<PAGE>
Registration No. 33-58611
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C>
MORGAN STANLEY GROUP INC. MORGAN STANLEY FINANCE PLC
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter)
</TABLE>
<TABLE>
<S> <C> <C> <C>
DELAWARE 13-2838811 ENGLAND Not Applicable
(State or other jurisdiction (I.R.S. Employer (State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number) of incorporation or organization) Identification Number)
</TABLE>
<TABLE>
<S> <C>
25 Cabot Square
1251 Avenue of the Americas Canary Wharf
New York, New York 10020 London, E14 4QA England
(212) 703-4000 (44-171) 425-8000
(Address, including zip code, and telephone number, (Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices) including area code, of registrant's principal executive offices)
</TABLE>
-----------------------
Ralph L. Pellecchio
Assistant Secretary
Morgan Stanley Group Inc.
1251 Avenue of the Americas
New York, New York 10020
(212) 703-4000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies To:
Jerry V. Elliott John M. Brandow
Shearman & Sterling Davis Polk & Wardwell
599 Lexington Avenue 450 Lexington Avenue
New York, New York 10022 New York, New York 10017
-----------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this registration statement becomes effective.
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 check the following box.[X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
The Registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission (the
"Commission"), acting pursuant to Section 8(a), may determine.
Pursuant to Rule 429 of the General Rules and Regulations under the
Securities Act of 1933, the Prospectus which is a part of this registration
statement is a combined Prospectus relating also to $3,572,500 of securities
registered and remaining unissued under registration statement no. 33-51067
previously filed by the Registrants, in respect of which $1,116 has been paid to
the Commission as a filing fee.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS (Subject to Completion)
Issued July 17, 1995
$503,572,500
Morgan Stanley Group Inc.
Morgan Stanley Finance plc
DEBT SECURITIES
GUARANTEES OF DEBT SECURITIES
PREFERRED STOCK
PREFERRED STOCK PURCHASE CONTRACTS
CAPITAL UNITS
----------
Morgan Stanley Finance plc ("MS plc"), an indirect wholly owned subsidiary of
Morgan Stanley Group Inc. (the "Company"), may offer and issue from time to
time Debt Securities in one or more series. Any Debt Securities offered by MS
plc will be fully and unconditionally guaranteed pursuant to a guarantee (a
"Guarantee") of the Company. Debt Securities may be issuable in registered form
without coupons or in bearer form with or without coupons attached. MS plc will
offer Debt Securities to the public on terms determined by market conditions.
Debt Securities may be sold for U.S. dollars, foreign denominated currency or
currency units; principal of and any interest on Debt Securities may likewise
be payable in U.S. dollars, foreign denominated currency or currency units as
MS plc specifically designates.
The Company may offer and issue from time to time in one or more series its
Preferred Stock, no par value, on terms to be determined at the time of sale.
The Company may also offer and issue from time to time contracts that require
the holders thereof to purchase Preferred Stock of the Company ("Purchase
Contracts") on terms to be determined at the time of sale. Any Purchase
Contracts offered by the Company would be offered together with Debt Securities
of MS plc and Guarantees of the Company in the form of units ("Capital Units").
Capital Units may be issued as Definitive Capital Units or Book-Entry Capital
Units. The Debt Securities, Guarantees, Preferred Stock, Purchase Contracts and
Capital Units are hereinafter referred to as the "Securities".
The accompanying Prospectus Supplement will set forth the specific terms of
the Securities, including (i) in the case of Debt Securities, the ranking as
senior or subordinated Debt Securities, the specific designation, aggregate
principal amount, purchase price, maturity, redemption terms, interest rate (or
manner of calculation thereof), time of payment of interest (if any), terms for
any conversion or exchange (including the terms relating to the adjustment
thereof), the ranking of the Guarantee as senior or subordinated indebtedness
of the Company, listing (if any) on a securities exchange and any other
specific terms of the Debt Securities being offered, (ii) in the case of a
particular series of Preferred Stock, the specific designation, the aggregate
number of shares offered, the dividend rate (or manner of calculation thereof),
the dividend periods (or manner of calculation thereof), the stated value of
the shares of such series, the voting rights of the shares of such series,
whether and on what terms the shares of such series may be redeemed at the
option of the Company, whether depositary shares representing shares of such
series of Preferred Stock will be offered and, if so, the fraction of a share
of Preferred Stock represented by each depositary share, listing, if any, on a
securities exchange and any other specific terms of such series of Preferred
Stock being offered and (iii) in the case of Capital Units, the specific terms
of the Debt Securities, the Purchase Contracts and the Preferred Stock issuable
pursuant to such Purchase Contracts, listing, if any, on a securities exchange,
whether such Capital Units will be issued as Definitive Capital Units, Book-
Entry Capital Units or both and the name of the depositary with respect to such
Capital Units. The accompanying Prospectus Supplement will also set forth the
name of and compensation to each dealer, underwriter or agent (if any) involved
in the sale of the Securities being offered and the managing underwriters with
respect to each series sold to or through underwriters. Any such underwriters
(and any representative thereof), dealers or agents in the United States will
include Morgan Stanley & Co. Incorporated ("MS & Co.") and any such
underwriters (and any representative thereof), dealers or agents outside the
United States will include Morgan Stanley & Co. International Limited ("MSIL")
or other affiliates of the Company.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------
Securities may be offered through dealers, underwriters or agents designated
from time to time, as set forth in the accompanying Prospectus Supplement. Net
proceeds to the Company or MS plc will be the purchase price in the case of
sales to a dealer, the public offering price less discount in the case of sales
to an underwriter or the purchase price less commission in the case of sales
through an agent -- in each case, less other expenses attributable to issuance
and distribution. See "Plan of Distribution" for possible indemnification
arrangements for dealers, underwriters and agents.
Following the initial distribution of a series of Securities, MS & Co., MSIL
and other affiliates of the Company may offer and sell previously issued
Securities in the course of their businesses as broker-dealers (subject, in the
case of Preferred Stock, Depositary Shares and Capital Units, to obtaining any
necessary approval of the New York Stock Exchange for any such offers and sales
by MS & Co.). MS & Co., MSIL and such other affiliates may act as principal or
agent in such transactions. This Prospectus and the accompanying Prospectus
Supplement may be used by MS & Co., MSIL and such other affiliates in
connection with such transactions. Such sales, if any, will be made at varying
prices related to prevailing market prices at the time of sale.
----------
MORGAN STANLEY & CO.
Incorporated
, 1995
<PAGE>
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus or in the Prospectus Supplement
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company, MS plc or any underwriter, dealer
or agent. Neither this Prospectus nor the Prospectus Supplement constitutes an
offer to sell or a solicitation of an offer to buy Securities by anyone in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do so or to any
person to whom it is unlawful to make such offer or solicitation.
__________________
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). MS plc is not (and will not become as a result
of the effectiveness of the Registration Statement of which this Prospectus is a
part) subject to the informational requirements of the Exchange Act. Reports,
proxy statements and other information filed by the Company with the Commission
can be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 or at
its Regional Offices located at Suite 1400, Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661 and at Seven World Trade Center, 13th Floor, New
York, New York 10048, and copies of such material can be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. The Company's Common Stock, par value $1.00
per share (the "Common Stock"), is listed on the New York Stock Exchange, Inc.
(the "NYSE"), the Boston Stock Exchange, the Chicago Stock Exchange and the
Pacific Stock Exchange, Inc. Reports, proxy statements and other information
concerning the Company can be inspected at the offices of the NYSE, 20 Broad
Street, New York, New York 10005; the Boston Stock Exchange, One Boston Place,
Boston, Massachusetts 02108; the Chicago Stock Exchange, 440 South LaSalle
Street, Chicago, Illinois 60605; and the Pacific Stock Exchange, Inc., 301 Pine
Street, San Francisco, California 94104 or 233 South Beaudry Avenue, Los
Angeles, California 90012.
This Prospectus constitutes a part of a Registration Statement filed by the
Company and MS plc with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement in accordance with the rules
and regulations of the Commission. Reference is hereby made to the Registration
Statement and related exhibits for further information with respect to the
Company, MS plc and the Securities. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
__________________
IN CONNECTION WITH THE OFFERING OF THE SECURITIES DESCRIBED IN THE
ACCOMPANYING PROSPECTUS SUPPLEMENT, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF SUCH SECURITIES OR
OTHER SECURITIES OF THE COMPANY OR MS PLC AT LEVELS ABOVE THOSE WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE
NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report on Form 10-K of the Company for the fiscal year ended
January 31, 1995, the Quarterly Report on Form 10-Q of the Company for the four-
month period ended May 31, 1995, and the Current Reports on Form 8-K of the
Company dated February 21, 1995, February 28, 1995, April 4, 1995 and June
28, 1995 have been filed with the Commission and are incorporated herein by
reference.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the later of (i) the termination of the offering of the Securities and (ii) the
date on which MS & Co., MSIL and other affiliates of the Company cease offering
and selling previously issued Securities shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Copies of the above documents (excluding exhibits) may be obtained upon
request without charge from the Company, 1251 Avenue of the Americas, New York,
New York 10020, Attention: Mailroom Manager (telephone number (212) 703-6010).
__________________
No action has been or will be taken in any jurisdiction by the Company, MS
plc or any underwriter, dealer or agent that would permit a public offering of
the Securities or possession or distribution of this Prospectus in any
jurisdiction where action for that purpose is required, other than (i) in the
United States and (ii) with respect to Debt Securities of MS plc, in the United
Kingdom. Persons into whose possession this Prospectus comes are required by
the Company, MS plc and the underwriters, dealers and agents to inform
themselves about and to observe any restrictions as to the offering of the
Securities and the distribution of this Prospectus.
In this Prospectus, references to "dollars" and "$" are to United States
dollars, and the terms "United States" and "U.S." mean the United States of
America, its states, its territories, its possessions and all areas subject to
its jurisdiction.
3
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MORGAN STANLEY GROUP INC.
Morgan Stanley Group Inc. is a holding company that, through its
subsidiaries, provides a wide range of financial services on a global basis.
Its businesses include securities underwriting, distribution and trading;
merger, acquisition, restructuring, real estate, project finance and other
corporate finance advisory activities; merchant banking and other principal
investment activities; brokerage and research services; asset management; the
trading of foreign exchange and commodities as well as derivatives on a broad
range of asset categories, rates and indices; and global custody, securities
clearance services and securities lending. These services are provided to a
large and diversified group of clients and customers, including corporations,
governments, financial institutions and individual investors. The Company,
which was formed in 1935, conducts business from its head office in New York
City, international branches or representative offices in Beijing, Bombay,
Frankfurt, Geneva, Hong Kong, Johannesburg, London, Luxembourg, Madrid,
Melbourne, Milan, Montreal, Moscow, Osaka, Paris, Seoul, Shanghai, Singapore,
Sydney, Taipei, Tokyo, Toronto and Zurich, and United States regional offices in
Chicago, Los Angeles and San Francisco.
Morgan Stanley & Company, Incorporated was incorporated under the laws of
the State of New York in 1935 and was liquidated and reconstituted as Morgan
Stanley & Co., a partnership, in 1941. MS & Co. was incorporated under the laws
of Delaware in 1969 and over a number of years assumed all of the business of
the partnership. Morgan Stanley Holdings Incorporated was incorporated under
the laws of Delaware in 1975 to own all of the stock of MS & Co. and other
related entities, and changed its name to Morgan Stanley Inc. in 1978 and to
Morgan Stanley Group Inc. in 1985. The Company's principal executive offices
are at 1251 Avenue of the Americas, New York, New York 10020, and its telephone
number is (212) 703-4000. Unless the context otherwise requires, the term
"Company" means Morgan Stanley Group Inc. and its consolidated subsidiaries.
MORGAN STANLEY FINANCE PLC
Morgan Stanley Finance plc was incorporated in 1993 under the Companies Act
1985 of Great Britain solely for the purpose of issuing securities to raise
capital for the purposes described below under "Use of Proceeds". Morgan
Stanley International Incorporated, a Delaware corporation that is a wholly
owned subsidiary of the Company, indirectly owns all of the ordinary shares of
MS plc. MS plc has no independent operations. MS plc's principal executive
offices are at 25 Cabot Square, Canary Wharf, London E14 4QA, England, and its
telephone number is (44-171) 425-8000.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the net
proceeds from the sale of the Securities offered hereby will be used for general
corporate purposes of the Company, which may include additions to working
capital, the redemption of outstanding preferred stock and repayment of
indebtedness. The Company anticipates that it will raise additional funds from
time to time through equity or debt financings, including borrowings under
revolving credit agreements, to finance its businesses worldwide.
4
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CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the unaudited consolidated ratios of
earnings to fixed charges and earnings to fixed charges and preferred stock
dividends for the Company for the periods indicated. Information for the four
months ended May 31, 1995 and the three months ended May 31, 1995 and April 30,
1994 was derived from unaudited condensed consolidated financial
statements.
<TABLE>
<CAPTION>
Four Three Fiscal
Months Ended Months Ended Year Ended Year Ended
May 31, May 31, April 30, January 31, December 31,
------------ ------- --------- ---------------------- -------------
1995 1995 1994 1995 1994 1993 1991 1990
---- ---- ---- ---- ---- ---- ---- ----
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings
to fixed charges..... 1.1 1.1 1.1 1.1 1.2 1.2 1.2 1.1
Ratio of earnings
to fixed charges
and preferred stock
dividends............ 1.1 1.1 1.1 1.1 1.2 1.2 1.2 1.1
</TABLE>
For the purpose of calculating the ratio of earnings to fixed charges and
the ratio of earnings to fixed charges and preferred stock dividends, earnings
consist of income before income taxes and fixed charges (exclusive of preferred
stock dividends). For the purposes of calculating both ratios, fixed charges
include interest expense, capitalized interest and that portion of rentals
representative of an interest factor. Additionally, for the purposes of
calculating the ratio of earnings to fixed charges and preferred stock
dividends, preferred stock dividends (on a pre-tax basis) are included in the
denominator of the ratio.
DESCRIPTION OF DEBT SECURITIES OF MS PLC
The Debt Securities will constitute either senior or subordinated debt of
MS plc and, unless otherwise specified in a Prospectus Supplement, will be
issued, in the case of Debt Securities that will be senior debt, under a Senior
Indenture (the "Senior Debt Indenture") among MS plc, the Company, as guarantor,
and Chemical Bank, as Trustee, and, in the case of Debt Securities that will be
subordinated debt, under a Subordinated Indenture dated as of November 15, 1993
(the "Subordinated Debt Indenture") among MS plc, the Company, as guarantor, and
Chemical Bank, as Trustee. The Senior Debt Indenture and the Subordinated Debt
Indenture are sometimes hereinafter referred to individually as an "Indenture"
and collectively as the "Indentures". Chemical Bank, in its capacity as trustee
under the Indentures, is hereinafter referred to as the "Trustee". As used in
this section and under "Description of Capital Stock of the Company" and
"Description of the Capital Units" below, the term "Company" means Morgan
Stanley Group Inc.
The following summaries of certain provisions of the Indentures and the
Debt Securities do not purport to be complete and such summaries are subject to
the detailed provisions of the applicable Indenture to which reference is hereby
made for a full description of such provisions, including the definition of
certain terms used herein, and for other information regarding the Debt
Securities. Numerical references in parentheses below are to sections in the
applicable Indenture. Wherever particular sections or defined terms of the
applicable Indenture are referred to, such sections or defined terms are
incorporated herein by reference as part of the statement made, and the
statement is qualified in its entirety by such reference. The Indentures are
substantially identical, except for the provisions relating to subordination and
the Company's negative pledge. See "Subordinated Debt" and "Certain Covenants".
The Debt Securities and any Guarantees offered by this Prospectus and the
accompanying Prospectus Supplement are referred to herein as the "Offered Debt
Securities".
5
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General
Neither of the Indentures limits the amount of additional indebtedness that
the Company or any of its subsidiaries (including MS plc) may incur. The Debt
Securities will be unsecured senior or subordinated obligations of MS plc and
fully and unconditionally guaranteed on a senior or subordinated basis by the
Company. Most of the assets reflected on the Company's consolidated balance
sheet are owned by its subsidiaries. Therefore, the Company's rights and the
rights of its creditors, including holders of Debt Securities guaranteed by the
Company, to participate in the assets of any subsidiary upon such subsidiary's
liquidation or recapitalization will be subject to the prior claims of such
subsidiary's creditors, except to the extent that the Company may itself be a
creditor with recognized claims against the subsidiary. In addition, dividends,
loans and advances from certain of the Company's subsidiaries, including MS &
Co., to the Company are restricted by net capital requirements under the
Exchange Act and under rules of certain exchanges and various domestic and
foreign regulatory bodies. MS plc has no subsidiaries.
The Indentures provide that Debt Securities may be issued from time to time
in one or more series and may be denominated and payable in foreign currencies
or units based on or relating to foreign currencies, including ECUs. Special
United States federal income tax considerations applicable to any Debt
Securities so denominated are described in the relevant Prospectus Supplement.
Reference is made to the Prospectus Supplement for the following terms of
and information relating to the Offered Debt Securities (to the extent such
terms are applicable to such Offered Debt Securities): (i) the classification
as senior or subordinated Debt Securities, the specific designation, aggregate
principal amount, purchase price and denomination thereof and the ranking of the
related Guarantee as senior or subordinated indebtedness of the Company; (ii)
the currency or units based on or relating to currencies in which such Debt
Securities are denominated and/or in which principal (and premium, if any)
and/or interest will or may be payable; (iii) any date of maturity; (iv) the
interest rate or rates (or the method by which such rate or rates will be
determined), if any; (v) the dates on which any such interest will be payable;
(vi) the place or places where the principal of, premium, if any, and interest,
if any, on the Offered Debt Securities will be payable; (vii) any repayment,
redemption, prepayment or sinking fund provisions; (viii) whether the Offered
Debt Securities will be issuable in registered form or bearer form ("Bearer
Securities") or both and, if Bearer Securities are issuable, any restrictions
applicable to the exchange of one form for another and to the offer, sale and
delivery of Bearer Securities; (ix) the terms, if any, on which such Debt
Securities may be converted into or exchanged for stock or other securities of
MS plc or other entities (including the Company), any specific terms relating to
the adjustment thereof and the period during which such Debt Securities may be
so converted or exchanged; (x) any applicable United States federal or United
Kingdom income tax consequences, including whether and under what circumstances
MS plc will pay additional amounts on Offered Debt Securities held by a person
who is a U.S. person (as defined in the Prospectus Supplement) in respect of
any tax, assessment or governmental charge withheld or deducted and, if so,
whether MS plc will have the option to redeem such Debt Securities rather than
pay such additional amounts; and (xi) any other specific terms of the Offered
Debt Securities, including any additional events of default or covenants
provided for with respect to such Debt Securities, and any terms which may be
required by or advisable under applicable laws or regulations.
Debt Securities may be presented for exchange and registered Debt
Securities may be presented for transfer in the manner, at the places and
subject to the restrictions set forth in the Debt Securities and the Prospectus
Supplement. Such services will be provided without charge, other than any tax
or other governmental charge payable in connection therewith, but subject to the
limitations provided in the applicable Indenture. Debt Securities in bearer
form and the coupons, if any, appertaining thereto will be transferable by
delivery.
Debt Securities will bear interest at a fixed rate (a "Fixed Rate
Security") or a floating rate (a "Floating Rate Security"). Debt Securities
bearing no interest or interest at a rate that at the time of issuance is below
the prevailing market rate will be sold at a discount below their stated
principal amount. Special United States federal income tax considerations
applicable to any such discounted Debt Securities or to certain Debt Securities
issued at par which are treated as having been issued at a discount for United
States federal income tax purposes will be described in the relevant Prospectus
Supplement.
6
<PAGE>
Debt Securities may be issued, from time to time, with the principal amount
payable on any principal payment date, or the amount of interest payable on any
interest payment date, to be determined by reference to one or more currency
exchange rates, commodity prices, equity indices or other factors. Holders of
such Debt Securities may receive a payment of principal on any principal payment
date, or a payment of interest on any interest payment date, that is greater
than or less than the amount of principal or interest otherwise payable on such
dates, depending upon the value on such dates of the applicable currency,
commodity, equity index or other factor. Information as to the methods for
determining the amount of principal or interest payable on any date, the
currencies, commodities, equity indices or other factors to which the amount
payable on such date is linked and certain additional tax considerations will be
set forth in the applicable Prospectus Supplement.
Global Debt Securities
The Debt Securities of a series may be issued in the form of one or more
fully registered or bearer global Securities (a "Global Debt Security"). The
specific terms of any Global Debt Security and the depositary arrangements with
respect to any portion of a series of Debt Securities to be represented by such
Global Debt Security will be described in the Prospectus Supplement relating to
such series of Debt Securities.
Senior Debt
The Debt Securities and, in the case of Bearer Securities, any coupons
appertaining thereto (the "Coupons") that will constitute part of the senior
debt of MS plc and the Guarantees by the Company of such Debt Securities and
Coupons will be issued under the Senior Debt Indenture and will rank pari passu
with all other unsecured and unsubordinated debt of MS plc or the Company, as
the case may be.
Subordinated Debt
The Debt Securities and Coupons that will constitute part of the
subordinated debt of MS plc and the Guarantees by the Company of such Debt
Securities and Coupons will be issued under the Subordinated Debt Indenture and
will be subordinate and junior in right of payment, to the extent and in the
manner set forth in the Subordinated Debt Indenture, to all "Senior
Indebtedness" of MS plc or the Company, as the case may be. The Subordinated
Debt Indenture defines "MS plc Senior Indebtedness" as obligations (other than
nonrecourse obligations, the subordinated Debt Securities or any other
obligations specifically designated as being subordinate in right of payment to
Senior Indebtedness of MS plc) of, or guaranteed or assumed by, MS plc for
borrowed money or evidenced by bonds, debentures, notes or other similar
instruments, and amendments, renewals, extensions, modifications and refundings
of any such indebtedness or obligations. The Subordinated Debt Indenture
defines "Company Senior Indebtedness" as obligations (other than nonrecourse
obligations, Guarantees of subordinated Debt Securities of MS plc or any other
obligations specifically designated as being subordinate in right of payment to
Senior Indebtedness of the Company) of, or guaranteed or assumed by, the Company
for borrowed money or evidenced by bonds, debentures, notes or other similar
instruments, and amendments, renewals, extensions, modifications and refundings
of any such indebtedness or obligations. (Subordinated Debt Indenture, Section
1.1)
In the event (a) of any insolvency, bankruptcy or administration
proceedings, or any receivership (including administrative receivership),
liquidation, reorganization or other similar proceedings in respect of MS plc or
the Company or a substantial part of their respective properties, or (b) that
(i) a default shall have occurred with respect to the payment of principal of
(and premium, if any) or any interest on or other monetary amounts due and
payable on any MS plc Senior Indebtedness or Company Senior Indebtedness, as the
case may be, or (ii) there shall have occurred an event of default (other than a
default in the payment of principal, premium, if any, or interest, or other
monetary amounts due and payable) with respect to any MS plc Senior Indebtedness
or Company Senior Indebtedness, as the case may be, as defined therein or in the
instrument under which the same is outstanding, permitting the holder or holders
thereof to accelerate the maturity thereof (with notice or lapse of time, or
both),
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and such event of default shall have continued beyond the period of grace, if
any, in respect thereof, and such default or event of default shall not have
been cured or waived or shall not have ceased to exist, or (c) that the
principal of and accrued interest on the subordinated Debt Securities shall have
been declared due and payable upon an Event of Default pursuant to Section 5.1
of the Subordinated Debt Indenture and such declaration shall not have been
rescinded and annulled as provided therein, then the holders of all MS plc
Senior Indebtedness or Company Senior Indebtedness, as the case may be, shall
first be entitled to receive payment of the full amount unpaid thereon, or
provision shall be made for such payment in money or money's worth, before the
holders of any of the subordinated Debt Securities or Coupons are entitled to
receive a payment on account of the principal of (and premium, if any) or any
interest on the indebtedness evidenced by such subordinated Debt Securities or
such Coupons. (Subordinated Debt Indenture, Sections 13.1 and 15.1) If this
Prospectus is being delivered in connection with a series of subordinated Debt
Securities, the accompanying Prospectus Supplement or the information
incorporated herein by reference will set forth the approximate amount of MS plc
Senior Indebtedness and Company Senior Indebtedness outstanding as of the end of
the most recent fiscal quarter.
Guarantee of Debt Securities by the Company
Any Debt Securities issued by MS plc will be fully and unconditionally
guaranteed pursuant to a Guarantee of the Company as to the payment of principal
of, premium, if any, interest and any Additional Amounts (as defined below) on
such Debt Securities when and as the same shall become due and payable, whether
at maturity or otherwise. Under the terms of the Guarantee, holders of such
Debt Securities will not be required to exercise their remedies against MS plc
prior to proceeding directly against the Company. In the event that MS plc
issues Debt Securities that relate to a Capital Unit, the Company will not be
entitled to offset its obligations under the Guarantee against the holder's
obligations under the related Purchase Contracts or the provisions of the
Capital Unit Agreement relating thereto and the failure by the Company to
satisfy its obligations under the Guarantee will not result in the termination
of or otherwise affect the obligations of the holders under such Purchase
Contracts or the Capital Unit Agreement.
Payment of Additional Amounts with Respect to Debt Securities
All amounts of principal of, premium, if any, and interest on any Debt
Securities will be paid by MS plc without deduction or withholding for any
withholding taxes, levies, imposts and charges whatsoever imposed by or for the
account of the United Kingdom or any political subdivision or taxing authority
thereof or therein, or if deduction or withholding of any such taxes, levies,
imposts or charges shall at any time be required by the United Kingdom or any
such subdivision or authority, MS plc will pay such additional amounts
("Additional Amounts") as may be necessary in order that the net amounts paid
to the holders of such Debt Securities (or, in the case of Book-Entry Capital
Units, holders of beneficial interests in the Debt Securities included in such
Capital Units) or the Trustee, after such deduction or withholding, shall equal
the respective amounts of principal, premium, if any, and interest to which the
holders of such Debt Securities (or the holders of such beneficial interests) or
the Trustee are entitled; provided that the foregoing will not apply to any such
tax, levy, impost or charge which would not be payable or due but for the fact
that (i) the holder of the Debt Security (or, in the case of a Book-Entry
Capital Unit, a holder of a beneficial interest in the Debt Security included in
such Capital Unit) is a citizen, national or resident of, or engaging in
business or maintaining a permanent establishment or being physically present
in, the United Kingdom or such political subdivision or otherwise having some
connection with the United Kingdom other than the holding or ownership of a
Debt Security, or the collection of principal of and interest on, or the
enforcement of, a Debt Security or (ii) the Debt Security is presented for
payment more than 30 days after the date payment became due or was provided for,
whichever is later, except to the extent that the holder would have been
entitled to such additional amount on presenting the same for payment at the
close of such 30-day period. The Prospectus Supplement will describe any
additional circumstances under which Additional Amounts will not be paid with
respect to Debt Securities.
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Service of Process, Enforcement of Liabilities
MS plc is incorporated under the laws of England and Wales. Certain of the
directors of MS plc are non-residents of the United States. As a result, it may
not be possible for investors to effect service of process within the United
States upon such persons or to enforce against them judgments of U.S. courts
predicated upon the civil liability provisions of the federal securities laws
of the United States. MS plc has been advised by its English solicitors,
Linklaters & Paines, that there is doubt as to the enforceability in the United
Kingdom, in original actions or in actions to enforce judgments of U.S. courts,
of liabilities predicated solely upon the federal securities laws of the United
States. MS plc has expressly submitted to the jurisdiction of New York State
and the federal courts of the United States sitting in the Borough of Manhattan,
in The City of New York for the purpose of any suit, action or proceeding
arising out of the Debt Securities or the Indenture and has appointed the
Company as an agent in the Borough of Manhattan, in The City of New York to
accept service of process in any such action.
Certain Covenants
Negative Pledge. The Senior Debt Indenture provides that the Company and
any successor corporation will not, and will not permit any Subsidiary (as
defined in such Indenture) to, create, assume, incur or guarantee any
indebtedness for borrowed money secured by a pledge, lien or other encumbrance
(except for certain liens specifically permitted by such Indenture) on the
Voting Securities (as defined in such Indenture) of either MS & Co. or MSIL
without making effective provision whereby the Guarantees of the Company issued
under such Indenture will be secured equally and ratably with such secured
indebtedness. (Senior Debt Indenture, Section 3.6)
Merger, Consolidation, Sale, Lease or Conveyance. Each Indenture provides
that neither MS plc nor the Company will merge or consolidate with any other
corporation and neither MS plc nor the Company will sell, lease or convey all or
substantially all its assets to any person, unless MS plc or the Company, as the
case may be, shall be the continuing corporation, or the successor corporation
or person that acquires all or substantially all the assets of MS plc or the
Company, as the case may be, shall be (i) with respect to MS plc, a company
incorporated under the laws of England and Wales or (ii) with respect to the
Company, a corporation organized under the laws of the United States or a state
thereof or the District of Columbia, and shall expressly assume all obligations
of MS plc or the Company, as the case may be, under such Indenture and the Debt
Securities or Guarantees issued thereunder, as the case may be, and immediately
after such merger, consolidation, sale, lease or conveyance, the Company, MS
plc, such person or such successor corporation shall not be in default in the
performance of the covenants and conditions of such Indenture to be performed or
observed by MS plc or the Company, as the case may be. (Indentures, Section
9.1) This covenant would not apply to a recapitalization transaction, a change
of control of the Company or MS plc or a highly leveraged transaction unless
such transactions or change of control were structured to include a merger or
consolidation or sale, lease or conveyance of all or substantially all of the
assets of the Company or MS plc.
Except as may be described in a Prospectus Supplement applicable to a
particular series of Debt Securities, there are no covenants or other provisions
in the Indentures providing for a put or increased interest or otherwise that
would afford holders of Debt Securities additional protection in the event of a
recapitalization transaction, a change of control of MS plc or the Company or a
highly leveraged transaction.
Events of Default
An Event of Default is defined under each Indenture with respect to Debt
Securities of any series issued under such Indenture as being: (a) default in
payment of any principal of the Debt Securities of such series, either at
maturity (or upon any redemption), by declaration or otherwise; (b) default for
30 days in payment of any interest on any Debt Securities of such series; (c)
default for 60 days after written notice in the observance or performance of any
other covenant or agreement of the Company or MS plc in the Debt Securities of
such series or such Indenture other than a covenant included in such Indenture
solely for the benefit of a series of Debt Securities other than such series;
(d) certain events of bankruptcy, insolvency, reorganization or administration
involving MS plc; (e) failure by MS plc to make any payment at maturity,
including any applicable grace period, in respect of
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indebtedness, which term as used in each of the Indentures means obligations
(other than nonrecourse obligations or the Debt Securities of such series issued
under such Indenture) of, or guaranteed or assumed by, MS plc for borrowed money
or evidenced by bonds, debentures, notes or other similar instruments
("Indebtedness") in an amount in excess of $10,000,000 and continuance of such
failure for a period of 30 days after written notice thereof to MS plc and the
Company by the Trustee, or to MS plc, the Company and the Trustee by the holders
of not less than 25% in principal amount of such outstanding Debt Securities
(treated as one class) issued under such Indenture; or (f) a default with
respect to any Indebtedness, which default results in the acceleration of
Indebtedness in an amount in excess of $10,000,000 without such Indebtedness
having been discharged or such acceleration having been cured, waived, rescinded
or annulled for a period of 30 days after written notice thereof to MS plc and
the Company by the Trustee, or to MS plc, the Company and the Trustee by the
holders of not less than 25% in principal amount of such outstanding Debt
Securities (treated as one class) issued under such Indenture; provided,
however, that if any such failure, default or acceleration referred to in
clause (e) or clause (f) above shall cease or be cured, waived, rescinded or
annulled, then the Event of Default by reason thereof shall be deemed likewise
to have been thereupon cured. (Indentures, Section 5.1)
Each Indenture provides that (a) if an Event of Default due to the default
in payment of principal of, premium, if any, or interest on, any series of Debt
Securities issued under such Indenture or due to the default in the performance
or breach of any other covenant or warranty of MS plc or the Company applicable
to the Debt Securities of such series but not applicable to all outstanding Debt
Securities issued under such Indenture shall have occurred and be continuing,
either the Trustee or the holders of not less than 25% in principal amount of
such Debt Securities of each affected series (treated as one class) issued under
such Indenture and then outstanding, by 45 days' written notice to MS plc and
the Company after the occurrence of such Event of Default, may then declare the
principal of all Debt Securities of each such affected series and interest
accrued thereon to be due and payable immediately; and (b) if an Event of
Default due to a default in the performance of any other of the covenants or
agreements in such Indenture applicable to all outstanding Debt Securities
issued under such Indenture and then outstanding or due to certain events of
bankruptcy, insolvency, reorganization or administration of MS plc shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of all Debt Securities issued under such Indenture and
then outstanding (treated as one class), by 45 days' written notice to MS plc
and the Company after the occurrence of such Event of Default, may declare the
principal of all such Debt Securities and interest accrued thereon to be due and
payable immediately, but upon certain conditions such declarations may be
annulled and past defaults may be waived (except a continuing default in payment
of principal of (or premium, if any) or interest on such Debt Securities) by the
holders of a majority in principal amount of the Debt Securities of all such
affected series then outstanding. (Indentures, Sections 5.1 and 5.10)
Each Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during a default to act with the required standard of care,
to be indemnified by the holders of Debt Securities (treated as one class)
issued under such Indenture before proceeding to exercise any right or power
under such Indenture at the request of such holders. (Indentures, Section 6.2)
Subject to such provisions in each Indenture for the indemnification of the
Trustee and certain other limitations, the holders of a majority in principal
amount of the outstanding Debt Securities (treated as one class) issued under
such Indenture 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 on the Trustee. (Indentures, Section 5.9)
Each Indenture provides that no holder of Debt Securities issued under such
Indenture may institute any action against MS plc or the Company under such
Indenture (except actions for payment of overdue principal or interest) unless
such holder previously shall have given to the Trustee written notice of default
and continuance thereof and unless the holders of not less than 25% in principal
amount of the Debt Securities of each affected series (treated as one class)
issued under such Indenture and then outstanding shall have requested the
Trustee to institute such action and shall have offered the Trustee reasonable
indemnity, the Trustee shall not have instituted such action within 60 days of
such request and the Trustee shall not have received direction inconsistent with
such written request by the holders of a majority in principal amount of the
Debt Securities of each affected series (treated as one class) issued under
such Indenture and then outstanding. (Indentures, Sections 5.6 and 5.9)
Each Indenture contains a covenant that MS plc and the Company will file
annually with the Trustee a certificate of no default or a certificate
specifying any default that exists. (Indentures, Section 3.5)
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Discharge, Defeasance and Covenant Defeasance
MS plc and the Company, as guarantor, can discharge or defease their
obligations under an Indenture as set forth below. (Indentures, Section 10.1)
MS plc and the Company may discharge certain obligations to holders of any
series of Debt Securities issued under such Indenture which have not already
been delivered to the Trustee for cancellation and which have either become due
and payable or are by their terms due and payable within one year (or scheduled
for redemption within one year) by irrevocably depositing with the Trustee cash
or, in the case of Debt Securities payable only in U.S. dollars, U.S. Government
Obligations (as defined in such Indenture) as trust funds in an amount certified
to be sufficient to pay at maturity (or upon redemption) the principal of,
premium, if any, and interest on such Debt Securities.
MS plc and the Company may also discharge any and all of their obligations
to holders of any series of Debt Securities issued under an Indenture at any
time ("defeasance"), but may not thereby avoid any duty to register the transfer
or exchange of such series of Debt Securities, to replace any temporary,
mutilated, destroyed, lost or stolen Debt Securities of such series or to
maintain an office or agency in respect of such series of Debt Securities. MS
plc and the Company may instead be released with respect to any outstanding
series of Debt Securities issued under the relevant Indenture from the
obligations imposed by Section 3.6 (in the case of the Senior Debt Indenture)
and Section 9.1 (which contain the covenants described above limiting liens and
consolidations, mergers, asset sales and leases), and omit to comply with such
Sections without creating an Event of Default ("covenant defeasance").
Defeasance or covenant defeasance may be effected only if, among other things:
(i) MS plc or the Company irrevocably deposits with the relevant Trustee cash
or, in the case of Debt Securities payable only in U.S. dollars, U.S. Government
Obligations, as trust funds in an amount certified to be sufficient to pay at
maturity (or upon redemption) the principal of, premium, if any, and interest on
all outstanding Debt Securities of such series issued under such Indenture; (ii)
MS plc or the Company delivers to the relevant Trustee an opinion of counsel to
the effect that the holders of such series of Debt Securities will not recognize
income, gain or loss for United States federal income tax purposes as a result
of such defeasance or covenant defeasance and that defeasance or covenant
defeasance will not otherwise alter such holders' United States federal income
tax treatment of principal and interest payments on such series of Debt
Securities (in the case of a defeasance, such opinion must be based on a ruling
of the Internal Revenue Service or a change in United States federal income tax
law occurring after the date of such Indenture, since such a result would not
occur under current tax law); and (iii) in the case of the Subordinated Debt
Indenture (a) no event or condition shall exist that, pursuant to certain
provisions described under "Subordinated Debt" above, would prevent MS plc or
the Company from making payments of principal of (and premium, if any) and
interest on the subordinated Debt Securities at the date of the irrevocable
deposit referred to above or at any time during the period ending on the 91st
day after such deposit date and (b) MS plc or the Company, as applicable,
delivers to the Trustee for the Subordinated Debt Indenture an opinion of
counsel to the effect that (1) the trust funds will not be subject to any rights
of holders of Senior Indebtedness and (2) after the 91st day following the
deposit, the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, except that if a court were to rule under any such law in any
case or proceeding that the trust funds remained property of MS plc or the
Company, as the case may be, then the relevant Trustee and the holders of the
subordinated Debt Securities would be entitled to certain rights as secured
creditors in such trust funds.
Modification of the Indentures
Each Indenture provides that MS plc, the Company and the Trustee may enter
into supplemental indentures without the consent of the holders of Debt
Securities to: (a) secure any Debt Securities, (b) evidence the assumption by a
successor corporation of the obligations of MS plc or the Company, (c) add
covenants for the protection of the holders of Debt Securities, (d) cure any
ambiguity or correct any inconsistency in such Indenture, (e) establish the
forms or terms of Debt Securities of any series and any Guarantee thereof and
(f) evidence the acceptance of appointment by a successor trustee. (Indentures,
Section 8.1)
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Each Indenture also contains provisions permitting MS plc, the Company and
the Trustee, with the consent of the holders of not less than a majority in
principal amount of Debt Securities of all series issued under such Indenture
then outstanding and affected (voting as one class), to add any provisions to,
or change in any manner or eliminate any of the provisions of, such Indenture or
modify in any manner the rights of the holders of the Debt Securities of each
series so affected; provided that MS plc, the Company and the Trustee may not,
without the consent of the holder of each outstanding Debt Security affected
thereby, (a) extend the stated maturity of the principal of any Debt Security,
or reduce the principal amount thereof or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof
or change the currency in which the principal thereof (including any amount in
respect of original issue discount), premium, if any, or interest thereon is
payable or reduce the amount of any original issue discount security payable
upon acceleration or provable in bankruptcy, or alter the provisions of any
Guarantee of the Debt Securities in any manner adverse to the holders, or alter
certain provisions of such Indenture relating to the Debt Securities issued
thereunder not denominated in U.S. dollars or impair the right to institute suit
for the enforcement of any payment on any Debt Security when due or (b) reduce
the aforesaid percentage in principal amount of Debt Securities of any series
issued under such Indenture, the consent of the holders of which is required for
any such modification. (Indentures, Section 8.2)
The Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding subordinated Debt Securities or of any
Guarantee thereof without the consent of each holder of MS plc Senior
Indebtedness or Company Senior Indebtedness, as the case may be, then
outstanding that would be adversely affected thereby. (Subordinated Debt
Indenture, Section 8.6)
Concerning the Trustee
Chemical Bank is one of a number of banks with which the Company and its
subsidiaries maintain ordinary banking relationships and with which the Company
and its subsidiaries maintain credit facilities.
LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES
Except as may otherwise be provided in the Prospectus Supplement applicable
thereto, in compliance with United States federal income tax laws and
regulations, Bearer Securities (including Bearer Securities in global form) will
not be offered, sold, resold or delivered, directly or indirectly, in the United
States or its possessions or to United States persons (as defined below), except
as otherwise permitted by United States Treasury Regulations Section 1.163-
5(c)(2)(i)(D). Any underwriters, agents and dealers participating in the
offerings of Bearer Securities, directly or indirectly, must agree that they
will not, in connection with the original issuance of any Bearer Securities or
during the restricted period (as defined in United States Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)) (the "restricted period"), offer, sell, resell
or deliver, directly or indirectly, any Bearer Securities in the United States
or its possessions or to United States persons (other than as permitted by the
applicable Treasury Regulations described above). In addition, any such
underwriters, agents and dealers must have procedures reasonably designed to
ensure that its employees or agents who are directly engaged in selling Bearer
Securities are aware of the above restrictions on the offering, sale, resale or
delivery of Bearer Securities. Moreover, Bearer Securities (other than
temporary global Debt Securities and Bearer Securities that satisfy the
requirements of United States Treasury Regulations Section 1.163-
5(c)(2)(i)(D)(3)(iii)) and any Coupons appertaining thereto will not be
delivered in definitive form unless MS plc has received a signed certificate in
writing (or an electronic certificate described in United States Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(3)(ii)) stating that on such date such
Bearer Security (i) is owned by a person that is not a United States person,
(ii) is owned by a United States person that (a) is a foreign branch of a United
States financial institution (as defined in United States Treasury Regulations
Section 1.165-12(c)(1)(v)) (a "financial institution") purchasing for its own
account or for resale or (b) is acquiring such Bearer Security through a foreign
branch of a United States financial institution and who holds the Bearer
Security through such financial institution through such date (and in either
case (a) or (b) above, each such United States financial institution agrees, on
its own behalf or through its agent, that MS plc may be advised that it will
comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal
Revenue Code of 1986, as amended, and
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the regulations thereunder) or (iii) is owned by a United States or foreign
financial institution for the purposes of resale during the restricted period
and, in addition, if the owner of such Bearer Security is a United States or
foreign financial institution described in clause (iii) above (whether or not
also described in clause (i) or clause (ii) above), such financial institution
certifies that it has not acquired the Bearer Security for purposes of resale
directly or indirectly to a United States person or to a person within the
United States or its possessions.
Bearer Securities (other than temporary global Debt Securities) and any
Coupons appertaining thereto will bear a legend substantially to the following
effect: "Any United States person who holds this obligation will be subject to
limitations under the United States federal income tax laws, including the
limitations provided in Sections 165(j) and 1287(a) of the United States
Internal Revenue Code." The sections referred to in such legend provide that,
with certain exceptions, a United States person will not be permitted to deduct
any loss and will not be eligible for capital gain treatment with respect to any
gain realized on the sale, exchange or redemption of such Bearer Security or
Coupon.
As used herein, "United States person" means a citizen, national or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or an estate or trust the income of which is subject to
United States federal income taxation regardless of its source.
DESCRIPTION OF CAPITAL STOCK OF THE COMPANY
As of the date of this Prospectus, the Company's authorized capital stock
consists of 300,000,000 shares of Common Stock, par value $1.00 per share, and
30,000,000 shares of Preferred Stock, no par value per share ("Preferred
Stock"). The Board of Directors of the Company has the power, without further
action by the stockholders unless action is required by applicable laws or
regulations or by the terms of outstanding Preferred Stock, to issue Preferred
Stock in one or more series and to fix the voting rights, designations,
preferences and relative, participating, optional and other special rights, and
the qualifications, limitations and restrictions applicable thereto.
The rights of holders of the Preferred Stock offered hereby (the "Offered
Preferred Stock") will be subject to, and may be adversely affected by, the
rights of holders of any Preferred Stock that may be issued in the future. The
Board of Directors may cause shares of Preferred Stock to be issued to obtain
additional financing, in connection with acquisitions, to officers, directors
and employees of the Company and its subsidiaries pursuant to benefit plans or
otherwise and for other proper corporate purposes. Shares of Preferred Stock
issued by the Company may have the effect, under certain circumstances, alone or
in combination with certain other provisions of the Company's Restated
Certificate of Incorporation described below, of rendering more difficult or
discouraging an acquisition of the Company deemed undesirable by the Board of
Directors.
As of June 30, 1995, there were 76,778,494 shares of Common Stock
outstanding. The Company also had outstanding on May 31, 1995 the following
series of Preferred Stock: 3,785,471 shares of ESOP Convertible Preferred
Stock, with a liquidation value of $35.88 per share (the "ESOP Preferred
Stock"), issued in connection with the Company's Employee Stock Ownership Plan
(the "ESOP"), 5,500,000 shares of 9.36% Cumulative Preferred Stock, with a
stated value of $25.00 per share (the "9.36% Preferred Stock"), 975,000 shares
of 8.88% Cumulative Preferred Stock, with a stated value of $200.00 per share
(the "8.88% Preferred Stock"), 750,000 shares of 8 3/4% Cumulative Preferred
Stock, with a stated value of $200.00 per share (the "8 3/4% Preferred Stock"),
and 1,000,000 shares of 7 3/8% Cumulative Preferred Stock, with a stated value
of $200.00 per share (the "7 3/8% Preferred Stock"). The 9.36% Preferred Stock,
the 8.88% Preferred Stock, the 8 3/4% Preferred Stock and the 7 3/8% Preferred
Stock are collectively referred to herein as the "Existing Cumulative Preferred
Stock". In addition, the Company and MS plc currently have outstanding Capital
Units that may result in up to 611,238 shares of the Company's 7.82% Cumulative
Preferred Stock, with a stated value of $200.00 per share (the "7.82% Preferred
Stock"), being issued at any time, up to 1,150,000 shares of the Company's 7.80%
Cumulative Preferred Stock, with a stated value of $200.00 per share (the "7.80%
Preferred Stock"), being issued at any time and up to 720,900 shares of the
Company's 9.00% Cumulative Preferred Stock, with a stated value of $200.00 per
share (the "9.00% Preferred Stock"), being issued at any time on or after
February 28, 1996. The following
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summary does not purport to be complete and is qualified by the Company's
Restated Certificate of Incorporation, by a Certificate of Designation of
Preferences and Rights of the ESOP Preferred Stock, by a Certificate of
Designation of Preferences and Rights for each of the 7.82% Preferred Stock, the
7.80% Preferred Stock and the 9.00% Preferred Stock and by a Certificate of
Designation of Preferences and Rights of each series of Existing Cumulative
Preferred Stock.
Offered Preferred Stock
The Board of Directors of the Company has authorized the issuance in series
of additional shares of Preferred Stock and has authorized a committee of the
Board of Directors (the "Committee") to establish and designate series and to
fix the number of shares and the relative rights, preferences and limitations of
the respective series of the Offered Preferred Stock (except for the voting
rights of the Offered Preferred Stock, which will be established by the Board of
Directors). The shares of Offered Preferred Stock, when issued and sold, will
be fully paid and nonassessable.
The following description of the terms of the Offered Preferred Stock sets
forth certain general terms and provisions of the Offered Preferred Stock to
which a Prospectus Supplement relates. If so indicated in the Prospectus
Supplement, the terms of any such series may differ from the terms set forth
below. The number of shares and all of the terms and conditions of the relative
rights, preferences and limitations of the respective series of Offered
Preferred Stock as established by the Board of Directors or the Committee will
be set forth in the Prospectus Supplement accompanying this Prospectus relating
to the particular series of Offered Preferred Stock being offered thereby. The
terms of particular series of Offered Preferred Stock may differ, among other
things, in (i) the number of shares that constitute such series, (ii) the
dividend rate (or the method of calculation thereof) on the shares of such
series, (iii) the dividend periods (or the method of calculation thereof), (iv)
the stated value of the shares of such series, (v) the voting rights of the
shares of such series, (vi) the preferences and rights of the shares of such
series upon any liquidation or winding-up of the Company, (vii) whether or not
and on what terms the shares of such series will be subject to redemption at the
option of the Company, (viii) whether depositary shares representing shares of
such series of Offered Preferred Stock will be offered and, if so, the fraction
of a share of such series of Offered Preferred Stock represented by each
depositary share and (ix) the other rights and privileges and any
qualifications, limitations or restrictions of such rights or privileges of such
series.
As described under "Depositary Shares" below, the Company may, at its
option, elect to offer depositary shares (the "Depositary Shares") evidenced by
depositary receipts, each representing a fraction (to be specified in the
Prospectus Supplement relating to the particular series of Offered Preferred
Stock) of a share of the particular series of Offered Preferred Stock issued and
deposited with a depositary, in lieu of offering full shares of such series of
Offered Preferred Stock.
The following statements are brief summaries of certain provisions that
will be contained in the Certificate of Designation authorizing the issuance of
a series of Offered Preferred Stock, do not purport to be complete and are
qualified in their entirety by reference to such Certificate of Designation, the
form of which has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part, and by the Company's Restated Certificate of
Incorporation. The resolutions to be set forth in the Certificate of
Designation will be adopted by the Board of Directors or the Committee prior to
the issuance of a series of Offered Preferred Stock, and such Certificate of
Designation will be filed with the Secretary of State of the State of Delaware
as soon thereafter as reasonably practicable. In the event the Company elects
to issue Depositary Shares, each representing a fraction of a share of a
particular series of Offered Preferred Stock, subject to the terms of the
Deposit Agreement (as defined below), each such Depositary Share will be
entitled, in proportion to the applicable fraction of a share of Offered
Preferred Stock represented by such Depositary Share, to all the rights and
preferences of the Offered Preferred Stock represented thereby (including
dividends, voting, redemption and liquidation rights). See "Depositary Shares"
below. The following statements concerning Depositary Shares, Depositary
Receipts (as defined below) and the Deposit Agreement do not purport to be
complete and are qualified in their entirety by reference to the forms of such
documents, which have been filed as exhibits to the Registration Statement of
which this Prospectus is a part.
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Rank. Each series of Offered Preferred Stock will rank, with respect to
voting powers, preferences or relative, participating, optional and other
special rights and the qualifications, limitations and restrictions thereof,
including with respect to the payment of dividends and the distribution of
assets, whether upon liquidation or otherwise, junior to any series of capital
stock of the Company expressly stated to be senior to such series of the Offered
Preferred Stock, senior to any class of capital stock expressly stated to be
junior to such series of the Offered Preferred Stock, and on a parity with each
other series of Offered Preferred Stock and all other classes of capital stock
of the Company. The Offered Preferred Stock will rank, as to payment of
dividends and amounts payable on liquidation, prior to the Common Stock (see
"Common Stock" below) and on a parity with the ESOP Preferred Stock, each series
of the Existing Cumulative Preferred Stock and, if issued, the 7.82% Preferred
Stock, the 7.80% Preferred Stock and the 9.00% Preferred Stock.
Dividends. Holders of shares of the Offered Preferred Stock will be
entitled to receive, when and as declared by the Board of Directors or the
Committee out of funds legally available for payment, cumulative cash dividends
at an annual rate set forth in, or determined or calculated in accordance with
the method or formula set forth in, and on the dates, for the periods and
otherwise in the manner set forth in, the Prospectus Supplement. Unless
otherwise indicated in the Prospectus Supplement, dividends on the Offered
Preferred Stock will be payable to holders of record as they appear on the stock
books of the Company on such record dates, not more than 60 days nor less than
10 days preceding the payment dates thereof, as shall be fixed by the Board of
Directors or the Committee. Unless otherwise provided in the Prospectus
Supplement, dividends will be cumulative from the date of original issue of
such series. The Offered Preferred Stock will be junior as to dividends to any
Preferred Stock that may be issued in the future that is expressly senior as to
dividends to the Offered Preferred Stock. If at any time the Company has failed
to pay accrued dividends on any such senior shares at the time such dividends
are payable, the Company may not pay any dividend on any series of Offered
Preferred Stock or redeem or otherwise repurchase any shares of any series of
Offered Preferred Stock until such accumulated but unpaid dividends on such
senior shares have been paid (or set aside for payment) in full by the Company.
No dividends may be declared or paid or set apart for payment on any
Preferred Stock ranking on a parity as to dividends with the Offered Preferred
Stock unless there shall also be or have been declared and paid or set apart for
payment on the outstanding shares of Offered Preferred Stock dividends for all
dividend payment periods of each series of the Offered Preferred Stock ending on
or before the dividend payment date of such parity stock, ratably in proportion
to the respective amounts of dividends (i) accumulated and unpaid or payable on
such parity stock, on the one hand, and (ii) accumulated and unpaid or payable
through the dividend payment period or periods of each series of the Offered
Preferred Stock next preceding such dividend payment date, on the other hand.
Except as set forth above, unless full cumulative dividends on the
outstanding shares of Offered Preferred Stock have been paid, dividends (other
than in Common Stock) may not be paid or declared and set aside for payment and
other distributions may not be made upon the Common Stock or on any other
Preferred Stock of the Company ranking junior to or on a parity with the Offered
Preferred Stock as to dividends (which parity Preferred Stock currently includes
the ESOP Preferred Stock and the Existing Cumulative Preferred Stock and, if
issued, would include the 7.82% Preferred Stock, the 7.80% Preferred Stock and
the 9.00% Preferred Stock), nor may any Common Stock or such other Preferred
Stock of the Company be redeemed, purchased or otherwise acquired by the
Company for any consideration or any payment be made to or available for a
sinking fund for the redemption of any shares of such stock; provided, however,
that any monies theretofore deposited in any sinking fund with respect to any
Preferred Stock in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such Preferred Stock in
accordance with the terms of such sinking fund, regardless of whether at the
time of such application full cumulative dividends upon shares of the Offered
Preferred Stock outstanding on the last dividend payment date for any series of
Offered Preferred Stock shall have been paid or declared and set apart for
payment; and provided further that any such junior or parity Preferred Stock or
Common Stock may be converted into or exchanged for stock of the Company ranking
junior to the Offered Preferred Stock as to dividends.
The amount of dividends payable for the initial dividend period or any
period shorter than a full dividend period shall be computed on the basis of a
360-day year of twelve 30-day months. Accrued but unpaid dividends will not
bear interest.
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The ability of the Company, as a holding company, to pay dividends on the
Offered Preferred Stock will be dependent upon, among other factors, the
Company's earnings, financial condition and cash requirements at the time such
payment is considered, and the payment to it of dividends or principal and
interest by, or the availability of other funds from, its subsidiaries.
Dividends, loans and advances from certain subsidiaries, including MS & Co., to
the Company are restricted by net capital requirements under the Exchange Act
and under rules of certain exchanges and various domestic and foreign regulatory
bodies. Such restrictions could limit the ability of the Company to pay
dividends to its stockholders.
Liquidation Rights. In the event of any liquidation, dissolution or
winding up of the Company, the holders of shares of Offered Preferred Stock will
be entitled to receive out of the assets of the Company available for
distribution to stockholders, before any distribution is made to holders of (i)
any other shares of Preferred Stock ranking junior to the Offered Preferred
Stock as to rights upon liquidation, dissolution or winding up that may be
issued in the future or (ii) Common Stock, liquidating distributions in an
amount equal to the stated value per share of each series of Offered Preferred
Stock, as set forth in the applicable Prospectus Supplement, plus accrued and
accumulated but unpaid dividends to the date of final distribution; but the
holders of the shares of Offered Preferred Stock will not be entitled to receive
the liquidation price of such shares until the liquidation preference of any
other shares of the Company's capital stock ranking senior to the Offered
Preferred Stock as to rights upon liquidation, dissolution or winding up shall
have been paid (or a sum set aside therefor sufficient to provide for payment)
in full. If upon any liquidation, dissolution or winding up of the Company, the
amounts payable with respect to the Offered Preferred Stock and any other
Preferred Stock ranking as to rights upon liquidation, dissolution or winding up
on a parity with the Offered Preferred Stock are not paid in full, the holders
of the Offered Preferred Stock and of such other Preferred Stock will share
ratably in any such distribution in proportion to the full respective
preferential amounts to which they are entitled. After payment of the full
amount of the liquidating distribution to which they are entitled, the holders
of the Offered Preferred Stock will not be entitled to any further participation
in any distribution of assets by the Company. Neither a consolidation or merger
of the Company with or into another corporation nor a merger of another
corporation with or into the Company nor a sale or transfer of all or part of
the Company's assets for cash or securities shall be considered a liquidation,
dissolution or winding up of the Company.
Because the Company is a holding company, its rights and the rights of its
creditors and its stockholders, including the holders of the shares of Offered
Preferred Stock, to participate in the assets of any subsidiary upon the
latter's liquidation or recapitalization may be subject to the prior claims of
the subsidiary's creditors, except to the extent that the Company may itself be
a creditor with recognized claims against the subsidiary.
Optional Redemption. The Prospectus Supplement will indicate whether, and
if so on what terms, shares of a series of the Offered Preferred Stock will be
subject to any mandatory redemption or sinking fund provision. The Prospectus
Supplement will also indicate whether, and if so on what terms (including the
date on or after which redemption may occur), shares of a series of the Offered
Preferred Stock will be redeemable. Any such redemption would be effected upon
not less than 30 days' notice at a redemption price of not less than the stated
value per share of the applicable series of Offered Preferred Stock plus accrued
and accumulated but unpaid dividends to but excluding the date fixed for
redemption. If full cumulative dividends on all outstanding shares of Offered
Preferred Stock have not been paid, no shares of Offered Preferred Stock may be
redeemed in part and the Company may not purchase or acquire any shares of
Offered Preferred Stock otherwise than pursuant to a purchase or exchange offer
made on the same terms to all holders of the Offered Preferred Stock. If fewer
than all the outstanding shares of a series of Offered Preferred Stock are to be
redeemed, the Company will select those to be redeemed by lot or a
substantially equivalent method.
Voting Rights. Unless otherwise determined by the Board of Directors of
the Company and indicated in the Prospectus Supplement, holders of the Offered
Preferred Stock will not have any voting rights except as set forth below or as
otherwise from time to time required by law. Whenever dividends on any shares
of Offered Preferred Stock or any other class or series of stock ranking on a
parity with the Offered Preferred Stock with respect to the payment of dividends
shall be in arrears for dividend periods, whether or not consecutive, containing
in the aggregate a number of days equivalent to six calendar quarters, the
holders of shares of each series of Offered Preferred Stock (voting separately
as a class with all other series of Preferred Stock (including the Existing
Cumulative Preferred Stock) upon which like voting rights have been conferred
and are exercisable) will be entitled
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to vote for the election of two of the authorized number of directors of the
Company at the next annual meeting of stockholders and at each subsequent
meeting until all dividends accumulated on such series of Offered Preferred
Stock have been fully paid or set apart for payment. The term of office of all
directors elected by the holders of Preferred Stock shall terminate immediately
upon the termination of the right of the holders of Preferred Stock to vote for
directors. Each holder of shares of the Offered Preferred Stock will have one
vote for each share of Offered Preferred Stock held.
So long as any shares of the Offered Preferred Stock remain outstanding,
the Company shall not, without the consent of the holders of at least two-thirds
of the shares of Offered Preferred Stock outstanding at the time, voting
separately as a class with all other series of Preferred Stock (including the
Existing Cumulative Preferred Stock and, if issued, the 7.82% Preferred Stock,
the 7.80% Preferred Stock and the 9.00% Preferred Stock) upon which like voting
rights have been conferred and are exercisable, (i) issue or increase the
authorized amount of any class or series of stock ranking prior to the
outstanding Offered Preferred Stock as to dividends or upon liquidation or (ii)
amend, alter or repeal the provisions of the Company's Restated Certificate of
Incorporation or of the resolutions contained in the Certificate of Designation,
whether by merger, consolidation or otherwise, so as to materially and adversely
affect any power, preference or special right of the outstanding Offered
Preferred Stock or the holders thereof; provided, however, that any increase in
the amount of the authorized Common Stock or authorized Preferred Stock or the
creation and issuance of other series of Common Stock or Preferred Stock ranking
on a parity with or junior to the Offered Preferred Stock as to dividends and
upon liquidation shall not be deemed to materially and adversely affect such
powers, preferences or special rights.
Unless otherwise indicated in a Prospectus Supplement, the transfer agent,
dividend disbursing agent and registrar for each series of Offered Preferred
Stock will be The Bank of New York.
Depositary Shares
General. The Company may, at its option, elect to offer fractional shares
of the Offered Preferred Stock, rather than full shares of the Offered Preferred
Stock. In the event such option is exercised, the Company will issue receipts
for Depositary Shares, each of which will represent a fraction (to be set forth
in the Prospectus Supplement relating to a particular series of Offered
Preferred Stock) of a share of a particular series of Offered Preferred Stock as
described below.
The shares of any series of Offered Preferred Stock represented by
Depositary Shares will be deposited under a Deposit Agreement (the "Deposit
Agreement") among the Company, The Bank of New York, as depositary (the
"Preferred Stock Depositary"), and the holders from time to time of depositary
receipts issued thereunder. Subject to the terms of the Deposit Agreement, each
holder of a Depositary Share will be entitled, in proportion to the applicable
fraction of a share of Offered Preferred Stock represented by such Depositary
Share, to all the rights and preferences of the Offered Preferred Stock
represented thereby (including dividend, voting and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of the
related series of Offered Preferred Stock. Copies of the forms of Deposit
Agreement and Depositary Receipt are filed as exhibits to the Registration
Statement of which this Prospectus is a part, and the following summary is
qualified in its entirety by reference to such exhibits. Immediately following
the issuance of shares of a series of Offered Preferred Stock by the Company,
the Company will deposit such shares with the Preferred Stock Depositary, which
will then issue and deliver the Depositary Receipts to the purchasers thereof.
Depositary Receipts will only be issued evidencing whole Depositary Shares. A
Depositary Receipt may evidence any number of whole Depositary Shares.
Pending the preparation of definitive engraved Depositary Receipts, the
Preferred Stock Depositary may, upon the written order of the Company, issue
temporary Depositary Receipts substantially identical to (and entitling the
holders thereof to all the rights pertaining to) the definitive Depositary
Receipts but not in definitive form. Definitive Depositary Receipts will be
prepared thereafter without unreasonable delay, and such temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at the
Company's expense.
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Dividends and Other Distributions. The Preferred Stock Depositary will
distribute all cash dividends or other cash distributions received in respect of
the related series of Offered Preferred Stock to the record holders of
Depositary Shares relating to such series of Offered Preferred Stock in
proportion to the number of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto in proportion to the number of Depositary
Shares owned by such holders, unless the Preferred Stock Depositary determines
that such distribution cannot be made proportionately among such holders or that
it is not feasible to make such distribution, in which case the Preferred Stock
Depositary may, with the approval of the Company, sell such property and
distribute the net proceeds from such sale to such holders in proportion to the
number of Depositary Shares owned by such holders.
The amount distributed in any of the foregoing cases will be reduced by any
amounts required to be withheld by the Company or the Preferred Stock Depositary
on account of taxes or other governmental charges.
Withdrawal of Stock. Upon surrender of the Depositary Receipts at the
corporate trust office of the Preferred Stock Depositary and upon payment of the
taxes, charges and fees provided for in the Deposit Agreement and subject to the
terms thereof, the holder of the Depositary Shares evidenced thereby is entitled
to delivery at such office, to or upon his or her order, of the number of whole
shares of the related series of Offered Preferred Stock and any money or other
property, if any, represented by such Depositary Shares. Holders of Depositary
Shares will be entitled to receive whole shares of the related series of
Offered Preferred Stock, but holders of such whole shares of Offered Preferred
Stock will not thereafter be entitled to deposit such shares of Offered
Preferred Stock with the Preferred Stock Depositary or to receive Depositary
Shares therefor. If the Depositary Receipts delivered by the holder evidence a
number of Depositary Shares in excess of the number of Depositary Shares
representing the number of whole shares of the related series of Offered
Preferred Stock to be withdrawn, the Preferred Stock Depositary will deliver to
such holder, or upon his or her order, at the same time a new Depositary Receipt
evidencing such excess number of Depositary Shares.
Voting the Offered Preferred Stock. Upon receipt of notice of any meeting
at which the holders of any series of the Offered Preferred Stock are entitled
to vote, the Preferred Stock Depositary will mail the information contained in
such notice of meeting to the record holders of the Depositary Shares relating
to such series of Offered Preferred Stock. Each record holder of such
Depositary Shares on the record date (which will be the same date as the record
date for the related series of Offered Preferred Stock) will be entitled to
instruct the Preferred Stock Depositary as to the exercise of the voting rights
pertaining to the number of shares of the series of Offered Preferred Stock
represented by such holder's Depositary Shares. The Preferred Stock Depositary
will endeavor, insofar as practicable, to vote or cause to be voted the number
of shares of the Offered Preferred Stock represented by such Depositary Shares
in accordance with such instructions, provided the Preferred Stock Depositary
receives such instructions sufficiently in advance of such meeting to enable it
to so vote or cause to be voted the shares of Offered Preferred Stock, and the
Company will agree to take all reasonable action that may be deemed necessary
by the Preferred Stock Depositary in order to enable the Preferred Stock
Depositary to do so. The Preferred Stock Depositary will abstain from voting
shares of the Offered Preferred Stock to the extent it does not receive specific
instructions from the holders of Depositary Shares representing such Offered
Preferred Stock.
Redemption of Depositary Shares. If a series of the Offered Preferred
Stock underlying the Depositary Shares is subject to redemption, the Depositary
Shares will be redeemed from the proceeds received by the Preferred Stock
Depositary resulting from any redemption, in whole or in part, of such series of
the Offered Preferred Stock held by the Preferred Stock Depositary. The
redemption price per Depositary Share will be equal to the applicable fraction
of the redemption price per share payable with respect to such series of the
Offered Preferred Stock. If the Company redeems shares of a series of Offered
Preferred Stock held by the Preferred Stock Depositary, the Preferred Stock
Depositary will redeem as of the same redemption date the number of Depositary
Shares representing the shares of Offered Preferred Stock so redeemed. If less
than all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by lot or substantially equivalent method determined
by the Preferred Stock Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive
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the moneys payable upon such redemption and any money or other property to which
the holders of such Depositary Shares were entitled upon such redemption, upon
surrender to the Preferred Stock Depositary of the Depositary Receipts
evidencing such Depositary Shares. Any funds deposited by the Company with the
Preferred Stock Depositary for any Depositary Shares that the holders thereof
fail to redeem will be returned to the Company after a period of two years from
the date such funds are so deposited.
Amendment and Termination of the Deposit Agreement. The form of Depositary
Receipt evidencing the Depositary Shares and any provision of the Deposit
Agreement may at any time and from time to time be amended by agreement between
the Company and the Preferred Stock Depositary. However, any amendment that
materially and adversely alters the rights of the holders of Depositary Shares
will not be effective unless such amendment has been approved by the holders of
at least a majority of the Depositary Shares then outstanding. Notwithstanding
the foregoing, in no event may any amendment impair the right of any holder of
any Depositary Shares, upon surrender of the Depositary Receipts evidencing such
Depositary Shares and subject to any conditions specified in the Deposit
Agreement, to receive shares of the related series of Offered Preferred Stock
and any money or other property represented thereby, except in order to comply
with mandatory provisions of applicable law. The Deposit Agreement may be
terminated by the Company at any time upon not less than 60 days' prior written
notice to the Depositary, in which case, on a date that is not later than 30
days after the date of such notice, the Preferred Stock Depositary shall deliver
or make available for delivery to holders of Depositary Shares, upon surrender
of the Depositary Receipts evidencing such Depositary Shares, such number of
whole or fractional shares of the related series of Offered Preferred Stock as
are represented by such Depositary Shares. The Deposit Agreement shall
automatically terminate after there has been a final distribution in respect of
the related series of Offered Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution has
been distributed to the holders of Depositary Shares.
Charges of Preferred Stock Depositary. The Company will pay all transfer
and other taxes and governmental charges arising solely from the existence of
the depositary arrangements. The Company will pay charges of the Preferred
Stock Depositary, including charges in connection with the initial deposit of
the related series of Offered Preferred Stock and the initial issuance of the
Depositary Shares and all withdrawals of shares of the related series of Offered
Preferred Stock, except that holders of Depositary Shares will pay other
transfer and other taxes and governmental charges and such other charges as are
expressly provided in the Deposit Agreement to be for their accounts.
Miscellaneous. The Preferred Stock Depositary will forward to the holders
of Depositary Shares all reports and communications from the Company that are
delivered to the Preferred Stock Depositary and which the Company is required to
furnish to the holders of the Offered Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Preferred Stock Depositary under the Deposit Agreement will be
limited to performance with best judgment and in good faith of their duties
thereunder, except that they are liable for negligence and willful misconduct in
the performance of their duties thereunder, and they will not be obligated to
appear in, prosecute or defend any legal proceeding in respect of any Depositary
Receipts, Depositary Shares or series of Offered Preferred Stock unless
satisfactory indemnity is furnished. The Preferred Stock Depositary and the
Company may rely on advice of legal counsel or accountants of their choice, or
information provided by persons presenting Offered Preferred Stock for deposit,
holders of Depositary Shares or other persons believed in good faith to be
competent and on documents believed to be genuine.
The Preferred Stock Depositary's corporate trust office is currently
located at 101 Barclay Street, New York, New York 10286. The Preferred Stock
Depositary will act as transfer agent and registrar for Depositary Receipts and
if shares of a series of Offered Preferred Stock are redeemable, the Preferred
Stock Depositary will act as redemption agent for the corresponding Depositary
Receipts.
Resignation and Removal of Preferred Stock Depositary. The Preferred Stock
Depositary may resign at any time by delivering to the Company written notice
of its election to do so, and the Company may at any time remove the Preferred
Stock Depositary, any such resignation or removal to take effect upon the
appointment of a successor Preferred Stock Depositary, which successor Preferred
Stock Depositary must be appointed within 60 days
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after delivery of the notice of resignation or removal and must be a bank or
trust company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
Common Stock
Each holder of Common Stock is entitled to one vote per share for the
election of directors and for all other matters to be voted on by the Company's
stockholders. Except as otherwise provided by law, the holders of shares of
Common Stock vote as one class, together with the ESOP Preferred Stock and any
other class or series of stock conferred with general class voting rights by the
Company's Restated Certificate of Incorporation. Holders of Common Stock may
not cumulate their votes in the election of directors, which means that the
holders of Common Stock, together with the holders of ESOP Preferred Stock, who
are entitled to exercise more than 50% of the voting rights generally are able
to elect all of the directors to be elected at each annual meeting and to cast a
sufficient number of votes to control the affairs of the Company subject to a
vote of stockholders. As of April 10, 1995, certain current and former Managing
Directors and Principals of MS & Co. owned, in the aggregate, 24,761,160 shares
of Common Stock subject to voting restrictions contained in certain agreements
(the "Voting Agreements"). As of such date, such shares constituted
approximately 30.1% of the votes that are entitled to be cast by the Common
Stock and ESOP Preferred Stock at any meeting of the Company's
stockholders.
The holders of the Common Stock are entitled to share equally in such
dividends as may be declared by the Board of Directors out of funds legally
available therefor, but only after payment of dividends required to be paid on
outstanding shares of Offered Preferred Stock, ESOP Preferred Stock, Existing
Cumulative Preferred Stock and any other class or series of stock having
preference over the Common Stock as to dividends, including, if issued, the
7.82% Preferred Stock, the 7.80% Preferred Stock and the 9.00% Preferred Stock.
The ability of the Company, as a holding company, to pay dividends on its Common
Stock will be dependent upon, among other factors, the Company's earnings,
financial condition and cash requirements at the time such payment is
considered, and payment to it of dividends or principal and interest by, or the
availability of other funds from, its subsidiaries. Dividends, loans and
advances from certain subsidiaries, including MS & Co., to the Company are
restricted by net capital requirements under the Exchange Act and under rules
of certain exchanges and various domestic and foreign regulatory bodies. Such
restrictions could limit the ability of the Company to pay dividends to its
stockholders.
Upon voluntary or involuntary liquidation, dissolution or winding up of the
Company, the holders of the Common Stock share pro rata in the assets remaining
after payments to creditors and provision for the preference of any Offered
Preferred Stock, ESOP Preferred Stock, Existing Cumulative Preferred Stock and
any other class or series of stock having preference over the Common Stock upon
liquidation, dissolution or winding up that may be then outstanding, including,
if issued, the 7.82% Preferred Stock, the 7.80% Preferred Stock and the 9.00%
Preferred Stock. There are no preemptive or other subscription rights,
conversion rights or redemption or sinking fund provisions with respect to
shares of Common Stock.
All of the outstanding shares of Common Stock are fully paid and
nonassessable.
The transfer agent and registrar for the Common Stock is First Chicago
Trust Company of New York.
ESOP Convertible Preferred Stock
The ESOP Preferred Stock is senior to the Company's Common Stock and ranks
on a parity with the Offered Preferred Stock and the Existing Cumulative
Preferred Stock (and, if issued, the 7.82% Preferred Stock, the 7.80% Preferred
Stock and the 9.00% Preferred Stock) as to the payment of dividends and upon
liquidation. The holders of shares of the ESOP Preferred Stock are entitled to
receive, when declared out of funds legally available therefor, cash dividends
in the amount of $2.78 per share per annum, subject to adjustment, payable
either annually or semiannually, at the election of the Board of Directors of
the Company. Holders of ESOP Preferred Stock are entitled to receive $35.88 per
share, subject to adjustment (the "ESOP Preferred Stock Liquidation Price"),
upon dissolution or liquidation of the Company.
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So long as any shares of ESOP Preferred Stock shall be outstanding, no
dividend shall be declared or paid or set apart for payment on any other series
of stock ranking on a parity with the ESOP Preferred Stock as to dividends
(which parity Preferred Stock currently includes the Offered Preferred Stock and
the Existing Cumulative Preferred Stock and, if issued, the 7.82% Preferred
Stock, the 7.80% Preferred Stock and the 9.00% Preferred Stock), unless there
shall also be or have been declared and paid or set apart for payment on the
ESOP Preferred Stock like dividends for all dividend payment periods of the ESOP
Preferred Stock ending on or before the dividend payment date of such parity
stock, ratably in proportion to the respective amounts of dividends (i)
accumulated and unpaid or payable on such parity stock, on the one hand, and
(ii) accumulated and unpaid through the dividend payment period or periods of
the ESOP Preferred Stock next preceding such dividend payment date, on the other
hand.
Holders of ESOP Preferred Stock are entitled to vote on all matters
submitted to a vote of the holders of shares of Common Stock, voting together
with the holders of shares of Common Stock as one class. Each share of ESOP
Preferred Stock is entitled to the number of votes equal to 1.35 times the
number of shares of Common Stock into which such share of ESOP Preferred Stock
could be converted on the record date for such vote. Shares of ESOP Preferred
Stock are allocated to each participant in the ESOP on December 31 in each year.
Each share of ESOP Preferred Stock is convertible into shares of Common
Stock by the trustee of the ESOP at any time prior to the date fixed for
redemption of the ESOP Preferred Stock at an initial conversion rate of one
share of ESOP Preferred Stock to one share of Common Stock, which rate is
subject to adjustment. The conversion price per share at which shares of Common
Stock will be issued upon conversion of any shares of ESOP Preferred Stock is
$35.88, subject to adjustment.
The ESOP Preferred Stock is redeemable at the Company's option at the ESOP
Preferred Stock Liquidation Price plus accrued dividends at any time after
September 19, 2000 and prior thereto under certain circumstances at specified
prices. The Company may pay the redemption price of the ESOP Preferred Stock in
cash, in shares of Common Stock or a combination thereof. Neither ESOP
Preferred Stock nor shares of Common Stock issued to participants in the ESOP
are subject to the restrictions on voting and disposition contained in the
Voting Agreements.
Existing Cumulative Preferred Stock
Other than as described below, the terms of the 9.36% Preferred Stock, the
8.88% Preferred Stock, the 8 3/4% Preferred Stock and the 7 3/8% Preferred Stock
are identical. Unless otherwise indicated, the terms and provisions described
below relate to each of the 9.36% Preferred Stock, the 8.88% Preferred Stock,
the 8 3/4% Preferred Stock and the 7 3/8% Preferred Stock, which are
collectively referred to as the "Existing Cumulative Preferred Stock". Unless
otherwise indicated below, the terms and provisions described below for the
Existing Cumulative Preferred Stock also relate to each of the 7.82% Preferred
Stock, the 7.80% Preferred Stock and the 9.00% Preferred Stock, if issued.
Each series of the Existing Cumulative Preferred Stock and, if issued, the
7.82% Preferred Stock, the 7.80% Preferred Stock and the 9.00% Preferred Stock
ranks on a parity with each other and with the Offered Preferred Stock and the
ESOP Preferred Stock and prior to the Common Stock as to payment of dividends
and amounts payable on liquidation. The shares of Existing Cumulative Preferred
Stock are fully paid and nonassessable, are not convertible into Common Stock of
the Company and have no preemptive rights.
Dividends. Holders of the shares of Existing Cumulative Preferred Stock
are entitled to receive, when and as declared by the Board of Directors of the
Company out of funds legally available therefor, cumulative cash dividends
payable quarterly at the rate of 9.36% per annum, 8.88% per annum, 8 3/4% per
annum, 7 3/8% per annum, 7.82% per annum (if the 7.82% Preferred Stock is
issued), 7.80% per annum (if the 7.80% Preferred Stock is issued) and 9.00% per
annum (if the 9.00% Preferred Stock is issued), as the case may be. The
Existing Cumulative Preferred Stock will be junior as to dividends to any
preferred stock that may be issued in the future that is expressly senior as to
dividends to the Existing Cumulative Preferred Stock. If at any time the
Company has failed to pay accrued dividends on any such senior shares at the
time such dividends are payable, the Company may not pay any dividend on the
Existing Cumulative Preferred Stock or redeem or otherwise repurchase any shares
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of Existing Cumulative Preferred Stock until such accumulated but unpaid
dividends on such senior shares have been paid (or set aside for payment) in
full by the Company.
No dividends may be declared or paid or set apart for payment on any
preferred stock ranking on a parity as to dividends with the Existing Cumulative
Preferred Stock unless there shall also be or have been declared and paid or set
apart for payment on each series of the Existing Cumulative Preferred Stock
dividends for all dividend payment periods of the Existing Cumulative Preferred
Stock ending on or before the dividend payment date of such parity stock,
ratably in proportion to the respective amounts of dividends (i) accumulated and
unpaid or payable on such parity stock, on the one hand, and (ii) accumulated
and unpaid or payable through the dividend payment period or periods of the
Existing Cumulative Preferred Stock next preceding such dividend payment date,
on the other hand.
Except as set forth above, unless full cumulative dividends on the Existing
Cumulative Preferred Stock have been paid, dividends (other than in Common
Stock) may not be paid or declared and set aside for payment and other
distributions may not be made upon the Common Stock or on any other preferred
stock of the Company ranking junior to or on a parity with the Existing
Cumulative Preferred Stock as to dividends (which parity preferred stock
currently includes the Offered Preferred Stock and the ESOP Preferred Stock),
nor may any Common Stock or such other preferred stock of the Company be
redeemed, purchased or otherwise acquired by the Company for any consideration
or any payment be made to or available for a sinking fund for the redemption of
any shares of such stock; provided, however, that any monies theretofore
deposited in any sinking fund with respect to any preferred stock in compliance
with the provisions of such sinking fund may thereafter be applied to the
purchase or redemption of such preferred stock in accordance with the terms of
such sinking fund regardless of whether at the time of such application full
cumulative dividends upon shares of each series of the Existing Cumulative
Preferred Stock outstanding on the last dividend payment date shall have been
paid or declared and set apart for payment; and provided further that any such
junior or parity preferred stock or Common Stock may be converted into or
exchanged for stock of the Company ranking junior to the Existing Cumulative
Preferred Stock as to dividends.
Optional Redemption. The Existing Cumulative Preferred Stock is not
subject to any mandatory redemption or sinking fund provision. The 9.36%
Preferred Stock is not redeemable prior to May 30, 1996, the 8.88% Preferred
Stock is not redeemable prior to November 30, 1996, the 8 3/4% Preferred Stock
is not redeemable prior to May 30, 1997, the 7 3/8% Preferred Stock is not
redeemable prior to August 30, 1998, if issued, the 7.82% Preferred Stock will
not be redeemable prior to November 30, 1998, if issued, the 7.80% Preferred
Stock will not be redeemable prior to February 28, 1999 and, if issued, the
9.00% Preferred Stock will not be redeemable prior to February 28, 2000. On or
after such dates, the applicable series of Existing Cumulative Preferred Stock
will be redeemable at the option of the Company, in whole or in part, upon not
less than 30 days' notice at a redemption price equal to $25.00 per share in the
case of the 9.36% Preferred Stock and $200.00 per share in the case of each of
the 8.88% Preferred Stock, the 8 3/4% Preferred Stock, the 7 3/8% Preferred
Stock and, if issued, the 7.82% Preferred Stock, the 7.80% Preferred Stock and
the 9.00% Preferred Stock, in each case plus accrued and accumulated but unpaid
dividends to but excluding the date fixed for redemption.
Liquidation Rights. In the event of any liquidation, dissolution or
winding up of the Company, the holders of shares of Existing Cumulative
Preferred Stock will be entitled to receive out of the assets of the Company
available for distribution to stockholders, before any distribution is made to
holders of (i) any other shares of preferred stock ranking junior to the
Existing Cumulative Preferred Stock as to rights upon liquidation, dissolution
or winding up which may be issued in the future and (ii) Common Stock,
liquidating distributions in the amount of $25.00 per share in the case of the
9.36% Preferred Stock and $200.00 per share in the case of each of the 8.88%
Preferred Stock, the 8 3/4% Preferred Stock and the 7 3/8% Preferred Stock and,
if issued, the 7.82% Preferred Stock, the 7.80% Preferred Stock and the 9.00%
Preferred Stock, in each case plus accrued and accumulated but unpaid dividends
to the date of final distribution, but the holders of the shares of Existing
Cumulative Preferred Stock will not be entitled to receive the liquidation price
of such shares until the liquidation preference of any other shares of the
Company's capital stock ranking senior to the Existing Cumulative Preferred
Stock as to rights upon liquidation, dissolution or winding up shall have been
paid (or a sum set aside therefor sufficient to provide for payment) in full.
If upon any liquidation, dissolution or winding up of the Company, the amounts
payable with respect to the Existing Cumulative Preferred Stock and any other
preferred stock ranking as to rights upon liquidation, dissolution or winding
up on a parity with the Existing Cumulative Preferred Stock
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(including the Offered Preferred Stock) are not paid in full, the holders of the
Existing Cumulative Preferred Stock and of such other preferred stock will share
ratably in any such distribution in proportion to the full respective
preferential amounts to which they are entitled. After payment of the full
amount of the liquidating distribution to which they are entitled, the holders
of Existing Cumulative Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Company.
Voting Rights. Holders of Existing Cumulative Preferred Stock do not have
any voting rights except as set forth below or as otherwise from time to time
required by law. Whenever dividends on any series of Existing Cumulative
Preferred Stock or any other class or series of stock ranking on a parity with
such series of Existing Cumulative Preferred Stock with respect to the payment
of dividends shall be in arrears for dividend periods, whether or not
consecutive, containing in the aggregate a number of days equivalent to six
calendar quarters, the holders of shares of such series of Existing Cumulative
Preferred Stock (voting separately as a class with all other series of preferred
stock upon which like voting rights have been conferred and are exercisable)
will be entitled to vote for the election of two of the authorized number of
directors of the Company at the next annual meeting of stockholders and at each
subsequent meeting until all dividends accumulated on such series of Existing
Cumulative Preferred Stock have been fully paid or set aside for payment. The
term of office of all directors elected by the holders of Preferred Stock shall
terminate immediately upon the termination of the right of the holders of
Preferred Stock to vote for directors. Each holder of shares of Existing
Cumulative Preferred Stock will have one vote for each share of Existing
Cumulative Preferred Stock held.
So long as any shares of Existing Cumulative Preferred Stock remain
outstanding, the Company shall not, without the consent of the holders of at
least two-thirds of the shares of each series of Existing Cumulative Preferred
Stock outstanding at the time, voting separately as a class with all other
series of preferred stock upon which like voting rights have been conferred and
are exercisable, (i) issue or increase the authorized amount of any class or
series of stock ranking prior to the Existing Cumulative Preferred Stock as to
dividends or upon liquidation or (ii) amend, alter or repeal the provisions of
the Company's Restated Certificate of Incorporation or of the resolutions
contained in the Certificate of Designation relating to such series of Existing
Cumulative Preferred Stock, whether by merger, consolidation or otherwise, so as
to materially and adversely affect any power, preference or special right of
such series of Existing Cumulative Preferred Stock or the holders thereof;
provided, however, that any increase in the amount of the authorized Common
Stock or authorized preferred stock or the creation and issuance of other series
of Common Stock or preferred stock ranking on a parity with or junior to the
Existing Cumulative Preferred Stock as to dividends and upon liquidation shall
not be deemed to materially and adversely affect such powers, preferences or
special rights.
The transfer agent and registrar for each series of Existing Cumulative
Preferred Stock is First Chicago Trust Company of New York.
Additional Provisions of the Company's Restated Certificate of Incorporation
Size of the Board of Directors, Removal of Directors and Filling Vacancies
on the Board of Directors. The Company's Restated Certificate of Incorporation
provides that the number of directors shall be not fewer than four nor greater
than fifteen persons, as shall be established from time to time by a majority of
the Board of Directors. The Company currently has ten directors. The Company's
Restated Certificate of Incorporation also provides that directors may be
removed, with or without cause, only with the approval of the holders of at
least 80% of the voting power of the outstanding shares of capital stock of the
Company entitled to be voted generally in the election of directors (the "Voting
Stock"), voting together as a single class. Furthermore, any vacancy on the
Board of Directors or newly-created directorship shall be filled by a majority
of the remaining directors then in office, though less than a quorum, and such
newly-elected director shall serve the balance of the term of the replaced
director or, if there is no replaced director, until the next annual election
of directors.
Calling Special Meetings of Stockholders. The Company's Restated
Certificate of Incorporation provides that special meetings of stockholders may
be called at any time and for any purpose by the Chairman of the Board, by the
President or by order of the Board of Directors, and shall be called by the
Secretary of the Company upon
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the written request of the holders of at least 80% of the voting power of the
Voting Stock, setting forth the purpose of such meeting.
Amendment of Restated Certificate of Incorporation and By-laws. The
Company's Restated Certificate of Incorporation provides that the affirmative
vote of the holders of at least 80% of the voting power of the Voting Stock,
voting together as a single class, is required to amend, repeal or adopt any By-
laws, to adopt any amendment to the Restated Certificate of Incorporation
inconsistent with the By-laws of the Company or to amend or repeal, or to adopt
any provision inconsistent with, any provisions of the Restated Certificate of
Incorporation described above.
Limitation of Directors' Liability. Section 102 of the Delaware General
Corporation Law allows a corporation to eliminate the personal liability of
directors of a corporation to the corporation or to any of its stockholders for
monetary damages for a breach of fiduciary duty as a director, except in the
case where the director breached his duty of loyalty, failed to act in good
faith, engaged in intentional misconduct or knowingly violated a law,
authorized the payment of a dividend or approved a stock repurchase in violation
of the Delaware General Corporation Law or obtained an improper personal
benefit. Under the Company's Restated Certificate of Incorporation, a director
of the Company shall not be liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except to the
extent such exemption from liability or limitation thereof is not permitted
under the General Corporation Law of Delaware as in effect or as the same may be
amended.
DESCRIPTION OF THE CAPITAL UNITS
The following description of the terms of the Capital Units sets forth
certain general terms and provisions of the Capital Units to which a Prospectus
Supplement relates. If so indicated in the Prospectus Supplement, the terms of
any such Capital Units may differ from the terms set forth below. Particular
terms of the Capital Units offered by a Prospectus Supplement will be described
in the Prospectus Supplement relating to such Capital Units. The following
summary of certain provisions of the Capital Unit Agreement and the Capital
Units does not purport to be complete and such summary is subject to the
detailed provisions of the Capital Unit Agreement to which reference is hereby
made for a full description of such provisions, including the definition of
certain terms used herein, and for other information regarding the Capital
Units.
General
Unless otherwise specified in the applicable Prospectus Supplement, Capital
Units will consist of (i) a Debt Security of MS plc, (ii) a full and
unconditional Guarantee by the Company of the payment of principal, premium, if
any, interest and any Additional Amounts on such Debt Security and (iii) a
related Purchase Contract requiring the purchase on the settlement date of the
Purchase Contract of a share of Preferred Stock of the Company (or a Depositary
Share representing an interest in a share of such Preferred Stock). The Debt
Security, the Guarantee thereof and the related Purchase Contract may be
purchased and transferred only as part of a Capital Unit. Capital Units may be
issued as Definitive Capital Units or Book-Entry Capital Units. Definitive
Capital Units will consist of definitive registered Purchase Contracts and
definitive registered Debt Securities and Guarantees of such Debt Securities.
Book-Entry Capital Units will be represented by certificateless depositary
interests issued to The Depository Trust Company or its nominee by a depositary
(the "Book-Entry Unit Depositary") holding a global registered Purchase Contract
and a global Debt Security and a Guarantee of such Debt Security.
Reference is made to the Prospectus Supplement for the following terms of
and information relating to a particular series of Capital Units: (i) the terms
of the Debt Securities, including the classification as senior or subordinated
Debt Securities, the classification of any Guarantee of the Debt Securities as
senior or subordinated indebtedness of the Company, the maturity date, any
interest rate and any interest payment dates with respect to such Debt
Securities, any redemption or repayment provisions and whether such Debt
Securities will be issued in registered or bearer form or both and in definitive
or global form or both; (ii) the terms of the related Purchase Contracts,
including the term thereof, any redemption provisions, any acceleration,
cancellation or termination
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provisions and whether the Purchase Contracts will be issued in definitive or
global form or both; (iii) the terms of the series of Preferred Stock to be
issued upon settlement of the related Purchase Contracts, including the number
of shares constituting such series, the dividend rate, dividend period, stated
value and any voting rights with respect to such series, the preferences and
rights of the shares of such series upon any liquidation or winding-up of the
Company, any redemption provisions and whether the shares of such series will
initially be represented by depositary shares and, if so, the fraction of a
share of such series to be represented by each depositary share; (iv) any
applicable United States federal or United Kingdom income tax consequences; (v)
any listing of such series of Capital Units on a national securities exchange;
(vi) whether such Capital Units will be issued as Definitive Capital Units,
Book-Entry Capital Units or both and the name of the Book-Entry Unit Depositary
with respect to Book-Entry Capital Units; (vii) any circumstances (in addition
to the circumstances described under "Description of Debt Securities of MS plc
- -- Payment of Additional Amounts with Respect to Debt Securities") under which
Additional Amounts will not be paid with respect to the Debt Securities; and
(viii) any other specific terms of the Debt Securities and Purchase Contracts.
Each series of Purchase Contracts will be issued under a Capital Unit
Agreement to be entered into by the Company, MS plc and Chemical Bank, as
capital unit agent (together with any successor thereto in such capacity, the
"Capital Unit Agent") and, with respect to any Book-Entry Capital Units, as
Book-Entry Unit Depositary, and the holders from time to time of Capital Units.
The Capital Unit Agreement will not be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), the Capital Unit
Agent will not be required to qualify as a trustee thereunder and the holders
of Purchase Contracts will not have the benefits of the protections of the
Trust Indenture Act. However, any Debt Securities and Guarantees issued as part
of a Capital Unit will be issued under an indenture qualified under the Trust
Indenture Act and the trustee thereunder will have qualified as a trustee under
the Trust Indenture Act.
Description of the Purchase Contracts
Unless otherwise specified in the accompanying Prospectus Supplement, each
Purchase Contract will obligate the holder thereof to purchase, and the Company
to sell, on dates to be specified in the accompanying Prospectus Supplement, a
share of Preferred Stock of the Company (or a Depositary Share representing an
interest in a share of such Preferred Stock) at a specified purchase price. The
Prospectus Supplement will also specify the methods by which the holders'
obligations to purchase Preferred Stock or a Depositary Share relating thereto
may be satisfied and any acceleration, cancellation or termination provisions
relating to the settlement of a Purchase Contract.
Certain Provisions of the Capital Unit Agreement
General. Under the terms of the Capital Unit Agreement, each holder of a
Definitive Capital Unit and each beneficial owner of a Book-Entry Capital Unit,
by its acceptance thereof, appoints the Capital Unit Agent as its authorized
agent to execute, deliver and perform each Purchase Contract in which such
holder or beneficial owner has an interest on behalf of such holder or
beneficial owner, as the case may be, and consents to the terms of the Capital
Unit Agreement. Under the terms of the Capital Unit Agreement, each holder of a
Definitive Capital Unit and each beneficial owner of a Book-Entry Capital Unit,
by acceptance thereof, irrevocably agrees to be a party to and be bound by the
terms of each Purchase Contract in which such holder or beneficial owner has an
interest. Upon the registration of transfer of a Capital Unit, the transferee
will assume the obligations of the transferor under each Purchase Contract in
which such holder or beneficial owner has an interest and the transferor will be
released from such obligations.
The specific terms of the depositary arrangement with respect to the Book-
Entry Capital Units will be described in the applicable Prospectus Supplement.
MS plc will appoint the Book-Entry Unit Depositary as its agent for purposes of
maintaining a register recording the right to principal of and interest on Debt
Securities that relate to Book-Entry Capital Units.
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Payment, Settlement, Transfer and Exchange of Definitive Capital Units.
Principal of, and interest on, any Debt Securities constituting part of a
Definitive Capital Unit will be payable, and transfers of Definitive Capital
Units will be registrable, at the office of Chemical Bank in the Borough of
Manhattan, The City of New York or at such other location as may be determined
by MS plc and Chemical Bank. Under circumstances specified in the applicable
Prospectus Supplement, payments in respect of principal of Debt Securities that
are part of Definitive Capital Units may be applied by the Capital Unit Agent in
satisfaction of the obligations of the holders of the Definitive Capital Units
under the related Purchase Contracts (unless a holder has delivered cash in
respect of its obligations under such Purchase Contract) and Preferred Stock or
Depositary Shares will be delivered only upon presentation and surrender of the
certificates evidencing Definitive Capital Units at the office of the Capital
Unit Agent. If a holder delivers cash in settlement of its obligations under a
Purchase Contract that is part of a Definitive Capital Unit, the related Debt
Security that is a part of such Definitive Capital Unit will remain outstanding
and, as more fully described in the applicable Prospectus Supplement, the
holder will receive a definitive registered Debt Security.
In the event that a holder does not elect to deliver cash in settlement of
its obligations under a Purchase Contract that is part of a Definitive Capital
Unit and fails to present and surrender the certificate evidencing the
Definitive Capital Units held by such holder to the Capital Unit Agent when
required, the Preferred Stock or Depositary Shares to be purchased under the
Purchase Contracts evidenced thereby shall be registered in the name of, and
together with any distributions thereon shall be held by, the Capital Unit Agent
in trust for the benefit of such holder until such certificate is presented and
surrendered or the holder provides satisfactory evidence that such certificate
has been destroyed, lost or stolen, together with any indemnity that may be
required by the Capital Unit Agent, the Company or MS plc in respect thereof.
In the event that a certificate is not presented (or such evidence and indemnity
are not provided) on or prior to the date two years after the relevant
settlement date with respect to the related Purchase Contract, any payments
received by the Capital Unit Agent in respect of the Preferred Stock or the
Depositary Shares issued in respect of the Definitive Capital Units evidenced by
such certificate will be paid by the Capital Unit Agent to the Company and such
holder will thereafter be required to look solely to the Company for payment
thereof. The Capital Unit Agent will have no obligation to invest or to pay
interest on any amounts held by the Capital Unit Agent pending distribution, as
described above.
No service charge will be made for any registration of transfer or exchange
of the Capital Units or interest therein, except for any tax or other
governmental charge that may be imposed in connection therewith.
Remedies. No holder of any Capital Unit or interest therein shall have any
right by virtue of or by availing itself of any provision of the Capital Unit
Agreement to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to the Capital Unit
Agreement, or for the appointment of a trustee, receiver, liquidator, custodian
or other similar official, unless such holder shall have given written notice to
the Capital Unit Agent, MS plc and the Company of the occurrence and continuance
of a default thereunder and, (i) in the case of an Event of Default under the
Debt Securities or applicable Indenture governing such Debt Securities, the
procedures (including notice to the Trustee, MS plc and the Company) described
in Article Five of such Indenture (see "Description of Debt Securities -- Events
of Default") have been complied with and (ii) in the case of certain defaults
under the Purchase Contracts, unless the holders of not less than 25% of the
Capital Units then outstanding shall have made written request upon the Capital
Unit Agent to institute such action or proceedings in its own name as Capital
Unit Agent under the Capital Unit Agreement and shall have offered to the
Capital Unit Agent such reasonable indemnity as it may require, and the Capital
Unit Agent for 60 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute such action or proceedings and no
direction inconsistent with such request shall have been given to the Capital
Unit Agent pursuant to the Capital Unit Agreement in writing by the holders of a
majority of the outstanding Capital Units, any holder of a Capital Unit may
then (but only then) seek to enforce the performance of the covenant or
agreement with respect to which such Purchase Contract default exists.
Except as may be described in a Prospectus Supplement applicable to a
particular series of Capital Units, there are no covenants or other provisions
in the Capital Unit Agreement providing for a put or increased interest or
otherwise that would afford holders of Capital Units additional protection in
the event of a recapitalization transaction, a change of control of the Company
or MS plc or a highly leveraged transaction.
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Modification. The Capital Unit Agreement will contain provisions
permitting the Company and the Capital Unit Agent, with the consent of the
holders of not less than a majority of all series of Capital Units at the time
outstanding under such Capital Unit Agreement and affected thereby (voting as
one class), to modify the terms of the Purchase Contracts and the terms of the
Capital Unit Agreement relating to the Purchase Contracts of each series so
affected or the rights of the holders of the Capital Units of each series so
affected in respect of the Purchase Contracts, except that no such modification
may, without the consent of the holder of each outstanding Capital Unit affected
thereby, (i) impair the right to institute suit for the enforcement of any
Purchase Contract, (ii) materially adversely affect the holders' rights under
any Purchase Contract, (iii) modify or affect (in any manner materially adverse
to the holders) the terms of the Preferred Stock or the Depositary Shares
(determined as if the Preferred Stock and Depositary Shares were outstanding),
or (iv) reduce the aforesaid percentage of outstanding Capital Units of any
series issued under the Capital Unit Agreement, the consent of the holders of
which is required for the modification or amendment of the provisions of the
Capital Unit Agreement relating to the Purchase Contracts or for any waiver of
compliance with certain provisions of the Capital Unit Agreement or waiver of
certain defaults relating to the Purchase Contracts, provided that the holders
of not less than 66 2/3% of the Capital Units of any series outstanding at the
time of an issuance of shares of a class of stock that ranks prior to the
Preferred Stock that is required to be purchased under the related Purchase
Contracts of such series as to dividends or upon liquidation may consent to such
an issuance, and such an issuance, if so consented to, will not relieve the
holders of their obligations to purchase such Preferred Stock under the Purchase
Contracts.
Title. The Company, MS plc, the Capital Unit Agent and any agent of the
Company, MS plc or the Capital Unit Agent will treat the registered owner of any
Capital Unit as the owner thereof (whether or not the Debt Security constituting
a part thereof shall be overdue and notwithstanding any notice to the contrary)
for the purpose of making payment, the performance of the Purchase Contracts and
for all other purposes.
Replacement of Capital Unit Certificates. Any mutilated certificate
evidencing a Definitive Capital Unit will be replaced at the expense of the
holder upon surrender of such certificate to the Capital Unit Agent.
Certificates that become destroyed, lost or stolen will be replaced at the
expense of the holder upon delivery to the Company, MS plc and the Capital Unit
Agent of evidence of the destruction, loss or theft thereof satisfactory to the
Company, MS plc and the Capital Unit Agent. In the case of a destroyed, lost or
stolen certificate, an indemnity satisfactory to the Capital Unit Agent, MS plc
and the Company may be required at the expense of the holder of the Definitive
Capital Units evidenced by such certificate before a replacement will be issued.
The Capital Unit Agreement provides that, notwithstanding the foregoing, no
such replacement certificate need be delivered (i) during the period beginning
15 days before the day of mailing of a notice of redemption or acceleration of
the Purchase Contracts evidenced by the mutilated, destroyed, lost or stolen
certificate and ending on the day of the giving of such notice, (ii) if such
mutilated, destroyed, lost or stolen certificate evidences Purchase Contracts
selected or called for redemption or acceleration or (iii) at any time on or
after the date of settlement or redemption, as applicable, with respect to the
Purchase Contracts evidenced by such mutilated, destroyed, lost or stolen
certificate, except with respect to any Definitive Capital Units that remain or
will remain outstanding following such date of settlement or redemption.
Governing Law. The Capital Unit Agreement and the Capital Units will be
governed by, and construed in accordance with, the laws of the State of New
York.
Consent to Service. The Capital Unit Agreement provides that MS plc
irrevocably designates the Company as its authorized agent for service of
process in connection with any legal action or proceeding arising out of or
relating to any applicable Debt Securities or the Capital Unit Agreement and for
actions brought under federal or state securities laws brought in any federal or
state court in the Borough of Manhattan, in The City of New York, New York, and
irrevocably submits to the jurisdiction of such courts.
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PLAN OF DISTRIBUTION
The Company and MS plc may sell the Securities being offered hereby in
three ways: (i) through agents, (ii) through underwriters and (iii) through
dealers. Any such underwriters, dealers or agents in the United States will
include MS & Co., and any such underwriters, dealers or agents outside the
United States will include MSIL or other affiliates of the Company.
Offers to purchase Securities may be solicited by agents designated by the
Company or MS plc from time to time. Any such agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act, involved in the offer
or sale of the Securities in respect of which this Prospectus is delivered will
be named, and any commissions payable by the Company or MS plc to such agent
will be set forth, in the Prospectus Supplement. Unless otherwise indicated in
the Prospectus Supplement, any such agent will be acting on a reasonable efforts
basis for the period of its appointment. Agents may be entitled under
agreements which may be entered into with the Company and, if applicable, MS
plc, to indemnification by the Company and, if applicable, MS plc, against
certain civil liabilities, including liabilities under the Securities Act, and
may be customers of, engage in transactions with or perform services for the
Company in the ordinary course of business.
If any underwriters are utilized in the sale of the Securities in respect
of which this Prospectus is delivered, the Company and, if applicable, MS plc
will enter into an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transaction
will be set forth in the Prospectus Supplement, which will be used by the
underwriters to make resales of the Securities in respect of which this
Prospectus is delivered to the public. The underwriters may be entitled, under
the relevant underwriting agreement, to indemnification by the Company and, if
applicable, MS plc against certain liabilities, including liabilities under the
Securities Act, and may be customers of, engage in transactions with or perform
services for the Company in the ordinary course of business.
If a dealer is utilized in the sale of the Securities in respect of which
the Prospectus is delivered, the Company and, if applicable, MS plc will sell
such Securities to the dealer, as principal. The dealer may then resell such
Securities to the public at varying prices to be determined by such dealer at
the time of resale. Dealers may be entitled to indemnification by the Company
and, if applicable, MS plc against certain liabilities, including liabilities
under the Securities Act, and may be customers of, engage in transactions with
or perform services for the Company in the ordinary course of business.
Securities may also be offered and sold, if so indicated in the Prospectus
Supplement, in connection with a remarketing upon their purchase, in accordance
with their terms by one or more firms, including MS & Co. and MSIL ("remarketing
firms"), acting as principals for their own accounts or as agents for the
Company and MS plc. Any remarketing firm will be identified and the terms of
its agreement, if any, with the Company and MS plc and its compensation will be
described in the Prospectus Supplement. Remarketing firms may be entitled under
agreements which may be entered into with the Company and MS plc to
indemnification by the Company and MS plc against certain civil liabilities,
including liabilities under the Securities Act, and may be customers of, engage
in transactions with or perform services for the Company in the ordinary course
of business.
If so indicated in the Prospectus Supplement, MS plc will authorize agents
and underwriters or dealers to solicit offers by certain purchasers to purchase
Offered Debt Securities from MS plc at the public offering price set forth in
the Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject to only those conditions set forth in the Prospectus Supplement, and the
Prospectus Supplement will set forth the commission payable for solicitation of
such offers.
Any underwriters, agents or dealers utilized in the sale of Securities will
not confirm sales to accounts over which they exercise discretionary authority.
MS & Co. and MSIL are wholly owned subsidiaries of the Company. Each
offering of Securities and any market-making activities by MS & Co. with respect
to Securities will be conducted in compliance with the requirements of Schedule
E of the By-Laws of the National Association of Securities Dealers, Inc. (the
"NASD") regarding a NASD member firm's distributing the securities of an
affiliate. Following the initial distribution of any Securities, MS & Co., MSIL
and other affiliates of the Company may offer and sell such Securities in the
course of their business as broker-dealers (subject, in the case of Preferred
Stock, Depositary Shares and Capital Units,
28
<PAGE>
to obtaining any necessary approval of the NYSE for any such offers and sales by
MS & Co.). MS & Co., MSIL and such other affiliates may act as principals or
agents in such transactions. This Prospectus may be used by MS & Co., MSIL and
such other affiliates in connection with such transactions. Such sales, if any,
will be made at varying prices related to prevailing market prices at the time
of sale or otherwise. Neither MS & Co., MSIL nor such other affiliates are
obligated to make a market in any Securities and may discontinue any market-
making activities at any time without notice.
LEGAL MATTERS
The validity of the Debt Securities, the Guarantees, the Preferred Stock
and the Purchase Contracts will be passed upon for the Company by Jonathan M.
Clark, General Counsel and Secretary of the Company and a Managing Director of
MS & Co., or other counsel who is satisfactory to MS & Co. or MSIL, as the case
may be, and an officer of the Company. Mr. Clark and such other counsel
beneficially own, or have rights to acquire under an employee benefit plan of
the Company, an aggregate of less than 1% of the common stock of the Company.
Certain legal matters relating to the Debt Securities governed by the laws of
England will be passed upon for MS plc by Linklaters & Paines. Certain legal
matters relating to the Debt Securities, the Guarantees, the Preferred Stock and
the Purchase Contracts will be passed upon for the Underwriters by Davis Polk &
Wardwell. Davis Polk & Wardwell has in the past represented and continues to
represent the Company on a regular basis and in a variety of matters, including
in connection with its merchant banking and leveraged capital activities. In
this regard, certain partners of Davis Polk & Wardwell, acting through a
separate partnership, acquired less than 1% of the common stock of a company of
which the Company and a fund managed by the Company own a controlling interest.
EXPERTS
The consolidated financial statements and financial statement schedules of
the Company included in and incorporated by reference in the Company's Annual
Report on Form 10-K for the fiscal year ended January 31, 1995 have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements and financial statement schedules are, and audited
consolidated financial statements and financial statement schedules to be
included in subsequently filed documents will be, incorporated herein in
reliance upon the reports of Ernst & Young LLP pertaining to such financial
statements and financial statement schedules (to the extent covered by consents
filed with the Commission) given upon the authority of such firm as experts in
accounting and auditing.
ERISA MATTERS FOR PENSION PLANS AND INSURANCE COMPANIES
The Company and certain affiliates of the Company, including MS & Co. and
MSIL, may each be considered a "party in interest" within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or a
"disqualified person" within the meaning of the Code with respect to many
employee benefit plans. Prohibited transactions within the meaning of ERISA or
the Code may arise, for example, if the Debt Securities or Guarantees are
acquired by or with the assets of a pension or other employee benefit plan with
respect to which MS & Co. or any of its affiliates is a service provider, unless
such Debt Securities or Guarantees are acquired pursuant to an exemption for
transactions effected on behalf of such plan by a "qualified professional asset
manager" or pursuant to any other available exemption. The assets of a pension
or other employee benefit plan may include assets held in the general account of
an insurance company that are deemed to be "plan assets" under ERISA. Any
insurance company or pension or employee benefit plan proposing to invest in the
Debt Securities or Guarantees should consult with its legal counsel.
29
<PAGE>
MORGAN STANLEY GROUP INC.
MORGAN STANLEY FINANCE PLC
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following are the expenses of the issuance and distribution of the
securities being registered, all of which will be paid by the Registrants. Other
than the registration fee and the NASD filing fee, all of such expenses are
estimated.
<TABLE>
<S> <C>
Registration fee........................................................ $ 172,414
NASD filing fee......................................................... 30,500
Blue Sky fees and expenses.............................................. 35,000
Printing and engraving expenses......................................... 250,000
Legal fees and expenses................................................. 175,000
Accounting fees and expenses............................................ 50,000
Trustees', Preferred Stock Depositary's and Capital Unit Agent's fees
and expenses (including counsel fees)................................. 30,000
Miscellaneous........................................................... 7,086
----------
Total............................................................... $ 750,000
==========
</TABLE>
Item 15. Indemnification of Officers and Directors
MS plc
The indemnification of officers and directors of MS plc is governed by
Sections 144, 310 and 727 of the UK Companies Act 1985, as amended, and the
provisions of Article 12 of MS plc's Articles of Association.
Section 310 of the Companies Act makes void any provision, whether
contained in the Articles of Association of a company or any contract with a
company or otherwise, for exempting any officer of the company or any person
(whether an officer or not) employed by the company as auditor from, or
indemnifying such person against, any liability which by virtue of any rule of
law would otherwise attach to such person in respect of any negligence, default,
or breach of duty or of trust of which such person may be guilty in relation to
the company. However, Section 310 does not prevent a company from purchasing and
maintaining for any officer or auditor insurance against the liabilities
referred to above. In addition, Section 310 does not prevent a company from
indemnifying any officer or auditor who is a successful defendant in criminal or
civil proceedings or who successfully applies for relief under Sections 144 or
727 of the Companies Act.
Section 144 (Acquisition of a company's own shares by a nominee) and 727
(Power of court to grant relief in certain cases) of the Companies Act contain
provisions for protecting directors in proceedings for negligence, default or
breach of duty or of trust on the basis that the relevant director acted
honestly and reasonably and that, having regard to all circumstances of the
case, the director ought fairly to be excused. The court may relieve the
director wholly or partially on such terms as it thinks fit.
Article 12(A) of MS plc's Articles of Association mirrors the exceptions to
Section 310 of the Companies Act. That is, directors, auditors, secretaries and
other officers of MS plc will be indemnified by MS plc out of its own funds from
all costs, charges, losses, expenses and liabilities incurred by him in relation
to or in connection with his duties, powers or office where the relevant
director, auditor, secretary or other officer is a successful defendant in
criminal or civil proceedings, or successfully applies for relief by the court.
Article 12(B) provides that the directors have the power to purchase and
maintain insurance against any liability incurred by officers of the Company in
respect of any act or omission in relation to or in connection with their
duties, powers or office.
The indemnification provisions described below under "The Company" also
apply to officers and directors of MS plc.
II-1
<PAGE>
The Company
Article VI of the Restated Certificate of Incorporation of the Company and
Article VI of the By-Laws of the Company, each as amended to date, provide for
the indemnification of directors and officers. Under these articles, any person
who is a director or officer of the Company or a corporation all of the capital
stock (other than directors' qualifying shares) of which is owned directly or
indirectly by the Company (a "Subsidiary") and any person who is or was serving
at the request of the Company or a Subsidiary as a director, officer, partner,
member, employee or agent of another corporation, partnership or other
enterprise shall be indemnified, to the fullest extent permitted by applicable
law, by the Company if such person was or is a party or is threatened to be made
a party to, or is involved in any manner in, any threatened, pending or
completed action, suit or proceeding (whether civil, criminal, administrative or
investigative) by reason of the fact that such person was acting in such a
capacity. The Restated Certificate of Incorporation and the By-Laws also permit,
to the extent deemed advisable by the Board of Directors of the Company,
indemnification, to the fullest extent permitted by applicable law, of any
person who was or is an employee or agent (other than a director or officer) of
the Company or a Subsidiary and who is involved in any of the aforementioned
actions.
The right to indemnification under the Restated Certificate of
Incorporation and the By-Laws includes, to the fullest extent permitted by
applicable law, the right to be paid the expenses (including attorneys' fees)
incurred in connection with any proceeding in advance of its final disposition.
The payment of any amounts to any indemnified person pursuant to the Restated
Certificate of Incorporation and the By-Laws shall subrogate the Company to any
right such person may have against any other person or entity.
Under both the Restated Certificate of Incorporation and the By-Laws, the
Company has the power to purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the Company or a
Subsidiary, or is or was serving at the request of the Company or a Subsidiary
as a director, officer, partner, member, employee or agent of another
corporation, partnership, joint venture, trust, committee or other enterprise,
against any expense, liability or loss asserted against such person and incurred
by him in any such capacity, or arising out of his status as such, whether or
not the Company or a Subsidiary would have the power to indemnify him against
such expense, liability or loss under the provisions of applicable law.
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
1-a Form of Underwriting Agreement for Debt Securities (to be filed by Form 8-K).
1-b Form of Underwriting Agreement for Preferred Stock (previously filed as an exhibit to the Company's
Registration Statement on Form S-3 (File No. 33-65838) and incorporated herein by this reference).
1-c Form of Underwriting Agreement for Capital Units (previously filed as an exhibit to the Company's
Current Report on Form 8-K dated November 19, 1993 and incorporated herein by this reference).
4-a Restated Certificate of Incorporation of the Company, as amended (previously filed as an exhibit to the
Company's Registration Statement on Form S-3 (File No. 33-57833) and incorporated herein by this
reference).
4-b Form of Certificate of Designation of Offered Preferred Stock (previously filed as an exhibit to the
Company's Registration Statement on Form S-3 (File No. 33-65838) and incorporated herein by this
reference).
4-c Form of Certificate of Offered Preferred Stock (previously filed as an exhibit to the Company's
Registration Statement on Form S-3 (File No. 33-65838) and incorporated herein by this reference).
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
4-d Form of Deposit Agreement (including Form of Depositary Receipt) (previously filed as an exhibit to
the Company's Registration Statement on Form S-3 (File No. 33-43542) and incorporated herein by this
reference).
4-e Form of Senior Indenture among MS plc, the Company and Chemical Bank, Trustee (previously filed
as an exhibit to the Registrants' Registration Statement on Form S-3 (File No. 33-51067) and
incorporated herein by this reference).
4-f Subordinated Indenture dated as of November 15, 1993 among MS plc, the Company, as guarantor, and
Chemical Bank, Trustee (previously filed as an exhibit to the Registrants' Registration Statement on Form
S-3 (File No. 33-51067) and incorporated herein by this reference).
4-g Form of Capital Unit Agreement among the Company, MS plc, Chemical Bank, as Capital Unit Agent
and Book-Entry Unit Depositary, and holders from time to time of Capital Units (including Form of
Purchase Contract) (previously filed as an exhibit to the Company's Current Report on Form 8-K dated
November 19, 1993 and incorporated herein by this reference).
5-a* Opinion of Ralph L. Pellecchio, Assistant Secretary of the Company.
5-b* Opinion of Linklaters & Paines, counsel to MS plc.
12-a Computation of Consolidated Ratio of Earnings to Fixed Charges (previously filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995 and incorporated
herein by this reference).
12-b Computation of Consolidated Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
(previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended
May 31, 1995 and incorporated herein by this reference).
23-a Consent of Ernst & Young LLP.
23-b Consent of Ralph L. Pellecchio, Assistant Secretary of the Company (included in Exhibit 5-a).
23-c Consent of Linklaters & Paines, counsel to MS plc (included in Exhibit 5-b).
24* Powers of Attorney.
25* Statement of Eligibility of Chemical Bank, Trustee under the Senior Indenture and the Subordinated
Indenture.
</TABLE>
- ----------
* Previously filed.
Item 17. Undertakings
(1) Each of the undersigned registrants hereby undertakes 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 Section
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 this
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.
(2) 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 Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by a 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, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
II-3
<PAGE>
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(3) 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 this 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 this registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement;
provided, however, that paragraphs (3)(a)(i) and (3)(a)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this 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.
II-4
<PAGE>
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 the
requirements for filing on Form S-3 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in The City of London, England, on the 17th day of July,
1995.
MORGAN STANLEY FINANCE PLC
(Registrant)
By /s/ Richard S. Rosenthal
------------------------------
Richard S. Rosenthal
Director
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed by the following persons in the
capacities indicated on the 17th day of July, 1995.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Richard S. Rosenthal
- ------------------------------------------ Director
Richard S. Rosenthal
*
- ------------------------------------------ Director
Ned R. Sachs
*
- ------------------------------------------ Director
Charles B. Hintz
- ------------------------------------------ Director
Thomas Riley
*
- ------------------------------------------ Director
Carolyn Twist
MORGAN STANLEY GROUP INC. Authorized Representative in the
United States
By: /s/ Ralph L. Pellecchio
---------------------------------------
Ralph L. Pellecchio
Assistant Secretary
</TABLE>
*By: /s/ Ralph L. Pellecchio
--------------------------------------
Ralph L. Pellecchio
Attorney-in-fact
II-5
<PAGE>
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 the
requirements for filing on Form S-3 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in The City of New York and State of New York, on the 17th day
of July, 1995.
MORGAN STANLEY GROUP INC.
(Registrant)
/s/ Jonathan M. Clark
------------------------------
Jonathan M. Clark
General Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed by the following persons in the
capacities indicated on the 17th of July, 1995.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
*
- ------------------------------------------ Chairman, Managing Director
Richard B. Fisher and Director
*
- ------------------------------------------ President, Managing Director
John J. Mack and Director
*
- ------------------------------------------ Managing Director and Director
Barton M. Biggs
*
- ------------------------------------------ Managing Director and Director
Peter F. Karches
*
- ------------------------------------------ Managing Director and Director
Sir David A. Walker
*
- ------------------------------------------ Chief Financial Officer
Philip N. Duff
*
- ------------------------------------------ Chief Accounting Officer and Controller
Eileen K. Murray
*
- ------------------------------------------ Director
Daniel B. Burke
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
*
- ------------------------------------------ Director
Richard B. Cheney
*
- ------------------------------------------ Director
S. Parker Gilbert
*
- ------------------------------------------ Director
Allen E. Murray
*
- ------------------------------------------ Director
Paul F. Oreffice
*
- ------------------------------------------ Director
Paul J. Rizzo
</TABLE>
*By: /s/ Ralph L. Pellecchio
--------------------------------------
Ralph L. Pellecchio
Attorney-in-fact
II-7
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Documents
- ------- ------------------------
5-a* Opinion of Ralph L. Pellecchio, Assistant Secretary of the
Company.
5-b* Opinion of Linklaters & Paines, counsel to MS plc.
23-a Consent of Ernst & Young LLP.
25* Statement of Eligibility of Chemical Bank, Trustee under the Senior
Indenture and the Subordinated Indenture.
- ----------
* Previously filed.
<PAGE>
EXHIBIT 23-a
Consent of Independent Auditors
-------------------------------
We consent to the reference to our firm under the caption "Experts" in
the Amendment No. 1 to Registration Statement No. 33-58611 on Form S-3 and
related Prospectus of Morgan Stanley Group Inc. and Morgan Stanley Finance plc
for the registration of up to $500,000,000 of debt securities, guarantees of
debt securities, preferred stock, depositary shares, preferred stock purchase
contracts, capital units, and depositary interests and to the incorporation by
reference therein of our report dated February 28, 1995, with respect to the
consolidated financial statements and financial statement schedules of Morgan
Stanley Group Inc. included and incorporated by reference in its Annual Report
on Form 10-K for the fiscal year ended January 31, 1995, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
New York, New York
July 14, 1995
