PROSPECTUS Dated March 29, 1995 Pricing Supplement No. 24 to
PROSPECTUS SUPPLEMENT Registration Statement No. 33-57833
Dated March 29, 1995 December 4, 1995
Rule 424(b)(3)
$23,120,000
Morgan Stanley Group Inc.
MEDIUM-TERM NOTES, SERIES C
Senior Fixed Rate Notes
MANDATORILY EXCHANGEABLE NOTES DUE DECEMBER 15, 1997
Mandatorily Exchangeable For Shares of Common Stock of
VISHAY INTERTECHNOLOGY, INC.
The Mandatorily Exchangeable Notes due December 15, 1997 (the "Notes") are
Medium-Term Notes, Series C (Senior Fixed Rate Notes) of Morgan Stanley Group
Inc. (the "Company"), as further described below and in the Prospectus
Supplement under "Description of Notes - Fixed Rate Notes."
The principal amount of each of the Notes being offered hereby will be $34.00
(the Market Price (as defined herein) of the common stock, par value $0.10 per
share, of Vishay Intertechnology, Inc. ("Vishay") on December 4, 1995) (the
"Initial Price"). The Notes will mature on December 15, 1997. Interest on
the Notes, at the rate of 6.0% of the principal amount per annum (equivalent
to $2.04 per annum per Note), is payable quarterly in arrears on each March
15, June 15, September 15 and December 15, beginning March 15, 1996.
At maturity (including as a result of acceleration or otherwise), the
principal amount of each Note will be mandatorily exchanged by the Company
into a number of shares of the common stock of Vishay (the "Vishay Stock") at
the Exchange Rate (or, at the Company's option, cash equal to the Cap Price
(as defined below) in the case of clause (a) below). The Exchange Rate for
each $34.00 principal amount of any Note is equal to, subject to certain
adjustments, either (a) if the product of the Exchange Factor (as defined
below) and the Market Price per share of Vishay Stock, determined as of the
maturity of the Notes (as defined herein, the "Maturity Price"), is greater
than $48.20 (the "Cap Price"), (i) the product of (x) the Exchange Factor and
(y) the Cap Price divided by the Maturity Price times (ii) one share of
Vishay Stock or (b) if the Maturity Price is less than or equal to the Cap
Price, the product of the Exchange Factor and one share of Vishay Stock. The
Exchange Factor will be set initially at 1.0, but will be subject to
adjustment upon the occurrence of certain corporate events. See "Exchange at
Maturity," "Maturity Price," "Exchange Factor" and "Antidilution Adjustments"
in this Pricing Supplement.
Cash dividends have not been paid on the Vishay Stock to date. The
opportunity for equity appreciation afforded by an investment in the Notes is
less than that afforded by an investment in the Vishay Stock because at
maturity a holder may receive less than one share of Vishay Stock per Note.
The value of the Vishay Stock received by a holder of the Notes upon exchange
at maturity, determined as described herein, may be more or less than the
principal amount of the Notes.
Vishay is not affiliated with the Company, is not involved in this offering of
Notes and will have no obligations with respect to the Notes. See "Historical
Information" in this Prospectus Supplement for information on the range of
Market Prices for Vishay Stock.
The Company will cause the Market Price, any adjustments to the Exchange
Factor and any other antidilution adjustments to be determined by the
Calculation Agent for Chemical Bank, as Trustee under the Senior Debt
Indenture.
An investment in the Notes entails risks not associated with similar
investments in a conventional debt security, as described under "Risk Factors"
on PS-4 through PS-6 herein.
PRICE 100% AND ACCRUED INTEREST
Proceeds to
Agent's -------------------
Price to Public(1) Commissions(2) Company(1)
------------------- --------------- -------------------
Per Note.. 100% 0.25% 99.75%
Total..... $23,120,000 $57,800 $23,062,200
_______________
(1) Plus accrued interest, if any, from December 11, 1995.
(2) The Company has agreed to indemnify the Agent against certain liabilities,
including liabilities under the Securities Act of 1933.
MORGAN STANLEY & CO.
Incorporated
Capitalized terms not defined herein have the meanings given to such terms in
the accompanying Prospectus Supplement.
Principal Amount:.............. $23,120,000
Maturity Date:................. December 15, 1997
Interest Rate:................. 6.0% per annum (equivalent to $2.04 per annum
per Note)
Interest Payment Dates......... March 15, June 15, September 15 and December
15, beginning March 15, 1996
Specified Currency:............ U.S. Dollars
Issue Price:................... 100%
Original Issue Date
(Settlement Date): ............ December 11, 1995
Book Entry Note or
Certificated Note: ............ Book Entry
Senior Note or Subordinated
Note: ......................... Senior
Denominations:................. $34.00 and integral multiples thereof
Trustee:....................... Chemical Bank
Exchange at Maturity:.......... At maturity (including as a result of
acceleration or otherwise), the principal
amount of each Note will be mandatorily
exchanged by the Company, upon delivery of
such Note to the Trustee, into a number of
shares of Vishay Stock at the Exchange Rate
(or, at the Company's option, cash equal to
the Cap Price (as defined below) in the case
of clause (a) below). The Exchange Rate for
each $34.00 principal amount of any Note is
equal to either (a) if the Maturity Price (as
defined below) is greater than $48.20 (the
"Cap Price"), (i) the product of (x) the
Exchange Factor and (y) the Cap Price divided
by the Maturity Price times (ii) one share of
Vishay Stock or (b) if the Maturity Price is
less than or equal to the Cap Price, the
product of the Exchange Factor and one share
of Vishay Stock, subject in each case to any
applicable antidilution adjustments as set
forth under "Antidilution Adjustments" below.
The Company shall, or shall cause the
Calculation Agent to, (i) provide written
notice to the Trustee on or prior to 10:30
a.m. on the NYSE Trading Day immediately
prior to maturity of the Notes of the
Company's determination to deliver Vishay
Stock or cash equal to the Cap Price and (ii)
deliver such shares of Vishay Stock or cash
to the Trustee for delivery to the holders.
The Calculation Agent shall calculate the
Exchange Factor and determine the Exchange
Rate applicable at the maturity of the Notes.
References to payment "per Note" refer to
each $34.00 principal amount of any Note.
No Fractional Shares:.......... Upon mandatory exchange of the Notes, the
Company will pay cash in lieu of issuing
fractional shares of Vishay Stock in an amount
equal to the corresponding fractional Market
Price as of the maturity of the Notes.
Exchange Factor:............... The Exchange Factor will be set initially at
1.0, but will be subject to adjustment upon
the occurrence of certain corporate events
through and including the second NYSE Trading
Day immediately prior to maturity. See
"Antidilution Adjustments" below.
Initial Price:................. $34.00
Maturity Price:................ Maturity Price means the product of (i) the
Market Price of one share of Vishay Stock and
(ii) the Exchange Factor, each determined as
of the second NYSE Trading Day immediately
prior to maturity.
Cap Price:..................... $48.20
Market Price:.................. If Vishay Stock (or any other security for
which a Market Price must be determined) is
listed on a national securities exchange, is a
security of The Nasdaq National Market
("NASDAQ NMS") or is included in the OTC
Bulletin Board Service ("OTC Bulletin Board")
operated by the National Association of
Securities Dealers, Inc. (the "NASD"), the
Market Price for one share of Vishay Stock
(or one unit of any such other security) on
any NYSE Trading Day means (i) the last
reported sale price, regular way, on such day
on the principal United States securities
exchange registered under the Securities
Exchange Act of 1934, as amended (the
"Exchange Act"), on which Vishay Stock is
listed or admitted to trading or (ii) if not
listed or admitted to trading on any such
securities exchange or if such last reported
sale price is not obtainable, the last
reported sale price on the over-the-counter
market as reported on the NASDAQ NMS or OTC
Bulletin Board on such day. If the last
reported sale price is not available pursuant
to clause (i) or (ii) of the preceding
sentence, the Market Price for any NYSE
Trading Day shall be the mean, as determined
by the Calculation Agent, of the bid prices
for Vishay Stock obtained from as many
dealers in such stock, but not exceeding
three, as will make such bid prices available
to the Calculation Agent. The term "NASDAQ
NMS security" shall include a security
included in any successor to such system and
the term "OTC Bulletin Board Service" shall
include any successor service thereto.
NYSE Trading Day:.............. A day on which trading is generally conducted
in the over-the-counter market for equity
securities in the United States and on the
New York Stock Exchange, as determined by the
Calculation Agent, and on which a Market
Disruption Event (as defined below) has not
occurred.
Calculation Agent:............. Morgan Stanley & Co. Incorporated ("MS & Co.")
Because the Calculation Agent is an affiliate
of the Company, potential conflicts of
interest may exist between the Calculation
Agent and the holders of the Notes, including
with respect to certain determinations and
judgments that the Calculation Agent must make
in making adjustments to the Exchange Factor
or other antidilution adjustments or
determining any Market Price or whether a
Market Disruption Event has occurred. See
"Antidilution Adjustments" and "Market
Disruption Event" below. MS & Co. is
obligated to carry out its duties and
functions as Calculation Agent in good faith
and using its reasonable judgment.
Risk Factors:.................. An investment in the Notes entails
significant risks not associated with similar
investments in a conventional debt security,
including the following:
The Notes combine features of equity and debt
instruments. Accordingly, the terms of the
Notes differ from those of ordinary debt
securities in that the value of the Vishay
Stock that a holder of the Notes will receive
upon mandatory exchange of the principal
amount thereof at maturity is not fixed, but
is based on the price of the Vishay Stock and
the Exchange Rate as determined at such
price. Because the price of the Vishay Stock
is subject to market fluctuations, the value
of the Vishay Stock received by a holder of
Notes upon exchange at maturity, determined
as described herein, may be more or less than
the principal amount of the Notes. If the
Maturity Price of the Vishay Stock is less
than the Initial Price, the amount receivable
upon exchange will be less than the principal
amount of the Notes, in which case an
investment in the Notes may result in a loss.
The opportunity for equity appreciation
afforded by an investment in the Notes is
less than that afforded by an investment in
the Vishay Stock because at maturity a holder
will receive less than one share of Vishay
Stock per Note if the value of such Vishay
Stock (as adjusted by the Exchange Factor)
has appreciated above the Cap Price. In
addition, because the Exchange Rate and the
Maturity Price are determined as of the
second NYSE Trading Day prior to maturity of
the Notes and because the price of Vishay
Stock may fluctuate after such NYSE Trading
Day and prior to its delivery at maturity, the
value of any Vishay Stock delivered at
maturity may be less than the Cap Price even
if the Maturity Price, as so determined, was
greater than the Cap Price. The amount
payable at maturity with respect to each Note
will not under any circumstances exceed
$48.20 per Note.
Although the amount that holders of the Notes
are entitled to receive at maturity is
subject to adjustment for certain corporate
events, such adjustments do not cover all
events that could affect the Market Price of
the Vishay Stock, including, without
limitation, the occurrence of a partial
tender or exchange offer for the Vishay Stock
by Vishay or any third party. Such other
events may adversely affect the market value
of the Notes.
There can be no assurance as to how the Notes
will trade in the secondary market or whether
such market will be liquid or illiquid.
Securities with characteristics similar to
the Notes are novel securities, and there is
currently no secondary market for the Notes.
The market value for the Notes will be
affected by a number of factors in addition
to the creditworthiness of the Company and the
value of Vishay Stock, including, but not
limited to, the volatility of Vishay Stock,
the dividend rate on Vishay Stock, market
interest and yield rates and the time
remaining to the maturity of the Notes. In
addition, the value of Vishay Stock depends
on a number of interrelated factors,
including economic, financial and political
events, that can affect the capital markets
generally and the market segment of which
Vishay is a part and over which the Company
has no control. The market value of the
Notes is expected to depend primarily on
changes in the Market Price of Vishay Stock.
The price at which a holder will be able to
sell Notes prior to maturity may be at a
discount, which could be substantial, from
the principal amount thereof, if, at such
time, the Market Price of Vishay Stock is
below, equal to or not sufficiently above the
Initial Price. The historical Market Prices
of Vishay Stock should not be taken as an
indication of Vishay Stock's future
performance during the term of any Note.
The Notes will not be listed on any national
securities exchange or accepted for quotation
on a trading market and, as a result, pricing
information for the Notes may be difficult to
obtain.
The Company is not affiliated with Vishay
and, although the Company as of the date of
this Pricing Supplement does not have any
material non-public information concerning
Vishay, corporate events of Vishay, including
those described below in "Antidilution
Adjustments," are beyond the Company's
ability to control and are difficult to
predict.
Vishay is not involved in the offering of the
Notes and has no obligations with respect to
the Notes, including any obligation to take
the interests of the Company or of holders of
Notes into consideration for any reason.
Vishay will not receive any of the proceeds
of the offering of the Notes made hereby and
is not responsible for, and has not
participated in, the determination of the
timing of, prices for or quantities of, the
Notes offered hereby.
Holders of the Notes will not be entitled to
any rights with respect to the Vishay Stock
(including, without limitation, voting
rights, the rights to receive any dividends
or other distributions in respect thereof and
the right to tender or exchange Vishay Stock
in any partial tender or exchange offer by
Vishay or any third party) until such time as
the Company shall deliver shares of Vishay
Stock to holders of the Notes at maturity.
Because the Calculation Agent is an affiliate
of the Company, potential conflicts of
interest may exist between the Calculation
Agent and the holders of the Notes, including
with respect to certain adjustments to the
Exchange Factor and other antidilution
adjustments that may influence the
determination of the amount of Vishay Stock
or other property receivable at the maturity
of the Notes. See "Antidilution Adjustments"
and "Market Disruption Event."
It is suggested that prospective investors
who consider purchasing the Notes should
reach an investment decision only after
carefully considering the suitability of the
Notes in light of their particular
circumstances.
Investors should also consider the tax
consequences of investing in the Notes. See
"United States Federal Taxation" below.
Antidilution Adjustments:...... The Exchange Factor (and, in the case of
paragraph 5 below, the determination of the
Exchange Rate) will be adjusted as follows:
1. If Vishay Stock is subject to a stock
split or reverse stock split, then once such
split has become effective, the Exchange
Factor will be adjusted to equal the product
of the prior Exchange Factor and the number
of shares issued in such stock split or
reverse stock split with respect to one share
of Vishay Stock.
2. If Vishay Stock is subject to a stock
dividend (issuance of additional shares of
Vishay Stock) that is given ratably to all
holders of shares of Vishay Stock, then once
the dividend has become effective and Vishay
Stock is trading ex-dividend, the Exchange
Factor will be adjusted so that the new
Exchange Factor shall equal the prior
Exchange Factor plus the product of (i) the
number of shares issued with respect to one
share of Vishay Stock and (ii) the prior
Exchange Factor.
3. There will be no adjustments to the
Exchange Factor to reflect cash dividends or
other distributions paid with respect to
Vishay Stock other than distributions
described in clause (v) of paragraph 5 below
and Extraordinary Dividends as described
below. A cash dividend or other distribution
with respect to Vishay Stock will be deemed
to be an "Extraordinary Dividend" if such
dividend or other distribution exceeds the
immediately preceding non-Extraordinary
Dividend for Vishay Stock by an amount equal
to at least 6% of the Market Price of Vishay
Stock on the NYSE Trading Day preceding the
ex-dividend date for the payment of such
Extraordinary Dividend (the "ex-dividend
date"). If an Extraordinary Dividend occurs
with respect to Vishay Stock, the Exchange
Factor with respect to Vishay Stock will be
adjusted on the ex-dividend date with respect
to such Extraordinary Dividend so that the
new Exchange Factor will equal the product of
(i) the then current Exchange Factor and (ii)
a fraction, the numerator of which is the
Market Price on the NYSE Trading Day
preceding the ex-dividend date, and the
denominator of which is the amount by which
the Market Price on the NYSE Trading Day
preceding the ex-dividend date exceeds the
Extraordinary Dividend Amount. The
"Extraordinary Dividend Amount" with respect
to an Extraordinary Dividend for Vishay Stock
will equal (i) in the case of cash dividends
or other distributions that constitute
quarterly dividends, the amount per share of
such Extraordinary Dividend minus the amount
per share of the immediately preceding
non-Extraordinary Dividend for Vishay Stock
or (ii) in the case of cash dividends or
other distributions that do not constitute
quarterly dividends, the amount per share of
such Extraordinary Dividend. To the extent
an Extraordinary Dividend is not paid in
cash, the value of the non-cash component
will be determined by the Calculation Agent,
whose determination shall be conclusive. A
distribution on the Vishay Stock described in
clause (v) of paragraph 5 below that also
constitutes an Extraordinary Dividend shall
only cause an adjustment to the Exchange
Factor pursuant to clause (v) of paragraph 5.
4. If Vishay issues rights or warrants to
all holders of Vishay Stock to subscribe for
or purchase Vishay Stock at an exercise price
per share less than the Market Price of the
Vishay Stock on (i) the date the exercise
price of such rights or warrants is
determined and (ii) the expiration date of
such rights or warrants, and if the expiration
date of such rights or warrants precedes the
maturity of the Notes, then the Exchange
Factor will be adjusted to equal the product
of the prior Exchange Factor and a fraction,
the numerator of which shall be the number of
shares of Vishay Stock outstanding immediately
prior to the issuance of such rights or
warrants plus the number of additional shares
of Vishay Stock offered for subscription or
purchase pursuant to such rights or warrants
and the denominator of which shall be the
number of shares of Vishay Stock outstanding
immediately prior to the issuance of such
rights or warrants plus the number of
additional shares of Vishay Stock which the
aggregate offering price of the total number
of shares of Vishay Stock so offered for
subscription or purchase pursuant to such
rights or warrants would purchase at the
Market Price on the expiration date of such
rights or warrants, which shall be determined
by multiplying such total number of shares
offered by the exercise price of such rights
or warrants and dividing the product so
obtained by such Market Price.
5. If (i) there occurs any reclassification
of Vishay Stock, (ii) Vishay, or any
surviving entity or subsequent surviving
entity of Vishay (a "Vishay Successor") has
been subject to a merger, combination or
consolidation and is not the surviving
entity, (iii) any statutory exchange of
securities of Vishay or any Vishay Successor
with another corporation occurs (other than
pursuant to clause (ii) above), (iv) Vishay
is liquidated, (v) Vishay issues to all of its
shareholders equity securities of an issuer
other than Vishay (other than in a
transaction described in clauses (ii), (iii)
or (iv) above) (a "Spin-off Event") or (vi) a
tender or exchange offer is consummated for
all the outstanding shares of Vishay Stock
(any such event in clauses (i) through (vi) a
"Reorganization Event"), the method of
determining the Exchange Rate in respect of
the amount payable upon exchange at maturity
for each Note will be adjusted to provide
that each holder of Notes will receive at
maturity, in respect of each $34.00 principal
amount of each Note, securities, cash or any
other assets distributed in any such
Reorganization Event, including, in the case
of a Spin-off Event, the share of Vishay
Stock with respect to which the spun-off
security was issued (collectively, the
"Exchange Property") (or, at the sole option
of the Company, cash equal to the Cap Price,
in the case of clause (a) below) in an amount
with a value equal to either (a) if the
Transaction Value (as defined below) is
greater than the Cap Price, (i) the Cap Price
divided by the Maturity Price (ii) multiplied
by the Transaction Value or (b) if the
Transaction Value is less than or equal to
the Cap Price, the Transaction Value;
provided that, if the Exchange Property
received in any such Reorganization Event
consists only of cash, the maturity date of
the Notes will be deemed to be accelerated to
the date on which such cash is distributed to
holders of Vishay Stock. If Exchange
Property consists of more than one type of
property, holders of Notes will receive at
maturity a pro rata share of each such type
of Exchange Property. "Transaction Value"
means (i) for any cash received in any such
Reorganization Event, the amount of cash
received per share of Vishay Stock, as
adjusted by the Exchange Factor, (ii) for any
property other than cash or securities
received in any such Reorganization Event,
the market value of such Exchange Property
received for each share of Vishay Stock at the
date of the receipt of such Exchange
Property, as adjusted by the Exchange Factor,
as determined by the Calculation Agent and
(iii) for any security received in any such
Reorganization Event, an amount equal to the
Market Price per share of such security at the
maturity of the Notes multiplied by the
quantity of such security received for each
share of Vishay Stock, as adjusted by the
Exchange Factor.
For purposes of paragraph 5 above, in the
case of a consummated tender or exchange
offer for all Exchange Property of a
particular type, Exchange Property shall be
deemed to include the amount of cash or other
property paid by the offeror in the tender or
exchange offer with respect to such Exchange
Property (in an amount determined on the
basis of the rate of exchange in such tender
or exchange offer). In the event of a tender
or exchange offer with respect to Exchange
Property in which an offeree may elect to
receive cash or other property, Exchange
Property shall be deemed to include the kind
and amount of cash and other property received
by offerees who elect to receive cash.
No adjustments to the Exchange Factor or
Exchange Rate will be required unless such
adjustment would require a change of at least
0.1% in the Exchange Factor or Exchange Rate
then in effect. The Exchange Factor or
Exchange Rate resulting from any of the
adjustments specified above will be rounded
to the nearest one thousandth with five
ten-thousandths being rounded upward.
No adjustments to the Exchange Factor or
Exchange Rate will be made other than those
specified above. The adjustments specified
above do not cover all events that could
affect the Market Price of the Vishay Stock,
including, without limitation, a partial
tender or exchange offer for the Vishay Stock.
NOTWITHSTANDING THE FOREGOING, THE AMOUNT
PAYABLE AT MATURITY WITH RESPECT TO EACH NOTE
WILL NOT UNDER ANY CIRCUMSTANCES EXCEED
$48.20 PER NOTE.
The Calculation Agent shall be solely
responsible for the determination and
calculation of any adjustments to the Exchange
Factor or Exchange Rate and of any related
determinations and calculations with respect
to any distributions of stock, other
securities or other property or assets
(including cash) in connection with any
corporate event described in paragraph 5
above, and its determinations and
calculations with respect thereto shall be
conclusive.
The Calculation Agent will provide
information as to any adjustments to the
Exchange Factor or Exchange Rate upon written
request by any holder of the Notes.
Market Disruption Event:....... "Market Disruption Event" means, with respect
to Vishay Stock:
(i) a suspension, absence or material
limitation of trading of Vishay Stock on the
primary market for Vishay Stock for more than
two hours of trading or during the one-half
hour period preceding the close of trading in
such market; or the suspension or material
limitation on the primary market for trading
in options contracts related to Vishay Stock,
if available, during the one-half hour period
preceding the close of trading in the
applicable market, in each case as determined
by the Calculation Agent in its sole
discretion; and
(ii) a determination by the Calculation
Agent in its sole discretion that the event
described in clause (i) above materially
interfered with the ability of the Company or
any of its affiliates to unwind all or a
material portion of the hedge with respect to
the Notes.
For purposes of determining whether a Market
Disruption Event has occurred: (1) a
limitation on the hours or number of days of
trading will not constitute a Market
Disruption Event if it results from an
announced change in the regular business
hours of the relevant exchange, (2) a
decision to permanently discontinue trading
in the relevant option contract will not
constitute a Market Disruption Event, (3)
limitations pursuant to New York Stock
Exchange Rule 80A (or any applicable rule or
regulation enacted or promulgated by the New
York Stock Exchange, any other self-regulatory
organization or the Securities and Exchange
Commission of similar scope as determined by
the Calculation Agent) on trading during
significant market fluctuations shall
constitute a Market Disruption Event, (4) a
suspension of trading in an options contract
on Vishay Stock by the primary securities
market trading in such options, if available,
by reason of (x) a price change exceeding
limits set by such securities exchange or
market, (y) an imbalance of orders relating
to such contracts or (z) a disparity in bid
and ask quotes relating to such contracts
will constitute a suspension or material
limitation of trading in options contracts
related to Vishay Stock and (5) an "absence
of trading" on the primary securities market
on which options contracts related to Vishay
Stock are traded will not include any time
when such securities market is itself closed
for trading under ordinary circumstances.
Vishay Stock; Public
Information ................... Vishay Stock is registered under the Exchange
Act. Companies with securities registered
under the Exchange Act are required to file
periodically certain financial and other
information specified by the Securities and
Exchange Commission (the "Commission").
Information provided to or filed with the
Commission is available at the offices of the
Commission specified under "Available
Information" in the accompanying Prospectus.
In addition, information regarding Vishay may
be obtained from other sources including, but
not limited to, press releases, newspaper
articles and other publicly disseminated
documents. The Company makes no
representation or warranty as to the accuracy
or completeness of such reports.
THIS PRICING SUPPLEMENT RELATES ONLY TO THE
NOTES OFFERED HEREBY AND DOES NOT RELATE TO
VISHAY STOCK OR OTHER SECURITIES OF VISHAY.
ALL DISCLOSURES CONTAINED IN THIS PRICING
SUPPLEMENT REGARDING VISHAY ARE DERIVED FROM
THE PUBLICLY AVAILABLE DOCUMENTS DESCRIBED IN
THE PRECEDING PARAGRAPH. NEITHER THE COMPANY
NOR THE AGENT HAS PARTICIPATED IN THE
PREPARATION OF SUCH DOCUMENTS OR MADE ANY DUE
DILIGENCE INQUIRY WITH RESPECT TO VISHAY.
NEITHER THE COMPANY NOR THE AGENT MAKES ANY
REPRESENTATION THAT SUCH PUBLICLY AVAILABLE
DOCUMENTS OR ANY OTHER PUBLICLY AVAILABLE
INFORMATION REGARDING VISHAY ARE ACCURATE OR
COMPLETE. FURTHERMORE, THERE CAN BE NO
ASSURANCE THAT ALL EVENTS OCCURRING PRIOR TO
THE DATE HEREOF (INCLUDING EVENTS THAT WOULD
AFFECT THE ACCURACY OR COMPLETENESS OF THE
PUBLICLY AVAILABLE DOCUMENTS DESCRIBED IN THE
PRECEDING PARAGRAPH) THAT WOULD AFFECT THE
TRADING PRICE OF VISHAY STOCK (AND THEREFORE
THE INITIAL PRICE AND THE CAP PRICE) HAVE BEEN
PUBLICLY DISCLOSED. SUBSEQUENT DISCLOSURE OF
ANY SUCH EVENTS OR THE DISCLOSURE OF OR
FAILURE TO DISCLOSE MATERIAL FUTURE EVENTS
CONCERNING VISHAY COULD AFFECT THE VALUE
RECEIVED AT MATURITY WITH RESPECT TO THE
NOTES AND THEREFORE THE TRADING PRICES OF THE
NOTES.
NEITHER THE COMPANY NOR ANY OF ITS AFFILIATES
MAKES ANY REPRESENTATION TO ANY PURCHASER OF
NOTES AS TO THE PERFORMANCE OF VISHAY STOCK.
The Company or its affiliates may presently
or from time to time engage in business with
Vishay including extending loans to, or
making equity investments in, Vishay or
providing advisory services to Vishay,
including merger and acquisition advisory
services. In the course of such business,
the Company or its affiliates may acquire
non-public information with respect to Vishay
and, in addition, one or more affiliates of
the Company may publish research reports with
respect to Vishay. The Company does not make
any representation to any purchaser of Notes
with respect to any matters whatsoever
relating to Vishay. Any prospective
purchaser of a Note should undertake an
independent investigation of Vishay as in its
judgment is appropriate to make an informed
decision with respect to an investment in
Vishay Stock.
Historical Information......... The following table sets forth the high and
low Market Price during 1992, 1993, 1994, and
during 1995 through December 4, 1995. The
Market Prices listed below have been derived
from publicly disseminated information that
the Company believes to be accurate. Neither
the Company nor the Agent makes any
representation as to the accuracy of such
information. The historical prices of Vishay
Stock should not be taken as an indication of
future performance, and no assurance can be
given that the price of Vishay Stock will not
decrease so that the beneficial owners of the
Notes will receive at maturity shares of
Vishay Stock worth less than the principal
amount of the Notes. Nor can assurance be
given that the price of Vishay Stock will
increase above the Initial Price so that at
maturity the beneficial owners of the Notes
will receive an amount in excess of the
principal amount of the Notes.
Vishay High Low
------ ---- ---
(CUSIP # 928298108)
1992:
First Quarter...... $9 13/32 $6 27/32
Second Quarter..... 10 29/32 8 7/16
Third Quarter...... 12 3/32 10 3/32
Fourth Quarter..... 15 13/16 11 53/64
1993:
First Quarter...... 15 7/8 12 37/64
Second Quarter..... 16 25/64 11 21/32
Third Quarter...... 16 57/64 14 13/32
Fourth Quarter..... 16 3/64 13 3/8
1994:
First Quarter...... 18 9/64 15 1/4
Second Quarter..... 19 9/32 14 31/32
Third Quarter...... 21 27/64 19 7/32
Fourth Quarter..... 24 53/64 21 1/64
1995:
First Quarter...... 28 3/8 23 3/32
Second Quarter..... 37 5/8 27 1/2
Third Quarter...... 44 3/8 35 1/8
Fourth Quarter
through
December 4, 1995. 40 1/4 30 1/8
Vishay has not paid cash dividends on the
Vishay Stock to date. The Company makes
no representation as to the amount of
dividends, if any, that Vishay will pay in
the future. In any event, holders of the
Notes will not be entitled to receive
dividends, if any, that may be payable on
Vishay Stock.
Use of Proceeds and Hedging:... The net proceeds to be received by the
Company from the sale of the Notes will be
used for general corporate purposes and, in
part, by the Company or one or more of its
affiliates in connection with hedging the
Company's obligations under the Notes. See
also "Use of Proceeds" in the accompanying
Prospectus.
Prior to and after the close of the NYSE
Trading Day on the date of this Pricing
Supplement, the Company, through its
subsidiaries and others, hedged its
anticipated exposure in connection with the
Notes by taking positions in Vishay Stock.
Such hedging was carried out in a manner
designed to minimize any impact on the price
of Vishay Stock. Purchase activity could
potentially have increased the price of
Vishay Stock, and therefore effectively
increase the level to which Vishay Stock must
rise before a holder of a Note would receive
at maturity an amount of Vishay Stock worth
as much as or more than the principal amount
of the Notes. Although the Company has no
reason to believe that its hedging activity
had a material impact on the price of Vishay
Stock, there can be no assurance that the
Company did not, or in the future will not,
affect such price as a result of its hedging
activities. The Company, through its
subsidiaries, is likely to modify its hedge
position throughout the life of the Notes by
purchasing and selling Vishay Stock, options
contracts on Vishay Stock listed on major
securities markets or positions in any other
instruments that it may wish to use in
connection with such hedging.
United States Federal Taxation: The following discussion supplements the
"United States Federal Taxation" section in
the accompanying Prospectus Supplement and
should be read in conjunction therewith. Any
limitations on disclosure and any defined
terms contained therein are equally
applicable to the summary below. Because of
the absence of authority on point, there are
substantial uncertainties regarding the U.S.
federal income tax consequences of an
investment in the Notes.
The Company intends to treat the Notes as
indebtedness of the Company and such
treatment is binding on the Company and on all
holders except for holders who disclose on
their tax returns that they are treating the
Notes in a manner that is inconsistent with
the Company's treatment of the Notes. The
Company's treatment is not, however, binding
upon the Internal Revenue Service or the
courts, and there can be no assurance that it
will be accepted.
The Company presently intends to treat the
coupon interest on the Notes as reportable
interest. Under this approach, such interest
would be taxable to a United States Holder as
ordinary interest income at the time it
accrues or is received in accordance with the
United States Holder's method of accounting
for United States income tax purposes.
Although proposed Treasury regulations
addressing the treatment of contingent debt
instruments were issued on December 15, 1994,
such regulations, which generally would
require current accrual of contingent amounts
and would affect the character of gain on the
sale, exchange or retirement of debt, by
their terms apply only to debt instruments
issued on or after the 60th day after the
regulations are finalized.
Under general United States federal income
tax principles, upon maturity of a Note, a
United States Holder will recognize gain or
loss, if any, equal to the difference between
the amount realized at maturity and such
Holder's tax basis in the Note. It is
unclear under existing law whether gain
recognized at maturity will be treated as
ordinary or capital in character. Subject to
further guidance from the Internal Revenue
Service, however, the Company intends to treat
such gain as interest income and to report
such amounts accordingly. Prospective
investors should consult with their tax
advisors regarding the character of gain
recognized at maturity.
United States Holders that have acquired debt
instruments similar to the Notes and have
accounted for such debt instruments under
proposed, but subsequently withdrawn,
Treasury regulations may be deemed to have
established a method of accounting that must
be followed with respect to the Notes, unless
consent of the Commissioner of the Internal
Revenue Service is obtained to change such
method. Absent such consent, such a Holder
would be required to account for the Notes in
the manner prescribed in such withdrawn
Treasury regulations. The Internal Revenue
Service, however, would not be required to
accept such method as correct.
Any gain or loss recognized on the sale or
exchange of a Note prior to the establishment
of the Maturity Price will be treated as
capital in character.
There can be no assurance that the ultimate
tax treatment of the Notes would not differ
significantly from the description herein.
Prospective investors are urged to consult
their tax advisors as to the possible
consequences of holding the Notes.
See also "United States Federal Taxation" in
the accompanying Prospectus Supplement.
