PROSPECTUS Dated March 26, 1998 Pricing Supplement No. 22 to
PROSPECTUS SUPPLEMENT Registration Statement No. 333-46935
Dated March 26, 1998 Dated August 14, 1998
Rule 424(b)(3)
$25,000,000
Morgan Stanley Dean Witter & Co.
BRoad InDex Guarded Equity-linked Securities[SM] due July 30, 2004
("BRIDGES[SM]")
based on the
Dow Jones Euro STOXX 50[SM]
MEDIUM-TERM NOTES, SERIES C
------------
The BRoad InDex Guarded Equity-linked Securities due July 30,
2004 (the "BRIDGES[SM]") based on the Dow Jones Euro STOXX 50[SM] are
Medium-Term Notes, Series C of Morgan Stanley Dean Witter & Co. (the
"Company"), as further described herein and in the Prospectus Supplement under
"Description of Notes--Fixed Rate Notes" and "-- Notes Linked to Commodity
Prices, Single Securities, Baskets of Securities or Indices." The BRIDGES are
being issued in minimum denominations of $10 and will mature on July 30, 2004
(the "Maturity Date"). The issue price of each BRIDGES will be $10 (the
"Issue Price"), and there will be no periodic payments of interest on the
BRIDGES. The BRIDGES will not be redeemable by the Company in whole or in
part prior to the Maturity Date.
At maturity, the holder of each BRIDGES will receive $10, the
par amount of such BRIDGES ("Par"), plus an amount (the "Supplemental
Redemption Amount") based on the percentage increase, if any, in the Final
Index Value of the Dow Jones Euro STOXX 50 (price return) (the "DJES50"), as
calculated by STOXX Ltd. ("STOXX") over the Initial Index Value, each as
further described below. "Dow Jones Euro STOXX 50" is a service mark of Dow
Jones & Company, Inc. ("Dow Jones"). The Supplemental Redemption Amount, if
any, payable with respect to each BRIDGES at maturity will be calculated on
the last of the Determination Dates and will equal the product of Par and the
DJES50 Percent Change. The DJES50 Percent Change is a fraction, the numerator
of which will be the Final Index Value less the Initial Index Value and the
denominator of which will be the Initial Index Value. The Supplemental
Redemption Amount cannot be less than zero. The Initial Index Value has been
set to equal 3284.47. The Final Index Value will equal the arithmetic average
of the DJES50 closing values on January 10, 2002, April 15, 2003 and July 21,
2004. See "Determination Dates" herein.
If the DJES50 Percent Change is equal to or less than zero, the
holder of each BRIDGES will be repaid Par, but will not receive any
Supplemental Redemption Amount.
For information as to the calculation of the Supplemental
Redemption Amount, the DJES50 Percent Change, the Final Index Value and
certain tax consequences to beneficial owners of the BRIDGES, see
"Supplemental Redemption Amount," "DJES50 Percent Change," "Final Index Value"
and "United States Federal Taxation" in this Pricing Supplement.
The Company will cause the Supplemental Redemption Amount, the
DJES50 Percent Change and the Final Index Value to be determined by Morgan
Stanley & Co. Incorporated (the "Calculation Agent") for The Chase Manhattan
Bank, as Trustee under the Senior Debt Indenture.
An investment in the BRIDGES entails risks not associated with
similar investments in a conventional debt security, as described under "Risk
Factors" on PS-7 through PS-9 herein.
The BRIDGES have been approved for listing on the New York
Stock Exchange ("NYSE"), subject to official notice of issuance. The NYSE
symbol for the BRIDGES is "BRX." It is not possible to predict whether the
BRIDGES will trade in the secondary market or if such market will be liquid or
illiquid.
"BRIDGES" and "BRoad InDex Guarded Equity-linked Securities"
are service marks of the Company.
------------------
PRICE $10 Per BRIDGES
------------------
Agent's
Price to Public(1) Commissions(1)(2)(3) Proceeds to Company
------------------ -------------------- -------------------
Per BRIDGES. $10 $0.25 $9.75
Total....... $25,000,000 $625,000 $24,375,000
- ------------
(1) The price to public for investors purchasing (i) greater than or equal to
100,000 BRIDGES and less than 500,000 BRIDGES in any single transaction
will be $9.90 per BRIDGES (99% of the Issue Price) and (ii) greater
than or equal to 500,000 BRIDGES will be $9.85 per BRIDGES (98.5% of
the Issue Price), subject to the holding period requirement described
under "Supplemental Information Concerning Plan of Distribution"
herein.
(2) The Company has agreed to indemnify the Agent against certain liabilities,
including liabilities under the Securities Act of 1933.
(3) The underwriting discounts and commissions for investors purchasing (i)
greater than or equal to 100,000 BRIDGES and less than 500,000 BRIDGES
will be $0.15 per BRIDGES and (ii) greater than or equal to 500,000
will be $0.10 per BRIDGES.
MORGAN STANLEY DEAN WITTER
(This page intentionally left blank)
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE
BRIDGES OR THE INDIVIDUAL STOCKS UNDERLYING THE DJES50. SPECIFICALLY, THE
AGENT MAY OVERALLOT IN CONNECTION WITH THE OFFERING, AND MAY BID FOR, AND
PURCHASE, THE BRIDGES OR INDIVIDUAL STOCKS UNDERLYING THE DJES50 IN THE OPEN
MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES SEE "SUPPLEMENTAL INFORMATION
CONCERNING PLAN OF DISTRIBUTION" AND "USE OF PROCEEDS AND HEDGING" IN THIS
PRICING SUPPLEMENT AND "PLAN OF DISTRIBUTION" IN THE ACCOMPANYING PROSPECTUS
SUPPLEMENT.
Capitalized terms not defined herein have the meanings given to such terms in
the accompanying Prospectus Supplement.
Principal Amount.............. $25,000,000
Maturity Date................. July 30, 2004
Specified Currency............ U.S. Dollars
Issue Price................... $10; provided that the price for investors
purchasing 100,000 or more BRIDGES will be at
a discount to the initial purchase price,
subject to a holding period requirement. See
"Supplemental Information Concerning Plan of
Distribution" in this Pricing Supplement.
Settlement Date (Original
Issue Date)................... August 19, 1998
CUSIP......................... 617446299
Book Entry Note or
Certificated Note............. Book Entry
Senior Note or
Subordinated Note............. Senior
Minimum Denominations......... $10
Trustee....................... The Chase Manhattan Bank
Agent......................... Morgan Stanley & Co. Incorporated
Maturity Redemption Amount.... At maturity (including as a result of
acceleration or otherwise), the holder of
each BRIDGES will receive $10, the par amount
of such BRIDGES ("Par"), plus the
Supplemental Redemption Amount, if any.
References herein to "BRIDGES" refer to each
$10 principal amount of any BRIDGES. There
will be no periodic payments of interest on
the BRIDGES.
Supplemental Redemption
Amount........................ The Supplemental Redemption Amount, payable
with respect to each BRIDGES at maturity,
will be calculated by the Calculation Agent
on the last of the Determination Dates and
will be an amount equal to the greater of (a)
zero and (b) the product of Par and the DJES50
Percent Change.
The Company will cause the Calculation Agent
to provide written notice to the Trustee at
its New York office, on which notice the
Trustee may conclusively rely, of the
Supplemental Redemption Amount, on or prior
to 11:00 a.m. on the Business Day preceding
the Maturity Date. See "Discontinuance of
the DJES50; Alteration of Method of
Calculation" below.
All percentages resulting from any
calculation with respect to the BRIDGES will
be rounded to the nearest one
hundred-thousandth of a percentage point,
with five one-millionths of a percentage point
rounded upwards (e.g., 9.876545% (or
.09876545) would be rounded to 9.87655% (or
.0987655)), and all dollar amounts used in or
resulting from such calculation will be
rounded to the nearest cent with one-half
cent being rounded upwards.
DJES50 Percent Change......... The DJES50 Percent Change is a fraction, the
numerator of which will be the Final Index
Value less the Initial Index Value and the
denominator of which will be the Initial
Index Value. The DJES50 Percent Change is
described by the following formula:
(Final Index Value - Initial Index Value)
-----------------------------------------
Initial Index Value
Initial Index Value........... 3284.47
Index Closing Value........... The Index Closing Value, on any Determination
Date, will equal the closing value of the
DJES50 or any Successor Index at the regular
official weekday close of trading on such
Determination Date. See "Discontinuance of
the DJES50; Alteration of Method of
Calculation."
References herein to the DJES50 will be
deemed to include any Successor Index, unless
the context requires otherwise.
Final Index Value............. The Final Index Value will equal the
arithmetic average of the Index Closing
Values on each of the Determination Dates as
calculated on the last Determination Date by
the Calculation Agent and rounded to the
nearest one hundredth of a point with five
one thousandths of a point being rounded
upwards.
Determination Dates........... The Determination Dates will be January 10,
2002, April 15, 2003 and July 21, 2004.
If either of the first two Determination
Dates is not a Trading Day or if a Market
Disruption Event occurs on either such date,
such Determination Date will be the
immediately succeeding Trading Day during
which no Market Disruption Event shall have
occurred; provided that if a Market
Disruption Event has occurred on each of the
five Trading Days immediately succeeding
either of the first two Determination Dates,
then (i) such fifth succeeding Trading Day
will be deemed to be the relevant
Determination Date, notwithstanding the
occurrence of a Market Disruption Event on
such day and (ii) with respect to any such
fifth Trading Day on which a Market
Disruption Event occurs, the Calculation
Agent will determine the value of the DJES50
on such fifth Trading Day in accordance with
the formula for and method of calculating the
DJES50 last in effect prior to the
commencement of the Market Disruption Event,
using the closing price (or, if trading in
the relevant securities has been materially
suspended or materially limited, its good
faith estimate of the closing price that
would have prevailed but for such suspension
or limitation) on such Trading Day of each
security most recently comprising the DJES50.
If the last scheduled Determination Date is
not a Trading Day or if there is a Market
Disruption Event on such last Determination
Date, such last Determination Date will be
the immediately succeeding Trading Day during
which no Market Disruption Event shall have
occurred; provided that the last
Determination Date will be no later than the
second scheduled Trading Day preceding the
Maturity Date, and if such date is not a
Trading Day or if there is a Market
Disruption Event on such date, the
Calculation Agent will determine the value of
the DJES50 on such last Determination Date in
accordance with clause (ii) of the preceding
paragraph.
Trading Day................... A day on which trading is generally conducted
(i) on the Frankfurt Stock Exchange ("FSE")
or its successors and (ii) on any exchange
on which futures or options contracts related
to the DJES50 are traded, other than a day on
which trading on the FSE is scheduled to
close prior to its regular weekday closing
time, as determined by the Calculation Agent.
Market Disruption Event....... "Market Disruption Event" means with respect
to the DJES50, the occurrence or existence of
either of the following events on a
Determination Date as determined by the
Calculation Agent:
(i) a suspension, material limitation or
absence of trading of stocks then
constituting 20% or more, by weight, of
the DJES50 (or the relevant Successor
Index) on the Relevant Exchanges for such
securities for more than two hours of
trading or during the one-half hour period
preceding the close of trading in such
market; or the suspension, material
limitation or absence of trading on any
major securities market of trading in
futures or options contracts related to
the DJES50 (or the relevant Successor
Index) for more than two hours of trading
or during the one-half hour period
preceding the close of trading on such
market; and
(ii) a determination by the Calculation
Agent in its sole discretion that the
event described in clause (i) above
materially interfered with the ability of
the Company or any of its affiliates to
unwind all or a material portion of the
hedge with respect to the BRIDGES.
For the purpose of determining whether a
Market Disruption Event exists at any time,
if trading in a security included in the
DJES50 is materially suspended or materially
limited at that time, then the relevant
percentage contribution of that security to
the level of the DJES50 shall be based on a
comparison of (x) the portion of the level of
the DJES50 attributable to that security
relative to (y) the overall level of the
DJES50, in each case immediately before that
suspension or limitation.
For purposes of determining whether a Market
Disruption Event has occurred: (1) a
limitation on the hours or number of days of
trading will not constitute a Market
Disruption Event if it results from an
announced change in the regular business
hours of the relevant exchange or market, (2)
a decision to permanently discontinue trading
in the relevant futures or options contract
will not constitute a Market Disruption
Event, (3) limitations pursuant to the rules
of any Relevant Exchange similar to New York
Stock Exchange Rule 80A (or any applicable
rule or regulation enacted or promulgated by
any other self-regulatory organization or any
government agency of similar scope as
determined by the Calculation Agent) on
trading during significant market
fluctuations will constitute a suspension,
absence or material limitation of trading,
(4) a suspension of trading in a futures or
options contract on the DJES50 by the primary
securities market related to such contract by
reason of (a) a price change exceeding limits
set by such exchange or market, (b) an
imbalance of orders relating to such
contracts or (c) a disparity in bid and ask
quotes relating to such contracts will
constitute a suspension or material
limitation of trading in futures or options
contracts related to the DJES50 and (5) a
"suspension, material limitation or absence
of trading" on any Relevant Exchange or on
the primary market on which futures or
options contracts related to the DJES50 are
traded will not include any time when such
market is itself closed for trading under
ordinary circumstances.
Relevant Exchange............. "Relevant Exchange" means the primary
exchange or market of trading for any
security then included in the DJES50 or any
Successor Index.
Alternative Determination
Date in case of an Event
of Default.................... In case an Event of Default with respect to
any BRIDGES shall have occurred and be
continuing, the amount declared due and
payable upon any acceleration of the BRIDGES
will be determined by the Calculation Agent
and will be equal to Par plus the Supplemental
Redemption Amount, if any, determined as
though each Determination Date scheduled to
occur on or after such date of acceleration
were the date of acceleration.
Calculation Agent............. Morgan Stanley & Co. Incorporated ("MS & Co.")
All determinations made by the Calculation
Agent will be at the sole discretion of the
Calculation Agent and will, in the absence of
manifest error, be conclusive for all
purposes and binding on the Company and
holders of the BRIDGES.
Because the Calculation Agent is an affiliate
of the Company, potential conflicts of
interest may exist between the Calculation
Agent and the holders of the BRIDGES,
including with respect to certain
determinations and judgments that the
Calculation Agent must make in determining
the DJES50 Percent Change, the Final Index
Value, the Supplemental Redemption Amount or
whether a Market Disruption Event has
occurred. See "Discontinuance of the DJES50;
Alteration of Method of Calculation" below
and "Market Disruption Event" above. MS &
Co., as a registered broker-dealer, is
required to maintain policies and procedures
regarding the handling and use of
confidential proprietary information, and such
policies and procedures will be in effect
throughout the term of the BRIDGES to
restrict the use of information relating to
the calculation of the DJES50 Percent Change,
the Final Index Value and the Supplemental
Redemption Amount prior to the dissemination
of such information. MS & Co. is obligated
to carry out its duties and functions as
Calculation Agent in good faith and using its
reasonable judgment.
Risk Factors.................. An investment in the BRIDGES entails
significant risks not associated with similar
investments in a conventional security,
including the following.
If the DJES50 Percent Change is equal to or
less than zero, the holders of the BRIDGES
will receive only the par amount of each
BRIDGES at maturity.
There will be no periodic payments of
interest on the BRIDGES as there would be on
a conventional fixed-rate debt security
having the same maturity date as the BRIDGES
and issued by the Company on the Original
Issue Date. Because the Supplemental
Redemption Amount may be equal to zero, the
effective yield to maturity of the BRIDGES
may be less than that which would be payable
on such a conventional fixed-rate debt
security.
The return of only the par amount of each
BRIDGES at maturity will not compensate the
holder for any opportunity cost implied by
inflation and other factors relating to the
time value of money. The percentage
appreciation of the DJES50 based on the Final
Index Value over the Initial Index Value does
not reflect the payment of dividends on the
stocks underlying the DJES50. Therefore, the
yield to maturity based on the Final Index
Value relative to the Initial Index Value
will not be the same yield as would be
produced if such underlying stocks were
purchased and held for a similar period.
Furthermore, an investment in the underlying
stocks would, unlike the calculation of the
Supplemental Redemption Amount with respect
to the Notes, be affected by any fluctuations
in the exchange rate between the ECU, the
Euro or other currencies in European
countries, as the case may be, and the U.S.
Dollar.
There can be no assurance as to whether there
will be a secondary market in the BRIDGES or,
if there were to be such a secondary market,
whether such market would be liquid or
illiquid. It is expected that the secondary
market for the BRIDGES will be affected by
the creditworthiness of the Company and by a
number of factors, including, but not limited
to, the volatility of the DJES50, dividend
rates on the stocks underlying the DJES50,
the time remaining to each Determination Date
and to the maturity of the BRIDGES and market
interest rates in the United States and
Europe. In addition, the Final Index Value
depends on a number of interrelated factors,
including economic, financial and political
events, over which the Company has no
control. The value of the BRIDGES prior to
maturity is expected to depend primarily on
market interest rates, market volatility and
the extent of the appreciation or
depreciation of the DJES50 from the Initial
Index Value on each of the Determination
Dates. The price at which a holder will be
able to sell the BRIDGES prior to maturity
may be at a discount, which could be
substantial, from the par amount thereof, if,
at such time, or on any previous
Determination Date the DJES50 (or the Final
Index Value, if determined) is below, equal
to or not sufficiently above the Initial
Index Value, if market interest rates rise
substantially or if market volatility
decreases.
The underlying stocks that constitute the
DJES50 have been issued by companies in
various European countries. Investments in
securities indexed to the value of such
country's equity securities involve certain
risks associated with the securities market
in such country, including the risks of
volatility in such markets, government
intervention in such markets,
cross-shareholdings in companies in certain
countries, legal requirements concerning
public information about companies in
European countries that are less exhaustive
than similar requirements concerning
companies that file reports with the United
States Securities and Exchange Commission
(the "SEC") and accounting and financial
standards that differ from country to country
and from those applicable to companies in the
United States.
Securities prices in each country are subject
to political, economic, financial and social
factors in that country that could negatively
affect securities markets in such country.
Moreover, the economies in such countries may
differ favorably or unfavorably from
economies in the United States in such
respects as growth of gross national product,
rate of inflation, capital reinvestment,
resources and self-sufficiency.
The historical DJES50 values should not be
taken as an indication of the future
performance of the DJES50 during the term of
the BRIDGES. While the trading prices of the
stocks underlying the DJES50 will determine
the value of the DJES50, it is impossible to
predict whether the value of the DJES50 will
rise or fall. Trading prices of the stocks
underlying the DJES50 will be influenced by
both the complex and interrelated political,
economic, financial and other factors that
can affect the capital markets generally and
the equity trading markets on which the
underlying stocks are traded, and by various
circumstances that can influence the values
of the underlying stocks in a specific market
segment or a particular underlying stock.
The policies of STOXX concerning additions,
deletions and substitutions of the stocks
underlying the DJES50 and the manner in which
STOXX takes account of certain changes
affecting such underlying stocks may affect
the value of the DJES50. The policies of
STOXX with respect to the calculation of the
DJES50 could also affect the value of the
DJES50. STOXX may discontinue or suspend
calculation or dissemination of the DJES50.
Any such actions could affect the value of
the BRIDGES. See "The Dow Jones Euro STOXX
50" and "Discontinuance of the DJES50;
Alteration of Method of Calculation" below.
Because the Calculation Agent is an affiliate
of the Company, potential conflicts of
interest may exist between the Calculation
Agent and the holders of the BRIDGES,
including with respect to certain
determinations and judgments that the
Calculation Agent must make in determining
the DJES50 Percent Change, the Final Index
Value, the Supplement Redemption Amount or
whether a Market Disruption Event has
occurred. See "Market Disruption Event" and
"Calculation Agent" above and "Discontinuance
of the DJES50; Alteration of Method of
Calculation" below.
It is suggested that prospective investors
who consider purchasing the BRIDGES should
reach an investment decision only after
carefully considering the suitability of the
BRIDGES in light of their particular
circumstances.
Investors should also consider the tax
consequences of investing in the BRIDGES.
See "United States Federal Taxation" below.
U.S. taxable investors will be subject to
annual income tax based on the comparable
yield of the BRIDGES even though they will
not receive any payments thereon prior to
maturity and at maturity may only receive the
return of the par amount of the BRIDGES. In
addition, any gain recognized by U.S. taxable
investors on the sale, exchange or retirement
of the BRIDGES will be treated as ordinary
income.
The Dow Jones Euro STOXX 50... All information regarding the DJES50 set
forth herein, including, without limitation,
its make-up, method of calculation and changes
in its components, has been derived from
publicly available information. Such
information reflects the policies of, and are
subject to change by, the publisher of the
DJES50. STOXX Ltd. does not have any
obligation to continue to publish, and may
discontinue publication of, the DJES50.
The first phase of the European Economic and
Monetary Union ("EMU") is expected to be
completed on January 1, 1999. The currency
exchange rates between participating
countries will be irrevocably fixed and the
new currency, the euro, will become the
currency of the member states. The eleven
initial member states included in EMU are:
Austria, Belgium, Finland, France, Germany,
The Netherlands, Ireland, Italy, Luxembourg,
Portugal and Spain. According to the
Economist Intelligence Unit, as of year end
1997, these eleven countries had a combined
GDP of approximately U.S. $6.23 trillion and
a combined population of 290 million.
According to Federation International des
Bourses de Valeurs, their combined equity
market capitalization at year end 1997 was
approximately U.S.$2.97 trillion.
Furthermore, Denmark, Greece, Sweden and the
United Kingdom may join the EMU at a later
date.
In order to provide a definitive standard for
measuring the stock market performance of the
blue chip companies in the countries expected
to join EMU from its inception, a new index,
the DJES50 was launched on February 26, 1998.
The DJES50 consists of 50 stocks that are
among the largest in market capitalization,
highest in liquidity and are the leaders of
their industrial sectors. Set forth below
are the country weightings and industrial
sector weightings of the securities currently
included in the DJES50 as of August 13, 1998:
Country Weightings Industrial Sector Weightings
----------------------------- -------------------------------------------
Germany 27.72% Bank/Financial Services/
Insurance 29.38%
France 24.32% Telecom/Technology/Media 26.39%
The Netherlands 24.07% Energy/Utility/Industrial 22.01%
Italy 9.99% Consumer Non-Cyclical/Food &
Beverages/Pharmaceutical/Retail 10.73%
Spain 7.63% Chemical/Conglomerate/
Construction 6.30%
Belgium 2.47% Auto/Consumer Cyclical 5.19%
Finland 2.28%
Ireland 0.86%
Portugal 0.66%
Source: http://www.stoxx.com
The DJES50 was created by STOXX Ltd.
("STOXX"), a company jointly founded by
Schweizer Borse, SBF-Bourse de Paris, Deutsche
Borse and Dow Jones. Publication of the
DJES50 began on February 26, 1998, based on
an initial DJES50 value of 1,000 at December
31, 1991. The DJES50 is published in The
Wall Street Journal.
The DJES50 is calculated by (i) multiplying
the per share price of each stock included in
the DJES50 by the number of outstanding
shares (and, if the stock is not quoted in
euro, then multiplied by the country currency
and an exchange factor which reflects the
exchange rate between the country currency
and the euro (or, prior to January 1, 1999,
the ECU)) (ii) calculating the sum of all
these products (such sum being hereinafter
the "DJES50 Aggregate Market Capitalization")
and (iii) dividing the DJES50 Aggregate Market
Capitalization by a divisor which represents
the DJES50 Aggregate Market Capitalization on
the base date of the DJES50 and which can be
adjusted to allow changes in the issued share
capital of individual underlying stocks
(including the deletion and addition of
stocks, the substitution of stocks, stock
dividends and stock splits) to be made
without distorting the DJES50. Because of
such capitalization weighting, movements in
share prices of companies with relatively
greater market capitalization will have a
greater effect on the level of the entire
DJES50 than will movements in share prices of
companies with relatively smaller market
capitalization.
A current list of the issuers of the DJES50,
as of August 13, 1998, is set forth below.
Current
Weight in
Issuer of Component Stock Country DJES50 Industry Sector
- ------------------------- ------- --------- ---------------
ABN-AMRO Hldg NV The Netherlands 2.16% Bank
Aegon NV The Netherlands 3.31% Insurance
Ahold NV The Netherlands 1.03% Consumer Non-
Cyclical
Air Liquide SA France 0.78% Chemical
Akzo Nobel The Netherlands 0.89% Chemical
Alcatel Alsthom SA France 2.02% Technology
Allianz AG Germany 5.19% Insurance
Allied Irish Bank Plc Ireland 0.86% Bank
Assicurazioni Generali Italy 2.39% Insurance
S.p.A.
AXA-UAP SA The Netherlands 2.74% Insurance
Banco Bilbao Vizcaya SA Spain 2.18% Bank
Bayer AG Germany 1.93% Chemical
Carrefour France 1.46% Retail
Credito Italiano S.p.A. Italy 0.96% Bank
Daimler-Benz AG Germany 3.67% Auto
Deutsche Bank Germany 2.51% Bank
Deutsche Telecom Germany 4.90% Telecom
Deutsche Lufthansa AG Germany 0.62% Consumer
Cyclical
Electrabel SA Belgium 1.14% Utility
ELF Aquitaine France 2.08% Energy
Elsevier NV The Netherlands 0.59% Media
Endesa SA Spain 1.30% Utility
ENI S.p.A. Italy 3.06% Energy
Fiat S.p.A. Italy 0.90% Auto
Fortis AG Belgium 0.76% Insurance
France Telecom France 4.54% Telecom
ING Groep NV The Netherlands 3.99% Financial
Services
Koninklijke PTT NV The Netherlands 1.26% Telecom
LVMH Moet-Hennesey France 0.98% Food &
Louis Vuitton Beverage
L'Oreal France 2.43% Consumer Non-
Cyclical
Mannesmann AG Germany 2.26% Industrial
Metro AG Germany 0.80% Retail
Nokia Ab Oy A Finland 2.28% Technology
Paribas France 1.00% Financial
Services
Petrofina SA Belgium 0.57% Energy
Philips Electronics NV The Netherlands 1.73% Technology
Portugal Telecom SA Portugal 0.66% Telecom
Repsol SA Spain 0.96% Energy
Rhone Poulenc A France 1.21% Pharmaceutical
Royal Dutch Petroleum The Netherlands 6.29% Energy
RWE AG Germany 1.57% Utility
Schneider SA France 0.62% Industrial
Siemens AG Germany 2.54% Technology
Societe Generale France 1.33% Bank
Cie de St-Gobain France 0.97% Construction
Telecom Italia Italy 2.68% Telecom
Telefonica de Espana Spain 3.19% Telecom
Unilever NV The Netherlands 2.82% Food &
Beverage
Veba AG Germany 1.73% Conglomerate
Vivendi France 2.16% Utility
(Source: http://www.stoxx.com)
The composition of the DJES50 is reviewed
annually, and changes are implemented on the
third Friday in September, using market data
from the end of July as the basis for the
review process. Changes in the composition
of the DJES50 are made to ensure that the
index includes those companies which, within
the eligible countries and within each
industry sector, have the greatest market
capitalization. Changes in the composition
of the DJES50 are made entirely by STOXX Ltd.
without consultation with the corporations
represented in the DJES50 or the Company.
The DJES50 is also reviewed on an ongoing
basis, and change in the composition of the
index may be necessary if there have been
extraordinary events for one of the index
companies (e.g. delisting, bankruptcy,
merger, takeover etc.) In these cases, the
event is taken into account as soon as it is
effective. The component stocks of the
DJES50 may be changed at any time for any
reason. Neither STOXX Ltd. nor any of its
founders is affiliated with the Company and
has participated in any way in the creation
of the Notes.
The table below summarizes the adjustments to
any component stock made for corporate
actions and the effect of such adjustment on
the base value, where "p" is the price of
such component stock and "q" is the number of
shares of such stock.
<TABLE>
<CAPTION>
Impact on
Events Adjustment Factor base value
------ ----------------- ----------
<S> <C> <C>
Special cash p before dividend - dividend Decrease
dividend adj. for p = ----------------------------
(from non- p before dividend
operating
income)
Stock 1 None
Dividend & adj. for p = -------------------------
Split (the 1 + no. of new shares (%)
same security)
adj. for q = 1 + no. of new shares (%)
Reverse Split 1 None
adj. for p = -------------------------
1 - no. of new shares (%)
adj. for q = 1 - no. of new shares (%)
Stock p before distribution cash equivalent Decrease
Dividend of a adj. for p = -------------------------------------
different p before distribution
company
security cash equivalent = other sec.p o no. of
distributed stocks (%)
Rights adj.p Increase
Offering adj. for p = -----------------
last cum rights p
last cum rights p+subscription prights(%)
adj. p = -----------------------------------------
1 + rights (%)
adj. for q = 1 + rights (%)
If the new shares have a dividend
disadvantage, then the subscription price will
be adjusted.
Combination: adj.p Increase
stock adj. for p = -----------------
distribution last cum rights p
(stock
dividend or last cum rights p + subscription p (1 + stock
split) and subscription (%)) o rights (%)
rights offering adj. p = ----------------------------------------------
- -- one action (1 + stock distribution (%)) (1 + rights (%))
applicable to
other (if rights
applicable adj. for q = (1 + stock distribution (%)) (1 + rights (%))
after stock
distribution)
Combination: adj.p Increase
stock adj. for p = -----------------
distribution last cum rights p
(stock
dividend or last cum rights p - subscription p o rights
split) and adj. p = -----------------------------------------------
rights offering (1 + rights (%)) o (1 + stock distribution (%))
- -- one action
applicable to adj. for q = (1 + stock distribution (%))(1 + rights (%))
other (if stock
distribution
applicable
after rights)
Combination: adj.p Increase
stock adj. for p = -----------------
distribution last cum rights p
(stock
dividend or last cum rights p + subscription p rights(%)
split) and adj. p = ---------------------------------------------
rights issues (1 + rights (%)) + stock distribution (%))
- -- neither
action is adj. for q = (1 + stock distribution (%) + rights (%))
applicable to
the other
Spin-off p before spinoff - cash equivalent Decrease
adj. for p = ----------------------------------
p before spinoff
cash equivalent = spunoff stock p o no. of
spunoff stocks (in %)
Repurchase p after tender Decrease
shares-self adj. for p = ---------------
tender p before tender
(p before tender)o(no. of q before tender)o
p after (tender po no. of tendered q)
tender = --------------------------------------------
(no. of q before tender)o no. of tendered q
no. of q after tender
adj. q = ----------------------
no. of q before tender
</TABLE>
The Company or its affiliates may presently
or from time to time engage in business with
the publishers, owners, founders or creators
of the DJES50 or any of its successors or
one or more of the issuers of the component
stocks of the DJES50, including extending
loans to, making equity investments in or
providing advisory services, including merger
and acquisition advisory services, to such
publishers, their successors, founders or
creators or to any of such issuers. In the
course of such business with issuers, the
Company or its affiliates may acquire
non-public information with respect to such
issuers. The Company may also act as market
maker for the common stocks of such issuers.
The Company does not make any representation
to any purchaser of Notes with respect to any
matters whatsoever relating to any of such
publishers, their successors, founders or
creators or to any of such issuers. Any
prospective purchaser of Notes should
undertake such an independent investigation
of the issuers of the component stocks of the
DJES50 and with respect to the competency of
its publisher to formulate and calculate the
DJES50 as in its judgment is appropriate to
make an informed decision with respect to an
investment in the Notes. The composition of
the DJES50 does not reflect any investment or
sell recommendations of the Company or its
affiliates.
Discontinuance of the DJES50;
Alteration of Method of
Calculation................... If STOXX discontinues publication of the
DJES50 and STOXX or another entity publishes
a successor or substitute index that the
Calculation Agent determines, in its sole
discretion, to be comparable to the
discontinued DJES50 (such index being
referred to herein as a "Successor Index"),
then any subsequent Index Closing Value will
be determined by reference to the value of
such Successor Index at the close of trading
on the relevant Determination Date.
Upon any selection by the Calculation Agent
of a Successor Index, the Calculation Agent
will cause written notice thereof to be
furnished to the Trustee, to the Company and
to the holders of the BRIDGES within three
Trading Days of such selection.
If STOXX discontinues publication of the
DJES50 prior to, and such discontinuance is
continuing on, any Determination Date and the
Calculation Agent determines that no
Successor Index is available at such time,
then on such Determination Date, the
Calculation Agent will determine the Index
Closing Value that would be used in computing
the DJES50 Percent Change on such
Determination Date. The Index Closing Value
will be computed by the Calculation Agent in
accordance with the formula for and method of
calculating the DJES50 last in effect prior
to such discontinuance, using the closing
price (or, if trading in the relevant
securities has been materially suspended or
materially limited, its good faith estimate
of the closing price that would have
prevailed but for such suspension or
limitation) on such Determination Date of
each security most recently comprising the
DJES50. Notwithstanding these alternative
arrangements, discontinuance of the
publication of the DJES50 may adversely
affect the value of the BRIDGES.
If at any time the method of calculating the
DJES50 or a Successor Index, or the value
thereof, is changed in a material respect, or
if the DJES50 or a Successor Index is in any
other way modified so that such index does
not, in the opinion of the Calculation Agent,
fairly represent the value of the DJES50 or
such Successor Index had such changes or
modifications not been made, then, from and
after such time, the Calculation Agent will,
at the close of business in New York City on
each Determination Date make such
calculations and adjustments as, in the good
faith judgment of the Calculation Agent, may
be necessary in order to arrive at a value of
a stock index comparable to the DJES50 or
such Successor Index, as the case may be, as
if such changes or modifications had not been
made, and calculate the Supplemental
Redemption Amount with reference to the
DJES50 or such Successor Index, as adjusted.
Accordingly, if the method of calculating the
DJES50 or a Successor Index is modified so
that the value of such index is a fraction of
what it would have been if it had not been
modified (e.g., due to a split in the index),
then the Calculation Agent will adjust such
index in order to arrive at a value of the
DJES50 or such Successor Index as if it had
not been modified (e.g., as if such split had
not occurred).
Public Information............ All disclosure contained in this Pricing
Supplement regarding the DJES50, including,
without limitation, its make-up, method of
calculation and changes in its components,
are derived from publicly available
information prepared by STOXX Ltd. Neither
the Company nor the Agent take any
responsibility for the accuracy or
completeness of such information.
Historical Information........ The following table sets forth the high and
low daily closing values, as well as
end-of-quarter closing values, of the DJES50
(price return) for each quarter in the period
from January 1, 1993 through August 14, 1998.
(Although publication of the DJES50 began on
February 26, 1998, historical levels of the
index have been calculated by STOXX from a
base date of December 31, 1991.) The
historical values of the DJES50 should not be
taken as an indication of future performance,
and no assurance can be given as to the level
of the DJES50 as of any Determination Date.
Daily Closing Values In ECU
------------------------------------
High Low Period End
-------- ------- ----------
1993
First Quarter......... 1148.63 1014.66 1140.82
Second Quarter........ 1161.96 1102.94 1157.58
Third Quarter......... 1321.88 1144.93 1285.92
Fourth Quarter........ 1433.34 1287.49 1433.34
1994
First Quarter......... 1459.27 1347.84 1365.74
Second Quarter........ 1441.33 1272.00 1284.60
Third Quarter......... 1401.79 1286.05 1302.53
Fourth Quarter........ 1344.61 1268.62 1320.59
1995
First Quarter......... 1348.10 1274.57 1300.13
Second Quarter........ 1400.60 1298.18 1362.52
Third Quarter......... 1469.19 1371.32 1419.60
Fourth Quarter........ 1509.91 1367.15 1506.82
1996
First Quarter......... 1612.24 1507.65 1612.24
Second Quarter........ 1691.04 1619.33 1665.90
Third Quarter......... 1694.51 1563.32 1694.51
Fourth Quarter........ 1859.10 1693.99 1850.32
1997
First Quarter......... 2169.71 1824.52 2137.28
Second Quarter........ 2438.38 2026.91 2398.41
Third Quarter......... 2699.78 2407.58 2581.36
Fourth Quarter........ 2641.68 2241.21 2531.99
1998
First Quarter......... 3179.72 2466.81 3153.32
Second Quarter........ 3443.76 3061.04 3406.82
Third Quarter (through
August 14, 1998).. 3670.82 3187.44 3284.47
(Source: Bloomberg)
Use of Proceeds and Hedging... The net proceeds to be received by the
Company from the sale of the BRIDGES will be
used for general corporate purposes and, in
part, by the Company or one or more of its
affiliates in connection with hedging the
Company's obligations under the BRIDGES,
including hedging market risks associated
with the Supplemental Redemption Amount.
On or prior to the date of this Pricing
Supplement, the Company, through its
subsidiaries and others, hedged its
anticipated exposure in connection with the
BRIDGES by the purchase and sale of exchange
traded and over the counter options on the
DJES50, individual stocks included in the
DJES50, futures contracts on the DJES50 and
options on such futures contracts or by
taking positions in any other instruments
that it may wish to use in connection with
such hedging. The Company, through its
subsidiaries, is likely to modify its hedge
position throughout the life of the BRIDGES,
including on each Determination Date, by
purchasing and selling the securities and
instruments listed above and other available
securities and instruments. Although the
Company has no reason to believe that its
hedging activity had or will have a material
impact on the price of such options, stocks,
futures contracts, and options on futures
contracts or on the value of the DJES50,
there can be no assurance that the Company
did not, or in the future will not, affect
such prices as a result of its hedging
activities. See also "Use of Proceeds" in
the accompanying Prospectus.
Supplemental Information
Concerning Plan of
Distribution.................. The Agent proposes initially to offer the
BRIDGES directly to the public at the public
offering price set forth on the cover page
hereof; provided that the price will be $9.90
per BRIDGES and the underwriting discounts
and commissions will be $0.15 per BRIDGES for
purchasers of greater than or equal to 100,000
BRIDGES and less than 500,000 BRIDGES (a
"Tier I Investor") and the price will be
$9.85 per BRIDGES and the underwriting
discounts and commissions will be $0.10 per
BRIDGES for purchasers of greater than or
equal to 500,000 BRIDGES (a "Tier II
Investor", and any Tier I Investor or Tier II
Investor being referred to herein as a "Tier
Investor"), in each case, in any single
transaction, subject to the holding period
requirements described herein. After the
initial offering of the BRIDGES, the offering
price and other selling terms may from time
to time be varied by the Agent.
Generally, delivery of approximately 99% of
the BRIDGES purchased by a Tier I Investor at
the applicable reduced price (the "Delivered
Tier I BRIDGES") or approximately 98.50% of
the BRIDGES purchased by a Tier II Investor
at the applicable reduced price (the
"Delivered Tier II BRIDGES," and together
with the Delivered Tier I BRIDGES, the
"Delivered BRIDGES") will be made on the date
of delivery of the BRIDGES referred to on the
cover of this Pricing Supplement. The
balance of approximately 1% of the BRIDGES
(the "Escrowed Tier I BRIDGES") purchased by
each Tier I Investor or approximately 1.50%
of the BRIDGES (the "Escrowed Tier II
BRIDGES," and together with the Escrowed Tier
I BRIDGES, the "Escrowed BRIDGES") purchased
by each Tier II Investor, will be held in
escrow and delivered to such Tier Investor
if the Tier Investor and any accounts in
which the Tier Investor may have deposited
any of its Delivered BRIDGES have held all of
the Delivered BRIDGES for 45 days following
the date of this Pricing Supplement or any
shorter period deemed appropriate by MS & Co.
If a Tier Investor or any accounts in which
the Tier Investor has deposited any of its
Delivered BRIDGES fails to satisfy the holding
period requirement, as determined by MS &
Co., all of the Tier Investor's Escrowed
BRIDGES will be forfeited by the Investor and
not delivered to it. The Escrowed BRIDGES
will instead be delivered to the Agent for
sale to investors. This forfeiture will have
the effect of increasing the purchase price
per BRIDGES for such investors to 100% of the
principal amount of the BRIDGES. Should the
Escrowed BRIDGES be sold in the event of such
forfeiture or once the holding period is no
longer applicable, the market price of the
BRIDGES may be adversely affected. See also
"Plan of Distribution" in the accompanying
Prospectus Supplement.
An affiliate of the Agent has purchased
190,183 of the BRIDGES offered hereby for
investment purposes, although the Agent may
sell such BRIDGES from time to time in
accordance with applicable law.
License Agreement............. STOXX Ltd. and MS & Co. have entered into a
non-exclusive license agreement providing for
the license to MS & Co., in exchange for a
fee, of the right to use the DJES50, which is
owned and published by STOXX, in connection
with certain securities, including the Notes.
The license agreement between STOXX and MS &
Co. provides that the following language must
be set forth in the Pricing Supplement:
The Notes are not sponsored, endorsed, sold
or promoted by STOXX or Dow Jones. Neither
STOXX nor Dow Jones makes any representation
or warranty, express or implied, to the
owners of the Notes or any member of the
public regarding the advisability of
investing in securities generally or in the
Notes particularly. The only relationship of
STOXX to the Company is as the licensor of the
Dow Jones Euro STOXX 50[SM] and of certain
trademarks, trade names and service marks of
STOXX, and as the sublicensor of the Dow
Jones STOXX[SM], the Dow Jones Euro STOXX[SM]
and of certain trademarks, trade names and
service marks of Dow Jones. The
aforementioned Indexes are determined,
composed and calculated by STOXX or Dow
Jones, as the case may be, without regard to
the Company or the Notes. Neither STOXX nor
Dow Jones is responsible for or has
participated in the determination of the
timing of, prices at, or quantities of the
Notes to be issued or in the determination or
calculation of the equation by which the
Notes are to be converted into cash. Neither
STOXX nor Dow Jones has any obligation or
liability in connection with the
administration, marketing or trading of the
Notes.
NEITHER STOXX NOR DOW JONES GUARANTEES THE
ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN AND
NEITHER SHALL HAVE ANY LIABILITY FOR ANY
ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
NEITHER STOXX NOR DOW JONES MAKES ANY
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS
TO BE OBTAINED BY THE COMPANY, OWNERS OF THE
NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF THE INDEXES OR ANY DATA INCLUDED
THEREIN. DOW JONES MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS
ALL WARRANTIES, OR MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE WITH RESPECT
TO THE INDEXES OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL EITHER STOXX OR DOW JONES HAVE
ANY LIABILITY FOR ANY LOST PROFITS OR
INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL
DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY
THEREOF. THERE ARE NO THIRD PARTY
BENEFICIARIES OF ANY AGREEMENTS OR
ARRANGEMENTS BETWEEN STOXX AND THE COMPANY.
The Dow Jones Euro STOXX 50 is owned by STOXX
Ltd. and is a service mark of Dow Jones &
Company, Inc., and has been licensed for
certain purposes by the Company. [Copyright]
1998 by STOXX Ltd. All rights reserved.
United States Federal
Taxation...................... The BRIDGES are Notes linked to an index and
investors should refer to the discussion
under "United States Federal Taxation --
Notes -- Notes Linked to Commodity Prices,
Single Securities, Baskets of Securities or
Indices" and "United States Federal Taxation
-- Notes -- Optionally Exchangeable Notes" in
the accompanying Prospectus Supplement. In
connection with the discussion thereunder,
the Company has determined that the
"comparable yield" is an annual rate of
6.10%, compounded annually. Based on the
Company's determination of the comparable
yield, the "projected payment schedule" for a
BRIDGES (assuming a par amount of $10 or with
respect to each integral multiple thereof)
consists of a projected amount due at
maturity, equal to $4.22.
The following table states the amount of
interest that will be deemed to have accrued
with respect to a BRIDGES during each accrual
period, based upon the Company's
determination of the comparable yield and the
projected payment schedule:
Total Interest
Deemed to Have
Accrued from
Interest Deemed Original Issue
to Accrue During Date per Bridges
Accrual Period as of End of
Accrual Period (Per Bridges) Accrual Period
-------------- ---------------- ---------------
Original Issue Date through
December 31, 1998 $0.22 $0.22
January 1, 1999 through
December 31,1999 $0.62 $0.84
January 1, 2000 through
December 31, 2000 $0.66 $1.50
January 1, 2001 through
December 31, 2001 $0.70 $2.20
January 1, 2002 through
December 31, 2002 $0.74 $2.94
January 1, 2003 through
December 31, 2003 $0.79 $3.73
January 1, 2004 through
July 30, 2004 $0.49 $4.22
THE COMPARABLE YIELD AND THE PROJECTED
PAYMENT SCHEDULE ARE NOT PROVIDED FOR ANY
PURPOSE OTHER THAN THE DETERMINATION OF
UNITED STATES HOLDERS' INTEREST ACCRUALS AND
ADJUSTMENTS THEREOF IN RESPECT OF THE BRIDGES
AND DO NOT CONSTITUTE A REPRESENTATION
REGARDING THE ACTUAL AMOUNTS OF THE PAYMENTS
ON THE BRIDGES.
Additional Disclosure for Non-U.S. Holders.
The following discussion is based on the
opinion of Davis Polk & Wardwell, special tax
counsel to the Company. As used herein, the
term "Non-U.S. Holder" means an owner of
a BRIDGES that is, for United States
federal income tax purposes, (i) a
nonresident alien individual, (ii) a
foreign corporation, (iii) a nonresident
alien fiduciary of a foreign trust or
estate or (iv) a foreign partnership one
or more of the members of which is, for
United States federal income tax purposes,
a nonresident alien individual, a foreign
corporation or a nonresident alien
fiduciary of a foreign trust or estate.
The following summary does not deal with
persons that are not Non-U.S. Holders or
that are subject to special rules, such as
nonresident alien individuals who have
lost United States citizenship or who have
ceased to be taxed as United States
resident aliens, corporations that are
treated as foreign personal holding
companies, controlled foreign corporations
or passive foreign investment companies,
and certain other Non-U.S. Holders that
are owned or controlled by persons subject
to United States federal income tax. In
addition, unless otherwise noted, the
following summary does not apply to
persons for whom interest or gain on a
BRIDGES is effectively connected with a
trade or business in the United States.
Persons considering the purchase of the
BRIDGES should consult their tax advisors
with regard to the application of the
United States federal income tax laws to
their particular situations as well as any
tax consequences arising under the laws of
any state, local or foreign taxing
jurisdiction. This discussion is based on
the Code and administrative
interpretations as of the date hereof, all
of which are subject to change, including
changes with retroactive effect.
Capitalized terms appearing herein and not
defined have the meanings assigned to such
terms in the Prospectus Supplement.
Subject to the discussion below concerning
backup withholding, payments of principal and
the Supplemental Redemption Amount, if any,
at maturity of a BRIDGES by the Company or a
paying agent to a Non-U.S. Holder, and gain
realized on the sale, exchange or other
disposition of such BRIDGES, will not be
subject to United States federal income or
withholding tax, provided that: (i) such
Non-U.S. Holder does not own, actually or
constructively, 10 percent or more of the
total combined voting power of all classes of
stock of the Company entitled to vote, is not
a controlled foreign corporation related,
directly or indirectly, to the Company
through stock ownership, and is not a bank
receiving interest described in Section
881(c)(3)(A) of the Code; (ii) the statement
required by Section 871(h) or Section 881(c)
of the Code has been provided with respect
to the beneficial owner, as discussed below;
(iii) such Non-U.S. Holder is not an
individual who is present in the United
States for 183 days or more in the taxable
year of disposition, or such individual does
not have a "tax home" (as defined in Section
911(d)(3) of the Code) or an office or other
fixed place of business in the United States;
and (iv) such payment and gain are not
effectively connected with the conduct by
such Holder of a trade or business in the
United States.
Sections 871(h) and 881(c) of the Code and
applicable regulations require that, in order
to obtain the portfolio interest exemption
from withholding tax, either the beneficial
owner of the BRIDGES, or a securities
clearing organization, bank or other
financial institution that holds customers'
securities in the ordinary course of its
trade or business (a "Financial Institution")
and that is holding the BRIDGES on behalf of
such beneficial owner, file a statement with
the withholding agent to the effect that the
beneficial owner of the BRIDGES is not a
United States person. Under United States
Treasury Regulations, such requirement will
be fulfilled if the beneficial owner of a
BRIDGES certifies on Internal Revenue Service
Form W-8, under penalties of perjury, that it
is not a United States person and provides
its name and address, and any Financial
Institution holding the BRIDGES on behalf of
the beneficial owner files a statement with
the withholding agent to the effect that it
has received such a statement from the Holder
(and furnishes the withholding agent with a
copy thereof). With respect to BRIDGES held
by a foreign partnership, under current law,
the Form W-8 may be provided by the foreign
partnership. However, for payments with
respect to a BRIDGES after December 31, 1999,
unless the foreign partnership has entered
into a withholding agreement with the
Internal Revenue Service, a foreign
partnership will be required, in addition to
providing an intermediary Form W-8, to attach
an appropriate certification by each partner.
Prospective investors, including foreign
partnerships and their partners, should
consult their tax advisors regarding possible
additional reporting requirements.
Under Section 2105(b) of the Code, a BRIDGES
held by an individual who is not a citizen or
resident of the United States at the time of
his death will not be subject to United
States federal estate tax as a result of such
individual's death, provided that the
individual does not own, actually or
constructively, 10 percent or more of the
total combined voting power of all classes of
stock of the Company entitled to vote and, at
the time of such individual's death, payments
with respect to such BRIDGES would not have
been effectively connected to the conduct by
such individual of a trade or business in the
United States.
Under current Treasury Regulations, backup
withholding at 31% will not apply to payments
by the Company made on a BRIDGES if the
certifications required by Sections 871(h)
and 881(c) are received, provided in each
case that the Company or such paying agent,
as the case may be, does not have actual
knowledge that the payee is a United States
person.
Under current Treasury Regulations, payments
on the sale, exchange or other disposition of
a BRIDGES made to or through a foreign office
of a broker generally will not be subject to
backup withholding. However, if such broker
is a United States person, a controlled
foreign corporation for United States tax
purposes, a foreign person 50 percent or more
of whose gross income is effectively
connected with a United States trade or
business for a specified three-year period
or, in the case of payments made after
December 31, 1999, a foreign partnership with
certain connections to the United States,
information reporting will be required unless
the broker has in its records documentary
evidence that the beneficial owner is not a
United States person and certain other
conditions are met or the beneficial owner
otherwise establishes an exemption. Backup
withholding may apply to any payment which
such broker is required to report if such
broker has actual knowledge that the payee is
a United States person. Payments to or
through the United States office of a broker
will be subject to backup withholding and
information reporting unless the Holder
certifies, under penalties of perjury, that
it is not a United States person or otherwise
establishes an exemption.
Non-U.S. Holders of BRIDGES should consult
their tax advisors regarding the application
of information reporting and backup
withholding in their particular situations,
the availability of an exemption therefrom,
and the procedure for obtaining such an
exemption, if available. Any amounts
withheld from a payment to a Non-U.S. Holder
under the backup withholding rules will be
allowed as a credit against such Holder's
United States federal income tax liability
and may entitle such Holder to a refund,
provided that the required information is
furnished to the Internal Revenue Service.
