Registration No. 333-________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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MORGAN STANLEY GROUP INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-2838811
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1585 Broadway
New York, New York 10036
(212) 761-4000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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Ralph L. Pellecchio
Assistant Secretary
Morgan Stanley Group Inc.
1585 Broadway
New York, New York 10036
(212) 761-4000
(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
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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, as amended (the "Securities Act"), 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. |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed maximum Proposed maximum
Title of each class of securities Amount to offering price aggregate offering Amount of
to be registered be registered per security(1) price (1) registration fee
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<S> <C> <C> <C> <C>
Debt Securities and Warrants to
Purchase Debt Securities (2)..... 100%
Preferred Stock (3)................... $4,000,000,000 (5)(6) -- $4,000,000,000 $1,379,311
Depositary Shares (4)................. --
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<FN>
(1) Estimated solely for purposes of calculating the registration fee.
(2) The Warrants being registered hereby may be exercised to purchase Debt
Securities registered hereby. The amount of Warrants to be registered is
the maximum aggregate principal amount of Debt Securities to be issued with
or without any such Warrants and includes all Debt Securities deliverable
upon the exercise of such Warrants.
(3) There are being registered hereby such indeterminate number of shares of
Preferred Stock as may from time to time be issued at indeterminate prices.
(4) There are being registered hereby such indeterminate number of Depositary
Shares as may be issued in the event that the Registrant elects to offer
fractional interests in shares of the Preferred Stock registered hereby.
(5) This registration statement also relates to offers and sales of Debt
Securities, Warrants, Preferred Stock and Depositary Shares in connection
with market-making transactions by and through affiliates of the Registrant
(subject, with respect to Preferred Stock and Depositary Shares, to
approval of the New York Stock Exchange in connection with market-making
transactions by and through Morgan Stanley & Co. Incorporated).
(6) Or, if any Debt Securities are issued (i) at an original issue discount,
such greater amount as shall result in aggregate net proceeds not in excess
of $4,000,000,000 to the Registrant or (ii) with a principal amount
denominated in a foreign currency or composite currency, such amount as
shall result in an aggregate initial offering price equivalent to
$4,000,000,000 at the time of initial offering.
</FN>
</TABLE>
The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the Registrant
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 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, the Prospectus which is a part of this registration statement is
a combined Prospectus relating also to $1,103,893,689 of securities registered
and remaining unissued under registration statement no. 33-57833 previously
filed by the Registrant and declared effective by the Commission.
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<PAGE>
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 March 12, 1996
$5,103,893,689
Morgan Stanley Group Inc.
DEBT SECURITIES
WARRANTS TO PURCHASE DEBT SECURITIES
PREFERRED STOCK
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Morgan Stanley Group Inc. (the "Company") may offer and issue from time
to time Debt Securities in one or more series. Debt Securities may be issuable
in registered form without coupons or in bearer form with or without coupons
attached. The Company also may issue and sell Debt Warrants to purchase Debt
Securities on terms to be determined at the time of sale. The Company may offer
Debt Warrants with Debt Securities or separately. The Company will offer Debt
Securities and Debt Warrants to the public on terms determined by market
conditions. Debt Securities and Debt Warrants 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 -- in each case, as the Company specifically
designates.
The Company may also 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 Debt Securities, Debt Warrants and Preferred Stock are hereinafter
collectively referred to as the "Securities."
The accompanying Prospectus Supplement will set forth the specific
terms of the Securities, including (i) in the case of the 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), listing (if any) on a securities exchange and any other
specific terms of the Debt Securities, (ii) in the case of Debt Warrants, the
exercise price and other specific terms of the Debt Warrants and (iii) 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. 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 any Securities 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.
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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.
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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 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 business as broker-dealers (subject, in the
case of Preferred Stock and Depositary Shares, 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 a 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.
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Morgan Stanley & Co.
Incorporated
, 1996
<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 and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any underwriter, dealer or agent. This Prospectus does not
constitute 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.
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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"). 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 618 South Spring Street, Los Angeles,
California 90014.
This Prospectus constitutes a part of a Registration Statement filed by
the Company 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 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.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report on Form 10-K of the Company for the fiscal period
ended November 30, 1995 and Current Reports on Form 8-K of the Company dated
January 4, 1996, January 5, 1996, January 23, 1996, February 7, 1996, February
20, 1996 (two Current Reports), February 23, 1996 and February 28, 1996 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, 1585 Broadway, New York, New York
10036, Attention: Mailroom Manager (telephone number (212) 761-4000).
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IN CONNECTION WITH THE OFFERING OF CERTAIN SECURITIES, THE UNDERWRITERS
MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICES OF SUCH SECURITIES, OTHER SECURITIES OF THE COMPANY OR ANY SECURITIES THE
PRICES OF WHICH MAY BE USED TO DETERMINE PAYMENTS ON SUCH SECURITIES 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.
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<PAGE>
THE COMPANY
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
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, Philadelphia, 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 the State 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 the State 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 1585 Broadway, New York, New York 10036, and
its telephone number is (212) 761-4000. Unless the context otherwise requires,
the term "Company" means Morgan Stanley Group Inc. and its consolidated
subsidiaries.
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 the 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.
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.
Fiscal Fiscal
Period Ended Year Ended Year Ended
November 30, January 31, December 31,
------------------
1995 1995 1994 1993 1991
---- ---- ---- ---- ----
Ratio of earnings
to fixed charges..... 1.2 1.1 1.2 1.2 1.2
Ratio of earnings
to fixed charges
and preferred stock
dividends............ 1.1 1.1 1.2 1.2 1.2
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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
The Debt Securities will constitute either senior or subordinated debt
of the Company 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 dated as of April 15, 1989, as supplemented by a First
Supplemental Senior Indenture dated as of May 15, 1991 (as so supplemented, the
"Senior Debt Indenture"), between the Company and Chemical Bank, as Trustee,
and, in the case of Debt Securities that will be subordinated debt, under a
Subordinated Indenture dated as of April 15, 1989, as supplemented by a First
Supplemental Subordinated Indenture dated as of May 15, 1991 (as so
supplemented, the "Subordinated Debt Indenture"), between the Company and The
First National Bank of Chicago, as Trustee. The Senior Debt Indenture and
Subordinated Debt Indenture are sometimes hereinafter referred to individually
as an "Indenture" and collectively as the "Indentures." Chemical Bank and The
First National Bank of Chicago are hereinafter referred to individually as a
"Trustee" and collectively as the "Trustees."
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 offered by this Prospectus and the accompanying Prospectus
Supplement are referred to herein as the "Offered Debt Securities." As used
under this caption and the captions "Description of Debt Warrants" and
"Description of Capital Stock," the term "Company" means Morgan Stanley Group
Inc.
General
Neither of the Indentures limits the amount of additional indebtedness
that the Company or any of its subsidiaries may incur. The Debt Securities will
be unsecured senior or subordinated obligations of the Company. Most of the
assets of the Company are owned by its subsidiaries. Therefore, the Company's
rights and the rights of its creditors, including holders of Debt Securities, 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.
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
European Currency Units ("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 Debt Securities): (i) classification as senior or
subordinated Debt Securities, the specific designation, aggregate principal
amount, purchase price and denomination; (ii) 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) interest rate or rates (or the method by which
such rate or rates will be determined), if any; (v)
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<PAGE>
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 the Company or other entities, 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 income tax consequences, including whether and under what
circumstances the Company will pay additional amounts on Offered Debt Securities
held by a person who is not 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 the Company 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.
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 Securities
The registered Debt Securities of a series may be issued in the form of
one or more fully registered global Securities (a "Registered Global Security")
that will be deposited with a depositary (a "Debt Depositary") or with a nominee
for a Debt Depositary identified in the Prospectus Supplement relating to such
series and registered in the name of such Debt Depositary or nominee thereof. In
such case, one or more Registered Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding registered Debt Securities of the series to be
represented by such Registered Global Securities. Unless and until it is
exchanged in whole for Debt Securities in definitive registered form, a
Registered Global Security may not be transferred except as a whole by the Debt
Depositary for such Registered Global Security to a nominee of such Debt
Depositary or by a nominee of such Debt Depositary to such Debt Depositary or
another nominee of such Debt Depositary or by such Debt Depositary or any such
nominee to a successor of such Debt Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Registered Global
Security will be described in the Prospectus Supplement relating to such series.
The Company anticipates that the following provisions will apply to all
depositary arrangements.
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<PAGE>
Ownership of beneficial interests in a Registered Global Security will
be limited to persons that have accounts with the Debt Depositary for such
Registered Global Security ("participants") or persons that may hold interests
through participants. Upon the issuance of a Registered Global Security, the
Debt Depositary for such Registered Global Security will credit, on its
book-entry registration and transfer system, the participants' accounts with the
respective principal amounts of the Debt Securities represented by such
Registered Global Security beneficially owned by such participants. The accounts
to be credited shall be designated by any dealers, underwriters or agents
participating in the distribution of such Debt Securities. Ownership of
beneficial interests in such Registered Global Security will be shown on, and
the transfer of such ownership interests will be effected only through, records
maintained by the Debt Depositary for such Registered Global Security (with
respect to interests of participants) and on the records of participants (with
respect to interests of persons holding through participants). The laws of some
states may require that certain purchasers of securities take physical delivery
of such securities in definitive form. Such limits and such laws may impair the
ability to own, transfer or pledge beneficial interests in Registered Global
Securities.
So long as the Debt Depositary for a Registered Global Security, or its
nominee, is the registered owner of such Registered Global Security, such Debt
Depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Debt Securities represented by such Registered Global
Security for all purposes under the applicable Indenture. Except as set forth
below, owners of beneficial interests in a Registered Global Security will not
be entitled to have the Debt Securities represented by such Registered Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of such Debt Securities in definitive form and will not be
considered the owners or holders thereof under the applicable Indenture.
Accordingly, each person owning a beneficial interest in a Registered Global
Security must rely on the procedures of the Debt Depositary for such Registered
Global Security and, if such person is not a participant, on the procedures of
the participant through which such person owns its interest, to exercise any
rights of a holder under the applicable Indenture. The Company understands that
under existing industry practices, if it requests any action of holders or if an
owner of a beneficial interest in a Registered Global Security desires to give
or take any action which a holder is entitled to give or take under the
applicable Indenture, the Debt Depositary for such Registered Global Security
would authorize the participants holding the relevant beneficial interests to
give or take such action, and such participants would authorize beneficial
owners owning through such participants to give or take such action or would
otherwise act upon the instructions of beneficial owners holding through them.
Principal, premium, if any, and interest payments on Debt Securities
represented by a Registered Global Security registered in the name of a Debt
Depositary or its nominee will be made to such Debt Depositary or its nominee,
as the case may be, as the registered owner of such Registered Global Security.
None of the Company, the Trustees or any other agent of the Company or agent of
the Trustees will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in such Registered Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Company expects that the Debt Depositary for any Debt Securities
represented by a Registered Global Security, upon receipt of any payment of
principal, premium or interest in respect of such Registered Global Security,
will immediately credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in such Registered Global
Security as shown on the records of such Debt Depositary. The Company also
expects that payments by participants to owners of beneficial interests in such
Registered Global Security held through such participants will be governed by
standing customer instructions and customary practices, as is now the case with
the securities held for the accounts of customers in bearer form or registered
in "street name", and will be the responsibility of such participants.
If the Debt Depositary for any Debt Securities represented by a
Registered Global Security is at any time unwilling or unable to continue as
Debt Depositary or ceases to be a clearing agency registered under the Exchange
Act, and a successor Debt Depositary registered as a clearing agency under the
Exchange Act is not appointed by the Company within 90 days, the Company will
issue such Debt Securities in definitive form in exchange for such Registered
Global Security. In addition, the Company may at any time and in its sole
discretion determine not to have any of the Debt Securities of a series
represented by one or more Registered Global Securities and, in such event, will
issue Debt Securities of such series in definitive form in exchange for all of
the Registered Global Security or Securities representing such Debt Securities.
Any Debt Securities issued in definitive form in exchange for a Registered
Global Security will be registered in such name or names as the Debt Depositary
shall instruct the
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relevant Trustee. It is expected that such instructions will be based upon
directions received by the Debt Depositary from participants with respect to
ownership of beneficial interests in such Registered Global Security.
The Debt Securities of a series may also be issued in the form of one
or more bearer global Securities (a "Bearer Global Security") that will be
deposited with a common depositary for the Euroclear System currently operated
by Morgan Guaranty Trust Company of New York, Brussels Office, or its successor
as operator of the Euro-clear System ("Euroclear") and Cedel Bank, societe
anonyme or its successor ("Cedel"), or with a nominee for such depositary
identified in the Prospectus Supplement relating to such series. The specific
terms and procedures, including the specific terms of the depositary
arrangement, with respect to any portion of a series of Debt Securities to be
represented by a Bearer Global Security will be described in the Prospectus
Supplement relating to such series.
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 the Company will be issued under the Senior Debt Indenture and will rank
pari passu with all other unsecured and unsubordinated debt of the Company.
Subordinated Debt
The Debt Securities and Coupons that will constitute part of the
subordinated debt of the Company 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 the Company. The Subordinated Debt Indenture defines "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, 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 or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or a substantial part of its property, 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 Senior Indebtedness 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 Senior
Indebtedness, 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), 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 Senior Indebtedness 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, Section 13.1) 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 Senior Indebtedness outstanding as of the end of the
most recent fiscal quarter.
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
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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 Debt Securities 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 the Company will not merge or consolidate with any other
corporation and will not sell, lease or convey all or substantially all its
assets to any person, unless the Company shall be the continuing corporation, or
the successor corporation or person that acquires all or substantially all the
assets of the Company shall be 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 the Company under such Indenture and the Debt
Securities issued thereunder, and immediately after such merger, consolidation,
sale, lease or conveyance, the Company, 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 the Company.
(Indentures, Section 9.1) This covenant would not apply to a recapitalization
transaction, a change of control of the Company 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.
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 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 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 or reorganization; (e) failure by the Company
to make any payment at maturity, including any applicable grace period, in
respect of 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, the Company
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 the Company by the Trustee, or to 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) 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 the Company by the
Trustee, or to 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 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 such affected series (treated
as one class) issued under such Indenture and then outstanding 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 or reorganization of the Company shall have occurred
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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) 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 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 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)
Discharge, Defeasance and Covenant Defeasance
The Company can discharge or defease its obligations under an Indenture
as set forth below. (Indentures, Section 10.1)
Under terms satisfactory to the Trustee, 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 and interest on such Debt
Securities.
The Company may also discharge any and all of the 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 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. Under terms satisfactory to
the relevant Trustee, 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 Sections 3.6 (in the case of the Senior Debt
Indenture) and 9.1 (which Sections contain the covenants described above
limiting liens and consolidations, mergers, asset sales and leases), and elect
not 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) 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 and interest on all
outstanding Debt Securities of such series issued under such Indenture; (ii) 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
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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 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) the Company 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
the Company, 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 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 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 (f) evidence the acceptance of appointment by a
successor trustee. (Indentures, Section 8.1)
Each Indenture also contains provisions permitting 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 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 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 without the
consent of each holder of Senior Indebtedness then outstanding that would be
adversely affected thereby. (Subordinated Debt Indenture, Section 8.6)
Concerning the Trustees
Chemical Bank and The First National Bank of Chicago are two 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.
DESCRIPTION OF DEBT WARRANTS
The Company may issue, together with Debt Securities or separately,
Debt Warrants for the purchase of Debt Securities. If the Debt Warrants are
issued together with any Debt Securities, they may be attached to or separate
from such Debt Securities. The Debt Warrants offered by this Prospectus and the
accompanying
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Prospectus Supplement are referred to herein as the "Offered Debt Warrants." The
Offered Debt Warrants are to be issued under a Debt Warrant Agreement (the "Debt
Warrant Agreement") to be entered into between the Company and a bank or trust
company, as Warrant Agent (the "Debt Warrant Agent"), and may be issued in one
or more series, all as shall be set forth in the Prospectus Supplement relating
thereto. The forms of the Debt Warrant Agreement and the certificates for the
Debt Warrants are filed as exhibits to the Registration Statement of which this
Prospectus is a part. The following summaries of certain provisions of the Debt
Warrant Agreement and the Debt Warrants do not purport to be complete and such
summaries are subject to the detailed provisions of the Debt Warrant 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 Debt Warrants. Numerical references (under this caption) are to
Sections in the Debt Warrant Agreement. Wherever particular provisions of the
Debt Warrant Agreement are referred to, such provisions are incorporated by
reference as a part of the statements made, and the statements are qualified in
their entirety by such reference.
General
Reference is made to the Prospectus Supplement for the following terms
of and information relating to the Offered Debt Warrants: (i) the price at which
the Offered Debt Warrants will be issued; (ii) the currency or composite
currency for which the Offered Debt Warrants may be purchased; (iii) the
designation, aggregate principal amount, currency or composite currency and
terms of the Debt Securities that may be purchased upon exercise of the Offered
Debt Warrants; (iv) if applicable, the designation and terms of the Debt
Securities with which the Offered Debt Warrants are issued and the number of
Offered Debt Warrants issued with each of such Debt Securities; (v) if
applicable, the date on and after which the Offered Debt Warrants and the
related Debt Securities will be separately transferable; (vi) the principal
amount of Debt Securities purchasable upon exercise of each Offered Debt Warrant
and the price at which and the currency or composite currency in which such
principal amount of Debt Securities may be purchased upon such exercise; (vii)
the date on which the right to exercise the Offered Debt Warrants shall commence
and the date (the "Debt Warrant Expiration Date") on which such right shall
expire or, if the Offered Debt Warrants are not continuously exercisable
throughout such period, the specific date or dates on which they will be
exercisable (each, a "Debt Warrant Exercise Date," which term shall also mean,
with respect to Offered Debt Warrants continuously exercisable for a period of
time, every date during such period); (viii) whether the Debt Warrant
certificates representing the Offered Debt Warrants (the "Debt Warrant
Certificates") will be in registered form ("Registered Warrants") or bearer form
("Bearer Warrants") or both; (ix) any applicable United States federal income
tax consequences; (x) the identity of the Debt Warrant Agent in respect of the
Offered Debt Warrants; (xi) the proposed listing, if any, of the Offered Debt
Warrants or the Debt Securities purchasable upon exercise thereof on any
securities exchange; and (xii) any other terms of the Offered Debt Warrants.
Registered Warrants of each series will be evidenced by Debt Warrant
Certificates in registered form and Bearer Warrants of each series will be
evidenced by a global Debt Warrant Certificate in bearer form (the "Global Debt
Warrant Certificate"). Bearer Warrants will not be issued in definitive form.
The Global Debt Warrant Certificate will be deposited with a common depositary
for Euroclear and Cedel, for credit to the accounts of the purchasers of the
Bearer Warrants on the related date of issue. (Sections 1.02 and 1.03)
At the option of the holder upon request confirmed in writing, and
subject to the terms of the Debt Warrant Agreement, Registered Warrants may be
presented for exchange and for registration of transfer (with the form of
transfer endorsed thereon duly executed) at the corporate trust office of the
Debt Warrant Agent for such series of Debt Warrants (or any other office
indicated in the Prospectus Supplement relating to such series of Debt Warrants)
without service charge and upon payment of any taxes and other governmental
charges as described in the relevant Debt Warrant Agreement. Such transfer or
exchange will be effected only if the Debt Warrant Agent for such series of Debt
Warrants is satisfied with the documents of title and identity of the person
making the request. (Section 4.01)
Exercise of Debt Warrants
Each Offered Debt Warrant will entitle the holder to purchase for cash
such principal amount of Debt Securities at such exercise price as shall in each
case be set forth in, or be determinable as set forth in, the
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Prospectus Supplement. Offered Debt Warrants may be exercised at any time up to
the close of business on the Debt Warrant Expiration Date set forth in the
Prospectus Supplement. After the close of business on the Debt Warrant
Expiration Date (or such later date to which the Debt Warrant Expiration Date
may be extended by the Company), unexercised Debt Warrants will become void.
(Section 2.02)
Subject to any restrictions and additional requirements that may be set
forth in the Prospectus Supplement, Registered Warrants may be exercised by
delivery to the Debt Warrant Agent of the Debt Warrant Certificate evidencing
such Registered Warrants properly completed and duly executed and of payment as
provided in the Prospectus Supplement of the amount required to purchase the
Debt Securities purchasable upon such exercise. (Section 2.03) Subject to any
such restrictions and additional requirements, Bearer Warrants may be exercised
by the beneficial owner thereof delivering to Euroclear or Cedel a duly
completed exercise letter or tested telex, in the form obtainable from Euroclear
or Cedel or the Warrant Agent, setting forth, among other things, instructions
for payment as provided in the Prospectus Supplement on the date of exercise of
the amount required to purchase the Debt Securities purchasable upon exercise of
Bearer Warrants. Purchasers of Bearer Securities to be delivered upon exercise
of the Bearer Warrants will be subject to certification procedures and may be
affected by certain limitations under the United States federal income tax laws.
See "Limitations on Issuance of Bearer Debt Securities and Bearer Debt
Warrants." The procedures to be followed in connection with the delivery of the
exercise letter will be set forth in the Prospectus Supplement. The exercise
price of Debt Warrants will be that price applicable on the date of receipt of
payment in full of the requisite amount of funds, determined as set forth in the
Prospectus Supplement. Upon receipt of such payment (plus payment of any accrued
interest on the Debt Securities being purchased, from and including the
immediately preceding interest payment date for such Debt Securities to and
including the Debt Warrant Exercise Date (unless the Debt Warrant Exercise Date
is after the record date, if any, but on or before the immediately succeeding
interest payment date, if any, for the Debt Securities being purchased, in which
case no accrued interest is payable in respect of Debt Securities to be issued
as Registered Securities)) and upon either (i) surrender of such Debt Warrant
Certificate at the corporate trust office of the Debt Warrant Agent or any other
office indicated in the Prospectus Supplement, in the case of Registered
Warrants, or (ii) satisfaction of the certification procedures referred to
above, in the case of Bearer Warrants, the Company will, as soon as practicable,
forward the Debt Securities purchasable upon such exercise. Only Registered
Securities will be deliverable upon exercise of Registered Warrants. Registered
Securities or, subject to the certification procedures referred to above under
"General," Bearer Securities will be delivered upon exercise of Bearer Warrants,
as may be specified in the exercise letter. If fewer than all of the Registered
Warrants represented by a Debt Warrant Certificate are exercised, a new Debt
Warrant Certificate will be issued representing the remaining number of
Registered Warrants. (Section 2.03)
Modifications
The Debt Warrant Agreement and the terms of the Debt Warrants and the
Debt Warrant Certificates may be amended by the Company and the Debt Warrant
Agent, without the consent of the holders, for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision therein or in any other manner which the Company may deem
necessary or desirable and which will not adversely affect the interests of the
holders in any material respect. (Section 6.01)
Merger, Consolidation, Sale or Other Disposition
If at any time there shall be a merger or consolidation of the Company
or a transfer of substantially all of its assets as permitted under the
applicable Indentures, the successor corporation thereunder shall succeed to and
assume all obligations of the Company under the Debt Warrant Agreement and the
Debt Warrant Certificates.(Section 3.04) See "Description of Debt Securities --
Certain Covenants."
Enforceability of Rights of Debt Warrantholders; Governing Law
The Debt Warrant Agent will act solely as an agent of the Company in
connection with the Debt Warrant Certificates and will not assume any obligation
or relationship of agency or trust for or with any holders of Debt Warrant
Certificates or beneficial owners of Debt Warrants. (Section 5.02) Any holder of
Debt Warrant
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Certificates evidencing Registered Warrants and any beneficial owner of Bearer
Warrants may, without the consent of the Debt Warrant Agent, any other holder,
the relevant Trustee, the holder of any Debt Securities issued upon exercise of
Debt Warrants or, if applicable, the common depositary for Euroclear and Cedel,
enforce by appropriate legal action, on its own behalf, its right to exercise
the Debt Warrants evidenced by such Debt Warrant Certificates or the Global Debt
Warrant Certificates evidencing such Bearer Warrants, as the case may be, in the
manner provided therein and in the Debt Warrant Agreement. (Section 3.03) No
holder of any Debt Warrant Certificate or beneficial owner of any Debt Warrants
shall be entitled to any of the rights of a holder of the Debt Securities
purchasable upon exercise of such Debt Warrants, including, without limitation,
the right to receive the payment of principal of or premium, if any, or
interest, if any, on such Debt Securities or to enforce any of the covenants in
the relevant Indenture. (Section 3.01) The Debt Warrants and each Debt Warrant
Agreement will be governed by, and construed in accordance with, the laws of the
State of New York. (Section 6.04)
LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES AND BEARER DEBT WARRANTS
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) and
Debt Warrants that are Bearer Warrants 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 or dealers participating in the offerings of Bearer
Securities or Bearer Warrants, directly or indirectly, must agree that (i) 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) and (ii) they will not, at any
time, offer, sell, resell or deliver, directly or indirectly, any Bearer
Warrants 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 or dealers must have
procedures reasonably designed to ensure that its employees or agents who are
directly engaged in selling Bearer Securities or Bearer Warrants are aware of
the above restrictions on the offering, sale, resale or delivery of Bearer
Securities or Bearer Warrants. 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 the
Company 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 the Company 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 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 Warrants will not be
issued in definitive form.
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.
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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
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 or 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 February 7, 1996, there were 154,087,313 shares of Common Stock
outstanding. On February 7, 1996, the Company also had outstanding the following
series of Preferred Stock: 3,750,783 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 its wholly owned subsidiary Morgan Stanley Finance 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, 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, up to 996,776 shares of the Company's 8.40% Cumulative
Preferred Stock, with a stated value of $200.00 per share (the "8.40% Preferred
Stock"), being issued at any time on or after August 30, 1996 and up to 847,500
shares of the Company's 8.20% Cumulative Preferred Stock, with a stated value of
$200.00 per share (the "8.20% Preferred Stock"), being issued at any time on or
after November 30, 1996. The following 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, the 9.00% Preferred Stock, the
8.40% Preferred Stock and the 8.20% 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
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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 dividend, 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.
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, the 9.00% Preferred Stock, the 8.40% Preferred
Stock and the 8.20% 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.
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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, the
9.00% Preferred Stock, the 8.40% Preferred Stock and the 8.20% 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.
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.
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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 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, the 9.00% Preferred Stock, the 8.40%
Preferred Stock and the 8.20% 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
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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.
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
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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 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
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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 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 February 7, 1996, certain current and former
Managing Directors and Principals of MS & Co. owned, in the aggregate,
47,650,342 shares of Common Stock subject to voting restrictions contained in
certain agreements (the "Voting Agreements"). As of such date, such shares
constituted approximately 29% 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
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issued, the 7.82% Preferred Stock, the 7.80% Preferred Stock, the 9.00%
Preferred Stock, the 8.40% Preferred Stock and the 8.20% 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, the
9.00% Preferred Stock, the 8.40% Preferred Stock and the 8.20% 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, the 9.00% Preferred Stock, the 8.40% Preferred Stock and the 8.20%
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.
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, would include the 7.82%
Preferred Stock, the 7.80% Preferred Stock, the 9.00% Preferred Stock, the 8.40%
Preferred Stock and the 8.20% 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 a conversion rate of one share of ESOP
Preferred Stock to two shares 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
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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, the 9.00% Preferred Stock, the 8.40% Preferred
Stock and the 8.20% 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, the 9.00% Preferred Stock,
the 8.40% Preferred Stock and the 8.20% 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), 9.00% per
annum (if the 9.00% Preferred Stock is issued), 8.40% per annum (if the 8.40%
Preferred Stock is issued) and 8.20% per annum (if the 8.20% 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 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
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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, if issued, the 9.00%
Preferred Stock will not be redeemable prior to February 28, 2000, if issued,
the 8.40% Preferred Stock will not be redeemable prior to August 30, 2000 and,
if issued, the 8.20% Preferred Stock will not be redeemable prior to November
30, 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, the 9.00% Preferred Stock, the 8.40% Preferred Stock and the
8.20% 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, the 7 3/8% Preferred Stock and, if
issued, the 7.82% Preferred Stock, the 7.80% Preferred Stock, the 9.00%
Preferred Stock, the 8.40% Preferred Stock and the 8.20% 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 (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
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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 nine 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 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.
PLAN OF DISTRIBUTION
The Company 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.
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Offers to purchase Securities may be solicited by agents designated by
the Company 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 to such agent 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 to indemnification by the Company 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 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 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 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 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. Any remarketing firm will be identified and the terms of its
agreement, if any, with the Company 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 to indemnification by the Company
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, the Company will
authorize agents, underwriters or dealers to solicit offers by certain
purchasers to purchase Offered Debt Securities or Offered Debt Warrants, as the
case may be, from the Company 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 and Depositary Shares, 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.
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LEGAL MATTERS
The validity of the Securities 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 Securities 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 schedule
of the Company incorporated by reference and included in the Company's Annual
Report on Form 10-K for the fiscal period ended November 30, 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 schedule 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 Debt Warrants 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 Debt Warrants 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 Debt Warrants should consult with its legal counsel.
26
<PAGE>
MORGAN STANLEY GROUP INC.
<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 registrant. Other
than the registration fee and the NASD filing fee, all of such expenses are
estimated.
Registration fee.............................................. $ 1,379,311
NASD filing fee............................................... 30,500
Blue Sky fees and expenses.................................... 20,000
Rating agency fees............................................ 250,000
Printing and engraving expenses............................... 200,000
Legal fees and expenses....................................... 175,000
Accounting fees and expenses.................................. 140,000
Trustees' and Preferred Stock Depositary's fees and expenses
(including counsel fees)................................ 90,000
Miscellaneous................................................. 5,189
-----------
Total................................................... $ 2,290,000
===========
Item 15. Indemnification of Officers and Directors
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.
II-1
<PAGE>
Item 16. Exhibits
Exhibit
Number Description
-------- ----------
1-a Form of Underwriting Agreement for Debt Securities and Debt
Warrants (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-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 U.S. Distribution Agreement (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated April 4,
1995 and incorporated herein by this reference).
1-d Form of Euro Distribution Agreement (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated April 4,
1995 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 Annual Report on
Form 10-K for the fiscal period ended November 30, 1995 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).
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 Senior Indenture dated as of April 15, 1989 between the Company
and Chemical Bank, Trustee (previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 1993 and incorporated herein by this reference).
4-f First Supplemental Senior Indenture, dated as of May 15, 1991, to
the Senior Indenture dated as of April 15, 1989, between the
Company and Chemical Bank, Trustee (previously filed as an exhibit
to the Company's Annual Report on Form 10-K for the fiscal year
ended January 31, 1993 and incorporated herein by this reference).
4-g Subordinated Indenture dated as of April 15, 1989 between the
Company and The First National Bank of Chicago, Trustee
(previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended January 31, 1993 and
incorporated herein by this reference).
4-h First Supplemental Subordinated Indenture, dated as of May 15,
1991, to the Subordinated Indenture dated as of April 15, 1989
between the Company and The First National Bank of Chicago,
Trustee (previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended January 31, 1993 and
incorporated herein by this reference).
4-i Form of Floating Rate Senior Note (previously filed as an exhibit
to the Company's Current Report on Form 8-K dated April 4, 1995
and incorporated herein by this reference).
4-j Form of Fixed Rate Senior Note (previously filed as an exhibit to
the Company's Current Report on Form 8-K dated April 4, 1995 and
incorporated herein by this reference).
4-k Form of Senior Variable Rate Renewable Note (previously filed as
an exhibit to the Company's Current Report on Form 8-K dated April
4, 1995 and incorporated herein by this reference).
4-l Form of Floating Rate Subordinated Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated April 4,
1995 and incorporated herein by this reference).
II-2
<PAGE>
Exhibit
Number Description
-------- ----------
4-m Form of Fixed Rate Subordinated Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated April 4,
1995 and incorporated herein by this reference).
4-n Form of Subordinated Variable Rate Renewable Note (previously
filed as an exhibit to the Company's Current Report on Form 8-K
dated April 4, 1995 and incorporated herein by this reference).
4-o Form of Temporary Global Floating Rate Senior Bearer Note
(previously filed as an exhibit to the Company's Current Report on
Form 8-K dated April 4, 1995 and incorporated herein by this
reference).
4-p Form of Temporary Global Fixed Rate Senior Bearer Note (previously
filed as an exhibit to the Company's Current Report on Form 8-K
dated April 4, 1995 and incorporated herein by this reference).
4-q Form of Permanent Global Floating Rate Senior Bearer Note
(previously filed as an exhibit to the Company's Current Report on
Form 8-K dated April 4, 1995 and incorporated herein by this
reference).
4-r Form of Permanent Global Fixed Rate Senior Bearer Note (previously
filed as an exhibit to the Company's Current Report on Form 8-K
dated April 4, 1995 and incorporated herein by this reference).
4-s Form of Euro Fixed Rate Senior Bearer Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated April 4,
1995 and incorporated herein by this reference).
4-t Form of Euro Fixed Rate Senior Registered Note (previously filed
as an exhibit to the Company's Current Report on Form 8-K dated
April 4, 1995 and incorporated herein by this reference).
4-u Form of Senior Amortizing Note (previously filed as an exhibit to
the Company's Current Report on Form 8-K dated April 4, 1995 and
incorporated herein by this reference).
4-v Form of Dollarized Yield Curve Note (Bond Basis) (previously filed
as an exhibit to the Company's Current Report on Form 8-K dated
April 4, 1995 and incorporated herein by this reference).
4-w Form of Dollarized Yield Curve Note (Money Market Basis)
(previously filed as an exhibit to the Company's Current Report on
Form 8-K dated April 4, 1995 and incorporated herein by this
reference).
4-x Form of ECU Puttable Floating Rate Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated April 4,
1995 and incorporated herein by this reference).
4-y Form of Floating/Fixed Rate Senior Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated April 4,
1995 and incorporated herein by this reference).
4-z Form of Senior Bull Note (previously filed as an exhibit to the
Company's Current Report on Form 8-K dated April 4, 1995 and
incorporated herein by this reference).
4-aa Form of Senior Dollarized Bull Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated April 4,
1995 and incorporated herein by this reference).
4-bb Form of S&P Indexed (Bull) Note (previously filed as an exhibit to
the Company's Current Report on Form 8-K dated April 4, 1995 and
incorporated herein by this reference).
4-cc Form of S&P Indexed (Bear) Note (previously filed as an exhibit to
the Company's Current Report on Form 8-K dated April 4, 1995 and
incorporated herein by this reference).
4-dd Form of Euro Fixed Rate Subordinated Registered Note (previously
filed as an exhibit to the Company's Current Report on Form 8-K
dated April 4, 1995 and incorporated herein by this reference).
4-ee Form of Principal Exchange Rate Linked Security (PERLS) Note
(previously filed as an exhibit to the Company's Current Report on
Form 8-K dated April 4, 1995 and incorporated herein by this
reference).
4-ff Form of Reverse PERLS Note (previously filed as an exhibit to the
Company's Current Report on Form
II-3
<PAGE>
8-K dated April 4, 1995 and incorporated herein by this
reference).
4-gg Form of Multicurrency PERLS Note (previously filed as an exhibit
to the Company's Current Report on Form 8-K dated April 4, 1995
and incorporated herein by this reference).
4-hh Form of Debt Warrant Agreement for Warrants Sold Attached to Debt
Securities (previously filed as an exhibit to the Company's
Registration Statement on Form S-3 (File No. 33-35300) and
incorporated herein by this reference).
4-ii Form of Debt Warrant Agreement for Warrants Sold Alone (previously
filed as an exhibit to the Company's Registration Statement on
Form S-3 (File No. 33-35300) and incorporated herein by this
reference).
5 Opinion of Ralph L. Pellecchio, Assistant Secretary and Counsel of
the Company.
12-a Computation of Consolidated Ratio of Earnings to Fixed Charges
(previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal period ended November 30, 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 Annual Report on Form 10-K for the fiscal period ended
November 30, 1995 and incorporated herein by this reference).
23-a Consent of Ernst & Young LLP.
23-b Consent of Ralph L. Pellecchio, Assistant Secretary and Counsel
of the Company (included in Exhibit 5).
24 Powers of Attorney (included on signature pages).
25-a Statement of Eligibility of Chemical Bank, Trustee under the
Senior Debt Indenture.
25-b Statement of Eligibility of The First National Bank of Chicago,
Trustee under the Subordinated Debt Indenture.
Item 17. Undertakings
(1) The undersigned registrant 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 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.
II-4
<PAGE>
(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-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 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 12th day of
March, 1996.
MORGAN STANLEY GROUP INC.
(Registrant)
By /s/ Richard B. Fisher
____________________________
Richard B. Fisher
Chairman
POWER OF ATTORNEY
We, the undersigned directors and executive officers of Morgan Stanley
Group Inc., hereby severally constitute Jonathan M. Clark, Philip N. Duff and
Ralph L. Pellecchio, and each of them singly, our true and lawful attorneys with
full power to them and each of them to sign for us, and in our names in the
capacities indicated below, any and all amendments to the registration statement
filed with the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by our said attorneys to any and
all amendments to said registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 12th day of March, 1996.
Signature Title
--------- -----
/s/ Richard B. Fisher Chairman, Managing Director
------------------------- and Director
Richard B. Fisher
/s/ John J. Mack President, Managing Director
------------------------- and Director
John J. Mack
/s/ Barton M. Biggs Managing Director and Director
-------------------------
Barton M. Biggs
/s/ Peter F. Karches Managing Director and Director
-------------------------
Peter F. Karches
/s/ Sir David A. Walker Managing Director and Director
-------------------------
Sir David A. Walker
/s/ Philip N. Duff Chief Financial Officer
------------------------- and Managing Director
Philip N. Duff
/s/ Eileen K. Murray Chief Accounting Officer and Controller
-------------------------
Eileen K. Murray
/s/ Daniel B. Burke Director
-------------------------
Daniel B. Burke
II-6
<PAGE>
Signature Title
--------- -----
/s/ S. Parker Gilbert Director
-------------------------
S. Parker Gilbert
/s/ Allen E. Murray Director
-------------------------
Allen E. Murray
/s/ Paul J. Rizzo Director
-------------------------
Paul J. Rizzo
II-7
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Documents
------- -----------------------
5 Opinion of Ralph L. Pellecchio, Assistant Secretary and Counsel
of the Company.
23-a Consent of Ernst & Young LLP.
25-a Statement of Eligibility of Chemical Bank, Trustee under the
Senior Debt Indenture.
25-b Statement of Eligibility of The First National Bank of Chicago,
Trustee under the Subordinated Debt Indenture.
[Morgan Stanley Letterhead]
March 12, 1996
Morgan Stanley Group Inc.
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
You have requested me, as Assistant Secretary and Counsel of
Morgan Stanley Group Inc. (the "Company"), to render my opinion in connection
with the preparation and filing of a registration statement on Form S-3 (as may
be amended or supplemented from time to time, the "Registration Statement")
under the Securities Act of 1933, as amended, with respect to the following
securities (collectively, the "Securities"): (i) debt securities ("Debt
Securities"), (ii) warrants to purchase Debt Securities ("Debt Warrants"), (iii)
shares of the Company's preferred stock, without par value ("Preferred Stock"),
to be issued from time to time in one or more series and (iv) an indeterminate
number of depositary shares representing fractional interests in shares of the
Preferred Stock (the "Depositary Shares").
The Debt Securities are to be issued from time to time as
either senior indebtedness of the Company under an indenture dated as of April
15, 1989, as supplemented by a First Supplemental Senior Indenture dated as of
May 15, 1991, between the Company and Chemical Bank, as trustee, or as
subordinated indebtedness of the Company under an indenture dated as of April
15, 1989, as supplemented by a First Supplemental Subordinated Indenture dated
as of May 15, 1991, between the Company and The First National Bank of Chicago,
as trustee (collectively, as so supplemented, the "Indentures"). The Debt
Warrants, if any, will be issued under a debt warrant agreement to be entered
into between the Company and a debt warrant agent (the "Debt Warrant
Agreement"). Depositary Shares representing fractional interests in shares of
Preferred Stock will be issued under a preferred stock deposit agreement to be
entered into among the Company, The Bank of New York, as depositary, and the
holders from time to time of depositary receipts issued thereunder (the "Deposit
Agreement"). The forms of the Indentures, the Debt Warrant Agreement, the
Deposit Agreement and the Securities are filed or incorporated by reference as
exhibits to the Registration Statement.
I am familiar with the restated certificate of incorporation
and the by-laws, as amended to date, of the Company and have examined the
originals, or copies of such corporate records of the Company, statutes and
other instruments and documents as I have deemed necessary as a basis for the
opinions expressed in this letter. In addition, I am, or someone under my
supervision is, familiar with the forms of the Indentures, the Debt Warrant
Agreement, the Deposit Agreement and the Securities.
<PAGE>
2
Based upon the foregoing, and having regard for such legal
considerations as I have deemed relevant, I am of the opinion that:
(i) the Indentures, the Debt Warrant Agreement, the Deposit
Agreement and the Securities have been duly authorized by the Company;
(ii) when the Debt Warrant Agreement has been duly executed
and delivered by the Company and the Debt Securities and Debt Warrants
have been duly executed and issued in accordance with the provisions of
the applicable Indenture and the Debt Warrant Agreement, respectively,
and duly paid for by the purchasers thereof in the manner and on the
terms described in the Registration Statement (after it is declared
effective), all required corporate action will have been taken with
respect to the issuance and sale of the Debt Securities and the Debt
Warrants and such Securities will have been validly issued and will
constitute valid and binding obligations of the Company, enforceable in
accordance with their terms; and
(iii) when the shares of Preferred Stock and, if applicable,
the Depositary Shares have been duly issued and paid for by the
purchasers thereof in the manner and on the terms described in the
Registration Statement (after it is declared effective), such shares of
Preferred Stock will be duly and validly issued, fully paid and
nonassessable and, if applicable, such Depositary Shares will represent
legal and valid interests in the corresponding shares of Preferred
Stock.
I am admitted to practice only in the State of New York. The
opinions set forth herein are limited to matters of the laws of the State of New
York and the General Corporation Law of the State of Delaware. Any opinion
expressed herein as to enforceability is qualified in that such enforceability
may be limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium and other similar laws affecting creditors' rights generally, and is
subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law. I hereby
consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to me appearing under the caption "Legal Matters"
in the related Prospectus.
Very truly yours,
/s/ Ralph L. Pellecchio
Ralph L. Pellecchio
Assistant Secretary and Counsel
EXHIBIT 23-a
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 for the registration of $4,000,000,000 of
debt securities and warrants to purchase debt securities, preferred stock and
depositary shares and in the related Prospectus of Morgan Stanley Group Inc. for
$5,103,893,689 of the same securities and to the incorporation by reference
therein of our report dated January 4, 1996, with respect to the consolidated
financial statements and financial statement schedule of Morgan Stanley Group
Inc. incorporated by reference and included in its Annual Report on Form 10-K
for the fiscal period ended November 30, 1995, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
New York, New York
March 12, 1996
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
---------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
MORGAN STANLEY GROUP INC.
(Exact name of obligor as specified in its charter)
Delaware 13-2838811
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1585 Broadway
New York, New York 10036
(Address of principal executive offices) (Zip Code)
-------------------------------------------
Debt Securities
(Title of the indenture securities)
-----------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject. New York State Banking Department, State House,
Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551 and Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 33-84460, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 8th day of March, 1996.
CHEMICAL BANK
By /s/ T. J. Foley
----------------
T. J. Foley
Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1995, in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................. $ 6,390
Interest-bearing balances ......................... 2,544
Securities:
Held to maturity securities............................. 3,807
Available for sale securities........................... 26,522
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold ................................ 750
Securities purchased under agreements to resell ... 259
Loans and lease financing receivables:
Loans and leases, net of unearned income $72,938
Less: Allowance for loan and lease losses 1,917
Less: Allocated transfer risk reserve ... 104
-------
Loans and leases, net of unearned income,
allowance, and reserve ............................ 70,917
Trading Assets ......................................... 27,963
Premises and fixed assets (including capitalized
leases)............................................ 1,355
Other real estate owned ................................ 21
Investments in unconsolidated subsidiaries and
associated companies............................... 171
Customer's liability to this bank on acceptances
outstanding ....................................... 1,166
Intangible assets ...................................... 433
Other assets ........................................... 4,822
-----
TOTAL ASSETS ........................................... $147,120
========
- 4 -
<PAGE>
LIABILITIES
Deposits
In domestic offices ............................... $47,524
Noninterest-bearing ........................$17,041
Interest-bearing ........................... 30,483
-------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ......................................... 37,690
Noninterest-bearing ........................$ 147
Interest-bearing ........................... 37,543
-------
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the
bank and of its Edge and Agreement subsidiaries, and
in IBF's
Federal funds purchased ...................... 9,384
Securities sold under agreements to repurchase 2,166
Demand notes issued to the U.S. Treasury .......... 741
Trading liabilities ............................... 21,847
Other Borrowed money:
With original maturity of one year or less ... 9,669
With original maturity of more than one year . 146
Mortgage indebtedness and obligations under
capitalized leases ................................ 14
Bank's liability on acceptances executed and outstanding 1,180
Subordinated notes and debentures ...................... 3,411
Other liabilities ...................................... 5,290
TOTAL LIABILITIES ...................................... 139,062
-------
EQUITY CAPITAL
Common stock ........................................... 620
Surplus ................................................ 4,665
Undivided profits and capital reserves ................. 3,055
Net unrealized holding gains (Losses)
on available-for-sale securities ....................... (290)
Cumulative foreign currency translation adjustments .... 8
TOTAL EQUITY CAPITAL ................................... 8,058
------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL .......................... $147,120
========
I, Joseph L. Sclafani, S.V.P. & Controller of the
above-named bank, do hereby declare that this Report of
Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and
belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
WILLIAM B. HARRISON )
- 5 -
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)____
----------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
----------
MORGAN STANLEY GROUP INC.
(Exact name of obligor as specified in its charter)
Delaware 13-2838811
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1585 Broadway
New York, New York 10036
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Chicago and State of Illinois, on the 8th day of March,
1996.
The First National Bank of Chicago,
Trustee
By /s/ R. D. Manella
R. D. Manella
Vice President
* Exhibit 1,2,3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 12 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 26 to the Registration Statement on Form S-3 of The
CIT Group Holdings, Inc., filed with the Securities and Exchange Commission on
February 16, 1993 (Registration No. 33-58418).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 8, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Morgan Stanley
Group Inc. and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ R. D. Manella
R. D. Manella
Vice President
4
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
C400 [-
Dollar Amounts in -------- ----
Thousands RCFD BIL MIL THOU
--------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) ........ 0081 4,003,995 1.a.
b. Interest-bearing balances(2) ................................. 0071 9,240,284 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) .... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) . 1773 827,134 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold ........................................... 0276 3,287,844 3.a.
b. Securities purchased under agreements to resell .............. 0277 612,400 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) ........................................................... RCFD 2122 16,463,126 4.a
b. LESS: Allowance for loan and lease losses .................... RCFD 3123 353,777 4.b.
c. LESS: Allocated transfer risk reserve ........................ RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) ......................... 2125 16,109,349 4.d.
5. Assets held in trading accounts ................................. 3545 12,379,396 5.
6. Premises and fixed assets (including capitalized leases) ........ 2145 591,753 6.
7. Other real estate owned (from Schedule RC-M) .................... 2150 8,796 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) .................................. 2130 40,560 8.
9. Customers' liability to this bank on acceptances outstanding .... 2155 524,918 9.
10. Intangible assets (from Schedule RC-M) .......................... 2143 101,011 10.
11. Other assets (from Schedule RC-F) ............................... 2160 1,633,056 11.
12. Total assets (sum of items 1 through 11) ........................ 2170 49,360,496 12.
<FN>
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
</FN>
</TABLE>
5
<PAGE>
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
<S> <C> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) .............................. RCON 2200 15,174,243 13.a.
(1) Noninterest-bearing(1) ............................... RCON 6631 6,217,164 13.a.(1)
(2) Interest-bearing ..................................... RCON 6636 8,957,079 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) ....................... RCFN 2200 14,435,503 13.b.
(1) Noninterest bearing .................................. RCFN 6631 625,206 13.b.(1)
(2) Interest-bearing ..................................... RCFN 6636 13,810,297 13.b.(2)
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its Edge
and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased .................................. RCFD 0278 2,449,282 14.a.
b. Securities sold under agreements to repurchase ........... RCFD 0279 880,215 14.b.
15. a. Demand notes issued to the U.S. Treasury ................. RCON 2840 93,942 15.a.
b. Trading Liabilities ...................................... RCFD 3548 7,523,265 15.b.
16. Other borrowed money:
a. With original maturity of one year or less ............... RCFD 2332 1,897,370 16.a.
b. With original maturity of more than one year ............ RCFD 2333 383,807 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases ...................................................... RCFD 2910 280,522 17.
18. Bank's liability on acceptance executed and outstanding ..... RCFD 2920 524,918 18.
19. Subordinated notes and debentures ........................... RCFD 3200 1,225,000 19.
20. Other liabilities (from Schedule RC-G) ...................... RCFD 2930 1,444,364 20.
21. Total liabilities (sum of items 13 through 20) .............. RCFD 2948 46,312,431 21.
22. Limited-Life preferred stock and related surplus ............ RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus ............... RCFD 3838 0 23.
24. Common stock ................................................ RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) .... RCFD 3839 2,320,126 25.
26. a. Undivided profits and capital reserves ................... RCFD 3632 519,849 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities ............................................... RCFD 8434 7,315 26.b.
27. Cumulative foreign currency translation adjustments ......... RCFD 3284 (83) 27.
28. Total equity capital (sum of items 23 through 27) ........... RCFD 3210 3,048,065 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) ....................... RCFD 3300 49,360,496 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the most
comprehensive level of auditing work performed for the bank by independent external Number
auditors as of any date during 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 6724 N/A M.1.
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state
public accounting firm which submits a report on the bank chartering authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
<FN>
- ----------
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</FN>
</TABLE>
6
