement, "business day" means:
-
- with respect to any payment, each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in
the Borough of Manhattan, New York City are authorized or required by law or executive order to close;
-
- when used for any other purpose, each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions
in the Borough of Manhattan, New York City, or in the city in which the corporate trust office of the trustee is located, are authorized or required by law or executive order to close;
-
- for debt securities, the interest rate of which is based on LIBOR only, such day shall also be a day on which dealings in deposits in
U.S. dollars are transacted in the London interbank market (a "London Business Day");
-
- for debt securities, the interest rate of which is based on EURIBOR only, such day shall be any day on which the Trans-European
Automated Real-Time Gross Settlement Express Transfer, or TARGET, or any successor system is open for business;
-
- for debt securities having a specified currency other than U.S. dollars only, any day that, in the capital city of the country issuing
the specified currency, except for Australian dollars or Canadian dollars, which will be based on the cities of Sydney or Toronto, respectively, is not a day on which banking institutions are
authorized or obligated to close, or for euros, any day which is not a day on which TARGET is closed; and
-
- for debt securities that are either Commercial Paper Rate debt securities, Prime Rate debt securities, or Federal Funds Rate debt
securities, any day except for a Saturday, Sunday or a day on which the Securities Industry and Financial Markets Association recommends that the fixed income department of its members be closed for
the entire day for purposes of trading in U.S. government securities.
The
rate of interest on each floating rate debt security will be reset on the "interest reset date" as specified in an accompanying prospectus supplement.
However,
in each case the interest rate in effect from the date of issue to the first interest reset date with respect to a floating rate debt security will be the initial interest rate
set forth in an accompanying prospectus supplement. If any interest reset date for any floating rate debt security would otherwise be a day that is not a business day for that floating rate debt
security, the interest reset date for that floating rate debt security shall be postponed to the next day that is a business day for that floating rate debt security, except that in the case of a
LIBOR debt security or a EURIBOR debt security, if such business day is in the next succeeding calendar month, the interest reset date shall be the immediately preceding business day.
The
interest rate applicable to each interest accrual period beginning on an interest reset date will be the rate determined on the calculation date, if any, by reference to the interest
determination date. Calculation date means the date, if any, on which the calculation agent (as defined below) is to calculate an interest rate for a floating rate debt security.
Unless
otherwise specified in the accompanying prospectus supplement, the calculation date, where applicable, pertaining to any interest determination date will be the earlier of
(a) the tenth calendar day after that interest determination date or, if such day is not a business day, the next succeeding business day or (b) the business day preceding the applicable
interest payment date or maturity date, as the case may be. Calculation agent means the agent we appoint to calculate interest rates on floating rate debt securities. The calculation agent will be The
Bank of New York Mellon unless we specify otherwise in an accompanying prospectus supplement.
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The
interest determination date pertaining to an interest reset date will be:
-
- the second business day preceding such interest reset date for (1) a Commercial Paper Rate debt security, (2) a Federal
Funds Rate debt security, or (3) a Prime Rate debt security;
-
- the second business day preceding such interest reset date for a LIBOR debt security or a EURIBOR debt security; or
-
- the day of the week in which such interest reset date falls on which Treasury bills would normally be auctioned for a Treasury Rate
debt security.
Treasury
bills are usually sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is usually held on the following Tuesday, except that
such auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is held on the preceding Friday, such Friday will be the interest determination date for the Treasury
Rate debt security pertaining to the interest reset date occurring in the next succeeding week. If an auction date shall fall on any interest reset date for a Treasury Rate debt security, then such
interest reset date shall instead be the first business day immediately following such auction date. Unless otherwise specified in the accompanying prospectus supplement, the interest determination
date pertaining to a floating rate note, the interest rate of which is determined with reference to two or more interest rate bases, will be the latest business day which is at least two business days
prior to each interest reset date for such floating rate note. Each interest rate basis will be determined and compared on such date, and the applicable interest rate will take effect on the related
interest reset date, as specified in the accompanying prospectus supplement.
Unless
we specify otherwise in an accompanying prospectus supplement, the interest payable on each interest payment date or at maturity for floating rate debt securities will be the
amount of interest
accrued from and including the issue date or from and including the last interest payment date to which interest has been paid, as the case may be, to, but excluding, such interest payment date or the
date of maturity, as the case may be.
Accrued
interest from the date of issue or from the last date to which interest has been paid is calculated by multiplying the face amount of a debt security by an accrued interest
factor. This accrued interest factor is computed by adding the interest factors calculated for each day from and including the later of (a) the date of issue and (b) the last day to
which interest has been paid or duly provided for to but excluding the last date for which accrued interest is being calculated. The interest factor (expressed as a decimal rounded to the nearest one
hundred-thousandth of a percentage point (e.g., 9.876544% and 9.876545% being rounded to 9.87654% and 9.87655%, respectively)) for each such day
is computed by dividing the interest rate (expressed as a decimal rounded to the nearest one hundred-thousandth of a percentage point) applicable to such date by 360, in the case of Commercial Paper
Rate debt securities, Federal Funds Rate debt securities, LIBOR debt securities, EURIBOR debt securities and Prime Rate debt securities, or by the actual number of days in the year, in the case of
Treasury Rate debt securities. All dollar amounts used in or resulting from calculations on floating rate debt securities will be rounded to the nearest cent with one half cent being rounded upward.
The
calculation agent will, upon the request of the holder of any floating rate debt security, provide the interest rate then in effect and, if determined, the interest rate that will
become effective as a result of a determination made on the most recent interest determination date with respect to such debt security. For purposes of calculating the rate of interest payable on
floating rate debt securities, we will enter into an agreement with the calculation agent.
In addition to any maximum interest rate that may be applicable to any floating rate debt security, the interest rate on the floating rate debt securities will in no event be
higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application. Under present New York law, the maximum rate of interest, with few
exceptions, is 25% per year (calculated on a simple interest
10
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basis). This limit only applies to obligations that are less than $2,500,000.Commercial Paper Rate Debt Securities
A
Commercial Paper Rate debt security will bear interest at an interest rate calculated with reference to the Commercial Paper Rate and the spread or spread multiplier, if any, that we
specify in the Commercial Paper Rate debt security and in an accompanying prospectus supplement.
Unless
we indicate otherwise in an accompanying prospectus supplement, Commercial Paper Rate for any interest determination date will be the money market yield (calculated as described
below) of the rate on that date for commercial paper having the index maturity designated in an accompanying prospectus supplement as such rate is published by the Federal Reserve in "Statistical
Release H.15(519), Selected Interest Rates" or any successor publication of the Federal Reserve, to which we refer as "H.15(519)," under the heading "Commercial PaperNonfinancial."
The
following procedures will be followed if the Commercial Paper Rate cannot be determined as described above:
-
- In the event that such rate is not published prior to 3:00 p.m., New York City time, on the applicable calculation date, then
the Commercial Paper Rate shall be the money market yield of the rate on such date for commercial paper having the index maturity designated in an accompanying prospectus supplement as published in
the daily update of H.15(519), available through the worldwide website of the Federal Reserve at http://www.federalreserve.gov/releases/H15/update, or any successor site or publication, to which we
refer as "H.15 Daily Update," under the heading "Commercial PaperNonfinancial" (with an index maturity of one month or three months being deemed to be equivalent to an index maturity of
30 days or 90 days, respectively).
-
- If by 3:00 p.m., New York City time, on such calculation date such rate is not yet published in H.15(519) or H.15 Daily
Update, then the Commercial Paper Rate for such interest determination date shall be calculated by the calculation agent and shall be the money market yield of the arithmetic mean (each as rounded to
the nearest one hundred-thousandth of a percentage point) of the offered rates of three leading dealers of commercial paper in New York City selected by us, as of 11:00 a.m., New York City
time, on such date, for commercial paper having the index maturity designated in an accompanying prospectus supplement placed for a non-financial issuer whose bond rating is "AA," or the equivalent,
from a nationally recognized securities rating agency.
-
- If the dealers selected by us are not quoting as mentioned in the previous sentence, the Commercial Paper Rate with respect to such
interest determination date will be the same as the Commercial Paper Rate for the immediately preceding interest reset period (or, if there was no preceding interest reset period, the rate of interest
will be the initial interest rate).
Money
market yield will be a yield (expressed as a percentage rounded to the nearest one hundred-thousandth of a percentage point) calculated in accordance with the following formula:
|
|
|
|
|
|
|
|
|
D × 360 |
|
|
|
|
Money Market Yield = |
|
|
|
= 100 |
|
|
|
|
360 (D × M) |
|
|
|
|
where
"D" refers to the annual rate for the commercial paper quoted on a bank discount basis and expressed as a decimal, and "M" refers to the actual number of days in the interest period for which
interest is being calculated.
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Federal Funds Rate Debt Securities
A Federal Funds Rate debt security will bear interest at an interest rate calculated with reference to the Federal Funds Rate and the
spread or spread multiplier, if any, that we specify in the Federal Funds Rate debt security and in an accompanying prospectus supplement.
Unless
we indicate otherwise in an accompanying prospectus supplement, Federal Funds Rate for any interest determination date will be the rate on that date for federal funds as published
in H.15(519) under the heading "Federal Funds (Effective)," as such rate is displayed on Reuters 3000 Xtra Service ("Reuters") (or any successor service) on page FEDFUNDS1 (or any page which
may replace such page).
The
following procedures will be followed if the Federal Funds Rate cannot be determined as described above:
-
- If that rate is not published by 3:00 p.m., New York City time, on the applicable calculation date, the Federal Funds Rate will
be the rate on such interest determination date as published in H.15 Daily Update under the heading "Federal Funds (Effective)."
-
- If such rate is not published in either H.15(519) or H.15 Daily Update by 3:00 p.m., New York City time, on the
applicable calculation date, then the Federal Funds Rate for such interest determination date will be calculated by the calculation agent and will be the arithmetic mean (rounded to the nearest one
hundred- thousandth of a percentage point) of the rates as of 9:00 a.m., New York City time, on such date for the last transaction in overnight United States dollar federal funds arranged by
three leading brokers of federal funds transactions in New York City selected by us.
-
- If the brokers selected by us are not quoting as mentioned in the previous sentence, the Federal Funds Rate with respect to such
interest determination date will be the same as the Federal Funds Rate for the immediately preceding interest reset period (or, if there was no preceding interest reset period, the rate of interest
will be the initial interest rate).
LIBOR Debt Securities
A LIBOR debt security will bear interest at an interest rate calculated with reference to LIBOR and the spread or spread multiplier, if
any, that we specify in the LIBOR debt security and in an accompanying prospectus supplement.
Unless
we indicate otherwise in an accompanying prospectus supplement, LIBOR will be determined by the calculation agent in accordance with the following provisions in the order set
forth below:
-
- On each interest determination date, LIBOR will be determined on the basis of the offered rate for deposits in the London interbank
market in the index currency (as defined below) having the index maturity designated in an accompanying prospectus supplement commencing on the second business day immediately following such interest
determination date that appears on the Designated LIBOR Page (as defined below) or a similar reporter of such rates selected by the calculation agent and acceptable to us, as of 11:00 a.m.,
London time, on such interest determination date. If no rate appears on the Designated LIBOR Page, LIBOR in respect of such interest determination date will be determined as if the parties had
specified the rate described in the following paragraph.
-
- With respect to an interest determination date relating to a LIBOR debt security to which the last sentence of the previous paragraph
applies, the calculation agent will request the principal London offices of each of four major reference banks (which may include any underwriters, agents or their affiliates) in the London interbank
market selected by us to provide the
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calculation
agent with its offered quotation for deposits in the index currency for the period of the index maturity designated in the accompanying prospectus supplement commencing on the second
London business day immediately following such interest determination date to prime banks in the London interbank market at approximately 11:00 a.m., London time, on such interest determination
date and in a principal amount that is at least U.S. $1,000,000 or the approximate equivalent in such index currency that is representative for a single transaction in such index currency in such
market at such time. If at least two such quotations are provided, LIBOR determined on such interest determination date will be the arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR determined on such interest determination date will be the arithmetic mean of the rates quoted at approximately 11:00 a.m. (or such other time specified in the accompanying
prospectus supplement), in the principal financial center of the country of the specified index currency, on that interest determination date for loans made in the index currency to leading European
banks having the index maturity designated in the accompanying prospectus supplement commencing on the second London business day immediately following such interest determination date and in a
principal amount that is representative for a single transaction in that index currency in that market at such time by three major reference banks (which may include any underwriters, agents or their
affiliates) in such principal financial center selected by us; provided, however, that if fewer than three reference banks so selected by us are quoting such rates as mentioned in this sentence, LIBOR
with respect to such interest determination date will be the same as LIBOR in effect for the immediately preceding interest reset period (or, if there was no preceding interest reset period, the rate
of interest will be the initial interest rate).
"Index
currency" means the currency (including currency units and composite currencies) specified in the accompanying prospectus supplement as the currency with respect to which LIBOR
will be calculated. If no currency is specified in the accompanying prospectus supplement, the index currency will be U.S. dollars.
"Designated
LIBOR Page" means the display on page LIBOR01 (or any other page specified in an accompanying prospectus supplement) of Reuters (or any similar service) for the purpose of
displaying the London interbank offered rates of major banks for the applicable index currency (or such other page as may replace that page on that service for the purpose of displaying such rates).
EURIBOR Debt Securities
Each EURIBOR debt security will bear interest for each interest reset period at an interest rate equal to EURIBOR and any spread or
spread multiplier as specified in the debt security and an accompanying prospectus supplement.
The
calculation agent will determine EURIBOR on each EURIBOR determination date. The EURIBOR determination date is the second business day prior to the interest reset date for each
interest reset period.
On
a EURIBOR determination date, the calculation agent will determine EURIBOR for each interest reset period as follows.
The
calculation agent will determine the offered rates for deposits in euros for the period of the index maturity specified in an accompanying prospectus supplement, commencing on the
interest reset date, which appears on page EURIBOR01 on Reuters or any similar service as of 11:00 a.m., Brussels time, on that interest determination date.
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If
EURIBOR cannot be determined on a EURIBOR determination date as described above, then the calculation agent will determine EURIBOR as
follows:
-
- For the EURIBOR debt security we will select four major banks in the euro-zone interbank market.
-
- The calculation agent will request that the principal euro-zone offices of those four selected banks provide their offered quotations
to prime banks in the euro-zone interbank market at approximately 11:00 a.m., Brussels time, on the EURIBOR determination date. These quotations shall be for deposits in euros for the period of
the specified index maturity, commencing on the interest reset date. Offered quotations must be based on a principal amount equal to at least €1,000,000 or the approximate equivalent
in U.S. dollars that is representative of a single transaction in such market at that time.
- (1)
- If
two or more quotations are provided, EURIBOR for the interest reset period will be the arithmetic mean of those quotations.
- (2)
- If
less than two quotations are provided, we will select three major banks in the euro-zone and the calculation agent will follow the steps in the two
bullet points below:
-
- The calculation agent will then determine EURIBOR for the interest reset period as the arithmetic mean of rates quoted by those three
major banks in the euro-zone to leading European banks at approximately 11:00 a.m., Brussels time, on the EURIBOR determination date. The rates quoted will be for loans in euros, for the period
of the specified index maturity, commencing on the interest reset date. Rates quoted must be based on a principal amount of at least €1,000,000 or the approximate equivalent in U.S.
dollars that is representative of a single transaction in such market at that time.
-
- If the banks so selected by us are not quoting rates as described above, EURIBOR for the interest reset period will be the same as for
the immediately preceding interest reset period. If there was no preceding interest reset period, the rate of interest will be the initial interest rate.
"Euro-zone"
means the region comprised of the member states of the European Union that adopted the Euro as their single currency in accordance with the Treaty establishing the European
Community, as amended.
Prime Rate Debt Securities
A Prime Rate debt security will bear interest at an interest rate calculated with reference to the Prime Rate and the spread or spread
multiplier, if any, that we specify in the Prime Rate debt security and in an accompanying prospectus supplement.
Unless
we indicate otherwise in an accompanying prospectus supplement, Prime Rate for any interest determination date will be the rate on that date as published in H.15(519) under
the heading "Bank Prime Loan."
The
following procedures will be followed if the Prime Rate cannot be determined as described above:
-
- If the rate is not published by 3:00 p.m., New York City time, on the calculation date, then the Prime Rate will be the rate on
that interest determination date as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying such rate, under the heading "Bank Prime Loan."
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-
- If the rate is not published in either H.15(519) or the H.15 Daily Update by 3:00 p.m., New York City time, on the
calculation date, then the calculation agent will determine the Prime Rate to be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters page USPRIME1
("Reuters page USPRIME1") or any similar service as that bank's prime rate or base lending rate as in effect as of 11:00 a.m., New York City time, for that interest determination date as quoted
on Reuters page USPRIME1 Page on that interest determination date.
-
- If fewer than four rates appear on Reuters page USPRIME1 Page for that interest determination date, the calculation agent will
determine the Prime Rate to be the arithmetic mean of the prime rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on that interest
determination date by three major banks in New York City selected by us, from which quotations are requested.
-
- If the banks so selected by us are not quoting rates as described above, the Prime Rate with respect to that interest determination
date will be the same as the Prime Rate for the immediately preceding interest reset period (or, if there was no preceding interest reset period, the rate of interest will be the initial interest
rate).
Reuters
Screen USPRIME 1 Page means the display designated as page "USPRIME 1" of the Reuters Monitor Money Rates Service, or any similar service, or any other page that may replace the
USPRIME 1 Page on that service for the purpose of displaying prime rates or base lending rates of major United States banks.
Treasury Rate Debt Securities
A Treasury Rate debt security will bear interest at an interest rate calculated with reference to the Treasury Rate and the spread or
spread multiplier, if any, that we specify in the Treasury Rate debt security and in an accompanying prospectus supplement.
Unless
we indicate otherwise in an accompanying prospectus supplement, the Treasury Rate for any interest determination date will be the rate applicable to the auction held on such date
of direct obligations of the United States ("Treasury bills") having the index maturity specified in the accompanying prospectus supplement as such rate appears opposite the caption "INVEST RATE" on
the display on Reuters (or any successor service) on page USAUCTION10 (or any other page as may replace such page) or page USAUCTION11 (or any other page as may replace such page).
The
following procedures will be followed if the Treasury Rate cannot be determined as above:
-
- If the above rate is not published by 3:00 p.m., New York City time, on the calculation date, the Treasury Rate will be the
bond equivalent yield (as defined below) of the rate for such Treasury bills as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying such rate,
under the heading "U.S. Government Securities/Treasury Bills/Auction High."
-
- In the event that the results of the auction of Treasury bills having the index maturity specified in an accompanying prospectus
supplement are not published or reported as provided above by 3:00 p.m., New York City time, on such calculation date, or if no such auction is held on such interest determination date, then
the calculation agent will determine the Treasury Rate to be the bond equivalent yield of the auction rate of such Treasury bills as announced by the U.S. Department of the Treasury.
-
- In the event that the auction rate of Treasury bills having the index maturity designated in the accompanying prospectus supplement is
not so announced by the U.S. Department of the Treasury, or if no such auction is held, then the Treasury rate will be the bond equivalent yield
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of
the rate on that interest determination date of Treasury bills having the index maturity designated in the accompanying prospectus supplement as published in H.15(519) under the heading
"U.S. Government Securities/Treasury Bills/Secondary Market" or, if not published by 3:00 p.m., New York City time, on the related calculation date, the rate on that interest determination date
of such Treasury bills as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying such rate, under the heading "U.S. Government
Securities/Treasury Bills/Secondary Market."
-
- In the event such rate is not published by 3:00 p.m., New York City time, on such calculation date, then the calculation agent
will calculate the Treasury rate, which will be a bond equivalent yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m., New York City time, on such
interest determination date, of three leading primary U.S. government securities dealers selected by us for the issue of Treasury bills with a remaining maturity closest to the index maturity
designated in the accompanying prospectus supplement.
-
- If the dealers selected by the calculation agent are not quoting bid rates as mentioned in this sentence, the Treasury rate with
respect to the interest determination date will be the same as the Treasury rate in effect for the immediately preceding interest reset period (or, if there was no preceding interest reset period, the
rate of interest will be the initial interest rate).
Bond
Equivalent Yield means a yield (expressed as a percentage) calculated as follows:
|
|
|
|
|
|
|
|
|
D × N |
|
|
|
|
Bond Equivalent Yield = |
|
|
|
= 100 |
|
|
|
|
360 (D × M) |
|
|
|
|
where
"D" refers to the applicable annual rate for the Treasury bills quoted on a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the case may be, and "M" refers to the
actual number of days in the interest period for which interest is being calculated.
Amortizing Debt Securities
We may from time to time offer amortizing debt securities on which a portion or all of the principal amount is payable prior to stated
maturity:
-
- in accordance with a schedule;
-
- by application of a formula; or
-
- based on an index.
Further
information concerning additional terms and conditions of any amortizing debt securities, including terms of repayment of such debt securities, will be set forth in the
accompanying prospectus supplement.
Indexed Debt Securities
We may also issue indexed debt securities on which the principal amount payable at maturity, premium, if any, and/or interest payments
are determined with reference to the price or prices of specified commodities (including baskets of commodities), securities (including baskets of securities), interest rate indices, interest rate or
exchange rate swap indices, the exchange rate of one or more specified currencies (including baskets of currencies or a composite currency) relative to an indexed currency, or such other price or
exchange rate or other financial or non-financial index or indices as we may specify in such indexed debt security and in the accompanying prospectus supplement for the indexed debt security. Holders
of indexed debt securities may receive a principal amount at maturity that is greater than, equal to, or less than the face amount of the indexed debt securities depending
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upon
the relative value at maturity of the specified index. We will provide information on the method for determining the principal payable at maturity, premium, if any and/or interest payments in an
accompanying prospectus supplement for the indexed debt securities. Certain historical information, where applicable, with respect to the specified indexed item or items and tax considerations
associated with an investment in indexed debt securities will also be provided in an accompanying prospectus supplement.
Notwithstanding
anything to the contrary contained herein or in the accompanying prospectus, for purposes of determining the rights of a holder of an indexed debt security in respect of
voting for or against amendments to the indentures and modifications and the waiver of rights thereunder, the principal amount of such indexed debt security shall be deemed to be equal to the face
amount thereof upon issuance. The amount of principal payable at maturity will be specified in an accompanying prospectus supplement.
Original Issue Discount Debt Securities
We may issue original issue discount debt securities at an issue price (as specified in the accompanying prospectus supplement) that is
less than 100% of the principal amount of such debt securities (i.e., par). Original issue discount debt securities may not bear any interest currently or may bear interest at a rate that is
below market rates at the time of issuance. The difference between the issue price of an original issue discount debt security and par is referred to herein as the "discount." In the event of
redemption, repayment or acceleration of maturity of an original issue discount debt security, the amount payable to the holder of an original issue discount debt security will be equal to the sum of
(a) the issue price (increased by any accruals of discount) and, in the event of any redemption by us of such original issue discount debt security (if applicable), multiplied by the initial
redemption percentage specified in the accompanying prospectus supplement (as adjusted by the initial redemption percentage reduction, if applicable) and (b) any unpaid interest on such
original issue discount debt security accrued from the date of issue to the date of such redemption, repayment or acceleration of maturity.
Unless
otherwise specified in the accompanying prospectus supplement, for purposes of determining the amount of discount that has accrued as of any date on which a redemption, repayment
or acceleration of maturity occurs for an original issue discount debt security, the discount will be accrued using a constant yield method. The constant yield will be calculated using a 30-day month,
360-day year convention, a compounding period that, except for the initial period (as defined below), corresponds to the shortest period between interest payment dates for the applicable original
issue discount debt security (with ratable accruals within a compounding period), a coupon rate equal to the initial coupon rate applicable to such original issue discount debt security and an
assumption that the maturity of such original issue discount debt security will not be accelerated. If the period from the date of issue to the initial interest payment date, or the initial period,
for an original issue discount debt security is shorter than the compounding period for such original issue discount debt security, a proportionate amount of the yield for an entire compounding period
will be accrued. If the initial period is longer than the compounding period, then such period will be divided into a regular compounding period and a short period with the short period being treated
as provided in the preceding sentence. The accrual of the applicable discount may differ from the accrual of original issue discount for purposes of the Internal Revenue Code.
Certain
original issue discount debt securities may not be treated as having original issue discount for federal income tax purposes, and debt securities other than original issue
discount debt securities may be treated as issued with original issue discount for federal income tax purposes. We refer you to "Certain U.S. Federal Income Tax Consequences."
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Payment
Unless otherwise specified in an accompanying prospectus supplement, principal and premium, if any, and interest, if any, on the debt
securities will be payable initially at the principal corporate trust office of the trustee. At our option, payment of interest may be made, subject to collection, by check mailed to the holders of
record at the address registered with the trustee.
If
the principal of or premium, if any, and interest, if any, on any series of debt securities is payable in foreign currencies or if debt securities are sold for foreign currencies, the
restrictions, elections, tax consequences, specific terms and other information with respect to such debt securities will be described in an accompanying prospectus supplement.
Redemption and Repayment
Unless we specify otherwise in an accompanying prospectus supplement, the debt securities will not be redeemable prior to their stated
maturity. If we so specify in an accompanying prospectus supplement, the debt security will be redeemable on or after the date or dates set forth in such supplement, either in whole or from time to
time in part, at our option, at a redemption price equal to 100% of the principal amount to be redeemed or at such other price or prices set forth in such prospectus supplement. We will pay interest
accrued on a redeemed debt security to the date of redemption, and will give notice of redemption no more than 60 and not less than 30 days prior to the date of redemption. The debt securities
will not be subject to any sinking fund or to any provisions for repayment at your option unless we specify otherwise in the accompanying prospectus supplement.
Modification of the Indenture
We may make modifications and amendments to the indentures with respect to one or more series of debt securities by supplemental
indentures without the consent of the holders of those debt securities in the following instances:
-
- to evidence the succession of another corporation to us and the assumption by such successor of our obligations under the indenture;
-
- to add to or modify our covenants or events of default for the benefit of the holders of the debt securities;
-
- to convey, transfer, assign, mortgage or pledge any property to or with the trustee;
-
- to surrender any right or power conveyed by the indenture upon us;
-
- to establish the form or terms of the debt securities of any series;
-
- to cure any ambiguity, to correct or supplement any provision that may be defective or inconsistent with any other provision or make
any other provisions with respect to matters or questions arising under the indentures that will not adversely affect the interests of the holders in any material respect;
-
- to modify, eliminate or add to the provisions of the indentures as necessary to qualify it under any applicable federal law;
-
- to name, by supplemental indenture, a trustee other than The Bank of New York Mellon for a series of debt securities;
-
- to provide for the acceptance of appointment by a successor trustee;
-
- to add to or modify the provisions of the indentures to provide for the denomination of debt securities in foreign currencies;
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-
- to supplement any provisions of the indentures as is necessary to permit or facilitate the defeasance and discharge of any debt
securities as described in this prospectus;
-
- to prohibit the authentication and delivery of additional series of debt securities;
-
- to modify the provisions of the indentures provided that such modifications do not apply to any outstanding security; or
-
- to provide for the issuance of securities in bearer form.
Any
other modifications or amendments of the indentures by way of supplemental indenture require the consent of the holders of a majority in principal amount of the debt securities at
the time outstanding of each series affected. However, no such modification or amendment may, without the consent of the holder of each debt security affected
thereby:
-
- modify the terms of payment of principal, premium or interest;
-
- reduce the percentage of holders of debt securities necessary to modify or amend the indentures or waive our compliance with any
restrictive covenant; or
-
- subordinate the indebtedness evidenced by the debt securities to any of our other indebtedness.
Events of Default, Notice and Waiver
The indentures provide holders of debt securities with remedies if we fail to perform specific obligations, such as making payments on
the debt securities. You should review these provisions carefully in order to understand what constitutes an event of default under the indentures.
Unless
otherwise stated in the accompanying prospectus supplement, an event of default with respect to any series of debt securities will
be:
-
- default in the payment of the principal of, or premium, if any, on any debt security of that series when it is due and payable;
-
- default in making a sinking fund payment or analogous obligation, if any, when due and payable;
-
- default for 30 days in the payment of an installment of interest, if any, on any debt security of that series;
-
- default for 60 days after written notice to us in the performance of any other covenant in respect of the debt securities of
that series;
-
- certain events of bankruptcy, insolvency or reorganization, or court appointment of a receiver, liquidator or trustee of us or our
property;
-
- an event of default with respect to any other series of debt securities outstanding under the indentures or as defined in any other
indenture or instrument under which we have outstanding any indebtedness for borrowed money, as a result of which indebtedness of us of at least $50,000,000 principal amount shall have been
accelerated and that acceleration shall not have been annulled within 15 days after written notice thereof; and
-
- any other event of default provided in or pursuant to the applicable resolution of our Board of Directors or the supplemental
indenture under which that series of debt securities is issued.
An
event of default with respect to a particular series of debt securities issued under the indentures does not necessarily constitute an event of default with respect to any other
series of debt securities.
The trustee may withhold notice to the holders of any series of debt securities of any default with respect to that series, except in the payment of principal, premium or interest, if it considers
such withholding to be in the interests of the holders of that series.
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If
an event of default with respect to any series of debt securities has occurred and is continuing, the trustee or the holders of 25% in aggregate principal amount of the debt
securities of that series may declare the principal, or in the case of discounted debt securities, such portion thereof as may be described in an accompanying prospectus supplement, of all the debt
securities of that series to be due and payable immediately.
The
indentures contain a provision entitling the trustee to be indemnified to its reasonable satisfaction by the holders before exercising any right or power under the indentures at the
request of any of the holders. The indentures provide that the holders of a majority in principal amount of the outstanding debt securities of any series may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred upon the trustee with respect to the debt securities of that series. The right of a holder
to institute a proceeding with respect to the indentures is subject to certain conditions precedent including notice and indemnity to the trustee. However, the holder has an absolute right to receipt
of principal and premium, if any, at stated maturity and interest on any overdue principal and interest or to institute suit for the enforcement thereof.
The
holders of not less than a majority in principal amount of the outstanding debt securities of any series under the indentures may on behalf of the holders of all the debt securities
of that series waive any past defaults, except a default in payment of the principal of or premium, if any, or interest, if any, on any debt security of that series and a default in respect of a
covenant or provision of the indentures that cannot be amended or modified without the consent of the holder of each debt security affected.
We
are required by the indentures to furnish to the trustee annual statements as to the fulfillment of our obligations under the indentures.
Defeasance of the Indentures and Debt Securities
The indentures permit us to be discharged from our obligations under the indentures and with respect to a particular series of debt
securities if we comply with the following procedures. This discharge from our obligations is referred to in this prospectus as defeasance.
Unless
an accompanying prospectus supplement states otherwise, if we deposit with the trustee sufficient cash and/or government securities to pay and discharge the principal and premium,
if any, and interest, if any, to the date of maturity of such series of debt securities, then from and after the ninety-first day following such
deposit:
-
- we will be deemed to have paid and discharged the entire indebtedness on the debt securities of any series; and
-
- our obligations under the indentures with respect to the debt securities of that series will cease to be in effect, except for certain
obligations to register the transfer or exchange of the debt securities of that series, replace stolen, lost or mutilated debt securities of that series, maintain paying agencies and hold moneys for
payment in trust.
The
indentures also provides that the defeasance will not be effective unless we deliver to the trustee a written opinion of our counsel to the effect that holders of the debt securities
subject to defeasance will not recognize gain or loss on those debt securities for federal income tax purposes solely as a result of the defeasance and that the holders of those debt securities will
be subject to federal income tax in the same amounts and at the same times as would be the case if the defeasance had not occurred.
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Following
the defeasance, holders of the applicable debt securities would be able to look only to the trust fund for payment of principal and premium, if any, and interest, if any, on
their debt securities.
Governing Law
The laws of the State of New York will govern the indentures and the debt securities.
Concerning the Trustee
The Bank of New York Mellon, the trustee under the indentures, provides corporate trust services to us. In addition, affiliates of the
trustee provide substantial investment banking, bank and corporate trust services and extend credit to us and many of our subsidiaries. We and our affiliates may have other customary banking
relationships (including other trusteeships) with the trustee.
Global Securities and Global Clearance and Settlement Procedures
We may issue debt securities under a book-entry system in the form of one or more global securities. We will register the global
securities in the name of a depositary or its nominee and deposit the global securities with that depositary. Unless we state otherwise in the accompanying prospectus supplement, The Depository Trust
Company, New York, New York, or DTC, will be the depositary if we use a depositary.
Following
the issuance of a global security in registered form, the depositary will credit the accounts of its participants with the debt securities upon our instructions. Only persons
who hold directly or indirectly through financial institutions that are participants in the depositary can hold beneficial interests in the global securities. Because the laws of some jurisdictions
require certain types of purchasers to take physical delivery of such securities in definitive form, you may encounter difficulties in your ability to own, transfer or pledge beneficial interests in a
global security.
So
long as the depositary or its nominee is the registered owner of a global security, we and the trustee will treat the depositary as the sole owner or holder of the debt securities for
purposes of the applicable indenture. Therefore, except as set forth below, you will not be entitled to have debt securities registered in your name or to receive physical delivery of certificates
representing the debt securities. Accordingly, you will have to rely on the procedures of the depositary and the participant in the depositary through whom you hold your beneficial interest in order
to exercise any rights of a holder under the indenture. We understand that under existing practices, the depositary would act upon the instructions of a participant or authorize that participant to
take any action that a holder is entitled to take.
Unless
stated otherwise in an accompanying prospectus supplement, you may elect to hold interests in the global securities through either DTC (in the United States) or Clearstream
Banking, société anonyme, which we refer to as Clearstream, Luxembourg, or Euroclear Bank, S.A./N.V., or its
successor, as operator of the Euroclear System, which we refer to as Euroclear, (outside of the United States) if you are participants of such systems, or indirectly through organizations that are
participants in such systems. Interests held through Clearstream, Luxembourg and Euroclear will be recorded on DTC's books as being held by the U.S. depositary for each of Clearstream, Luxembourg and
Euroclear, which U.S. depositaries will in turn hold interests on behalf of their participants' customers' securities accounts.
As
long as the debt securities of a series are represented by the global securities, we will pay principal of and interest and premium on those securities to or as directed by DTC as the
registered holder of the global securities. Payments to DTC will be in immediately available funds by wire transfer. DTC, Clearstream, Luxembourg or Euroclear, as applicable, will credit the relevant
accounts
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of
their participants on the applicable date. Neither we nor the trustee will be responsible for making any payments to participants or customers of participants or for maintaining any records
relating to the holdings of participants and their customers, and you will have to rely on the procedures of the depositary and its participants. If an issue of debt securities is denominated in a
currency other than the U.S. dollar, we will make payments of principal and any interest in the foreign currency in which the debt securities are denominated or in U.S. dollars. DTC has elected to
have all payments of principal and interest paid in U.S. dollars unless notified by any of its participants through which an interest in the debt securities is held that it elects, in accordance with,
and to the extent permitted by, the accompanying prospectus supplement and the relevant debt security, to receive payment of principal or interest in the foreign currency. On or prior to the third
business day after the record date for payment of interest and 12 days prior to the date for payment of principal, a participant will be required to notify DTC of (a) its election to
receive all, or the specified portion, of payment in the foreign currency and (b) its instructions for wire transfer of payment to a foreign currency account.
We
have been advised by DTC, Clearstream, Luxembourg and Euroclear, respectively, as follows:
-
- As to DTC: DTC has advised us that it 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 Exchange Act. DTC holds securities
deposited with it by its participants and facilitates the settlement of transactions among its participants in such securities through electronic computerized book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities certificates. DTC's participants include securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations, some of whom (and/or their representatives) own DTC. Access to DTC's book-entry system is also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant, either directly or indirectly.
According
to DTC, the foregoing information with respect to DTC has been provided to the financial community for informational purposes only and is not intended to serve as a
representation, warranty or contract modification of any kind.
-
- As to Clearstream, Luxembourg: Clearstream, Luxembourg
has advised us that it was incorporated as a limited liability company under Luxembourg law. Clearstream, Luxembourg is owned by Cedel International, société anonyme, and
Deutsche Börse AG. The shareholders of these two entities are banks, securities dealers and financial institutions.
Clearstream,
Luxembourg holds securities for its customers and facilitates the clearance and settlement of securities transactions between Clearstream, Luxembourg customers through
electronic book-entry changes in accounts of Clearstream, Luxembourg customers, thus eliminating the need for physical movement of certificates. Transactions may be settled by Clearstream, Luxembourg
in many currencies, including United States dollars. Clearstream, Luxembourg provides to its customers, among other things, services for safekeeping, administration, clearance and settlement of
internationally traded securities, securities lending and borrowing. Clearstream, Luxembourg also deals with domestic securities markets in over 30 countries through established depository and
custodial relationships. Clearstream, Luxembourg interfaces with domestic markets in a number of countries. Clearstream, Luxembourg has established an electronic bridge with Euroclear
Bank S.A./N.V., the operator of Euroclear, or the Euroclear operator, to facilitate settlement of trades between Clearstream, Luxembourg and Euroclear.
As
a registered bank in Luxembourg, Clearstream, Luxembourg is subject to regulation by the Luxembourg Commission for the Supervision of the Financial Sector. Clearstream, Luxembourg
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customers
are recognized financial institutions around the world, including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations. In the United States,
Clearstream, Luxembourg customers are limited to securities brokers and dealers and banks, and may include the underwriters for the debt securities. Other institutions that maintain a custodial
relationship with a Clearstream, Luxembourg customer may obtain indirect access to Clearstream, Luxembourg. Clearstream, Luxembourg is an indirect participant in DTC.
Distributions
with respect to the debt securities held beneficially through Clearstream, Luxembourg will be credited to cash accounts of Clearstream, Luxembourg customers in accordance
with its rules and procedures, to the extent received by Clearstream, Luxembourg.
-
- As to Euroclear: Euroclear has advised us that it was
created in 1968 to hold securities for participants of Euroclear and to clear and settle transactions between Euroclear participants through simultaneous electronic book-entry delivery against
payment, thus eliminating the need for physical movement of certificates and risk from lack of simultaneous transfers of securities and cash. Transactions may now be settled in many currencies,
including United States dollars and Japanese Yen. Euroclear provides various other services, including securities lending and borrowing and interfaces with domestic markets in several countries
generally similar to the arrangements for cross-market transfers with DTC described below.
Euroclear
is operated by the Euroclear operator, under contract with Euroclear plc, a U.K. corporation. The Euroclear operator conducts all operations, and all Euroclear securities clearance
accounts and
Euroclear
cash accounts are accounts with the Euroclear operator, not Euroclear plc. Euroclear plc establishes policy for Euroclear on behalf of Euroclear participants. Euroclear
participants include banks (including central banks), securities brokers and dealers and other professional financial intermediaries and may include the underwriters for the debt securities. Indirect
access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly. Euroclear is an indirect
participant in DTC.
The
Euroclear operator is a Belgian bank. The Belgian Banking Commission and the National Bank of Belgium regulate and examine the Euroclear operator.
The
Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, or the Euroclear Terms and Conditions, and applicable Belgian law govern securities
clearance accounts and cash accounts with the Euroclear operator. Specifically, these terms and conditions govern:
-
- transfers of securities and cash within Euroclear;
-
- withdrawal of securities and cash from Euroclear; and
-
- receipt of payments with respect to securities in Euroclear.
All
securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear operator acts under the terms and
conditions only on behalf of Euroclear participants and has no record of or relationship with persons holding securities through Euroclear participants.
Distributions
with respect to debt securities held beneficially through Euroclear will be credited to the cash accounts of Euroclear participants in accordance with the Euroclear Terms and Conditions,
to the extent received by the Euroclear operator.
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Global
certificates are generally not transferable. We will issue physical certificates to beneficial owners of a global security if:
-
- the depositary notifies us that it is unwilling or unable to continue as depositary or ceases to be a clearing agency registered under
the Exchange Act or other applicable statute or regulation and we are unable to locate a qualified successor depositary;
-
- an event of default has occurred and is continuing with respect to the applicable series of securities; or
-
- we decide in our sole discretion that we do not want to have the debt securities of that series represented by global certificates.
If
any of the events described in the preceding paragraph occurs, we will issue definitive securities in certificated form in an amount equal to a holder's beneficial interest in the
securities. Definitive securities will be issued in minimum denominations of $1,000 and integral multiples thereof in excess of that amount, and will be registered in the name of the person DTC
specifies in a written instruction to the registrar of the debt securities.
In
the event that definitive securities are issued:
-
- holders of definitive securities will be able to receive payments of principal and interest on their debt securities at the office of
our paying agent maintained in the Borough of Manhattan or, at our option, by check mailed to the address of the person entitled to the payment at his or her address in the security register;
-
- holders of definitive securities will be able to transfer their debt securities, in whole or in part, by surrendering the debt
securities for registration of transfer at the corporate trust office of The Bank of New York Mellon. We will not charge any fee for the registration or transfer or exchange, except that we may
require the payment of a sum sufficient to cover any applicable tax or other governmental charge payable in connection with the transfer; and
-
- any moneys we pay to our paying agents for the payment of principal and interest on the debt securities that remains unclaimed at the
second anniversary of the date such payment was due will be returned to us, and thereafter holders of definitive securities may look only to us, as general unsecured creditors, for payment.
You
will be required to make your initial payment for the debt securities in immediately available funds. Secondary market trading between DTC participants will occur in the ordinary way
in accordance with DTC rules and will be settled in immediately available funds using DTC's Same-Day Funds Settlement System. Secondary market trading between Clearstream, Luxembourg customers and/or
Euroclear participants will occur in the ordinary way in accordance with the applicable rules and operating procedures of Clearstream, Luxembourg and Euroclear and will be settled using the procedures
applicable to conventional eurobonds in immediately available funds.
Cross-market
transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream, Luxembourg customers or Euroclear
participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of the relevant European international clearing system by U.S. depositary; however, such cross-market
transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in such system in accordance with its rules and procedures and within its
established deadlines (based on European time). The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to the U.S.
depositary to take action to effect final settlement on its behalf by delivering or receiving debt securities in DTC, and making or receiving payment in accordance with normal procedures for same-day
funds settlement applicable to
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DTC.
Clearstream, Luxembourg customers and Euroclear participants may not deliver instructions directly to their respective U.S. depositaries.
Because
of time-zone differences, credits of debt securities received in Clearstream, Luxembourg or Euroclear as a result of a transaction with a DTC participant will be made during
subsequent securities settlement processing and dated the business day following the DTC settlement date. Such credits or any transactions in such debt securities settled during such processing will
be reported to the relevant Clearstream, Luxembourg customers or Euroclear participants on such business day. Cash received in Clearstream, Luxembourg or Euroclear as a result of sales of debt
securities by or through a Clearstream, Luxembourg customer or a Euroclear participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant
Clearstream, Luxembourg or Euroclear cash account only as of the business day following settlement in DTC.
Although
DTC, Clearstream, Luxembourg and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of debt securities among participants of DTC, Clearstream,
Luxembourg and Euroclear, they are under no obligation to perform or continue to perform such procedures and such procedures may be discontinued at any time.
Provisions Applicable Solely to Subordinated Securities
General
We may issue subordinated debt securities in one or more series under the subordinated debt indenture. Holders of subordinated debt
securities should recognize that contractual provisions in the subordinated debt indenture may prohibit us from making payments on these securities. The subordinated debt securities will rank on an
equal basis with certain of our other subordinated debt that may be outstanding from time to time and will rank junior to all of our senior indebtedness, as defined below, including any senior debt
securities, that may be outstanding from time to time.
If
subordinated debt securities are issued under the subordinated indenture, the aggregate principal amount of senior indebtedness outstanding as of a recent date will be set forth in
the accompanying prospectus supplement. Neither the senior nor the subordinated indenture restricts the amount of senior indebtedness that we may incur.
Subordination
The payment of the principal of, and premium, if any, and interest on the subordinated debt securities is expressly subordinated, to
the extent and in the manner set forth in the subordinated indenture, in right of payment to the prior payment in full of all of our senior indebtedness. The term senior indebtedness is defined in the
subordinated indenture as indebtedness we incur for money borrowed, all deferrals, renewals or extensions of any of that indebtedness and all evidences of indebtedness issued in exchange for any of
that indebtedness. Senior indebtedness also includes our guarantees of the foregoing items of indebtedness for money borrowed by persons other than us, unless, in any such case, that indebtedness or
guarantee provides by its terms that it will not constitute senior indebtedness.
The
subordinated debt indenture provides that, unless all principal of, and any premium or interest on, the senior indebtedness has been paid in full, or provision has been made to make
these payments in full, no payment or other distribution may be made with respect to the subordinated indebtedness in the following circumstances:
-
- any acceleration of the principal amount due on the subordinated debt securities;
-
- our dissolution or winding-up or total or partial liquidation or reorganization, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings;
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-
- a default in the payment of principal, premium, if any, sinking fund or interest with respect to any of our senior indebtedness; or
-
- an event of default, other than a default in the payment of principal, premium, if any, sinking funds or interest, with respect to any
senior indebtedness, as defined in the instrument under which the same is outstanding, permitting the holders of senior indebtedness to accelerate its maturity, and such event of default has not been
cured or waived.
A
merger, consolidation or conveyance of all or substantially all of our assets on the terms and conditions provided in the subordinated indenture will not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of these subordination provisions.
If
the holders of subordinated securities receive any payment or distribution of our assets not permitted by the subordination provisions, the holders of subordinated debt securities
will have to repay that amount to the holders of the senior debt securities or to the trustee.
Subrogation
After the payment in full of all senior indebtedness, the holders of the subordinated debt securities will be subrogated to the rights
of the holders of senior indebtedness to receive payments or distributions of our assets or securities applicable to the senior indebtedness until the subordinated debt securities are paid in full.
Under these subrogation provisions, no payments or distributions to the holders of senior indebtedness which otherwise would have been payable or distributable to holders of the subordinated debt
securities will be deemed to be a payment by us to or on the account of the senior indebtedness. These provisions of the subordinated indenture are intended solely for the purpose of defining the
relative rights of the holders of the subordinated debt securities and the holders of the senior debt securities. Nothing contained in the subordinated indenture is intended to impair our absolute
obligation to pay the principal of and premium and interest on the subordinated debt securities in accordance with their terms or to affect the relative rights of the holders of the subordinated debt
securities and our creditors other than the holders of the senior indebtedness. These subrogation provisions of the subordinated indenture will not prevent the holder of any subordinated debt security
from exercising all remedies otherwise permitted by applicable law upon default of that security, subject to the rights of subordination described above.
Provisions Applicable Solely to Senior Securities
Restrictions as to Liens
The senior indenture includes a covenant providing that we will not at any time directly or indirectly create, or allow to exist or be
created, any mortgage, pledge, encumbrance or lien of any kind upon:
-
- any shares of capital stock owned by us of any of American Express Travel Related Services Company, Inc. or American Express
Banking Corporation and any one or more of our subsidiaries that succeeds to all or substantially all of the business or ownership of the property of those companies, so long as they continue to be
our subsidiaries, which we refer to collectively as the "principal subsidiaries"; or
-
- any shares of capital stock owned by us of a subsidiary that owns, directly or indirectly, capital stock of the principal
subsidiaries.
However,
liens of this nature are permitted if we provide that the senior debt securities will be secured by the lien equally and ratably with any and all other obligations also secured,
for as long as any other obligations of that type are so secured. Also, we may incur or allow to exist upon the stock of the principal subsidiaries liens for taxes, assessments or other governmental
charges or levies which are not yet due or are payable without penalty or which we are contesting in good faith, or liens of judgments that are on appeal or are discharged within 60 days.
This
covenant will cease to be binding on us with respect to any series of the senior debt securities to which this covenant applies following discharge of those senior debt securities.
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DESCRIPTION OF PREFERRED SHARES
General
The following briefly summarizes certain of the material terms of our preferred shares. Other pricing and related terms will be
disclosed in the accompanying prospectus supplement. You should read the accompanying prospectus supplement together with the certificate of designation relating to that series and our amended and
restated certificate of incorporation for a more detailed description of a particular series of preferred shares and other provisions that may be important to you.
Under
our amended and restated certificate of incorporation, we are authorized to issue 20,000,000 preferred shares, par value $1.662/3 per share. At June 30, 2015,
we had outstanding 750 shares of 5.200% Fixed Rate/Floating Rate Noncumulative Preferred Shares, Series B (the "Series B Preferred Stock") and 850 shares of 4.900% Fixed
Rate/Floating Rate Noncumulative Preferred Shares, Series C (the "Series C Preferred Stock"). Our Board of Directors is authorized to issue our preferred shares from time to time in one
or more series with such designations, voting powers, dividend rates, rights of redemption, conversion rights or other special rights, preferences and limitations as may be stated in resolutions
adopted by our Board of Directors.
The
preferred shares will have the dividend, liquidation and voting rights set forth below unless otherwise provided in the prospectus supplement relating to a particular series of
preferred shares. You should read the prospectus supplement relating to the particular series of the preferred shares being offered for specific terms,
including:
-
- the title and number of shares offered and liquidation preference per share;
-
- the price per share;
-
- the dividend rate, the dates on which dividends will be payable, the conditions under which dividends will be payable or the method of
determining that rate, dates and conditions;
-
- whether dividends will be cumulative or non cumulative and, if cumulative, the dates from which dividends will begin to accumulate;
-
- whether dividends are participating or non-participating;
-
- any redemption, sinking fund or analogous provisions;
-
- any conversion or exchange provisions;
-
- whether we have elected to offer depositary shares with respect to the preferred shares, as described below under "Depositary Shares";
-
- whether the preferred shares will have voting rights, in addition to the voting rights described below, and, if so, the terms of those
voting rights;
-
- the procedures for any auction and remarketing of the preferred shares; and
-
- any additional dividend, liquidation, redemption, sinking fund or other rights, preferences, privileges, limitations and restrictions.
When
issued, the preferred shares will be fully paid and nonassessable.
Dividend Rights
All preferred shares will be of equal rank with each other regardless of series. If the stated dividends or the amounts payable on
liquidation are not paid in full, the preferred shares of all series will share ratably in the payment of dividends and in any distribution of assets. All preferred shares will have dividend rights
prior to the dividend rights of the common shares.
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Rights Upon Liquidation
Unless otherwise specified in the accompanying prospectus supplement, in the event of a liquidation, each series of the preferred
shares will rank on an equal basis with all other outstanding preferred shares and prior to the common stock as to dividends and distributions.
Voting Rights
Except as described below, the holders of preferred shares have no voting rights, other than as may be required by law. Whenever
dividends payable on the preferred shares of any series will be in arrears in an aggregate amount at least equal to six full quarterly dividends on that series, the holders of the outstanding
preferred shares of all series will have the special right, voting separately as a single class, to elect two directors at the next succeeding annual meeting of shareholders. Subject to the terms of
any outstanding series of preferred shares, the holders of common stock and the holders of one or more series of preferred shares then entitled to vote will have the right, voting as a single class,
to elect the remaining authorized number of directors.
At
each meeting of shareholders at which the holders of the preferred shares will have this special right, the presence in person or by proxy of the holders of record of one-third of the
total number of
the preferred shares of all series then issued and outstanding will constitute a quorum of that class. Each director elected by the holders of the preferred shares of all series will hold office until
the annual meeting of shareholders next succeeding that election and until that director's successor, if any, is elected by those holders and qualified or until the death, resignation or removal of
that director in the manner provided in our by-laws. A director elected by the holders of the preferred shares of all series may only be removed without cause by those holders. In case any vacancy
will occur among the directors elected by the holders of the preferred shares of all series, that vacancy may be filled for the unexpired portion of the term by vote of the remaining directors elected
by such shareholders, or that director's successor in office. If such vacancy occurs more than 90 days prior to the first anniversary of the next preceding annual meeting of shareholders, the
vacancy may be filled by the vote of those shareholders taken at a special meeting of those shareholders called for that purpose. Whenever all arrears of dividends on the preferred shares of all
series will have been paid and dividends for the current quarterly period will have been paid or declared and provided for, the right of the holders of the preferred shares of all series to elect two
directors will terminate at the next succeeding annual meeting of shareholders.
The
consent of the holders of at least two-thirds of the outstanding preferred shares voting separately as a single class will be required
for:
-
- the authorization of any class of shares ranking prior to the preferred shares as to dividends or upon liquidation, dissolution or
winding up;
-
- an increase in the authorized amount of any class of shares ranking prior to the preferred shares; or
-
- the authorization of any amendment to our restated certificate of incorporation or by-laws that would adversely affect the relative
rights, preferences or limitations of the preferred shares. If any such amendment will adversely affect the relative rights, preferences or limitations of one or more, but not all, of the series of
preferred shares then outstanding, the consent of the holders of at least two-thirds of the outstanding preferred shares of the several series so affected will be required in lieu of the consent of
the holders of at least two-thirds of the outstanding preferred shares of all series.
In
any case in which the holders of the preferred shares will be entitled to vote separately as a single class, each holder of preferred shares of any series will be entitled to one vote for each such
share held.
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DESCRIPTION OF DEPOSITARY SHARES
The following summary does not purport to be complete. You should read the deposit agreement and depositary receipts relating to each
series of preferred shares filed with the SEC in connection with the offering of that series of preferred shares.
We
may elect to offer fractional interests in preferred shares rather than preferred shares, with those rights and subject to the terms and conditions that we may specify in the related
prospectus supplement. If we do, we will select a depositary that will issue to the public receipts for depositary shares, each of which will represent fractional interests of a particular series of
preferred shares. These depositary receipts will be distributed in accordance with the terms of the offering described in the related prospectus supplement.
The
depositary will be a bank or trust company that has its principal office in the United States. We will deposit the preferred shares underlying the depositary shares with the
depositary under the terms of a separate deposit agreement. The prospectus supplement relating to a series of depositary shares will set forth the name and address of the depositary.
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DESCRIPTION OF COMMON SHARES
We are authorized to issue up to 3,600,000,000 common shares, par value $0.20 each. At July 24, 2015, we had outstanding
1,001,283,308 common shares. As of December 31, 2014, we had reserved approximately 56 million common shares for issuance under employee stock and employee benefit plans.
The
following description of the common shares does not purport to be complete and is subject to, and qualified in its entirety by reference to the applicable provisions of the New York
Business Corporation Law, our amended and restated certificate of incorporation and our by-laws.
Dividends. Subject to the prior rights of holders of any preferred shares, holders of common shares are entitled to receive dividends
when, as and if
declared by our Board of Directors out of funds legally available for that purpose.
Liquidation Rights. In the event of our liquidation, dissolution or winding up, after the satisfaction in full of the liquidation
preferences of
holders of any preferred shares, holders of common shares are entitled to ratable distribution of the remaining assets available for distribution to shareholders.
Voting Rights. Each common share is entitled to one vote on all matters submitted to a vote of shareholders. Holders of the common
shares do not have
cumulative voting rights.
No Redemption Provisions. The common shares are not subject to redemption by operation of a sinking fund or otherwise.
No Preemptive Rights. Holders of common shares are not entitled to preemptive rights.
No Assessment. The issued and outstanding common shares are fully paid and nonassessable.
Transfer Agent and Registrar. The transfer agent and registrar for the common shares is Computershare Inc., 480 Washington
Boulevard,
29th Floor, Jersey City, New Jersey 07310.
Certain
provisions of our amended and restated certificate of incorporation and our by-laws as well as the New York Business Corporations Law may have the effect of encouraging persons
considering unsolicited tender offers or unilateral takeover proposals for us to negotiate with the Board of Directors and could thereby have an effect of delaying, deferring or preventing a change in
control. These provisions include:
Authorized But Unissued Shares. As of July 24, 2015, 2,598,716,692 common shares and 19,998,400 preferred shares were authorized
but unissued
and 3,039,125 common shares were held by us as treasury shares. Such shares could be issued without stockholder approval in transactions that might prevent or render more difficult or costly the
completion of a takeover transaction. In this regard, our amended and restated certificate of incorporation grants the Board of Directors broad corporate power to establish the rights and preferences
of preferred stock, one or more classes or series of which could be issued which would entitle holders to exercise rights which could have the effect of impeding a takeover, including rights to
convert or exchange the stock into common shares or other securities or to demand redemption of the stock at a specified price under prescribed circumstances related to a change of control.
Advance Notice By-law. Under our by-laws, written notice of any proposal to be presented by any shareholder or any person to be
nominated by any
shareholder for election as a director must be received by our secretary at our principal executive offices not less than 90 nor more than 120 days prior to the anniversary of the preceding
year's annual meeting; provided, however, that if the date of the annual meeting is not within 25 days before or after such anniversary date, such notice must be received not later than
10 days following the day on which the date of the meeting is first disclosed to the shareholders or publicly, whichever occurs first.
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DESCRIPTION OF SECURITIES WARRANTS
We may issue warrants for the purchase of:
-
- debt securities,
-
- preferred shares,
-
- depositary shares,
-
- common shares, or
-
- equity securities issued by one of our affiliated or unaffiliated corporations or other entity.
Each
securities warrant will entitle the holder to purchase for cash the amount of securities at the exercise price stated or determinable in the prospectus supplement for the securities
warrants. We may issue these securities warrants independently or together with any other securities offered by any prospectus supplement. The securities warrants may be attached to or separate from
those securities.
Each series of securities warrants will be issued under a separate warrant agreement to be entered into between us and a warrant agent. The warrant agent will act solely as our agent in connection
with the securities warrants of that series and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of such securities warrants.
The
prospectus supplement relating to any securities warrants that we may offer will contain the specific terms of the securities warrants. These terms will include some or all of the
following:
-
- the title and aggregate number of the securities warrants;
-
- the price or prices at which the securities warrants will be issued;
-
- the currency or currencies or currency unit or units in which the price of the securities warrants may be payable;
-
- the designation, aggregate principal amount and terms of the securities purchasable upon exercise of the securities warrants;
-
- the designation and terms of the other securities, if any, with which the securities warrants are to be issued and the number of the
securities warrants issued with each other security;
-
- the currency or currencies or currency unit or units in which the principal of or any premium or interest on the securities
purchasable upon exercise of the securities warrant will be payable;
-
- if applicable, the date on and after which the securities warrants and the related securities will be separately transferable;
-
- the price at which and currency or currencies or currency unit or units in which the securities purchasable upon exercise of the
securities warrants may be purchased;
-
- the date on which the right to exercise the securities warrants will commence and the date on which that right will expire;
-
- the minimum or maximum amount of the securities warrants which may be exercised at any one time;
-
- information with respect to book-entry procedures, if any;
-
- a discussion of any material U.S. federal income tax considerations applicable to the exercise of the securities warrants; and
-
- any other terms of the securities warrants, including terms, procedures and limitations relating to the exchange and exercise of the
securities warrants.
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DESCRIPTION OF CURRENCY WARRANTS
We may issue warrants entitling the holder to receive the cash value in U.S. dollars of the right to purchase or the right to sell
foreign currencies or composite currencies.
Each
issue of currency warrants will be issued under a warrant agreement to be entered into between us and a warrant agent. The currency warrant agent will act solely as our agent under
the applicable currency warrant agreement and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of such currency warrants.
The
prospectus supplement relating to any currency warrants that we may offer will contain the specific terms of the currency warrants. These terms will include some or all of the
following:
-
- the aggregate amount and number of the currency warrants;
-
- the offering price of the currency warrants;
-
- the designated currency of the currency warrants, which currency may be a foreign currency or a composite currency, and information
regarding that currency or composite currency;
-
- the date on which the right to exercise the currency warrants commences and the date on which that right expires;
-
- the manner in which the currency warrants may be exercised;
-
- the circumstances which will cause the currency warrants to be deemed automatically exercised;
-
- the minimum number, if any, of the currency warrants exercisable at any one time and any other restrictions on exercise;
-
- the method of determining the amount payable in connection with the exercise of the currency warrants, including the strike price or
range of strike prices of the currency warrants, the method of determining the spot exchange rate and the U.S. dollar settlement value for the currency warrants;
-
- the securities exchange on which the currency warrants will be listed, if any;
-
- whether the currency warrants will be represented by certificates or issued in book-entry form;
-
- the place or places at which payment of the cash settlement value of the currency warrants is to be made, if applicable;
-
- information with respect to book-entry procedures, if any;
-
- the plan of distribution of the currency warrants; and
-
- any other terms of the currency warrants.
Prospective
purchasers of the currency warrants should be aware of special U.S. federal income tax considerations applicable to instruments such as the currency warrants. The prospectus
supplement relating to each issue of currency warrants will describe such tax considerations.
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DESCRIPTION OF OTHER WARRANTS
We may issue other warrants to buy or sell:
-
- debt securities of or guaranteed by the United States,
-
- units of a stock index or stock basket,
-
- a commodity, or
-
- a unit of a commodity index or another item or unit of an index.
We
refer to the property in the above clauses as the warrant property. Other warrants will be settled either through physical delivery of the warrant property or through payment of a
cash settlement value as set forth in the accompanying prospectus supplement. Other warrants will be issued under a warrant agreement to be entered into between us and a warrant agent. The other
warrant agent will act solely as our agent under the applicable other warrant agreement and will not assume any obligation or relationship of agency or trust for or with any holder or beneficial owner
of such other warrants.
The
prospectus supplement relating to any other warrants that we may offer will contain the specific terms of the other warrants. These terms will include some or all of the
following:
-
- the title and aggregate number of the other warrants;
-
- the offering price of the other warrants;
-
- the material risk factors of the other warrants;
-
- the warrant property of the other warrants;
-
- the procedures and conditions relating to the exercise of the other warrants;
-
- the date on which the right to exercise the other warrants will commence and the date on which that right will expire;
-
- the identity of the other warrant agent for the other warrants;
-
- whether the certificates evidencing the other warrants will be issuable in definitive registered form or global form or both;
-
- a discussion of any material U.S. federal income tax considerations applicable to the exercise of the other warrants; and
-
- any other terms of the other warrants, including any terms that may be required or advisable under applicable law.
The
other warrants may entail significant risks, including, without limitation, the possibility of significant fluctuations in the market for the applicable warranty property, potential
illiquidity in the secondary market and the risk that they will expire worthless. These risks will vary depending on the particular terms of the other warrants and will be more fully described in the
accompanying prospectus supplement.
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ERISA CONSIDERATIONS
A fiduciary of a pension, profit-sharing or other employee benefit plan governed by the Employee Retirement Income Security Act of
1974, as amended, to which we refer as ERISA, should consider the fiduciary standards of ERISA in the context of the ERISA plan's particular circumstances before authorizing an investment in the
offered securities. Among other factors, the fiduciary should consider whether such an investment is in accordance with the documents governing the ERISA plan and whether the investment is appropriate
for the ERISA plan in view of its overall investment policy and diversification of its portfolio.
Certain
provisions of ERISA and the Internal Revenue Code of 1986, as amended, to which we refer as the Code, prohibit employee benefit plans (as defined in Section 3(3) of ERISA)
that are subject to Title I of ERISA, plans described in Section 4975(e)(1) of the Code (including, without limitation, retirement accounts and Keogh Plans), and entities whose underlying
assets include plan assets by reason of a plan's investment in such entities (including, without limitation, as applicable, insurance company general accounts), from engaging in certain transactions
involving "plan assets" with parties that are "parties in interest" under ERISA or "disqualified persons" under the Code with respect to the plan or entity. Governmental and other plans that are not
subject to ERISA or to the Code may be subject to similar restrictions under non-U.S. federal, state or local law ("similar law"). Any employee benefit plan or other entity, to which such provisions
of ERISA, the Code or similar law apply, proposing to acquire the offered securities should consult with its legal counsel.
We,
directly or through our affiliates, may be considered a "party in interest" or a "disqualified person" to a large number of plans. A purchase of offered securities by any such plan
would be likely to result in a prohibited transaction between us and the plan.
Accordingly,
unless otherwise provided in the related prospectus supplement, offered securities may not be purchased, held or disposed of by any plan or any other person investing "plan
assets" of any plan that is subject to the prohibited transaction rules of ERISA or Section 4975 of the Code or other similar law, unless one of the following statutory exemptions, Prohibited
Transaction Class Exemptions, to which we refer as PTCE, issued by the United States Department of Labor or a similar exemption or exception applies to such purchase, holding and
disposition:
-
- PTCE 96-23 for transactions determined by in-house asset managers;
-
- PTCE 95-60 for transactions involving insurance company general accounts;
-
- PTCE 91-38 for transactions involving bank collective investment funds;
-
- PTCE 90-1 for transactions involving insurance company separate accounts; or
-
- PTCE 84-14 for transactions determined by independent qualified professional asset managers.
In
addition, ERISA Section 408(b)(17) and Section 4975(d)(20) of the Code provide an exemption for the purchase and sale of securities and related lending transactions,
provided that neither the issuer of the securities nor any of its affiliates have or exercise any discretionary authority or control or render any investment advice with respect to the assets of any
plan involved in the transaction, and provided further that the plan pays no more than "adequate consideration" in connection with the transaction (the "service provider exemption").
Unless
otherwise provided in the related prospectus supplement, any purchaser of the offered securities or any interest therein will be deemed to have represented and warranted to us on
each day including the dates of its purchase of the offered securities through and including the date of disposition of such offered securities that either:
(a) it
is not a plan subject to Title I of ERISA or Section 4975 of the Code and is not purchasing securities or interest therein on behalf of, or with "plan assets"
of, any such plan;
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(b) its
purchase, holding and disposition of such securities are not and will not be prohibited because they are exempt from the prohibited transaction provisions of ERISA
and the Code by one or more of the following prohibited transaction exemptions: PTCE 96-23, 95-60, 91-38, 90-1 or 84-14, the service provider exemption, or another applicable exemption; or
(c) it
is a governmental plan (as defined in Section 3 of ERISA) or other plan that is not subject to the provisions of Title I of ERISA or Section 4975 of the
Code and its purchase, holding and disposition of such securities are not otherwise prohibited under any similar law.
Due
to the complexity of these rules and the penalties imposed upon persons involved in prohibited transactions, it is important that any person considering the purchase of the offered
securities with plan assets consult with its counsel regarding the consequences under ERISA and the Code, or other similar law, of the acquisition and ownership of offered securities and the
availability of exemptive relief under the exemptions listed above.
Please
consult the accompanying prospectus supplement for further information with respect to a particular offering of securities.
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TAXATION
Certain U.S. Federal Income Tax Consequences
The following is a summary of certain United States federal income tax considerations that may be relevant to persons considering the
purchase of the debt securities covered by this prospectus. This summary does not address United States federal income tax considerations that may be relevant to persons considering the purchase of
the preferred shares, depositary shares, common shares, securities warrants, currency warrants or other warrants covered by this prospectus.
For a discussion of certain United States federal income tax considerations that may be relevant to persons considering the purchase of preferred shares, depositary shares, common shares, securities
warrants, currency warrants or other warrants, please refer to the accompanying prospectus supplement. This summary, which does not represent tax advice, is based on laws, regulations, rulings and
decisions now in effect, all of which are subject to change (including changes in effective dates) or possible differing interpretations.
This
summary deals only with debt securities that will be held as capital assets and, except where otherwise specifically stated, is addressed only to persons who purchase debt
securities in the initial offering. It does not address tax considerations applicable to investors that may be subject to special tax rules, such as banks, tax-exempt entities, insurance companies,
dealers in securities or currencies, traders in securities electing to mark to market, persons that will hold debt securities as a position in a "straddle" or conversion transaction, or as part of a
"synthetic security" or other integrated financial transaction or persons that have a "functional currency" other than the U.S. dollar. Further, this summary does not address the alternative minimum
tax, the Medicare tax on net investment income or other aspects of U.S. federal income or state and local taxation that may be relevant to a holder in light of such holder's particular circumstances.
Prospective purchasers of debt securities should review the accompanying prospectus supplements for summaries of special United States federal income tax considerations that may be relevant to a
particular issue of debt securities, including any floating rate debt securities, amortizing debt securities, indexed debt securities or foreign currency debt securities (defined below).
As
used herein, the term "United States Holder" means a beneficial owner of a debt security that is (i) a citizen or resident of the United States; (ii) a corporation (or
an entity taxable as a corporation for United States federal income tax purposes), that was established under the laws of the United States, any state thereof, or the District of Columbia; or
(iii) an estate or trust whose world-wide income is subject to United States federal income tax. If a partnership holds debt securities, the tax treatment of partners will generally depend upon
the status of the partner and the activities of the partnership. Partners of a partnership holding debt securities should accordingly consult their own tax advisors. As used herein, the term
"Non-United States Holder" means a beneficial owner of a debt security that is not a United States Holder and is not a partnership.
Tax Consequences to United States Holders
Payments of Interest. Payments of qualified stated interest (as defined below under "Original Issue Discount") on a debt security
will
be taxable to a United States Holder as ordinary interest income at the time that such payments are accrued or are received (in accordance with the United States Holder's method of tax accounting).
Unless
otherwise specified in the applicable prospectus supplement, debt securities will be denominated in U.S. dollars and payments of principal of, and interest on, debt securities
will be made in U.S. dollars. Debt securities may be denominated in a currency other than U.S. dollars, which we refer to as foreign currency debt securities. If such payments of interest are made
with respect to a foreign currency debt security, the amount of interest income realized by a United States Holder that uses the cash method of tax accounting will be the U.S. dollar value of the
specified currency payment based on the exchange rate in effect on the date of receipt regardless of whether the payment in fact is
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converted
into U.S. dollars. A United States Holder that uses the accrual method of accounting for tax purposes will accrue interest income on the foreign currency debt security in the relevant
foreign currency and translate the amount accrued into U.S. dollars based on the average exchange rate in effect during the interest accrual period (or portion thereof within the United States
Holder's taxable year) or, at the accrual-basis United States Holder's election, at the spot rate of exchange on the last day of the accrual period (or the last day of the taxable year within such
accrual period if the accrual period spans more than one taxable year), or at the spot rate of exchange on the date of receipt, if such date is within five business days of the last day of the accrual
period. A United States Holder that makes such election must apply it consistently to all debt instruments from year to year and cannot change the election without the consent of the Internal Revenue
Service, or IRS. A United States Holder that uses the accrual method of accounting for tax purposes will recognize foreign currency gain or loss, as the case may be, on the receipt of an interest
payment made with respect to a foreign currency debt security if the exchange rate in effect on the date the payment is received differs from the rate applicable to a previous accrual of that interest
income. This foreign currency gain or loss will be treated as ordinary income or loss but generally will not be treated as an adjustment to interest income received on the debt security.
Purchase, Sale, Exchange and Retirement of Debt Securities. A United States Holder's tax basis in a debt security generally will equal
the cost of
such debt security to such holder, increased by any amounts includible in income by the holder as original issue discount and market discount and reduced by any amortized premium (each as described
below) and any payments other than payments of qualified stated interest (as defined below) made on such debt security.
In
the case of a foreign currency debt security, the cost of such debt security to a United States Holder will be the U.S. dollar value of the foreign currency purchase price on the date
of purchase. In the case of a foreign currency debt security that is traded on an established securities market, a cash-basis United States Holder (and, if it so elects, an accrual-basis United States
Holder) will determine the U.S. dollar value of the cost of such debt security by translating the amount paid at the spot rate of exchange on the settlement date of the purchase. The amount of any
subsequent adjustments to a United States Holder's tax basis in a debt security in respect of original issue discount, market discount
and premium denominated in a specified currency will be determined in the manner described under "Original Issue Discount" and "Premium and Market Discount" below. The
conversion of U.S. dollars to a specified currency and the immediate use of the specified currency to purchase a foreign currency debt security generally will not result in taxable gain or loss for a
United States Holder.
Upon
the sale, exchange or retirement of a debt security, a United States Holder generally will recognize gain or loss equal to the difference between the amount realized on the sale,
exchange or retirement (less any accrued qualified stated interest, which will be taxable as such) and the United States Holder's tax basis in such debt security. If a United States Holder receives a
currency other than the U.S. dollar in respect of the sale, exchange or retirement of a debt security, the amount realized will be the U.S. dollar value of the specified currency received calculated
at the exchange rate in effect on the date the instrument is disposed of or retired. In the case of a foreign currency debt security that is traded on an established securities market, a cash-basis
United States Holder and, if it so elects, an accrual-basis United States Holder will determine the U.S. dollar value of the amount realized by translating such amount at the spot rate on the
settlement date of the sale. The election available to accrual-basis United States Holders in respect of the purchase and sale of foreign currency debt securities traded on an established securities
market, discussed above, must be applied consistently to all debt instruments from year to year and cannot be changed without the consent of the IRS.
Except
as discussed below with respect to market discount, short-term debt securities (as defined below) and foreign currency gain or loss, gain or loss recognized by a United States
Holder generally will be long-term capital gain or loss if the United States Holder has held the debt security for more
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than
one year at the time of disposition. Long-term capital gains recognized by an individual United States Holder generally are subject to tax at a lower rate than short-term capital gains or
ordinary income. The deductibility of capital losses is subject to limitations.
Gain
or loss recognized by a United States Holder on the sale, exchange or retirement of a foreign currency debt security generally will be treated as ordinary income or loss to the
extent that the gain or loss is attributable to changes in exchange rates during the period in which the holder held such debt security. This foreign currency gain or loss will not be treated as an
adjustment to interest income received on the debt securities.
Original Issue Discount. United States Holders of debt securities with original issue discount, or OID, generally will be subject to the
special tax
accounting rules for obligations issued with OID provided by
the Code and certain regulations promulgated thereunder, which we refer to as the OID Regulations. Debt securities issued with OID will be referred to as original issue discount debt securities.
Notice will be given in the accompanying prospectus supplement when we determine that a particular debt security is an original issue discount debt security. United States Holders of such original
issue discount debt securities should be aware that, as described in greater detail below, they generally must include OID in ordinary gross income for United States federal income tax purposes as it
accrues, in advance of the receipt of cash attributable to that income.
A
debt security will generally be considered to be issued with OID if its stated redemption price at maturity (as defined below) exceeds its issue price (as defined below) by more than a
de minimis amount (generally, 0.25% of such stated redemption price multiplied by the number of complete years to maturity). The "stated redemption price at maturity" of a debt security is generally
the sum of all payments to be made on the debt security other than payments of qualified stated interest. "Qualified stated interest" is generally stated interest that is unconditionally payable in
cash or in property (other than our debt instruments) at least annually during the entire term of a debt security at a single fixed rate or, subject to certain conditions, based on one or more
interest indices. The "issue price" of each debt security in a particular offering will generally be the first price at which a substantial amount of that particular offering is sold to the public
(ignoring sales to underwriters, placement agents or wholesalers).
In
general, each United States Holder of an original issue discount debt security, whether such holder uses the cash or the accrual method of tax accounting, will be required to include
in ordinary gross income the sum of the "daily portions" of OID on the debt security for all days during the taxable year that the United States Holder owns the debt security. The daily portions of
OID on an original issue discount debt security are determined by allocating to each day in any accrual period a ratable portion of the OID allocable to that accrual period. Accrual periods may be any
length and may vary in length over the term of an original issue discount debt security, provided that no accrual period is longer than one year and each scheduled payment of principal or interest
occurs on either the final day or the first day of an accrual period. In the case of an initial United States Holder, the amount of OID on an original issue discount debt security allocable to each
accrual period is determined by (a) multiplying the adjusted issue price (as defined below) of the original issue discount debt security at the beginning of the accrual period by the yield to
maturity (as defined below) of such original issue discount debt security (appropriately adjusted to reflect the length of the accrual period) and (b) subtracting from that product the amount
(if any) of qualified stated interest allocable to that accrual period. The "yield to maturity" of a debt security is the discount rate that causes the present value of all payments on the debt
security as of its original issue date to equal the issue price of such debt security. The "adjusted issue price" of an original issue discount debt security at the beginning of any accrual period
will generally be the sum of its issue price (generally including accrued interest, if any) and the amount of OID allocable to all prior accrual periods, reduced by the amount of all payments other
than payments of qualified stated interest (if any) made with respect to such debt security in all prior accrual periods. As a result of this "constant-yield" method of including OID in
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income,
the amounts includible in income by a United States Holder in respect of an original issue discount debt security denominated in U.S. dollars generally are lesser in the early years and
greater in the later years than the amounts that would be includible on a straight-line basis.
A
United States Holder generally may make an irrevocable election to include in its income its entire return on a debt security (i.e., the
excess of all remaining payments to be received on the debt security, including payments of qualified stated interest, over the amount paid by such United States Holder for such debt security) under
the constant-yield method described above. For debt securities purchased at a premium or bearing market discount in the hands of the United States Holder, the United States Holder making such election
will also be deemed to have made the election (discussed below under "Premium and Market Discount") to amortize premium or to accrue market discount in income currently on a
constant-yield basis.
In
the case of an original issue discount debt security that is also a foreign currency debt security, a United States Holder should determine the U.S. dollar amount includible in income
as OID for each accrual period by (a) calculating the amount of OID allocable to each accrual period in the specified currency using the constant-yield method described above, and
(b) translating the amount of the specified currency so derived at the average exchange rate in effect during that accrual period (or portion thereof within a United States Holder's taxable
year) or, at the United States Holder's election (as described above under "Payments of Interest"), at the spot rate of exchange on the last day of the accrual period (or the last day of
the taxable year within such accrual period if the accrual period spans more than one taxable year), or at the spot rate of exchange on the date of receipt, if such date is within five business days
of the last day of the accrual period. Because exchange rates may fluctuate, a United States Holder of an original issue discount debt security that is also a foreign currency debt security may
recognize a different amount of OID income in each accrual period than would the holder of an otherwise similar original issue discount debt security denominated in U.S. dollars. All payments on an
original issue discount debt security (other than payments of qualified stated interest) will generally be viewed first as payments of previously accrued OID (to the extent thereof), with payments
attributed first to the earliest-accrued OID, and then as payments of principal. Upon the receipt of an amount attributable to OID (whether in connection with a payment of an amount that is not
qualified stated interest or the sale or retirement of the original issue discount debt security), a United States Holder will recognize ordinary income or loss measured by the difference between the
amount received (translated into U.S. dollars at the exchange rate in effect on the date of receipt or on the date of disposition of the original issue discount debt security, as the case may be) and
the amount accrued (using the exchange rate applicable to such previous accrual).
A
subsequent United States Holder of an original issue discount debt security that purchases the debt security at a cost less than its remaining redemption amount (as defined below), or
an initial United States Holder that purchases an original issue discount debt security at a price other than the debt security's issue price, also generally will be required to include in gross
income the daily portions of OID, calculated as described above. However, if the United States Holder acquires the original issue discount debt security at a price greater than its adjusted issue
price, such holder is required to reduce its periodic inclusions of OID income to reflect the premium paid over the adjusted issue price. The
"remaining redemption amount" for a debt security is the total of all future payments to be made on the debt security other than payments of qualified stated interest.
Floating
rate debt securities generally will be treated as "variable rate debt instruments" under the OID Regulations. Accordingly, the stated interest on a floating rate debt security
generally will be treated as "qualified stated interest" and such a debt security will not have OID solely as a result of the fact that it provides for interest at a variable rate. If a floating rate
debt security does not qualify as a "variable rate debt instrument", such debt security will be subject to special rules, which we refer to as the Contingent Payment Regulations, that govern the tax
treatment of debt obligations that provide for contingent payments, which we refer to as Contingent Debt Obligations. Prospective purchasers of
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floating
rate debt securities should carefully examine the accompanying prospectus supplement to see if the Company has determined that such debt securities constitute Contingent Debt Obligations. If
it has, they should consult their own tax advisors with respect to the tax consequences to them of such obligations.
Certain
of the debt securities may be subject to special redemption, repayment or interest rate reset features, as indicated in the accompanying prospectus supplement. Debt securities
containing such features, in particular original issue discount debt securities, may be subject to special rules that differ from the general rules discussed above. Purchasers of debt securities with
such features should carefully examine the accompanying prospectus supplement and should consult their own tax advisors with respect to such debt securities because the tax consequences with respect
to such features, and especially with respect to OID, will depend, in part, on the particular terms of the purchased debt securities.
Premium and Market Discount. A United States Holder of a debt security that purchases the debt security at a cost greater than its
remaining
redemption amount (as defined in the third preceding paragraph) will be considered to have purchased the debt security at a premium, and may elect to amortize such premium (as an offset to interest
income), using a constant-yield method, over the remaining term of the debt security. Such election, once made, generally applies to all bonds held or subsequently acquired by the United States Holder
on or after the first taxable year to which the election applies and may not be revoked without the consent of the IRS. A United States Holder that elects to amortize such premium must reduce its tax
basis in a debt security by the amount of the premium amortized during its holding period. Original issue discount debt securities purchased at a premium will not be subject to the OID rules described
above.
In
the case of premium in respect of a foreign currency debt security, a United States Holder should calculate the amortization of such premium in the specified currency. Amortization
deductions attributable to a period reduce interest income attributable to payments in respect of that period and therefore are translated into U.S. dollars at the exchange rate used by the United
States Holder for such interest payments. Exchange gain or loss will be realized with respect to amortized bond premium on such a debt security based on the difference between the exchange rate on the
date or dates such premium is recovered through interest payments on the debt security and the exchange rate on the date on which the United States Holder acquired the debt security.
With
respect to a United States Holder that does not elect to amortize such premium, the amount of such premium will be included in the United States Holder's tax basis when the debt
security matures or is disposed of by the United States Holder. Therefore, a United States Holder that does not elect to amortize such premium and that holds the debt security to maturity generally
will be required to treat the premium as a capital loss when the debt security matures.
If
a United States Holder of a debt security purchases the debt security at a price that is lower than its remaining redemption amount or, in the case of an original issue discount debt
security, its adjusted issue price, by at least 0.25% of its remaining redemption amount (or adjusted issue price) multiplied by the number of remaining whole years to maturity, the debt security will
be considered to have "market discount" in the hands of such United States Holder. In such case, gain realized by the United States Holder on the disposition of the debt security generally will be
treated as ordinary income to the extent of the market discount that accrued on the debt security while held by such United States Holder. In addition, the United States Holder could be required to
defer the deduction of a portion of the interest paid on any indebtedness incurred or maintained to purchase or carry the debt security. In general terms, market discount on a debt security will be
treated as accruing ratably over the term of such debt security or, at the election of the United States Holder, under a constant yield method. Market discount on a foreign currency debt security will
be accrued by a United States Holder in the specified currency. The amount includible in income by a United States Holder in
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respect
of such accrued market discount will be the U.S. dollar value of the amount accrued, generally calculated at the exchange rate in effect on the date that the debt security is disposed of by
the United States Holder.
A
United States Holder may elect to include market discount in income on a current basis as it accrues (on either a ratable or constant-yield basis), in lieu of treating a portion of any
gain realized on a sale of a debt security as ordinary income. If a United States Holder elects to include market discount on a current basis, the interest deduction deferral rule described above will
not apply. Any accrued market discount on a foreign currency debt security that is currently includible in income will be translated into U.S. dollars at the average exchange rate for the accrual
period (or portion thereof within the United States Holder's taxable year). Any such election, if made, applies to all market discount bonds acquired
by the taxpayer on or after the first day of the first taxable year to which such election applies and is revocable only with the consent of the IRS.
Short-Term Debt Securities. The rules set forth above will also generally apply to debt securities having maturities of not more than
one year, which
we refer to as short-term debt securities, but with modifications, certain of which are summarized below:
First,
the OID Regulations treat none of the interest on a short-term debt security as qualified stated interest. Thus, all short-term
debt securities will be original issue discount debt securities. OID will be treated as accruing on a short-term debt security ratably or, at the election of a United States Holder, under a constant
yield method.
Second,
a United States Holder of a short-term debt security that uses the cash method of tax accounting and is not a bank, securities dealer, regulated investment company or common
trust fund, and does not identify the short-term debt security as part of a hedging transaction, will generally not be required to include OID in income on a current basis. Such a United States Holder
may be required to defer the deduction of interest paid or accrued on any indebtedness incurred or maintained to purchase or carry such debt security until the maturity of the debt security or its
earlier disposition in a taxable transaction. In addition, such a United States Holder will be required to treat any gain realized on a sale, exchange or retirement of the debt security as ordinary
income to the extent such gain does not exceed the OID accrued with respect to the debt security during the period the United States Holder held the debt security. Notwithstanding the foregoing, a
cash-basis United States Holder of a short-term debt security may elect to accrue OID into income on a current basis (in which case the limitation on the deductibility of interest described above will
not apply). A United States Holder using the accrual method of tax accounting and certain cash-basis United States Holders (including banks, securities dealers, regulated investment companies and
common trust funds) generally will be required to include OID on a short-term debt security in income on a current basis.
Third,
any United States Holder (whether cash or accrual basis) of a short-term debt security can elect to accrue the "acquisition discount," if any, with respect to the debt security on
a current basis. If such an election is made, the OID rules will not apply to the debt security. Acquisition discount is the excess of the remaining redemption amount of the debt security at the time
of acquisition over the purchase price. Acquisition discount will be treated as accruing ratably or, at the election of the United States Holder, under a constant-yield method based on daily
compounding.
Finally,
the market discount rules will not apply to a short-term debt security.
Debt Securities Providing for Contingent Payments. The Contingent Payment Regulations, which govern
the tax treatment of Contingent Debt Obligations, generally require accrual of interest income on a constant-yield basis in respect of such obligations at a yield determined at the time of their
issuance, and may require adjustments to such accruals when any contingent payments are made. Prospective purchasers of debt securities should carefully examine the accompanying prospectus supplement
to see if we have determined that such debt securities constitute Contingent Debt
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Obligations.
If we have, prospective purchasers should consult their own tax advisors with respect to the tax consequences to them of such obligations.
Information Reporting and Backup Withholding. The issuing and paying agent will be required to file information returns with the IRS
with respect to
payments made to United States Holders of debt securities unless an exemption exists. In addition, United States Holders who are not exempt will be subject to backup withholding tax in respect of such
payments if they do not provide their taxpayer identification numbers to the issuing and paying agent. All individuals are subject to these requirements. In general, corporations, tax-exempt
organizations and individual retirement accounts are exempt from these requirements.
Reportable Transactions. A United States taxpayer that participates in a "reportable transaction" will be required to disclose its
participation to
the IRS. Under the relevant rules, if the debt securities are denominated in a foreign currency, a United States Holder may be required to treat a foreign currency exchange loss from the debt
securities as a reportable transaction if this loss exceeds the relevant threshold in the regulations ($50,000 in a single taxable year, if the United States Holder is an individual or trust, or
higher amounts for other nonindividual United States Holders), and to disclose its investment by filing Form 8886 with the IRS. A penalty in the amount of $10,000 in the case of a natural
person and $50,000 in all other cases is generally imposed on any taxpayer that fails to timely file an information return with the IRS with respect to a transaction resulting in a loss that is
treated as a reportable transaction. Prospective purchasers are urged to consult their tax advisors regarding the application of these rules.
Tax Consequences to Non-United States Holders
Under present United States federal income and estate tax law, and subject to the discussion below concerning backup withholding and
foreign accounts:
(a) no
withholding of United States federal income tax generally will be required with respect to the payment by us or any issuing and paying agent of principal or interest
(which for purposes of this discussion includes OID) on a debt security owned by a Non-United States Holder, provided that (i) the beneficial owner does not actually or constructively own 10%
or more of the total combined voting power of all classes of our stock entitled to vote within the meaning of section 871(h)(3) of the Code and the regulations thereunder, (ii) the
beneficial owner is not a controlled foreign corporation that is related to us through stock ownership, (iii) the beneficial owner is not a bank whose receipt of interest on a debt security is
described in section 881(c)(3)(A) of the Code, (iv) in the case of a registered debt security, the beneficial owner provides a statement signed under penalties of perjury that includes
its name and address and certifies that it is a Non-United States Holder in compliance with applicable requirements, generally made, under current procedures, on IRS Form W-8BEN or W-8BEN-E (or
satisfies certain documentary evidence requirements for establishing that is it a Non-United States Holder), and (v) neither we nor our paying agent has actual knowledge or reason to know that
the beneficial owner of the note is a United States Holder;
(b) a
Non-United States Holder will generally not be subject to United States federal income tax on gain realized on the sale, exchange or redemption of a debt security,
unless (i) such gain is effectively connected with the conduct by the holder of a trade or business in the United States or, (ii) in the case of gain realized by an individual holder,
the holder is present in the United States for 183 days or more in the taxable year of the retirement or disposition and certain other conditions are met;
(c) a
debt security beneficially owned by an individual who at the time of death is a Non-United States Holder will generally not be subject to United States federal estate
tax as a result of such individual's death, provided that such individual does not actually or constructively
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own
10% or more of the total combined voting power of all classes of our stock entitled to vote within the meaning of section 871(h)(3) of the Code and provided that the interest payments with
respect to such debt security would not have been, if received at the time of such individual's death, effectively connected with the conduct of a United States trade or business by such individual.
If
a Non-United States Holder is subject to withholding at a rate in excess of a reduced rate for which such holder is eligible under a tax treaty or otherwise, such holder may be able
to obtain a refund of or credit for any amounts withheld in excess of the applicable rate. Investors are encouraged to consult with their own tax advisors regarding the possible implications of these
withholding requirements on their investment in the debt securities.
Notwithstanding
the foregoing, a Non-United States Holder generally will be taxed in the same manner as a United States Holder with respect to interest income that is effectively
connected with its U.S. trade or business. In addition, under certain circumstances, effectively connected interest income of a corporate Non- United States Holder may be subject to a "branch profits"
tax imposed at a 30% rate. A Non-United States Holder with effectively connected income will, however, generally not be subject to withholding tax on interest income if, under current procedures, it
delivers a properly completed IRS Form W-8ECI.
United
States information reporting requirements and backup withholding tax will not apply to payments on a debt security if the beneficial owner (1) certifies its Non-United
States Holder status under penalties of perjury, generally made, under current procedures, on IRS Form W-8BEN or W-8BEN-E, or satisfies documentary evidence requirements for establishing that
it is a Non-United States Holder, or (2) otherwise establishes an exemption.
Information
reporting requirements will generally not apply to any payment of the proceeds of the sale of a debt security effected outside the United States by a foreign office of a
foreign broker, provided that such broker derives less than 50% of its gross income for particular periods from the conduct of a trade or business in the United States, is not a controlled foreign
corporation for United States federal income tax purposes, and is not a foreign partnership that, at any time during its taxable year, is 50% or more, by income or capital interest, owned by United
States Holders or is engaged in the conduct of a United States trade or business.
Backup
withholding tax will generally not apply to the payment of the proceeds of the sale of a debt security effected outside the United States by a foreign office of any broker.
However, information
reporting requirements will be applicable to such payment unless (1) such broker has documentary evidence in its records that the beneficial owner is a Non-United States Holder and other
conditions are met or (2) the beneficial owner otherwise establishes an exemption. Information reporting requirements and backup withholding tax will apply to the payment of the proceeds of a
sale of a debt security by the U.S. office of a broker, unless the beneficial owner certifies its Non-United States Holder status under penalties of perjury or otherwise establishes an exemption.
The
rules regarding withholding, backup withholding and information reporting for Non-United States Holders are complex, may vary depending on a holder's particular situation, and are
subject to change. Non-United States Holders should accordingly consult their own tax advisors as to the specific methods to use and forms to complete to satisfy these rules.
Foreign Accounts
A United States law enacted in 2010 and commonly referred to as FATCA potentially imposes a withholding tax of 30% on payments of
(i) interest on a debt obligation of a United States issuer and (ii) after December 31, 2018, gross proceeds from the sale or other disposition of such a debt obligation, in each
case made to (a) a foreign financial institution (as a beneficial owner or as an
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intermediary),
unless such institution enters into an agreement with the United States government (or is required by applicable local law) to collect and provide to the United States or other relevant
tax authorities certain information regarding United States account holders of such institution or (b) a non-United States entity (as a beneficial owner) that is not a financial institution
unless such entity provides the withholding agent with a certification that it does not have any substantial United States owners or that identifies its substantial United States owners, which
generally includes any specified United States person that directly or indirectly owns more than a specified percentage of such entity. FATCA applies to the debt securities. United States Holders that
will hold the debt securities through a non-United States intermediary and Non-United States Holders are urged to consult their own tax advisors regarding foreign account tax compliance.
European Union Directive on Taxation of Certain Interest Payments
Under Council Directive 2003/48/EC on the taxation of savings income (the "Savings Directive"), each Member State of the European Union
is required to provide to the tax authorities of another such Member State details of payments of interest or other similar income paid by a person within its jurisdiction to, or secured by such a
person for, an individual beneficial owner resident in, or certain limited types of entity established in, that other Member State. However, for a transitional period, Austria will (unless during such
period it elects otherwise) instead operate a withholding system in relation to such payments. The rate of withholding is 35%. However, the beneficial owner of the interest (or similar income) payment
may elect that certain provision of information procedures should be applied instead of withholding. The transitional period is to terminate at the end of the first full fiscal year following
agreement by certain non-EU countries to exchange of information procedures relating to interest and other similar income.
A
number of non-EU countries and certain dependent or associated territories of certain Member States have adopted similar measures to the Savings Directive
The
Council of the European Union has adopted a Directive amending the Savings Directive (the "Amending Directive") which, when implemented, will broaden the Savings Directive's scope.
The Member States will have until January 1, 2016 to adopt national legislation necessary to comply with the Amending Directive, which legislation must apply from January 1, 2017. The
changes made under the Amending Directive include extending the scope of the Savings Directive to payments made to, or secured for, certain other entities and legal arrangements (including certain
trusts and partnerships), where certain conditions are satisfied. They also broaden the definition of "interest payment" to cover certain additional types of income. Investors who are in any doubt as
to their position should consult their professional advisers.
However,
the European Commission has proposed the repeal of the Savings Directive from January 1, 2017 in the case of Austria and from January 1, 2016 in the case of all
other Member States (subject to on-going requirements to fulfill administrative obligations such as the reporting and exchange of information relating to, and accounting for withholding taxes on,
payments made before those dates). This is to prevent overlap between the Savings Directive and a new automatic exchange of information regime to be implemented under Council Directive 2011/16/EU on
Administrative Cooperation in the field of taxation (as amended by Council Directive 2014/107/EU). The proposal also provides that, if it proceeds, Member States will not be required to apply the new
requirements of the Amending Directive.
If
a payment under a note were to be made and an amount of, or in respect of, tax were to be withheld from that payment pursuant to the Savings Directive (as amended from time to time)
or any law implementing or complying with, or introduced in order to conform to, such Directive, neither the
Company nor any other person would be obliged to pay additional amounts under the terms of such note as a result of the imposition of such withholding tax.
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The Proposed Financial Transactions Tax
The European Commission has published a proposal (the "Commission's Proposal") for a Directive for a common financial transactions tax
("FTT") in Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovenia, Slovakia and Spain (the "participating Member States").
The
Commission's Proposal has very broad scope and could, if introduced in its current form, apply to certain dealings in the notes (including secondary market transactions) in certain
circumstances. The issuance and subscription of the notes should, however, be exempt.
Under
the Commission's Proposal, the FTT could apply in certain circumstances to persons both within and outside of the participating Member States. Generally, it would apply to certain
dealings in the notes where at least one party is a financial institution, and at least one party is established in a participating Member State. A financial institution may be, or be deemed to be,
"established" in a participating Member State in a broad range of circumstances, including (a) by transacting with a person established in a participating Member State or (b) where the
financial instrument which is subject to the dealings is issued in a participating Member State.
The
FTT remains subject to negotiation between the participating Member States and the legality of the proposal is uncertain. It may therefore be altered prior to any implementation.
Additional EU Member States may decide to participate and/or certain of the participating Member States may decide to withdraw.
Joint
statements issued by several participating Member States indicate an intention to implement the FTT by January 1, 2016. Prospective holders of the notes are advised to seek
their own professional advice in relation to the FTT.
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PLAN OF DISTRIBUTION
We may sell the securities from time to time in one or more of the following ways:
-
- to or through underwriters or dealers;
-
- directly to one or more purchasers;
-
- through agents; or
-
- through a combination of any such methods of sale.
The
prospectus supplement with respect to the offered securities will set forth the terms of the offering, including:
-
- the name or names of any underwriters or agents;
-
- the purchase price of the offered securities and the proceeds to us from their sale;
-
- any underwriting discounts or sales agents' commissions and other items constituting underwriters' or agents' compensation;
-
- any initial public offering price;
-
- any discounts or concessions allowed or reallowed or paid to dealers; and
-
- any securities exchanges on which those securities may be listed.
Only
underwriters or agents named in the accompanying prospectus supplement are deemed to be underwriters or agents in connection with the securities offered thereby.
If
underwriters are used in the sale, the securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase those securities will be subject to
certain conditions precedent, and unless otherwise specified in the accompanying prospectus supplement, the underwriters will be obligated to purchase all the securities of the series offered by such
accompanying prospectus supplement relating to that series if any of such securities are purchased. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
We
may also sell securities directly or through agents we designate from time to time. Any agent involved in the offering and sale of the offered securities will be named in the
accompanying prospectus supplement, and any commissions payable by us to that agent will be set forth in the accompanying prospectus supplement. Unless otherwise indicated in such accompanying
prospectus supplement, any agent will be acting on a best efforts basis for the period of its appointment.
If
so indicated in an accompanying prospectus supplement, we will authorize agents, underwriters or dealers to solicit offers by certain institutional investors to purchase securities,
which offers provide for payment and delivery on a future date specified in such accompanying prospectus supplement. There may be limitations on the minimum amount that may be purchased by any such
institutional investor or on the portion of the aggregate principal amount of the particular securities that may be sold pursuant to these arrangements.
Institutional
investors to which offers may be made, when authorized, include commercial and savings banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and such other institutions as may be approved by us. The obligations of any purchasers
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pursuant
to delayed delivery and payment arrangements will only be subject to the following two conditions:
-
- the purchase by an institution of the particular securities will not, at the time of delivery, be prohibited under the laws of any
jurisdiction in the United States to which that institution is subject; and
-
- if the particular securities are being sold to underwriters, we will have sold to those underwriters the total principal amount or
number of those securities less the principal amount or number thereof, as the case may be, covered by such arrangements.
Underwriters
will not have any responsibility in respect of the validity of these arrangements or the performance of us or institutional investors thereunder.
In
connection with an offering of securities, the underwriters may purchase and sell securities in the open market. These transactions may include over-allotment, syndicate covering
transactions and stabilizing transactions. Over-allotment involves sales of securities in excess of the principal amount of securities to be purchased by the underwriters in an offering, which creates
a short position for the underwriters. Covering transactions involve purchases of the securities in the open market after the distribution has been completed in order to cover short positions.
Stabilizing transactions consist of certain bids or purchases of securities made for the purpose of preventing or retarding a decline in the market price of the securities while the offering is in
progress. Any of these activities may have the effect of preventing or retarding a decline in the market price of the securities being offered. They may also cause the price of the securities being
offered to be higher than the price that otherwise would exist in the open market in the absence of these transactions. The underwriters may conduct these transactions in the over-the-counter market
or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time.
Underwriters
and agents may be entitled under agreements entered into with us to indemnification by us against civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments that the underwriters or agents may be required to make in that respect. Underwriters and agents or their affiliates may engage in transactions with, or perform
services for, us or our subsidiaries or affiliates in the ordinary course of business.
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LEGAL MATTERS
The validity of the securities will be passed upon for us by Cleary Gottlieb Steen & Hamilton LLP, New York, New York.
EXPERTS
Our financial statements and management's assessment of the effectiveness of internal control over financial reporting (which is
included in Management's Report on Internal Control over Financial Reporting), incorporated in this prospectus by reference to our Annual Report on Form 10-K for the year ended
December 31, 2014, have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said
firm as experts in auditing and accounting.
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PART IIINFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a statement of the estimated expenses (other than underwriting compensation) to be incurred by us in connection with a
distribution of an assumed amount of $5,000,000,000 of securities registered under this registration statement. The assumed amount has been used to demonstrate the expenses of an offering and does not
represent an estimate
of the amount of securities that may be registered or distributed because such amount is unknown at this time.
|
|
|
|
|
SEC registration fee |
|
$ |
0 |
* |
Printing and engraving expenses |
|
|
75,000 |
|
Legal fees and expenses |
|
|
250,000 |
|
Blue Sky fees and expenses |
|
|
5,000 |
|
Accounting fees and expenses |
|
|
160,000 |
|
Fees and expenses of trustee, depositary, transfer agent and/or warrant agent |
|
|
160,000 |
|
Fees of Rating Agencies |
|
|
900,000 |
|
Miscellaneous |
|
|
75,000 |
|
|
|
|
|
|
Total |
|
$ |
1,625,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- *
- Deferred
in accordance with Rules 456(b) and 457(r)
Item 15. Indemnification of Directors and Officers.
Article VI of the Registrant's By-laws, as amended, provides as follows:
SECTION 6.1.
DIRECTORS, OFFICERS AND EMPLOYEES. The corporation shall, to the fullest extent permitted by applicable law as the same exists or may hereafter be in effect,
indemnify any person, made or threatened to be made, a party to, or who is otherwise involved in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative, legislative or investigative, by reason of the fact that such person, is or was or has agreed to become a director of the corporation, or is or was an officer or employee of the
corporation, or serves or served or has agreed to serve any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity at the request of the
corporation, against judgments, fines, penalties, amounts paid in settlement and reasonable expenses, including attorneys' fees actually and necessarily incurred in connection with such action or
proceeding, or any appeal therein; provided, however, that no indemnification shall be provided to any such person if a judgment or other final adjudication adverse to the director, officer or
employee establishes that (i) his acts were committed in bad faith or were the result of active and deliberate dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) he personally gained in fact a financial profit or other advantage to which he was not legally entitled. Any action or proceeding by or in the right of the corporation to
procure a judgment in
its favor or by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise, which any
director, officer or employee serves or served or agreed to serve at the request of the corporation shall be included in the actions for which directors, officers and employees will be indemnified
under the terms of this Section 6.1. Such indemnification shall include the right to be paid advances of any expenses incurred by such person in connection with such action, suit or proceeding,
upon receipt of an undertaking by or on behalf of such person to repay such amount consistent with the provisions of applicable law. (B.C.L. Sections 721, 722, 723(c).)
SECTION 6.2
OTHER INDEMNIFICATION. The corporation may indemnify any person to whom the corporation is permitted by applicable law or these by-laws to provide indemnification or
the
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advancement
of expenses, whether pursuant to rights granted pursuant to, or provided by, the New York Business Corporation Law or any other law or these by-laws or other rights created by (i) a
resolution of shareholders, (ii) a resolution of directors, or (iii) an agreement providing for such indemnification, it being expressly intended that these by-laws authorize the
creation of other rights in any such manner. The right to be indemnified and to the reimbursement or advancement of expenses incurred in defending a proceeding in advance of its final disposition
authorized by this Section 6.2, shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the certificate of incorporation,
by-laws, agreement, vote of shareholders or disinterested directors or otherwise. (B.C.L. Sections 721, 723(c).)
SECTION 6.3
MISCELLANEOUS. The right to indemnification conferred by Section 6.1, and any indemnification extended under Section 6.2, (i) is a contract right
pursuant to which the person entitled thereto may bring suit as if the provisions thereof were set forth in a separate written contract between the corporation and such person, (ii) is intended
to be retroactive to events occurring prior to the adoption of this Article VI, to the fullest extent permitted by applicable law, and (iii) shall continue to exist after the rescission
or restrictive modification thereof with respect to events occurring prior thereto. The benefits of Section 6.1 shall extend to the heirs, executors, administrators and legal representatives of
any person entitled to indemnification under this Article.
The
form Underwriting Agreements filed or incorporated by reference as Exhibits 1(a) through (d) to this Registration Statement and the form Agency Agreement filed as
Exhibit 1(e) to this Registration Statement provide for indemnification of, or contribution to, directors and officers of the Company by the underwriters and agents against certain liabilities
under the Securities Act of 1933, as amended, in certain instances.
Item 16. Exhibits.
The "Exhibit Index" on pages II-8 and II-9 is hereby incorporated by reference.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(a) To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) to
include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) to
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii) to
include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(i), (a)(ii) and (a)(iii) above do not apply if the
registration statement is on Form S-3 and the information required to be included in a post-effective amendment
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by
those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(b) That,
for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(d) That,
for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) Each
prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus
was deemed part of and included in the registration statement; and
(ii) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to
an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be
deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be
deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or
made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any
such document immediately prior to such effective date.
(e) That,
for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the
Registrant undertakes that in a primary offering of securities of the Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the Registrant will be a seller to the purchaser and will be considered to offer or
sell such securities to such purchaser:
(i) Any
preliminary prospectus or prospectus of the Registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the Registrant or used or referred to by the Registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing material information about the Registrant or its securities provided by or on
behalf of the Registrant; and
II-3
Table of Contents
(iv) Any
other communication that is an offer in the offering made by the Registrant to the purchaser.
(f) That,
for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13
(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
(g) To
file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act
in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act.
(h) Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, that the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of
1933 and will be governed by the final adjudication of such issue.
II-4
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York on the 2nd day of October, 2015.
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AMERICAN EXPRESS COMPANY |
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By: |
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/s/ JEFFREY C. CAMPBELL
JEFFREY C. CAMPBELL Executive Vice President and Chief
Financial Officer |
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities indicated on the 2nd day
of October, 2015.
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Signature
|
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Title
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*
KENNETH I. CHENAULT |
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Chairman, Chief Executive Officer and Director |
/s/ JEFFREY C. CAMPBELL
JEFFREY C. CAMPBELL |
|
Executive Vice President and Chief Financial Officer |
*
LINDA ZUKAUCKAS |
|
Executive Vice President and Corporate Comptroller (Principal Accounting Officer) |
*
CHARLENE BARSHEFSKY |
|
Director |
*
URSULA M. BURNS |
|
Director |
*
PETER CHERNIN |
|
Director |
*
ANNE LAUVERGEON |
|
Director |
II-5
Table of Contents
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Signature
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Title
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*
MICHAEL O. LEAVITT |
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Director |
*
THEODORE J. LEONSIS |
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Director |
*
RICHARD C. LEVIN |
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Director |
*
SAMUEL J. PALMISANO |
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Director |
*
DANIEL L. VASELLA |
|
Director |
*
ROBERT D. WALTER |
|
Director |
*
RONALD A. WILLIAMS |
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Director |
*By: |
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/s/ CAROL V. SCHWARTZ
CAROL V. SCHWARTZ as Attorney-in-Fact |
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II-6
Table of Contents
EXHIBIT INDEX
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Exhibit |
|
Description |
|
1(a) |
* |
Underwriting Agreement Basic Provisions (Debt Securities). |
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|
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1(b) |
** |
Form of Underwriting Agreement for Convertible Debt Securities and Exchangeable Debt Securities. |
|
|
|
|
|
1(c) |
** |
Form of Underwriting Agreement for Equity Securities. |
|
|
|
|
|
1(d) |
** |
Form of Agency Agreement. |
|
|
|
|
|
3(a) |
|
Registrant's Amended and Restated Certificate of Incorporation, as amended to date (incorporated by reference to Exhibit 3.1 of Registrant's Quarterly Report on Form 10-Q (File No. 1-7657) for the
quarter ended March 31, 2015). |
|
|
|
|
|
3(b) |
|
Registrant's By-laws, as amended (incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K (File No. 1-7657), filed on October 20, 2014). |
|
|
|
|
|
4(a) |
|
Form of Note with optional redemption provisions (incorporated by reference to Exhibit 4(a) of the Registrant's Registration Statement Under the Securities Act of 1933 on Form S-3 (File No. 333-162791),
filed on October 30, 2009). |
|
|
|
|
|
4(b) |
|
Form of Debenture with optional redemption and sinking fund provisions (incorporated by reference to Exhibit 4(b) of the Registrant's Registration Statement Under the Securities Act of 1933 on Form S-3
(File No. 333-162791), filed on October 30, 2009). |
|
|
|
|
|
4(c) |
|
Form of Original Issue Discount Note with optional redemption provisions (incorporated by reference to Exhibit 4(c) of the Registrant's Registration Statement Under the Securities Act of 1933 on Form S-3
(File No. 333-162791), filed on October 30, 2009). |
|
|
|
|
|
4(d) |
|
Form of Zero Coupon Note with optional redemption provision (incorporated by reference to Exhibit 4(d) of the Registrant's Registration Statement Under the Securities Act of 1933 on Form S-3
(File No. 333-162791), filed on October 30, 2009). |
|
|
|
|
|
4(e) |
|
Form of Variable Rate Note with optional redemption and repayment provisions (incorporated by reference to Exhibit 4(e) of the Registrant's Registration Statement Under the Securities Act of 1933 on Form S-3
(File No. 333-162791), filed on October 30, 2009). |
|
|
|
|
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4(f) |
|
Form of Extendible Note with optional redemption and repayment provisions (incorporated by reference to Exhibit 4(f) of the Registrant's Registration Statement Under the Securities Act of 1933 on Form S-3
(File No. 333-162791), filed on October 30, 2009). |
|
|
|
|
|
4(g) |
|
Form of Fixed Rate Medium-Term Note (incorporated by reference to Exhibit 4(g) of the Registrant's Registration Statement Under the Securities Act of 1933 on Form S-3 (File No. 333-162791), filed on
October 30, 2009). |
|
|
|
|
|
4(h) |
|
Form of Floating Rate Medium-Term Note (incorporated by reference to Exhibit 4(h) of the Registrant's Registration Statement Under the Securities Act of 1933 on Form S-3 (File No. 333-162791), filed on
October 30, 2009). |
|
|
|
|
|
4(i) |
|
Form of Supplemental Indenture providing for an additional trustee (incorporated by reference to Exhibit 4(i) of the Registrant's Registration Statement Under the Securities Act of 1933 on Form S-3
(File No. 333-162791), filed on October 30, 2009). |
|
|
|
|
II-7
Table of Contents
|
|
|
|
Exhibit |
|
Description |
|
4(j) |
|
Subordinated Indenture dated as of August 1, 2007, between the Registrant and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4(j) of the Registrant's Registration Statement Under
the Securities Act of 1933 on Form S-3 (File No. 333-162791), filed on October 30, 2009). |
|
|
|
|
|
4(k) |
|
Senior Indenture dated as of August 1, 2007, between the Registrant and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4(k) of the Registrant's Registration Statement Under the
Securities Act of 1933 on Form S-3 (File No. 333-162791), filed on October 30, 2009). |
|
|
|
|
|
4(l) |
** |
Form of Deposit Agreement, including form of Depositary Receipt. |
|
|
|
|
|
4(m) |
** |
Form of Warrant Agreement for Common Shares and Preferred Shares (including form of Warrant Certificates). |
|
|
|
|
|
4(n) |
** |
Form of Warrant Agreement for Debt Securities (including form of Warrant Certificates). |
|
|
|
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|
4(o) |
** |
Form of Currency Warrant Agreement (including form of Currency Warrant). |
|
|
|
|
|
4(p) |
** |
Form of Stock-Index Warrant Agreement. |
|
|
|
|
|
4(q) |
** |
Form of Warrant Agreement for Other Stock (including form of Warrant Certificate). |
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|
|
|
|
4(r) |
|
Form of Common Share Certificate (incorporated by reference to Exhibit 4 to the Registrant's Registration Statement on Form 8-A/A Amendment No. 1 (File No. 1-7657), filed on June 12,
2000). |
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|
|
|
|
5 |
* |
Opinion and consent of Cleary Gottlieb Steen & Hamilton LLP. |
|
|
|
|
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12 |
* |
Computation in support of ratio of earnings to fixed charges and ratio of earnings to combined fixed charges and preferred share dividends. |
|
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|
|
23(a) |
* |
Consent of Cleary Gottlieb Steen & Hamilton LLP (included in Exhibit 5). |
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|
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23(b) |
* |
Consent of PricewaterhouseCoopers LLP. |
|
|
|
|
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24(a) |
* |
Power of Attorney. |
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|
|
|
|
25(a) |
* |
Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of The Bank of New York Mellon (Senior Debt Securities). |
|
|
|
|
|
25(b) |
* |
Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of the Bank of New York Mellon (Subordinated Debt Securities). |
- *
- Filed
herewith.
- **
- To
be filed prior to or in connection with the first offering contemplated by such agreement as an exhibit to a Current Report on Form 8-K and
incorporated herein by reference.
II-8
Exhibit 1(a)
AMERICAN EXPRESS COMPANY
DEBT SECURITIES
UNDERWRITING AGREEMENT BASIC PROVISIONS
To the Representative or
Representatives named in the
Terms Agreement referred to
below
American Express Company, a New York corporation (the Company), may issue and sell from time to time series of its debt securities registered under the registration statement referred to in Section 1(a) hereof. Such debt securities may have varying designations, denominations, currencies, interest rates and payment dates, maturities, redemption provisions and selling prices. The basic provisions set forth herein are intended to be incorporated by reference in a terms agreement of the type referred to below relating to the series of debt securities to be issued and sold by the Company pursuant thereto (the Securities) to the firm or firms named therein (each an Underwriter and together the Underwriters) for whom you (the Representatives) are acting as representatives. The Securities will be issued under an indenture, dated as of August 1, 2007, between the Company and The Bank of New York Mellon (formerly known as The Bank of New York), as trustee (such trust company, or such other trustee as may be named for the Securities, being hereafter referred to as the Trustee), as it may be supplemented or amended by one or more indentures supplemental thereto, the Indenture).
The obligation of the Underwriters to purchase, and the Company to sell, the Securities is evidenced by the terms agreement (the Terms Agreement) substantially in the form specified in Exhibit I hereto delivered at the time the Company determines to sell the Securities. The Terms Agreement specifies the firm or firms that will be Underwriters, the principal amount of the Securities to be purchased by each Underwriter, the purchase price to be paid by the Underwriters for the Securities, the public offering price, if any, of the Securities, whether the Underwriters are authorized to solicit institutional investors to purchase Securities pursuant to Delayed Delivery Contracts (as defined in Section 3(b)), certain terms thereof and the Underwriters compensation therefor and any terms of the Securities not otherwise specified in the Indenture (including, but not limited to, designations, denominations, currencies, interest rates and payment dates, maturities, redemption provisions and sinking fund requirements). The Terms Agreement specifies any details of the terms of the offering that should be reflected in the Final Prospectus. The Terms Agreement, together with the provisions hereof incorporated therein by reference, is herein referred to as this Agreement.
Any reference herein to the Registration Statement, the Base Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 that were filed under the Exchange Act on or before the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the case may
be; and any reference herein to the terms amend, amendment or supplement with respect to the Registration Statement, the Base Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference. Certain terms used herein are defined in Section 20 hereof.
1. Representations and Warranties. The Company represents and warrants to, and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the Act and has prepared and filed with the Commission an automatic shelf registration statement, as defined in Rule 405. Such Registration Statement, including any amendments thereto filed prior to the Execution Time, became effective upon filing. The Company may have filed with the Commission, as part of an amendment to the Registration Statement or pursuant to Rule 424(b), one or more Preliminary Final Prospectuses. The Company will file with the Commission a final prospectus supplement relating to the Securities in accordance with Rule 424(b). As filed, such final prospectus supplement shall contain all information required by the Act and the rules thereunder, and, except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the Base Prospectus and any Preliminary Final Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein. The Registration Statement, at the Execution Time, meets the requirements set forth in Rule 415(a)(1)(x).
(b) On each Effective Date, the Registration Statement did, and when the Final Prospectus is first filed (if required) in accordance with Rule 424(b) and on the Closing Date (as defined herein), the Final Prospectus (and any supplement thereto) will, comply in all material respects with the applicable requirements of the Act, the Exchange Act and the Trust Indenture Act and the respective rules thereunder; on each Effective Date and at the Execution Time, the Registration Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; on the Effective Date and on the Closing Date, the Indenture did or will comply in all material respects with the applicable requirements of the Trust Indenture Act and the rules thereunder; and on the date of any filing pursuant to Rule 424(b), as of its date and on the Closing Date, the Final Prospectus (together with any supplement thereto) will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to (i) that part of the Registration Statement that shall constitute the Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of the Trustee or (ii) the information contained in or omitted from any document in reliance upon and in conformity
2
with information furnished in writing to the Company by or on behalf of any Underwriter through the Representatives specifically for inclusion in such document.
(c) As of the Applicable Time, the Disclosure Package, when considered as a whole, did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Disclosure Package based upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representatives specifically for inclusion therein.
(d) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Sections 13 or 15 (d) of the Exchange Act or form of prospectus), (iii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c)) made any offer relating to the Securities in reliance on the exemption in Rule 163 and (iv) at the Execution Time (with such date being used as the determination date for purposes of this clause (iv)), the Company was or is (as the case may be) a Well-Known Seasoned Issuer. The Company agrees to pay the fees required by the Commission relating to the Securities within the time required by Rule 456(b)(1) without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r).
(e) (i) At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Securities and (ii) as of the Execution Time (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an ineligible issuer (as defined in Rule 405) (Ineligible Issuer), without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an Ineligible Issuer.
(f) Each Issuer Free Writing Prospectus does not include any information that conflicts with the information contained in the Registration Statement, including any document incorporated therein and any prospectus supplement deemed to be a part thereof that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from the Disclosure Package based upon and in conformity with written information furnished in writing to the Company by any Underwriter through the Representatives specifically for inclusion therein.
The consolidated historical financial statements and schedules of the Company included in each Preliminary Final Prospectus present fairly, and the consolidated historical financial statements and schedules of the Company included in the Final Prospectus will present fairly, in all material respects the financial condition, the results of operations and cash flows of the Company and its consolidated subsidiaries as of the dates and for the periods indicated, comply as to form with the applicable accounting requirements of the Act and have been prepared in conformity with generally accepted accounting principles, applied on a consistent basis throughout the periods involved (except as otherwise noted therein).
3
The interactive data in the eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance with the Commissions rules and guidelines applicable thereto.
(g) PricewaterhouseCoopers LLP are independent public accountants with respect to the Company within the meaning of the Act and the applicable published rules and regulations thereunder.
(h) The Indenture and the Securities have been duly authorized; the Indenture has been duly qualified under the Trust Indenture Act; and the Indenture, when duly executed and delivered, and the Securities, when duly executed, authenticated, issued and delivered as contemplated hereby, by the Indenture and by the Delayed Delivery Contracts (as defined in Section 3(b)), if any, will constitute valid and legally binding obligations of the Company in accordance with their respective terms subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights generally and to general principles of equity regardless of whether such enforceability is considered in a proceeding in equity or at law; and the Securities and the Indenture conform in all material respects to the descriptions thereof in the Base Prospectus and any applicable Preliminary Final Prospectus or Final Prospectus.
(i) Subsequent to the respective dates as of which information contained in the Registration Statement, the Base Prospectus or any Preliminary Final Prospectus is given, except as disclosed in the Disclosure Package, (i) there has not been any material adverse change in the condition (financial or other), earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, (ii) neither the Company nor any of its subsidiaries has entered into any transaction not in the ordinary course of business material to the Company and its subsidiaries, taken as a whole, (iii) neither the Company nor any of its subsidiaries has incurred any liabilities or obligations, direct or contingent, not in the ordinary course of business that are material in relation to the Company and its subsidiaries, taken as a whole, and (iv) there has been no change in the Companys internal control over financial reporting that has materially affected, or is likely to materially affect, the Companys internal control over financial reporting.
(j) Each of the Company and its subsidiaries has been duly incorporated or otherwise constituted and is validly existing as a corporation or other legal entity in good standing under the laws of the jurisdiction in which it is chartered or organized with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Disclosure Package, each Preliminary Final Prospectus and the Final Prospectus; and each of the Company and its subsidiaries is duly qualified to do business as a foreign corporation or other entity and is in good standing under the laws of each jurisdiction that, in the opinion of counsel for the Company, requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries, taken as a whole.
4
(k) Neither the issuance or sale of the Securities, nor the execution, delivery and performance of this Agreement, the Indenture and any Delayed Delivery Contracts (as defined in Section 3(b)) and the consummation of any other transactions contemplated herein or in any Delayed Delivery Contracts will conflict with, or result in a breach or violation of, or result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Company or any of its subsidiaries pursuant to (i) the charter or by-laws or other constitutive documents of the Company or any of its subsidiaries, (ii) the terms of the Indenture or any other indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company or any of its subsidiaries is a party or bound or to which its or their property is subject, or (iii) to the best knowledge of the Company, any statute, law, rule, regulation, judgment, order or decree applicable to the Company, any of its subsidiaries or any of their respective properties of any court, regulatory body, administrative agency, governmental agency, arbitrator or other authority having jurisdiction over the Company or any of its subsidiaries or any of its or their properties, except, in the case of (ii) or (iii), where such conflict, breach or imposition of any lien, charge or encumbrance would not, individually or in the aggregate, have a material adverse effect on the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries, taken as a whole.
(l) To the best knowledge of the Company, no material action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or its or their property is pending or threatened that (i) could reasonably be expected to have a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby or (ii) could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Disclosure Package.
(m) Neither the Company nor any of American Express Banking Corp., American Express Travel Related Services Company, American Express Bank, FSB, American Express Centurion Bank, American Express Credit Corporation, American Express Limited and American Express International (the Principal Subsidiaries) is in violation or default of (i) any provision of its charter or bylaws or other constitutive documents, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or such Principal Subsidiary or any of its properties, as applicable, except, in the case of (ii) or (iii), where such violation or default would not, individually or in the aggregate, have a material adverse effect on the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries, taken as a whole.
(n) No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated
5
herein, except such as have been obtained under the Act and the Trust Indenture Act and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters in the manner contemplated herein.
(o) Except as may be permitted under Regulation M of the Exchange Act, the Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, any stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
(p) The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with managements general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with managements general or specific authorization; (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) the interactive data in the eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement fairly presents the information called for in all material respects and is prepared in accordance with the Commissions rules and guidelines applicable thereto.
(q) There is and has been no failure on the part of the Company or any of the Companys directors or officers, in their capacities as such, to comply with any provision of the Sarbanes Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the Sarbanes Oxley Act), including Section 402 related to loans and Sections 302 and 906 related to certifications.
(r) The Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, any stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
(s) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof, will not be an investment company, as such term is defined in the Investment Company Act.
(t) The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Companys principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective.
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(u) None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by the Company or its subsidiaries of the Foreign Corrupt Practices Act of 1977 (the FCPA), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any foreign official (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith. No part of the proceeds of the offering will be used, directly or indirectly, in violation of the FCPA.
(v) The operations of the Company are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and the rules and regulations thereunder and any applicable related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the Money Laundering Laws) and no action, suit or proceeding by or before any governmental entity involving the Company with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(w) None of the Company, any of its subsidiaries, or, to the knowledge of the Company, any director or officer of the Company or any of its subsidiaries is an individual or entity (Person) currently the subject or target of any sanctions administered or enforced by the United States government, including, without limitation, the U.S. Department of the Treasurys Office of Foreign Assets Control, the United Nations Security Council, the European Union, or Her Majestys Treasury (collectively, Sanctions), nor is the Company located, organized or resident in a country or territory that is the subject of comprehensive Sanctions generally prohibiting dealings with such country or territory (presently Cuba, Iran, North Korea, Sudan, or Syria (each, a Sanctioned Country)); and the Company will not directly or indirectly use the proceeds of the sale of the Notes, or lend, contribute or otherwise make available such proceeds to any subsidiaries, joint venture partners or other Person, to fund any activities of or business with any Person, that, at the time of such funding, is the subject of Sanctions, or in any country or territory that, at the time of such funding, is a Sanctioned Country, in either case, in any manner that will result in a violation by any Person (including any Person participating in the transaction, whether as underwriter, agent, advisor, investor or otherwise) of Sanctions.
Any certificate signed by any officer of the Company and delivered to the Underwriters or Counsel for the Underwriters in connection with the offering of the Securities
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shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company, at the purchase price set forth in the Terms Agreement the principal amount of the Securities set forth opposite such Underwriters name in the Terms Agreement.
3. Delivery and Payment.
(a) Delivery of and payment for the Securities shall be made on the date and at the time specified in the Terms Agreement or at such time on such later date not more than three Business Days thereafter as the Representatives and the Company may determine (such date and time of delivery and payment for the Securities being herein called the Closing Date). The Securities shall be in global or definitive form and in such denominations and registered in such names as you may require upon at least two business days notice prior to the Closing Date. Delivery of the Securities shall be made by the Company to the Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. Delivery of the Securities shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct.
(b) If so authorized in the Terms Agreement, the Underwriters may solicit offers from investors of the types set forth in the Base Prospectus or any Preliminary Final Prospectus to purchase Securities from the Company pursuant to delayed delivery contracts (Delayed Delivery Contracts). Such contracts shall be substantially in the form of Exhibit II hereto but with such changes therein as the Company may approve. Securities to be purchased pursuant to Delayed Delivery Contracts are herein called Contract Securities. When Delayed Delivery Contracts are authorized in the Terms Agreement, the Company will enter into a Delayed Delivery Contract in each case where a sale of Contract Securities arranged through you has been approved by the Company but, except as the Company may otherwise agree, such Delayed Delivery Contracts must be for at least the minimum principal amount of Contract Securities set forth in the Terms Agreement, and the aggregate principal amount of Contract Securities may not exceed the amount set forth in the Terms Agreement. The Company will advise you not later than 9:30 A.M., New York City time, on the third full business day preceding the Closing Date (or at such later time as you may otherwise agree) of the sales of the Contract Securities that have been so approved. You and the other Underwriters will not have any responsibility in respect of the validity or performance of Delayed Delivery Contracts.
(c) The amount of Securities to be purchased by each Underwriter as set forth in the Terms Agreement shall be reduced by an amount that shall bear the same proportion to the total principal amount of Contract Securities as the principal amount of Securities set forth opposite the name of such Underwriter bears to the total principal amount of Securities set
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forth in the Terms Agreement, except to the extent that you determine that such reduction shall be otherwise than in such proportion and so advise the Company; provided, however, that the total principal amount of Securities to be purchased by all Underwriters shall be the total principal amount of Securities set forth in the Terms Agreement less the aggregate principal amount of Contract Securities.
4. Offering by Underwriters. It is understood that the several Underwriters propose to offer the Securities for sale to the public as set forth in the Final Prospectus.
5. Agreements of the Company. The Company agrees with the several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the Company will not file any amendment of the Registration Statement or supplement unless the Company has furnished you a copy for your review prior to filing and will not file any such proposed amendment or supplement to which you reasonably object. The Company will cause the Final Prospectus, properly completed, and any supplement thereto to be filed in a form approved by the Representatives with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed. The Company will promptly advise the Representatives (1) when the Final Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b), (2) when, prior to termination of the offering of the Securities, any amendment to the Registration Statement shall have been filed and become effective, (3) of any request by the Commission or its staff for any amendment of the Registration Statement, or for any supplement to the Final Prospectus or for any additional information, (4) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any notice that would prevent its use or the institution or threatening of any proceeding for that purpose and (5) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Company will promptly use its best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or prevention and, upon such issuance, occurrence or prevention, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or prevention, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its best efforts to have such amendment or new registration statement declared effective as soon as practicable.
(b) To prepare a final term sheet, containing solely a description of the Securities, in a form approved by the Representatives and to file such term sheet pursuant to Rule 433(d) within the time required by such Rule.
(c) Prior to the termination of the offering of the Securities, if there occurs an event or development as a result of which the Disclosure Package or any Issuer Free Writing Prospectus would include an untrue statement of a material fact or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will notify promptly the Representatives so that any use of the Disclosure Package or any Issuer Free Writing
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Prospectus may cease until it is amended or supplemented, and will amend or supplement, at the expense of the Company, the Disclosure Package or any such Issuer Free Writing Prospectus, as the case may be, to correct any such misstatements or omissions and supply any amendment or supplement to you in such quantities as you may reasonably request.
(d) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), any event occurs as a result of which the Final Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or if it shall be necessary to amend the Registration Statement, file a new registration statement or supplement the Final Prospectus to comply with the Act or the Exchange Act or the respective rules thereunder, including in connection with use or delivery of the Final Prospectus, the Company promptly will (1) notify the Representatives of such event, (2) prepare and file with the Commission, subject to the second sentence of paragraph (a) of this Section 5, an amendment or supplement or new registration statement that will correct such statement or omission or effect such compliance, (3) use its best efforts to have any amendment to the Registration Statement or new registration statement declared effective as soon as practicable in order to avoid any disruption in use of the Final Prospectus and (4) supply any supplemented Final Prospectus to you in such quantities as you may reasonably request.
(e) As soon as practicable, the Company will make generally available to its security holders and to the Representatives an earnings statement or statements of the Company and its subsidiaries (which need not be audited) covering a 12-month period beginning after the date on which the Final Prospectus is filed pursuant to Rule 424 under the Act that will satisfy the provisions of Section 11(a) of the Act and Rule 158.
(f) The Company will furnish to the Underwriters copies of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), as many copies of each Preliminary Final Prospectus, the Final Prospectus and each Issuer Free Writing Prospectus and any supplement thereto as the Underwriters may reasonably request.
(g) The Company will arrange, if necessary, for the qualification of the Securities for sale under the laws of such jurisdictions as the Representatives may designate, will maintain such qualifications in effect so long as required for the distribution of the Securities and will pay any fee of the Financial Industry Regulatory Authority, Inc. (FINRA), in connection with its review of the offering; provided, however, that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the Securities, in any jurisdiction where it is not now so subject.
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(h) The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay all expenses incident to the performance of its obligations hereunder, including, without limiting the generality of the foregoing, all costs, taxes and expenses incident to the issue and delivery of the Securities, all fees and expenses of the Companys counsel and accountants, and all costs and expenses incident to the preparing, printing, filing and distributing of all documents relating to the offering, and will reimburse the Underwriters for any expenses and disbursements (including fees and disbursements of counsel not exceeding the amount, if any, specified in the Terms Agreement) incurred by them in connection with the matters referred to in Section 5(g) hereof and the preparation of memoranda relating thereto, for any filing fee of FINRA relating to the Securities, and for any fees charged by investment rating agencies for rating the Securities. If the sale of Securities provided for in this Agreement is not consummated by reason of any failure, refusal or inability on the part of the Company to perform any agreement on its part to be performed, or because any other condition of the Underwriters obligations hereunder required to be fulfilled by the Company is not fulfilled, the Company will reimburse the Underwriters for all reasonable out-of-pocket disbursements (including fees and disbursements of counsel) incurred by the Underwriters in connection with the proposed purchase and sale of the Securities.
(i) If so stated in the Terms Agreement, the Company will use its best efforts to cause an application for the listing of the Securities on The New York Stock Exchange, Inc. or listing or quotation on such other securities exchange or automatic quotation system specified in the Terms Agreement and for the registration of the Securities under the Exchange Act to become effective.
(j) The Company agrees that, unless it obtains the prior written consent of the Representatives, and each Underwriter, severally and not jointly, agrees with the Company that, unless it has obtained or will obtain, as the case may be, the prior written consent of the Company, it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a free writing prospectus (as defined in Rule 405) required to be filed by the Company with the Commission or retained by the Company under Rule 433, other than a free writing prospectus containing the information contained in the final term sheet prepared and filed pursuant to Section 5(b) hereto; provided, however, that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses included in Schedule II to the Terms Agreement. Any such free writing prospectus consented to by the Representatives or the Company is hereinafter referred to as a Permitted Free Writing Prospectus. The Company agrees that (x) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.
(k) The Company will not, without your consent, offer or sell any debt securities denominated in the currency in which the Securities are denominated having a maturity of more than one year (except under prior contractual commitments or pursuant to bank credit agreements) other than the Securities or publicly announce an intention to effect any such
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transaction during the period beginning on the Execution Time and ending on the business day immediately following the Closing Date.
(l) The Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
6. Agreements of the Underwriters. The Underwriters agree that they will comply in all material respects with the selling restrictions set forth in the any Preliminary Final Prospectus and any Final Prospectus under the caption Underwriting Selling Restrictions.
7. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters to purchase the Securities shall be subject to the accuracy, in all material respects, of the representations and warranties on the part of the Company contained herein as of the Execution Time and the Closing Date; to the accuracy, in all material respects, of the statements of the Company made in any certificates pursuant to the provisions hereof; to the performance by the Company in all material respects of its obligations hereunder and to the following additional conditions:
(a) The Final Prospectus, and any supplement thereto, shall have been filed in the manner and within the time period required by Rule 424(b); the final term sheet contemplated by Section 5(b) hereto, and any other material required to be filed by the Company pursuant to Rule 433(d) under the Act, shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; and no stop order suspending the effectiveness of the Registration Statement or any notice that would prevent its use shall have been issued and no proceedings for that purpose shall have been instituted or threatened.
(b) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the Final Prospectus (exclusive of any supplement thereto), there shall not have been (i) any material change or decrease specified in the letter or letters referred to in paragraph (g) of this Section 7; (ii) any material change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto) or (iii) any decrease in the rating of any of the Companys debt securities by any nationally recognized statistical rating organization (as defined for purposes of Section 3(a)(62) under the Exchange Act) or any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change the effect of which, in any case referred to in clause (i), (ii) or (iii) above, in the judgment of the Representatives, makes it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Registration Statement (exclusive of any amendment thereof), the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto).
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(c) The Company shall have requested and caused counsel for the Company, to have furnished to the Representatives its opinion, dated the Closing Date and addressed to the Representatives, to the effect that:
(i) The Company and each Principal Subsidiary has been duly incorporated and is validly existing and in good standing under the laws of its jurisdiction of incorporation. The Company and each Principal Subsidiary has the corporate power necessary to own its properties and conduct the businesses in which they are engaged as described in the Pricing Prospectus and the Final Prospectus; and except as may be disclosed in the Pricing Prospectus and the Final Prospectus, all outstanding shares of capital stock of each of the Principal Subsidiaries are owned by the Company directly, or indirectly through wholly-owned subsidiaries, free and clear of any lien, pledge and encumbrance or, to the best of such counsels knowledge, any claim of any third party, except as permitted by the Indenture;
(ii) The Indenture has been duly authorized, executed and delivered, has been duly qualified under the Trust Indenture Act, and constitutes a legal, valid and binding instrument enforceable against the Company in accordance with its terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law, and to an implied covenant of good faith and fair dealing); and the Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters pursuant to this Agreement (and, in the case of any Contract Securities, pursuant to the Delayed Delivery Contracts with respect thereto), will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture;
(iii) The Indenture conforms in all material respects to the description thereof in the Registration Statement, the Base Prospectus and any Preliminary Final Prospectus and, at the Closing Date, the Indenture will conform in all material respects to the description thereof in the Final Prospectus;
(iv) The Registration Statement has become effective under the Act; any required filing of the Base Prospectus, any Preliminary Final Prospectus and the Final Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued, no proceedings for that purpose have been instituted or threatened, and the Registration Statement and the Final Prospectus (other than the financial statements and other financial and statistical information contained therein and Exhibit 25, as to which such counsel need express no opinion) comply as to form in all material respects with the applicable requirements of the Act, the Exchange Act and the Trust Indenture Act and the respective rules thereunder; and such counsel has no reason to believe that on the
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Effective Date the Registration Statement contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Final Prospectus as of its date and on the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (in each case, including the documents incorporated by reference therein but excluding than the financial statements or schedules and other financial and statistical information contained therein, as to which such counsel need express no opinion) and the statements included or incorporated by reference in the Final Prospectus under the heading Description of Debt Securities and any similar headings, insofar as such statements summarize documents specifically discussed therein, provide a fair summary of such documents;
(v) No order directed to any document incorporated by reference in the Final Prospectus has been issued and, to the knowledge of such counsel, no challenge has been made to the accuracy or adequacy of any such document, except as described in the Registration Statement;
(vi) Such counsel has no reason to believe that the documents specified in a schedule to such counsels letter, consisting of those included in the Disclosure Package and the final term sheet prepared and filed pursuant to Section 5(b) hereto, when taken together as a whole, at the Applicable Time contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of circumstances under which they were made, not misleading (including the documents incorporated by reference therein but excluding the financial statements or schedules and other financial and statistical information contained therein, as to which such counsel need express no opinion);
(vii) Such counsel does not know of any contracts or other documents which are required to be filed as exhibits to the Registration Statement by the Act or by the rules and regulations of the Commission thereunder, or which are required to be filed by the Exchange Act or the Trust Indenture Act or the rules and regulations of the Commission thereunder as exhibits to any document incorporated by reference in the Final Prospectus, which have not been filed as exhibits to the Registration Statement or to such document or incorporated therein by reference as permitted by such rules and regulations of the Commission;
(viii) This Agreement and any Delayed Delivery Contracts have been duly authorized, executed and delivered by the Company;
(ix) No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated herein, except such as have been obtained under the Act and the Trust Indenture Act, and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters in the manner contemplated in this Agreement, in any Delayed Delivery
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Contract and in the Registration Statement and the Final Prospectus and such other approvals (specified in such opinion) as have been obtained;
(x) To the best of such counsels knowledge, neither the Company nor any of its Principal Subsidiaries is in violation of its corporate charter or by-laws, or, to the best of such counsels knowledge, in default under any agreement, indenture or instrument the effect of any of which would be material to the Company and its subsidiaries taken as a whole;
(xi) Neither the execution and delivery of the Indenture, the issue and sale of the Securities, nor the consummation of any other of the transactions herein contemplated nor the fulfillment of the terms hereof will conflict with, result in a breach or violation of, or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to (i) the charter or by-laws of the Company or any of its Principal Subsidiaries, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument known to such counsel to which the Company or any of its Principal Subsidiaries is a party or bound or to which its or their property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Company, any of its Principal Subsidiaries or any of their respective properties of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or its Principal Subsidiaries or any of its or their properties (but such counsel need not express an opinion relating to the United States federal securities laws or any state securities or Blue Sky laws), except, in the case of (ii) and (iii), where any such breach, violation or default would not be material to the Company and its subsidiaries, taken as a whole;
(xii) Except as required by the Act, the Exchange Act, the Trust Indenture Act and applicable state securities laws, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance of this Agreement, any Delayed Delivery Contract and the Indenture, except as has been duly obtained or made and is in full force and effect;
(xiii) Such counsel does not know of any litigation or any governmental proceeding pending or threatened against the Company or any of its subsidiaries which would affect the subject matter of this Agreement or the Indenture or is required to be disclosed in the Registration Statement which is not disclosed and correctly summarized therein; and
(xiv) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof, will not be an investment company, as such term is defined in the Investment Company Act.
In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the State of New York, or the federal laws
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of the United States, to the extent such counsel deems proper and specified in such opinion, upon the opinion of other counsel of good standing whom such counsel believes to be reliable and who are satisfactory to Counsel for the Underwriters and (B) as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers of the Company and public officials. References to the Final Prospectus in this paragraph (c) shall also include any supplements thereto at the Closing Date.
(d) You shall have received from Counsel for the Underwriters such opinion or opinions dated the Closing Date with respect to the issuance and sale of the Securities, the Indenture, the Registration Statement, the Disclosure Package, the Final Prospectus (together with any supplement thereto) and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Representatives a certificate of the Company, signed by the Chairman of the Board of Directors, the President or any Vice President and by the Treasurer or an Assistant Treasurer, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Final Prospectus, the Disclosure Package and any supplements or amendments thereto and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date and the Company has complied in all material respects with all the agreements and satisfied, in all material respects, all the conditions on its part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no proceedings for that purpose have been instituted or, to the Companys knowledge, threatened; and
(iii) since the date of the most recent financial statements included or incorporated by reference in the Final Prospectus (exclusive of any supplement thereto), there has been no material adverse effect on the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto).
(f) The Company shall have requested and caused PricewaterhouseCoopers LLP to have furnished to the Representatives, at the Execution Time and at the Closing Date, letters (which may refer to letters previously delivered to one or more of the Representatives), dated respectively as of the Execution Time and as of the Closing Date, in form and substance satisfactory to the Representatives, confirming the matters set forth in Exhibit III hereto. Additionally, if any of the audited financial statements or financial statement schedules included or incorporated by reference in the Registration Statement
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and the Final Prospectus have not been audited by PricewaterhouseCoopers LLP, the Company shall have requested and caused such other independent public accountants as have audited such financial statements or financial statement schedules to have furnished to the Representatives, at the Execution Time and at the Closing Date, letters (which may refer to letters previously delivered to one or more of the Representatives), dated respectively as of the Execution Time and as of the Closing Date, in form and substance satisfactory to the Representatives, confirming those matters set forth in Exhibit III that are applicable to the audit engagement of such other independent public accountants. References to the Final Prospectus in the letters furnished under this paragraph (f)will include any supplement thereto at the date of the letter.
(g) Prior to the Closing Date, the Company shall have furnished to you such further information, certificates and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 7 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in writing.
8. Reimbursement of Underwriters Expenses. If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 11 hereof or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Company will reimburse the Underwriters severally through the Representatives for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities.
9. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter, the directors, officers, employees and agents of each Underwriter and each person who controls any Underwriter within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement for the registration of the Securities as originally filed or in any amendment thereof, or in the Base Prospectus, any Preliminary Final Prospectus, the Final Prospectus, any Issuer Free Writing Prospectus, any issuer information filed or required to be filed pursuant to Rule 433(d) or the information contained in the final term sheet required to be prepared and filed pursuant to Section 5(b) hereto, or in any amendment thereof or
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supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon (x) any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representatives specifically for inclusion therein or (y) that part of the Registration Statement that shall constitute the Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Company by or on behalf of such Underwriter through the Representatives specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability that any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 9 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 9, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying partys choice at the indemnifying partys expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying partys election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed
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counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party.
(d) In the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 9 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Underwriters severally agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively Losses) to which the Company and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by the Underwriters on the other from the offering of the Securities; provided, however, that in no case shall any Underwriter (except as may be provided in any agreement among underwriters relating to the offering of the Securities) be responsible for any amount in excess of the underwriting discount or commission applicable to the Securities purchased by such Underwriter hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Underwriters severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and of the Underwriters on the other in connection with the statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by it, and benefits received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Final Prospectus. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company on the one hand or the Underwriters on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation that does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each
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person who controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).
(e) The obligations of the Company under this Section 8 shall be in addition to any liability that the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act or the Exchange Act; and the obligations of the Underwriters under this Section 9 shall be in addition to any liability that the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each director of the Company (including any person who, with his consent, is named in the Registration Statement as about to become a director of the Company), to each officer of the Company who has signed the Registration Statement and to each person, if any, who controls the Company within the meaning of the Act or the Exchange Act.
10. Default by an Underwriter. If any one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions that the principal amount of Securities set forth opposite their names in the Terms Agreement bears to the aggregate principal amount of Securities set forth opposite the names of all the remaining Underwriters) the Securities that the defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the event that the aggregate principal amount of Securities that the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate principal amount of Securities set forth in the Terms Agreement, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if arrangements satisfactory to you and the Company for the purchase of such Securities by other persons are not made within 36 hours after such failure, this Agreement will terminate without liability to any non-defaulting Underwriter or the Company. In the event of a default by any Underwriter as set forth in this Section 9, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the Representatives shall determine in order that the required changes in the Registration Statement and the Final Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company and any non-defaulting Underwriter for damages occasioned by its default hereunder.
11. Termination. This Agreement shall be subject to termination by the Representatives, by notice given to the Company prior to delivery of and payment for the Securities, if at any time prior to such time (i) trading in the Companys common stock shall have been suspended by the Commission or the New York Stock Exchange or trading in securities generally shall have been suspended or materially limited or minimum prices shall have been established on such Exchange, (ii) a banking moratorium shall have been declared either by federal or New York State authorities or a material disruption in securities settlement or clearance services in the United States or (iii) there shall have occurred any outbreak of major hostilities in which the United States is involved, declaration by the United States of a national
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emergency or war, or other substantial national or international calamity or crisis the effect of which on financial markets is such as to make it, in the reasonable judgment of the Representatives, impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Final Prospectus (exclusive of any supplement thereto). Any such termination shall be without liability of any party to any other party except that the provisions of Section 5(h) and Section 9 shall at all times be effective. If you elect to terminate this Agreement as provided in this Section 10, the Company shall be notified promptly by you by telephone or facsimile, confirmed by letter.
12. Representations and Indemnities to Survive. The respective agreements, warranties, indemnities and other statements of the Company or its officers, and of the Underwriters, set forth in or made pursuant to this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of any Underwriter or any controlling persons referred to in Section 9 hereof, and will survive delivery of and payment for the Securities.
13. Notices. All notices or communications hereunder shall be in writing and if sent to the Representatives will be mailed, delivered or telefaxed to you at your address set forth for that purpose in the Terms Agreement, or if sent to the Company, will be mailed, delivered or telefaxed (to fax no. +1 212 640 2409) and confirmed to it at American Express Company, 200 Vesey Street, New York, New York 10285, Attention of the Treasurer. Any party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.
14. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Section 9 hereof, and no other person will have any right or obligation hereunder.
15. No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and sale of the Securities pursuant to this Agreement is an arms-length commercial transaction between the Company, on the one hand, and the Underwriters and any affiliate through which it may be acting, on the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the Company and (c) the Companys engagement of the Underwriters in connection with the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any of the Underwriters has advised or is currently advising the Company on related or other matters). The Company agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.
16. Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any of them, with respect to the subject matter hereof.
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17. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.
18. Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement.
19. Headings. The section headings used herein are for convenience only and shall not affect the construction hereof.
20. Definitions. The terms that follow, when used in this Agreement, shall have the meanings indicated.
Act shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
Applicable Time shall mean [ ], New York City time, on the date of the Terms Agreement.
Base Prospectus shall mean the prospectus referred to in paragraph 1(a) above contained in the Registration Statement at the Effective Date.
Business Day shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City.
Commission shall mean the Securities and Exchange Commission.
Counsel for the Underwriters shall mean [ ].
Disclosure Package shall mean (i) the Base Prospectus, (ii) the Preliminary Final Prospectus used most recently prior to the Execution Time, (iii) the Issuer Free Writing Prospectus identified in Schedule II of the Terms Agreement (excluding the treasury benchmark, treasury price, treasury yield, re-offer spread to benchmark, and re-offer yield included therein) and (iv) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package.
Effective Date shall mean each date and time that the Registration Statement and any post-effective amendment or amendments thereto became or become effective.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
Execution Time shall mean the date and time that the Terms Agreement is executed and delivered by the parties hereto.
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Final Prospectus shall mean the prospectus supplement relating to the Securities that was first filed pursuant to Rule 424(b) after the Execution Time, together with the Base Prospectus.
Free Writing Prospectus shall mean a free writing prospectus, as defined in Rule 405.
Investment Company Act shall mean the Investment Company Act of 1940, as amended.
Issuer Free Writing Prospectus shall mean an issuer free writing prospectus, as defined in Rule 433.
Preliminary Final Prospectus shall mean any preliminary prospectus supplement to the Base Prospectus that describes the Securities and the offering thereof and is used prior to filing of the Final Prospectus, together with the Base Prospectus.
Registration Statement shall mean the registration statement referred to in paragraph 1(a)above, including exhibits and financial statements and any prospectus supplement relating to the Securities that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430B, as amended on each Effective Date and, in the event any post-effective amendment thereto becomes effective prior to the Closing Date, shall also mean such registration statement as so amended.
Rule 158, Rule 163, Rule 164, Rule 172, Rule 405, Rule 415, Rule 424, Rule 430B and Rule 433 refer to such rules under the Act.
Trust Indenture Act shall mean the Trust Indenture Act of 1939, as amended and the rules and regulations of the Commission promulgated thereunder.
Well-Known Seasoned Issuer shall mean a well-known seasoned issuer, as defined in Rule 405.
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EXHIBIT I
FORM OF TERMS AGREEMENT
Debt Securities
American Express Company
200 Vesey Street
New York, New York 10285
Attention: Treasurer
Dear Sirs:
We (the Representative(s)) understand that American Express Company, a New York corporation (the Company), proposes to issue and sell $ aggregate principal amount of its debt securities (the Securities). Subject to the terms and conditions set forth herein or incorporated by reference herein, the underwriters named in Schedule I hereto (the Underwriters) offer to purchase, severally and not jointly, the principal amount of Securities set forth therein opposite their respective names at % of the principal amount thereof, together with accrued interest, if any, thereon from , 20 to the Closing Date. The Closing Date shall be at 9:30 A.M. on , 20 at the offices of [ ].
The Securities shall have the terms set forth in Schedule II hereto.
All the provisions contained in the document entitled American Express CompanyDebt SecuritiesUnderwriting Agreement Basic Provisions and filed with the Commission on , 2015 (the Basic Provisions), a copy of which you have previously received, are herein incorporated by reference in their entirety and shall be deemed to be a part of this Terms Agreement, except as provided herein, to the same extent as if the Basic Provisions had been set forth in full herein. Terms defined in the Basic Provisions are used herein as therein defined.
Pursuant to Section 5(i) of the Basic Provisions, the Companys agreement to reimburse the Underwriters for expenses incurred in connection with the matters referred to in Section 5(h) thereof and the preparation of memoranda relating thereto will include fees and disbursements of counsel not in excess of $ . (The Securities will be listed on .)
Please accept this offer no later than oclock .M. on , 20 by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us, or by sending us a written acceptance in the following form:
We hereby accept your offer, set forth in the Terms Agreement, dated , 20 , to purchase the Securities on the terms set forth therein.
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Accepted: |
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American Express Company |
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SCHEDULE I
Underwriters |
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SCHEDULE II
(FORM OF FREE WRITING PROSPECTUSES INCLUDED IN THE DISCLOSURE PACKAGE)
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Interest Payment Dates: |
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Redemption Provisions: |
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Additional Terms: |
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(Insert any delayed delivery provisions for Securities) |
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EXHIBIT II
AMERICAN EXPRESS COMPANY
[Insert specific title of securities]*
DELAYED DELIVERY CONTRACT
[Insert date of initial public offering]*
American Express Company
c/o
Gentlemen:
The undersigned hereby agrees to purchase from American Express Company (hereinafter called the Company), and the Company agrees to sell to the undersigned, [If one delayed closing, insert the following: as of the date hereof, for delivery on (the Delivery Date)]
$
principal amount of the Companys [title of Securities] (the Securities), offered by the Companys prospectus relating thereto, receipt of a copy of which is hereby acknowledged, at a purchase price of % of the principal amount thereof plus accrued interest, if any, and on the further terms and conditions set forth in this contract.
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the date hereof, for delivery on the dates set forth below, Securities in the principal amounts set forth below:
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Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to purchase for delivery on [the] [each] Delivery Date shall be made to the Company or its order by certified or official bank check in New York Clearing House funds or by wire transfer payable in same-day funds (or as otherwise specified in the Terms Agreement) at the office of [ ] at [ ].M., time, on such Delivery Date upon delivery to the undersigned of the Securities to be purchased by the undersigned for delivery on such Delivery Date in definitive form and in such denominations and registered in such names as the undersigned may designate in writing to the Company not less than five full Business Days prior to such Delivery Date. If no designation is received, the Securities will be registered in the name of the undersigned and issued in a denomination equal to the aggregate principal amount of Securities to be purchased by the undersigned on such Delivery Date.
The obligation of the undersigned to take delivery of, and make payment for, Securities on [the] [each] Delivery Date shall be subject only to the conditions that (1) investment in the Securities shall not at such Delivery Date be prohibited under the laws of any jurisdiction in the United States to which the undersigned is subject, which investment the undersigned represents is not prohibited on the date hereof, and (2) the Company shall have delivered to the Underwriters the principal amount of the Securities to be purchased by them pursuant to the Underwriting Agreement referred to in the prospectus mentioned above and received payment therefor.
Promptly after completion of the sale to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by a copy of the opinion of counsel for the Company delivered to the Underwriters in connection therewith.
This contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other.
It is understood that the acceptance of this contract and any other similar contracts is in the Companys sole discretion and without limiting the foregoing, need not be on a first-come, first-served basis. If this contract is acceptable to the Company, it is requested that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract between the Company and the undersigned when such counterpart is mailed or delivered.
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This contract shall be governed by, and construed in accordance with, the laws of the State of New York.
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Very truly yours, |
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(Name of Purchaser) |
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By |
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(Title of Signatory) |
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(Address of Purchaser) |
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Accepted, as of the above date: |
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American Express Company |
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EXHIBIT III
The independent accountants referred to in Section 7(f) of the Basic Provisions shall deliver letters, in accordance with such section confirming that they are independent public accountants with respect to the Company within the meaning of the Act and the Exchange Act and the respective applicable rules and regulations adopted by the Commission thereunder and [that they have performed a review of the unaudited interim financial information of the Company for the -month period ended , 20 , and as at , 20 , [insert in each case the date of the most recent unaudited financial statements included or incorporated by reference in the Registration Statement and Final Prospectus] in accordance with Statement on Auditing Standards No. 100, and stating in effect that:
(i) in their opinion the audited financial statements and financial statement schedules [and pro forma financial statements] included or incorporated by reference in the Registration Statement and the Final Prospectus and reported on by them comply as to form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial statements made available by the Company; [their limited review, in accordance with standards established under Statement on Auditing Standards No. 100, of the unaudited interim financial information for the -month period ended , 20 and as at , 20 [insert in each case the date of the most recent unaudited financial statements included or incorporated by reference in the Registration Statement and the Final Prospectus][, as indicated in their report dated , 20 incorporated by reference in the Registration Statement and the Final Prospectus];] carrying out certain specified procedures (but not an examination in accordance with generally accepted auditing standards) that would not necessarily reveal matters of significance with respect to the comments set forth in such letter; a reading of the minutes of the meetings of the stockholders and directors of the Company; and inquiries of certain officials of the Company who have responsibility for financial and accounting matters of the Company as to transactions and events subsequent to , 20 , [insert date of the most recent audited financial statements included or incorporated by reference in the Registration Statement and Final Prospectus], nothing came to their attention that caused them to believe that:
(1) any unaudited financial statements included or incorporated by reference in the Registration Statement and the Final Prospectus do not comply as to form in all material respects with applicable accounting requirements of the Act and with the related rules and regulations adopted by the Commission with respect to financial statements included or incorporated by reference in quarterly reports on Form 10-Q under the Exchange Act; and said unaudited financial statements are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included or incorporated by reference in the Registration Statement and the Final Prospectus;
(2) with respect to the period subsequent to , 20 [insert date of the most recent financial statements (other than any capsule information), audited or unaudited, included or incorporated by reference in the Registration Statement and the Final Prospectus], there were, at a specified date not more than five days prior to the date of the letter, [any change in the capital stock, increase in long-term debt, or decrease in consolidated stockholders equity of the consolidated Company] as compared with the amounts shown on the , 20 [insert same date as above] consolidated balance sheet included or incorporated by reference in the Registration Statement and the Final Prospectus, or for the period from , 20 [insert date one day after the date inserted above] to such specified date there were any decreases, as compared with [insert the appropriate comparative period; e.g.: the corresponding period in the preceding year; or, the corresponding period in the preceding quarter; or if no appropriate period exists, insert dollar amounts for each item] in consolidated revenues or consolidated net income, except in all instances for changes or decreases set forth in such letter, in which case the letter shall be accompanied by an explanation by the Company as to the significance thereof unless said explanation is not deemed necessary by the Representatives;
(3) [If the interim financial statements included or incorporated by reference in the Registration Statement and the Final Prospectus are supplemented by later income statement information (so called capsule information), add: the unaudited amounts of [describe the capsule information and its location] do not agree with the amounts set forth in the unaudited financial statements for the same periods or were not determined on a basis substantially consistent with that of the corresponding amounts in the audited financial statements included or incorporated by reference in the Registration Statement and the Final Prospectus; and [If the capsule information meets the minimum disclosure requirements of APB Opinion No. 28, paragraph 30, the section above should be expanded also to cover conformity with generally accepted accounting principles; see paragraph 38 of Statement on Auditing Standards No. 72]
(iii) they have performed certain other specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Company and its subsidiaries) set forth or incorporated by reference in the Registration Statement and the Final Prospectus, agrees with the accounting records of the Company and its subsidiaries, excluding any questions of legal interpretation [; and][.]
(iv) [If unaudited pro forma financial statements are included or incorporated by reference in the Registration Statement and the Final Prospectus, it is preferable for the accountants to prepare and include in the Registration Statement and the Final Prospectus an examination or review report on the pro forma financial statements (see bracketed language in paragraph (i) above). To the extent a report is not included on annual or interim pro forma financial statements,
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include the following in the comfort letter, which is based on Example D of Statement on Auditing Standards No. 72: on the basis of a reading of the unaudited pro forma financial statements included or incorporated by reference in the Registration Statement and the Final Prospectus (the pro forma financial statements); carrying out certain specified procedures; inquiries of certain officials of the Company [and ] [insert name of acquired company, if appropriate] who have responsibility for financial and accounting matters; and proving the arithmetic accuracy of the application of the pro forma adjustments to the historical amounts in the pro forma financial statements, nothing came to their attention that caused them to believe that the pro forma financial statements do not comply as to form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X or that the pro forma adjustments have not been properly applied to the historical amounts in the compilation of such statements.]
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Exhibit 5
Writers Direct Dial: +1 212 225 2380 |
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E-Mail: lsilverman@cgsh.com |
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October 2, 2015
American Express Company
200 Vesey Street
New York, New York 10285
Ladies and Gentlemen:
We have acted as special counsel to American Express Company, a New York corporation (the Company), in connection with the preparation and filing with the Securities and Exchange Commission (the Commission) of the Companys registration statement on Form S-3 (excluding the documents incorporated by reference therein, the Registration Statement) pursuant to the Securities Act of 1933, as amended (the Securities Act), relating to the offering from time to time, together or separately and in one or more series (if applicable), of the Companys (i) debt securities (the Debt Securities); (ii) preferred shares, par value $1.66 2/3 per share (the Preferred Shares); (iii) fractional interests in Preferred Shares represented by depositary receipts (the Depositary Shares); (iv) common shares, par value $0.20 per share (the Common Shares); (v) warrants to purchase Debt Securities, Preferred Shares, Common Shares or equity securities issued by another entity (the Securities Warrants), (vi) warrants the value of which is related to the value of various currencies (the Currency Warrants) and (vii) warrants the value of which is related to other items or indices (the Other Warrants). The Securities Warrants, Currency Warrants and Other Warrants are collectively referred to herein as the Warrants. The Debt Securities, Preferred Shares, Depositary Shares, Common Shares and Warrants are collectively referred to herein as the Securities. The Securities being registered under the Registration Statement will have an indeterminate aggregate initial offering price and will be offered on a continuous or delayed basis pursuant to the provisions of Rule 415 under the Securities Act.
The Debt Securities are to be issued in one or more series and may be either senior debt securities issued pursuant to a senior indenture dated August 1, 2007 between the Company and The Bank of New York Mellon (formerly known as The Bank of New York), as trustee (as amended or supplemented, the Senior Indenture), or subordinated debt securities issued pursuant to a subordinated indenture dated August 1, 2007 between the Company and The Bank of New York Mellon (formerly known as The Bank of New York), as trustee (as amended or supplemented, the Subordinated Indenture). The Senior Indenture and the Subordinated Indenture are each referred to herein as an Indenture and collectively referred to herein as the Indentures. The terms of the Preferred Shares are to be established in one or more certificates of amendment to be filed with the Secretary of State of the State of New York (each, a Certificate of Amendment). The Depositary Shares are to be issued under one or more deposit agreements (each, a Deposit Agreement), to be entered into between the Company and the depositary to be named therein. The Warrants are to be issued under one or more warrant agreements (each, a Warrant Agreement), to be entered into between the Company and the warrant agent to be named therein.
In arriving at the opinions expressed below, we have reviewed the following documents:
(a) the Registration Statement;
(b) executed copies of the Indentures, conformed copies of which are filed as Exhibits 4(j) and 4(k) to the Registration Statement;
(c) the form of supplemental indenture filed as Exhibit 4(i) to the Registration Statement;
(d) the forms of Debt Securities filed as Exhibits 4(a)-4(h) of the Registration Statement;
(e) the form of certificate of Common Shares filed as Exhibit 4(r) to the Registration Statement; and
(f) copies of the Companys Amended and Restated Certificate of Incorporation (the Certificate of Incorporation) and Bylaws, as amended and restated (the Bylaws), certified by the Secretary of State of the State of New York and the corporate secretary of the Company, respectively.
In addition, we have reviewed the originals or copies certified or otherwise identified to our satisfaction of all such corporate records of the Company and such other documents, and we have made such investigations of law, as we have deemed appropriate as a basis for the opinions expressed below.
In rendering the opinions expressed below, we have assumed the authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies. In addition, we have assumed and have not verified the accuracy as to factual matters of each document we have reviewed.
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Based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion that:
1. The Debt Securities will be the valid, binding and enforceable obligations of the Company, entitled to the benefits of the applicable Indenture.
2. The Preferred Shares will be validly issued by the Company, fully paid and, except as may otherwise be provided by Section 630 of the Business Corporation Law of the State of New York, nonassessable.
3. The Depositary Shares, upon the due issuance by the Depositary of depositary receipts evidencing such Depositary Shares against the deposit of such Depositary Shares in respect thereof in accordance with the Deposit Agreement, will be validly issued and will entitle the holders thereof to the rights specified in the Deposit Agreement and the depositary receipts issued thereunder.
4. The Common Shares, including Common Shares to be issued upon conversion, exchange or exercise of any other Security in accordance with its terms, will be validly issued by the Company, fully paid and, except as may otherwise be provided by Section 630 of the Business Corporation Law of the State of New York, nonassessable.
5. The Warrants will be the valid, binding and enforceable obligations of the Company.
Insofar as the foregoing opinions relate to the validity, binding effect or enforceability of any agreement or obligation of the Company, (x) we have assumed that the Company and each other party to such agreement or obligation has satisfied or, prior to the issuance of the Securities, will satisfy, those legal requirements that are applicable to it to the extent necessary to make such agreement or obligation enforceable against it and (y) such opinions are subject to applicable bankruptcy, insolvency and similar laws affecting creditors rights generally and to general principles of equity.
In rendering the opinions expressed above, we have further assumed that (i) prior to the issuance of the Securities, the Company will authorize the offering and issuance of the Securities and will duly authorize, approve and establish the final terms and conditions thereof, which terms will conform to the descriptions thereof in the Registration Statement and the terms of any agreement governing those Securities, and will not violate any applicable law, conflict with any matter of public policy, result in a default under or breach of any agreement or instrument binding upon the Company or violate any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company; (ii) prior to the issuance of the Securities, the Company will duly authorize, execute and deliver any applicable deposit agreement or warrant agreement and any other agreement necessary with respect to the Securities or contemplated by the Securities or the Registration Statement and will take any other
3
appropriate or necessary corporate action, including the filing of any Certificate of Amendment with the Secretary of State of the State of New York; (iii) any agreement governing the Securities and any instruments evidencing the Securities will be governed by New York law; (iv) the Securities will be offered, issued, sold and delivered in compliance with applicable law and any requirements therefor set forth in any corporate action authorizing such Securities and any agreement governing those Securities and in the manner contemplated by the Registration Statement; (v) the Securities will be offered, sold and delivered to, and paid for by, the purchasers thereof at the price specified in, and in accordance with the terms of, an agreement or agreements duly authorized, executed and delivered by the parties thereto, which price, in the case of Common Shares or Preferred Shares, shall not be less than the respective par value thereof; and (vi) if issued in certificated form, certificates representing the Securities will be duly executed and delivered and, to the extent required by any applicable agreement, duly authenticated or countersigned, and if issued in book-entry form, the Securities will be duly registered to the extent required by any applicable agreement.
In rendering the opinions expressed in paragraph 1 above, we have assumed that each series of Debt Securities will be issued with an original aggregate principal amount (or in the case of Debt Securities issued at an original issue discount, an aggregate issue price) of $2,500,000 or more.
We note that any designation in the Securities or any applicable agreement governing those Securities of the U.S. federal courts sitting in New York City as the venue for actions or proceedings relating to such Securities is (notwithstanding any waiver thereof) subject to the power of such courts to transfer actions pursuant to 28 U.S.C. §1404(a) or to dismiss such actions or proceedings on the grounds that such a federal court is an inconvenient forum for such an action or proceeding.
We note that by statute New York provides that a judgment or decree rendered in a currency other than the currency of the United States shall be converted into U.S. dollars at the rate of exchange prevailing on the date of entry of the judgment or decree. There is no corresponding federal statute and no controlling federal court decision on this issue. Accordingly, we express no opinion as to whether a federal court would award a judgment in a currency other than U.S. dollars or, if it did so, whether it would order conversion of the judgment into U.S. dollars. In addition, to the extent that any Securities or applicable agreement governing those Securities includes a provision relating to indemnification against any loss in obtaining currency due from a court judgment in another currency, we express no opinion as to the enforceability of such provision.
The foregoing opinions are limited to the law of the State of New York.
We hereby consent to the use of our name in the prospectus constituting a part of the Registration Statement under the heading Legal Matters as counsel for the Company that has passed on the validity of the Securities and to the use of this opinion letter as a part (Exhibit 5) of the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the
4
rules and regulations of the Commission thereunder. The opinions expressed herein are rendered on and as of the date hereof, and we assume no obligation to advise you or any other person, or to make any investigations, as to any legal developments or factual matters arising subsequent to the date hereof that might affect the opinions expressed herein.
|
Very truly yours, |
|
|
|
CLEARY GOTTLIEB STEEN & HAMILTON LLP |
|
|
|
|
|
By |
/s/ Leslie N. Silverman |
|
|
Leslie N. Silverman, a Partner |
5
EXHIBIT 12
AMERICAN EXPRESS COMPANY
COMPUTATION IN SUPPORT OF RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(Millions)
|
|
Six Months Ended |
|
Years Ended December 31, |
|
|
|
June 30, 2015 |
|
2014 |
|
2013 |
|
2012 |
|
2011 |
|
2010 |
|
Earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax income from continuing operations |
|
$ |
4,546 |
|
$ |
8,991 |
|
$ |
7,888 |
|
$ |
6,451 |
|
$ |
6,956 |
|
$ |
5,964 |
|
Interest expense(a) |
|
823 |
|
1,707 |
|
1,958 |
|
2,226 |
|
2,320 |
|
2,423 |
|
Other adjustments(b) |
|
84 |
|
402 |
|
133 |
|
117 |
|
124 |
|
126 |
|
Total earnings |
|
$ |
5,453 |
|
$ |
11,100 |
|
$ |
9,979 |
|
$ |
8,794 |
|
$ |
9,400 |
|
$ |
8,513 |
|
Fixed charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
$ |
823 |
|
$ |
1,707 |
|
$ |
1,958 |
|
$ |
2,226 |
|
$ |
2,320 |
|
$ |
2,423 |
|
Other adjustments(c) |
|
29 |
|
79 |
|
93 |
|
102 |
|
94 |
|
85 |
|
Total fixed charges |
|
$ |
852 |
|
$ |
1,786 |
|
$ |
2,051 |
|
$ |
2,328 |
|
$ |
2,414 |
|
$ |
2,508 |
|
Ratio of earnings to fixed charges |
|
6.40 |
|
6.22 |
|
4.87 |
|
3.78 |
|
3.89 |
|
3.39 |
|
Preferred stock dividends |
|
$ |
20 |
|
|
|
|
|
|
|
|
|
|
|
Total fixed charges and preferred stock dividends |
|
$ |
872 |
|
$ |
1,786 |
|
$ |
2,051 |
|
$ |
2,328 |
|
$ |
2,414 |
|
$ |
2,508 |
|
Ratio of earnings to combined fixed charges and preferred stock dividends |
|
6.25 |
|
6.22 |
|
4.87 |
|
3.78 |
|
3.89 |
|
3.39 |
|
(a) Included in interest expense is interest expense related to the Card Member lending activities, international banking operations, and charge card and other activities in the Consolidated Statements of Income. Interest expense does not include interest on liabilities recorded under GAAP governing accounting for uncertainty in income taxes. The Companys policy is to classify such interest in income tax provision in the Consolidated Statements of Income.
(b) For purposes of the earnings computation, other adjustments include adding the amortization of capitalized interest, the net loss of affiliates accounted for under the equity method whose debt is not guaranteed by the Company, the noncontrolling interest in the earnings of majority-owned subsidiaries with fixed charges, and the interest component of rental expense, and subtracting undistributed net income of affiliates accounted for under the equity method.
(c) For purposes of the fixed charges computation, other adjustments include capitalized interest costs and the interest component of rental expense.
Exhibit 23(b)
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated February 24, 2015 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in the 2014 Annual Report to Shareholders, which is incorporated by reference in American Express Companys Annual Report on Form 10-K for the year ended December 31, 2014. We also consent to the reference to us under the heading Experts in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
New York, New York
October 2, 2015
Exhibit 24(a)
AMERICAN EXPRESS COMPANY
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Laureen E. Seeger and Carol V. Schwartz, severally, each with full power to act alone and without the other, his or her true and lawful attorney-in-fact, with full power of substitution, and with the authority to execute in the name of each such person, a registration statement covering primary and secondary offerings of debt securities, preferred shares, depositary shares, common shares and warrants of American Express Company and any and all amendments (including without limitation, post-effective amendments) to such registration statement, and to file such registration statement with the Securities and Exchange Commission, together with any exhibits thereto and other documents therewith, necessary or advisable to enable American Express Company to comply with the Securities Act of 1933, and any rules, regulations or requirements of the Securities and Exchange Commission in respect thereof, which amendments may make such other changes in the registration statement as the aforesaid attorney-in-fact executing the same deems appropriate.
This Power of Attorney may be executed in counterparts.
/s/ Kenneth I. Chenault |
|
Chairman, Chief Executive Officer and Director |
|
September 28, 2015 |
Kenneth I. Chenault |
|
|
|
|
|
|
|
|
|
/s/ Jeffrey C. Campbell |
|
Executive Vice President and Chief Financial Officer |
|
September 28, 2015 |
Jeffrey C. Campbell |
|
|
|
|
|
|
|
|
|
/s/ Linda Zukauckas |
|
Executive Vice President and Corporate Comptroller (Principal Accounting Officer) |
|
September 28, 2015 |
Linda Zukauckas |
|
|
|
|
|
|
|
|
|
/s/ Charlene Barshefsky |
|
Director |
|
September 28, 2015 |
Charlene Barshefsky |
|
|
|
|
|
|
|
|
|
/s/ Ursula M. Burns |
|
Director |
|
September 28, 2015 |
Ursula M. Burns |
|
|
|
|
|
|
|
|
|
/s/ Peter Chernin |
|
Director |
|
September 28, 2015 |
Peter Chernin |
|
|
|
|
|
|
|
|
|
/s/ Anne Lauvergeon |
|
Director |
|
September 28, 2015 |
Anne Lauvergeon |
|
|
|
|
|
|
|
|
|
/s/ Michael O. Leavitt |
|
Director |
|
September 28, 2015 |
Michael O. Leavitt |
|
|
|
|
|
|
|
|
|
/s/ Theodore J. Leonsis |
|
Director |
|
September 28, 2015 |
Theodore J. Leonsis |
|
|
|
|
/s/ Richard C. Levin |
|
Director |
|
September 28, 2015 |
Richard C. Levin |
|
|
|
|
|
|
|
|
|
/s/ Samuel J. Palmisano |
|
Director |
|
September 28, 2015 |
Samuel J. Palmisano |
|
|
|
|
|
|
|
|
|
/s/ Daniel L. Vasella |
|
Director |
|
September 28, 2015 |
Daniel L Vasella |
|
|
|
|
|
|
|
|
|
/s/ Robert D. Walter |
|
Director |
|
September 28, 2015 |
Robert D. Walter |
|
|
|
|
|
|
|
|
|
/s/ Ronald A. Williams |
|
Director |
|
September 28, 2015 |
Ronald A. Williams |
|
|
|
|
Exhibit 25(a)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) o
THE BANK OF NEW YORK MELLON
(Exact name of trustee as specified in its charter)
New York (Jurisdiction of incorporation if not a U.S. national bank) |
|
13-5160382 (I.R.S. employer identification no.) |
|
|
|
One Wall Street, New York, N.Y. (Address of principal executive offices) |
|
10286 (Zip code) |
American Express Company
(Exact name of obligor as specified in its charter)
New York (State or other jurisdiction of incorporation or organization) |
|
13-4922250 (I.R.S. employer identification no.) |
|
|
|
200 Vesey Street New York, New York (Address of principal executive offices) |
|
10285 (Zip code) |
Senior Debt Securities
(Title of the indenture securities)
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it is subject.
Name |
|
Address |
|
|
|
Superintendent of the Department of Financial Services of the State of New York |
|
One State Street, New York, N.Y. 10004-1417, and Albany, N.Y. 12223 |
|
|
|
Federal Reserve Bank of New York |
|
33 Liberty Street, New York, N.Y. 10045 |
|
|
|
Federal Deposit Insurance Corporation |
|
550 17th Street, NW Washington, D.C. 20429 |
|
|
|
The Clearing House Association L.L.C. |
|
100 Broad Street New York, N.Y. 10004 |
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the Act) and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York Mellon (formerly known as The Bank of New York, itself formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637, Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-152735).
2
4. A copy of the existing By-laws of the Trustee (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-207042).
6. The consent of the Trustee required by Section 321(b) of the Act (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-188382).
7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.
3
SIGNATURE
Pursuant to the requirements of the Act, the trustee, The Bank of New York Mellon, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York, and State of New York, on the 24th day of September, 2015.
|
THE BANK OF NEW YORK MELLON |
|
|
|
|
By: |
/s/ |
Eva Waite |
|
|
Name: |
Eva Waite |
|
|
Title: |
Associate |
4
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK MELLON
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 2015, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
|
|
Dollar amounts in thousands |
|
ASSETS |
|
|
|
Cash and balances due from depository institutions: |
|
|
|
Noninterest-bearing balances and currency and coin |
|
7,835,000 |
|
Interest-bearing balances |
|
115,236,000 |
|
Securities: |
|
|
|
Held-to-maturity securities |
|
42,679,000 |
|
Available-for-sale securities |
|
76,620,000 |
|
Federal funds sold and securities purchased under agreements to resell: |
|
|
|
Federal funds sold in domestic offices |
|
0 |
|
Securities purchased under agreements to resell |
|
14,211,000 |
|
Loans and lease financing receivables: |
|
|
|
Loans and leases held for sale |
|
264,000 |
|
Loans and leases, net of unearned income |
|
35,026,000 |
|
LESS: Allowance for loan and lease losses |
|
162,000 |
|
Loans and leases, net of unearned income and allowance |
|
34,864,000 |
|
Trading assets |
|
5,134,000 |
|
Premises and fixed assets (including capitalized leases) |
|
1,065,000 |
|
Other real estate owned |
|
5,000 |
|
Investments in unconsolidated subsidiaries and associated companies |
|
533,000 |
|
Direct and indirect investments in real estate ventures |
|
0 |
|
Intangible assets: |
|
|
|
Goodwill |
|
6,352,000 |
|
Other intangible assets |
|
1,097,000 |
|
Other assets |
|
14,309,000 |
|
Total assets |
|
320,204,000 |
|
LIABILITIES |
|
|
|
Deposits: |
|
|
|
In domestic offices |
|
155,532,000 |
|
Noninterest-bearing |
|
106,199,000 |
|
Interest-bearing |
|
49,333,000 |
|
In foreign offices, Edge and Agreement subsidiaries, and IBFs |
|
122,363,000 |
|
Noninterest-bearing |
|
7,932,000 |
|
Interest-bearing |
|
114,431,000 |
|
Federal funds purchased and securities sold under agreements to repurchase: |
|
|
|
Federal funds purchased in domestic offices |
|
68,000 |
|
Securities sold under agreements to repurchase |
|
1,380,000 |
|
Trading liabilities |
|
4,985,000 |
|
Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases) |
|
7,008,000 |
|
Not applicable |
|
|
|
Not applicable |
|
|
|
Subordinated notes and debentures |
|
765,000 |
|
Other liabilities |
|
6,825,000 |
|
Total liabilities |
|
298,926,000 |
|
|
|
|
|
EQUITY CAPITAL |
|
|
|
Perpetual preferred stock and related surplus |
|
0 |
|
Common stock |
|
1,135,000 |
|
Surplus (exclude all surplus related to preferred stock) |
|
10,184,000 |
|
Retained earnings |
|
11,326,000 |
|
Accumulated other comprehensive income |
|
-1,717,000 |
|
Other equity capital components |
|
0 |
|
Total bank equity capital |
|
20,928,000 |
|
Noncontrolling (minority) interests in consolidated subsidiaries |
|
350,000 |
|
Total equity capital |
|
21,278,000 |
|
Total liabilities and equity capital |
|
320,204,000 |
|
I, Thomas P. Gibbons, Chief Financial Officer of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.
|
Thomas P. Gibbons, |
|
Chief Financial Officer |
We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.
Gerald L. Hassell |
|
Directors |
Catherine A. Rein |
Joseph J. Echevarria |
Exhibit 25(b)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) o
THE BANK OF NEW YORK MELLON
(Exact name of trustee as specified in its charter)
New York (Jurisdiction of incorporation if not a U.S. national bank) |
|
13-5160382 (I.R.S. employer identification no.) |
|
|
|
One Wall Street, New York, N.Y. (Address of principal executive offices) |
|
10286 (Zip code) |
American Express Company
(Exact name of obligor as specified in its charter)
New York (State or other jurisdiction of incorporation or organization) |
|
13-4922250 (I.R.S. employer identification no.) |
|
|
|
200 Vesey Street New York, New York (Address of principal executive offices) |
|
10285 (Zip code) |
Subordinated Debt Securities
(Title of the indenture securities)
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it is subject.
Name |
|
Address |
|
|
|
Superintendent of the Department of Financial Services of the State of New York |
|
One State Street, New York, N.Y. 10004-1417, and Albany, N.Y. 12223 |
|
|
|
Federal Reserve Bank of New York |
|
33 Liberty Street, New York, N.Y. 10045 |
|
|
|
Federal Deposit Insurance Corporation |
|
550 17th Street, NW Washington, D.C. 20429 |
|
|
|
The Clearing House Association L.L.C. |
|
100 Broad Street New York, N.Y. 10004 |
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the Act) and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York Mellon (formerly known as The Bank of New York, itself formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637, Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-152735).
2
4. A copy of the existing By-laws of the Trustee (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-207042).
6. The consent of the Trustee required by Section 321(b) of the Act (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-188382).
7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.
3
SIGNATURE
Pursuant to the requirements of the Act, the trustee, The Bank of New York Mellon, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York, and State of New York, on the 24th day of September, 2015.
|
THE BANK OF NEW YORK MELLON |
|
|
|
|
By: |
/s/ |
Eva Waite |
|
|
Name: |
Eva Waite |
|
|
Title: |
Associate |
4
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK MELLON
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 2015, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
|
|
Dollar amounts in thousands |
|
ASSETS |
|
|
|
Cash and balances due from depository institutions: |
|
|
|
Noninterest-bearing balances and currency and coin |
|
7,835,000 |
|
Interest-bearing balances |
|
115,236,000 |
|
Securities: |
|
|
|
Held-to-maturity securities |
|
42,679,000 |
|
Available-for-sale securities |
|
76,620,000 |
|
Federal funds sold and securities purchased under agreements to resell: |
|
|
|
Federal funds sold in domestic offices |
|
0 |
|
Securities purchased under agreements to resell |
|
14,211,000 |
|
Loans and lease financing receivables: |
|
|
|
Loans and leases held for sale |
|
264,000 |
|
Loans and leases, net of unearned income |
|
35,026,000 |
|
LESS: Allowance for loan and lease losses |
|
162,000 |
|
Loans and leases, net of unearned income and allowance |
|
34,864,000 |
|
Trading assets |
|
5,134,000 |
|
Premises and fixed assets (including capitalized leases) |
|
1,065,000 |
|
Other real estate owned |
|
5,000 |
|
Investments in unconsolidated subsidiaries and associated companies |
|
533,000 |
|
Direct and indirect investments in real estate ventures |
|
0 |
|
Intangible assets: |
|
|
|
Goodwill |
|
6,352,000 |
|
Other intangible assets |
|
1,097,000 |
|
Other assets |
|
14,309,000 |
|
Total assets |
|
320,204,000 |
|
LIABILITIES |
|
|
|
Deposits: |
|
|
|
In domestic offices |
|
155,532,000 |
|
Noninterest-bearing |
|
106,199,000 |
|
Interest-bearing |
|
49,333,000 |
|
In foreign offices, Edge and Agreement subsidiaries, and IBFs |
|
122,363,000 |
|
Noninterest-bearing |
|
7,932,000 |
|
Interest-bearing |
|
114,431,000 |
|
Federal funds purchased and securities sold under agreements to repurchase: |
|
|
|
Federal funds purchased in domestic offices |
|
68,000 |
|
Securities sold under agreements to repurchase |
|
1,380,000 |
|
Trading liabilities |
|
4,985,000 |
|
Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases) |
|
7,008,000 |
|
Not applicable |
|
|
|
Not applicable |
|
|
|
Subordinated notes and debentures |
|
765,000 |
|
Other liabilities |
|
6,825,000 |
|
Total liabilities |
|
298,926,000 |
|
|
|
|
|
EQUITY CAPITAL |
|
|
|
Perpetual preferred stock and related surplus |
|
0 |
|
Common stock |
|
1,135,000 |
|
Surplus (exclude all surplus related to preferred stock) |
|
10,184,000 |
|
Retained earnings |
|
11,326,000 |
|
Accumulated other comprehensive income |
|
-1,717,000 |
|
Other equity capital components |
|
0 |
|
Total bank equity capital |
|
20,928,000 |
|
Noncontrolling (minority) interests in consolidated subsidiaries |
|
350,000 |
|
Total equity capital |
|
21,278,000 |
|
Total liabilities and equity capital |
|
320,204,000 |
|
I, Thomas P. Gibbons, Chief Financial Officer of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.
|
Thomas P. Gibbons, |
|
Chief Financial Officer |
We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.
Gerald L. Hassell |
|
Directors |
Catherine A. Rein |
Joseph J. Echevarria |
American Express (NYSE:AXP)
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American Express (NYSE:AXP)
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From Apr 2023 to Apr 2024