==============================================================================
As filed with the Securities and Exchange Commission on June 2, 1997
Registration No. 333-27919______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-------------
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
(Exact name of registrant as specified in its charter)
DELAWARE 36-3145972
(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)
-------------
Christine A. Edwards, Esq.
Executive Vice President, Chief Legal Officer and Secretary
Morgan Stanley, Dean Witter, Discover & Co.
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:
Joseph W. Armbrust, Esq. John M. Brandow, Esq.
Brown & Wood LLP Davis Polk & Wardwell
One World Trade Center 450 Lexington Avenue
New York, New York 10048 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 the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
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"), other than
securities offered only in connection with dividend or interest
reinvestment plans, 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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
Title of each class of Amount to Proposed maximum Proposed maximum Amount of
securities to be registered be registered offering price per security(1) aggregate offering price(1) registration fee
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities...............
Warrants (2)..................
Preferred Stock (3)........... $7,000,000,000(7(8) 100% $7,000,000,000 $2,121,213 (9)
Depositary Shares (4).........
Purchase Contracts (5)........
Units(6)......................
================================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee.
(2) There are being registered hereby such indeterminate number of Warrants as
may be issued by the Registrant at indeterminate prices. Such Warrants may be
issued together with any Debt Securities or Purchase Contracts or both.
Warrants may be exercised to purchase Debt Securities registered hereby or to
purchase or sell (i) securities of an entity unaffiliated with the Registrant,
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.
(3) There are being registered hereby such indeterminate number of shares of
Preferred Stock as may from time to time be issued at indeterminate prices.
(4) There are being registered hereby such indeterminate number of Depositary
Shares as may be issued in the event that the Registrant elects to offer
fractional interests in shares of the Preferred Stock registered hereby.
(5) There are being registered hereby such indeterminate number of Purchase
Contracts as may be issued by the Registrant at indeterminate prices. Such
Purchase Contracts may be issued together with any Debt Securities or Warrants
or both. Purchase Contracts may require the holders thereof to purchase or
sell (i) securities of an entity unaffiliated with the Registrant, 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.
(6) There are being registered hereby such indeterminate number of Units as
may be issued at indeterminate prices. Units may consist of one or more
Purchase Contracts, Warrants and Debt Securities or any combination of the
above.
(7) Represents an increase from the $1,000,000 of Debt Securities, Warrants,
Preferred Stock, Depositary Shares, Purchase Contracts and Units
(collectively, "Securities") initially covered by this Registration Statement
as filed on May 28, 1997. This registration statement also relates to offers
and sales of Securities in connection with market-making transactions by and
through affiliates of the Registrant (subject, with respect to Preferred Stock
and Depositary Shares, to approval of the New York Stock Exchange in
connection with market-making transactions by and through Dean Witter Reynolds
Inc. and Morgan Stanley & Co. Incorporated).
(8) Or, if any Debt Securities are issued at an original issue discount, such
greater amount as shall result in aggregate net proceeds not in excess of
$7,000,000,000 to the Registrant or, if any Securities are issued with an
offering price payable in a foreign currency or composite currency, such
amount as shall result in an aggregate initial offering price equivalent to
$7,000,000,000 at the time of initial offering.
(9) Includes $304 which was paid on May 28, 1997. The balance being paid with
the filing of this Amendment No. 1 is $2,120,909.
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.
==============================================================================
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 June 2, 1997)
$7,000,000,000
Morgan Stanley, Dean Witter, Discover & Co.
DEBT SECURITIES
WARRANTS
PREFERRED STOCK
PURCHASE CONTRACTS
UNITS
---------------------------
Morgan Stanley, Dean Witter, Discover & Co. (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, par value $0.01 per share, 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/or
Dean Witter Reynolds Inc. ("DWR") and any such underwriters (and any
representative thereof), dealers or agents outside the United States will
include Morgan Stanley & Co. International Limited ("MSIL"), Dean Witter
International Ltd. ("DWIL") or other affiliates of the Company.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------------
Securities may be offered through dealers, underwriters or agents
designated from time to time, as set forth in the accompanying Prospectus
Supplement. Net proceeds to the Company 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, DWR, DWIL 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. and DWR ). MS & Co., MSIL, DWR, DWIL 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, DWR, DWIL and
such other affiliates in connection with such transactions. Such sales, if any,
will be made at varying prices related to prevailing market prices at the time
of sale.
---------------------------
MORGAN STANLEY DEAN WITTER
June , 1997
1
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"). Effective May 31, 1997, Morgan Stanley Group Inc.
("Morgan Stanley") merged with and into Dean Witter, Discover & Co. ("Dean
Witter Discover"), which, as the surviving corporation, was renamed Morgan
Stanley, Dean Witter, Discover & Co. Prior to the merger, Morgan Stanley was
subject to the information requirements of the Exchange Act. Reports, proxy
statements and other information filed by the Company (and, prior to the merger,
by Morgan Stanley) 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 $0.01 per share (the "Common Stock"), is
listed on the New York Stock Exchange, Inc. (the "NYSE") 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 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 following documents previously filed with the Commission under the
Exchange Act by the Company are incorporated herein by reference:
(a) Annual Report on Form 10-K for the fiscal period ended December 31,
1996;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1997;
(c) Current Reports on Form 8-K dated January 22, 1997, February 4,
1997 (two reports), February 20, 1997, February 27, 1997, February 28,
1997, April 15, 1997, April 17, 1997 (two reports), April 30, 1997 and May
31, 1997; and
(d) the Company's Registration Statement on Form 8-A filed with the
Commission pursuant to Section 12 of the Exchange Act on April 26, 1995, as
amended by the Form 8-A/A dated May 4, 1995 which relates to the Company's
Shareholder Rights Plan.
The following documents previously filed with the Commission under the
Exchange Act by Morgan Stanley, a predecessor of the Company, are incorporated
herein by reference:
(a) Annual Report on Form 10-K for the fiscal period ended November 30,
1996;
(b) Quarterly Report on Form 10-Q for the quarter ended February 28,
1997; and
(c) Current Reports on Form 8-K dated December 18, 1996, December 26,
1996, January 7, 1997, January 24, 1997, February 4, 1997, February 5, 1997,
February 20, 1997, February 21, 1997, February 28, 1997, March 27, 1997, April
14, 1997, April 17, 1997 and April 30, 1997.
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, DWR, DWIL 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: Investor Relations (telephone number (212) 762-8131).
---------------------------
CERTAIN PERSONS PARTICIPATING IN THE OFFERING OF THE SECURITIES MAY ENGAGE
IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE
SECURITIES OR ANY SECURITIES THE PRICES OF WHICH MAY BE USED TO DETERMINE
PAYMENTS ON THE SECURITIES. SPECIFICALLY, THE AGENTS SPECIFIED IN THE RELEVANT
PROSPECTUS SUPPLEMENT OR PRICING SUPPLEMENT MAY OVERALLOT IN CONNECTION WITH THE
OFFERING, AND MAY BID FOR, AND PURCHASE, THE SECURITIES OR ANY SECURITIES THE
PRICES OF WHICH MAY BE USED TO DETERMINE PAYMENTS ON THE SECURITIES IN THE OPEN
MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION" IN
THIS PROSPECTUS AND "PLAN OF DISTRIBUTION" OR "UNDERWRITING" IN THE RELEVANT
PROSPECTUS SUPPLEMENT AND PRICING SUPPLEMENT.
THE COMPANY
Morgan Stanley, Dean Witter, Discover & Co. is a preeminent global
financial services firm that maintains leading market positions in each of its
three primary businesses -- securities, asset management and credit services.
The Company is a combination of Dean Witter Discover and Morgan Stanley pursuant
to a merger (the "Merger") that was effected on May 31, 1997 in which Morgan
Stanley was merged with and into Dean Witter Discover. The Company combines
three well recognized brands in the financial services industry: Discover(R)
Card, Morgan Stanley and Dean Witter. The Company combines Morgan Stanley's
global strengths in investment banking, including in the origination of quality
underwritten public offerings and mergers and acquisitions, institutional sales
and trading and global asset management with Dean Witter Discover's strengths in
providing investment and asset management services to its customers and in
providing quality consumer credit products to its customers, primarily through
its Discover Card brand. At December 31, 1996, the Company had the third largest
account executive sales organization in the United States, with approximately
9,100 professional account executives and 371 branches, and one of the largest
global asset management operations, with total assets under management and
administration of approximately $271 billion. In addition, based on its
approximately 39 million general purpose credit card accounts as of December 31,
1996, the Company is the nation's largest credit card issuer as measured by
number of accounts and cardmembers.
The Company conducts its business from its head office in New York City,
regional offices and branches throughout the United States, and through 28
principal offices in 19 countries outside the United States. Dean Witter
Discover was incorporated under the laws of the State of Delaware in 1981 and
its predecessor companies date back to 1924. Morgan Stanley was incorporated
under the laws of the State of Delaware in 1975 and its predecessor companies
date back to 1935. 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,
Dean Witter, Discover & Co. 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 financing, 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 consolidated ratios of earnings to
fixed charges and earnings to fixed charges and preferred stock dividends for
the Company for the periods indicated. The fiscal year information combines the
historical financial information of Dean Witter Discover for the years ended
December 31, 1996, 1995, 1994, 1993 and 1992 with the historical financial
information of Morgan Stanley for the fiscal years ended November 30, 1996,
1995, 1994, 1993 and 1992. The first fiscal quarter information combines the
unaudited historical financial information of Dean Witter Discover for the
fiscal quarters ended March 31, 1997 and 1996 with the historical financial
information of Morgan Stanley for the fiscal quarters ended February 28, 1997
and February 29, 1996.
<TABLE>
<CAPTION>
Fiscal First Quarter Fiscal Year
-------------------- -----------------------------------------------
1997 1996 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges........... 1.4 1.4 1.3 1.3 1.3 1.4 1.3
Ratio of earnings to
fixed charges and
preferred stock
dividends............... 1.3 1.4 1.3 1.3 1.3 1.4 1.3
</TABLE>
For the purpose of calculating the ratio of earnings to fixed charges and
the ratio of earnings to fixed charges and preferred stock dividends, earnings
consist of income before income taxes and fixed charges (exclusive of preferred
stock dividends). Additionally, "earnings" in 1992 excludes a nonrecurring gain
of $32.1 million from the initial public offering of 25.7% of SPS Transaction
Services, Inc. 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, each
between Morgan Stanley (as predecessor to the Company) and The Chase Manhattan
Bank (formerly known as Chemical Bank), as Trustee, and by a Third Supplemental
Senior Indenture dated as of June 1, 1997, between the Company and The Chase
Manhattan Bank, as Trustee (as so supplemented, the "Senior Debt Indenture"),
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 each between
Morgan Stanley (as predecessor to the Company) and The First National Bank of
Chicago, as Trustee, and by a Third Supplemental Subordinated Indenture dated as
of June 1, 1997, between the Company and The First National Bank of Chicago, as
Trustee (as so supplemented, the "Subordinated Debt Indenture"). 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, Dean Witter, Discover & Co.
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 subsidiaries to the Company are restricted by legal
requirements, including (in the case of MS & Co. and DWR) net capital
requirements under the Exchange Act and under rules of certain exchanges and
other regulatory bodies and (in the case of Greenwood Trust Company, a Delaware
chartered bank and an indirect wholly owned subsidiary of the Company, and other
bank subsidiaries) by banking regulations.
The Indentures provide that Debt Securities may be issued from time to
time in one or more series and may be denominated and payable in foreign
currencies or units based on or relating to foreign currencies, including
European Currency Units ("ECUs"). Special United States federal income tax
considerations applicable to any Debt Securities so denominated are described in
the relevant Prospectus Supplement.
Reference is made to the Prospectus Supplement for the following terms of
and information relating to the Offered Debt Securities (to the extent such
terms are applicable to such Debt Securities): (i) classification as senior or
subordinated Debt Securities, the specific designation, aggregate principal
amount, purchase price and denomination; (ii) currency or units based on or
relating to currencies in which such Debt Securities are denominated and/or in
which principal (and premium, if any) and/or interest will or may be payable;
(iii) any date of maturity; (iv) interest rate or rates (or the method by which
such rate or rates will be determined), if any; (v) 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 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 below) 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 (i) the Voting
Securities (as defined below) of MS & Co., MSIL, DWR, Greenwood Trust Company,
or any Subsidiary succeeding to any substantial part of the business now
conducted by any of such corporations (collectively, the "Principal
Subsidiaries") or (ii) Voting Securities of a Subsidiary that owns, directly or
indirectly, Voting Securities of any of the Principal Subsidiaries (other than
directors' qualifying shares) without making effective provisions whereby the
Debt Securities issued under such Indenture will be secured equally and ratably
with such secured indebtedness. "Subsidiary" means any corporation, partnership
or other entity of which at the time of determination the Company owns or
controls directly or indirectly more than 50% of the shares of the voting stock
or equivalent interest. "Voting Securities" means stock of any class or classes
having general voting power under ordinary circumstances to elect a majority of
the board of directors, managers or trustees of the Subsidiary in question,
provided that, for the purposes hereof, stock which carries only the right to
vote conditionally on the happening of an event shall not be considered voting
stock whether or not such event shall have happened. (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 person 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 the Indenture and the Debt Securities issued
thereunder, and immediately after such merger, consolidation, sale, lease or
conveyance, the Company, such person or such successor corporation shall not be
in default in the performance of the covenants and conditions of such Indenture
to be performed or observed by the Company. (Indentures, Section 9.1) This
covenant would not apply to a recapitalization transaction, a change of control
of the Company or a highly leveraged transaction unless such transactions or
change of control were structured to include a merger or consolidation or sale,
lease or conveyance of all or substantially all of the assets of the Company.
Except as may be described in a Prospectus Supplement applicable to a
particular series of Debt Securities, there are no covenants or other provisions
in the Indentures providing for a put or increased interest or otherwise that
would afford holders of Debt Securities additional protection in the event of a
recapitalization transaction, a change of control of the Company or a highly
leveraged transaction.
Events of Default
An Event of Default is defined under each Indenture with respect to Debt
Securities of any series issued under such Indenture as being: (a) default in
payment of any principal of the Debt Securities of such series, either at
maturity (or upon any redemption), by declaration or otherwise; (b) default for
30 days in payment of any interest on any Debt Securities of such series; (c)
default for 60 days after written notice in the observance or performance of any
other covenant or agreement in the Debt Securities of such series or such
Indenture other than a covenant included in such Indenture solely for the
benefit of a series of Debt Securities other than such series; (d) certain
events of bankruptcy, insolvency or reorganization; (e) failure by the Company
to make any payment at maturity, including any applicable grace period, in
respect of indebtedness, which term as used in each of the Indentures means
obligations (other than nonrecourse obligations or the Debt Securities of such
series issued under such Indenture) of, or guaranteed or assumed by, the Company
for borrowed money or evidenced by bonds, debentures, notes or other similar
instruments ("Indebtedness") in an amount in excess of $10,000,000 and
continuance of such failure for a period of 30 days after written notice thereof
to the Company by the Trustee, or to the Company and the Trustee by the holders
of not less than 25% in principal amount of such outstanding Debt Securities
(treated as one class) issued under such Indenture; or (f) default with respect
to any Indebtedness, which default results in the acceleration of Indebtedness
in an amount in excess of $10,000,000 without such Indebtedness having been
discharged or such acceleration having been cured, waived, rescinded or annulled
for a period of 30 days after written notice thereof to the Company by the
Trustee, or to the Company and the Trustee by the holders of not less than 25%
in principal amount of such outstanding Debt Securities (treated as one class)
issued under such Indenture; provided, however, that if any such failure,
default or acceleration referred to in clause (e) or clause (f) above shall
cease or be cured, waived, rescinded or annulled, then the Event of Default by
reason thereof shall be deemed likewise to have been thereupon cured.
(Indentures, Section 5.1)
Each Indenture provides that (a) if an Event of Default due to the default
in payment of principal of, premium, if any, or interest on, any series of Debt
Securities issued under such Indenture or due to the default in the performance
or breach of any other covenant or warranty of the Company applicable to the
Debt Securities of such series but not applicable to all outstanding Debt
Securities issued under such Indenture shall have occurred and be continuing,
either the Trustee or the holders of not less than 25% in principal amount of
such Debt Securities of each such affected series (treated as one class) issued
under such Indenture and then outstanding may then declare the principal of all
Debt Securities of each such affected series and interest accrued thereon to be
due and payable immediately; and (b) if an Event of Default due to a default in
the performance of any other of the covenants or agreements in such Indenture
applicable to all outstanding Debt Securities issued under such Indenture and
then outstanding or due to certain events of bankruptcy, insolvency or
reorganization of the Company shall have occurred and be continuing, either the
Trustee or the holders of not less than 25% in principal amount of all Debt
Securities issued under such Indenture and then outstanding (treated as one
class) may declare the principal of all such Debt Securities and interest
accrued thereon to be due and payable immediately, but upon certain conditions
such declarations may be annulled and past defaults may be waived (except a
continuing default in payment of principal of (or premium, if any) or interest
on such Debt Securities) by the holders of a majority in principal amount of the
Debt Securities of all such affected series then outstanding. (Indentures,
Sections 5.1 and 5.10)
Each Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during a default to act with the required standard of care,
to be indemnified by the holders of Debt Securities (treated as one class)
issued under such Indenture before proceeding to exercise any right or power
under such Indenture at the request of such holders. (Indentures, Section 6.2)
Subject to such provisions in each Indenture for the indemnification of the
Trustee and certain other limitations, the holders of a majority in principal
amount of the outstanding Debt Securities (treated as one class) issued under
such Indenture may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee. (Indentures, Section 5.9)
Each Indenture provides that no holder of Debt Securities issued under
such Indenture may institute any action against the Company under such Indenture
(except actions for payment of overdue principal or interest) unless such holder
previously shall have given to the Trustee written notice of default and
continuance thereof and unless the holders of not less than 25% in principal
amount of the Debt Securities of each affected series (treated as one class)
issued under such Indenture and then outstanding shall have requested the
Trustee to institute such action and shall have offered the Trustee reasonable
indemnity, the Trustee shall not have instituted such action within 60 days of
such request and the Trustee shall not have received direction inconsistent with
such written request by the holders of a majority in principal amount of the
Debt Securities of each affected series (treated as one class) issued under such
Indenture and then outstanding. (Indentures, Sections 5.6 and 5.9)
Each Indenture contains a covenant that the Company will file annually
with the Trustee a certificate of no default or a certificate specifying any
default that exists. (Indentures, Section 3.5)
Discharge, Defeasance and Covenant Defeasance
The Company can discharge or defease its obligations under an Indenture as
set forth below. (Indentures, Section 10.1)
Under terms satisfactory to the Trustee, the Company may discharge certain
obligations to holders of any series of Debt Securities issued under such
Indenture which have not already been delivered to the Trustee for cancellation
and which have either become due and payable or are by their terms due and
payable within one year (or scheduled for redemption within one year) by
irrevocably depositing with the Trustee cash or, in the case of Debt Securities
payable only in U.S. dollars, U.S. Government Obligations (as defined in such
Indenture), as trust funds in an amount certified to be sufficient to pay at
maturity (or upon redemption) the principal of and interest on such Debt
Securities.
The Company may also discharge any and all of the obligations to holders
of any series of Debt Securities issued under an Indenture at any time
("defeasance"), but may not thereby avoid any duty to register the transfer or
exchange of such series of Debt Securities, to replace any mutilated, defaced,
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 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
written 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 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 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, (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.
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 thereupon be relieved of any further obligation
under such Warrant Agreements and such Warrants. The Company shall notify the
Warrantholders of the occurrence 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 Obligations 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, dividends, loans and
advances from certain subsidiaries to the Company are restricted by legal
requirements, including (in the case of MS & Co. and DWR) net capital
requirements under the Exchange Act and under rules of certain exchanges and
other regulatory bodies and (in the case of Greenwood Trust Company and other
bank subsidiaries) by banking regulations.
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 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 (the "Code"), 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.
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 in the preceding two paragraphs, the term Bearer Securities
includes Bearer Securities that are part of Units and the term Bearer Debt
Warrants includes Bearer Debt Warrants that are part of Units. 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 1,750,000,000 shares of Common Stock, par value $0.01 per share, and
30,000,000 shares of Preferred Stock, par value $0.01 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 Amended and
Restated Certificate of Incorporation ("Certificate of Incorporation") described
below, of rendering more difficult or discouraging an acquisition of the Company
deemed undesirable by the Board of Directors.
As of June 2, 1997, there were approximately 585,665,000 shares of Common
Stock outstanding. On June 2, 1997, the Company also had outstanding the
following series of Preferred Stock: approximately 3,681,000 shares of ESOP
Convertible Preferred Stock, with a liquidation value of $35.875 per share (the
"ESOP Preferred Stock"), issued in connection with the Company's Employee Stock
Ownership Plan (the "ESOP"), 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"),
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") and 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 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 have outstanding Capital Units that
may result in up to 611,238 shares of the Company's 7.82% Cumulative Preferred
Stock, with a stated value of $200.00 per share (the "7.82% Preferred Stock"),
being issued at any time, up to 1,150,000 shares of the Company's 7.80%
Cumulative Preferred Stock, with a stated value of $200.00 per share (the "7.80%
Preferred Stock"), being issued at any time, up to 720,900 shares of the
Company's 9.00% Cumulative Preferred Stock, with a stated value of $200.00 per
share (the "9.00% Preferred Stock"), being issued at any time, up to 996,776
shares of the Company's 8.40% Cumulative Preferred Stock, with a stated value of
$200.00 per share (the "8.40% Preferred Stock"), being issued at any time, 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. In addition, the
Company has authorized the issuance of up to 450,000 shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share (the "Series A
Preferred Stock"), which may be issued as a result of the exercise of
certain rights issued to the holders of the Common Stock pursuant to the
Company's Rights Plan. See "The Rights Plan." The following summary does
not purport to be complete and is qualified by the Company's 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, by a Certificate of
Designation of Preferences and Rights of each series of Existing Cumulative
Preferred Stock and by a Certificate of Designation of Preferences and
Rights for the Series A 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. 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.
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 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 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 to the Company are
restricted by legal requirements, including (in the case of MS & Co. and DWR )
net capital requirements under the Exchange Act and under rules of certain
exchanges and other regulatory bodies and (in the case of Greenwood Trust
Company and other bank subsidiaries) by banking regulations. Such restrictions
could limit the ability of the Company to pay dividends to its stockholders.
Liquidation Rights. In the event of any liquidation, dissolution or
winding up of the Company, the holders of shares of Offered Preferred Stock will
be entitled to receive out of the assets of the Company available for
distribution to stockholders, before any distribution is made to holders of (i)
any other shares of Preferred Stock ranking junior to the Offered Preferred
Stock as to rights upon liquidation, dissolution or winding up that may be
issued in the future or (ii) Common Stock, liquidating distributions in an
amount equal to the stated value per share of each series of Offered Preferred
Stock, as set forth in the applicable Prospectus Supplement, plus accrued and
accumulated but unpaid dividends to the date of final distribution; but the
holders of the shares of Offered Preferred Stock will not be entitled to receive
the liquidation price of such shares until the liquidation preference of any
other shares of the Company's capital stock ranking senior to the Offered
Preferred Stock as to rights upon liquidation, dissolution or winding up shall
have been paid (or a sum set aside therefor sufficient to provide for payment)
in full. If upon any liquidation, dissolution or winding up of the Company, the
amounts payable with respect to the Offered Preferred Stock and any other
Preferred Stock ranking as to rights upon liquidation, dissolution or winding up
on a parity with the Offered Preferred Stock are not paid in full, the holders
of the Offered Preferred Stock and of such other Preferred Stock will share
ratably in any such distribution in proportion to the full respective
preferential amounts to which they are entitled. After payment of the full
amount of the liquidating distribution to which they are entitled, the holders
of the Offered Preferred Stock will not be entitled to any further participation
in any distribution of assets by the Company. Neither a consolidation or merger
of the Company with or into another corporation nor a merger of another
corporation with or into the Company nor a sale or transfer of all or part of
the Company's assets for cash or securities shall be considered a liquidation,
dissolution or winding up of the Company.
Because the Company is a holding company, its rights and the rights of its
creditors and its stockholders, including the holders of the shares of Offered
Preferred Stock, to participate in the assets of any subsidiary upon the
latter's liquidation or recapitalization may be subject to the prior claims of
the subsidiary's creditors, except to the extent that the Company may itself be
a creditor with recognized claims against the subsidiary.
Optional Redemption. The Prospectus Supplement will indicate whether, and
if so on what terms, shares of a series of the Offered Preferred Stock will be
subject to any mandatory redemption or sinking fund provision. The Prospectus
Supplement will also indicate whether, and if so on what terms (including the
date on or after which redemption may occur), shares of a series of the Offered
Preferred Stock will be redeemable. Any such redemption would be effected upon
not less than 30 days' notice at a redemption price of not less than the stated
value per share of the applicable series of Offered Preferred Stock plus accrued
and accumulated but unpaid dividends to but excluding the date fixed for
redemption. If full cumulative dividends on all outstanding shares of Offered
Preferred Stock have not been paid, no shares of Offered Preferred Stock may be
redeemed in part and the Company may not purchase or acquire any shares of
Offered Preferred Stock otherwise than pursuant to a purchase or exchange offer
made on the same terms to all holders of the Offered Preferred Stock. If fewer
than all the outstanding shares of a series of Offered Preferred Stock are to be
redeemed, the Company will select those to be redeemed by lot or a substantially
equivalent method.
Voting Rights. Unless otherwise determined by the Board of Directors of
the Company and indicated in the Prospectus Supplement, holders of the Offered
Preferred Stock will not have any voting rights except as set forth below or as
otherwise from time to time required by law. Whenever dividends on any shares of
Offered Preferred Stock or any other class or series of stock ranking on a
parity with the Offered Preferred Stock with respect to the payment of dividends
shall be in arrears for dividend periods, whether or not consecutive, containing
in the aggregate a number of days equivalent to six calendar quarters, the
holders of shares of each series of Offered Preferred Stock (voting separately
as a class with all other series of Preferred Stock (including the Existing
Cumulative Preferred Stock) upon which like voting rights have been conferred
and are exercisable) will be entitled 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 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).
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 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 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 on all
matters voted on generally by the stockholders, including the election of
directors, and except as otherwise required by law or except as provided with
respect to any series of Preferred Stock (including the ESOP Preferred Stock),
the holders of such shares, together with the holders of ESOP Preferred Stock,
will possess all voting power. The Board is divided into three classes of
directors with the term of one class expiring at each annual meeting of
stockholders. Because the Company's Certificate of Incorporation does not
provide for cumulative voting rights, the holders of a plurality of the voting
power of the then outstanding shares of capital stock entitled to be voted
generally in the election of directors (the "Voting Stock") represented at a
meeting will be able to elect all the directors standing for election at such
meeting. As of June 2, 1997, certain current and former Managing Directors and
Principals of MS & Co. owned in the aggregate approximately 79,546,500 shares of
Common Stock subject to voting restrictions contained in certain agreements (the
"Voting Agreements"). As of such date, such shares constituted approximately 14%
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 to the Company are restricted by legal
requirements, including (in the case of MS & Co. and DWR ) net capital
requirements under the Exchange Act and under rules of certain exchanges and
other regulatory bodies and (in the case of Greenwood Trust Company and other
bank subsidiaries) by banking regulations. 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.
The transfer agent and registrar for the Common Stock is Dean Witter Trust
Company.
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 $35.875 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 3.3 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 $35.875,
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 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 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.
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 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 8.03% per annum (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); provided,
however, that the dividends so payable will not be less than 6.41% nor greater
than 12.41% per annum (subject to certain adjustments described below). 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 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, except under certain
circumstances, prior thereto, and at specified prices; the Series A
Fixed/Adjustable Rate Preferred Stock is not redeemable prior to November 30,
2001, except that under certain circumstances prior thereto, it may be redeemed
at specified prices; 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, except that under certain circumstances prior thereto, it may be redeemed
at specified prices. On or after such dates, the applicable 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, 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 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, 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 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, 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 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, will not be
entitled to any further participation in any distribution of assets by the
Company.
Voting Rights. Holders of Existing Cumulative Preferred Stock, which for
purposes of this section shall include, 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, 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 Certificate of Incorporation or of the resolutions contained in
the Certificate of Designation relating to such series of Existing Cumulative
Preferred Stock, whether by merger, consolidation or otherwise, so as to
materially and adversely affect any power, preference or special right of such
series of Existing Cumulative Preferred Stock or the holders thereof; provided,
however, that any increase in the amount of the authorized Common Stock or
authorized preferred stock or the creation and issuance of other series of
Common Stock or preferred stock ranking on a parity with or junior to the
Existing Cumulative Preferred Stock as to dividends and upon liquidation shall
not be deemed to materially and adversely affect such powers, preferences or
special rights.
The transfer agent and registrar for each series of Existing Cumulative
Preferred Stock is The Bank of New York.
Additional Provisions of the Company's Amended and Restated Certificate of
Incorporation and By-laws
Size of the Board of Directors, Removal of Directors and Filling Vacancies
on the Board of Directors. The Company's Certificate of Incorporation provides
for a Board of Directors initially consisting of 14 directors, divided into
classes initially consisting of four, four and six directors, respectively, with
initial terms expiring at the annual meetings of stockholders to be held in
1998, 1999 and 2000, respectively. Thereafter, directors shall hold office for a
term expiring at the third succeeding annual meeting of stockholders after their
election. Under the Company's Amended and Restated By-Laws ("By-Laws"), a
majority of the Board may increase or decrease the number of directors, except
that until December 31, 2000, a three-quarters vote of the Board will be
required to change the number of directors to an odd number. The Company's
Certificate of Incorporation also provides that directors may be removed only
for cause and with the approval of the holders of at least 80% of the voting
power of the Voting Stock, voting together as a single class. 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 for a term expiring at the annual meeting of
stockholders at which the term of office of the class to which they have been
elected expires.
Calling Special Meetings of Stockholders. The Company's By-Laws provide
that special meetings of the stockholders may be called at any time only by the
Secretary of the Company at the direction of the Board.
Amendment of Governing Documents. The Company's Certificate of
Incorporation provides that, generally, it can be amended pursuant to the
provisions of the laws of the State of Delaware. Under Section 242 of the
Delaware General Corporation Law (the "DGCL"), the Board may propose, and the
stockholders may adopt by a majority vote of the Voting Stock, an amendment to
the Company's Certificate of Incorporation. However, the Company's Certificate
of Incorporation also provides that the approval of 80% of the voting power of
the Voting Stock, voting together as a single class, is required in order to
amend, repeal or adopt any provision inconsistent with the provisions in the
Certificate relating to amendment of the By-Laws, action of stockholders and the
Board of Directors and to change the provisions establishing such 80% vote
requirement.
The Company's Certificate of Incorporation provides that the Company's
By-Laws may be altered, amended or repealed or new provisions may be adopted by
a majority of the Company's Board of Directors or with the approval of at least
80% of the voting power of the Voting Stock of the Company, voting together as a
single class. Furthermore, the By-Laws provide that they may be altered, amended
or repealed or new provisions may be adopted by a majority of the Board of
Directors or with the approval of at least 80% of the voting power of the Voting
Stock of the Company; provided, however, that a three-quarters vote of the Board
of Directors is required for the Board of Directors to amend, alter, repeal or
adopt new By-Laws in conflict with the provisions of the By-Laws relating to the
removal of certain officers and certain amendments of the By-Laws; and provided
further, however, that until December 31, 2000, a three-quarters vote of the
Board of Directors is required for the Board of Directors to amend, alter,
repeal or adopt new ByLaws in conflict with certain provisions of the By-Laws
relating to committees, committee members and chairmen, certain changes to the
number of directors and certain other amendments of the By-Laws.
Limitation of Directors' Liability. Section 102 of the DGCL 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 DGCL or obtained an improper
personal benefit. Under the Company's 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 DGCL as in effect or as the same may be amended.
The Rights Plan
Pursuant to a Rights Agreement (as amended, the "Rights Plan"), dated
as of April 25, 1995 and amended as of February 4, 1997, with The Chase
Manhattan Bank, as rights agent, holders of shares of Common Stock have
certain rights (each a "Right") to purchase from the Company a unit
consisting of one one-thousandth of a share of Series A Preferred
Stock at a purchase price of $175 per unit subject to adjustment. At
present, each share of Common Stock is entitled to one-half Right.
The Rights become exercisable upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 15% or more of the outstanding
shares of Common Stock (the "Stock Acquisition Date") and (ii) 10 business
days following the commencement of a tender offer or exchange offer that
would result in a person or group beneficially owning 15% or more of such
outstanding shares of Common Stock. After the Rights become exercisable,
the Rights (other than rights held by an Acquiring Person) will entitle the
holders to purchase, under certain circumstances, either Common Stock or
common stock of the potential acquirer at a substantially reduced price.
The Company is generally entitled to redeem the Rights at a price of $0.01
per Right at any time until ten days following the Stock Acquisition Date.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. Unless earlier redeemed, the Rights
will expire at the close of business on April 21, 2005.
The foregoing description of the Rights is qualified in its entirety
by reference to the description of the Rights Plan contained in the
Company's Registration Statement on Form 8-A dated April 26, 1995, as
amended by a Form 8-A/A dated May 4, 1995, which is incorporated herein by
reference.
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 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 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/or DWR and any such underwriters, dealers or agents outside the United
States will include MSIL, DWIL 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.
In order to facilitate the offering of the Securities, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Securities or any other securities the prices of which may be used
to determine payments on such Securities. Specifically, the underwriters may
overallot in connection with the offering, creating a short position in the
Securities for their own accounts. In addition, to cover overallotments or to
stabilize the price of the Securities or of any such other securities, the
underwriters may bid for, and purchase, the Securities or any such other
securities in the open market. Finally, in any offering of the Securities
through a syndicate of underwriters, the underwriting syndicate may reclaim
selling concessions allowed to an underwriter or a dealer for distributing the
Securities in the offering if the syndicate repurchases previously distributed
Securities in transactions to cover syndicate short positions, in stabilization
transactions or otherwise. Any of these activities may stabilize or maintain the
market price of the Securities above independent market levels. The underwriters
are not required to engage in these activities, and may end any of these
activities at any time.
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., MSIL, DWR and DWIL
("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 underwriter, agent or dealer utilized in the initial offering of
Securities will not confirm sales to accounts over which it exercises
discretionary authority without the prior specific written approval of its
customer.
MS & Co., MSIL, DWR and DWIL are wholly owned subsidiaries of the Company.
Each initial offering of 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, DWR, DWIL 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. and DWR ). MS &
Co., MSIL, DWR, DWIL and such other affiliates may act as principals or agents
in such transactions. This Prospectus may be used by MS & Co., MSIL, DWR, DWIL
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. None of MS & Co., MSIL, DWR, DWIL or any such other
affiliate is obligated to make a market in any Securities and may discontinue
any market-making activities at any time without notice.
LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by
Brown & Wood LLP, or other counsel who is satisfactory to MS & Co., MSIL, DWR or
DWIL, as the case may be, and who may be an officer 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 Morgan Stanley 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 supplemental consolidated financial statements and supplemental
financial statement schedule of the Company and subsidiaries, except Morgan
Stanley, as of fiscal year end 1996 and 1995 and for each of the three years in
the period ended fiscal year end 1996 included in the Company's Current Report
on Form 8-K dated May 31, 1997 have been audited by Deloitte & Touche LLP,
independent auditors, as set forth in their report thereon and incorporated
herein by reference. The financial statements and financial statement schedule
of Morgan Stanley (supplementally consolidated with those of the Company) have
been audited by Ernst & Young LLP, independent auditors, as stated in their
reports incorporated herein by reference. Such supplemental consolidated
financial statements and supplemental financial statement schedule have been
incorporated herein by reference in reliance upon the respective reports given
upon the authority of such firms as experts in accounting and auditing.
The consolidated financial statements of Dean Witter Discover incorporated
by reference and included in Dean Witter Discover's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 have been audited by Deloitte &
Touche LLP, independent auditors, as set forth in their reports thereon and
incorporated herein by reference. Such consolidated financial statements have
been incorporated herein by reference in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Morgan Stanley incorporated by
reference and included in Morgan Stanley's Annual Report on Form 10-K for the
fiscal year ended November 30, 1996 have been audited by Ernst & Young LLP,
independent auditors, as stated in their report thereon and incorporated herein
by reference. Such consolidated financial statements have been incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
With respect to the unaudited interim financial information of Dean Witter
Discover for the periods ended March 31, 1997 and 1996, which is incorporated
herein by reference, Deloitte & Touche LLP have applied limited procedures in
accordance with professional standards for review of such information. However,
as stated in their report included in Dean Witter Discover's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1997 and incorporated by reference
herein, they did not audit and they do not express an opinion on that interim
financial information. Accordingly, the degree of reliance on their report on
such information should be restricted in light of the limited nature of the
review procedures applied. Deloitte & Touche LLP are not subject to the
liability provisions of Section 11 of the Securities Act for their reports on
the unaudited interim financial information because these reports are not
"reports" or a "part" of the registration prepared or certified by an accountant
within the meaning of Sections 7 and 11 of the Securities Act.
ERISA MATTERS FOR PENSION PLANS AND INSURANCE COMPANIES
The Company and certain affiliates of the Company, including MS & Co. and
DWR , 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., DWR or any of their 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. In addition, employee benefit plans
subject to ERISA (or insurance companies deemed to be investing ERISA plan
assets) purchasing Universal Warrants or Purchase Contracts should consider the
possible implications of owning the securities underlying such instruments in
the event of settlement by physical delivery. 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.
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
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................................................. $2,121,213*
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.......................................... 300,000
Accounting fees and expenses..................................... 175,000
Unit Agents', Warrant Agents', Trustees' and Preferred Stock
Depositary's fees and expenses (including counsel fees)....... 135,000
Miscellaneous.................................................... 6,287
Total......................................................... $3,703,000
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* Includes $304 paid on May 28, 1997. The balance being paid with the filing of
this Amendment No. 1 is $2,120,909.
Item 15. Indemnification of Officers and Directors
Article VIII of the Amended and Restated Certificate of Incorporation of
the Company ("Certificate of Incorporation") and Section 6.07 of the Amended and
Restated By-Laws of the Company ("By-Laws"), each as amended to date, provide
for the indemnification of directors and officers. Under these provisions, any
person who is a director or officer of the Company or a corporation a majority
of the capital stock (other than directors' qualifying shares) of which is owned
directly or indirectly by the Company (a "Subsidiary") shall be indemnified by
the Company to the fullest extent permitted by applicable law. The Company's
Certificate of Incorporation and By-Laws also provide that the Company may, by
action of the Board of Directors, provide indemnification to any person who is
or was an employee or agent (other than a director or officer) of the Company or
a Subsidiary and to any person serving as a director, officer, partner, member,
employee or agent of another corporation, partnership, limited liability
company, joint venture, trust or other enterprise at the request of the Company
or a Subsidiary, to the same scope and effect as the foregoing indemnification
of directors and officers of the Company.
The right to indemnification under the By-Laws includes the right to be
paid the expenses incurred in connection with any proceeding in advance of its
final disposition upon receipt (unless the Company upon authorization of the
Board of Directors waives said requirement to the extent permitted by applicable
law) of an undertaking by or on behalf of such person to repay such amount if it
shall ultimately be determined that such person is not entitled to be
indemnified by the Company.
Under 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, partner,
member, employee or agent of the Company or a Subsidiary, or of another
corporation, partnership, limited liability company, joint venture, trust or
other enterprise, against any expense, liability or loss 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.
The Company has in effect insurance policies in the amount of $75 million
for general officers' and directors' liability insurance and $25 million for
fiduciary liability insurance covering all of the Company's directors and
officers in certain instances where by law they may not be indemnified by the
Company.
The forms of Underwriting Agreements and Distribution Agreements filed as
Exhibits 1-a, 1-b, 1-c and 1-d hereto, and incorporated herein by reference,
contain certain provisions relating to the indemnification of the Company's
directors, officers and controlling persons.
Item 16. Exhibits
Exhibit
Number Description
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1-a* Form of Underwriting Agreements for Debt Securities, Warrants,
Purchase Contracts and Units.
1-b* Form of Underwriting Agreement for Preferred Stock and Depositary
Shares.
1-c* Form of U.S. Distribution Agreement.
1-d* Form of Euro Distribution Agreement.
4-a Amended and Restated Certificate of Incorporation of the Company
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 31, 1997 and incorporated herein by
reference).
4-b* Form of Certificate of Designation of Offered Preferred Stock.
4-c* Form of Certificate of Offered Preferred Stock.
4-d* Form of Deposit Agreement (including Form of Depositary Receipt).
4-e Senior Indenture dated as of April 15, 1989 between Morgan Stanley
and The Chase Manhattan Bank (formerly known as Chemical Bank),
Trustee (previously filed as an exhibit to Morgan Stanley'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 Morgan Stanley
and The Chase Manhattan Bank (formerly known as Chemical Bank),
Trustee (previously filed as an exhibit to Morgan Stanley'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 Morgan
Stanley and The Chase Manhattan Bank (formerly known as Chemical
Bank), Trustee (previously filed as an exhibit to Morgan Stanley's
Current Report on Form 8-K dated May 6, 1996 and incorporated herein
by this reference).
4-h Form of Third Supplemental Senior Indenture, dated as of June 1,
1997, to the Senior Indenture dated as of April 15, 1989 between the
Company and The Chase Manhattan Bank, Trustee.
4-i Subordinated Indenture dated as of April 15, 1989 between Morgan
Stanley and The First National Bank of Chicago, Trustee (previously
filed as an exhibit to Morgan Stanley's Annual Report on Form 10-K
for the fiscal year ended January 31, 1993 and incorporated herein by
this reference).
4-j First Supplemental Subordinated Indenture, dated as of May 15, 1991,
to the Subordinated Indenture dated as of April 15, 1989 between
Morgan Stanley and The First National Bank of Chicago, Trustee
(previously filed as an exhibit to Morgan Stanley's Annual Report on
Form 10-K for the fiscal year ended January 31, 1993 and incorporated
herein by this reference).
4-k Second Supplemental Subordinated Indenture, dated as of April 15,
1996, to the Subordinated Indenture dated as of April 15, 1989
between Morgan Stanley and The First National Bank of Chicago,
Trustee (previously filed as an exhibit to Morgan Stanley's Current
Report on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-l Form of Third Supplemental Subordinated Indenture, dated as of June
1, 1997, to the Subordinated Indenture dated as of April 15, 1989
between the Company and The First National Bank of Chicago, Trustee.
4-m* Form of Floating Rate Senior Note.
4-n* Form of Fixed Rate Senior Note.
4-o* Form of Senior Variable Rate Renewable Note.
4-p* Form of Floating Rate Subordinated Note.
4-q* Form of Fixed Rate Subordinated Note.
4-r* Form of Subordinated Variable Rate Renewable Note.
4-s* Form of Temporary Global Floating Rate Senior Bearer Note.
4-t* Form of Temporary Global Fixed Rate Senior Bearer Note.
4-u* Form of Permanent Global Floating Rate Senior Bearer Note.
4-v* Form of Permanent Global Fixed Rate Senior Bearer Note.
4-w* Form of Euro Fixed Rate Senior Bearer Note.
4-x* Form of Euro Fixed Rate Senior Registered Note.
4-y* Form of Floating/Fixed Rate Senior Note.
4-z* Form of Senior Dollarized Bull Note.
4-aa* Form of S&P Indexed (Bull) Note.
4-bb* Form of S&P Indexed (Bear) Note.
4-cc* Form of Euro Fixed Rate Subordinated Registered Note.
4-dd* Form of Principal Exchange Rate Linked Security (PERLS) Note.
4-ee* Form of Reverse PERLS Note.
4-ff* Form of Multicurrency PERLS Note.
4-gg* Form of Fixed Rate Amortizing Senior Note.
4-hh* Form of Senior Dollarized Yield Curve Note (Bond Basis).
4-ii* Form of Senior Dollarized Yield Curve Note (Money Market Basis).
4-jj* Form of Permanent Global Senior Bull Note.
4-kk* Form of Definitive Floating Rate Senior Bearer Note.
4-ll* Form of Temporary Global Senior ECU Puttable Floating Rate Note.
4-mm* Form of Permanent Global Senior ECU Puttable Floating Rate Note.
4-nn* Form of Debt Warrant Agreement for Warrants Sold Attached to Debt
Securities.
4-oo* Form of Debt Warrant Agreement for Warrants Sold Alone.
4-pp* Form of Warrant Agreement for Universal Warrants.
4-qq* Form of Unit Agreement.
4-rr* Form of Put Warrant (included in Exhibit 4-pp).
4-ss* Form of Call Warrant (included in Exhibit 4-pp).
4-tt* Form of Purchase Contract (Issuer Sale) (included in Exhibit 4-qq).
4-uu* Form of Purchase Contract (Issuer Purchase) (included in Exhibit
4-qq).
4-vv* Form of Unit Certificate (included in Exhibit 4-qq).
5 Opinion of Brown & Wood LLP.
12-a Computation of Consolidated Ratio of Earnings to Fixed Charges.
12-b Computation of Consolidated Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends.
15-a Letter of Awareness from Deloitte & Touche LLP Concerning Unaudited
Financial Information.
15-b Letter of Awareness from Ernst & Young LLP Concerning Unaudited
Financial Information.
23-a Consent of Deloitte & Touche LLP.
23-b Consent of Ernst & Young LLP.
23-c Consent of Brown & Wood LLP (included in Exhibit 5).
24 Powers of Attorney (included on the signature pages).
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.
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* 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 (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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in New York, New York, on this second day of June,
1997.
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By: /s/ Philip J. Purcell
---------------------------------
Name: Philip J. Purcell
Title: Chairman of the Board and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature
appears below hereby constitutes and appoints Christine A. Edwards, Mitchell M.
Merin, Ronald T. Carman, Michael T. Gregg, Jonathan C. Clark, Ralph L.
Pellecchio and Martin M. Cohen and each of them singly, his or her true and
lawful attorney-in-fact and agent with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any and all amendments, including post-effective
amendments, to this Registration Statement (any of which amendments may make
such changes and additions to this Registration Statement as such
attorneys-in-fact may deem necessary or appropriate) and to file the same, with
all exhibits thereto, and any other documents that may be required in connection
therewith, granting unto said attorneys-in-fact and agents full power and
authority to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirement of the Securities Act of 1933, as amended,
this Amendment No. 1 to Registration Statement has been signed below by the
following persons in the capacities indicated on this second day of June, 1997.
<TABLE>
<CAPTION>
Signature
--------
<S> <C>
/s/ Philip J. Purcell
- -----------------------------------------------
Philip J. Purcell Chairman of the Board, Chief Executive Officer
and Director
/s/ John J. Mack
- -----------------------------------------------
John J. Mack President, Chief Operating Officer and Director
/s/ Thomas C. Schneider
- -----------------------------------------------
Thomas C. Schneider Executive Vice President, Chief Strategic and
Administrative Officer and Director
/s/ Richard B. Fisher
- -----------------------------------------------
Richard B. Fisher Chairman of the Executive Committee of Board of
Directors and Director
/s/ Robert G. Scott
- -----------------------------------------------
Robert G. Scott Executive Vice President and Chief Financial
Officer
/s/ Robert P. Seass
- -----------------------------------------------
Robert P. Seass Controller (Principal Accounting Officer)
/s/ Robert P. Bauman
- -----------------------------------------------
Robert P. Bauman Director
/s/ Edward A. Brennan
- -----------------------------------------------
Edward A. Brennan Director
/s/ Daniel B. Burke
- -----------------------------------------------
Daniel B. Burke Director
/s/ C. Robert Kidder
- -----------------------------------------------
C. Robert Kidder Director
/s/ Miles L. Marsh
- -----------------------------------------------
Miles L. Marsh Director
/s/ Michael A. Miles
- -----------------------------------------------
Michael A. Miles Director
/s/ Allen E. Murray
- -----------------------------------------------
Allen E. Murray Director
/s/ Paul J. Rizzo
- -----------------------------------------------
Paul J. Rizzo Director
/s/ Clarence B. Rogers, Jr.
- -----------------------------------------------
Clarence B. Rogers, Jr. Director
/s/ Laura D'Andrea Tyson
- -----------------------------------------------
Laura D'Andrea Tyson Director
</TABLE>
EXHIBIT INDEX
Exhibit
Number Description
------------- ---------------------
1-a* Form of Underwriting Agreements for Debt Securities, Warrants,
Purchase Contracts and Units.
1-b* Form of Underwriting Agreement for Preferred Stock and Depositary
Shares.
1-c* Form of U.S. Distribution Agreement.
1-d* Form of Euro Distribution Agreement.
4-b* Form of Certificate of Designation of Offered Preferred Stock.
4-c* Form of Certificate of Offered Preferred Stock.
4-d* Form of Deposit Agreement (including Form of Depositary Receipt).
4-h Form of Third Supplemental Senior Indenture, dated as of June 1,
1997, to the Senior Indenture dated as of April 15, 1989 between the
Company and The Chase Manhattan Bank, Trustee.
4-l Form of Third Supplemental Subordinated Indenture, dated as of June
1, 1997, to the Subordinated Indenture dated as of April 15, 1989
between the Company and The First National Bank of Chicago, Trustee.
4-m* Form of Floating Rate Senior Note.
4-n* Form of Fixed Rate Senior Note.
4-o* Form of Senior Variable Rate Renewable Note.
4-p* Form of Floating Rate Subordinated Note.
4-q* Form of Fixed Rate Subordinated Note.
4-r* Form of Subordinated Variable Rate Renewable Note.
4-s* Form of Temporary Global Floating Rate Senior Bearer Note.
4-t* Form of Temporary Global Fixed Rate Senior Bearer Note.
4-u* Form of Permanent Global Floating Rate Senior Bearer Note.
4-v* Form of Permanent Global Fixed Rate Senior Bearer Note.
4-w* Form of Euro Fixed Rate Senior Bearer Note.
4-x* Form of Euro Fixed Rate Senior Registered Note.
4-y* Form of Floating/Fixed Rate Senior Note.
4-z* Form of Senior Dollarized Bull Note.
4-aa* Form of S&P Indexed (Bull) Note.
4-bb* Form of S&P Indexed (Bear) Note.
4-cc* Form of Euro Fixed Rate Subordinated Registered Note.
4-dd* Form of Principal Exchange Rate Linked Security (PERLS) Note.
4-ee* Form of Reverse PERLS Note.
4-ff* Form of Multicurrency PERLS Note.
4-gg* Form of Fixed Rate Amortizing Senior Note.
4-hh* Form of Senior Dollarized Yield Curve Note (Bond Basis).
4-ii* Form of Senior Dollarized Yield Curve Note (Money Market Basis).
4-jj* Form of Permanent Global Senior Bull Note.
4-kk* Form of Definitive Floating Rate Senior Bearer Note.
4-ll* Form of Temporary Global Senior ECU Puttable Floating Rate Note.
4-mm* Form of Permanent Global Senior ECU Puttable Floating Rate Note.
4-nn* Form of Debt Warrant Agreement for Warrants Sold Attached to Debt
Securities.
4-oo* Form of Debt Warrant Agreement for Warrants Sold Alone.
4-pp* Form of Warrant Agreement for Universal Warrants.
4-qq* Form of Unit Agreement.
4-rr* Form of Put Warrant (included in Exhibit 4-pp).
4-ss* Form of Call Warrant (included in Exhibit 4-pp).
4-tt* Form of Purchase Contract (Issuer Sale) (included in Exhibit 4-qq).
4-uu* Form of Purchase Contract (Issuer Purchase) (included in Exhibit
4-qq).
4-vv* Form of Unit Certificate (included in Exhibit 4-qq).
5 Opinion of Brown & Wood LLP.
12-a Computation of Consolidated Ratio of Earnings to Fixed Charges.
12-b Computation of Consolidated Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends.
15-a Letter of Awareness from Deloitte & Touche LLP Concerning Unaudited
Financial Information.
15-b Letter of Awareness from Ernst & Young LLP Concerning Unaudited
Financial Information.
23-a Consent of Deloitte & Touche LLP.
23-b Consent of Ernst & Young LLP.
23-c Consent of Brown & Wood LLP (included in Exhibit 5).
24 Powers of Attorney (included on the signature pages).
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.
THIRD SUPPLEMENTAL SENIOR INDENTURE
BETWEEN
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
AND
THE CHASE MANHATTAN BANK, Trustee
---------------
Dated as of June 1, 1997
---------------
SUPPLEMENTAL TO SENIOR INDENTURE DATED
AS OF APRIL 15, 1989 BETWEEN MORGAN STANLEY GROUP
INC. AND THE CHASE MANHATTAN BANK (FORMERLY KNOWN
AS CHEMICAL BANK) AS TRUSTEE, 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
THIRD SUPPLEMENTAL SENIOR INDENTURE, dated as of June 1, 1997
between MORGAN STANLEY, DEAN WITTER, DISCOVER & CO., a Delaware corporation
(the "Successor Corporation" and hereinafter the "Issuer"), and THE CHASE
MANHATTAN BANK (formerly known as Chemical Bank), as trustee (the "Trustee"),
W I T N E S S E T H :
WHEREAS, Morgan Stanley Group Inc. ("Morgan Stanley") and the
Trustee are parties to that certain 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
(such Indenture as so supplemented, the "Indenture");
WHEREAS, as of May 31, 1997, Morgan Stanley merged with and
into Dean Witter, Discover & Co., which continued as the successor corporation
and changed its name to Morgan Stanley, Dean Witter, Discover & Co.;
WHEREAS, Section 9.1 of the Indenture requires the Successor
Corporation to expressly assume the obligations of Morgan Stanley under the
Indenture in a supplemental indenture satisfactory to the Trustee;
WHEREAS, pursuant to and in compliance with Section 9.2 of the
Indenture, the Successor Corporation shall succeed to and be substituted for
Morgan Stanley under the Indenture as "Issuer," with the same effect as if it
had been named therein;
WHEREAS, Section 8.1 of the Indenture provides that, without
the consent of the Holders of any Securities or Coupons, the Issuer, when
authorized by a resolution of its Board of Directors, and the Trustee may
enter into indentures supplemental to the Indenture for the purpose of,
among other things, adding to the covenants of the Issuer such further
covenants, restrictions, conditions, or provisions as the Trustee and the
Issuer shall consider to be for the protection of the Holders of Securities
or Coupons or making any provisions as the Issuer may deem necessary or
desirable, subject to the conditions set forth therein;
WHEREAS, the Issuer desires to add to and modify certain
provisions of the Indenture to reflect (1) a modification of the officers of
the Issuer who are authorized to execute certain documents in connection with
the issuance of Securities and (2) a modification of the negative pledge
covenant of the Issuer;
WHEREAS, the entry into this Third Supplemental Senior
Indenture by the parties hereto is in all respects authorized by the
provisions of the Indenture; and
WHEREAS, all things necessary to make this Third Supplemental
Senior Indenture a valid indenture and agreement according to its terms have
been done;
NOW, THEREFORE, for and in consideration of the premises, the
Issuer and the Trustee mutually covenant and agree for the equal and
proportionate benefit of the respective Holders from time to time of the
Securities and of the Coupons, if any, appertaining thereto as follows:
ARTICLE 1
Section 1.1. Assumption of Obligations by Successor
Corporation. Pursuant to Section 9.1 of the Indenture, the Successor
Corporation does hereby: (i) expressly assume the due and punctual payment of
the principal of and interest on all the Securities and Coupons, if any,
according to their tenor, and the due and punctual performance and observance
of all of the covenants and conditions of the Indenture to be performed or
observed by Morgan Stanley; (ii) agree to succeed to and be substituted for
Morgan Stanley under the Indenture with the same effect as if it had been
named therein; and (iii) represent that it is not in default in the
performance of any such covenant and condition.
Section 1.2. Amendment of Section 1.1. Section 1.1 of the
Indenture is hereby amended by
(a) deleting the definition of "Issuer Order" and inserting in
lieu thereof the following: " 'Issuer Order' means a written statement,
request or order of the Issuer signed in its name by any one of the
following: the Chairman of the Board, the President, the Chief Financial
Officer, the Chief Strategic and Administrative Officer, the Chief Legal
Officer, the Treasurer, any Assistant Treasurer or any other person
authorized by the Board of Directors to execute any such written statement,
request or order."; and
(b) deleting in the definition of "Officer's Certificate" the
first sentence and inserting in lieu thereof the following: " 'Officer's
Certificate' means a certificate signed by any one of the following: the
Chairman of the Board, the President, the Chief Financial Officer, the
Chief Strategic and Administrative Officer, the Chief Legal Officer, the
Treasurer, any Assistant Treasurer or any other person authorized by the
Board of Directors to execute any such certificate and delivered to the
Trustee."
Section 1.3. Amendment of Section 2.5. Section 2.5 of the
Indenture shall be amended by deleting the first sentence of the first
paragraph and inserting in lieu thereof the following:
"The Securities and, if applicable, each Coupon appertaining
thereto shall be signed on behalf of the Issuer by any one of the
following: the Chairman of the Board, the President, the Chief
Financial Officer, the Chief Strategic and Administrative Officer,
the Chief Legal Officer, the Treasurer, any Assistant Treasurer or
any other person authorized by the Board of Directors to execute
Securities or, if applicable, Coupons, which Securities or Coupons
may, but need not, be attested."
Section 1.4. Amendment to Section 3.6. Section 3.6 of the
Indenture is hereby amended and restated to read in its entirety as follows:
"SECTION 3.6 Negative Pledge. Neither the Issuer nor any
successor corporation will, or will permit any Subsidiary (as hereinafter
defined) to, create, assume, incur or guarantee any indebtedness for borrowed
money secured by a pledge, lien or other encumbrance (except for Permitted
Liens, as hereinafter defined) on (i) the Voting Securities (as hereinafter
defined) of Morgan Stanley & Co. Incorporated, a Delaware corporation and a
wholly owned subsidiary of the Issuer, Morgan Stanley & Co. International
Limited, an English company and an indirect wholly owned subsidiary of the
Issuer, Greenwood Trust Company, a Delaware chartered bank and an indirect
wholly owned subsidiary of the Issuer, Dean Witter Reynolds Inc., a Delaware
corporation and a wholly owned subsidiary of the Issuer, or any Subsidiary
succeeding to any substantial part of the business now conducted by any of
such corporations (collectively, the "Principal Subsidiaries") or (ii) Voting
Securities of a Subsidiary that owns, directly or indirectly, Voting
Securities of any of the Principal Subsidiaries (other than directors'
qualifying shares) unless the Issuer shall cause the Securities to be secured
equally and ratably with (or, at the Issuer's option, prior to) any
indebtedness secured thereby. "Subsidiary" means any corporation, partnership
or other entity of which at the time of determination the Issuer owns or
controls directly or indirectly more than 50% of the shares of voting stock or
equivalent interest. "Permitted Liens" means liens for taxes or assessments or
governmental charges or levies not then due and delinquent or the validity of
which is being contested in good faith or which are less than $1,000,000 in
amount, liens created by or resulting from any litigation or legal proceeding
which is currently being contested in good faith by appropriate proceedings or
which involves claims of less than $1,000,000, deposits to secure (or in lieu
of) surety, stay, appeal or customs bonds and such other liens as the Board of
Directors of the Issuer determines do not materially detract from or interfere
with the present value or control of the Voting Securities subject thereto or
affected thereby. "Voting Securities" means stock of any class or classes
having general voting power under ordinary circumstances to elect a majority
of the board of directors, managers or trustees of the Subsidiary in question,
provided that, for the purposes hereof, stock which carries only the right to
vote conditionally on the happening of an event shall not be considered voting
stock whether or not such event shall have happened."
ARTICLE 2
Miscellaneous
Section 2.1. Further Assurances. The Issuer will, upon
request by the Trustee, execute and deliver such further instruments and do
such further acts as may reasonably be necessary or proper to carry out more
effectively the purposes of this Third Supplemental Senior Indenture.
Section 2.2. Other Terms of Indenture. Except insofar as
herein otherwise expressly provided, all the provisions, terms and conditions
of the Indenture are in all respects ratified and confirmed and shall remain
in full force and effect.
Section 2.3. Terms Defined. All terms defined elsewhere in
the Indenture shall have the same meanings when used herein.
Section 2.4. GOVERNING LAW. THE INTERNAL LAWS OF THE STATE
OF NEW YORK SHALL GOVERN THIS THIRD SUPPLEMENTAL SENIOR INDENTURE.
Section 2.5. Multiple Counterparts. This Third
Supplemental Senior Indenture may be executed in any number of
counterparts, each of which shall be deemed to be an original for all
purposes, but such counterparts shall together be deemed to constitute but
one and the same instrument.
Section 2.6. Responsibility of Trustee. The recitals
contained herein shall be taken as the statements of the Issuer, and the
Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representations as to the validity or sufficiency of this
Third Supplemental Senior Indenture.
Section 2.7. Agency Appointments. The Issuer hereby
confirms and agrees to all agency appointments made by Morgan Stanley under
or with respect to the Indenture or the Securities and hereby expressly
assumes the due and punctual performance and observance of all the
covenants and conditions to have been performed or observed by Morgan
Stanley contained in any agency agreement entered into by Morgan Stanley
under or with respect to the Indenture or the Securities.
* * * * * * * * * * * * * *
IN WITNESS WHEREOF, this Third Supplemental Senior Indenture
has been duly executed by the Issuer and the Trustee as of the day and year
first written above.
MORGAN STANLEY, DEAN
WITTER, DISCOVER & CO.
By: _____________________
Title:
Attest:
By: ___________________
Title:
THE CHASE MANHATTAN
BANK, as Trustee
By: ______________________
Title:
Attest:
By: ____________________
Title:
THIRD SUPPLEMENTAL SUBORDINATED INDENTURE
BETWEEN
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
AND
THE FIRST NATIONAL BANK OF CHICAGO, Trustee
--------------
Dated as of June 1, 1997
--------------
SUPPLEMENTAL TO SUBORDINATED INDENTURE
DATED AS OF APRIL 15, 1989 BETWEEN MORGAN
STANLEY GROUP INC. AND THE FIRST NATIONAL
BANK OF CHICAGO AS TRUSTEE, 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
THIRD SUPPLEMENTAL SUBORDINATED INDENTURE, dated as of June 1,
1997 between MORGAN STANLEY, DEAN WITTER, DISCOVER & CO., a Delaware
corporation (the "Successor Corporation" and hereinafter the "Issuer"), and
THE FIRST NATIONAL BANK OF CHICAGO, as trustee (the "Trustee"),
W I T N E S S E T H :
WHEREAS, Morgan Stanley Group Inc. ("Morgan Stanley") and the
Trustee are parties to that certain 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 (such Indenture as so supplemented, the "Indenture");
WHEREAS, as of May 31, 1997, Morgan Stanley merged with and
into Dean Witter, Discover & Co., which continued as the successor corporation
and changed its name to Morgan Stanley, Dean Witter, Discover & Co.;
WHEREAS, Section 9.1 of the Indenture requires the Successor
Corporation to expressly assume the obligations of Morgan Stanley under the
Indenture in a supplemental indenture satisfactory to the Trustee;
WHEREAS, pursuant to and in compliance with Section 9.2 of the
Indenture, the Successor Corporation shall succeed to and be substituted for
Morgan Stanley under the Indenture as "Issuer," with the same effect as if it
had been named therein;
WHEREAS, Section 8.1 of the Indenture provides that, without
the consent of the Holders of any Securities or Coupons, the Issuer, when
authorized by a resolution of its Board of Directors, and the Trustee may
enter into indentures supplemental to the Indenture for the purpose of,
among other things, evidencing the succession of another corporation to the
Issuer and the assumption by the successor corporation of the covenants,
agreements and obligations of the Issuer and making any provisions as the
Issuer may deem necessary or desirable, subject to the conditions set forth
therein;
WHEREAS, the Issuer desires to add to and modify certain
provisions of the Indenture to reflect a modification of the officers of the
Issuer who are authorized to execute certain documents in connection with the
issuance of Securities;
WHEREAS, the entry into this Third Supplemental Subordinated
Indenture by the parties hereto is in all respects authorized by the
provisions of the Indenture; and
WHEREAS, all things necessary to make this Third Supplemental
Subordinated Indenture a valid indenture and agreement according to its terms
have been done;
NOW, THEREFORE, for and in consideration of the premises, the
Issuer and the Trustee mutually covenant and agree for the equal and
proportionate benefit of the respective Holders from time to time of the
Securities and of the Coupons, if any, appertaining thereto as follows:
ARTICLE 1
Section 1.1. Assumption of Obligations by Successor
Corporation. Pursuant to Section 9.1 of the Indenture, the Successor
Corporation does hereby: (i) expressly assume the due and punctual payment of
the principal of and interest on all the Securities and Coupons, if any,
according to their tenor, and the due and punctual performance and observance
of all of the covenants and conditions of the Indenture to be performed or
observed by Morgan Stanley; (ii) agrees to succeed to and be substituted for
Morgan Stanley under the Indenture with the same effect as if it had been
named therein; and (iii) represent that it is not in default in the
performance of any such covenant and condition.
Section 1.2. Amendment of Section 1.1. Section 1.1 of the
Indenture is hereby amended by
(a) deleting the definition of "Issuer Order" and inserting in
lieu thereof the following: " 'Issuer Order' means a written statement,
request or order of the Issuer signed in its name by any one of the
following: the Chairman of the Board, the President, the Chief Financial
Officer, the Chief Strategic and Administrative Officer, the Chief Legal
Officer, the Treasurer, any Assistant Treasurer or any other person
authorized by the Board of Directors to execute any such written statement,
request or order."; and
(b) deleting in the definition of "Officer's Certificate" the
first sentence and inserting in lieu thereof the following: " 'Officer's
Certificate' means a certificate signed by any one of the following: the
Chairman of the Board, the President, the Chief Financial Officer, the
Chief Strategic and Administrative Officer, the Chief Legal Officer, the
Treasurer, any Assistant Treasurer or any other person authorized by the
Board of Directors to execute any such certificate and delivered to the
Trustee."
Section 1.3. Amendment of Section 2.5. Section 2.5 of the
Indenture shall be amended by deleting the first sentence of the first
paragraph and inserting in lieu thereof the following:
"The Securities and, if applicable, each Coupon appertaining
thereto shall be signed on behalf of the Issuer by any one of the
following: the Chairman of the Board, the President, the Chief
Financial Officer, the Chief Strategic and Administrative Officer,
the Chief Legal Officer, the Treasurer, any Assistant Treasurer or
any other person authorized by the Board of Directors to execute
Securities or, if applicable, Coupons, which Securities or Coupons
may, but need not, be attested."
ARTICLE 2
Miscellaneous
Section 2.1. Further Assurances. The Issuer will, upon
request by the Trustee, execute and deliver such further instruments and do
such further acts as may reasonably be necessary or proper to carry out more
effectively the purposes of this Third Supplemental Subordinated Indenture.
Section 2.2. Other Terms of Indenture. Except insofar as
herein otherwise expressly provided, all the provisions, terms and conditions
of the Indenture are in all respects ratified and confirmed and shall remain
in full force and effect.
Section 2.3. Terms Defined. All terms defined elsewhere in
the Indenture shall have the same meanings when used herein.
Section 2.4. GOVERNING LAW. THE INTERNAL LAWS OF THE STATE OF
NEW YORK SHALL GOVERN THIS THIRD SUPPLEMENTAL SUBORDINATED INDENTURE.
Section 2.5. Multiple Counterparts. This Third Supplemental
Subordinated Indenture may be executed in any number of counterparts, each of
which shall be deemed to be an original for all purposes, but such
counterparts shall together be deemed to constitute but one and the same
instrument.
Section 2.6. Responsibility of Trustee. The recitals
contained herein shall be taken as the statements of the Issuer, and the
Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representations as to the validity or sufficiency of this
Third Supplemental Subordinated Indenture.
Section 2.7. Agency Appointments. The Issuer hereby
confirms and agrees to all agency appointments made by Morgan Stanley under
or with respect to the Indenture or the Securities and hereby expressly
assumes the due and punctual performance and observance of all the
covenants and conditions to have been performed or observed by Morgan
Stanley contained in any agency agreement entered into by Morgan Stanley
under or with respect to the Indenture or the Securities.
* * * * * * * * * * * * * *
IN WITNESS WHEREOF, this Third Supplemental Subordinated
Indenture has been duly executed by the Issuer and the Trustee as of the
day and year first written above.
MORGAN STANLEY, DEAN
WITTER, DISCOVER & CO.
By: _____________________
Title:
Attest:
By: ___________________
Title:
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By: ______________________
Title:
Attest:
By: ____________________
Title:
[Letterhead of Brown & Wood LLP]
Exhibit 5
June 2, 1997
Morgan Stanley, Dean Witter, Discover & Co.
1585 Broadway
New York, NY 10036
Ladies and Gentlemen:
We have acted as counsel to Morgan Stanley, Dean Witter, Discover & Co.,
a Delaware corporation (the "Company"), in connection with the preparation and
filing of a registration statement on Form S-3 (as it may be amended or
supplemented from time to time, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to
$7,000,000,000 aggregate initial offering price of 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 of 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, par value
$0.01 per share ("Preferred Stock"), to be issued from time to time in one
or more series and (vi) an indeterminate number of depositary shares
representing fractional 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 (a) 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, between Morgan Stanley Group Inc.
("Morgan Stanley") and The Chase Manhattan Bank (formerly known as Chemical
Bank), as trustee (the "Senior Debt Trustee"), and a Third Supplemental
Senior Indenture dated as of June 1, 1997 (the "Third Supplemental Senior
Indenture") between the Company (as successor to Morgan Stanley) and the
Senior Debt Trustee (such indenture as so supplemented the "Senior
Indenture") or (b) 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, between
Morgan Stanley and The First National Bank of Chicago, as trustee (the
"Subordinated Debt Trustee"), and a Third Supplemental Subordinated
Indenture dated as of June 1, 1997 (the "Third Supplemental Subordinated
Indenture" and, together with the Third Supplemental Senior Indenture, the
"Third Supplemental Indentures") between the Company (as successor to
Morgan Stanley) and the Subordinated Debt Trustee (such indenture as so
supplemented the "Subordinated Indenture" and, together with the Senior
Indenture, the "Indentures"). The Debt Warrants, if any, will be issued
under a debt warrant agreement to be entered into between the Company and a
debt warrant agent (the "Debt Warrant Agreement"). 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 interests in shares of Preferred Stock will be
issued under a preferred stock deposit agreement to be entered into among
the Company, The Bank of New York, as depositary, and the holders from time
to time of depositary receipts issued thereunder (the "Deposit Agreement").
The forms of the Indentures, the Debt Warrant Agreement, the Deposit
Agreement and the Securities are filed or incorporated by reference as
exhibits to the Registration Statement.
In rendering this opinion, we have examined the originals or copies,
certified to our satisfaction, of such corporate records and other documents
and certificates as we deemed necessary. In such examination, we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, the conformity to the original documents of all documents
submitted to us as copies and the authenticity of the originals of all such
latter documents. In addition, in rendering this opinion, we have assumed the
authorization, execution and delivery of the Indentures, the Debt Warrant
Agreement and the Deposit Agreement by all parties (including Morgan Stanley)
other than the Company. As to any facts material to this opinion, we have,
when relevant facts were not independently established by us, relied upon the
aforesaid records, certificates and documents.
Based upon the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that:
(i) the Third Supplemental 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 and 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
(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.
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.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm appearing under the
caption "Legal Matters" in the related Prospectus. In giving such consent, we
do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act.
Very truly yours,
/s/ Brown & Wood LLP
Exhibit 12a
<TABLE>
<CAPTION>
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (1)
First Fiscal Quarter Fiscal Year
-------------------- -----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
------ ------- ------- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings
Income before income taxes $ 964 $ 840 $ 3,117 $ 2,292 $1,962 $2,175 $ 1,546
Interest expense 2,697 2,250 8,934 8,190 6,697 5,620 5,346
Interest factor in rent expense 24 24 92 95 90 85 80
Gain on sale of subsidiary stock - - - - - - (32)
------ ------- ------- ------- ------ ------ -------
Total earnings $3,685 $ 3,114 $12,143 $10,577 $8,749 $7,880 $ 6,940
====== ======= ======= ======= ====== ====== =======
Ratio of earnings to fixed charges:
Fixed charges
Interest expense 2,697 2,250 8,934 8,190 6,697 5,620 5,346
Interest factor in rent expense 24 24 92 95 90 85 80
------ ------- ------- ------- ------ ------ -------
Total fixed charges $2,721 $ 2,274 $ 9,026 $ 8,285 $6,787 $5,705 $ 5,426
====== ======= ======= ======= ====== ====== =======
Ratio of earnings to fixed charges 1.4 1.4 1.3 1.3 1.3 1.4 1.3
====== ======= ======= ======= ====== ====== =======
</TABLE>
- ----------
(1) For purposes 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). Additionally, "earnings" in
1992 excludes a nonrecurring gain of $32.1 million from the initial
public offering of 25.7% of SPS Transaction Services, Inc. For
purposes of calculating both ratios, fixed charges include interest
expense, capitalized interest and that portion of rentals
representative of an interest factor.
<TABLE>
<CAPTION>
Exhibit 12-b
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS (1)
First Fiscal Quarter Fiscal Year
------------------- -----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
------ ------- ------- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings
Income before income taxes $ 964 $ 840 $ 3,117 $ 2,292 $1,962 $2,175 1,546
Interest expense 2,697 2,250 8,934 8,190 6,697 5,620 5,346
Interest factor in rent expense 24 24 92 95 90 85 80
Gain on sale of subsidiary stock - - - - - - (32)
------ ------- ------- ------- ------ ------ -------
Total earnings $3,685 $ 3,114 $12,143 $10,577 $8,749 $7,880 $ 6,940
====== ======= ======= ======= ====== ====== =======
Ratio of earnings to fixed charges and
preferred stock dividends:
Fixed charges
Interest expense 2,697 2,250 8,934 8,190 6,697 5,620 5,346
Interest factor in rent expense 24 24 92 95 90 85 80
Preferred stock dividends 31 26 101 95 94 83 81
------ ------- ------- ------- ------ ------ -------
Total fixed charges $2,752 $ 2,300 $ 9,127 $ 8,380 $6,881 $5,788 $ 5,507
====== ======= ======= ======= ====== ====== =======
Ratio of earnings to fixed charges
and preferred stock dividends 1.3 1.4 1.3 1.3 1.3 1.4 1.3
====== ======= ======= ======= ====== ====== =======
</TABLE>
- ----------
(1) For purposes 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). Additionally, "earnings" in
1992 excludes a nonrecurring gain of $32.1 million from the initial
public offering of 25.7% of SPS Transaction Services, Inc. For
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.
Exhibit 15-a
To the Directors and Shareholders of Morgan Stanley,
Dean Witter, Discover & Co.:
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
consolidated financial information of Dean Witter, Discover & Co. (renamed
"Morgan Stanley, Dean Witter, Discover & Co." on May 31, 1997) and
subsidiaries as of March 31, 1997 and for the three month periods ended March
31, 1997 and 1996, as indicated in our report dated April 30, 1997; because
we did not perform an audit, we expressed no opinion on that information. We
are aware that our report, which is included in your Quarterly Report on Form
10-Q for the quarter ended March 31, 1997, is incorporated by reference in
this Amendment No. 1 to Registration Statement No. 333-27919.
We have also made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the supplemental
unaudited interim consolidated financial information of Morgan Stanley, Dean
Witter, Discover & Co. and subsidiaries as of first fiscal quarter end 1997
and for the first fiscal quarter 1997 and 1996, as indicated in our report
dated May 31, 1997 (which makes reference to the review of Morgan Stanley
Group Inc. by other auditors); because we did not perform an audit, we
expressed no opinion on that information. We are aware that our report, which
is included in your Current Report on Form 8-K filed on June 2, 1997, is
incorporated by reference in this Amendment No. 1 to Registration Statement
No. 333-27919.
We are also aware that the aforementioned reports, pursuant to Rule 436(c)
under the Securities Act of 1933, are not considered a part of the
Registration Statement prepared or certified by an accountant or a report
prepared or certified by an accountant within the meaning of Sections 7 and 11
of that Act.
DELOITTE & TOUCHE LLP
New York, New York
June 2, 1997
The Stockholders and
Board of Directors of
Morgan Stanley Group Inc.
We are aware of the inclusion in Amendment No. 1 to the Registration Statement
on Form S-3 (No. 333-27919) for the registration of $7,000,000,000 of debt
securities, warrants, preferred stock, purchase contracts and units and in the
related Prospectus of Morgan Stanley, Dean Witter, Discover & Co. for
$7,000,000,000 of the same securities of our report dated March 27, 1997
included in the Current Report on Form 8-K of Morgan Stanley, Dean Witter,
Discover & Co. dated May 31, 1997, relating to the unaudited condensed
consolidated interim financial statements of Morgan Stanley Group Inc. which
are included in its Form 10-Q for the quarter ended February 28, 1997.
Pursuant to Rule 436(c) of the Securities Act of 1933 our report is not a part
of the registration statement prepared or certified by accountants within the
meaning of Section 7 or 11 of the Securities Act of 1933.
Ernst & Young LLP
New York, New York
June 2, 1997
Exhibit 23-a
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-27919 of Morgan Stanley, Dean Witter, Discover
& Co. (the "Registrant") on Form S-3 of our reports dated February 21, 1997,
appearing in and incorporated by reference in the Annual Report on Form 10-K
of the Registrant for the year ended December 31, 1996; and our report dated
May 31, 1997, appearing in the Current Report on Form 8-K of the Registrant
filed on June 2, 1997 (which makes reference to the audit of Morgan Stanley
Group Inc. by other auditors); and to the reference to us under the
heading "Experts" in the Prospectus, which is a part of this Registration
Statement.
DELOITTE & TOUCHE LLP
New York, New York
June 2, 1997
EXHIBIT 23-b
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement on Form S-3 (No. 333-27919) for
the registration of $7,000,000,000 of debt securities, warrants, preferred
stock, purchase contracts and units and in the related Prospectus of Morgan
Stanley, Dean Witter, Discover & Co. for $7,000,000,000 of the same securities
and to the incorporation by reference therein of our reports with respect to
the consolidated financial statements and financial statement schedule of
Morgan Stanley Group Inc. dated January 7, 1997 included and incorporated by
reference in its Annual Report on Form 10-K for the fiscal year ended November
30, 1996 and dated May 27, 1997 included in the Current Report on Form 8-K of
Morgan Stanley, Dean Witter, Discover & Co. dated May 31, 1997, filed with the
Securities and Exchange Commission.
Ernst & Young LLP
New York, New York
June 2, 1997
