As filed with the Securities and Exchange Commission on January 22, 1997
Registration No. 333-18005
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1 TO
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
____________________________________
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. |_|
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.
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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 January 22, 1997)
$6,000,000,000
Morgan Stanley Group Inc.
DEBT SECURITIES
WARRANTS
PREFERRED STOCK
PURCHASE CONTRACTS
UNITS
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Morgan Stanley Group Inc. (the "Company") may offer and issue from time
to time its debt securities ("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 warrants
to purchase Debt Securities ("Debt Warrants") or to purchase or sell (i)
securities of an entity unaffiliated with the Company, a basket of such
securities, an index or indices of such securities or any combination of the
above, (ii) currencies or composite currencies or (iii) commodities ("Universal
Warrants," and together with Debt Warrants, the "Warrants"), as set forth in the
applicable Prospectus Supplement on terms to be determined at the time of sale.
The Company also may offer and issue from time to time purchase contracts
("Purchase Contracts") requiring the holders thereof to purchase or sell (i)
securities of an entity unaffiliated with the Company, a basket of such
securities, an index or indices of such securities or any combination of the
above, (ii) currencies or composite currencies or (iii) commodities, as set
forth in the applicable Prospectus Supplement on terms to be determined at the
time of sale. The Company may satisfy its obligations, if any, with respect to
any Universal Warrants or Purchase Contracts by delivering the underlying
securities, currencies or commodities or, in the case of underlying securities
or commodities, the cash value thereof, as set forth in the applicable
Prospectus Supplement. Debt Securities, Purchase Contracts and Warrants or any
combination thereof may be offered in the form of Units ("Units").
Units may be issued as Definitive Units or Book-Entry Units.
The Company will offer Debt Securities, Warrants, Purchase Contracts
and Units to the public on terms determined by market conditions. Debt
Securities, Warrants, Purchase Contracts and Units may be sold for U.S. dollars,
foreign denominated currency or currency units; principal of and any interest on
Debt Securities and cash amounts payable with respect to Warrants or Purchase
Contracts 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, Warrants, Purchase Contracts, Units 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 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 Warrants, whether
such Warrants are Debt Warrants or Universal Warrants, and in the case of
Universal Warrants, the (a) security, basket of securities, index or indices of
securities, (b) currencies or composite currencies or (c) commodities,
underlying such Universal Warrants and, in any case, the exercise price and
other specific terms of the Warrants, (iii) in the case of Purchase Contracts,
the (a) security, basket of securities, index or indices of securities, (b)
currencies or composite currencies or (c) commodities, underlying such Purchase
Contracts and other specific terms of such Purchase Contracts, (iv) in the case
of Units, the particular combination of Purchase Contracts, Warrants and Debt
Securities comprising such Units and any other specific terms of such Units and
(v) 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.
---------------------------
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 businesses 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
, 1997
<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.
---------------------------
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. In addition, the Commission maintains a Website that contains
reports, proxy and other information regarding registrants that file
electronically, such as the Company. The address of the Commission's Website is
http:/www.sec.gov. 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.
---------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report on Form 10-K of the Company for the fiscal period
ended November 30, 1995, as amended, Quarterly Reports on Form 10-Q for the
quarters ended February 29, 1996, May 31, 1996 and August 31, 1996, 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, February 28, 1996, March 7, 1996, March 15, 1996, March 27,
1996, April 8, 1996, May 6, 1996, May 9, 1996, May 23, 1996, May 30, 1996, June
14, 1996, June 24, 1996, June 26, 1996, July 2, 1996, July 17, 1996, July 24,
1996, August 12, 1996, August 23, 1996, October 2, 1996, December 18, 1996,
December 26, 1996 and January 7, 1997 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 document incorporated or deemed to be
incorporated by reference herein has not been nor shall be submitted for review
under the clearance procedures of the Commission des Operations de Bourse of the
Paris Bourse, except as required in connection with the listing of any
Securities on the Paris Bourse.
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).
___________________________
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, Frankfurt, Geneva, Hong Kong, Johannesburg, London,
Luxembourg, Madrid, Melbourne, Milan, Montreal, Moscow, Mumbai, Osaka, Paris,
Sao Paulo, Seoul, Shanghai, Singapore, Sydney, Taipei, Tokyo, Toronto and
Zurich, and United States regional offices in Chicago, Houston, Los Angeles,
Philadelphia 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
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 or for such other purposes set forth in the applicable
Prospectus Supplement. 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.
<TABLE>
<CAPTION>
Fiscal Fiscal
(Unaudited) Period Ended Year Ended Year Ended
Nine Months Ended November 30, January 31, December 31,
------------------------------- ------------ ------------------------- ------------
August 31, August 31,
1996 1995 1995 1995 1994 1993 1991
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings
to fixed charges...... 1.2 1.1 1.2 1.1 1.2 1.2 1.2
Ratio of earnings
to fixed charges
and preferred stock
dividends............. 1.2 1.1 1.1 1.1 1.2 1.2 1.2
</TABLE>
3
<PAGE>
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 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
and a Second Supplemental Senior Indenture dated as of April 15, 1996 (as so
supplemented, the "Senior Debt Indenture"), between the Company and The Chase
Manhattan Bank (formerly known as 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 and a Second Supplemental
Subordinated Indenture dated as of April 15, 1996 (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." The Chase Manhattan 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 Warrants," "Description of
Capital Stock," "Description of Purchase Contracts" and "Description of Units,"
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
4
<PAGE>
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) 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, securities or baskets of securities, commodity prices
or indices. 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, security or basket of securities, commodity or index.
Information as to the methods for determining the amount of principal or
interest payable on any date, the currencies, securities or baskets of
securities, commodities or indices to which the amount payable on such date is
linked and certain additional tax considerations will be set forth in the
applicable Prospectus Supplement.
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
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<PAGE>
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 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.
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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 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
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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 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
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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
The Chase Manhattan 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 WARRANTS
The Company may issue, together with Debt Securities or separately,
Debt Warrants for the purchase of Debt Securities on terms to be determined at
the time of sale. The Company may also issue Universal Warrants to purchase or
sell (i) securities of an entity unaffiliated with the Company, a basket of such
securities, an index or indices of such securities or any combination of the
above, (ii) currencies or composite currencies or (iii) commodities, on terms to
be determined at the time of sale. The Company may satisfy its obligations, if
any, with respect to any Universal Warrants by delivering the underlying
securities, currencies or commodities or, in the case of underlying securities
or commodities, the cash value thereof, as set forth in the applicable
Prospectus Supplement. Warrants may be offered separately or together with one
or more additional Warrants, Purchase Contracts or Debt Securities or any
combination thereof in the form of Units, as set forth in the applicable
Prospectus Supplement. If Warrants are issued as part of a Unit, the
accompanying Prospectus Supplement will specify whether such Warrants may be
separated from the other Securities in such Unit prior to the Warrants'
expiration date. The Warrants offered by this Prospectus and the accompanying
Prospectus Supplement are referred to herein as the "Offered Warrants."
The Offered Warrants are to be issued under one or more Warrant
Agreements (each, a "Warrant Agreement") to be entered into between the Company
and a bank or trust company, as Warrant Agent (the "Warrant Agent"), and may be
issued in one or more series, all as shall be set forth in the Prospectus
Supplement relating thereto. Reference is made to the Prospectus Supplement for
any further description of the terms of any Warrant Agreement governing the
Offered Warrants. The forms of Warrant Agreement for the Warrants are filed as
exhibits to the Registration Statement of which this Prospectus is a part. The
following summaries of certain provisions of the applicable Warrant Agreement
and the Warrants do not purport to be complete and such summaries are subject to
the detailed provisions of such 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
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Warrants. Wherever particular provisions of the 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 Warrants: (i) the specific
designation and the aggregate number of and the price at which the Offered
Warrants will be issued; (ii) the currency or composite currency for which the
Offered Warrants may be purchased; (iii) the date on which the right to exercise
the Offered Warrants shall commence and the date (the "Warrant Expiration Date")
on which such right shall expire or, if the Offered Warrants are not
continuously exercisable throughout such period, the specific date or dates on
which they will be exercisable (each, a "Warrant Exercise Date," which term
shall also mean, with respect to Offered Warrants continuously exercisable for a
period of time, every date during such period); (iv) whether the Warrant
certificates representing the Offered Warrants (the "Warrant Certificates") will
be in registered form ("Registered Warrants") or bearer form ("Bearer Warrants")
or both; (v) whether any Offered Warrants will be issued in global or definitive
form or both; (vi) any applicable United States federal income tax consequences;
(vii) the identity of the Warrant Agent in respect of the Offered Warrants and
of any other depositaries, execution or paying agents, transfer agents,
registrars or determination or other agents; (viii) the proposed listing, if
any, of the Offered Warrants or the securities purchasable upon exercise thereof
on any securities exchange; (ix) whether the Offered Warrants are to be sold
separately or with other Offered Securities as part of Units; and (x) any other
terms of the Offered Warrants.
Reference is made to the Prospectus Supplement for the following terms
of and information relating to any Offered Debt Warrants: (i) 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,
(ii) if applicable, the designation and terms of the Debt Securities with which
the Offered Debt Warrants are issued and the number of the Offered Debt Warrants
issued with each of such Debt Securities, (iii) if applicable, the date on and
after which the Offered Securities and the related Debt Securities will be
separately transferable and (iv) the principal amount of Debt Securities
purchasable upon exercise of each Offered Debt Warrant, the price at which and
the currency or composite currency in which such principal amount of Debt
Securities may be purchased upon such exercise and the method of such exercise.
Reference is made to the Prospectus Supplement for the following terms
of and information relating to any Offered Universal Warrants: (i) whether such
Offered Universal Warrants are put Warrants or call Warrants (ii)(a) the
specific security, basket of securities, index or indices of securities or
combination of the above and the amount thereof, (b) currencies or composite
currencies or (c) commodities (and, in each case, the amount thereof or the
method for determining the same) purchasable or saleable upon exercise of each
Offered Universal Warrant; (iii) the price at which and the currency or
composite currency with which such underlying securities, currencies or
commodities may be purchased or sold upon such exercise (or the method of
determining the same); (iv) whether such exercise price may be paid in cash, by
the exchange of any other Security offered with such Offered Universal Warrants
or both and the method of such exercise and (v) whether the exercise of such
Offered Universal Warrants is to be settled in cash or by delivery of the
underlying securities or commodities or both.
Registered Warrants of each series will be evidenced by Warrant
Certificates in registered form, which may be global Registered Warrants or
definitive Registered Warrants, as specified in the applicable Prospectus
Supplement. Bearer Warrants of each series will be evidenced by one or more
global Warrant Certificates in bearer form and, if specified in the applicable
Prospectus Supplement, in definitive form. Bearer Debt Warrants will not be
issued in definitive form. See "Global Securities" herein.
At the option of the holder upon request confirmed in writing, and
subject to the terms of the applicable Warrant Agreement, Registered Warrants in
definitive form 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 Warrant Agent for such series of Warrants (or any other
office indicated in the Prospectus Supplement relating to such series of
Warrants) without service charge and upon payment of any taxes and other
governmental charges as described in such Warrant Agreement. Such transfer or
exchange will be effected only if the Warrant Agent for such series of Warrants
is satisfied with the documents of title and identity of the person making the
request.
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Modifications
Each Warrant Agreement and the terms of the Warrants and the Warrant
Certificates may be amended by the Company and the 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 affected holders in any material
respect.
The Company and any Warrant Agent may also modify or amend the Warrant
Agreement between them and the terms of the Warrants issued thereunder, with the
consent of the owners of not less than a majority in number of the then
outstanding unexercised Warrants affected, provided that no such modification or
amendment that changes the exercise price of the Warrants, reduces the amount
receivable upon exercise, cancellation or expiration, shortens the period of
time during which the Warrants may be exercised or otherwise materially and
adversely affects the rights of the owners of the Warrants or reduces the
percentage of outstanding Warrants, the consent of whose owners is required for
modification or amendment of the applicable Warrant Agreement or the terms of
the Warrants issued thereunder, may be made without the consent of the owners
affected thereby.
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 each Warrant Agreement and the
Warrant Certificates. The Company shall notify the Warrantholders of the
occurence of any such event. See "Description of Debt Securities -- Certain
Covenants."
Enforceability of Rights of Warrantholders; Governing Law
The Warrant Agents will act solely as agents of the Company in
connection with the Warrant Certificates and will not assume any obligation or
relationship of agency or trust for or with any holders of Warrant Certificates
or beneficial owners of Warrants. Any holder of Warrant Certificates and any
beneficial owner of Warrants may, without the consent of the Warrant Agent, any
other holder or beneficial owner, the relevant Trustee, the holder of any Debt
Securities or other securities issuable upon exercise of Warrants or, if
applicable, the 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 Euroclear System ("Euroclear") and Cedel Bank, societe anonyme
or its successor ("Cedel Bank"), enforce by appropriate legal action, on its own
behalf, its right to exercise the Warrants evidenced by such Warrant
Certificates, in the manner provided therein and in the applicable Warrant
Agreement. No holder of any Warrant Certificate or beneficial owner of any
Warrants shall be entitled to any of the rights of a holder of the Debt
Securities or other securities purchasable upon exercise of such Warrants,
including, without limitation, the right to receive the payment of dividends,
principal of or premium, if any, or interest, if any, on such Debt Securities or
other securities or to enforce any of the covenants or rights in the relevant
Indenture or any other similar agreement. The Warrants and each Warrant
Agreement will be governed by, and construed in accordance with, the laws of the
State of New York.
Unsecured Oblications of the Company
The Warrants are unsecured contractual obligations of the Company and
will rank pari passu with the Company's other unsecured contractual obligations
and with the Company's unsecured and unsubordinated debt. Most of the assets of
the Company are owned by its subsidiaries. Therefore, the Company's rights and
the rights of its creditors, including Warrantholders, to participate in the
distribution of 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,
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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.
DESCRIPTION OF PURCHASE CONTRACTS
The Company may issue Purchase Contracts for the purchase or sale of
(i) securities of an entity unaffiliated with the Company, a basket of such
securities, an index or indices of such securities or any combination of the
above as specified in the applicable Prospectus Supplement, (ii) currencies or
composite currencies or (iii) commodities. Each Purchase Contract will entitle
the holder thereof to purchase or sell, and obligate the Company to sell or
purchase, on specified dates, such securities, currencies or commodities at a
specified purchase price, all as set forth in the applicable Prospectus
Supplement. The applicable Prospectus Supplement will also specify the methods
by which the holders may purchase or sell such securities, currencies or
commodities and any acceleration, cancellation or termination provisions or
other provisions relating to the settlement of a Purchase Contract.
Purchase Contracts may require holders to satisfy their obligations
thereunder when such Purchase Contracts are issued ("Pre-paid Purchase
Contracts"). The Company's obligation to settle such Pre-paid Purchase Contracts
on the relevant settlement date will constitute Senior Indebtedness or
subordinated indebtedness of the Company. Accordingly, such Pre-paid Purchase
Contracts will be issued under the Senior Debt Indenture or the Subordinated
Debt Indenture, as specified in the applicable Prospectus Supplement.
DESCRIPTION OF UNITS
As specified in the applicable Prospectus Supplement, Units will
consist of one or more Purchase Contracts, Warrants and Debt Securities or any
combination thereof. Reference is made to the applicable Prospectus Supplement
for (i) all terms of Units and of the Purchase Contracts, Warrants and Debt
Securities, or any combination thereof, comprising such Units, including whether
and under what circumstances the Securities comprising such Units may or may not
be traded separately, (ii) a description of the terms of any Unit Agreement
governing the Units and (iii) a description of the provisions for the payment,
settlement, transfer or exchange of the Units.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES AND BEARER DEBT WARRANTS
In compliance with United States federal income tax laws and
regulations, Bearer Securities (including Bearer Securities in global form) and
Bearer Debt 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 Debt 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 Debt
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 Debt Warrants are aware
of the above restrictions on the offering, sale, resale or delivery of Bearer
Securities or Bearer Debt 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, and no interest will be paid thereon, 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
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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 Debt Warrants will not be issued in definitive form. Payments on Bearer
Securities and Bearer Debt Warrants will be made only outside the United States
and its possessions except as permitted by the above regulations.
As used in the preceding two paragraphs, the term Bearer Securities
includes Bearer Securities that are parts of Units and the term Bearer Debt
Warrants includes Bearer Debt Warrants that are parts of Units Bearer Securities
(other than temporary global Securities) and any Coupons appertaining thereto
will bear the following legend: "Any United States person who holds this
obligation will be subject to limitations under the United States federal income
tax laws, including the limitations provided in Sections 165(j) and 1287(a) of
the United States Internal Revenue Code." The sections referred to in such
legend provide that, with certain exceptions, a United States person will not be
permitted to deduct any loss, and will not be eligible for capital gain
treatment with respect to any gain, realized on the sale, exchange or redemption
of such Bearer Security or Coupon.
As used herein, "United States person" means, for United States federal
income tax purposes, a citizen 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 the income of
which is subject to United States federal income taxation regardless of its
source, or a trust if both: (A) a United States court is able to exercise
primary supervision over the administration of the trust, and (B) one or more
United States trustees or fiduciaries have the authority to control all
substantial decisions of the trust.
DESCRIPTION OF CAPITAL STOCK
As of the date of this Prospectus, the Company's authorized capital
stock consists of 600,000,000 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 August 31, 1996, there were 152,419,789 shares of Common Stock
outstanding. On August 31, 1996, the Company also had outstanding the following
series of Preferred Stock: 3,711,165 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"), 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
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shares of 8 3/4% Cumulative Preferred Stock, with a stated value of $200.00 per
share (the "8 3/4% Preferred Stock"), 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") and 1,000,000 shares of 7 3/4% Cumulative Preferred Stock, with a stated
value of $200.00 per share (the "7 3/4% Preferred Stock"). All 975,000 shares of
the 8.88% Preferred Stock were redeemed on January 3, 1997. Subsequent to August
31, 1996 the Company issued 1,725,000 shares of Series A Fixed/Adjustable Rate
Cumulative Preferred Stock, with a stated value of $200.00 per share (the
"Series A Fixed/Adjustable Rate Preferred Stock"). The 8 3/4% Preferred Stock,
the 7 3/8% Preferred Stock, the 7 3/4% Preferred Stock and the Series A
Fixed/Adjustable Rate 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 611,237 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 996,775
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, 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 and up to 670,000 shares of the Company's 8.03% Cumulative Preferred Stock,
with a stated value of $200.00 per share (the "8.03% Preferred Stock"), being
issued at any time on or after February 28, 1998. 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, the 8.20% Preferred Stock and the
8.03% Preferred Stock and by a Certificate of Designation of Preferences and
Rights of each series of Existing Cumulative Preferred Stock.
Offered Preferred Stock
The Board of Directors of the Company has authorized the issuance in
series of additional shares of Preferred Stock and has authorized a committee of
the Board of Directors (the "Committee") to establish and designate series and
to fix the number of shares and the relative rights, preferences and limitations
of the respective series of the Offered Preferred Stock (except for the voting
rights of the Offered Preferred Stock, which will be established by the Board of
Directors). The shares of Offered Preferred Stock, when issued and sold, will be
fully paid and nonassessable.
The following description of the terms of the Offered Preferred Stock
sets forth certain general terms and provisions of the Offered Preferred Stock
to which a Prospectus Supplement relates. 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 or multiple 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 or a multiple (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 individual shares of
such series of Offered Preferred Stock.
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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 (except for the voting rights of the
Offered Preferred Stock, which will be established by the Board of Directors),
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 or a
multiple 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 or multiple 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, the 8.20% Preferred Stock and the 8.03% 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. 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. 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
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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, the
8.20% Preferred Stock and the 8.03% 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. 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
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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, the 8.20% Preferred Stock and the 8.03% Preferred Stock) upon
which like voting rights have been conferred and are exercisable, (i) issue or
increase the authorized amount of any class or series of stock ranking prior to
the outstanding Offered Preferred Stock as to dividends or upon liquidation or
(ii) amend, alter or repeal the provisions of the Company's Restated Certificate
of Incorporation or of the resolutions contained in the Certificate of
Designation, whether by merger, consolidation or otherwise, so as to materially
and adversely affect any power, preference or special right of the outstanding
Offered Preferred Stock or the holders thereof; provided, however, that any
increase in the amount of the authorized Common Stock or authorized Preferred
Stock or the creation and issuance of other series of Common Stock or Preferred
Stock ranking on a parity with or junior to the Offered Preferred Stock as to
dividends and upon liquidation shall not be deemed to materially and adversely
affect such powers, preferences or special rights.
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 or some multiple of shares of Offered Preferred Stock, rather than
individual shares of 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 or a multiple (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 or multiple 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).
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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 or multiple
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 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
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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
or multiple 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 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
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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 issued, the
7.82% Preferred Stock, the 7.80% Preferred Stock, the 9.00% Preferred Stock, the
8.40% Preferred Stock, the 8.20% Preferred Stock and the 8.03% 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, the 8.20% Preferred Stock and
the 8.03% 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.
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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, the 8.20% Preferred
Stock and the 8.03% 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, the 8.20% Preferred Stock and the 8.03% 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 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 8 3/4% Preferred Stock,
the 7 3/8% Preferred Stock, the 7 3/4% Preferred Stock and the Series A
Fixed/Adjustable Rate Preferred Stock are identical. Unless otherwise indicated,
the terms and provisions described below relate to each of the 8 3/4% Preferred
Stock, the 7 3/8% Preferred Stock, the 7 3/4% Preferred Stock and the Series A
Fixed/Adjustable Rate 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, the 8.20% Preferred Stock and
the 8.03% Preferred Stock, if issued.
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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, the 8.20% Preferred Stock and the 8.03% 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
(except for the Series A Fixed/Adjustable Rate 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 8 3/4% per annum, 7 3/8% per annum, 7 3/4% 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), 8.20% per
annum (if the 8.20% Preferred Stock is issued) and the 8.03% Preferred Stock (if
the 8.03% Preferred Stock is issued), as the case may be. Holders of the shares
of Series A Fixed/Adjustable Rate 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 a rate of
5.91% per annum through November 30, 2001 and thereafter at a rate of .37% plus
the highest of the Treasury Bill Rate, the Ten-Year Constant Maturity Rate and
the Thirty-Year Constant Maturity Rate (each as defined in the applicable
Certificate of Designation). The amount of dividends payable in respect of the 7
3/4% Preferred Stock and the Series A Fixed/Adjustable Rate Preferred Stock will
be adjusted in the event of certain amendments to the Code in respect of the
dividends received deduction. 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 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 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, the 7 3/4% Preferred Stock is
not redeemable prior to August 30, 2001, the Series A Fixed/Adjustable Rate
Preferred Stock is not redeemable prior to November 30,
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2001, 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, if issued, the 8.20% Preferred Stock
will not be redeemable prior to November 30, 2000 and, if issued, the 8.03%
Preferred Stock will not be redeemable prior to February 28, 2007. 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 $200.00 per share in the case of
each of the series of 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, the 8.20% Preferred Stock and the 8.03% 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 $200.00 per share in the case of each
of the series of 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, the 8.20% Preferred Stock and the 8.03% 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
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
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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 The Bank of New York.
Additional Provisions of the Company's Restated Certificate of Incorporation
Size of the Board of Directors, Removal of Directors and Filling
Vacancies on the Board of Directors. The Company's Restated Certificate of
Incorporation provides that the number of directors shall be not fewer than four
nor greater than fifteen persons, as shall be established from time to time by a
majority of the Board of Directors. The Company currently has ten directors. The
Company's Restated Certificate of Incorporation also provides that directors may
be removed, with or without cause, only with the approval of the holders of at
least 80% of the voting power of the outstanding shares of capital stock of the
Company entitled to be voted generally in the election of directors (the "Voting
Stock"), voting together as a single class. Furthermore, any vacancy on the
Board of Directors or newly created directorship shall be filled by a majority
of the remaining directors then in office, though less than a quorum, and such
newly elected director shall serve the balance of the term of the replaced
director or, if there is no replaced director, until the next annual election of
directors.
Calling Special Meetings of Stockholders. The Company's Restated
Certificate of Incorporation provides that special meetings of stockholders may
be called at any time and for any purpose by the Chairman of the Board, by the
President or by order of the Board of Directors, and shall be called by the
Secretary of the Company upon 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.
GLOBAL SECURITIES
The registered Debt Securities, Warrants, Purchase Contracts and Units
of any 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 "Depositary") or with a nominee for a Depositary identified in the
Prospectus Supplement relating to such series and registered in the name of such
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 or face amount of outstanding registered
Securities of the series to be represented by such Registered Global Securities.
Unless and until it is exchanged in whole for Securities in definitive
registered form, a Registered Global Security may not be transferred except as a
whole by the Depositary for such Registered Global
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Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor of such Depositary or a nominee of such
successor.
The specific terms of the depositary arrangement with respect to any
portion of a series of 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.
Ownership of beneficial interests in a Registered Global Security will
be limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Registered Global Security, the Depositary
for such Registered Global Security will credit, on its book-entry registration
and transfer system, the participants' accounts with the respective principal or
face amounts of the 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 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 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 Depositary for a Registered Global Security, or its
nominee, is the registered owner of such Registered Global Security, such
Depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Securities represented by such Registered Global Security
for all purposes under the applicable Indenture, Warrant Agreement, Purchase
Contract or Unit Agreement. Except as set forth below, owners of beneficial
interests in a Registered Global Security will not be entitled to have the
Securities represented by such Registered Global Security registered in their
names, will not receive or be entitled to receive physical delivery of such
Securities in definitive form and will not be considered the owners or holders
thereof under the applicable Indenture, Warrant Agreement, Purchase Contract or
Unit Agreement. Accordingly, each person owning a beneficial interest in a
Registered Global Security must rely on the procedures of the 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, Warrant
Agreement, Purchase Contract or Unit Agreement. 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, Warrant Agreement, Purchase Contract or Unit Agreement,
the 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,
and any payments to holders with respect to Warrants, Purchase Contracts or
Units, represented by a Registered Global Security registered in the name of a
Depositary or its nominee will be made to such Depositary or its nominee, as the
case may be, as the registered owner of such Registered Global Security. None of
the Company, the Trustees, the Warrant Agents, the Unit Agents or any other
agent of the Company, agent of the Trustees or agent of the Warrant Agents or
Unit Agents 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 Depositary for any Securities represented
by a Registered Global Security, upon receipt of any payment of principal,
premium, interest or other distribution of underlying securities or commodities
to holders in respect of such Registered Global Security, will immediately
credit participants' accounts in amounts proportionate to their respective
beneficial interests in such Registered Global Security as shown on the records
of such 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
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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 Depositary for any Securities represented by a Registered Global
Security is at any time unwilling or unable to continue as Depositary or ceases
to be a clearing agency registered under the Exchange Act, and a
successor Depositary registered as a clearing agency under the Exchange Act is
not appointed by the Company within 90 days, the Company will issue such
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 Securities of a series represented by one or more
Registered Global Securities and, in such event, will issue Securities of such
series in definitive form in exchange for all of the Registered Global Security
or Securities representing such Securities. Any Securities issued in definitive
form in exchange for a Registered Global Security will be registered in such
name or names as the Depositary shall instruct the relevant Trustee, Warrant
Agent or other relevant agent of the Company, the Trustees or the Warrant
Agents. It is expected that such instructions will be based upon directions
received by the Depositary from participants with respect to ownership of
beneficial interests in such Registered Global Security.
The 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 Euroclear and Cedel Bank, 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
Securities to be represented by a Bearer Global Security will be described in
the Prospectus Supplement relating to such series.
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.
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. Any such agent will be acting on a reasonable efforts
basis for the period of its appointment or, if indicated in the applicable
Prospectus Supplement, on a firm commitment basis. 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
26
<PAGE>
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 Warrants, Purchase
Contracts or Units, 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 Rule 2720
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.
27
<PAGE>
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., Ralph L. Pellecchio, Assistant Secretary and Counsel 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, Mr. Pellecchio 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.
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, Warrants or Purchase
Contracts (or any Units including Debt Securities, Warrants or Purchase
Contracts) 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, Warrants or Purchase Contracts
(or any Units including Debt Securities, Warrants or Purchase Contracts) 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, Warrants or
Purchase Contracts (or any Units including Debt Securities, Warrants, or
Purchase Contracts) should consult with its legal counsel.
28
<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............................................$ 1,818,182
NASD filing fee............................................. 30,500
Blue Sky fees and expenses.................................. 10,000
Rating agency fees.......................................... 250,000
Printing and engraving expenses............................. 675,000
Legal fees and expenses..................................... 175,000
Accounting fees and expenses................................ 150,000
Trustees' and Preferred Stock Depositary's
fees and expenses (including counsel fees)............ 135,000
Miscellaneous............................................... 6,318
-----------
Total.................................................$ 3,250,000
===========
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, Warrants,
Purchase Contracts and Units.
1-b Form of Underwriting Agreement for Preferred Stock (previously
filed as an exhibit to the Company's Current Report on Form 8-K
dated August 23, 1996 and incorporated herein by this
reference).
1-c Form of U.S. Distribution Agreement (to be filed by Form 8-K).
1-d Form of Euro Distribution Agreement (to be filed by Form 8-K).
4-a Restated Certificate of Incorporation of the Company, as
amended (previously filed as an exhibit to the Company's
Registration Statement on Form 8-A (File No. 1-9085) 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 The Chase Manhattan Bank (formerly known as 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 The Chase Manhattan Bank (formerly known as 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 Second Supplemental Senior Indenture, dated as of April 15,
1996, to the Senior Indenture dated as of April 15, 1989 between
the Company and The Chase Manhattan Bank (formerly known as
Chemical Bank), Trustee (previously filed as an exhibit to the
Company's Current Report on Form 8-K dated May 6, 1996 and
incorporated herein by this reference).
4-h 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 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).
II-2
<PAGE>
Exhibit
Number Description
------- ----------
4-j Second Supplemental Subordinated Indenture, dated as of April
15, 1996, 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 Current
Report on Form 8-K dated May 6, 1996 and incorporated herein by
this reference).
4-k Form of Floating Rate Senior Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated May 6,
1996 and incorporated herein by this reference).
4-l Form of Fixed Rate Senior Note (previously filed as an exhibit
to the Company's Current Report on Form 8-K dated May 6, 1996
and incorporated herein by this reference).
4-m Form of Senior Variable Rate Renewable Note (previously filed as
an exhibit to the Company's Current Report on Form 8-K dated May
6, 1996 and incorporated herein by this reference).
4-n Form of Floating Rate Subordinated Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated May 6,
1996 and incorporated herein by this reference).
4-o Form of Fixed Rate Subordinated Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated May 6,
1996 and incorporated herein by this reference).
4-p Form of Subordinated Variable Rate Renewable Note (previously
filed as an exhibit to the Company's Current Report on Form 8-K
dated May 6, 1996 and incorporated herein by this reference).
4-q 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 May 6, 1996 and incorporated herein by this
reference).
4-r 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 May 6, 1996 and incorporated herein by this
reference).
4-s 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 May 6, 1996 and incorporated herein by this
reference).
4-t 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 May 6, 1996 and incorporated herein by this
reference).
4-u Form of Euro Fixed Rate Senior Bearer Note (previously filed as
an exhibit to the Company's Current Report on Form 8-K dated May
6, 1996 and incorporated herein by this reference).
4-v Form of Euro Fixed Rate Senior Registered Note (previously filed
as an exhibit to the Company's Current Report on Form 8-K dated
May 6, 1996 and incorporated herein by this reference).
4-w Form of Floating/Fixed Rate Senior Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated May 6,
1996 and incorporated herein by this reference).
4-x Form of Senior Dollarized Bull Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated May 6,
1996 and incorporated herein by this reference).
4-y Form of S&P Indexed (Bull) Note (previously filed as an exhibit
to the Company's Current Report on Form 8-K dated May 6, 1996
and incorporated herein by this reference).
4-z Form of S&P Indexed (Bear) Note (previously filed as an exhibit
to the Company's Current Report on Form 8-K dated May 6, 1996
and incorporated herein by this reference).
4-aa Form of Euro Fixed Rate Subordinated Registered Note (previously
filed as an exhibit to the Company's Current Report on Form 8-K
dated May 6, 1996 and incorporated herein by this reference).
II-3
<PAGE>
Exhibit
Number Description
------- ----------
4-bb 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 May 6, 1996 and incorporated herein by this
reference).
4-cc Form of Reverse PERLS Note (previously filed as an exhibit to
the Company's Current Report on Form 8-K dated May 6, 1996 and
incorporated herein by this reference).
4-dd Form of Multicurrency PERLS Note (previously filed as an exhibit
to the Company's Current Report on Form 8-K dated May 6, 1996
and incorporated herein by this reference).
4-ee Form of Fixed Rate Amortizing Senior Note (previously filed as
an exhibit to the Company's Current Report on Form 8-K dated May
6, 1996 and incorporated herein by this reference).
4-ff Form of Senior Dollarized Yield Curve Note (Bond Basis)
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-gg Form of Senior Dollarized Yield Curve Note (Money Market Basis)
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-hh Form of Permanent Global Senior Bull Note (previously filed as
an exhibit to the Company's Current Report on Form 8-K dated May
6, 1996 and incorporated herein by this reference).
4-ii Form of Definitive Floating Rate Senior Bearer Note (previously
filed as an exhibit to the Company's Current Report on Form 8-K
dated May 6, 1996 and incorporated herein by this reference).
4-jj Form of Temporary Global Senior ECU Puttable Floating Rate Note
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-kk Form of Permanent Global Senior ECU Puttable Floating Rate Note
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-ll 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-mm 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).
4-nn* Form of Warrant Agreement for Universal Warrants (to be filed by
Form 8-K).
4-oo* Form of Unit Agreement (to be filed by Form 8-K).
4-pp Form of Put Warrant (included in Exhibit 4-nn).
4-11 Form of Call Warrant (included in Exhibit 4-nn).
4-rr Form of Purchase Contract (Issuer Sale) (included in Exhibit
4-oo).
4-ss Form of Purchase Contract (Issuer Purchase) (included in Exhibit
4-oo).
4-tt Form of Unit Certificate (included in Exhibit 4-oo).
5 Opinion of Ralph L. Pellecchio, Assistant Secretary and Counsel
of the Company.
II-4
<PAGE>
Exhibit
Number Description
------- ----------
12-a Computation of Consolidated Ratio of Earnings to Fixed Charges
(previously filed as an exhibit to the Company's Quarterly
Report on Form 10-Q for the quarter ended August 31, 1996 and
incorporated herein by this reference).
12-b Computation of Consolidated Ratio of Earnings to Fixed Charges
and Preferred Stock Dividends (previously filed as an exhibit to
the Company's Quarterly Report on Form 10-Q for the quarter
ended August 31, 1996 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.
25-a* Statement of Eligibility of The Chase Manhattan 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.
- ---------------
* Previously filed.
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.
(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.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered
II-5
<PAGE>
(if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in 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-6
<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 22nd day of
January, 1997.
MORGAN STANLEY GROUP INC.
(Registrant)
By /s/ Ralph L. Pellecchio
----------------------------------------
Ralph L. Pellecchio
Assistant Secretary
POWER OF ATTORNEY
Each of the undersigned officers and directors of Morgan Stanley Group
Inc. constitutes and appoints Jonathan M. Clark, Philip N. Duff, Eileen K.
Murray and Ralph L. Pellecchio, and each or any of them, his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign
this registration statement and all amendments (including post-effective
amendments) to this registration statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each or any of them, full power and authority to do and perform each
and every act and thing requisite and necessary to enable the Registrant to
comply with the Securities Act of 1933 and all requirements of the Securities
and Exchange Commission, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each or any of them, or their or his
substitutes or substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated and on the 22nd day of January 1997.
Signature Title
--------- -----
* Chairman, Managing Director and
------------------------------ Director
Richard B. Fisher
* President, Managing Director and
------------------------------ Director
John J. Mack
* Managing Director and Director
------------------------------
Barton M. Biggs
* Managing Director and Director
------------------------------
Peter F. Karches
* Managing Director and Director
------------------------------
Sir David A. Walker
* Chief Financial Officer
------------------------------ and Managing Director
Philip N. Duff
II-7
<PAGE>
* Treasurer and Chief Accounting Officer
------------------------------
Eileen K. Murray
Director
------------------------------
Daniel B. Burke
Director
------------------------------
Robert P. Bauman
* Director
------------------------------
S. Parker Gilbert
* Director
------------------------------
Allen E. Murray
* Director
------------------------------
Paul J. Rizzo
By: /s/Ralph L. Pellecchio
------------------------------
Ralph L. Pellecchio
Attorney-in-Fact
II-8
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Documents
------- -----------------------
1-a Form of Underwriting Agreement for Debt Securities, Warrants,
Purchase Contracts and Units.
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 The Chase Manhattan 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.
- ---------------
* Previously filed.
UNDERWRITING AGREEMENT
(Debt Securities)
, 199_
MORGAN STANLEY GROUP INC.
1585 Broadway
New York, New York 10036
Dear Sirs:
We (the "Underwriter") understand that Morgan Stanley Group
Inc., a Delaware corporation (the "Company"), proposes to issue and sell
$ aggregate principal amount of % Notes Due (the
"Offered Securities").
Subject to the terms and conditions set forth or incorporated
by reference herein, the Company hereby agrees to sell and the Underwriter
agrees to purchase the aggregate principal amount of the Offered Securities at
a purchase price of , plus accrued interest, if any, from
to the date of payment (the "Purchase Price").
The Underwriter will pay for the Offered Securities upon
delivery thereof at the offices of Davis Polk & Wardwell, 450 Lexington
Avenue, New York, New York at 10:00 a.m. (New York time) on
199_, or at such other time, not later than 5:00 p.m. (New York time) on
199_, as shall be designated by us. The time and date of such payment
and delivery are hereinafter referred to as the Closing Date.
The Offered Securities shall have the terms set forth in the
Prospectus dated , 1997, and the Prospectus Supplement dated
, 199_, including the following:
Terms of Offered Securities
Maturity Date:
Interest Rate:
Redemption Provisions:
Interest Payment Dates: _________________,
commencing ____________ (Interest accrues from ____________)
Form and Denomination:
Ranking:
Other Terms:
Capitalized terms used above and not defined herein shall have
the meanings set forth in the Prospectus and Prospectus Supplement referred to
above.
Except as set forth below, all provisions contained in the
document entitled Morgan Stanley Group Inc. Underwriting Agreement Standard
Provisions (Debt Securities, Warrants, Purchase Contracts and Units) dated
, 1997 (the "Standard Provisions"), a copy of which is attached
hereto, are herein incorporated by reference in their entirety and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
had been set forth in full herein, except that (i) if any term defined in such
document is otherwise defined herein, the definition set forth herein shall
control, (ii) all references in such document to a type of security that is
not an Offered Security shall not be deemed to be a part of this Agreement and
(iii) all references in such document to a type of agreement that has not been
entered into in connection with the transactions contemplated hereby shall not
be deemed to be a part of this Agreement.
Please confirm your agreement by having an authorized officer
sign a copy of this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By:_______________________________
Name:
Title:
Accepted:
MORGAN STANLEY GROUP INC.
By:__________________________
Name:
Title:
UNDERWRITING AGREEMENT
(Warrants)
, 199_
MORGAN STANLEY GROUP INC.
1585 Broadway
New York, New York 10036
Dear Sirs:
We (the "Underwriter") understand that Morgan Stanley Group
Inc., a Delaware corporation (the "Company"), proposes to issue and sell
[number and title of warrants] Warrants (the "Offered Securities"). The
Offered Securities are to be issued pursuant to the provisions of a Warrant
Agreement (the "Warrant Agreement") dated as of [ ]
between the Company and [name of Warrant Agent], as Warrant Agent.
Subject to the terms and conditions set forth or incorporated
by reference herein, the Company hereby agrees to sell and the Underwriter
agrees to purchase the aggregate number of Offered Securities at a purchase
price of per Offered Security, (the "Purchase Price").
The Underwriter will pay for the Offered Securities upon
delivery thereof at the offices of Davis Polk & Wardwell, 450 Lexington
Avenue, New York, New York at 10:00 a.m. (New York time) on 199_,
or at such other time, not later than 5:00 p.m. (New York time) on
199_, as shall be designated by us. The time and date of such payment
and delivery are hereinafter referred to as the Closing Date.
The Offered Securities shall have the terms set forth in the
Prospectus dated , 1997, and the Prospectus Supplement dated
, 199_, including the following:
Terms of Offered Securities
Designation of the Series of Warrants: [Call] [Put] Warrants
Warrant Property:
Aggregate Number of Warrants:
Price to Public:
Warrant Exercise Price:
Dates upon which Warrants may be exercised:
Expiration Date:
Form:
Currency in which exercise payments shall
be made:
Minimum number of Warrants exercisable by
any holder on any day:
Maximum number of Warrants exercisable on
any day: [In the aggregate] [By any
beneficial owner]
Formula for determining Cash Settlement Value:
Exchange Rate (or method of calculation):
Exchange on which Warrants are to be listed:
Other Terms:
[Specify procedures for purchase and delivery of bearer
Universal Warrants.]
Capitalized terms used above and not defined herein shall have
the meanings set forth in the Prospectus and Prospectus Supplement referred to
above.
Except as set forth below, all provisions contained in the
document entitled Morgan Stanley Group Inc. Underwriting Agreement Standard
Provisions (Debt Securities, Warrants, Purchase Contracts and Units) dated
, 1997 (the "Standard Provisions"), a copy of which is attached
hereto, are herein incorporated by reference in their entirety and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
had been set forth in full herein, except that (i) if any term defined in such
document is otherwise defined herein, the definition set forth herein shall
control, (ii) all references in such document to a type of security that is
not an Offered Security shall not be deemed to be a part of this Agreement and
(iii) all references in such document to a type of agreement that has not been
entered into in connection with the transactions contemplated hereby shall not
be deemed to be a part of this Agreement.
Please confirm your agreement by having an authorized officer
sign a copy of this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By:______________________________
Name:
Title:
Accepted:
MORGAN STANLEY GROUP INC.
By:_________________________
Name:
Title:
UNDERWRITING AGREEMENT
(Prepaid Purchase Contracts)
, 199_
MORGAN STANLEY GROUP INC.
1585 Broadway
New York, New York 10036
Dear Sirs:
We (the "Underwriter") understand that Morgan Stanley Group
Inc., a Delaware corporation (the "Company"), proposes to issue and sell
[number and title of purchase contracts] Purchase Contracts (the "Offered
Securities"). The Offered Securities are to be issued pursuant to the
provisions of the [Senior Debt Indenture] [Subordinated Debt Indenture].
Subject to the terms and conditions set forth or incorporated
by reference herein, the Company hereby agrees to sell and the Underwriter
agrees to purchase the aggregate number of Offered Securities at a purchase
price of per Offered Security, (the "Purchase Price").
The Underwriter will pay for the Offered Securities upon
delivery thereof at the offices of Davis Polk & Wardwell, 450 Lexington
Avenue, New York, New York at 10:00 a.m. (New York time) on
199_, or at such other time, not later than 5:00 p.m. (New York time) on
199_, as shall be designated by us. The time and date of such payment
and delivery are hereinafter referred to as the Closing Date.
The Offered Securities shall have the terms set forth in the
Prospectus dated , 1997, and the Prospectus Supplement dated
, 199_, including the following:
Terms of Offered Securities
Designation of the Series of Purchase Contracts: [Purchase][Sale]
Purchase Contracts
Purchase Contract Property:
Aggregate Number of Purchase Contracts:
Price to Public:
Settlement Date:
[Purchase/Sale] Price of Purchase Contract Property
Form:
Other Terms:
Capitalized terms used above and not defined herein shall have
the meanings set forth in the Prospectus and Prospectus Supplement referred to
above.
Except as set forth below, all provisions contained in the
document entitled Morgan Stanley Group Inc. Underwriting Agreement Standard
Provisions (Debt Securities, Warrants, Purchase Contracts and Units) dated
, 1997 (the "Standard Provisions"), a copy of which is attached
hereto, are herein incorporated by reference in their entirety and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
had been set forth in full herein, except that (i) if any term defined in such
document is otherwise defined herein, the definition set forth herein shall
control, (ii) all references in such document to a type of security that is
not an Offered Security shall not be deemed to be a part of this Agreement and
(iii) all references in such document to a type of agreement that has not been
entered into in connection with the transactions contemplated hereby shall not
be deemed to be a part of this Agreement.
Please confirm your agreement by having an authorized officer
sign a copy of this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By:______________________________
Name:
Title:
Accepted:
MORGAN STANLEY GROUP INC.
By:___________________________
Name:
Title:
UNDERWRITING AGREEMENT
(Units)
, 199_
MORGAN STANLEY GROUP INC.
1585 Broadway
New York, New York 10036
Dear Sirs:
We (the "Underwriter") understand that Morgan Stanley Group
Inc., a Delaware corporation (the "Company"), proposes to issue and sell
[number and title of units] Units (the "Offered Securities") consisting of
[$ aggregate principal amount of % Notes Due ] [number and title of
Warrants] [number and title of Purchase Contracts]. The Offered Securities
are to be issued pursuant to the provisions of a Unit Agreement (the "Unit
Agreement") dated as of [ ] among the Company, [The Chase Manhattan Bank],
as Agent, and the holders from time to time of the Units. [The Notes
included in the Offered Securities will be issued pursuant to the [specify
the indenture].] [The Warrants included in the Offered Securities will be
issued pursuant the [specify the warrant agreement.]] [The Purchase
Contracts included in the Offered Securities will be issued pursuant to the
Unit Agreement.]
Subject to the terms and conditions set forth or incorporated
by reference herein, the Company hereby agrees to sell and the Underwriter
agrees to purchase the aggregate number of Offered Securities at a purchase
price of , plus accrued interest, if any, from to the
date of payment (the "Purchase Price").
The Underwriter will pay for the Offered Securities upon
delivery thereof at the offices of Davis Polk & Wardwell, 450 Lexington
Avenue, New York, New York at 10:00 a.m. (New York time) on
199_, or at such other time, not later than 5:00 p.m. (New York time) on
199_, as shall be designated by us. The time and date of such payment
and delivery are hereinafter referred to as the Closing Date.
The Offered Securities shall have the terms set forth in the
Prospectus dated , 1997, and the Prospectus Supplement dated
, 199_, including the following:
Terms of Debt Securities
Maturity Date:
Interest Rate:
Redemption Provisions:
Interest Payment Dates: _________________,
commencing ____________ (Interest accrues from ____________)
Form and Denomination:
Ranking:
Other Terms:
Terms of Warrants
Designation of the Series of Warrants: [Call] [Put] Warrants
Warrant Property:
Aggregate Number of Warrants:
Warrant Exercise Price:
Dates upon which Warrants may be exercised:
Expiration Date:
Currency in which exercise payments shall
be made:
[Maximum number of Warrants exercisable on
any day: [In the aggregate] [By any
beneficial owner]]
Formula for determining Cash Settlement Value:
Exchange Rate (or method of calculation):
Other Terms:
Terms of Purchase Contracts
Designation of the Series of Purchase Contracts: [Purchase][Sale]
Purchase Contracts
Purchase Contract Property:
Aggregate Number of Purchase Contracts:
Price to Public:
Settlement Date:
[Purchase/Sale] Price of Purchase Contract Property
Form:
Other Terms:
Capitalized terms used above and not defined herein shall have
the meanings set forth in the Prospectus and Prospectus Supplement referred to
above.
Except as set forth below, all provisions contained in the
document entitled Morgan Stanley Group Inc. Underwriting Agreement Standard
Provisions (Debt Securities, Warrants, Purchase Contracts and Units) dated
, 1997 (the "Standard Provisions"), a copy of which is attached
hereto, are herein incorporated by reference in their entirety and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
had been set forth in full herein, except that (i) if any term defined in such
document is otherwise defined herein, the definition set forth herein shall
control, (ii) all references in such document to a type of security that is
not an Offered Security shall not be deemed to be a part of this Agreement and
(iii) all references in such document to a type of agreement that has not been
entered into in connection with the transactions contemplated hereby shall not
be deemed to be a part of this Agreement.
Please confirm your agreement by having an authorized officer
sign a copy of this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By:______________________________
Name:
Title:
Accepted:
MORGAN STANLEY GROUP INC.
By:_________________________
Name:
Title:
MORGAN STANLEY GROUP INC.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES, WARRANTS,
PURCHASE CONTRACTS AND UNITS)
___________ __ , 1997
From time to time, Morgan Stanley Group Inc., a Delaware
corporation (the "Company"), may enter into one or more underwriting
agreements that provide for the sale of designated securities to the several
underwriters named therein. The standard provisions set forth herein may be
incorporated by reference in any such underwriting agreement (an "Underwriting
Agreement"). The Underwriting Agreement, including the provisions
incorporated therein by reference, is herein referred to as this Agreement.
Terms defined in the Underwriting Agreement are used herein as therein
defined.
The Company proposes to issue from time to time (a) its debt
securities ("Debt Securities"), (b) warrants to purchase Debt Securities
("Debt Warrants") or to purchase or sell (i) securities of an entity
unaffiliated with the Company, a basket of such securities, an index or
indices of such securities or any combination of the above, (ii) currencies or
composite currencies or (iii) commodities ("Universal Warrants," and together
with Debt Warrants, the "Warrants") and (c) purchase contracts ("Purchase
Contracts") requiring the holders thereof to purchase or sell (i) securities
of an entity unaffiliated with the Company, a basket of such securities, an
index or indices of such securities or any combination of the above, (ii)
currencies or composite currencies or (iii) commodities. Debt Securities,
Purchase Contracts and Warrants or any combination thereof may be offered in
the form of Units ("Units"). As used herein, the term "Debt Securities"
includes prepaid Purchase Contracts.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement including a prospectus
relating to the Debt Securities, Warrants, Purchase Contracts and Units
(collectively, the "Securities") and has filed with, or transmitted for filing
to, or shall promptly hereafter file with or transmit for filing to, the
Commission a prospectus supplement (the "Prospectus Supplement") pursuant to
Rule 424 under the Securities Act of 1933, as amended (the "Securities Act"),
specifically relating to the Securities offered pursuant to this Agreement
(the "Offered Securities"). The term Registration Statement means the
registration statement as amended to the date of this Agreement. The term
Basic Prospectus means the prospectus included in the Registration Statement.
The term Prospectus means the Basic Prospectus together with the Prospectus
Supplement. The term preliminary prospectus means a preliminary prospectus
supplement specifically relating to the Offered Securities, together with the
Basic Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus"
and "preliminary prospectus" shall include in each case the documents, if any,
incorporated by reference therein. The terms "supplement," "amendment" and
"amend" as used herein shall include all documents deemed to be incorporated
by reference in the Prospectus that are filed subsequent to the date of the
Basic Prospectus by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
The term Contract Securities means the Offered Securities, if
any, to be purchased pursuant to the delayed delivery contracts substantially
in the form of Schedule I hereto, with such changes therein as the Company may
approve (the "Delayed Delivery Contracts"). The term "Underwriters'
Securities" means the Offered Securities other than Contract Securities.
1. Representations and Warranties. The Company represents and
warrants to each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b)(i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and
the applicable rules and regulations of the Commission thereunder, (ii) each
part of the Registration Statement, when such part became effective, did not
contain and each such part, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement and the
Prospectus comply, and, as amended or supplemented, if applicable, will
comply, in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (iv) the Prospectus
does not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 1(b) do not apply (A)
to statements or omissions in the Registration Statement or the Prospectus
based upon information concerning any Underwriter furnished to the Company in
writing by such Underwriter through the Manager expressly for use therein or
(B) to those parts of the Registration Statement that constitute the
Statements of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), of the trustees referred to in the
Registration Statement.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on the Company and
its consolidated subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing
of property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its consolidated subsidiaries, taken as a whole.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) Each of the Senior Debt Indenture dated as of April 15,
1989, as supplemented by a First Supplemental Senior Indenture dated as of May
15, 1991 and as supplemented by a Second Supplemental Senior Indenture dated
as of April 15, 1996 (as so supplemented, the "Senior Debt Indenture"), and
the Subordinated Debt Indenture dated as of April 15, 1989, as supplemented by
a First Supplemental Subordinated Indenture dated as of May 15, 1991 and as
supplemented by a Second Supplemental Subordinated Indenture dated as of April
15, 1996 (as so supplemented, the "Subordinated Debt Indenture"), has been
duly qualified under the Trust Indenture Act and has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws affecting
creditors' rights generally and (ii) is subject to general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(g) The Debt Warrant Agreement, if any, has been duly
authorized, executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws affecting
creditors' rights generally and (ii) is subject to general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(h) The Universal Warrant Agreement, if any, has been duly
authorized, executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws affecting
creditors' rights generally and (ii) is subject to general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(i) The Unit Agreement, if any, has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws affecting
creditors' rights generally and (ii) is subject to general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(j) The Offered Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the relevant
Indenture, the Debt Warrant Agreement, the Universal Warrant Agreement and the
Unit Agreement, as the case may be, and delivered to and paid for (A) by the
Underwriters in accordance with the terms of the Underwriting Agreement, in
the case of the Underwriters' Securities, or by institutional investors in
accordance with the terms of the Delayed Delivery Contracts, in the case of
Contract Securities and (B) upon exercise of the Debt Warrants pursuant to the
Debt Warrant Agreement, in the case of Debt Warrant Securities, will be
entitled to the benefits of the relevant Indenture, the Debt Warrant
Agreement, the Universal Warrant Agreement and the Unit Agreement, as the case
may be, and will be valid and legally binding obligations of the Company, in
each case enforceable in accordance with their respective terms except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws affecting
creditors' rights generally and (ii) is subject to general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(k) The Delayed Delivery Contracts, if any, have been duly
authorized, executed and delivered by the Company and are valid and binding
agreements of the Company, enforceable in accordance with their respective
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting creditors' rights generally and (ii) is subject to general
principles of equity, regardless of whether such enforceability is considered
in a proceeding in equity or at law.
(l) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Senior Debt Indenture, the Subordinated Debt Indenture, the Offered
Securities, any Delayed Delivery Contracts, the Debt Warrant Agreement, the
Universal Warrant Agreement and the Unit Agreement, if any, will not
contravene any provision of applicable law or the certificate of incorporation
or by-laws of the Company or any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and its
consolidated subsidiaries, taken as a whole, or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the Company
or any of its consolidated subsidiaries, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations under
this Agreement, the Senior Debt Indenture, the Subordinated Debt Indenture,
the Offered Securities, any Delayed Delivery Contract, the Debt Warrant
Agreement, the Universal Warrant Agreement and the Unit Agreement, if any,
except such as may be required by the securities or blue sky laws of the
various states in connection with the offer and sale of the Offered
Securities; provided, however, that no representation is made as to whether
the purchase of the Offered Securities constitutes a "prohibited transaction"
under Section 406 of the Employee Retirement Income Security Act of 1974, as
amended, or Section 4975 of the Internal Revenue Code of 1986, as amended.
(m) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto effected
subsequent to the date of the Underwriting Agreement).
(n) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its consolidated subsidiaries is a
party or to which any of the properties of the Company or any of its
consolidated subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed or
incorporated by reference as exhibits to the Registration Statement that are
not described, filed or incorporated as required.
(o) Each of the Company and its consolidated subsidiaries has
all necessary consents, authorizations, approvals, orders, certificates and
permits of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease, license and
use its properties and assets and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure to obtain
or file would not have a material adverse effect on the Company and its
consolidated subsidiaries, taken as a whole.
(p) Morgan Stanley & Co. Incorporated is registered as a
broker-dealer and investment adviser with the Commission, is registered with
the Commodity Futures Trading Commission as a futures commission merchant and
is a member of the New York Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc.
(q) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government of
Cuba or with any person or affiliate located in Cuba.
2. Delayed Delivery Contracts. If the Prospectus provides for
sales of Offered Securities pursuant to Delayed Delivery Contracts, the
Company hereby authorizes the Underwriters to solicit offers to purchase
Contract Securities on the terms and subject to the conditions set forth in
the Prospectus pursuant to Delayed Delivery Contracts. Delayed Delivery
Contracts may be entered into only with institutional investors approved by
the Company of the types set forth in the Prospectus. On the Closing Date,
the Company will pay to the Manager as compensation for the accounts of the
Underwriters the commission set forth in the Underwriting Agreement in respect
of the Contract Securities. The Underwriters will not have any responsibility
in respect of the validity or the performance of any Delayed Delivery
Contracts.
If the Company executes and delivers Delayed Delivery Contracts
with institutional investors, the aggregate amount of Offered Securities to be
purchased by the several Underwriters shall be reduced by the aggregate amount
of Contract Securities; and such reduction shall be applied to the commitment
of each Underwriter pro rata in proportion to the amount of Offered Securities
set forth opposite such Underwriter's name in the Underwriting Agreement,
except to the extent that the Manager determines that such reduction shall be
applied in other proportions and so advises the Company; provided, however,
that the total amount of Offered Securities to be purchased by all
Underwriters shall be the aggregate amount set forth above, less the aggregate
amount of Contract Securities.
3. Public Offering. The Company is advised by the Manager
that the Underwriters propose to make a public offering of their respective
portions of the Underwriters' Securities as soon after this Agreement has been
entered into as in the Manager's judgment is advisable. The terms of the
public offering of the Underwriters' Securities are set forth in the
Prospectus.
4. Purchase and Delivery. Except as otherwise provided in
this Section 4, payment for the Underwriters' Securities shall be made to the
Company in immediately available funds at the time and place set forth in the
Underwriting Agreement, upon delivery to the Manager for the respective
accounts of the several Underwriters of the Underwriters' Securities
registered in such names and in such denominations as the Manager shall
request in writing not less than one full business day prior to the date of
delivery, with any transfer taxes payable in connection with the transfer of
the Underwriters' Securities to the Underwriters duly paid.
Delivery on the Closing Date of any Underwriters' Securities
(i) that are Debt Securities in bearer form or are Units that contain Debt
Securities in bearer form shall be effected by delivery of a single
temporary global Security without coupons (the "Temporary Global Security")
evidencing the Offered Securities that are or include Debt Securities in
bearer form and (ii) that are Debt Warrants in bearer form or are Units
that (a) contain Debt Warrants in bearer form and (b) contain no other Debt
Securities in bearer form shall be effected only by delivery of a single
permanent global Debt Warrant (the "Global Debt Warrant") evidencing the
Offered Securities that are or include Debt Warrants in bearer form, in
each case to a common depositary for Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euro-clear System ("Euro-clear"),
and for Cedel Bank, Societe Anonyme ("Cedel") for credit to the respective
accounts at Euro-clear or Cedel of each Underwriter or to such other
accounts as such Underwriter may direct. Any Temporary Global Security or
Global Debt Warrant shall be delivered to the Manager not later than the
Closing Date, against payment of funds to the Company in the net amount due
to the Company for such Temporary Global Security or Global Debt Warrant,
as the case may be, by the method and in the form set forth herein. The
Company shall cause global and, if applicable, definitive Debt Securities
in bearer form to be prepared and delivered in exchange for such Temporary
Global Security in such manner and at such time as may be provided in or
pursuant to the Senior Debt Indenture or the Subordinated Debt Indenture,
as the case may be; provided, however, that the Temporary Global Security
shall be exchangeable for other Debt Securities in bearer form only on or
after the date specified for such purpose in the Prospectus. Debt Warrants
in bearer form shall be evidenced only by a Global Debt Warrant until their
expiration.
5. Conditions to Closing. The several obligations of the
Underwriters hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the
Underwriting Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does
not indicate the direction of the possible change, in the
rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its consolidated subsidiaries,
taken as a whole, from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto effected
subsequent to the execution and delivery of the Underwriting
Agreement), that, in the judgment of the Manager, is material
and adverse and that makes it, in the judgment of the Manager,
impracticable to market the Offered Securities on the terms and
in the manner contemplated in the Prospectus.
(b) the Manager shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in clause (i) above
and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) The Manager shall have received on the Closing Date an
opinion of Jonathan M. Clark, General Counsel and Secretary of the
Company, or of other counsel satisfactory to the Agent and who is an
officer of the Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of Delaware, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its consolidated subsidiaries, taken as a whole;
(ii) each of Morgan Stanley & Co. Incorporated and Morgan
Stanley International Incorporated (the "Material Subsidiaries") has
been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct
its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole;
(iii) each of the Company and its Material Subsidiaries has
all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all declarations
and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and
other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain or file
would not have a material adverse effect on the Company and its
consolidated subsidiaries, taken as a whole;
(iv) each of the Senior Debt Indenture and the Subordinated
Debt Indenture has been duly qualified under the Trust Indenture Act
and has been duly authorized, executed and delivered by the Company
and is a valid and binding agreement of the Company, enforceable in
accordance with its terms except as (a) the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium and other similar laws affecting creditors'
rights generally and (b) is subject to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(v) the Debt Warrant Agreement, if any, has been duly
authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable in accordance with its
terms except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and
other similar laws affecting creditors' rights generally and (b) is
subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
(vi) the Universal Warrant Agreement, if any, has been duly
authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable in accordance with its
terms except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and
other similar laws affecting creditors' rights generally and (b) is
subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
(vii) the Unit Agreement, if any, has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms
except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and
other similar laws affecting creditors' rights generally and (b) is
subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
(viii) the Offered Securities have been duly authorized and,
when executed and authenticated in accordance with the provisions of
the relevant Indenture, the Debt Warrant Agreement, the Universal
Warrant Agreement and the Unit Agreement, as the case may be, and
delivered to and paid for (A) by the Underwriters in accordance with
the terms of the Underwriting Agreement, in the case of the
Underwriters' Securities, or by institutional investors in accordance
with the terms of the Delayed Delivery Contracts, in the case of the
Contract Securities and (B) upon exercise of the Debt Warrants
pursuant to the Debt Warrant Agreement, in the case of Debt Warrant
Securities, will be entitled to the benefits of the relevant
Indenture, the Debt Warrant Agreement, the Universal Warrant
Agreement and the Unit Agreement, as the case may be, and will be
valid and binding obligations of the Company, in each case
enforceable in accordance with their respective terms except as (a)
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws
affecting creditors' rights generally and (b) is subject to general
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law;
(ix) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(x) the Delayed Delivery Contracts, if any, have been duly
authorized, executed and delivered by the Company and are valid and
binding agreements of the Company enforceable in accordance with
their respective terms except as (a) the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium and other similar laws affecting creditors' rights
generally and (b) is subject to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(xi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement, the Senior Debt Indenture, the Subordinated Debt
Indenture, the Offered Securities, any Delayed Delivery Contracts,
the Debt Warrant Agreement, the Universal Warrant Agreement and the
Unit Agreement, if any, will not contravene any provisions of
applicable law or the certificate of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company
or any of its subsidiaries that is material to the Company and its
consolidated subsidiaries, taken as a whole, or, to the best of such
counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company or any of its consolidated subsidiaries, and no consent,
approval or authorization or order of or qualification with any
governmental body or agency is required for the performance by the
Company of its obligations under the Underwriting Agreement, the
Senior Debt Indenture, the Subordinated Debt Indenture, the Offered
Securities, any Delayed Delivery Contract, the Debt Warrant Agreement,
the Universal Warrant Agreement and the Unit Agreement, if any,
except such as may be required by the securities or blue sky laws of
the various states in connection with the offer and sale of the
Offered Securities; provided, however, that such counsel need not
express an opinion as to whether the purchase of the Offered
Securities constitutes a "prohibited transaction" under Section 406
of the Employee Retirement Income Security Act of 1974, as amended,
or Section 4975 of the Internal Revenue Code of 1986, as amended;
(xii) the statements (1) in the Prospectus under the captions
"Description of Debt Securities," "Description of Warrants,"
"Description of Purchase Contracts," "Description of Units" and "Plan
of Distribution," (2) in the Registration Statement under Item 15,
(3) in "Item 3 - Legal Proceedings" of the Company's most recent
annual report on Form 10-K incorporated by reference in the
Prospectus and (4) in "Item 1 - Legal Proceedings" of Part II of the
Company's quarterly reports on Form 10-Q, if any, filed since such
annual report, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such legal matters, documents and proceedings and fairly summarize the
matters referred to therein;
(xiii) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or any of its consolidated subsidiaries is a party or to
which any of the properties of the Company or any of its consolidated
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
of any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to
the Registration Statement that are not described, filed or
incorporated by reference as required; and
(xiv) such counsel (1) is of the opinion that each document,
if any, filed pursuant to the Exchange Act and incorporated by
reference in the Registration Statement and the Prospectus (except as
to financial statements and schedules included therein as to which
such counsel need not express any opinion) complied when so filed as
to form in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (2)
has no reason to believe that any part of the Registration Statement
(except as to financial statements and schedules included therein, as
to which such counsel need not express any belief, and except for
that part of the Registration Statement that constitutes Forms T-1),
on the date such part became effective contained, and the
Registration Statement (except as to financial statements and
schedules included therein, as to which such counsel need not express
any belief, and except for the part of the Registration Statement
that constitutes Forms T-1) as of the date such opinion is delivered
contains any untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (3) is of the opinion
that the Registration Statement and Prospectus (except as to
financial statements and schedules included therein, as to which such
counsel need not express any opinion) comply as to form in all
material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder and (4) has no reason to
believe that the Prospectus (except as to financial statements and
schedules included therein as to which such counsel need not express
any belief) as of the date such opinion is delivered contains any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) The Manager shall have received on the Closing Date an
opinion of Davis Polk & Wardwell, special counsel for the
Underwriters, dated the Closing Date, covering the matters referred
to in subparagraphs (iv), (v), (vi), (vii), (viii), (ix), (x), (xii)
(but only as to statements in the Prospectus under "Description of
Debt Securities," "Description of Warrants," "Description of
Purchase Contracts," "Description of Units" and "Plan of
Distribution"), and (xiv) (2), (3) and (4) of paragraph (c) above.
With respect to subparagraph (xiv) of Paragraph (c) above,
Jonathan M. Clark or such other counsel for the Company may state
that his opinion and belief are based upon his participation, or the
participation of someone under his supervision, in the preparation of
the Registration Statement and Prospectus and documents incorporated
therein by reference and review and discussion of the contents
thereof, but are without independent check or verification, except as
specified. With respect to clauses (2), (3) and (4) of subparagraph
(xiv) of paragraph (c) above, Davis Polk & Wardwell may state that
their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus (but not
including documents incorporated therein by reference) and review and
discussion of the contents thereof (including documents incorporated
therein by reference), but are without independent check or
verification, except as specified.
(e) The Manager shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to
the Manager, from the Company's independent auditors, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Prospectus.
6. Covenants of the Company. In further consideration of the
agreements of the Underwriters contained herein, the Company covenants as
follows:
(a) To furnish the Manager, without charge, a conformed copy
of the Registration Statement (including exhibits and all amendments
thereto) and for delivery to each other Underwriter a conformed copy
of the Registration Statement (without exhibits thereto) and, during
the period mentioned in paragraph (c) below, as many copies of the
Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto or to the Registration Statement
as the Manager may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus with respect to the Offered Securities,
to furnish to the Manager a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement
to which the Manager reasonably objects.
(c) If, during such period after the first date of the public
offering of the Offered Securities as in the opinion of counsel for
the Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, not misleading, or if in the
opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with law, forthwith to prepare
and furnish, at its own expense, to the Underwriters and to the
dealers (whose names and addresses the Manager will furnish to the
Company) to which Offered Securities may have been sold by the
Manager on behalf of the Underwriters and to any other dealers upon
request, either amendments or supplements to the Prospectus,
satisfactory in all respects to the Manager, so that the statements
in the Prospectus as so amended or supplemented will not, in the
light of the circumstances existing when the Prospectus is delivered
to a purchaser, be misleading or so that the Prospectus, as so
amended or supplemented, will comply with law and to cause such
amendments or supplements to be filed promptly with the Commission.
(d) To endeavor to qualify the Offered Securities for offer
and sale under the securities or blue sky laws of such jurisdictions
as the Manager shall reasonably request and to maintain such
qualifications for as long as the Manager shall reasonably request.
(e) To make generally available to the Company's security
holders and to the Manager as soon as practicable an earning
statement covering a twelve month period beginning on the first day
of the first full fiscal quarter after the date of the Underwriting
Agreement, which earning statement shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder. If such fiscal quarter is the last fiscal
quarter of the Company's fiscal year, such earning statement shall be
made available not later than 90 days after the close of the period
covered thereby and in all other cases shall be made available not
later than 45 days after the close of the period covered thereby.
(f) During the period beginning on the date of the Underwriting
Agreement and continuing to and including the Closing Date, not to
offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company, warrants, purchase contracts or units
substantially similar to the Offered Securities (other than (i) the
Offered Securities and (ii) commercial paper issued in the ordinary
course of business), without the prior written consent of the
Manager.
(g) Whether or not any sale of Offered Securities is
consummated, to pay all expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation and
filing of the Registration Statement and the Prospectus and all
amendments and supplements thereto, (ii) the preparation, issuance
and delivery of the Offered Securities, (iii) the fees and
disbursements of the Company's counsel and accountants and of the
Trustees and their counsel, (iv) the qualification of the Offered
Securities under securities or blue sky laws in accordance with the
provisions of Section 6(d), including filing fees and the fees and
disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of any blue sky or Legal
Investment Memoranda, (v) the printing and delivery to the
Underwriters in quantities as hereinabove stated of copies of the
Registration Statement and all amendments thereto and of the
Prospectus and any amendments or supplements thereto, (vi) the
printing and delivery to the Underwriters of copies of any blue sky
or Legal Investment Memoranda, (vii) any fees charged by rating
agencies for the rating of the Offered Securities, (viii) any
expenses incurred by the Company in connection with a "road show"
presentation to potential investors, (ix) all document production
charges of counsel to the Underwriters (but not including their fees
for professional services in connection with the preparation of this
Agreement) and (x) any filing fees in connection with any review of
the offering of the Offered Securities by the National Association of
Securities Dealers, Inc.
7. Covenants of the Underwriters.
(A) Each of the several Underwriters represents and agrees
with the Company that:
(a) except to the extent permitted under U.S. Treas. Reg.
Section 1.163-5(c)(2)(i)(D) (the "D Rules"), (i) it has not offered
or sold, and during the restricted period will not offer or sell,
Debt Securities in bearer form (including any Debt Security in global
form that is exchangeable for Debt Securities in bearer form) to a
person who is within the United States or its possessions or to a
United States person and (ii) it has not delivered and will not
deliver within the United States or its possessions definitive Debt
Securities in bearer form that are sold during the restricted period;
(b) it has, and throughout the restricted period will have, in
effect procedures reasonably designed to ensure that its employees or
agents who are directly engaged in selling Debt Securities in bearer
form are aware that such Debt Securities may not be offered or sold
during the restricted period to a person who is within the United
States or its possessions or to a United States person, except as
permitted by the D Rules;
(c) if it is a United States person, it is acquiring the Debt
Securities in bearer form for purposes of resale in connection with
their original issuance and if it retains Debt Securities in bearer
form for its own account, it will only do so in accordance with the
requirements of U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6);
(d) if it transfers to any affiliate Debt Securities in bearer
form for the purpose of offering or selling such Debt Securities
during the restricted period, it will either (i) obtain from such
affiliate for the benefit of the Company the representations and
agreements contained in clauses (a), (b) and (c) or (ii) repeat and
confirm the representations and agreements contained in clauses (a),
(b) and (c) on such affiliate's behalf and obtain from such affiliate
the authority to so obligate it;
(e) it will obtain for the benefit of the Company the
representations and agreements contained in clauses (a), (b), (c) and
(d) from any person other than its affiliate with whom it enters into
a written contract, as defined in U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D)(4) for the offer or sale during the restricted
period of Debt Securities in bearer form; and
(f) it will comply with or observe any other restrictions or
limitations set forth in the Prospectus on persons to whom, or the
jurisdictions in which, or the manner in which, the Debt Securities
may be offered, sold, resold or delivered.
The restricted period is defined at U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D)(7). The term "Debt Securities in bearer form," as used in
the preceding paragraph, includes Units containing Debt Securities in bearer
form. All other terms used in the preceding paragraph have the meaning given
to them by the U.S. Internal Revenue Code and regulations thereunder,
including the D Rules.
(B) Each of the several Underwriters represents and agrees
with the Company that:
(a) except to the extent permitted under the D Rules, (i) it
has not offered or sold Debt Warrants in bearer form to a person who
is within the United States or its possessions or to a United States
person and (ii) it will not offer or sell Debt Warrants in bearer
form at any time to a person who is within the United States or its
possessions or to a United States person;
(b) it has in effect procedures reasonably designed to ensure
that its employees or agents who are directly engaged in selling Debt
Warrants in bearer form are aware that such Debt Warrants may not be
offered or sold at any time to a person who is within the United
States or its possessions or to a United States person, except as
permitted by the D Rules;
(c) if it is a United States person, it is acquiring the Debt
Warrants in bearer form for purposes of resale in connection with
their original issuance and if it retains Debt Warrants in bearer
form for its own account, it will only do so in accordance with the
requirements of U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6);
(d) if it transfers to any affiliate Debt Warrants in bearer
form for the purpose of offering or selling such Debt Warrants, it
will either (i) obtain from such affiliate for the benefit of the
Company the representations and agreements contained in clauses (a),
(b) and (c) or (ii) repeat and confirm the representations and
agreements contained in clauses (a), (b) and (c) on such affiliate's
behalf and obtain from such affiliate the authority to so obligate it;
(e) it will obtain for the benefit of the Company the
representations and agreements contained in clauses (a), (b), (c) and
(d) from any person other than its affiliate with whom it enters into
a written contract, as defined in U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D)(4) for the offer or sale of Debt Warrants in
bearer form; and
(f) it will comply with or observe any other restrictions or
limitations set forth in the Prospectus on persons to whom, or the
jurisdictions in which, or the manner in which, the Debt Warrants may
be offered, sold, resold or delivered.
As used in the preceding paragraph, the term "Debt Warrants in bearer form"
includes Units containing Debt Warrants in bearer form. All other terms used
in the preceding paragraph have the meaning given to them by the U.S. Internal
Revenue Code and regulations thereunder, including the D Rules.
8. Indemnification and Contribution. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
allegedly untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or allegedly untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Manager expressly for use therein; provided,
however, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages or liabilities
purchased Offered Securities, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Offered Securities to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only with reference to information relating
to such Underwriter furnished to the Company by such Underwriter in writing
through the Manager expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the two preceding paragraphs,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and
the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by the Manager,
in the case of parties indemnified pursuant to the second preceding paragraph,
and by the Company, in the case of parties indemnified pursuant to the first
preceding paragraph. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the third sentence of this
paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject
matter of such proceeding.
To the extent the indemnification provided for in the first or
second paragraph in this Section 8 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Offered Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Offered Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of such Offered Securities (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus Supplement, bear to the aggregate public offering
price of the Offered Securities. The relative fault of the Company and of the
Underwriters shall be determined by reference to, among other things, whether
the untrue or allegedly untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Offered Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or allegedly untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the respective amounts of Offered Securities purchased by each
of such Underwriters and not joint. The remedies provided for in this Section
8 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
9. Termination. This Agreement shall be subject to
termination by notice given by the Manager to the Company, if (a) after the
execution and delivery of the Underwriting Agreement and prior to the Closing
Date (i) trading generally shall have been suspended or materially limited on
or by, as the case may be, any of the New York Stock Exchange, the American
Stock Exchange, the National Association of Securities Dealers, Inc., the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have
been declared by either Federal or New York State authorities, or (iv) there
shall have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Manager, is material and adverse and (b) in the case of any of the events
specified in clauses (a)(i) through (iv), such event, singly or together with
any other such event, makes it, in the judgment of the Manager, impracticable
to market the Offered Securities on the terms and in the manner contemplated
in the Prospectus.
10. Defaulting Underwriters. If on the Closing Date any one
or more of the Underwriters shall fail or refuse to purchase Offered
Securities that it has or they have agreed to purchase on such date, and the
aggregate amount of Offered Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate amount of the Offered Securities to be purchased on
such date, the other Underwriters shall be obligated severally in the
proportions that the amount of Underwriters' Securities set forth opposite
their respective names above bears to the aggregate amount of Underwriters'
Securities set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Manager may specify, to
purchase the Underwriters' Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the amount of Offered Securities that any Underwriter
has agreed to purchase pursuant to this Agreement be increased pursuant to
this Section 10 by an amount in excess of one-ninth of such amount of Offered
Securities without the written consent of such Underwriter. If on the Closing
Date any Underwriter or Underwriters shall fail or refuse to purchase Offered
Securities and the aggregate amount of Offered Securities with respect to
which such default occurs is more than one-tenth of the aggregate amount of
Offered Securities to be purchased on such date, and arrangements satisfactory
to the Manager and the Company for the purchase of such Offered Securities are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either the Manager or the Company shall have the
right to postpone the Closing Date but in no event for longer than seven days,
in order that the required changes, if any, in the Registration Statement and
in the Prospectus or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason the Company shall be unable to perform its obligations
under this Agreement, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering of the Offered Securities.
11. Representations and Indemnities to Survive. The
respective indemnity and contribution agreements and the representations,
warranties and other statements of the Company, its officers and the
Underwriters set forth in this Agreement will remain in full force and effect,
regardless of (i) any termination of this Agreement, (ii) any investigation
made by or on behalf of any Underwriter or any person controlling any
Underwriter or by or on behalf of the Company, its officers or directors or
any person controlling the Company and (iii) acceptance of and payment for any
of the Offered Securities.
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 8, and no
other person will have any right or obligation hereunder.
13. Counterparts. The Underwriting Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
14. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
15. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Schedule I
DELAYED DELIVERY CONTRACT
________, 19__
Dear Sirs:
The undersigned hereby agrees to purchase from Morgan Stanley
Group Inc., a Delaware corporation (the "Company"), and the Company agrees to
sell to the undersigned the Company's securities described in Schedule A
annexed hereto (the "Securities"), offered by the Company's Prospectus dated
, 19__ and Prospectus Supplement dated , 19__, receipt of copies of
which are hereby acknowledged, at a purchase price stated in Schedule A and on
the further terms and conditions set forth in this agreement. The undersigned
does not contemplate selling Securities prior to making payment therefor.
The undersigned will purchase from the Company Securities in the
principal amount and numbers on the delivery dates set forth in Schedule A.
Each such date on which Securities are to be purchased hereunder is
hereinafter referred to as a "Delivery Date."
Payment for the Securities which the undersigned has agreed to
purchase on each Delivery Date shall be made to the Company or its order by
certified or official bank check in immediately available funds at the office
of , New York, N.Y., at 10:00 A.M. (New York time) on the
Delivery Date, upon delivery to the undersigned of the Securities to be
purchased by the undersigned on the Delivery Date, in such denominations and
registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than five full
business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for the Securities on the Delivery Date shall be subject to the
conditions that (1) the purchase of Securities to be made by the undersigned
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which the undersigned is subject and (2) the Company shall
have sold, and delivery shall have taken place to the underwriters (the
"Underwriters") named in the Prospectus Supplement referred to above of, such
part of the Securities as is to be sold to them. Promptly after completion of
sale and delivery to the Underwriters, the Company will mail or deliver to the
undersigned at its address set forth below notice to such effect, accompanied
by a copy of the opinion of counsel for the Company delivered to the
Underwriters in connection therewith.
Failure to take delivery of and make payment for Securities by
any purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this agreement.
This agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
If this agreement is acceptable to the Company, it is requested
that the Company sign the form of acceptance below and mail or deliver one of
the counterparts hereof to the undersigned at its address set forth below.
This will become a binding agreement, as of the date first above written,
between the Company and the undersigned when such counterpart is so mailed or
delivered.
This agreement shall be governed by and construed in accordance
with the laws of the State of New York.
Yours very truly,
___________________________
(Purchaser)
By ________________________
___________________________
(Title)
___________________________
___________________________
(Address)
Accepted:
Morgan Stanley Group Inc.
By ________________________
PURCHASER --- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the representative of
the Purchaser with whom details of delivery on the Delivery Date may be
discussed is as follows: (Please print.)
Telephone No.
Name (Including Area Code) Department
---- --------------------- ----------
________________ _______________ _________________
________________ _______________ _________________
________________ _______________ _________________
SCHEDULE A
Securities:
Principal amounts or Numbers to be Purchased:
Purchase Price:
Delivery Dates:
Exhibit 5
[Morgan Stanley Letterhead]
January 22, 1997
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
(Registration No. 333-18005) (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") or to purchase or sell (a) securities
of an entity unaffiliated with the Company, a basket of such securities, an
index or indices of such securities or any combination of the above, (b)
currencies or composite currencies or (c) commodities ("Universal Warrants," and
together with Debt Warrants, the "Warrants"), (iii) purchase contracts
("Purchase Contracts") requiring the holders thereof to purchase or sell (a)
securities of an entity unaffiliated with the Company, a basket of such
securities, an index or indices of such securities or any combination of the
above, (b) currencies or composite currencies or (c) commodities, (iv) Debt
Securities, Purchase Contracts and Warrants or any combination thereof that may
be offered in the form of Units ("Units"), (v) 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 (vi) an indeterminate number of depositary shares
representing fractional or multiple interests in shares of the Preferred Stock
(the "Depositary Shares").
The Debt Securities and certain pre-paid Purchase Contracts
("Pre-paid Purchase Contracts"), if any, 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 and a Second Supplemental Senior Indenture dated as of April 15,
1996 (as so supplemented, the "Senior Debt Indenture"), between the Company and
The Chase Manhattan Bank (formerly known as 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 and a Second Supplemental Subordinated Indenture dated as of
April 15, 1996 (as so supplemented, the "Subordinated Debt Indenture"), 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
<PAGE>
2
between the Company and a debt warrant agent (the "Debt Warrant Agreement"). The
Universal Warrants, if any, will be issued under a Universal Warrant agreement
to be entered into between the Company and The Chase Manhattan Bank, as warrant
agent (the "Universal Warrant Agreement"). The Purchase Contracts and Units, if
any, will be issued under a unit agreement to be entered into among the Company,
The Chase Manhattan Bank as unit agent and the holders from time to time of the
Units (the "Unit Agreement"). Depositary Shares representing fractional or
multiple 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 Universal Warrant Agreement, the Unit Agreement, the
Deposit Agreement and the Securities are filed or incorporated by reference or
will be filed 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 Universal Warrant Agreement, the Unit Agreement, the Deposit
Agreement and the Securities.
Based upon the foregoing and subject to the last paragraph of
this letter, 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
Universal Warrant Agreement, the Unit Agreement, the Deposit Agreement
and the Securities have been duly authorized by the Company;
(ii) when the Debt Warrant Agreement, the Universal Warrant
Agreement and the Unit Agreement have been duly executed and delivered
by the Company and the Debt Securities, the Debt Warrants, the
Universal Warrants, the Purchase Contracts and the Units have been duly
executed and issued in accordance with the provisions of the applicable
Indenture, the Debt Warrant Agreement, the Universal Warrant Agreement
and the Unit 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, the Debt Warrants, the Universal Warrants,
the Purchase Contracts and the Units 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
<PAGE>
3
(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
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 $6,000,000,000 of
debt securities, warrants, preferred stock depositary shares, purchase contracts
and units and in the related Prospectus of Morgan Stanley Group Inc. for
$6,000,000,000 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
January 22, 1997
