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As filed with the Securities and Exchange Commission on June 2, 1997
Registration No. 333-27881
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
(Exact name of registrant as specified in its charter)
MORGAN STANLEY FINANCE PLC
(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)
ENGLAND Not Applicable
(State or other jurisdiction of (I.R.S. Employer
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)
25 Cabot Square
Canary Wharf
London, E14 4QA England
(44-171) 425-8000
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
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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
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Approximate date of commencement of proposed sale to the public: As soon
as practicable after this registration statement becomes effective.
If 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 check the following box.[X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.[ ]
The Registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Securities and Exchange Commission
(the "Commission"), acting pursuant to Section 8(a), may determine.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
PROSPECTUS (Subject to Completion, Issued June 2, 1997)
Morgan Stanley, Dean Witter, Discover & Co.
Morgan Stanley Finance plc
DEBT SECURITIES
GUARANTEES OF DEBT SECURITIES
PREFERRED STOCK
PREFERRED STOCK PURCHASE CONTRACTS
CAPITAL UNITS
Morgan Stanley Group Inc. ("Morgan Stanley"), a predecessor of
Morgan Stanley, Dean Witter, Discover & Co. (the "Company"), offered and
issued from time to time contracts that require the holders thereof to
purchase preferred stock of Morgan Stanley ("Purchase Contracts") on terms
determined at the time of sale. Purchase Contracts issued by Morgan Stanley
were offered together with debt securities (the "Debt Securities") of Morgan
Stanley Finance plc ("MS plc"), an indirect wholly owned subsidiary of the
Company (and formerly of Morgan Stanley), and full and unconditional
guarantees of Morgan Stanley (the "Guarantees") in the form of units ("Capital
Units").
Effective May 31, 1997, Morgan Stanley merged with and into
Dean Witter, Discover & Co. (the "Merger"), which, pursuant to the Merger, was
renamed Morgan Stanley, Dean Witter, Discover & Co. The Company has assumed
all of the obligations of Morgan Stanley under the Guarantees and Purchase
Contracts and, upon any acceleration of the Purchase Contracts, will issue one
share of the preferred stock, par value $0.01 per share, of the Company (the
"Preferred Stock"), having terms otherwise identical to those of the
underlying Morgan Stanley preferred stock, for each share of Morgan Stanley
preferred stock required to be delivered pursuant to the terms of the Purchase
Contracts. The Debt Securities, Guarantees, Preferred Stock, Purchase
Contracts and Capital Units are hereinafter referred to as the "Securities."
The accompanying Prospectus Supplement prepared by Morgan
Stanley and MS plc in connection with the initial offering of the Capital
Units (the "Prospectus Supplement") sets forth the specific terms of the
Capital Units, including the specific terms of the Debt Securities, the
Purchase Contracts and the Preferred Stock issuable pursuant to such Purchase
Contracts, listing, if any, on a securities exchange, whether such Capital
Units were issued as Definitive Capital Units, Book-Entry Capital Units or
both and the name of the depositary with respect to such Capital Units.
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.
Morgan Stanley & Co. Incorporated ("MS & Co."), Morgan Stanley & Co.
International Limited ("MSIL"), Dean Witter Reynolds Inc. ("DWR"), Dean Witter
International Ltd. ("DWIL") and other affiliates of the Company may offer and
sell previously issued Securities in the course of their businesses as
broker-dealers. MS & Co., MSIL, DWR, DWIL and such other affiliates may act
as principal or agent in such transactions. This Prospectus and the
accompanying Prospectus Supplements 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
No dealer, salesman or any other person has been authorized to
give any information or to make any representations other than those contained
or incorporated by reference in this Prospectus or in any Prospectus
Supplement and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company, MS plc or any
underwriter, dealer or agent. Neither this Prospectus nor any Prospectus
Supplement constitutes an offer to sell or a solicitation of an offer to buy
Securities by anyone in any jurisdiction in which such offer or solicitation
is not authorized or in which the person making such offer or solicitation is
not qualified to do so or to any person to whom it is unlawful to make such
offer or solicitation.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). MS plc is not (and will not become
as a result of the effectiveness of the Registration Statement of which this
Prospectus is a part) subject to the informational requirements of the
Exchange Act. Prior to the Merger, Morgan Stanley was subject to the
informational 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 90012.
This Prospectus constitutes a part of a Registration Statement
filed by the Company and MS plc with the Commission under the Securities Act
of 1933, as amended (the "Securities Act"). This Prospectus omits certain of
the information contained in the Registration Statement in accordance with the
rules and regulations of the Commission. Reference is hereby made to the
Registration Statement and related exhibits for further information with
respect to the Company, MS plc and the Securities. Statements contained herein
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
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 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 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).
No action has been or will be taken in any jurisdiction by the
Company, MS plc or any underwriter, dealer or agent that would permit a public
offering of the Securities or possession or distribution of this Prospectus in
any jurisdiction where action for that purpose is required, other than (i) in
the United States and (ii) with respect to Debt Securities of MS plc, in the
United Kingdom. Persons into whose possession this Prospectus comes are
required by the Company, MS plc and the underwriters, dealers and agents to
inform themselves about and to observe any restrictions as to the offering of
the Securities and the distribution of this Prospectus.
In this Prospectus, references to "dollars" and "$" are to
United States dollars, and the terms "United States" and "U.S." mean the
United States of America, its states, its territories, its possessions and all
areas subject to its jurisdiction.
MORGAN STANLEY, DEAN WITTER DISCOVER & CO.
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 & Co. ("Dean
Witter Discover") and Morgan Stanley Group Inc. ("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([Registered]) 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.
MORGAN STANLEY FINANCE PLC
Morgan Stanley Finance plc was incorporated in 1993 under the
Companies Act 1985 of Great Britain solely for the purpose of issuing
securities to raise capital for the purposes described below under "Use of
Proceeds". Morgan Stanley International Incorporated, a Delaware corporation
that is a wholly owned subsidiary of the Company, indirectly owns all of the
ordinary shares of MS plc. MS plc has no independent operations. MS plc's
principal executive offices are at 25 Cabot Square, Canary Wharf, London E14
4QA, England, and its telephone number is (44-171) 425-8000.
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 OF MS PLC
The Debt Securities constitute subordinated debt of MS plc and
were issued under a Subordinated Indenture dated as of November 15, 1993,
among MS plc, Morgan Stanley, as guarantor, and The Chase Manhattan Bank
(formerly known as Chemical Bank), as Trustee. Following the Merger, the
Subordinated Indenture was supplemented by a First Supplemental Subordinated
Indenture dated as of June 1, 1997 among MS plc, the Company, as guarantor,
and The Chase Manhattan Bank, as Trustee. The Indenture, as so supplemented,
is hereinafter referred to as the "Indenture". The Chase Manhattan Bank, in
its capacity as trustee under the Indenture, is hereinafter referred to as the
"Trustee". As used in this section and under "Description of Capital Stock of
the Company" and "Description of the Capital Units" below, the term "Company"
means Morgan Stanley, Dean Witter, Discover & Co.
The following summaries of certain provisions of the Indenture
and the Debt Securities do not purport to be complete and such summaries are
subject to the detailed provisions of the 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 Indenture. Wherever particular sections or defined terms of the
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 Debt Securities and any
Guarantees offered by this Prospectus and the accompanying Prospectus
Supplements are referred to herein as the "Offered Debt Securities".
General
The Indenture does not limit the amount of additional
indebtedness that the Company or any of its subsidiaries (including MS plc)
may incur. The Debt Securities are unsecured, subordinated obligations of MS
plc and are fully and unconditionally guaranteed on a subordinated basis by
the Company. Most of the assets reflected on the Company's consolidated
balance sheet are owned by its subsidiaries. Therefore, the Company's rights
and the rights of its creditors, including holders of Debt Securities
guaranteed by the Company, to participate in the assets of any subsidiary upon
such subsidiary's liquidation or recapitalization will be subject to the prior
claims of such subsidiary's creditors, except to the extent that the Company
may itself be a creditor with recognized claims against the subsidiary. In
addition, dividends, loans and advances from certain 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. MS plc has no subsidiaries.
The Indenture provides that Debt Securities may be issued from
time to time in one or more series and may be denominated and payable in
foreign currencies or units based on or relating to foreign currencies,
including ECUs. Special United States federal income tax considerations
applicable to any Debt Securities so denominated are described in the relevant
Prospectus Supplement.
Reference is made to the applicable Prospectus Supplement for
the following terms of and information relating to the Offered Debt Securities
(to the extent such terms are applicable to such Offered Debt Securities): (i)
the specific designation, aggregate principal amount, purchase price and
denomination thereof; (ii) the currency or units based on or relating to
currencies in which such Debt Securities are denominated and/or in which
principal (and premium, if any) and/or interest will or may be payable; (iii)
any date of maturity; (iv) the interest rate or rates (or the method by which
such rate or rates is to be determined), if any; (v) the dates on which any
such interest is 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 were issued in
registered form or bearer form ("Bearer Securities") or both and, if Bearer
Securities were issued, any restrictions applicable to the exchange of one
form for another and to the offer, sale and delivery of Bearer Securities;
(ix) the terms, if any, on which such Debt Securities may be converted into or
exchanged for stock or other securities of MS plc or other entities (including
the Company), any specific terms relating to the adjustment thereof and the
period during which such Debt Securities may be so converted or exchanged; (x)
any applicable United States federal or United Kingdom income tax
consequences, including whether and under what circumstances MS plc will pay
additional amounts on Offered Debt Securities held by a person who is a U.S.
person (as defined in the relevant Prospectus Supplement) in respect of any
tax, assessment or governmental charge withheld or deducted and, if so,
whether MS plc will have the option to redeem such Debt Securities rather than
pay such additional amounts; and (xi) any other specific terms of the Offered
Debt Securities, including any additional events of default or covenants
provided for with respect to such Debt Securities, and any terms which may be
required by or advisable under applicable laws or regulations.
Debt Securities may be presented for exchange and registered
Debt Securities may be presented for transfer in the manner, at the places and
subject to the restrictions set forth in the Debt Securities and the relevant
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 Indenture. Debt Securities in
bearer form and the coupons, if any, appertaining thereto are transferable by
delivery.
Debt Securities bear interest at a fixed rate (a "Fixed Rate
Security") or a floating rate (a "Floating Rate Security"), all as more fully
described in the relevant Prospectus Supplement.
Global Debt Securities
The Debt Securities of each series were issued in the form of
one or more fully registered or bearer global Securities (a "Global Debt
Security"). The specific terms of each Global Debt Security and the depositary
arrangements with respect to the portion of a series of Debt Securities
represented by such Global Debt Security are described in the Prospectus
Supplement relating to such series of Debt Securities.
Subordinated Debt
The Debt Securities and Coupons that constitute part of the
subordinated debt of MS plc and the Guarantees by the Company of such Debt
Securities and Coupons were issued under the Indenture and are subordinate and
junior in right of payment, to the extent and in the manner set forth in the
Indenture, to all "Senior Indebtedness" of MS plc or the Company, as the case
may be. The Indenture defines "MS plc Senior Indebtedness" as obligations
(other than nonrecourse obligations, the subordinated Debt Securities or any
other obligations specifically designated as being subordinate in right of
payment to Senior Indebtedness of MS plc) of, or guaranteed or assumed by, MS
plc for borrowed money or evidenced by bonds, debentures, notes or other
similar instruments, and amendments, renewals, extensions, modifications and
refundings of any such indebtedness or obligations. The Indenture defines
"Company Senior Indebtedness" as obligations (other than nonrecourse
obligations, Guarantees of subordinated Debt Securities of MS plc or any other
obligations specifically designated as being subordinate in right of payment
to Senior Indebtedness of the Company) of, or guaranteed or assumed by, the
Company for borrowed money or evidenced by bonds, debentures, notes or other
similar instruments, and amendments, renewals, extensions, modifications and
refundings of any such indebtedness or obligations. (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 MS plc or the Company or a substantial part of their respective
properties, or of any proceedings for liquidation, dissolution or other
winding up of MS plc or the Company, whether or not involving insolvency or
bankruptcy, or (b) that (i) a default shall have occurred with respect to the
payment of principal of (and premium, if any) or any interest on or other
monetary amounts due and payable on any MS plc Senior Indebtedness or Company
Senior Indebtedness, as the case may be, or (ii) there shall have occurred an
event of default (other than a default in the payment of principal, premium,
if any, or interest, or other monetary amounts due and payable) with respect
to any MS plc Senior Indebtedness or Company Senior Indebtedness, as the case
may be, as defined therein or in the instrument under which the same is
outstanding, permitting the holder or holders thereof to accelerate the
maturity thereof (with notice or lapse of time, or both), 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
Indenture and such declaration shall not have been rescinded and annulled as
provided therein, then the holders of all MS plc Senior Indebtedness or
Company Senior Indebtedness, as the case may be, shall first be entitled to
receive payment of the full amount unpaid thereon, or provision shall be made
for such payment in money or money's worth, before the holders of any of the
subordinated Debt Securities or Coupons are entitled to receive a payment on
account of the principal of (and premium, if any) or any interest on the
indebtedness evidenced by such subordinated Debt Securities or such Coupons.
(Indenture, Sections 13.1 and 15.1) The information incorporated herein by
reference will set forth the approximate amount of MS plc Senior Indebtedness
and Company Senior Indebtedness outstanding as of the end of the most recent
fiscal quarter.
Guarantee of Debt Securities by the Company
Debt Securities issued by MS plc are fully and unconditionally
guaranteed pursuant to a Guarantee of the Company as to the payment of
principal of, premium, if any, interest and any Additional Amounts (as defined
below) on such Debt Securities when and as the same shall become due and
payable, whether at maturity or otherwise. Under the terms of the Guarantee,
holders of such Debt Securities will not be required to exercise their
remedies against MS plc prior to proceeding directly against the Company. The
Company will not be entitled to offset its obligations under the Guarantee
that forms part of a Capital Unit against the holders' obligations under the
related Purchase Contracts or the provisions of the Capital Unit Agreement
relating thereto and the failure by the Company to satisfy its obligations
under the Guarantee will not result in the termination of or otherwise affect
the obligations of the holders under such Purchase Contracts or the Capital
Unit Agreement. Guarantees of Debt Securities and Coupons are subordinated to
the Company Senior Indebtedness.
Payment of Additional Amounts with Respect to Debt Securities
All amounts of principal of, premium, if any, and interest on
any Debt Securities will be paid by MS plc without deduction or withholding
for any withholding taxes, levies, imposts and charges whatsoever imposed by
or for the account of the United Kingdom or any political subdivision or
taxing authority thereof or therein, or if deduction or withholding of any
such taxes, levies, imposts or charges shall at any time be required by the
United Kingdom or any such subdivision or authority, MS plc will pay such
additional amounts ("Additional Amounts") as may be necessary in order that
the net amounts paid to the holders of such Debt Securities (or, in the case
of Book-Entry Capital Units, holders of beneficial interests in the Debt
Securities included in such Capital Units) or the Trustee, after such deduction
or withholding, shall equal the respective amounts of principal, premium, if
any, and interest to which the holders of such Debt Securities (or the holders
of such beneficial interests) or the Trustee are entitled; provided that the
foregoing will not apply to any such tax, levy, impost or charge which would
not be payable or due but for the fact that (i) the holder of the Debt
Security (or, in the case of a Book-Entry Capital Unit, a holder of a
beneficial interest in the Debt Security included in such Capital Unit) is a
citizen, national or resident of, or engaging in business or maintaining a
permanent establishment or being physically present in, the United Kingdom or
such political subdivision or otherwise having some connection with the United
Kingdom other than the holding or ownership of a Debt Security, or the
collection of principal of and interest on, or the enforcement of, a Debt
Security or (ii) the Debt Security is presented for payment more than 30 days
after the date payment became due or was provided for, whichever is later,
except to the extent that the holder would have been entitled to such
additional amount on presenting the same for payment at the close of such
30-day period. The relevant Prospectus Supplement describes any additional
circumstances under which Additional Amounts will not be paid with respect to
Debt Securities.
Service of Process, Enforcement of Liabilities
MS plc is incorporated under the laws of England and Wales.
Certain of the directors of MS plc are non-residents of the United States. As
a result, it may not be possible for investors to effect service of process
within the United States upon such persons or to enforce against them
judgments of U.S. courts predicated upon the civil liability provisions of the
federal securities laws of the United States. MS plc has been advised by its
English solicitors, Linklaters & Paines, that there is doubt as to the
enforceability in the United Kingdom, in original actions or in actions to
enforce judgments of U.S. courts, of liabilities predicated solely upon the
federal securities laws of the United States. MS plc has expressly submitted
to the jurisdiction of New York State and the federal courts of the United
States sitting in the Borough of Manhattan, in The City of New York for the
purpose of any suit, action or proceeding arising out of the Debt Securities
or the Indenture and has appointed the Company as an agent in the Borough of
Manhattan, in The City of New York to accept service of process in any such
action.
Certain Covenants
Merger, Consolidation, Sale, Lease or Conveyance. The Indenture
provides that neither MS plc nor the Company will merge or consolidate with
any other person and neither MS plc nor the Company will sell, lease or convey
all or substantially all its assets to any person, unless MS plc or the
Company, as the case may be, shall be the continuing corporation, or the
successor corporation or person that acquires all or substantially all the
assets of MS plc or the Company, as the case may be, shall be (i) with respect
to MS plc, a company incorporated under the laws of England and Wales or (ii)
with respect to the Company, a corporation organized under the laws of the
United States or a state thereof or the District of Columbia, and shall
expressly assume all obligations of MS plc or the Company, as the case may be,
under the Indenture and the Debt Securities or Guarantees issued thereunder,
as the case may be, and immediately after such merger, consolidation, sale,
lease or conveyance, the Company, MS plc, such person or such successor
corporation shall not be in default in the performance of the covenants and
conditions of the Indenture to be performed or observed by MS plc or the
Company, as the case may be. (Indenture, Section 9.1) This covenant would not
apply to a recapitalization transaction, a change of control of the Company or
MS plc or a highly leveraged transaction unless such transactions or change of
control were structured to include a merger or consolidation or sale, lease or
conveyance of all or substantially all of the assets of the Company or MS plc.
There are no covenants or other provisions in the Indenture
providing for a put or increased interest or otherwise that would afford
holders of Debt Securities additional protection in the event of a
recapitalization transaction, a change of control of MS plc or the Company or
a highly leveraged transaction.
Events of Default
An Event of Default is defined under the Indenture with respect
to Debt Securities of any series issued under such Indenture as being: (a)
default in payment of any principal of the Debt Securities of such series,
either at maturity (or upon any redemption), by declaration or otherwise; (b)
default for 30 days in payment of any interest on any Debt Securities of such
series; (c) default for 60 days after written notice in the observance or
performance of any other covenant or agreement of the Company or MS plc in the
Debt Securities of such series or the Indenture other than a covenant included
in the Indenture solely for the benefit of a series of Debt Securities other
than such series; (d) certain events of bankruptcy, insolvency, reorganization
or administration involving MS plc; (e) failure by MS plc to make any payment
at maturity, including any applicable grace period, in respect of
indebtedness, which term as used in the Indenture means obligations (other
than nonrecourse obligations or the Debt Securities of such series issued
under the Indenture) of, or guaranteed or assumed by, MS plc for borrowed
money or evidenced by bonds, debentures, notes or other similar instruments
("Indebtedness") in an amount in excess of $10,000,000 and continuance of such
failure for a period of 30 days after written notice thereof to MS plc and the
Company by the Trustee, or to MS plc, the Company and the Trustee by the
holders of not less than 25% in principal amount of such outstanding Debt
Securities (treated as one class) issued under the Indenture; or (f) a default
with respect to any Indebtedness, which default results in the acceleration of
Indebtedness in an amount in excess of $10,000,000 without such Indebtedness
having been discharged or such acceleration having been cured, waived,
rescinded or annulled for a period of 30 days after written notice thereof to
MS plc and the Company by the Trustee, or to MS plc, the Company and the
Trustee by the holders of not less than 25% in principal amount of such
outstanding Debt Securities (treated as one class) issued under the 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. (Indenture, Section 5.1)
The 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 the Indenture or due to the default in
the performance or breach of any other covenant or warranty of MS plc or the
Company applicable to the Debt Securities of such series but not applicable to
all outstanding Debt Securities issued under such Indenture shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of such Debt Securities of each affected series
(treated as one class) issued under the Indenture and then outstanding, by 45
days' written notice to MS plc or the Company after the occurrence of such
Event of Default, may then declare the principal of all Debt Securities of each
such affected series and interest accrued thereon to be due and payable
immediately; and (b) if an Event of Default due to a default in the
performance of any other of the covenants or agreements in the Indenture
applicable to all outstanding Debt Securities issued under the Indenture and
then outstanding or due to certain events of bankruptcy, insolvency,
reorganization or administration of MS plc shall have occurred and be
continuing, either the Trustee or the holders of not less than 25% in
principal amount of all Debt Securities issued under the Indenture and then
outstanding (treated as one class), by 45 days' written notice to MS plc or
the Company after the occurrence of such Event of Default, may declare the
principal of all such Debt Securities and interest accrued thereon to be due
and payable immediately, but upon certain conditions such declarations may be
annulled and past defaults may be waived (except a continuing default in
payment of principal of (or premium, if any) or interest on such Debt
Securities) by the holders of a majority in principal amount of the Debt
Securities of all such affected series then outstanding. (Indenture, Sections
5.1 and 5.10)
The 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.
(Indenture, Section 6.2) Subject to such provisions in the 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. (Indenture, Section
5.9)
The Indenture provides that no holder of Debt Securities issued
under the Indenture may institute any action against MS plc or the Company
under such Indenture (except actions for payment of overdue principal or
interest) unless such holder previously shall have given to the Trustee
written notice of default and continuance thereof and unless the holders of
not less than 25% in principal amount of the Debt Securities of each affected
series (treated as one class) issued under such Indenture and then outstanding
shall have requested the Trustee, in writing, 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. (Indenture, Sections 5.6 and 5.9)
The Indenture contains a covenant that MS plc and the Company
will file annually with the Trustee a certificate of no default or a
certificate specifying any default that exists. (Indenture, Section 3.6)
Discharge, Defeasance and Covenant Defeasance
MS plc and the Company, as guarantor, can discharge or defease
their obligations under the Indenture as set forth below. (Indenture, Section
10.1)
MS plc and the Company may discharge certain obligations to
holders of any series of Debt Securities issued under the Indenture which have
not already been delivered to the Trustee for cancellation and which have
either become due and payable or are by their terms due and payable within one
year (or scheduled for redemption within one year) by irrevocably depositing
with the Trustee cash or, in the case of Debt Securities payable only in U.S.
dollars, U.S. Government Obligations (as defined in such Indenture) as trust
funds in an amount certified to be sufficient to pay at maturity (or upon
redemption) the principal of, premium, if any, and interest on such Debt
Securities.
MS plc and the Company may also discharge any and all of their
obligations to holders of any series of Debt Securities issued under the
Indenture at any time ("defeasance"), but may not thereby avoid any duty to
register the transfer or exchange of such series of Debt Securities, to
replace any temporary, mutilated, 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. MS plc and the Company may instead be released
with respect to any outstanding series of Debt Securities issued under the
Indenture from the obligations imposed by Section 9.1 (which contains the
covenant described above limiting consolidations, mergers, asset sales and
leases), and omit to comply with such Section without creating an Event of
Default ("covenant defeasance"). Defeasance or covenant defeasance may be
effected only if, among other things: (i) MS plc or the Company irrevocably
deposits with the Trustee cash or, in the case of Debt Securities payable only
in U.S. dollars, U.S. Government Obligations, as trust funds in an amount
certified to be sufficient to pay at maturity (or upon redemption) the
principal of, premium, if any, and interest on all outstanding Debt Securities
of such series issued under the Indenture; (ii) MS plc or the Company delivers
to the 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 the Indenture, since such a result would not occur under current
tax law); (iii) no event or condition shall exist that, pursuant to certain
provisions described under "Subordinated Debt" above, would prevent MS plc
from making payments of principal of (and premium, if any) and interest on the
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
(iv) MS plc or the Company, as applicable, delivers to the Trustee an opinion
of counsel to the effect that (a) the trust funds will not be subject to any
rights of holders of Senior Indebtedness and (b) after the 91st day following
the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, except that if a court were to rule under any
such law in any case or proceeding that the trust funds remained property of
MS plc or the Company, as the case may be, then the Trustee and the holders of
the Debt Securities would be entitled to certain rights as secured creditors
in such trust funds.
Modification of the Indenture
The Indenture provides that MS plc, the Company and the
Trustee may enter into supplemental indenture without the consent of the
holders of Debt Securities to: (a) secure any Debt Securities, (b) evidence
the assumption by a successor corporation of the obligations of MS plc or the
Company, (c) add covenants for the protection of the holders of Debt
Securities, (d) cure any ambiguity or correct any inconsistency in such
Indenture, (e) establish the forms or terms of Debt Securities of any series
and any coupons thereto and (f) evidence the acceptance of appointment by a
successor trustee. (Indenture, Section 8.1)
The Indenture also contains provisions permitting MS plc, the
Company and the Trustee, with the consent of the holders of not less than a
majority in principal amount of Debt Securities of all series issued under
such Indenture then outstanding and affected (voting as one class), to add any
provisions to, or change in any manner or eliminate any of the provisions of,
such Indenture or modify in any manner the rights of the holders of the Debt
Securities of each series so affected; provided that MS plc, the Company and
the Trustee may not, without the consent of the holder of each outstanding
Debt Security affected thereby, (a) extend the stated maturity of the
principal of any Debt Security, or reduce the principal amount thereof or
reduce the rate or extend the time of payment of interest thereon, or reduce
any amount payable on redemption thereof or change the currency in which the
principal thereof (including any amount in respect of original issue
discount), premium, if any, or interest thereon is payable or reduce the
amount of any original issue discount security payable upon acceleration or
provable in bankruptcy, or alter the provisions of any Guarantee of the Debt
Securities in any manner adverse to the holders, or alter certain provisions
of the 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 the Indenture, the consent of the holders of which is required for
any such modification. (Indenture, Section 8.2)
The Indenture may not be amended to alter the subordination of
any outstanding subordinated Debt Securities or of any Guarantee thereof
without the written consent of each holder of MS plc Senior Indebtedness or
Company Senior Indebtedness, as the case may be, then outstanding that would
be adversely affected thereby. (Indenture, Section 8.6)
Concerning the Trustee
The Chase Manhattan Bank is one of a number of banks with which
the Company and its subsidiaries maintain ordinary banking relationships and
with which the Company and its subsidiaries maintain credit facilities.
DESCRIPTION OF CAPITAL STOCK OF THE COMPANY
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 required to be
purchased pursuant to the Purchase Contracts 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. 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 are collectively referred to
herein as "Offered Preferred Stock". 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 series of
Offered 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 of the Offered Preferred Stock. The shares of Offered Preferred
Stock, if issued, will be fully paid and nonassessable, are not convertible
into Common Stock of the Company and have no preemptive rights.
The following description of the terms of the Offered Preferred
Stock sets forth certain general terms and provisions of the Offered Preferred
Stock to which a Prospectus Supplement relates. If so indicated in the
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below. The number of shares and all of the terms and conditions of
the relative rights, preferences and limitations of the respective series of
Offered Preferred Stock as established by the Board of Directors or any
committee thereof are set forth in the Prospectus Supplement accompanying this
Prospectus relating to the particular series of Offered Preferred Stock. 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 were offered
and, if so, the fraction of a share of such series of Offered Preferred Stock
represented by each depositary share and (ix) the other rights and privileges
and any qualifications, limitations or restrictions of such rights or
privileges of such series.
As described under "Depositary Shares" below, the Company has
elected to offer depositary shares (the "Depositary Shares") evidenced by
depositary receipts, each representing a fraction (specified in the Prospectus
Supplement relating to the particular series of Offered Preferred Stock) of a
share of the particular series of Offered Preferred Stock issued and deposited
with a depositary, in lieu of offering full shares of such series of Offered
Preferred Stock.
The following statements are brief summaries of certain
provisions that are 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 set forth in the
Certificate of Designation were adopted by the Board of Directors or a
committee thereof prior to the issuance of a series of Offered Preferred
Stock, and such Certificate of Designation was filed with the Secretary of
State of the State of Delaware. Subject to the terms of the Deposit Agreement
(as defined below), each Depositary Share is entitled, in proportion to the
applicable fraction of a share of Offered Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Offered Preferred
Stock represented thereby (including dividends, voting, redemption and
liquidation rights). See "Depositary Shares" below. The following statements
concerning Depositary Shares, Depositary Receipts (as defined below) and the
Deposit Agreement do not purport to be complete and are qualified in their
entirety by reference to the forms of such documents, which have been filed as
exhibits to the Registration Statement of which this Prospectus is a part.
Rank. Each series of Offered Preferred Stock, if issued, 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. Each series of the Offered
Preferred Stock, if issued, 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 each other and with the ESOP Preferred Stock and each
series of the Existing Cumulative Preferred Stock.
Dividends. Holders of shares of the Offered Preferred Stock, if
issued, will be entitled to receive, when and as declared by the Board of
Directors or any committee thereof out of funds legally available for payment,
cumulative cash dividends at an annual rate of 7.82% per annum (with respect
to the 7.82% Preferred Stock, if issued), 7.80% per annum (with respect to the
7.80% Preferred Stock, if issued), 9.00% per annum (with respect to the 9.00%
Preferred Stock, if issued), 8.40% per annum (with respect to the 8.40%
Preferred Stock, if issued), 8.20% per annum (with respect to the 8.20%
Preferred Stock, if issued) on the dates, for the periods and otherwise as
specified in the relevant 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 any committee thereof. Dividends are cumulative from
the date of original issue of such series. The Offered Preferred Stock, if
issued, 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), 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, a Delaware chartered bank and an indirect wholly owned
subsidiary of the Company, and other bank subsidiaries) by banking
regulations.
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 Offered Preferred Stock will not be
subject to any mandatory redemption or sinking fund provision. 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 Offered 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 and, in
each case, 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. 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) 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 relevant 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 is The Bank of New York.
Depositary Shares
General. As indicated in the applicable Prospectus Supplement,
the Company has elected to issue fractional shares of the Offered Preferred
Stock, rather than full shares of the Offered Preferred Stock. Accordingly,
the Company will issue receipts for Depositary Shares, each of which will
represent a fraction (set forth in the Prospectus Supplement relating to a
particular series of Offered Preferred Stock) of a share of a particular
series of Offered Preferred Stock as described below.
The shares of any series of Offered Preferred Stock represented
by Depositary Shares will be deposited under a Deposit Agreement (the "Deposit
Agreement") among the Company, The Bank of New York, as depositary (the
"Preferred Stock Depositary"), and the holders from time to time of depositary
receipts issued thereunder. Subject to the terms of the Deposit Agreement,
each holder of a Depositary Share will be entitled, in proportion to the
applicable fraction of a share of Offered Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Offered Preferred
Stock represented thereby (including dividend, voting and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts
issued pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary
Receipts will be distributed to those persons purchasing the fractional shares
of the related series of Offered Preferred Stock. Copies of the forms of
Deposit Agreement and Depositary Receipt are filed as exhibits to the
Registration Statement of which this Prospectus is a part, and the following
summary is qualified in its entirety by reference to such exhibits.
Immediately following the issuance of shares of a series of Offered Preferred
Stock by the Company, the Company will deposit such shares with the Preferred
Stock Depositary, which will then issue and deliver the Depositary Receipts to
the purchasers thereof. Depositary Receipts will only be issued evidencing
whole Depositary Shares. A Depositary Receipt may evidence any number of whole
Depositary Shares.
Pending the preparation of definitive engraved Depositary
Receipts, the Preferred Stock Depositary may, upon the written order of the
Company, issue temporary Depositary Receipts substantially identical to (and
entitling the holders thereof to all the rights pertaining to) the definitive
Depositary Receipts but not in definitive form. Definitive Depositary Receipts
will be prepared thereafter without unreasonable delay, and such temporary
Depositary Receipts will be exchangeable for definitive Depositary Receipts at
the Company's expense.
Dividends and Other Distributions. The Preferred Stock
Depositary will distribute all cash dividends or other cash distributions
received in respect of the related series of Offered Preferred Stock to the
record holders of Depositary Shares relating to such series of Offered
Preferred Stock in proportion to the number of such Depositary Shares owned
by such holders.
In the event of a distribution other than in cash, the
Preferred Stock Depositary will distribute property received by it to the
record holders of Depositary Shares entitled thereto in proportion to the
number of Depositary Shares owned by such holders, unless the Preferred Stock
Depositary determines that such distribution cannot be made proportionately
among such holders or that it is not feasible to make such distribution, in
which case the Preferred Stock Depositary may, with the approval of the
Company, sell such property and distribute the net proceeds from such sale to
such holders in proportion to the number of Depositary Shares owned by such
holders.
The amount distributed in any of the foregoing cases will be
reduced by any amounts required to be withheld by the Company or the Preferred
Stock Depositary on account of taxes or other governmental charges.
Withdrawal of Stock. Upon surrender of the Depositary Receipts
at the corporate trust office of the Preferred Stock Depositary and upon
payment of the taxes, charges and fees provided for in the Deposit Agreement
and subject to the terms thereof, the holder of the Depositary Shares
evidenced thereby is entitled to delivery at such office, to or upon his or
her order, of the number of whole shares of the related series of Offered
Preferred Stock and any money or other property, if any, represented by such
Depositary Shares. Holders of Depositary Shares will be entitled to receive
whole shares of the related series of Offered Preferred Stock, but holders of
such whole shares of Offered Preferred Stock will not thereafter be entitled
to deposit such shares of Offered Preferred Stock with the Preferred Stock
Depositary or to receive Depositary Shares therefor. If the Depositary
Receipts delivered by the holder evidence a number of Depositary Shares in
excess of the number of Depositary Shares representing the number of whole
shares of the related series of Offered Preferred Stock to be withdrawn, the
Preferred Stock Depositary will deliver to such holder, or upon his or her
order, at the same time a new Depositary Receipt evidencing such excess number
of Depositary Shares.
Voting the Offered Preferred Stock. Upon receipt of notice of
any meeting at which the holders of any series of the Offered Preferred Stock
are entitled to vote, the Preferred Stock Depositary will mail the information
contained in such notice of meeting to the record holders of the Depositary
Shares relating to such series of Offered Preferred Stock. Each record holder
of such Depositary Shares on the record date (which will be the same date as
the record date for the related series of Offered Preferred Stock) will be
entitled to instruct the Preferred Stock Depositary as to the exercise of the
voting rights pertaining to the number of shares of the series of Offered
Preferred Stock represented by such holder's Depositary Shares. The Preferred
Stock Depositary will endeavor, insofar as practicable, to vote or cause to
be voted the number of shares of the Offered Preferred Stock represented by
such Depositary Shares in accordance with such instructions, provided the
Preferred Stock Depositary receives such instructions sufficiently in advance
of such meeting to enable it to so vote or cause to be voted the shares of
Offered Preferred Stock, and the Company will agree to take all reasonable
action that may be deemed necessary by the Preferred Stock Depositary in order
to enable the Preferred Stock Depositary to do so. The Preferred Stock
Depositary will abstain from voting shares of the Offered Preferred Stock to
the extent it does not receive specific instructions from the holders of
Depositary Shares representing such Offered Preferred Stock.
Redemption of Depositary Shares. If a series of the Offered
Preferred Stock underlying the Depositary Shares is subject to redemption, the
Depositary Shares will be redeemed from the proceeds received by the Preferred
Stock Depositary resulting from any redemption, in whole or in part, of such
series of the Offered Preferred Stock held by the Preferred Stock Depositary.
The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Offered Preferred Stock. If the Company redeems shares of a series of
Offered Preferred Stock held by the Preferred Stock Depositary, the Preferred
Stock Depositary will redeem as of the same redemption date the number of
Depositary Shares representing the shares of Offered Preferred Stock so
redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or substantially
equivalent method determined by the Preferred Stock Depositary.
After the date fixed for redemption, the Depositary Shares so
called for redemption will no longer be deemed to be outstanding and all
rights of the holders of the Depositary Shares will cease, except the right to
receive the moneys payable upon such redemption and any money or other
property to which the holders of such Depositary Shares were entitled upon
such redemption, upon surrender to the Preferred Stock Depositary of the
Depositary Receipts evidencing such Depositary Shares. Any funds deposited by
the Company with the Preferred Stock Depositary for any Depositary Shares that
the holders thereof fail to redeem will be returned to the Company after a
period of two years from the date such funds are so deposited.
Amendment and Termination of the Deposit Agreement. The form of
Depositary Receipt evidencing the Depositary Shares and any provision of the
Deposit Agreement may at any time and from time to time be amended by agreement
between the Company and the Preferred Stock Depositary. However, any amendment
that materially and adversely alters the rights of the holders of Depositary
Shares will not be effective unless such amendment has been approved by the
holders of at least a majority of the Depositary Shares then outstanding.
Notwithstanding the foregoing, in no event may any amendment impair the right
of any holder of any Depositary Shares, upon surrender of the Depositary
Receipts evidencing such Depositary Shares and subject to any conditions
specified in the Deposit Agreement, to receive shares of the related series of
Offered Preferred Stock and any money or other property represented thereby,
except in order to comply with mandatory provisions of applicable law. The
Deposit Agreement may be terminated by the Company at any time upon not less
than 60 days' prior written notice to the Depositary, in which case, on a date
that is not later than 30 days after the date of such notice, the Preferred
Stock Depositary shall deliver or make available for delivery to holders of
Depositary Shares, upon surrender of the Depositary Receipts evidencing such
Depositary Shares, such number of whole or fractional shares of the related
series of Offered Preferred Stock as are represented by such Depositary
Shares. The Deposit Agreement shall automatically terminate after there has
been a final distribution in respect of the related series of Offered
Preferred 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 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 Offered 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 the 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 Offered 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.
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.
ESOP Convertible Preferred Stock
The ESOP Preferred Stock is senior to the Company's Common
Stock and ranks on a parity with the Existing Cumulative Preferred Stock (and,
if issued, the Offered 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 Existing
Cumulative Preferred Stock and, if issued, would include the Offered 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."
Each series of the Existing Cumulative 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 (with respect to
the 7 3/8% Preferred Stock) and 7 3/4% per annum (with respect to the 7 3/4%
Preferred Stock). 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 Internal Revenue Code of 1986, as
amended (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 includes the Offered Preferred Stock, if issued, 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 that under
certain circumstances prior thereto, it may be redeemed at specified prices;
and 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. On or after such dates, the
applicable series of Existing Cumulative Preferred Stock will be redeemable at
the option of the Company, in whole or in part, upon not less than 30 days'
notice at a redemption price equal to $200.00 per share, in each case plus
accrued and accumulated but unpaid dividends to but excluding the date fixed
for redemption.
Liquidation Rights. In the event of any liquidation,
dissolution or winding up of the Company, the holders of shares of Existing
Cumulative Preferred Stock will be entitled to receive out of the assets of
the Company available for distribution to stockholders, before any
distribution is made to holders of (i) any other shares of Preferred Stock
ranking junior to the Existing Cumulative Preferred Stock as to rights upon
liquidation, dissolution or winding up which may be issued in the future and
(ii) Common Stock, liquidating distributions in the amount of $200.00 per
share, in each case plus accrued and accumulated but unpaid dividends to the
date of final distribution, but the holders of the shares of Existing
Cumulative Preferred Stock will not be entitled to receive the liquidation
price of such shares until the liquidation preference of any other shares of
the Company's capital stock ranking senior to the Existing Cumulative
Preferred Stock as to rights upon liquidation, dissolution or winding up shall
have been paid (or a sum set aside therefor sufficient to provide for payment)
in full. If upon any liquidation, dissolution or winding up of the Company, the
amounts payable with respect to the Existing Cumulative Preferred Stock and
any other Preferred Stock ranking as to rights upon liquidation, dissolution
or winding up on a parity with the Existing Cumulative Preferred Stock
(including the Offered Preferred Stock, if issued) are not paid in full, the
holders of the Existing Cumulative Preferred Stock and of such other Preferred
Stock will share ratably in any such distribution in proportion to the full
respective preferential amounts to which they are entitled. After payment of
the full amount of the liquidating distribution to which they are entitled,
the holders of Existing Cumulative Preferred Stock will not be entitled to any
further participation in any distribution of assets by the Company.
Voting Rights. Holders of Existing Cumulative Preferred Stock
do not have any voting rights except as set forth below or as otherwise from
time to time required by law. Whenever dividends on any series of Existing
Cumulative Preferred Stock or any other class or series of stock ranking on a
parity with such series of Existing Cumulative Preferred Stock (including the
Offered Preferred Stock, if issued) 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 (including the Offered Preferred Stock, if
issued), (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
By-Laws 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.
DESCRIPTION OF THE CAPITAL UNITS
The following description of the terms of the Capital Units
sets forth certain general terms and provisions of the Capital Units to which
a Prospectus Supplement relates. If so indicated in the Prospectus Supplement,
the terms of any such Capital Units may differ from the terms set forth below.
Particular terms of the Capital Units offered by a Prospectus Supplement are
described in the Prospectus Supplement relating to such Capital Units. The
following summary of certain provisions of the Capital Unit Agreement and the
Capital Units does not purport to be complete and such summary is subject to
the detailed provisions of the Capital Unit Agreement to which reference is
hereby made for a full description of such provisions, including the
definition of certain terms used herein, and for other information regarding
the Capital Units.
General
Capital Units consist of (i) a Debt Security of MS plc, (ii) a
full and unconditional Guarantee by the Company of the payment of principal,
premium, if any, interest and any Additional Amounts on such Debt Security and
(iii) a related Purchase Contract requiring the purchase on the settlement
date of the Purchase Contract of a share of Preferred Stock of the Company (or
a Depositary Share representing an interest in a share of such Preferred
Stock). The Debt Security, the Guarantee thereof and the related Purchase
Contract may be purchased and transferred only as part of a Capital Unit.
Capital Units were issued as Definitive Capital Units or Book-Entry Capital
Units. Definitive Capital Units consist of definitive registered Purchase
Contracts and definitive registered Debt Securities and Guarantees of such Debt
Securities. Book-Entry Capital Units are represented by certificateless
depositary interests issued to The Depository Trust Company or its nominee by
a depositary (the "Book-Entry Unit Depositary") holding a global registered
Purchase Contract and a global Debt Security and a Guarantee of such Debt
Security.
Reference is made to the Prospectus Supplement for the
following terms of and information relating to a particular series of Capital
Units: (i) the terms of the Debt Securities, including the maturity date, any
interest rate and any interest payment dates with respect to such Debt
Securities, any redemption or repayment provisions and whether such Debt
Securities were issued in registered or bearer form or both and in definitive
or global form or both; (ii) the terms of the related Purchase Contracts,
including the term thereof, any redemption provisions, any acceleration,
cancellation or termination provisions and whether the Purchase Contracts were
issued in definitive or global form or both; (iii) the terms of the series of
Preferred Stock to be issued upon settlement of the related Purchase
Contracts, including the number of shares constituting such series, the
dividend rate, dividend period, stated value and any voting rights with
respect to such series, the preferences and rights of the shares of such
series upon any liquidation or winding-up of the Company, any redemption
provisions and whether the shares of such series will initially be represented
by depositary shares and, if so, the fraction of a share of such series to be
represented by each depositary share; (iv) any applicable United States
federal or United Kingdom income tax consequences; (v) any listing of such
series of Capital Units on a national securities exchange; (vi) whether such
Capital Units were issued as Definitive Capital Units, Book-Entry Capital
Units or both and the name of the Book-Entry Unit Depositary with respect to
Book-Entry Capital Units; (vii) any circumstances (in addition to the
circumstances described under "Description of Debt Securities of MS plc --
Payment of Additional Amounts with Respect to Debt Securities") under which
Additional Amounts will not be paid with respect to the Debt Securities; and
(viii) any other specific terms of the Debt Securities and Purchase Contracts.
Each series of Purchase Contracts was issued under a Capital
Unit Agreement entered into by Morgan Stanley (as predecessor to the Company),
MS plc and The Chase Manhattan Bank (formerly known as Chemical Bank), as
capital unit agent (together with any successor thereto in such capacity, the
"Capital Unit Agent") and, with respect to any Book-Entry Capital Units, as
Book-Entry Unit Depositary, and the holders from time to time of Capital
Units. Upon the consummation of the Merger, each such agreement was amended
to provide for the Company's succession to the rights and obligations of
Morgan Stanley thereunder. The Capital Unit Agreements are not qualified as
indentures under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), the Capital Unit Agent is not required to qualify as a
trustee thereunder and the holders of Purchase Contracts do not have the
benefits of the protections of the Trust Indenture Act. However, any Debt
Securities and Guarantees issued as part of a Capital Unit were issued under
an indenture qualified under the Trust Indenture Act and the trustee
thereunder has qualified as a trustee under the Trust Indenture Act.
Description of the Purchase Contracts
Each Purchase Contract obligates the holder thereof to
purchase, and the Company to sell, on dates specified in the accompanying
Prospectus Supplement, a share of Preferred Stock of the Company (or a
Depositary Share representing an interest in a share of such Preferred Stock)
at a specified purchase price. The applicable Prospectus Supplement also
specifies the methods by which the holders' obligations to purchase Preferred
Stock or a Depositary Share relating thereto may be satisfied and any
acceleration, cancellation or termination provisions relating to the
settlement of a Purchase Contract.
Certain Provisions of the Capital Unit Agreement
General. Under the terms of the Capital Unit Agreement, each
holder of a Definitive Capital Unit and each beneficial owner of a Book-Entry
Capital Unit, by its acceptance thereof, appoints the Capital Unit Agent as its
authorized agent to execute, deliver and perform each Purchase Contract in
which such holder or beneficial owner has an interest on behalf of such holder
or beneficial owner, as the case may be, and consents to the terms of the
Capital Unit Agreement. Under the terms of the Capital Unit Agreement, each
holder of a Definitive Capital Unit and each beneficial owner of a Book-Entry
Capital Unit, by acceptance thereof, irrevocably agrees to be a party to and
be bound by the terms of each Purchase Contract in which such holder or
beneficial owner has an interest. Upon the registration of transfer of a
Capital Unit, the transferee will assume the obligations of the transferor
under each Purchase Contract in which such holder or beneficial owner has an
interest and the transferor will be released from such obligations.
The specific terms of the depositary arrangement with respect
to the Book-Entry Capital Units are described in the applicable Prospectus
Supplement. MS plc has appointed the Book-Entry Unit Depositary as its agent
for purposes of maintaining a register recording the right to principal of and
interest on Debt Securities that relate to Book-Entry Capital Units.
Payment, Settlement, Transfer and Exchange of Definitive
Capital Units. Principal of, and interest on, any Debt Securities constituting
part of a Definitive Capital Unit will be payable, and transfers of Definitive
Capital Units will be registrable, at the office of The Chase Manhattan Bank
in the Borough of Manhattan, The City of New York or at such other location as
may be determined by MS plc and The Chase Manhattan Bank. Under circumstances
specified in the applicable Prospectus Supplement, payments in respect of
principal of Debt Securities that are part of Definitive Capital Units may be
applied by the Capital Unit Agent in satisfaction of the obligations of the
holders of the Definitive Capital Units under the related Purchase Contracts
(unless a holder has delivered cash in respect of its obligations under such
Purchase Contract) and Preferred Stock or Depositary Shares will be delivered
only upon presentation and surrender of the certificates evidencing Definitive
Capital Units at the office of the Capital Unit Agent. If a holder delivers
cash in settlement of its obligations under a Purchase Contract that is part
of a Definitive Capital Unit, the related Debt Security that is a part of such
Definitive Capital Unit will remain outstanding and, as more fully described
in the applicable Prospectus Supplement, the holder will receive a definitive
registered Debt Security.
In the event that a holder does not elect to deliver cash in
settlement of its obligations under a Purchase Contract that is part of a
Definitive Capital Unit and fails to present and surrender the certificate
evidencing the Definitive Capital Units held by such holder to the Capital
Unit Agent when required, the Preferred Stock or Depositary Shares to be
purchased under the Purchase Contracts evidenced thereby shall be registered
in the name of, and together with any distributions thereon shall be held by,
the Capital Unit Agent in trust for the benefit of such holder until such
certificate is presented and surrendered or the holder provides satisfactory
evidence that such certificate has been destroyed, lost or stolen, together
with any indemnity that may be required by the Capital Unit Agent, the Company
or MS plc in respect thereof. In the event that a certificate is not presented
(or such evidence and indemnity are not provided) on or prior to the date two
years after the relevant settlement date with respect to the related Purchase
Contract, any payments received by the Capital Unit Agent in respect of the
Preferred Stock or the Depositary Shares issued in respect of the Definitive
Capital Units evidenced by such certificate will be paid by the Capital Unit
Agent to the Company and such holder will thereafter be required to look
solely to the Company for payment thereof. The Capital Unit Agent will have
no obligation to invest or to pay interest on any amounts held by the Capital
Unit Agent pending distribution, as described above.
No service charge will be made for any registration of transfer
or exchange of the Capital Units or interest therein, except for any tax or
other governmental charge that may be imposed in connection therewith.
Remedies. No holder of any Capital Unit or interest therein
shall have any right by virtue of or by availing itself of any provision of
the Capital Unit Agreement to institute any action or proceeding at law or in
equity or in bankruptcy or otherwise upon or under or with respect to the
Capital Unit Agreement, or for the appointment of a trustee, receiver,
liquidator, custodian or other similar official, unless such holder shall have
given written notice to the Capital Unit Agent, MS plc and the Company of the
occurrence and continuance of a default thereunder and, (i) in the case of an
Event of Default under the Debt Securities or the Indenture governing such
Debt Securities, the procedures (including notice to the Trustee, MS plc and
the Company) described in Article Five of the Indenture (see "Description of
Debt Securities -- Events of Default") have been complied with and (ii) in the
case of certain defaults under the Purchase Contracts, unless the holders of
not less than 25% of the Capital Units then outstanding shall have made
written request upon the Capital Unit Agent to institute such action or
proceedings in its own name as Capital Unit Agent under the Capital Unit
Agreement and shall have offered to the Capital Unit Agent such reasonable
indemnity as it may require, and the Capital Unit Agent for 60 days after its
receipt of such notice, request and offer of indemnity shall have failed to
institute such action or proceedings and no direction inconsistent with such
request shall have been given to the Capital Unit Agent pursuant to the
Capital Unit Agreement in writing by the holders of a majority of the
outstanding Capital Units, any holder of a Capital Unit may then (but only
then) seek to enforce the performance of the covenant or agreement with
respect to which such Purchase Contract default exists.
There are no covenants or other provisions in the Capital Unit
Agreement providing for a put or increased interest or otherwise that would
afford holders of Capital Units additional protection in the event of a
recapitalization transaction, a change of control of the Company or MS plc or
a highly leveraged transaction.
Modification. Each Capital Unit Agreement contains provisions
permitting the Company and the Capital Unit Agent, with the consent of the
holders of not less than a majority of all series of Capital Units at the time
outstanding under such Capital Unit Agreement and affected thereby (voting as
one class), to modify the terms of the Purchase Contracts and the terms of the
Capital Unit Agreement relating to the Purchase Contracts of each series so
affected or the rights of the holders of the Capital Units of each series so
affected in respect of the Purchase Contracts, except that no such
modification may, without the consent of the holder of each outstanding
Capital Unit affected thereby, (i) impair the right to institute suit for the
enforcement of any Purchase Contract, (ii) materially adversely affect the
holders' rights under any Purchase Contract, (iii) modify or affect (in any
manner materially adverse to the holders) the terms of the Preferred Stock or
the Depositary Shares (determined as if the Preferred Stock and Depositary
Shares were outstanding), or (iv) reduce the aforesaid percentage of
outstanding Capital Units of any series issued under the Capital Unit
Agreement, the consent of the holders of which is required for the
modification or amendment of the provisions of the Capital Unit Agreement
relating to the Purchase Contracts or for any waiver of compliance with
certain provisions of the Capital Unit Agreement or waiver of certain defaults
relating to the Purchase Contracts, provided that the holders of not less than
66 2/3% of the Capital Units of any series outstanding at the time of an
issuance of shares of a class of stock that ranks prior to the Preferred Stock
that is required to be purchased under the related Purchase Contracts of such
series as to dividends or upon liquidation may consent to such an issuance,
and such an issuance, if so consented to, will not relieve the holders of
their obligations to purchase such Preferred Stock under the Purchase
Contracts.
Title. The Company, MS plc, the Capital Unit Agent and any
agent of the Company, MS plc or the Capital Unit Agent will treat the
registered owner of any Capital Unit as the owner thereof (whether or not the
Debt Security constituting a part thereof shall be overdue and notwithstanding
any notice to the contrary) for the purpose of making payment, the performance
of the Purchase Contracts and for all other purposes.
Replacement of Capital Unit Certificates. Any mutilated
certificate evidencing a Definitive Capital Unit will be replaced at the
expense of the holder upon surrender of such certificate to the Capital Unit
Agent. Certificates that become destroyed, lost or stolen will be replaced at
the expense of the holder upon delivery to the Company, MS plc and the Capital
Unit Agent of evidence of the destruction, loss or theft thereof satisfactory
to the Company, MS plc and the Capital Unit Agent. In the case of a destroyed,
lost or stolen certificate, an indemnity satisfactory to the Capital Unit
Agent, MS plc and the Company may be required at the expense of the holder of
the Definitive Capital Units evidenced by such certificate before a
replacement will be issued.
Each Capital Unit Agreement provides that, notwithstanding the
foregoing, no such replacement certificate need be delivered (i) during the
period beginning 15 days before the day of mailing of a notice of redemption
or acceleration of the Purchase Contracts evidenced by the mutilated,
destroyed, lost or stolen certificate and ending on the day of the giving of
such notice, (ii) if such mutilated, destroyed, lost or stolen certificate
evidences Purchase Contracts selected or called for redemption or acceleration
or (iii) at any time on or after the date of settlement or redemption, as
applicable, with respect to the Purchase Contracts evidenced by such
mutilated, destroyed, lost or stolen certificate, except with respect to any
Definitive Capital Units that remain or will remain outstanding following such
date of settlement or redemption.
Governing Law. The Capital Unit Agreement and the Capital Units
will be governed by, and construed in accordance with, the laws of the State
of New York.
Consent to Service. The Capital Unit Agreement provides that MS
plc irrevocably designates the Company as its authorized agent for service of
process in connection with any legal action or proceeding arising out of or
relating to any applicable Debt Securities or the Capital Unit Agreement and
for actions brought under federal or state securities laws brought in any
federal or state court in the Borough of Manhattan, in The City of New York,
New York, and irrevocably submits to the jurisdiction of such courts.
PLAN OF DISTRIBUTION
MS & Co., MSIL, DWR and DWIL are wholly owned subsidiaries of
the Company. MS & Co., MSIL, DWR, DWIL and other affiliates of the Company
may offer and sell Securities in the course of their business as
broker-dealers. MS & Co., MSIL, DWR, DWIL and such other affiliates may act
as principals or agents in such transactions. This Prospectus and the
accompanying Prospectus Supplements 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 Guarantees, the Preferred Stock and the
Purchase Contracts 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 Debt Securities governed by the laws of England will be passed
upon for MS plc by Linklaters & Paines.
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., MSIL, DWR and DWIL, may each be considered a "party in interest" within
the meaning of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or a "disqualified person" within the meaning of the Code with
respect to many employee benefit plans. Prohibited transactions within the
meaning of ERISA or the Code may arise, for example, if the Debt Securities
or Guarantees are acquired by or with the assets of a pension or other
employee benefit plan with respect to which MS & Co., DWR or any of their
affiliates is a service provider, unless such Debt Securities or Guarantees
are acquired pursuant to an exemption for transactions effected on behalf of
such plan by a "qualified professional asset manager" or pursuant to any other
available exemption. The assets of a pension or other employee benefit plan
may include assets held in the general account of an insurance company that
are deemed to be "plan assets" under ERISA. Any insurance company or pension
or employee benefit plan proposing to invest in the Debt Securities or
Guarantees should consult with its legal counsel.
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution*
Commission Registration fee.............................. None
Blue Sky fees and expenses............................... $ None
Printing and engraving expenses.......................... 250,000
Legal fees and expenses.................................. 30,000
Accounting fees and expenses............................. 20,000
Trustees', Preferred Stock Depositary's and Capital Unit
Agent's fees and expenses (including counsel fees)....... 50,000
Miscellaneous............................................ 7,000
Total................................................... $ 357,000
- --------------
* All amounts are estimated except for the Commission
registration fee.
Item 15. Indemnification of Officers and Directors
MS plc
The indemnification of officers and directors of MS plc is
governed by Sections 144, 310 and 727 of the UK Companies Act 1985, as
amended, and the provisions of Article 12 of MS plc's Articles of Association.
Section 310 of the Companies Act makes void any provision,
whether contained in the Articles of Association of a company or any contract
with a company or otherwise, for exempting any officer of the company or any
person (whether an officer or not) employed by the company as auditor from, or
indemnifying such person against, any liability which by virtue of any rule of
law would otherwise attach to such person in respect of any negligence,
default, breach of duty or breach of trust of which such person may be guilty
in relation to the company. However, Section 310 does not prevent a company
from purchasing and maintaining for any officer or auditor insurance against
the liabilities referred to above. In addition, Section 310 does not prevent a
company from indemnifying any officer or auditor who is a successful defendant
in criminal or civil proceedings or who successfully applies for relief under
Sections 144 or 727 of the Companies Act.
Sections 144 (Acquisition of a company's own shares by a
nominee) and 727 (Power of court to grant relief in certain cases) of the
Companies Act contain provisions for protecting directors in proceedings for
negligence, default, breach of duty or breach of trust on the basis that the
relevant director acted honestly and reasonably and that, having regard to all
circumstances of the case, the director ought fairly to be excused. The court
may relieve the director wholly or partially on such terms as it thinks fit.
Article 12(A) of MS plc's Articles of Association mirrors the
exceptions to Section 310 of the Companies Act. That is, any director,
auditor, secretary or other officer of MS plc will be indemnified by MS plc
out of its own funds from all costs, charges, losses, expenses and liabilities
incurred by him in relation to or in connection with his duties, powers or
office where the relevant director, auditor, secretary or other officer is a
successful defendant in criminal or civil proceedings, or successfully applies
for relief by the court. Article 12(B) provides that the directors have the
power to purchase and maintain insurance against any liability incurred, inter
alia, by directors and officers of the Company in respect of any act or
omission in relation to or in connection with their duties, powers or office.
The indemnification provisions described below under "The
Company" also apply to officers and directors of MS plc.
The Company
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, at its expense, to protect itself and 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.
Item 16. Exhibits
Exhibit
Number Description
- -------- -----------
4-a * Amended and Restated Certificate of Incorporation of the Company
(previously filed as an exhibit to the Current Report of the
Company 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* Subordinated Indenture dated as of November 15, 1993 among
MS plc, Morgan Stanley, as Guarantor, and The Chase
Manhattan Bank (formerly known as Chemical Bank), as Trustee
(previously filed as an exhibit to the Registration
Statement filed by Morgan Stanley and MS plc on Form S-3
(File No. 33-51067) and incorporated herein by this
reference).
4-f Form of First Supplemental Subordinated Indenture, dated as
of June 1, 1997, to the Subordinated Indenture dated as of
November 15, 1993 among MS plc, the Company, as Guarantor,
and The Chase Manhattan Bank, as Trustee.
4-g* Form of Capital Unit Agreement among MS plc, Morgan Stanley,
The Chase Manhattan Bank (formerly known as Chemical Bank),
as Agent and Book-Entry Unit Depositary, and as Trustee, and
holders from time to time of Capital Units (including Form
of Purchase Contract) (previously filed as an exhibit to
Morgan Stanley's Current Report on Form 8-K dated November
19, 1993 and incorporated herein by this reference).
4-h * Form of First Supplemental Agreement, dated as of June 1,
1997, to the Capital Unit Agreement dated as of December 18,
1996, to the Capital Unit Agreement dated as of October 18,
1995, to the Capital Unit Agreement dated as of August 1,
1995, to the Capital Unit Agreement dated as of February 21,
1995, to the Capital Unit Agreement dated as of February 8,
1994 and to the Capital Unit Agreement dated as of November
29, 1993, each among MS plc, the Company, The Chase
Manhattan Bank, as Agent and Book-Entry Unit Depositary, and
as Trustee, and the respective holders from time to time of
each series of Capital Units.
5-a Opinion of Brown & Wood LLP.
5-b* Opinion of Linklaters & Paines.
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-a).
23-d* Consent of Linklaters & Paines (included in Exhibit 5-b).
24 Powers of Attorney (included on signature pages).
25* Statement of Eligibility of The Chase Manhattan Bank,
Trustee under the Subordinated Indenture.
- --------------
* Previously Filed.
Item 17. Undertakings
(1) Each of the undersigned registrants hereby undertakes that,
for purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(2) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by a registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(3) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that paragraphs (3)(a)(i) and (3)(a)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
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 to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of London, England, on
this second day of June, 1997.
MORGAN STANLEY FINANCE PLC
(Registrant)
By: /s/ Richard S. Rosenthal
------------------------------------
Name: Richard S. Rosenthal
Title: Director
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 M. 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 requirements of the Securities Act of 1933,
this amendment to the registration statement has been signed by the following
persons in the capacities indicated on this second day of June, 1997.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Richard S. Rosenthal Director
- -------------------------------------------------
Richard S. Rosenthal
/s/ Daniel McHugh Director
- -------------------------------------------------
Daniel McHugh
/s/ Stephen Allery Director
- -------------------------------------------------
Stephen Allery
/s/ Eileen K. Murray Director
- -------------------------------------------------
Eileen K. Murray
</TABLE>
MORGAN STANLEY, DEAN WITTER, Authorized Representative
DISCOVER & CO. in the United States
By: /s/ William J. O'Shaughnessy
-------------------------------------------------
Name: William J. O'Shaughnessy
Title: Assistant Secretary
*By: /s/ Ronald T. Carman
-------------------------------------------------
Name: Ronald T. Carman
Attorney-in-fact
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.
Signature Title
- ------------------------------- ---------------------------------------
/s/ Philip J. Purcell Chairman of the Board, Chief Executive
- ------------------------------- Officer and Director
Philip J. Purcell
/s/ John J. Mack President, Chief Operating Officer and
- ------------------------------- Director
John J. Mack
/s/ Thomas C. Schneider Executive Vice President, Chief
- ------------------------------- Strategic and Administrative Officer
Thomas C. Schneider and Director
/s/ Richard B. Fisher Chairman of the Executive Committee of
- ------------------------------- Board of Directors and Director
Richard B. Fisher
/s/ Robert G. Scott Executive Vice President and Chief
- ------------------------------- Financial Officer
Robert G. Scott
/s/ Robert P. Seass Controller (Principal Accounting Officer)
- -------------------------------
Robert P. Seass
/s/ Robert P. Bauman Director
- -------------------------------
Robert P. Bauman
/s/ Edward A. Brennan Director
- -------------------------------
Edward A. Brennan
/s/ Daniel B. Burke Director
- -------------------------------
Daniel B. Burke
/s/ C. Robert Kidder Director
- -------------------------------
C. Robert Kidder
/s/ Miles L. Marsh Director
- -------------------------------
Miles L. Marsh
/s/ Michael A. Miles Director
- -------------------------------
Michael A. Miles
/s/ Allen E. Murray Director
- -------------------------------
Allen E. Murray
/s/ Paul J. Rizzo Director
- -------------------------------
Paul J. Rizzo
/s/ Clarence B. Rogers, Jr. Director
- ---------------------------------
Clarence B. Rogers, Jr.
/s/ Laura D'Andrea Tyson Director
- ---------------------------------
Laura D'Andrea Tyson
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
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-f Form of First Supplemental Subordinated Indenture, dated as of
June 1, 1997, to the Subordinated Indenture dated as of November
15, 1993 among MS plc, the Company, as Guarantor, and The Chase
Manhattan Bank, as Trustee.
4-h* Form of First Supplemental Agreement, dated as of June 1, 1997,
to the Capital Unit Agreement dated as of December 18, 1996, to
the Capital Unit Agreement dated as of October 18, 1995, to the
Capital Unit Agreement dated as of August 1, 1995, to the
Capital Unit Agreement dated as of February 21, 1995, to the
Capital Unit Agreement dated as of February 8, 1994 and to the
Capital Unit Agreement dated as of November 29, 1993, each among
MS plc, the Company, The Chase Manhattan Bank, as Agent and
Book-Entry Unit Depositary, and as Trustee, and the respective
holders from time to time of each series of Capital Units.
5-a Opinion of Brown & Wood LLP.
5-b* Opinion of Linklaters & Paines.
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-a).
23-d* Consent of Linklaters & Paines (included in Exhibit 5-b).
24 Powers of Attorney (included on signature pages).
25* Statement of Eligibility of The Chase Manhattan Bank, Trustee under
the Subordinated Indenture.
- ---------------
* Previously Filed.
EXHIBIT 4-f
FIRST SUPPLEMENTAL SUBORDINATED INDENTURE
AMONG
MORGAN STANLEY FINANCE PLC, Issuer
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO., Guarantor
AND
THE CHASE MANHATTAN BANK, Trustee
Dated as of June 1, 1997
SUPPLEMENTAL TO SUBORDINATED INDENTURE
DATED AS OF NOVEMBER 15, 1993
AMONG MORGAN STANLEY FINANCE PLC, AS ISSUER,
MORGAN STANLEY GROUP INC., AS GUARANTOR
AND THE CHASE MANHATTAN BANK
(FORMERLY KNOWN AS CHEMICAL BANK), AS TRUSTEE
FIRST SUPPLEMENTAL SUBORDINATED INDENTURE, dated as of June 1,
1997 among MORGAN STANLEY FINANCE PLC, a company incorporated under the laws
of England and Wales ("MS plc" or the "Issuer"), MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO., a Delaware corporation (the "Successor Corporation" and
hereinafter the "Guarantor"), 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, the Issuer, Morgan Stanley Group Inc. ("Morgan
Stanley") and the Trustee are parties to that certain Subordinated Indenture
dated as of November 15, 1993 (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 and the applicable Guarantee 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 "Guarantor," 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, each of the Issuer and
the Guarantor, 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 Guarantor and the assumption by the successor corporation
of the covenants, agreements and obligations of the Guarantor and making any
provisions as the Issuer or Guarantor may deem necessary or desirable, subject
to the conditions set forth therein;
WHEREAS, the Guarantor desires to add to and modify certain
provisions of the Indenture to reflect a modification of the officers of the
Guarantor who are authorized to execute certain documents contemplated by the
Indenture;
WHEREAS, the entry into this First 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 First 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, the Guarantor 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 Sections 9.1 and 9.2 of the Indenture, the Successor
Corporation does hereby: (i) expressly assume the obligations of the Guarantor
under the applicable Guarantee 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 "Guarantor Order" and inserting in
lieu thereof the following: " 'Guarantor Order' means a written statement,
request or order of the Guarantor 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 such other person
authorized by the Board of Directors of the Guarantor to execute any such
written statement, request or order"; and
(b) deleting the definition of "Officer's Certificate" and
inserting in lieu thereof the following: "'Officer's Certificate,' when used
with respect to the Issuer, means a certificate signed by the chairman or vice
chairman of the board of directors, the president, the chief financial
officer, any managing director or the treasurer of the Issuer and delivered to
the Trustee. 'Officer's Certificate,' when used with respect to the
Guarantor, 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 such other person authorized by the Board of
Directors of the Guarantor to execute any such certificate and delivered to
the Trustee."
ARTICLE 2
MISCELLANEOUS
Section 2.1. Further Assurances. The Guarantor 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 First 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 FIRST SUPPLEMENTAL SUBORDINATED INDENTURE.
Section 2.5. Multiple Counterparts. This First 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
Guarantor, 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 First Supplemental Subordinated Indenture.
Section 2.7. Agency Appointments. The Guarantor 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 First Supplemental Subordinated
Indenture has been duly executed by the Issuer, the Guarantor and the
Trustee as of the day and year first written above.
MORGAN STANLEY FINANCE PLC
By:______________________________
Title:
Attest:
By: ____________________
Title:
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By:______________________________
Title:
Attest:
By: ___________________
Title:
THE CHASE MANHATTAN BANK,
as Trustee
By:______________________________
Title:
Attest:
By: ____________________
Title:
Exhibit 5-a
[Letterhead of Brown & Wood LLP]
June 2, 1997
Morgan Stanley, Dean Witter, Discover & Co.
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
We have acted as counsel to Morgan Stanley, Dean Witter, Discover & Co.,
a Delaware corporation (the "Company"), and we are familiar with the corporate
proceedings of the Company in connection with the filing of a registration
statement on Form S-3 (as it may be amended from time to time, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the following securities of the Company: (i)
guarantees of debt securities of Morgan Stanley Finance plc, an indirect
wholly owned subsidiary of the Company ("MS plc"); (ii) shares of the
Company's preferred stock, par value $0.01 per share (the "Preferred Stock"),
described below; (iii) depositary shares representing fractional interests in
shares of the Preferred Stock (the "Depositary Shares"); and (iv) preferred
stock purchase contracts described below.
The Registration Statement relates solely to offers and sales of the
Securities (as defined below) in connection with market-making transactions by
or through affiliates of the Company. Morgan Stanley Group Inc. ("Morgan
Stanley"), a predecessor of the Company, previously offered and issued
preferred stock purchase contracts (the "Purchase Contracts") requiring the
holders thereof to purchase preferred stock of Morgan Stanley (the "Morgan
Stanley Preferred Stock"). The Purchase Contracts were offered together with
debt securities (the "Debt Securities") of MS plc, which at the time was an
indirect wholly-owned subsidiary of Morgan Stanley, and full and unconditional
guarantees ("Guarantees") of the Debt Securities by Morgan Stanley in the form
of units ("Capital Units").
Effective May 31, 1997, Morgan Stanley merged with and into Dean Witter,
Discover & Co. (the "Merger"), which, pursuant to the Merger, was renamed
Morgan Stanley, Dean Witter, Discover & Co. The Company has assumed all of
the obligations of Morgan Stanley under the Guarantees and Purchase Contracts
and, upon any acceleration of the Purchase Contracts, will issue one share of
the Preferred Stock, having a different par value but otherwise having terms
identical to those of the Morgan Stanley Preferred Stock, for each share of
Morgan Stanley Preferred Stock required to be delivered pursuant to the terms
of the Purchase Contracts. The Debt Securities, Guarantees, Preferred Stock,
Purchase Contracts and Capital Units are hereinafter referred to as the
"Securities."
In connection with the rendering of this opinion, we have examined such
documents and records as we deemed appropriate, including the following:
(a) a copy of the Amended and Restated Certificate of Incorporation
of the Company and amendments thereto included in the Certificate of Merger
filed by the Company with the Secretary of State of the State of Delaware on
May 30, 1997, each certified by the Secretary of State of the State of
Delaware;
(b) a copy of the Amended and Restated By-laws of the Company in
effect on the date hereof, certified by an Assistant Secretary of the
Company to be a true and complete copy;
(c) a copy, certified by an Assistant Secretary of the Company to be a
true and correct copy, of the resolutions adopted by the Board of Directors
of the Company by unanimous written consent dated May 31, 1997;
(d) a copy of the Certificate of Designation relating to 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"), certified by the Secretary
of State of the State of Delaware;
(e) a copy of the Certificate of Designation relating to 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"), certified
by the Secretary of State of the State of Delaware;
(f) a copy of the Certificate of Designation relating to up to 720,900
shares of the Company's 9.00% Cumulative Preferred Stock, with a stated value
of $200.000 per share (the "9.00% Preferred Stock"), certified by the
Secretary of State of the State of Delaware;
(g) a copy of the Certificate of Designation relating to 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"), certified by the Secretary
of State of the State of Delaware;
(h) a copy of the Certificate of Designation relating to 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"), certified by the Secretary
of State of the State of Delaware;
(i) a copy of the Certificate of Designation relating to 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" and, together with 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 "Offered Preferred Stock"), certified by the Secretary of State of
the State of Delaware;
(j) a form of Certificate of Offered Preferred Stock;
(k) an executed copy of the Subordinated Indenture, dated as of
November 15, 1993 (the "Subordinated Indenture"), among MS plc, Morgan
Stanley and The Chase Manhattan Bank (formerly known as Chemical Bank), as
Trustee;
(l) an executed copy of the First Supplemental Subordinated Indenture,
dated as of June 1, 1997 (the "Supplemental Indenture"), to the Subordinated
Indenture among MS plc, the Company, as guarantor and The Chase Manhattan
Bank, as Trustee;
(m) an executed copy of the Capital Unit Agreement, dated as of
December 18, 1996 (the "December 18, 1996 Capital Unit Agreement"), among
MS plc, Morgan Stanley, The Chase Manhattan Bank, as agent and Book-Entry
Unit Depository, and holders from time to time of Capital Units;
(n) an executed copy of the First Supplemental Agreement to the
December 18, 1996 Capital Unit Agreement, dated as of June 1, 1997 (the
"December 18, 1996 Supplement"), among MS plc, the Company (as successor to
Morgan Stanley) and The Chase Manhattan Bank, as agent and Book-Entry Unit
Depository, and holders from time to time of Capital Units;
(o) an executed copy of the Capital Unit Agreement, dated as of October
18, 1995 (the "October 18, 1995 Capital Unit Agreement"), among MS plc, Morgan
Stanley, The Chase Manhattan Bank (formerly known as Chemical Bank), as agent
and Book-Entry Unit Depository, and holders from time to time of Capital
Units;
(p) an executed copy of the First Supplemental Agreement to the October
18, 1995 Capital Unit Agreement, dated as of June 1, 1997 (the "October 18,
1995 Supplement"), among MS plc, the Company (as successor to Morgan
Stanley), The Chase Manhattan Bank, as agent and Book-Entry Unit
Depository, and holders from time to time of Capital Units;
(q) an executed copy of the Capital Unit Agreement, dated as of August 1,
1995 (the "August 1, 1995 Capital Unit Agreement"), among MS plc, Morgan
Stanley, The Chase Manhattan Bank (formerly known as Chemical Bank), as agent
and Book-Entry Unit Depository, and holders from time to time of Capital Units;
(r) an executed copy of the First Supplemental Agreement to the August 1,
1995 Capital Unit Agreement, dated as of June 1, 1997 (the "August 1, 1995
Supplement"), among MS plc, the Company (as successor to Morgan Stanley), The
Chase Manhattan Bank, as agent and Book-Entry Unit Depository, and holders
from time to time of Capital Units;
(s) an executed copy of the Capital Unit Agreement, dated as of February
21, 1995 (the "February 21, 1995 Capital Unit Agreement"), among MS plc,
Morgan Stanley, The Chase Manhattan Bank (formerly known as Chemical Bank), as
agent and Book-Entry Unit Depository, and holders from time to time of Capital
Units;
(t) an executed copy of the First Supplemental Agreement to the February
21, 1995 Capital Unit Agreement, dated as of June 1, 1997 (the "February 21,
1995 Supplement"), among MS plc, the Company (as successor to Morgan Stanley),
The Chase Manhattan Bank, as agent and Book-Entry Unit Depository, and holders
from time to time of Capital Units;
(u) an executed copy of the Capital Unit Agreement, dated as of
February 8, 1994 (the "February 8, 1994 Capital Unit Agreement"), among MS
plc, Morgan Stanley, The Chase Manhattan Bank (formerly known as Chemical
Bank), as agent and Book-Entry Unit Depository, and holders from time to
time of Capital Units; and
(v) an executed copy of the First Supplemental Agreement to the
February 8, 1994 Capital Unit Agreement, dated as of June 1, 1997 (the
"February 8, 1994 Supplement"), among MS plc, the Company (as successor to
Morgan Stanley), The Chase Manhattan Bank, as agent and Book-Entry Unit
Depository, and holders from time to time of Capital Units;
(w) an executed copy of the Capital Unit Agreement, dated as of
November 29, 1993 (the "November 29, 1993 Capital Unit Agreement" and,
together with the December 18, 1996 Capital Unit Agreement, the October 18,
1995 Capital Unit Agreement, the August 1, 1995 Capital Unit Agreement, the
February 21, 1995 Capital Unit Agreement and the February 8, 1994 Capital
Unit Agreement, the "Capital Unit Agreements"), among MS plc, Morgan
Stanley, The Chase Manhattan Bank (formerly known as Chemical Bank), as
agent and Book-Entry Unit Depository, and holders from time to time of
Capital Units.
(x) an executed copy of the First Supplemental Agreement, dated as of
June 1, 1997, to the November 29, 1993 Capital Unit Agreement (the
"November 29, 1993 Supplement" and, together with the December 18, 1996
Supplement, the October 18, 1995 Supplement, the August 1, 1995 Supplement,
the February 21, 1995 Supplement, and the February 8, 1994 Supplement, the
"Supplements"), among MS plc, the Company (as successor to Morgan Stanley),
The Chase Manhattan Bank, as agent and Book-Entry Unit Depository, and
holders from time to time of Capital Units;
(y) an executed copy of the Deposit Agreement, dated as of December 18,
1996 (the "December 18, 1996 Deposit Agreement"), among Morgan Stanley, The
Bank of New York, as depositary, and the holders from time to time of
depositary receipts issued thereunder;
(z) an executed copy of the Deposit Agreement, dated as of October 18,
1995 (the "October 18, 1995 Deposit Agreement"), among Morgan Stanley, The
Bank of New York, as depositary, and the holders from time to time of
depositary receipts issued thereunder;
(aa) an executed copy of the Deposit Agreement, dated as of August 1,
1995 (the "August 1, 1995 Deposit Agreement"), among Morgan Stanley, The
Bank of New York, as depositary, and the holders from time to time of
depositary receipts issued thereunder;
(ab) an executed copy of the Deposit Agreement, dated as of February 21,
1995 (the "February 21, 1995 Deposit Agreement"), among Morgan Stanley, The
Bank of New York, as depositary, and the holders from time to time of
depositary receipts issued thereunder;
(ac) an executed copy of the Deposit Agreement, dated as of February 8,
1994 (the "February 8, 1994 Deposit Agreement"), among Morgan Stanley, The
Bank of New York, as depositary, and the holders from time to time of
depositary receipts issued thereunder; and
(ad) an executed copy of the Deposit Agreement, dated as of November 29,
1993 (the "November 29, 1993 Deposit Agreement" and, together with the
December 18, 1996 Deposit Agreement, the October 18, 1995 Deposit
Agreement, the August 1, 1995 Deposit Agreement, the February 21, 1995
Deposit Agreement and the February 8, 1994 Deposit Agreement, the "Deposit
Agreements"), among Morgan Stanley, The Bank of New York, as depositary,
and the holders from time to time of depositary receipts issued thereunder.
Based upon the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that
(i) the Supplements and the Supplemental Indenture have been duly
authorized by the Company and the Subordinated Indenture, the Deposit
Agreements and the Capital Unit Agreements and the Guarantees have been
assumed by the Company;
(ii) all required corporate action has been taken with respect to the
assumption of the Guarantees by the Company and such Guarantees have been
validly issued and constitute valid and binding obligations of the Company;
(iii) when the shares of Preferred Stock and, if applicable, the
Depositary Shares have been issued and paid for by the purchasers thereof
in the manner and on the terms described in the Registration Statement,
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;
and
(iv) all required corporate action has been taken with respect to the
assumption of the Purchase Contracts by the Company and such Purchase
Contracts have been validly assumed by the Company and constitute valid and
binding obligations of the Company.
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. 333-27881.
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. 333-27881.
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.
/s/ 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. 333-27881) for the registration of debt securities,
guarantees of debt securities, preferred stock, preferred stock purchase
contracts and capital units and in the related Prospectus of Morgan Stanley,
Dean Witter, Discover & Co. and Morgan Stanley Finance plc for 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.
/s/ 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. 333-27881 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.
/s/ DELOITTE & TOUCHE LLP
New York, New York
June 2, 1997
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. 333-27881) for
the registration of debt securities, guarantees of debt securities, preferred
stock, preferred stock purchase contracts and capital units and in the related
Prospectus of Morgan Stanley, Dean Witter, Discover & Co. and Morgan Stanley
Finance plc for 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.
/s/ Ernst & Young LLP
New York, New York
June 2, 1997
