MORGAN STANLEY DEAN WITTER DISCOVER & CO, 424B2, 1998-03-06

MORGAN STANLEY DEAN WITTER DISCOVER & CO
424B2, 1998-03-06
FINANCE SERVICES

Previous: STAGECOACH FUNDS INC /AK/, 485APOS, 1998-03-06

Next: MORGAN STANLEY DEAN WITTER DISCOVER & CO, 424B3, 1998-03-06

Filed pursuant to Rule 424(b)(2)
File Nos. 333-46403
333-46403-01

PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED FEBRUARY 25, 1998)

$400,000,000

MSDW CAPITAL TRUST I

7.10% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $25 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY

MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.

The 7.10 % Capital Securities (the "Capital Securities") offered hereby
will represent preferred undivided beneficial interests in the assets of MSDW
Capital Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Issuer Trust"). Morgan Stanley, Dean Witter,
Discover & Co. (the "Company") will initially be the owner, directly or
indirectly, of all the beneficial interests represented by common securities
of the Issuer Trust (the "Common Securities" and, together with the Capital
Securities, the "Trust Securities"). The Issuer Trust exists for the sole
purpose of issuing the Trust Securities and investing the proceeds thereof in
7.10% Junior Subordinated Deferrable Interest Debentures (the "Junior
Subordinated Debentures," and together with the Trust Securities, the
"Securities") to be issued by the Company. The Junior Subordinated
Debentures will mature on February 28, 2038 (such date, as it may be advanced
under certain circumstances, as hereinafter described, the "Stated
Maturity"), which may be advanced to a date not earlier than February 28,
2013.
(continued on next page)
SEE "RISK FACTORS" BEGINNING ON PAGE S-6 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN EVALUATING AN
INVESTMENT IN THE CAPITAL SECURITIES.

THE CAPITAL SECURITIES HAVE BEEN APPROVED FOR LISTING ON THE NEW YORK
STOCK EXCHANGE, INC. (THE "NYSE"), SUBJECT TO OFFICIAL NOTICE OF ISSUANCE,
AND TRADING OF THE CAPITAL SECURITIES ON THE NYSE IS EXPECTED TO COMMENCE
WITHIN A 30-DAY PERIOD AFTER THE INITIAL DELIVERY OF THE CAPITAL SECURITIES.
THE NYSE SYMBOL FOR THE CAPITAL SECURITIES IS "MWC."

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 SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION> Underwriting
Price to Commissions and Proceeds to the
Public(1) Discounts(2) Issuer Trust (3)(5)
<S> <C> <C> <C>
Per Capital Security . . . . . . $25 (3) $25
Total (4) . . . . . . . . . . . $400,000,000 (3) $400,000,000

</TABLE>

- ------------------
(1) Plus accumulated Distributions, if any, from March 12, 1998.
(2) The Company and the Issuer Trust have each agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting" in
this Prospectus Supplement.
(3) In view of the fact that the proceeds of the sale of the Capital
Securities will be used to purchase the Junior Subordinated Debentures,
the Company has agreed to pay to the Underwriters, as compensation for
their arranging the investment therein of such proceeds, $0.7875 per
Capital Security (or $12,600,000 in the aggregate). See "Underwriting"
in this Prospectus Supplement.
(4) The Issuer Trust has granted to the Underwriters an option, exercisable
within 30 days of the date of this Prospectus Supplement, to purchase up
to an aggregate of 2,400,000 additional Capital Securities at the price
to public for the purpose of covering over-allotments, if any. If the
Underwriters exercise such option in full, the total price to public and
proceeds to the Issuer Trust will be $460,000,000 and $460,000,000,
respectively. If the option to purchase additional Capital Securities
is exercised in full, the aggregate compensation paid to the
Underwriters for their arranging the investment in the Junior
Subordinated Debentures will be $14,490,000.
(5) Before deducting estimated expenses of $465,000 payable by the Company.

The Capital Securities are offered subject to prior sale, when, as and
if issued to and accepted by the Underwriters and subject to approval of
certain legal matters by Davis Polk & Wardwell, counsel for the Underwriters,
and to certain other conditions. It is expected that delivery of the Capital
Securities will be made in book-entry form through the book-entry facilities
of DTC on or about March 12, 1998, against payment therefor in immediately
available funds.

This Prospectus Supplement and the accompanying Prospectus may be used
by the Underwriters in connection with offers and sales of the Capital
Securities in market-making transactions at negotiated prices related to
prevailing market prices at the time of sale or otherwise. The Underwriters
may act as principal or agent in such transactions.

MORGAN STANLEY DEAN WITTER
A.G. EDWARDS & SONS, INC.
GOLDMAN, SACHS & CO.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SALOMON SMITH BARNEY

March 5, 1998

(continued from the previous page)

The Capital Securities will have a preference under certain circumstances
with respect to cash distributions and amounts payable on liquidation,
redemption or otherwise over the Common Securities. See "Description of
Capital Securities--Subordination of Common Securities" in the accompanying
Prospectus.

The Capital Securities will be represented by one or more global
Securities in fully registered form, deposited with a custodian for and
registered in the name of a nominee of The Depository Trust Company (the
"Depository" or "DTC"). Beneficial interests in such global Capital
Securities will be shown on, and transfers thereof will be effected only
through, records maintained by DTC and its participants. Except as described
under "Description of Capital Securities" in this Prospectus Supplement,
Capital Securities in definitive form will not be issued and owners of
beneficial interests in the global Securities will not be considered holders
of the Capital Securities.

Holders of the Capital Securities will be entitled to receive
preferential cumulative cash distributions accumulating from and including
March 12, 1998 and payable quarterly in arrears on February 28, May 30,
August 30 and November 30 of each year, commencing May 30, 1998, at the
annual rate of 7.10% of the liquidation amount of $25 per Capital Security
("Distributions"). The Company will have the right to defer payment of
interest on the Junior Subordinated Debentures at any time or from time to
time for a period not exceeding 20 consecutive quarterly periods with respect
to each deferral period (each, an "Extension Period"), provided that no
Extension Period may extend beyond the Stated Maturity. No interest shall be
due and payable during any Extension Period, except at the end thereof, but
the Company may prepay at any time all or any portion of the interest accrued
during an Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Company may elect to begin a new
Extension Period subject to the requirements described herein. If interest
payments on the Junior Subordinated Debentures are so deferred, Distributions
will also be deferred and the Company will not be permitted, subject to
certain exceptions described herein, to declare or pay any cash distributions
with respect to the Company's capital stock or with respect to debt
securities of the Company that rank pari passu in all respects with or junior
to the Junior Subordinated Debentures. During an Extension Period, interest
on the Junior Subordinated Debentures will continue to accrue (and the amount
of Distributions will accumulate) at the rate of 7.10% per annum, compounded
quarterly, and holders of Capital Securities will be required to accrue such
amounts as interest income for United States federal income tax purposes.
See "Description of Junior Subordinated Debentures--Option to Extend Interest
Payment Period" and "Certain Federal Income Tax Consequences--Interest Income
and Original Issue Discount," each in this Prospectus Supplement.

The Company will, through the Guarantee, the Trust Agreement, the Junior
Subordinated Debentures and the Junior Subordinated Debt Indenture (each as
defined herein), taken together, fully, irrevocably and unconditionally
guarantee all the Issuer Trust's obligations under the Capital Securities as
described below. See "Relationship Among the Capital Securities, the Junior
Subordinated Debentures and the Guarantee--Full and Unconditional Guarantee"
in this Prospectus Supplement. The Guarantee of the Company guarantees the
payment of Distributions and payments on liquidation or redemption of the
Capital Securities, but only in each case to the extent of funds held by the
Issuer Trust, as described herein and in the accompanying Prospectus (the
"Guarantee"). See "Description of Guarantee" herein and "Description of
Guarantees" in the accompanying Prospectus. If the Company does not make
payments on the Junior Subordinated Debentures held by the Issuer Trust, the
Issuer Trust will have insufficient funds to pay Distributions on and other
amounts payable under the Capital Securities. In such event, a holder of
Capital Securities may institute a legal proceeding directly against the
Company to enforce payment of such Distributions to such holder. See
"Description of Junior Subordinated Debentures--Enforcement of Certain Rights
by Holders of Capital Securities" in this Prospectus Supplement. The
Guarantee does not cover payment of Distributions when the Issuer Trust does
not have sufficient funds to pay such Distributions. The obligations of the
Company under the Guarantee and the Junior Subordinated Debentures are
subordinate and junior in right of payment to all Senior Indebtedness (as
defined in the Junior Subordinated Debt Indenture) of the Company. As of
November 30, 1997, there was approximately $41.5 billion of outstanding
Senior Indebtedness (as so defined) of the Company and its consolidated
subsidiaries. Because the Company is a holding company, the Junior
Subordinated Debentures and the Guarantee are effectively subordinated to all
indebtedness and other liabilities of its subsidiaries. As of November 30,
1997, the Company's subsidiaries had indebtedness and other liabilities of
approximately $2.9 billion. See "Description of Debt Securities--
Subordinated Debt--Junior Subordinated Debt" in the accompanying Prospectus.

The Capital Securities will be subject to mandatory redemption in whole,
but not in part, upon repayment of the Junior Subordinated Debentures at
Stated Maturity or their earlier redemption. The Junior Subordinated
Debentures are redeemable prior to the Stated Maturity at the option of the
Company (i) on or after March 12, 2003, in whole at any time or in part from
time to time, and (ii) prior to March 12, 2003, in whole (but not in part) at
any time within 90 days following the occurrence and continuation of a Tax
Event or an Investment Company Event (each as defined herein), in each case
at a redemption price equal to 100% of the principal amount of the Junior
Subordinated Debentures so redeemed plus accrued and unpaid interest thereon
to the date fixed for redemption. See "Description of Junior Subordinated
Debentures--Redemption" and "Description of Capital Securities--Liquidation
Distribution Upon Dissolution," each in this Prospectus Supplement.

The holders of the outstanding Common Securities have the right at any
time to dissolve the Issuer Trust and, after satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, to cause the
Junior Subordinated Debentures to be distributed to the holders of the
Capital Securities and Common Securities in liquidation of the Issuer Trust.
See "Description of Capital Securities--Liquidation Distribution Upon
Dissolution" in this Prospectus Supplement.

The Capital Securities have been approved for listing on the NYSE,
subject to official notice of issuance. The NYSE symbol for the Capital
Securities is "MWC." If the Junior Subordinated Debentures are distributed
to the holders of Capital Securities upon the liquidation of the Issuer
Trust, the Company will use all reasonable efforts to list the Junior
Subordinated Debentures on the NYSE or such other securities exchange or
automated quotation system, if any, on which the Capital Securities may then
be listed or traded.

In the event of the dissolution of the Issuer Trust, after satisfaction
of liabilities to creditors of the Issuer Trust as provided by applicable
law, the holders of the Capital Securities will be entitled to receive a
liquidation amount of $25 per Capital Security plus accumulated and unpaid
Distributions thereon to the date of payment, subject to certain exceptions,
which may be in the form of a distribution of such amount in Junior
Subordinated Debentures. See "Description of Capital Securities--Liquidation
Distribution Upon Dissolution" in this Prospectus Supplement.

If the purchaser is using for its purchase of the Capital Securities the
assets of an Employee Benefit Plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or of a plan or
individual retirement account subject to section 4975 of the Internal Revenue
Code of 1986, as amended (the "Code"), the purchase shall constitute a
representation by such person that its purchase and holding of the Capital
Securities will not result in a non-exempt prohibited transaction under ERISA
or the Code. See "Certain ERISA Considerations" in this Prospectus
Supplement.

The information in this Prospectus Supplement supplements, and should be
read in conjunction with, the information contained in the accompanying
Prospectus.

As used herein, (i) the "Junior Subordinated Debt Indenture" means the
Junior Subordinated Debt Indenture, as amended and supplemented from time to
time, between the Company and The Bank of New York, as trustee (the "Debt
Securities Trustee"), pursuant to which the Junior Subordinated Debentures
are issued, (ii) the "Trust Agreement" means the Amended and Restated Trust
Agreement relating to the Issuer Trust, as amended and supplemented from time
to time, among the Company, as Depositor, The Bank of New York, as Property
Trustee (the "Property Trustee"), The Bank of New York (Delaware), as
Delaware Trustee (the "Delaware Trustee") (collectively, the "Issuer
Trustees"), two individuals selected by the holders of the Common Securities
to act as administrators with respect to the Issuer Trust (the
"Administrators") and the holders, from time to time, of the Trust Securities
(iii) the "Guarantee" means the Guarantee Agreement relating to the Capital
Securities, as amended and supplemented from time to time, between the
Company and The Bank of New York, as Guarantee Trustee (the "Guarantee
Trustee"). Unless otherwise expressly stated, all information in this
Prospectus Supplement assumes that the over-allotment option granted to the
Underwriters is not exercised. See "Underwriting" in this Prospectus
Supplement.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE
CAPITAL SECURITIES OFFERED HEREBY. SPECIFICALLY, THE UNDERWRITERS MAY
OVERALLOT CAPITAL SECURITIES, AND MAY BID FOR, AND PURCHASE, THE CAPITAL
SECURITIES IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING" IN THIS PROSPECTUS SUPPLEMENT.

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, THE ISSUER TRUST OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION 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 ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.

TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT

Page Page
---
Risk Factors . . . . . . . . S-6 Relationship Among the Capital
MSDW Capital Trust I . . . . S-11 Securities, the Junior
Capitalization . . . . . . . S-12 Subordinated Debentures
Accounting Treatment . . . . S-14 and the Guarantee . . . . . . S-30
Description of Capital Certain Federal Income Tax
Securities. . . . . . . . . S-14 Consequences . . . . . . . S-31
Description of Junior Certain ERISA Considerations. . S-37
Subordinated Debentures . . S-22 Underwriting . . . . . . . . . S-38
Description of Guarantee. . . S-28

PROSPECTUS

Available Information . . . . . 3 Description of Debt Securities. 8
Incorporation of Certain Description of Capital
Documents by Reference. . . . 3 Securities. . . . . . . . . . 16
The Company . . . . . . . . . . 5 Global Securities . . . . . . . 23
The Issuer Trusts . . . . . . . 6 Description of Guarantees . . . 25
Use of Proceeds . . . . . . . . 7 Plan of Distribution . . . . . 28
Consolidated Ratios of Earnings Validity of Securities . . . . 30
to Fixed Charges and Earnings Experts . . . . . . . . . . . . 30
to Fixed Charges and Preferred
Stock Dividends . . . . . . . 7

RISK FACTORS

Prospective purchasers of the Capital Securities should carefully review
the information contained elsewhere in this Prospectus Supplement and the
accompanying Prospectus and should particularly consider the following
matters.

RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES

The obligations of the Company under the Guarantee issued by the Company
for the benefit of the holders of Capital Securities and under the Junior
Subordinated Debentures are subordinate and junior in right of payment to all
Senior Indebtedness (as defined in the Junior Subordinated Debt Indenture).
As of November 30, 1997 there was approximately $41.5 billion of outstanding
Senior Indebtedness (as so defined) of the Company and its consolidated
subsidiaries. None of the Junior Subordinated Debt Indenture, the Guarantee
or the Trust Agreement places any limitation on the amount of secured or
unsecured debt, including such Senior Indebtedness, that may be incurred by
the Company. Because the Company is a holding company, the Junior
Subordinated Debentures and the Guarantee are effectively subordinated to all
indebtedness and other liabilities of its subsidiaries. See "Description of
Guarantee--Status of the Guarantee" in this Prospectus Supplement and
"Description of Debt Securities--Subordinated Debt" in the accompanying
Prospectus.

The ability of the Issuer Trust to pay amounts due on the Capital
Securities is solely dependent upon the Company's making payments on the
Junior Subordinated Debentures as and when required.

OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES

So long as no Event of Default (as defined in the Junior Subordinated
Debt Indenture and herein referred to as a "Debenture Event of Default") has
occurred and is continuing with respect to the Junior Subordinated
Debentures, the Company will have the right to defer the payment of interest
on the Junior Subordinated Debentures at any time or from time to time for a
period not exceeding 20 consecutive quarterly periods with respect to each
Extension Period, provided that no Extension Period may extend beyond the
Stated Maturity of the Junior Subordinated Debentures. See "Description of
Junior Subordinated Debentures--Debenture Events of Default" in this
Prospectus Supplement. As a consequence of any such deferral, quarterly
Distributions on the Capital Securities by the Issuer Trust will be deferred
during any such Extension Period. Distributions to which holders of the
Capital Securities are entitled will accumulate additional Distributions
thereon during any Extension Period at the rate of 7.10% per annum,
compounded quarterly from the most recent Distribution payment date on which
Distributions were paid, computed on the basis of a 360-day year of twelve
30-day months and the actual days elapsed in a partial month in such period.
Additional Distributions payable for each full Distribution period will be
computed by dividing the rate per annum by four. The term "Distribution" as
used herein shall include any such additional Distributions. During any such
Extension Period, the Company is subject to certain restrictions. See
"Description of Junior Subordinated Debentures--Restrictions on Certain
Payments; Certain Covenants of the Company" in this Prospectus Supplement.
Prior to the dissolution of any such Extension Period, the Company may
further defer the payment of interest, provided that no Extension Period may
exceed 20 consecutive quarterly periods or extend beyond the Stated Maturity
of the Junior Subordinated Debentures.

Upon the termination of any Extension Period and the payment of all
interest then accrued and unpaid (together with interest thereon at the
annual rate of 7.10%, compounded quarterly) on the Junior Subordinated
Debentures, the Company may elect to begin a new Extension Period subject to
the above conditions. No interest shall be due and payable during an
Extension Period, except at the end thereof, but the Company may prepay at
any time all or any portion of the interest accrued during an Extension
Period. The Company must give the Issuer Trustee notice of its election of
an Extension Period at least 30 calendar days prior to the date the
Distributions on the Capital Securities would have been payable but for the
election to begin such Extension Period. The Property Trustee will give
notice of the Company's election to begin an Extension Period to the holders
of the Capital Securities. Subject to the foregoing, there is no limitation
on the number of times that the Company may elect to begin an Extension
Period. See "Description of Capital Securities--Distributions" and
"Description of Junior Subordinated Debentures--Option to Extend Interest
Payment Period," each in this Prospectus Supplement.

Should an Extension Period occur, a holder of Capital Securities will
continue to accrue income (in the form of original issue discount) in respect
of its pro rata share of the Junior Subordinated Debentures held by the
Issuer Trust for United States federal income tax purposes. As a result, a
holder of Capital Securities will include such income in gross income for
United States federal income tax purposes in advance of the receipt of cash,
and will not receive the cash related to such income from the Issuer Trust if
the holder disposes of the Capital Securities prior to the record date for
the payment of Distributions. See "Certain Federal Income Tax Consequences--
Interest Income and Original Issue Discount" and "--Sales of Capital
Securities" in this Prospectus Supplement.

The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior
Subordinated Debentures. However, should the Company elect to exercise such
right in the future, the market price of the Capital Securities is likely to
be affected. A holder that disposes of its Capital Securities during an
Extension Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Capital Securities. In
addition, as a result of the existence of the Company's right to defer
interest payments, the market price of the Capital Securities (which
represent preferred undivided beneficial interests in the assets of the
Issuer Trust) may be more volatile than the market prices of other securities
on which original issue discount or interest accrues that are not subject to
such deferrals.

TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION

Upon the occurrence and continuation of a Tax Event or an Investment
Company Event (in each case, as defined herein), the Company will have the
right to redeem the Junior Subordinated Debentures in whole, but not in part,
at any time within 90 days following the occurrence and continuation of such
Tax Event or Investment Company Event and thereby cause a mandatory
redemption of the Capital Securities. If the Company redeems the Junior
Subordinated Debentures, it will thereby cause a mandatory redemption of the
Capital Securities. Any such redemption will be at a Redemption Price equal
to 100% of the Liquidation Amount (as defined herein) of such Capital
Securities plus accumulated and unpaid Distributions to but excluding the
date fixed for redemption. See "Description of Junior Subordinated
Debentures--Redemption" and "Description of Capital Securities-- Redemption"
and "--Liquidation Distribution Upon Dissolution," each in this Prospectus
Supplement.

CONDITIONAL RIGHT TO ADVANCE MATURITY

If a Tax Event occurs, then the Company will have the right, prior to
the dissolution of the Issuer Trust, to advance the Stated Maturity of the
Junior Subordinated Debentures to the minimum extent required in order to
allow for the payments of interest in respect of the Junior Subordinated
Debentures to continue to be tax deductible, but in no event shall the
resulting maturity of the Junior Subordinated Debentures be less than 15
years from the date of original issuance thereof. The Stated Maturity shall
be advanced only if, in the opinion of counsel to the Company experienced in
such matters, (a) after advancing the Stated Maturity, interest paid on the
Junior Subordinated Debentures will be deductible for United States federal
income tax purposes and (b) advancing the Stated Maturity will not result in
a taxable event to holders of the Capital Securities.

EXCHANGE OF CAPITAL SECURITIES FOR JUNIOR SUBORDINATED DEBENTURES

The holders of all the outstanding Common Securities have the right at
any time to dissolve the Issuer Trust and, after satisfaction of liabilities
to creditors of the Issuer Trust as provided by applicable law, cause the
Junior Subordinated Debentures to be distributed to the holders of the
Capital Securities and Common Securities in liquidation of the Issuer Trust.
See "Description of Capital Securities--Liquidation Distribution Upon
Dissolution" in this Prospectus Supplement.

Under current United States federal income tax law and interpretations
and assuming, as expected, that the Issuer Trust will not be taxable as a
corporation, a distribution of the Junior Subordinated Debentures upon a
liquidation of the Issuer Trust will not be a taxable event to holders of the
Capital Securities. However, if a Tax Event were to occur that would cause
the Issuer Trust to be subject to United States federal income tax with
respect to income received or accrued on the Junior Subordinated Debentures,
a distribution of the Junior Subordinated Debentures by the Issuer Trust
would likely constitute a taxable event to the holders of the Capital
Securities. See "Certain Federal Income Tax Consequences" in this Prospectus
Supplement.

RIGHTS UNDER THE GUARANTEE

The Bank of New York will act as the trustee under the Guarantee and
will hold the Guarantee for the benefit of the holders of the Capital
Securities. The Bank of New York will also act as Debt Securities Trustee
for the Junior Subordinated Debentures and as Property Trustee under the
Trust Agreement. The Bank of New York (Delaware) will act as Delaware
Trustee under the Trust Agreement. The Guarantee guarantees to the holders
of the Capital Securities the following payments, to the extent not paid by
or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions required to be paid on the Capital Securities, to the extent
that the Issuer Trust has funds legally available therefor at such time; (ii)
the applicable Redemption Price with respect to any Capital Securities called
for redemption, to the extent that the Issuer Trust has funds on hand
available therefor at such time; and (iii) upon a voluntary or involuntary
dissolution, winding up or liquidation of the Issuer Trust (unless the Junior
Subordinated Debentures are distributed to holders of the Capital
Securities), the lesser of (a) the aggregate of the Liquidation Amount and
all accumulated and unpaid Distributions to the date of payment, and (b) the
amount of assets of the Issuer Trust remaining available for distribution to
holders of the Capital Securities on liquidation of the Issuer Trust.

The Guarantee is subordinated as described under "--Ranking of
Subordinated Obligations Under the Guarantee and the Junior Subordinated
Debentures" above and "Description of Guarantee--Status of the Guarantee" in
this Prospectus Supplement. The holders of not less than a majority in
aggregate Liquidation Amount of the outstanding Capital Securities will have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of the Guarantee
or to direct the exercise of any trust power conferred upon the Guarantee
Trustee under the Guarantee.

If the Company were to default on its obligation to pay amounts payable
under the Junior Subordinated Debentures, the Issuer Trust would lack funds
for the payment of Distributions or amounts payable on redemption of the
Capital Securities or otherwise, and, in such event, holders of the Capital
Securities would not be able to rely upon the Guarantee for payment of such
amounts. Instead, if a Debenture Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to
pay any amounts payable in respect of the Junior Subordinated Debentures on
the payment date on which such payment is due and payable, then a holder of
Capital Securities may institute a legal proceeding directly against the
Company for enforcement of payment to such holder of any amounts payable in
respect of such Junior Subordinated Debentures having a principal amount
equal to the aggregate Liquidation Amount of the Capital Securities of such
holder (a "Direct Action").

In connection with any Direct Action, the Company will have a right of
set-off under the Junior Subordinated Debt Indenture to the extent of any
payment made by the Company to such holder of Capital Securities in the
Direct Action. Except as described herein, holders of Capital Securities
will not be able to exercise directly any other remedy available to the
holders of the Junior Subordinated Debentures or assert directly any other
rights in respect of the Junior Subordinated Debentures. See "Description of
Junior Subordinated Debentures--Debenture Events of Default" and "--
Enforcement of Certain Rights by Holders of Capital Securities" and
"Description of Guarantee," each in this Prospectus Supplement. The Trust
Agreement will provide that each holder of Capital Securities by acceptance
thereof agrees to the provisions of the Guarantee, the Junior Subordinated
Debentures and the Junior Subordinated Debt Indenture.

LIMITED VOTING RIGHTS

Holders of Capital Securities will have limited voting rights relating
generally to the modification of the Capital Securities and the Guarantee and
the exercise of the Issuer Trust's rights as holder of Junior Subordinated
Debentures. Holders of Capital Securities will not be entitled to appoint,
remove or replace the Property Trustee or the Delaware Trustee except upon
the occurrence of certain events specified in the Trust Agreement and
described herein. The Property Trustee and the holders of all the Common
Securities may, subject to certain conditions, amend the Trust Agreement
without the consent of holders of Capital Securities to cure any ambiguity or
make other provisions not inconsistent with other provisions under the Trust
Agreement or to ensure that the Issuer Trust (i) will not be taxable as a
corporation for United States federal income tax purposes, or (ii) will not
be required to register as an "investment company" under the Investment
Company Act. See "Description of Capital Securities--Voting Rights;
Amendment of Trust Agreement" and "--Removal of Issuer Trustees; Appointment
of Successors" in the accompanying Prospectus.

MARKET PRICES

There can be no assurance as to the market prices for Capital
Securities, or the market prices for Junior Subordinated Debentures that may
be distributed in exchange for Capital Securities if a liquidation of the
Issuer Trust occurs. Accordingly, the Capital Securities or the Junior
Subordinated Debentures that a holder of Capital Securities may receive on
liquidation of the Issuer Trust may trade at a discount to the price that the
investor paid to purchase the Capital Securities offered hereby. As a result
of the existence of the Company's right to defer interest payments, the
market price of the Capital Securities may be more volatile than the market
prices of other securities on which original issue discount accrues that are
not subject to such deferrals. Because holders of Capital Securities may
receive Junior Subordinated Debentures on dissolution of the Issuer Trust,
prospective purchasers of Capital Securities are also making an investment
decision with regard to the Junior Subordinated Debentures and should
carefully review all the information regarding the Junior Subordinated
Debentures contained herein. In addition, because the Company has the right
to advance the Stated Maturity of the Junior Subordinated Debentures, there
can be no assurance that the Company will not exercise its option to shorten
the maturity of the Junior Subordinated Debentures as permitted by the terms
thereof. If the Company does exercise such option, there can be no assurance
that advancing the Stated Maturity of the Junior Subordinated Debentures will
not have an effect on the market price of the Capital Securities. See
"Description of Junior Subordinated Debentures" in this Prospectus
Supplement.

TRADING CHARACTERISTICS OF CAPITAL SECURITIES

The Capital Securities have been approved for listing on the NYSE,
subject to official notice of issuance. The NYSE symbol for the Capital
Securities is "MWC." The Capital Securities may trade at prices that do not
fully reflect the value of accrued but unpaid interest with respect to the
underlying Junior Subordinated Debentures. A holder of Capital Securities
that disposes of its Capital Securities between record dates for payments of
Distributions (and consequently does not receive a Distribution for the
period prior to such disposition) will nevertheless be required to include
accrued but unpaid interest on the Junior Subordinated Debentures through the
date of disposition in income as ordinary income and to add such amount to
its adjusted tax basis in the Capital Securities disposed of. Such holder
will recognize a capital loss to the extent that the selling price (which may
not fully reflect the value of accrued but unpaid interest) is less than its
adjusted tax basis (which will include accrued but unpaid interest). Subject
to certain limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes. See "Certain
Federal Income Tax Consequences--Sales of Capital Securities" in this
Prospectus Supplement.

The Capital Securities have been approved for listing on the NYSE,
subject to official notice of issuance. If the Capital Securities are not
listed on a national securities exchange or the Nasdaq National Market and
the Underwriters do not make a market for the securities, the liquidity of
the Capital Securities would be adversely affected.

POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL SECURITIES

On February 6, 1997, President Clinton proposed certain tax law changes
(the "Tax Proposal") that, among other things, generally would have denied
corporate issuers a deduction for interest on certain debt obligations that
had a maximum term in excess of 15 years and were not shown as indebtedness
on the separate balance sheet of the issuer or, where the instrument was
issued to a related party (other than a corporation), where the holder or
some other related party issued a related instrument that was not shown as
indebtedness on the issuer's consolidated balance sheet. The Tax Proposal
would have been effective generally for instruments issued on or after the
date of first Congressional committee action. The Tax Proposal was not
included in the recently enacted Taxpayer Relief Act of 1997. In addition,
the Tax Proposal was not included in President Clinton's 1999 Budget
proposal,which was released on February 2, 1998. However, if similar
legislation to the Tax Proposal is enacted in the future with retroactive
effect with respect to the Junior Subordinated Debentures, the Company would
not be entitled to an interest deduction with respect to the Junior
Subordinated Debentures. There can be no assurance that future legislation
similar to the Tax Proposal enacted after the date hereof, if any, will not
otherwise adversely affect the ability of the Company to deduct the interest
payable on the Junior Subordinated Debentures. Accordingly, there can be no
assurance that a Tax Event will not occur. See "Description of the Capital
Securities--Redemption" in this Prospectus Supplement.

MSDW CAPITAL TRUST I

The Issuer Trust is a statutory business trust created under Delaware
law pursuant to the filing of a certificate of trust with the Delaware
Secretary of State on February 12, 1998. The Issuer Trust will be governed
by the Trust Agreement. The Company, as the holder, directly or indirectly,
of the Common Securities, intends to select two individuals who are employees
or officers of or affiliated with the Company to serve as the Administrators.
See "Description of Capital Securities--Miscellaneous" in the accompanying
Prospectus. The Issuer Trust exists for the exclusive purposes of (i)
issuing and selling the Trust Securities, (ii) using the proceeds from the
sale of the Trust Securities to acquire the Junior Subordinated Debentures
and (iii) engaging in only those other activities necessary, convenient or
incidental thereto (such as registering the transfer of the Trust
Securities). Accordingly, the Junior Subordinated Debentures will be the
sole assets of the Issuer Trust, and payments under the Junior Subordinated
Debentures will be the sole source of revenue of the Issuer Trust.

All of the Common Securities will be owned, directly or indirectly, by
the Company. The Common Securities will rank pari passu, and payments will
be made thereon pro rata, with the Capital Securities, except that upon the
occurrence and during the continuation of a Debenture Event of Default
arising as a result of any failure by the Company to pay any amounts in
respect of the Junior Subordinated Debentures when due, the rights of the
holders of the Common Securities to payment in respect of Distributions and
payments upon liquidation, redemption or otherwise will be subordinated to
the rights of the holders of the Capital Securities. See "Description of
Capital Securities--Subordination of Common Securities" in the accompanying
Prospectus. The Company will acquire Common Securities in an aggregate
liquidation amount equal to 3% of the total capital of the Issuer Trust. The
Issuer Trust has a term of 41 years, but may dissolve earlier as provided in
the Trust Agreement.

CAPITALIZATION

The following table sets forth the consolidated short-term borrowings
and total capitalization of the Company as of November 30, 1997, and as
adjusted to give effect to the consummation of the offering of the Capital
Securities offered hereby. As of the date hereof and except as disclosed in
this Prospectus Supplement and the accompanying Prospectus, including the
documents incorporated by reference, there has been no material change in the
capitalization of the Company since November 30, 1997.

The following information should be read in conjunction with the
Company's audited consolidated financial statements for its 1997, 1996 and
1995 fiscal years, all as contained in the Company's Annual Report on Form
10-K for the fiscal year ended November 30, 1997, the related notes thereto,
and Management's Discussion and Analysis of Financial Condition and Results
of Operations, all incorporated by reference in the accompanying Prospectus.

<TABLE>
<CAPTION>
November 30, 1997
(In millions, except share data)

Actual As Adjusted
------ -----------

<S> <C> <C>
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . U.S.$22,614 U.S.$22,614
Current portion of long-term borrowings . . . . . . . . . . . . 6,170 6,170
Total . . . . . . . . . . . . . . . . . . . . . U.S.$28,784 U.S.$28,784

Long-term borrowings (1) . . . . . . . . . . . . . . . . . . . U.S.$18,622 U.S.$18,622
Capital Units . . . . . . . . . . . . . . . . . . . . . . . . . 999 999
Guaranteed preferred beneficial interests in the Company's 7.10%
junior subordinated debentures held by MSDW Capital Trust I (2) -- 400
Shareholders' equity:
Preferred stock, par value $0.01 per share; authorized
30,000,000 shares:
ESOP Convertible Preferred Stock, liquidation
preference U.S.$35.875; outstanding 3,646,664 shares . . . 131 131
7-3/8% Cumulative Preferred Stock, stated value U.S.$200;
outstanding 1,000,000 shares . . . . . . . . . . . . . . 200 200
7-3/4% Cumulative Preferred Stock, stated value
U.S.$200; outstanding 1,000,000 shares . . . . . . . . . 200 200
Series A Fixed/Adjustable Rate Cumulative Preferred
Stock, stated value U.S.$200; outstanding 1,725,000
shares . . . . . . . . . . . . . . . . . . . . . . . . . 345 345
Common stock, U.S.$0.01 par value; authorized 1,750,000,000
shares; issued 602,829,994 shares; outstanding 594,708,971
shares . . . . . . . . . . . . . . . . . . . . . . . . 6 6
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . 3,952 3,952
Retained earnings . . . . . . . . . . . . . . . . . . . . . . 9,330 9,330
Cumulative translation adjustments . . . . . . . . . . . . . . (9) (9)
Subtotal. . . . . . . . . . . . . . . . . . . . . . . . . 14,155 14,155
Note receivable related to sale of preferred stock to
ESOP . . . . . . . . . . . . . . . . . . . . . . . . . . . (68) (68)
Common stock held in treasury, at cost 8,121,023
shares . . . . . . . . . . . . . . . . . . . . . . . . . . (250) (250)
Stock compensation related adjustments . . . . . . . . . . . 119 119
------- -------
Total shareholders' equity . . . . . . . . . . . 13,956 13,956

Total capitalization . . . . . . . . . . . . . . U.S.$33,577 U.S.$33,977
</TABLE>

__________________

(1) Subsequent to November 30, 1997 and through March 5, 1998, additional
senior notes aggregating U.S. $4,717,944,222 were issued. As of March
5, 1998, the Company has effective (1) registration statements pursuant
to which it may issue up to an aggregate of U.S.$3,200,000,000 of debt
securities, of which U.S.$3,200,000,000 remains available and (2) a
registration statement pursuant to which it may issue up to
U.S.$7,000,000,000 of debt securities, warrants, preferred stock,
depositary shares, purchase contracts and units, of which
U.S.$1,281,319,143 remains available.

(2) As described herein, the sole assets of the Issuer Trust will be U.S.
$412,371,150 principal amount of Junior Subordinated Debentures issued
by the Company to the Issuer Trust (U.S. $474,226,825 if the
Underwriters' over-allotment option is exercised in full). The Junior
Subordinated Debentures will bear interest at a fixed rate of 7.10% and
will mature on February 28, 2038, subject to the right of the Company to
advance the Stated Maturity under certain circumstances. The Company
will own all the Common Securities of the Issuer Trust.

ACCOUNTING TREATMENT

For financial reporting purposes, the Issuer Trust will be treated as a
subsidiary of the Company and, accordingly, the accounts of the Issuer Trust
will be included in the consolidated financial statements of the Company.
The Capital Securities will be included in the consolidated balance sheets of
the Company and appropriate disclosures about the Capital Securities, the
Guarantee and the Junior Subordinated Debentures will be included in the
notes to the consolidated financial statements of the Company. For financial
reporting purposes, Distributions on the Capital Securities will be recorded
in the consolidated statements of income of the Company.

DESCRIPTION OF CAPITAL SECURITIES

The following summary of certain terms and provisions of the Capital
Securities supplements the information set forth in the accompanying
Prospectus under the heading "Description of Capital Securities," to which
description reference is hereby made. This summary of certain terms and
provisions of the Capital Securities does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the Trust
Agreement, to which reference is hereby made. A copy of the form of the
Trust Agreement is available upon request from the Issuer Trustees.

GENERAL

The Capital Securities will be limited to $400,000,000 aggregate
Liquidation Amount at any one time outstanding ($460,000,000 aggregate
Liquidation Amount if the Underwriters' over-allotment option is exercised in
full). The Capital Securities will rank pari passu, and payments will be
made thereon pro rata, with the Common Securities except as described in the
accompanying Prospectus under "Description of Capital Securities--
Subordination of Common Securities." The Junior Subordinated Debentures will
be registered in the name of the Issuer Trust and held by the Property
Trustee in trust for the benefit of the holders of the Capital Securities and
the Common Securities. The Guarantee will be a guarantee on a subordinated
basis with respect to the Capital Securities but will not guarantee payment
of Distributions or amounts payable on redemption or liquidation of such
Capital Securities when the Issuer Trust does not have funds on hand
available to make such payments. See "Description of Guarantee" in this
Prospectus Supplement.

DISTRIBUTIONS

The Capital Securities represent preferred undivided beneficial
interests in the assets of the Issuer Trust, and Distributions on each
Capital Security will be payable at the annual rate of 7.10% of the stated
Liquidation Amount of $25, payable quarterly in arrears on February 28, May
30, August 30 and November 30 of each year (each, a "Distribution Date"), to
the holders of the Capital Securities at the close of business on the 15th
calendar day (whether or not a Business Day) next preceding the relevant
Distribution Date. Distributions on the Capital Securities will be
cumulative. Distributions will accumulate from and including March 12, 1998.
The first Distribution Date for the Capital Securities will be May 30, 1998.
The amount of Distributions payable for any period less than a full
Distribution period will be computed on the basis of a 360-day year of twelve
30-day months and the actual days elapsed in a partial month in such period.
Distributions payable for each full Distribution period will be computed by
dividing the rate per annum by four. If any date on which Distributions are
payable on the Capital Securities is not a Business Day, then payment of the
Distributions payable on such date will be made on the next succeeding day
that is a Business Day (without any additional Distributions or other payment
in respect of any such delay), with the same force and effect as if made on
the date such payment was originally payable.

So long as no Debenture Event of Default has occurred and is continuing,
the Company will have the right under the Junior Subordinated Debt Indenture
to defer the payment of interest on the Junior Subordinated Debentures at any
time and from time to time for a period not exceeding 20 consecutive
quarterly periods with respect to each Extension Period, provided that no
Extension Period may extend beyond the Stated Maturity of the Junior
Subordinated Debentures. As a consequence of any such deferral, quarterly
Distributions on the Capital Securities by the Issuer Trust will be deferred
during an Extension Period. Distributions to which holders of the Capital
Securities are entitled will accumulate additional distributions thereon at
the rate of 7.10% per annum, compounded quarterly from the most recent date
on which Distributions were paid, computed on the basis of a 360-day year of
twelve 30-day months and the actual days elapsed in a partial month in such
period. Additional Distributions payable for each full Distribution period
will be computed by dividing the rate per annum by four. The term
"Distributions" as used herein shall include any such additional
distributions.

During an Extension Period, the Company may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or
(ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company that rank pari
passu in all respects with or junior in interest to the Junior Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company (1) in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit
of any one or more employees, officers, directors or consultants, (2) in
connection with a dividend reinvestment or stockholder stock purchase plan or
(3) in connection with the issuance of capital stock of the Company (or
securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to such
Extension Period, (b) as a result of an exchange, redemption or conversion of
any class or series of the Company's capital stock (or any capital stock of a
subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class
or series of the Company's capital stock, (c) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted
or exchanged, (d) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of
rights pursuant thereto, (e) payments under the Guarantee, or (f) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options
or other rights is the same stock as that on which the dividend is being paid
or ranks pari passu with or junior to such stock). Prior to the termination
of an Extension Period, the Company may further defer the payment of
interest, provided that no Extension Period may exceed 20 consecutive
quarterly periods or extend beyond the Stated Maturity of the Junior
Subordinated Debentures.

Upon the termination of an Extension Period and the payment of all
amounts then due, the Company may elect to begin a new Extension Period. No
interest shall be due and payable during an Extension Period, except at the
end thereof, but the Company may prepay at any time all or any portion of the
interest accrued during an Extension Period. The Company must give the
Issuer Trustees notice of its election of an Extension Period at least 30
calendar days prior to the date the Distributions on the Capital Securities
would have been payable but for the election to begin such Extension Period.
The Property Trustee will give notice of the Company's election to begin an
Extension Period to the holders of the Capital Securities. Subject to the
foregoing, there is no limitation on the number of times that the Company may
elect to begin an Extension Period. See "Description of Junior Subordinated
Debentures--Option To Extend Interest Payment Period" and "Certain Federal
Income Tax Consequences--Interest Income and Original Issue Discount," each
in this Prospectus Supplement.

The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior
Subordinated Debentures.

The revenue of the Issuer Trust available for distribution to holders of
the Capital Securities will be limited to payments under the Junior
Subordinated Debentures in which the Issuer Trust will invest the proceeds
from the issuance and sale of the Capital Securities. See "Description of
Junior Subordinated Debentures" in this Prospectus Supplement. If the
Company does not make payments on the Junior Subordinated Debentures, the
Issuer Trust will not have funds available to pay Distributions or other
amounts payable on the Capital Securities. The payment of Distributions and
other amounts payable on the Capital Securities (if and to the extent the
Issuer Trust has funds legally available for and cash sufficient to make such
payments) is guaranteed by the Company on a subordinated basis as described
under "Description of Guarantee" in this Prospectus Supplement.

REDEMPTION

Upon the repayment or redemption, in whole or in part, of the Junior
Subordinated Debentures, whether at Stated Maturity or upon earlier
redemption as provided in the Junior Subordinated Debentures, the proceeds
from such repayment or redemption shall be applied by the Property Trustee to
redeem a Like Amount (as defined below) of the Trust Securities, upon not
less than 30 nor more than 60 days' notice prior to the date fixed for
repayment or redemption, at a redemption price (the "Redemption Price") equal
to 100% of the aggregate Liquidation Amount of such Trust Securities plus
accumulated and unpaid Distributions thereon to the date of redemption (the
"Redemption Date"). See "Description of Junior Subordinated Debentures--
Redemption" in this Prospectus Supplement. If less than all the Junior
Subordinated Debentures are to be repaid or redeemed on a Redemption Date,
then the proceeds from such repayment or redemption shall be allocated to the
redemption pro rata of the Capital Securities and the Common Securities.

The Company will have the right to redeem the Junior Subordinated
Debentures (i) on or after March 12, 2003, in whole at any time or in part
from time to time, or (ii) prior to March 12, 2003, in whole (but not in
part) at any time within 90 days following the occurrence and continuation of
a Tax Event or an Investment Company Event (each as defined below). See "--
Liquidation Distribution Upon Dissolution" below. A redemption of the Junior
Subordinated Debentures would cause a mandatory redemption of the Capital
Securities and the Common Securities.

"Business Day" means a day other than (a) a Saturday or Sunday, or (b) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed.

"Like Amount" means (i) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that
portion of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Junior Subordinated Debt
Indenture, allocated to the Common Securities and to the Capital Securities
based upon the relative Liquidation Amounts of such classes and (ii) with
respect to a distribution of Junior Subordinated Debentures to holders of
Trust Securities in connection with a dissolution or liquidation of the
Issuer Trust, Junior Subordinated Debentures having a principal amount equal
to the Liquidation Amount of the Trust Securities of the holder to whom such
Junior Subordinated Debentures are distributed.

"Liquidation Amount" means the stated amount of $25 per Trust Security.

The term "Tax Event" means the receipt by the Issuer Trust of an opinion
of counsel to the Company experienced in such matters, who shall not be an
officer or employee of the Company or any of its affiliates, to the effect
that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official or administrative pronouncement or
action or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement,
action or decision is announced on or after the date of issuance of the
Capital Securities, there is more than an insubstantial risk that (i) the
Issuer Trust is, or will be within 90 days of the delivery of such opinion,
subject to United States federal income tax with respect to income received
or accrued on the Junior Subordinated Debentures, (ii) interest payable by
the Company on the Junior Subordinated Debentures is not, or within 90 days
of the delivery of such opinion will not be, deductible by the Company, in
whole or in part, for United States federal income tax purposes or (iii) the
Issuer Trust is, or will be within 90 days of the delivery of the opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.

See "Certain Federal Income Tax Consequences--Possible Tax Law Changes
Affecting the Capital Securities" in this Prospectus Supplement for a
discussion of certain legislative proposals that, if adopted, could give rise
to a Tax Event, which may permit the Company to cause a redemption of the
Capital Securities prior to March 12, 2003.

"Investment Company Event" means the receipt by the Issuer Trust of an
opinion of counsel to the Company experienced in such matters, who shall not
be an officer or employee of the Company or any of its affiliates, to the
effect that, as a result of the occurrence of a change in law or regulation
or a written change (including any announced prospective change) in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Issuer Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), which change
or prospective change becomes effective or would become effective, as the
case may be, on or after the date of the issuance of the Capital Securities.

If an event described in clause (i) or (iii) of the definition of Tax
Event has occurred and is continuing and the Issuer Trust is the holder of
all the Junior Subordinated Debentures, the Company will pay Additional Sums
(as defined below), if any, on the Junior Subordinated Debentures.
"Additional Sums" means such additional amounts as may be necessary in order
that the Distributions paid by the Issuer Trust on its outstanding Trust
Securities will not be reduced as a result of any additional taxes, duties
and other governmental charges to which the Issuer Trust has become subject
as a result of a Tax Event.

REDEMPTION PROCEDURES

Capital Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Junior Subordinated Debentures. Redemptions of the Capital
Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Issuer Trust has funds then on
hand and legally available for the payment of such Redemption Price. See
also "Description of Capital Securities--Subordination of Common Securities"
in the accompanying Prospectus.

If the Issuer Trust gives a notice of redemption in respect of the
Capital Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, to the extent funds are available, in the case of Capital
Securities held in book-entry form, the Property Trustee will irrevocably
deposit with DTC funds sufficient to pay the applicable Redemption Price and
will give DTC irrevocable instructions and authority to pay the Redemption
Price to the holders of the Capital Securities. With respect to Capital
Securities not held in book-entry form, the Property Trustee, to the extent
funds are available, will irrevocably deposit with the paying agent for the
Capital Securities funds sufficient to pay the applicable Redemption Price
and will give such paying agent irrevocable instructions and authority to pay
the Redemption Price to the holders thereof upon surrender of their
certificates evidencing the Capital Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Capital Securities called for redemption shall be payable to the holders of
the Capital Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit all rights of the
holders of such Capital Securities so called for redemption will cease,
except the right of the holders of such Capital Securities to receive the
Redemption Price, but without interest on such Redemption Price, and such
Capital Securities will cease to be outstanding. If any date fixed for
redemption of Capital Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
which is a Business Day (without any interest or other payment in respect of
any such delay), with the same force and effect as if made on the date such
payment was originally payable. In the event that payment of the Redemption
Price in respect of Capital Securities called for redemption is improperly
withheld or refused and not paid either by the Issuer Trust or by the Company
pursuant to the Guarantee, Distributions on such Capital Securities will
continue to accumulate at the then applicable rate, from the Redemption Date
originally established by the Issuer Trust for such Capital Securities to the
date such Redemption Price is actually paid, in which case the actual payment
date will be the date fixed for redemption for purposes of calculating the
Redemption Price.

Subject to applicable law (including, without limitation, United States
federal securities laws), the Company or its affiliates may at any time and
from time to time purchase outstanding Capital Securities by tender, in the
open market or by private agreement, and may resell such securities.

If less than all the Capital Securities and Common Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of such
Capital Securities and Common Securities to be redeemed shall be allocated
pro rata to the Capital Securities and the Common Securities based upon the
relative Liquidation Amounts of such classes. The particular Capital
Securities to be redeemed shall be selected on a pro rata basis not more than
60 days prior to the Redemption Date from the outstanding Capital Securities
not previously called for redemption, by such method as the Property Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to $25 or an integral multiple of $25 in excess
thereof) of the Liquidation Amount of Capital Securities of a denomination
larger than $25 or, if the Capital Securities are then held in the form of a
Global Capital Security (as defined below), in accordance with DTC's
customary procedures. The Property Trustee shall promptly notify the
securities registrar for the Trust Securities in writing of the Capital
Securities selected for redemption and, in the case of any Capital Securities
selected for partial redemption, the Liquidation Amount thereof to be
redeemed. For all purposes of the Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Capital
Securities shall relate, in the case of any Capital Securities redeemed or to
be redeemed only in part, to the portion of the aggregate Liquidation Amount
of Capital Securities which has been or is to be redeemed.

Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each registered holder of Capital
Securities to be redeemed at its address appearing on the securities register
for the Trust Securities. Unless the Company defaults in payment of the
Redemption Price on the Junior Subordinated Debentures, on and after the
Redemption Date interest will cease to accrue on the Junior Subordinated
Debentures or portions thereof called for redemption and, unless payment of
the Redemption Price in respect of the Capital Securities is withheld or
refused and not paid either by the Issuer Trust or the Company pursuant to
the Guarantee, Distributions will cease to accumulate on the Capital
Securities or portions thereof called for redemption.

LIQUIDATION DISTRIBUTION UPON DISSOLUTION

The amount payable on the Capital Securities in the event of any
liquidation of the Issuer Trust is $25 per Capital Security plus accumulated
and unpaid Distributions, subject to certain exceptions, which may be paid in
the form of a distribution of such amount in Junior Subordinated Debentures.

Pursuant to the Trust Agreement, the Issuer Trust will automatically
dissolve upon expiration of its term or, if earlier, will dissolve on the
first to occur of: (i) certain events of bankruptcy, dissolution or
liquidation of the Company; (ii) the distribution of a Like Amount of the
Junior Subordinated Debentures to the holders of the Trust Securities, if the
holders of Common Securities have given written direction to the Property
Trustee to dissolve the Issuer Trust (which direction, subject to the
foregoing restrictions, is optional and wholly within the discretion of the
holders of Common Securities); (iii) the repayment of all the Capital
Securities in connection with the redemption of all the Trust Securities as
described above under "--Redemption;" and (iv) the entry of an order for the
dissolution of the Issuer Trust by a court of competent jurisdiction.

If dissolution of the Issuer Trust occurs as described in clause (i),
(ii) or (iv) above, the Issuer Trust will be liquidated by the Property
Trustee as expeditiously as the Property Trustee determines to be possible by
distributing, after satisfaction of liabilities to creditors of the Issuer
Trust as provided by applicable law, to the holders of such Trust Securities
a Like Amount of the Junior Subordinated Debentures, unless such distribution
is not practical, in which event such holders will be entitled to receive out
of the assets of the Issuer Trust available for distribution to holders,
after satisfaction of liabilities to creditors of the Issuer Trust as
provided by applicable law, an amount equal to, in the case of holders of
Capital Securities, the aggregate of the Liquidation Amount plus accumulated
and unpaid Distributions thereon to the date of payment (such amount being
the "Liquidation Distribution"). If such Liquidation Distribution can be
paid only in part because the Issuer Trust has insufficient assets available
to pay in full the aggregate Liquidation Distribution, then the amounts
payable directly by the Issuer Trust on its Capital Securities shall be paid
on a pro rata basis. The holders of the Common Securities will be entitled
to receive distributions upon any such liquidation pro rata with the holders
of the Capital Securities, except that if a Debenture Event of Default has
occurred and is continuing as a result of any failure by the Company to pay
any amounts in respect of the Junior Subordinated Debentures when due, the
Capital Securities shall have a priority over the Common Securities. See
"Description of Capital Securities--Subordination of Common Securities" in
the accompanying Prospectus.

After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures (i) the Capital Securities will no longer be deemed
to be outstanding, (ii) DTC or its nominee, as the registered holder of
Capital Securities, will receive a registered global certificate or
certificates representing the Junior Subordinated Debentures to be delivered
upon such distribution with respect to Capital Securities held by DTC or its
nominee and (iii) any certificates representing the Capital Securities not
held by DTC or its nominee will be deemed to represent the Junior
Subordinated Debentures having a principal amount equal to the stated
Liquidation Amount of the Capital Securities and bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on
the Capital Securities until such certificates are presented to the security
registrar for the Trust Securities for transfer or reissuance.

If the Company does not redeem the Junior Subordinated Debentures prior
to the Stated Maturity and the Issuer Trust is not liquidated and the Junior
Subordinated Debentures are not distributed to holders of the Capital
Securities, the Capital Securities will remain outstanding until the
repayment of the Junior Subordinated Debentures and the distribution of the
Liquidation Distribution to the holders of the Capital Securities.

There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for Capital Securities if a dissolution and liquidation of the
Issuer Trust were to occur. Accordingly, the Capital Securities that an
investor may purchase, or the Junior Subordinated Debentures that the
investor may receive on dissolution and liquidation of the Issuer Trust, may
trade at a discount to the price that the investor paid to purchase the
Capital Securities offered hereby.

BOOK-ENTRY PROCEDURES, DELIVERY AND FORM

The Capital Securities will be issued in the form of one or more fully
registered global securities which will be deposited with, or on behalf of,
the Depository and registered in the name of the Depository's nominee.
Unless and until it is exchangeable in whole or in part for Capital
Securities in definitive form, a global security may not be transferred
except as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor of such
Depository or a nominee of such successor.

Ownership of beneficial interests in a global security will be limited
to persons that have accounts with the Depository or its nominee
("Participants") or persons that may hold interests through Participants.
The Company expects that, upon the issuance of a global security, the
Depository will credit, on its book-entry registration and transfer system,
the Participants' accounts with their respective principal amounts of the
Capital Securities represented by such global security. Ownership of
beneficial interests in such global security will be shown on, and the
transfer of such ownership interests will be effected only through, records
maintained by the Depository (with respect to interests of Participants) and
on the records of Participants (with respect to interests of persons holding
through Participants). Beneficial owners who hold through participants will
not receive written confirmation from the Depository of their purchase, but
are expected to receive written confirmations from the Participants through
which the beneficial owner entered into the transaction. Transfers of such
ownership interests will be accomplished by entries on the books of
Participants acting on behalf of the beneficial owners.

So long as the Depository, or its nominee, is the registered owner of a
global security, the Depository or such nominee, as the case may be, will be
considered the sole owner or holder of the Capital Securities represented by
such global security for all purposes under the Trust Agreement. Except as
provided below, owners of beneficial interests in a global security will not
be entitled to receive physical delivery of the Capital Securities in
definitive form and will not be considered the owners or holders thereof
under the Trust Agreement. Accordingly, each person owning a beneficial
interest in such a global security must rely on the procedures of the
Depository and, if such person is not a Participant, on the procedures of the
participant through which such person owns its interest, to exercise any
rights of a holder under the Trust Agreement or the Junior Subordinated
Debentures. The Company understands that, under the Depository's existing
practices, in the event that the Company requests any action of holders, or
an owner of a beneficial interest in such a global security desires to take
any action which a holder is entitled to take under the Trust Agreement or
the Junior Subordinated Debentures, the Depository would authorize the
Participants holding the relevant beneficial interests to take such action,
and such Participants would authorize beneficial owners owning through such
Participants to take such action or would otherwise act upon the instructions
of beneficial owners owning through them. Redemption notices will also be
sent to the Depository. If less than all of the Capital Securities are being
redeemed, the Company understands that it is the Depository's existing
practice to determine by lot the amount of the interest of each Participant
to be redeemed.

Distributions on the Capital Securities registered in the name of the
Depository or its nominee will be made to the Depository or its nominee, as
the case may be, as the registered owner of the global security representing
such Capital Securities. None of the Company, the Issuer Trust, the Issuer
Trustees, any Paying Agent, the Administrators or any other agent of the
Company or the Issuer Trust will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the global security for such Capital Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests. Payment of Distributions to Participants shall be the
responsibility of the Depository. The Depository's practice is to credit
Participants' accounts on a payable date in accordance with their respective
holdings shown on the Depository's records unless the Depository has reason
to believe that it will not receive payment on such payable date. Payments
by Participants to beneficial owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participant and not of the Depository, the
Company, the Issuer Trust, the Issuer Trustees, the Paying Agent or any other
agent of the Company or the Issuer Trust, subject to any statutory or
regulatory requirements as may be in effect from time to time.

The Depository may discontinue providing its services as securities
depository with respect to the Capital Securities at any time by giving
reasonable notice to the Property Trustee. If the Depository notifies the
Company that it is unwilling to continue as such, or if it is unable to
continue or ceases to be a clearing agency registered under the Exchange Act
and a successor depository is not appointed by the Company within ninety days
after receiving such notice or becoming aware that the Depository is no
longer so registered, the Company will issue the Capital Securities in
definitive form, at its expense, upon registration of transfer of, or in
exchange for, such global security. In addition, the Issuer Trust may at any
time and in its sole discretion determine not to have the Capital Securities
represented by one or more global securities and, in such event, will issue
Capital Securities in definitive form, at its expense, in exchange for all of
the global securities representing such Capital Securities.

DTC has advised the Company and the Issuer Trust as follows: DTC is a
limited purpose trust company organized under the laws of the State of New
York, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was
created to hold securities for its Participants and to facilitate the
clearance and settlement of securities transactions between Participants
through electronic book entry changes to accounts of its Participants,
thereby eliminating the need for physical movement of certificates.
Participants include securities brokers and dealers, banks, trust companies
and clearing corporations and may include certain other organizations such as
the Underwriters. Certain of such Participants (or their representatives),
together with other entities, own DTC. Indirect access to the DTC system is
available to others such as banks, brokers, dealers and trust companies that
clear through, or maintain a custodial relationship, with a Participant,
either directly or indirectly.

PAYMENT AND PAYING AGENCY

Payments in respect of the Capital Securities will be made to DTC, which
will credit the relevant accounts at DTC on the applicable Distribution
Dates, or if the Capital Securities are not held by DTC, such payments will
be made by check mailed to the address of the holder entitled thereto as such
address appears on the securities register for the Trust Securities.
However, a holder of $1 million or more in aggregate Liquidation Amount of
Capital Securities may receive Distribution payments (other than
Distributions payable at the Stated Maturity) by wire transfer of immediately
available funds upon written request to the Property Trustee not later than
15 calendar days prior to the date on which the Distribution is payable. The
paying agent (the "Paying Agent") will initially be the Property Trustee and
any co-paying agent chosen by the Property Trustee and acceptable to the
Administrators. The Paying Agent will be permitted to resign as Paying Agent
upon 30 days' written notice to the Property Trustee and the Administrators.
If the Property Trustee is no longer the Paying Agent, the Property Trustee
will appoint a successor (which must be a bank or trust company reasonably
acceptable to the Administrators) to act as Paying Agent.

DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES

The Junior Subordinated Debentures are a series of Debt Securities to be
issued pursuant to the Junior Subordinated Debt Indenture and the following
summary of certain terms and provisions of the Junior Subordinated Debentures
and the Junior Subordinated Debt Indenture supplements the description of the
terms and provisions of such Debt Securities and such Indenture set forth in
the accompanying Prospectus under the heading "Description of Debt
Securities," to which description reference is hereby made. The summary of
certain terms and provisions of the Junior Subordinated Debentures set forth
below does not purport to be complete and is subject to, and qualified in its
entirety by reference to, the Junior Subordinated Debentures and the Junior
Subordinated Debt Indenture, to which reference is hereby made. Copies of
the forms of Junior Subordinated Debentures and the Junior Subordinated Debt
Indenture are available from the Debt Securities Trustee upon request.

GENERAL

Concurrently with the issuance of the Capital Securities, the Issuer
Trust will invest the proceeds thereof, together with the consideration paid
by the Company for the Common Securities, in the Junior Subordinated
Debentures issued by the Company. The Junior Subordinated Debentures will
bear interest, accruing from and including March 12, 1998, at the annual rate
of 7.10% of the principal amount thereof, payable quarterly in arrears on
February 28, May 30, August 30 and November 30 of each year (each, an
"Interest Payment Date"), commencing May 30, 1998, to the person in whose
name each Junior Subordinated Debenture is registered at the close of
business on the 15th calendar day (whether or not a Business Day) next
preceding such Interest Payment Date. It is anticipated that, until the
liquidation, if any, of the Issuer Trust, each Junior Subordinated Debenture
will be registered in the name of the Issuer Trust and held by the Property
Trustee in trust for the benefit of the holders of the Trust Securities. The
amount of interest payable for any period less than a full interest period
will be computed on the basis of a 360-day year of twelve 30-day months and
the actual days elapsed in a partial month in such period. The amount of
interest payable for any full interest period will be computed by dividing
the rate per annum by four. If any date on which interest is payable on the
Junior Subordinated Debentures is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day that is
a Business Day (without any interest or other payment in respect of any such
delay) with the same force and effect as if made on the date such payment was
originally payable. Accrued interest that is not paid on the applicable
Interest Payment Date will bear additional interest on the amount thereof at
the rate per annum of 7.10%, compounded quarterly and computed on the basis
of a 360-day year of twelve 30-day months and the actual days elapsed in a
partial month in such period. The amount of additional interest payable for
any full interest period will be computed by dividing the rate per annum by
four. The term "interest" as used herein includes quarterly interest
payments, interest on quarterly interest payments not paid on the applicable
Interest Payment Date and Additional Sums, as applicable.

The Junior Subordinated Debentures will mature on February 28, 2038
(such date, as it may be advanced as hereinafter described, the "Stated
Maturity"). If a Tax Event occurs, then the Company will have the right
prior to the termination of the Issuer Trust, to advance the Stated Maturity
of the Junior Subordinated Debentures to the minimum extent required in order
to allow for the payments of interest in respect of the Junior Subordinated
Debentures to continue to be tax deductible, but in no event shall the
resulting maturity of the Junior Subordinated Debentures be less than 15
years from the date of original issuance thereof. The Stated Maturity shall
be advanced only if, in the opinion of counsel to the Company experienced in
such matters, (a) after advancing the Stated Maturity, interest paid on the
Junior Subordinated Debentures will be deductible for United States federal
income tax purposes and (b) advancing the Stated Maturity will not result in
a taxable event to holders of the Capital Securities.

If the Company elects to advance the Stated Maturity of the Junior
Subordinated Debentures, it will give notice to the Debt Securities Trustee,
and the Debt Securities Trustee will give notice of such change to the
holders of the Junior Subordinated Debentures not less than 30 and not more
than 60 days prior to the effectiveness thereof.

The provisions of the Junior Subordinated Debt Indenture described in
the accompanying Prospectus relating to discharge, defeasance and covenant
defeasance will not apply to the Junior Subordinated Debentures. See
"Description of Debt Securities--Discharge, Defeasance and Covenant
Defeasance" in the accompanying Prospectus.

OPTION TO EXTEND INTEREST PAYMENT PERIOD

So long as no Debenture Event of Default has occurred and is continuing,
the Company will have the right at any time during the term of the Junior
Subordinated Debentures to defer the payment of interest at any time or from
time to time for a period not exceeding 20 consecutive quarterly periods with
respect to each Extension Period, provided that no Extension Period may
extend beyond the Stated Maturity of the Junior Subordinated Debentures. At
the end of an Extension Period, the Company must pay all interest then
accrued and unpaid (together with interest thereon at the annual rate of
7.10%, compounded quarterly and computed on the basis of a 360-day year of
twelve 30-day months and the actual days elapsed in a partial month in such
period). The amount of additional interest payable for any full interest
period will be computed by dividing the rate per annum by four. During an
Extension Period, interest will continue to accrue and holders of Junior
Subordinated Debentures (or holders of Capital Securities while outstanding)
will be required to accrue interest income for United States federal income
tax purposes. See "Certain Federal Income Tax Consequences--Interest Income
and Original Issue Discount" in this Prospectus Supplement.

During an Extension Period, the Company is subject to certain
restrictions. See "--Restrictions on Certain Payments; Certain Covenants of
the Company" below. Prior to the termination of an Extension Period, the
Company may further defer the payment of interest, provided that no Extension
Period may exceed 20 consecutive quarterly periods or extend beyond the
Stated Maturity of the Junior Subordinated Debentures. In the event that the
Stated Maturity is advanced to a date prior to the end of an Extension
Period, such Extension Period shall be deemed to end on such date or such
earlier date as may be determined by the Company. In the event that any
Junior Subordinated Debentures are called for redemption on a date prior to
the end of an Extension Period, with respect to such Junior Subordinated
Debentures, such Extension Period shall be deemed to end on such date or such
earlier date as may be determined by the Company. Upon the termination of an
Extension Period and the payment of all amounts then due, the Company may
elect to begin a new Extension Period subject to the above conditions. No
interest shall be due and payable during an Extension Period, except at the
end thereof, but the Company may prepay at any time all or any portion of the
interest accrued during an Extension Period. The Company must give the
Issuer Trustees notice of its election of such Extension Period at least 30
calendar days prior to the date the Distributions on the Capital Securities
would have been payable but for the election to begin such Extension Period.
If the Property Trustee is not the only holder, or is not itself the holder,
of the Junior Subordinated Debentures at the time the Company selects an
Extension Period, the Company shall give the holders of the Junior
Subordinated Debentures and the Property Trustee written notice of its
selection of such Extension Period at least 10 Business Days before the
earlier of the next succeeding Interest Payment Date or the date the Company
is required to give notice of the record or payment date of such interest
payment to holders of the Junior Subordinated Debentures. The Property
Trustee will give notice of the Company's election to begin an Extension
Period to the holders of the Capital Securities. There is no limitation on
the number of times that the Company may elect to begin an Extension Period.

REDEMPTION

The Junior Subordinated Debentures are redeemable prior to the Stated
Maturity at the option of the Company (i) on or after March 12, 2003, in
whole at any time or in part from time to time, and (ii) prior to March 12,
2003, in whole (but not in part) at any time within 90 days following the
occurrence and continuation of a Tax Event or an Investment Company Event
(each as defined under "Description of Capital Securities--Redemption" in
this Prospectus Supplement) (the "90-Day Period"), in each case at a
Redemption Price equal to the accrued and unpaid interest on the Junior
Subordinated Debentures so redeemed to the date fixed for redemption, plus
100% of the principal amount thereof. See "Description of Capital
Securities--Redemption" in this Prospectus Supplement.

The Company's right to redeem the Junior Subordinated Debentures under
the preceding paragraph shall be subject to the condition that if at the time
there is available to the Company or the Issuer Trust the opportunity to
eliminate, within the 90-Day Period, the Tax Event or Investment Company
Event by taking some ministerial action ("MINISTERIAL ACTION"), such as
filing a form or making an election, or pursuing some other similar
reasonable measure that will have no adverse effect on the Company, the
Issuer Trust or the holders of the Trust Securities and will involve no
material cost, the Company shall pursue such measures in lieu of redemption;
provided further, that the Company shall have no right to redeem the Junior
Subordinated Debentures while the Issuer Trust is pursuing any Ministerial
Action pursuant to the Trust Agreement.

ADDITIONAL SUMS

The Company will covenant that, if and for so long as (i) the Issuer
Trust is the holder of all Junior Subordinated Debentures and (ii) the Issuer
Trust is required to pay any additional taxes, duties or other governmental
charges as a result of a Tax Event, the Company will pay as Additional Sums
on the Junior Subordinated Debentures such amounts as may be required so that
the Distributions paid by the Issuer Trust will not be reduced as a result of
any such additional taxes, duties or other governmental charges. See
"Description of Capital Securities--Redemption" in this Prospectus
Supplement.

REGISTRATION, DENOMINATION AND TRANSFER

The Junior Subordinated Debentures will initially be registered in the
name of the Issuer Trust. The Junior Subordinated Debentures will be issued
in denominations of $25 and integral multiples thereof. If the Junior
Subordinated Debentures are distributed to holders of Capital Securities, it
is anticipated that the depository arrangements for the Junior Subordinated
Debentures will be substantially identical to those in effect for the Capital
Securities. See "Description of Capital Securities--Book-Entry Procedures,
Delivery and Form" in this Prospectus Supplement.

Although DTC has agreed to the procedures described above, it is under
no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. If DTC is at any time unwilling
or unable to continue as depositary and a successor depositary is not
appointed by the Company within 90 days of receipt of notice from DTC to such
effect, the Company will cause the Junior Subordinated Debentures to be
issued in definitive form.

Payments on Junior Subordinated Debentures represented by a global
security will be made to Cede & Co., the nominee for DTC, as the registered
holder of the Junior Subordinated Debentures, as described under "Description
of the Capital Securities--Book-Entry Procedures, Delivery and Form" in this
Prospectus Supplement. If Junior Subordinated Debentures are issued in
certificated form, principal and interest will be payable, the transfer of
the Junior Subordinated Debentures will be registrable, and Junior
Subordinated Debentures will be exchangeable for Junior Subordinated
Debentures of other authorized denominations of a like aggregate principal
amount, at the corporate trust office of the Debt Securities Trustee in New
York, New York or at the offices of any Paying Agent or transfer agent
appointed by the Company, provided that payment of interest may be made at
the option of the Company by check mailed to the address of the persons
entitled thereto. However, a holder of $1 million or more in aggregate
principal amount of Junior Subordinated Debentures may receive payments of
interest (other than interest payable at the Stated Maturity) by wire
transfer of immediately available funds upon written request to the Debt
Securities Trustee not later than 15 calendar days prior to the date on which
the interest is payable.

Junior Subordinated Debentures will be exchangeable for other Junior
Subordinated Debentures of like tenor, of any authorized denominations, and
of a like aggregate principal amount.

Junior Subordinated Debentures may be presented for exchange as provided
above, and may be presented for registration of transfer (with the form of
transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the securities registrar appointed under the
Junior Subordinated Debt Indenture or at the office of any transfer agent
designated by the Company for such purpose without service charge and upon
payment of any taxes and other governmental charges as described in the
Junior Subordinated Debt Indenture. The Company will appoint the Debt
Securities Trustee as securities registrar under the Junior Subordinated Debt
Indenture. The Company may at any time designate additional transfer agents
with respect to the Junior Subordinated Debentures.

In the event of any redemption, neither the Company nor the Debt
Securities Trustee shall be required to (i) issue, register the transfer of
or exchange Junior Subordinated Debentures during a period beginning 15 days
next preceding the first mailing of the relevant notice of redemption or (ii)
transfer or exchange any Junior Subordinated Debentures so selected for
redemption, except, in the case of any Junior Subordinated Debentures being
redeemed in part, any portion thereof not to be redeemed.

Any monies deposited with the Debt Securities Trustee or any paying
agent, or then held by the Company in trust, for the payment of the principal
of (and premium, if any) or interest on any Junior Subordinated Debenture and
remaining unclaimed for two years after such principal (and premium, if any)
or interest has become due and payable shall, at the request of the Company,
be repaid to the Company and the holder of such Junior Subordinated Debenture
shall thereafter look, as a general unsecured creditor, only to the Company
for payment thereof.

RESTRICTIONS ON CERTAIN PAYMENTS; CERTAIN COVENANTS OF THE COMPANY

The Company will covenant that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock or
(ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company that rank pari
passu in all respects with or junior in interest to the Junior Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company (1) in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit
of any one or more employees, officers, directors or consultants, (2) in
connection with a dividend reinvestment or stockholder stock purchase plan or
(3) in connection with the issuance of capital stock of the Company (or
securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to the
applicable Extension Period or other event referred to below, (b) as a result
of an exchange, redemption or conversion of any class or series of the
Company's capital stock (or any capital stock of a subsidiary of the Company)
for any class or series of the Company's capital stock or of any class or
series of the Company's indebtedness for any class or series of the Company's
capital stock, (c) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any stockholder's rights plan,
or the issuance of rights, stock or other property under any stockholder's
rights plan, or the redemption or repurchase of rights pursuant thereto, (e)
payments under the Guarantee, or (f) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with or
junior to such stock), if at such time (i) there has occurred any event (a)
of which the Company has actual knowledge that with the giving of notice or
the lapse of time, or both, would constitute a Debenture Event of Default and
(b) that the Company has not taken reasonable steps to cure, (ii) if the
Junior Subordinated Debentures are held by the Issuer Trust, the Company is
in default with respect to its payment of any obligations under the Guarantee
or (iii) the Company has given notice of its election of an Extension Period
as provided in the Junior Subordinated Debt Indenture and has not rescinded
such notice, or such Extension Period, or any extension thereof, is
continuing.

The Company will covenant (i) to continue to hold, directly or
indirectly, 100% of the Common Securities, provided that certain successors
that are permitted pursuant to the Junior Subordinated Debt Indenture may
succeed to the Company's ownership of the Common Securities, (ii) as holder
of the Common Securities, not to voluntarily dissolve, windup or liquidate
the Issuer Trust, other than (a) in connection with a distribution of Junior
Subordinated Debentures to the holders of the Capital Securities in
liquidation of the Issuer Trust or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the Trust Agreement and (iii) to
use its reasonable efforts, consistent with the terms and provisions of the
Trust Agreement, to cause the Issuer Trust to continue not to be taxable as a
corporation for United States federal income tax purposes.

EXPENSES AND TAXES

The Company, as borrower, will agree to pay all debts and other
obligations (other than with respect to the Capital Securities issued by the
Issuer Trust) and all costs and expenses of the Issuer Trust (including costs
and expenses relating to the organization of the Issuer Trust, the fees and
expenses of the Issuer Trustees for the Issuer Trust and the costs and
expenses relating to the operation of the Issuer Trust) and to pay any and
all taxes and all costs and expenses with respect thereto (other than United
States withholding taxes) to which the Issuer Trust might become subject.
The foregoing obligations of the Company under the Debt Securities owned by
the Issuer Trust are for the benefit of, and shall be enforceable by, any
person to whom any such debts, obligations, costs, expenses and taxes are
owed (a "Creditor") whether or not such Creditor has received notice thereof.
Any such Creditor may enforce such obligations of the Company directly
against the Company, and the Company will irrevocably waive any right or
remedy to require that any such Creditor take any action against the Issuer
Trust or any other person before proceeding against the Company. The Company
will also agree in the Debt Securities owned by the Issuer Trust to execute
such additional agreements as may be necessary or desirable to give full
effect to the foregoing.

MODIFICATION OF JUNIOR SUBORDINATED DEBT INDENTURE

The provisions for modifying the Junior Subordinated Debt Indenture and
the Debt Securities issued thereunder, including the Junior Subordinated
Debentures, are summarized under the heading "Description of Debt Securities-
- -Modification of the Indentures" in the accompanying Prospectus. In
addition, so long as any of the Capital Securities remain outstanding, no
such modification may be made that adversely affects the holders of such
Capital Securities in any material respect, and no termination of the Junior
Subordinated Debt Indenture may occur, and no waiver of any Debenture Event
of Default or compliance with any covenant under the Junior Subordinated Debt
Indenture may be effective, without the prior consent of the holders of at
least a majority of the aggregate Liquidation Amount of the outstanding
Capital Securities unless and until the principal of (and premium, if any,
on) the Junior Subordinated Debentures and all accrued and unpaid interest
thereon have been paid in full and certain other conditions are satisfied.
In addition, the Company may not amend the Junior Subordinated Debt Indenture
to remove the rights of holders of Capital Securities of the Issuer Trust to
institute a Direct Action without the prior written consent of all the
holders of Capital Securities or to remove the obligation to obtain the
consent of holders of Capital Securities as provided for, or without the
consent of the required percentage of holders of the Capital Securities of
the Issuer Trust. So long as the Company acts in accordance with the terms
of the Junior Subordinated Debentures and the Junior Subordinated Debt
Indenture, the Company may advance the Stated Maturity of and defer interest
payable on the Junior Subordinated Debentures, in each case without the
consent of the Issuer Trust or the holders of the Capital Securities.

DEBENTURE EVENTS OF DEFAULT

The Junior Subordinated Debt Indenture provides that any one or more of
the events described under "Description of Debt Securities--Events of
Default" in the accompanying Prospectus constitutes an "Event of Default"
with respect to the Junior Subordinated Debentures. Deferral of any due date
for the payment of interest in connection with an Extension Period does not
constitute an Event of Default. For purposes of the Trust Agreement and this
Prospectus Supplement, each such Event of Default under the Junior
Subordinated Debenture is referred to as a "Debenture Event of Default." As
described in "Description of Capital Securities--Events of Default; Notice"
in the accompanying Prospectus, the occurrence of a Debenture Event of
Default will also constitute an Event of Default in respect of the Capital
Securities.

The holders of at least a majority in aggregate principal amount of
outstanding Junior Subordinated Debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debt Securities Trustee. The Debt Securities Trustee or the holders of not
less than 25% in aggregate principal amount of outstanding Junior
Subordinated Debentures may declare the principal due and payable immediately
upon a Debenture Event of Default, and, should the Debt Securities Trustee or
such holders of Junior Subordinated Debentures fail to make such declaration,
the holders of at least 25% in aggregate Liquidation Amount of the
outstanding Capital Securities shall have such right. The holders of a
majority in aggregate principal amount of outstanding Junior Subordinated
Debentures, with the consent of a majority in aggregate Liquidation Amount of
the outstanding Capital Securities, if such Junior Subordinated Debentures
are held by the Issuer Trust, may annul such declaration and waive the
default if all defaults (other than the non-payment of the principal of
Junior Subordinated Debentures which has become due solely by such
acceleration) have been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debt Securities Trustee. Should the holders of
Junior Subordinated Debentures fail to annul such declaration and waive such
default, the holders of a majority in aggregate Liquidation Amount of the
outstanding Capital Securities shall have such right.

The holders of at least a majority in aggregate principal amount of the
outstanding Junior Subordinated Debentures affected thereby may, on behalf of
the holders of all the Junior Subordinated Debentures, waive any past
default, except a default in the payment of principal (or premium, if any) or
interest (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debt Securities Trustee) or a
default in respect of a covenant or provision which under the Junior
Subordinated Debt Indenture cannot be modified or amended without the consent
of the holder of each outstanding Junior Subordinated Debenture affected
thereby, provided, that if the Junior Subordinated Debentures are held by the
Issuer Trust or an Issuer Trustee, such waiver shall not be effective as to
the Junior Subordinated Debentures unless the holders of at least a majority
in aggregate liquidation amount of the Capital Securities shall have
consented to such waiver; provided further, that if the consent of the Holder
of each outstanding Junior Subordinated Debenture is required, such waiver
shall not be effective unless each holder of the Capital Securities shall
have consented to such waiver. See "Description of Debt Securities--
Modification of Indentures" in the accompanying Prospectus. The Company is
required to file annually with the Debt Securities Trustee a certificate as
to whether or not the Company is in compliance with all the conditions and
covenants applicable to it under the Junior Subordinated Debt Indenture.

If a Debenture Event of Default occurs and is continuing, the Property
Trustee will have the right to declare the principal of and the interest on
the Junior Subordinated Debentures, and any other amounts payable under the
Junior Subordinated Debentures and the Junior Subordinated Debt Indenture, to
be forthwith due and payable and to enforce its other rights as a creditor
with respect to the Junior Subordinated Debentures.

ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES

If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay any amounts
payable in respect of the Junior Subordinated Debentures on the date such
amounts are otherwise payable, a registered holder of Capital Securities may
institute a legal proceeding directly against the Company for enforcement of
payment to such holder of an amount equal to the amount payable in respect of
Junior Subordinated Debentures having a principal amount equal to the
aggregate Liquidation Amount of the Capital Securities held by such holder.
The Company may not amend the Junior Subordinated Debentures to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all the Capital Securities. The Company will have the right
under the Junior Subordinated Debentures to set-off any payment made to such
holder of Capital Securities by the Company in connection with a Direct
Action.

The holders of the Capital Securities would not be able to exercise
directly any remedies available to the holders of the Junior Subordinated
Debentures except under the circumstances described in the preceding
paragraph. See "Description of Capital Securities--Events of Default;
Notice" in the accompanying Prospectus.

DESCRIPTION OF GUARANTEE

The following summary of certain terms and provisions of the Guarantee
supplements the information set forth in the accompanying Prospectus under
the heading "Description of Guarantees." The Guarantee will be executed and
delivered by the Company concurrently with the issuance of Capital Securities
by the Issuer Trust for the benefit of the holders from time to time of the
Capital Securities. This summary of certain provisions of the Guarantee does
not purport to be complete and is subject to, and qualified in its entirety
by reference to, all the provisions of the Guarantee, including the
definitions therein of certain terms. A copy of the form of the Guarantee is
available upon request from the Guarantee Trustee.

GENERAL

The Company will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined
below) to the holders of the Capital Securities, as and when due, regardless
of any defense, right of set-off or counterclaim that the Issuer Trust may
have or assert other than the defense of payment. The following payments
with respect to the Capital Securities, to the extent not paid by or on
behalf of the Issuer Trust (the "Guarantee Payments"), will be subject to the
Guarantee: (i) any accumulated and unpaid Distributions required to be paid
on such Capital Securities, to the extent that the Issuer Trust has funds on
hand available therefor at such time, (ii) the Redemption Price with respect
to any Capital Securities called for redemption, to the extent that the
Issuer Trust has funds on hand available therefor at such time, and (iii)
upon a voluntary or involuntary dissolution, winding-up or liquidation of the
Issuer Trust (unless the Junior Subordinated Debentures are distributed to
holders of the Capital Securities), the lesser of (a) the aggregate of the
Liquidation Amount and all accumulated and unpaid Distributions to the date
of payment, and (b) the amount of assets of the Issuer Trust remaining
available for distribution to holders of the Capital Securities on
liquidation of the Issuer Trust. The Company's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts
by the Company to the holders of the Capital Securities or by causing the
Issuer Trust to pay such amounts to such holders.

The Company will, through the Guarantee, the Trust Agreement, the Junior
Subordinated Debentures and the Junior Subordinated Debt Indenture, taken
together, fully, irrevocably and unconditionally guarantee all the Issuer
Trust's obligations under the Capital Securities. No single document
standing alone or operating in conjunction with fewer than all the other
documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Issuer Trust's obligations in respect of the
Capital Securities. See "Relationship Among the Capital Securities, the
Junior Subordinated Debentures and the Guarantee" in this Prospectus
Supplement.

STATUS OF THE GUARANTEE

The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior
Indebtedness (as defined in the Junior Subordinated Debt Indenture) of the
Company in the same manner as the Junior Subordinated Debentures.

The Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Guarantor to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other person or
entity). The Guarantee will be held by the Guarantee Trustee for the benefit
of the holders of the Capital Securities. The Guarantee will not be
discharged except by payment of the Guarantee Payments in full to the extent
not paid by the Issuer Trust or distribution to the holders of the Capital
Securities of the Junior Subordinated Debentures.

RELATIONSHIP AMONG THE CAPITAL SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE

FULL AND UNCONDITIONAL GUARANTEE

Payments of Distributions and other amounts due on the Capital
Securities (to the extent the Issuer Trust has funds available for such
payment) are irrevocably guaranteed by the Company as and to the extent
described under "Description of Guarantee" in this Prospectus Supplement.
Taken together, the Company's obligations under the Junior Subordinated
Debentures, the Junior Subordinated Debt Indenture, the Trust Agreement and
the Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the Capital Securities. No single document standing alone or operating in
conjunction with fewer than all the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Issuer Trust's obligations in respect of the Capital Securities. If and to
the extent that the Company does not make payments on the Junior Subordinated
Debentures, the Issuer Trust will not have sufficient funds to pay
Distributions or other amounts due on the Capital Securities. The Guarantee
does not cover payment of amounts payable with respect to the Capital
Securities when the Issuer Trust does not have sufficient funds to pay such
amounts. In such event, one remedy of a holder of the Capital Securities
would be to institute a legal proceeding directly against the Company for
enforcement of payment of the Company's obligations under Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Capital Securities held by such holder.

The obligations of the Company under the Junior Subordinated Debentures
and the Guarantee are subordinate and junior in right of payment to all
Senior Indebtedness (as defined in the Junior Subordinated Debt Indenture).

SUFFICIENCY OF PAYMENTS

As long as payments are made when due on the Junior Subordinated
Debentures, such payments will be sufficient to cover Distributions and other
payments distributable on the Capital Securities, primarily because (i) the
aggregate principal amount of the Junior Subordinated Debentures will be
equal to the sum of the aggregate stated Liquidation Amount of the Capital
Securities and Common Securities; (ii) the interest rate and interest and
other payment dates on the Junior Subordinated Debentures will match the
Distribution rate, Distribution Dates and other payment dates for the Capital
Securities; (iii) the Company will pay for all and any costs, expenses and
liabilities of the Issuer Trust except withholding taxes and the Issuer
Trust's obligations to holders of the Trust Securities; and (iv) the Trust
Agreement further provides that the Issuer Trust will not engage in any
activity that is not consistent with the limited purposes of the Issuer
Trust.

Notwithstanding anything to the contrary in the Junior Subordinated Debt
Indenture, the Company has the right to set-off any payment it is otherwise
required to make thereunder against and to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the Guarantee.

ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES

A holder of any Capital Security may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Guarantee Trustee,
the Issuer Trust or any other person or entity. See "Description of
Guarantee" in this Prospectus Supplement.

A default or event of default under any Senior Indebtedness (as defined
in the Junior Subordinated Debt Indenture) of the Company would not
necessarily constitute a default or Event of Default in respect of the
Capital Securities. However, in the event of payment defaults under, or
acceleration of, Senior Indebtedness (as so defined) of the Company, the
subordination provisions of the Junior Subordinated Debt Indenture provide
that no payments may be made in respect of the Junior Subordinated Debentures
until such Senior Indebtedness has been paid in full or any payment default
thereunder has been cured or waived. See "Description of Junior Subordinated
Debentures--Subordination" in this Prospectus Supplement.

LIMITED PURPOSE OF ISSUER TRUST

The Capital Securities represent preferred undivided beneficial
interests in the assets of the Issuer Trust, and the Issuer Trust exists for
the sole purpose of issuing its Capital Securities and Common Securities,
investing the proceeds thereof in Junior Subordinated Debentures and engaging
in only those other activities necessary, convenient or incidental thereto
(such as registering the transfer of the Trust Securities). A principal
difference between the rights of a holder of a Capital Security and a holder
of a Junior Subordinated Debenture is that a holder of a Junior Subordinated
Debenture is entitled to receive from the Company payments on Junior
Subordinated Debentures held, while a holder of Capital Securities is
entitled to receive Distributions or other amounts distributable with respect
to the Capital Securities from the Issuer Trust (or from the Company under
the Guarantee) only if and to the extent the Issuer Trust has funds available
for the payment of such Distributions.

RIGHTS UPON DISSOLUTION

Upon any voluntary or involuntary dissolution, winding-up or liquidation
of the Issuer Trust, other than any such dissolution, winding-up or
liquidation involving the distribution of the Junior Subordinated Debentures,
after satisfaction of liabilities to creditors of the Issuer Trust as
required by applicable law, the holders of the Capital Securities will be
entitled to receive, out of assets held by the Issuer Trust, the Liquidation
Distribution in cash. See "Description of Capital Securities--Liquidation
Distribution Upon Dissolution" in this Prospectus Supplement. Upon any
voluntary or involuntary liquidation or bankruptcy of the Company, the Issuer
Trust, as registered holder of the Junior Subordinated Debentures, would be a
subordinated creditor of the Company, subordinated and junior in right of
payment to all Senior Indebtedness (as defined in the Junior Subordinated
Debt Indenture) as set forth in the Junior Subordinated Debt Indenture, but
entitled to receive payment in full of all amounts payable with respect to
the Junior Subordinated Debentures before any stockholders of the Company
receive payments or distributions. Since the Company is the guarantor under
the Guarantee and has agreed under the Junior Subordinated Debt Indenture to
pay for all costs, expenses and liabilities of the Issuer Trust (other than
withholding taxes and the Issuer Trust's obligations to the holders of the
Trust Securities), the positions of a holder of the Capital Securities and a
holder of such Junior Subordinated Debentures relative to other creditors and
to stockholders of the Company in the event of liquidation or bankruptcy of
the Company are expected to be substantially the same.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

GENERAL

In the opinion of Brown & Wood LLP, tax counsel to the Company and the
Issuer Trust, the following discussion summarizes the material United States
federal income tax consequences of the purchase, ownership and disposition of
the Capital Securities.

This summary is based on the Internal Revenue Code of 1986, as amended
(the "Code"), Treasury regulations thereunder, and administrative and
judicial interpretations thereof, each as of the date hereof, all of which
are subject to change, possibly on a retroactive basis. The authorities on
which this summary is based are subject to various interpretations, and this
summary is not binding on the Internal Revenue Service (the "IRS") or the
courts, either of which could take a contrary position. Moreover, no rulings
have been or will be sought from the IRS with respect to the transactions
described herein. Accordingly, there can be no assurance that the IRS will
not challenge the opinions expressed herein or that a court would not sustain
such a challenge.

Except as otherwise stated, this summary deals only with the Capital
Securities held as a capital asset by a holder who or which (i) purchased the
Capital Securities upon original issuance (an "Initial Holder") at the price
to the public and (ii) is a US Holder (as defined below). This summary does
not address all the tax consequences that may be relevant to a US Holder, nor
does it address the tax consequences, except as stated below, to holders that
are not US Holders ("Non-US Holders") or to holders that may be subject to
special tax treatment (such as banks, thrift institutions, real estate
investment trusts, regulated investment companies, insurance companies,
brokers and dealers in securities or currencies, other financial
institutions, tax-exempt organizations, persons holding the Capital
Securities as a position in a "straddle," as part of a "synthetic security,"
"hedging," "conversion" or other integrated investment, persons having a
functional currency other than the U.S. Dollar and certain United States
expatriates). Further, this summary does not address

(a) the income tax consequences to shareholders in, or partners or
beneficiaries of, a holder of the Capital Securities,

(b) the United States federal alternative minimum tax consequences of
the purchase, ownership or disposition of the Capital Securities,
or

A "US Holder" is a holder of the Capital Securities who or which is (i)
a citizen or individual resident (or is treated as a citizen or individual
resident) of the United States for income tax purposes, (ii) a corporation or
partnership created or organized (or treated as created or organized for
income tax purposes) in or under the laws of the United States or any
political subdivision thereof (other than a partnership that is not treated
as a United States person under any applicable Treasury regulations), (iii)
an estate the income of which is includible in its gross income for United
States federal income tax purposes without regard to its source, or (iv) a
trust if (a) a court within the United States is able to exercise primary
supervision over the administration of the trust and (b) one or more United
States persons have the authority to control all substantial decisions of the
trust. Notwithstanding the preceding sentence, to the extent provided in
Treasury regulations, certain trusts in existence on August 20, 1996, and
treated as United States persons prior to such date that elect to continue to
be treated as United States persons will also be a US Holder.

HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED
STATES FEDERAL OR OTHER TAX LAWS.

US HOLDERS

CHARACTERIZATION OF THE ISSUER TRUST. Under current law and based on
the representations, facts and assumptions set forth in this Prospectus, and
assuming full compliance with the terms of the Trust Agreement (and other
relevant documents), the Issuer Trust will be characterized for United States
federal income tax purposes as a grantor trust and will not be characterized
as an association taxable as a corporation. Accordingly, for United States
federal income tax purposes, each holder of the Capital Securities generally
will be considered the owner of an undivided interest in the Junior
Subordinated Debentures owned by the Issuer Trust, and each US Holder will be
required to include all income or gain recognized for United States federal
income tax purposes with respect to its allocable share of the Junior
Subordinated Debentures on its own income tax return.

CHARACTERIZATION OF THE JUNIOR SUBORDINATED DEBENTURES. The Company
and the Issuer Trust will agree to treat the Junior Subordinated Debentures
as indebtedness for all United States federal income tax purposes. Under
current law and based on the representations, facts and assumptions set forth
in this Prospectus, and assuming full compliance with the terms of the Junior
Subordinated Debt Indenture (and other relevant documents), the Junior
Subordinated Debentures will be characterized for United States federal
income tax purposes as debt of the Company.

INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT. Under the terms of the
Junior Subordinated Debentures, the Company has the ability to defer payments
of interest from time to time by extending the interest payment period for a
period not exceeding 20 consecutive quarterly periods, but not beyond the
maturity of the Junior Subordinated Debentures. Treasury regulations under
Section 1273 of the Code provide that debt instruments like the Junior
Subordinated Debentures will not be considered issued with original issue
discount ("OID") by reason of the Company's ability to defer payments of
interest if the likelihood of such deferral is "remote."

The Company has concluded, and this discussion assumes, that, as of the
date of this Prospectus, the likelihood of deferring payments of interest
under the terms of the Junior Subordinated Debentures is "remote" within the
meaning of the applicable Treasury regulations, in part because exercising
that option would prevent the Company from declaring dividends on its stock
and would prevent the Company from making any payments with respect to debt
securities that rank pari passu with or junior to the Junior Subordinated
Debentures. Therefore, the Junior Subordinated Debentures should not be
treated as issued with OID by reason of the Company's deferral option.
Rather, stated interest on the Junior Subordinated Debentures will generally
be taxable to a US Holder as ordinary income when paid or accrued in
accordance with that holder's method of accounting for income tax purposes.
It should be noted, however, that these Treasury regulations have not yet
been interpreted in any rulings or any other published authorities of the
IRS. Accordingly, it is possible that the IRS could take a position contrary
to the interpretation described herein.

In the event the Company exercises its option to defer payments of
interest, the Junior Subordinated Debentures would be treated as redeemed and
reissued for OID purposes and the sum of the remaining interest payments (and
any de minimis OID) on the Junior Subordinated Debentures would thereafter be
treated as OID, which would accrue, and be includible in a US Holder's
taxable income, on an economic accrual basis (regardless of the US Holder's
method of accounting for income tax purposes) over the remaining term of the
Junior Subordinated Debentures (including any period of interest deferral),
without regard to the timing of payments under the Junior Subordinated
Debentures. Subsequent distributions of interest on the Junior Subordinated
Debentures generally would not, by themselves, be taxable. The amount of OID
that would accrue in any period would generally equal the amount of interest
that accrued on the Junior Subordinated Debentures in that period at the
stated interest rate. Consequently, during any period of interest deferral,
US Holders will include OID in gross income in advance of the receipt of
cash, and a US Holder which disposes of a Capital Security prior to the
record date for payment of distributions on the Junior Subordinated
Debentures following that period will be subject to income tax on OID accrued
through the date of disposition (and not previously included in income), but
will not receive cash from the Issuer Trust with respect to the OID.

If the possibility of the Company's exercise of its option to defer
payments of interest is not treated as remote, the Junior Subordinated
Debentures would be treated as initially issued with OID in an amount equal
to the aggregate stated interest (plus any de minimis OID) over the term of
the Junior Subordinated Debentures. That OID would generally be includible
in a US Holder's taxable income, over the term of the Junior Subordinated
Debentures, on an economic accrual basis.

CHARACTERIZATION OF INCOME. Because the income underlying the Capital
Securities will not be characterized as dividends for income tax purposes,
corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction for any income recognized with respect to the
Capital Securities.

MARKET DISCOUNT AND BOND PREMIUM. Holders of the Capital Securities
other than Initial Holders may be considered to have acquired their undivided
interests in the Junior Subordinated Debentures with market discount or
acquisition premium (as each phrase is defined for United States federal
income tax purposes).

RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF
THE ISSUER TRUST. Under certain circumstances described herein, the Issuer
Trust may distribute the Junior Subordinated Debentures to holders in
exchange for the Capital Securities and in liquidation of the Issuer Trust.
See "Description of the Capital Securities--Liquidation Distribution Upon
Dissolution" in this Prospectus Supplement. Except as discussed below, such
a distribution would not be a taxable event for United States federal income
tax purposes, and each US Holder would have an aggregate adjusted basis in
its Junior Subordinated Debentures for United States federal income tax
purposes equal to such holder's aggregate adjusted basis in its Capital
Securities. For United States federal income tax purposes, a US Holder's
holding period in the Junior Subordinated Debentures received in such a
liquidation of the Issuer Trust would include the period during which the
Capital Securities were held by the holder. If, however, the relevant event
is a Tax Event which results in the Issuer Trust being treated as an
association taxable as a corporation, the distribution would likely
constitute a taxable event to US Holders of the Capital Securities for United
States federal income tax purposes.

Under certain circumstances described herein, the Junior Subordinated
Debentures may be redeemed for cash and the proceeds of such redemption
distributed to holders in redemption of their Capital Securities. See
"Description of the Capital Securities" in this Prospectus Supplement. Such
a redemption would be taxable for United States federal income tax purposes,
and a US Holder would recognize gain or loss as if it had sold the Capital
Securities for cash. See "--Sales of Capital Securities" below.

SALES OF CAPITAL SECURITIES. A US Holder that sells Capital Securities
will recognize gain or loss equal to the difference between its adjusted
basis in the Capital Securities and the amount realized on the sale of such
Capital Securities. A US Holder's adjusted basis in the Capital Securities
generally will be its initial purchase price, increased by OID previously
included (or currently includible) in such holder's gross income to the date
of disposition, and decreased by payments received on the Capital Securities
(other than any interest received with respect to the periods prior to the
effective date of the Company's first exercise of its option to defer
payments of interest). Any such gain or loss generally will be capital gain
or loss, and generally will be a long-term capital gain or loss if the
Capital Securities have been held for more than one year prior to the date of
disposition.

A holder who disposes of its Capital Securities between record dates for
payments of Distributions thereon will be required to include accrued but
unpaid interest (or OID) on the Junior Subordinated Debentures through the
date of disposition in its taxable income for United States federal income
tax purposes (notwithstanding that the holder may receive a separate payment
from the purchaser with respect to accrued interest), and to deduct that
amount from the sales proceeds received (including the separate payment, if
any, with respect to accrued interest) for the Capital Securities (or as to
OID only, to add such amount to such holder's adjusted tax basis in its
Capital Securities). To the extent the selling price is less than the
holder's adjusted tax basis (which will include accrued but unpaid OID, if
any), a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.

TAXPAYER RELIEF ACT OF 1997

On August 5, 1997, the Taxpayer Relief Act of 1997 (the "Tax Act") was
enacted into law. The Tax Act reduces the maximum rates on long-term capital
gains recognized on capital assets held by individual taxpayers for more than
eighteen months as of the date of disposition (and would further reduce the
maximum rates on such gains in the year 2001 and thereafter for certain
taxpayers who meet specified conditions). Prospective investors should
consult their own tax advisors concerning these tax law changes.

PROPOSED TAX LAW CHANGES

On February 6, 1997, President Clinton proposed certain tax law changes
(the "Tax Proposal") that, among other things, generally would have denied
corporate issuers a deduction for interest on certain debt obligations that
had a maximum term in excess of 15 years and were not shown as indebtedness
on the separate balance sheet of the issuer or, where the instrument was
issued to a related party (other than a corporation), where the holder or
some other related party issued a related instrument that was not shown as
indebtedness on the issuer's consolidated balance sheet. The Tax Proposal
would have been effective generally for instruments issued on or after the
date of first Congressional committee action. The Tax Proposal was not
included in the Tax Act. In addition, the Tax Proposal was not included in
President Clinton's 1999 Budget proposal, which was released on February 2,
1998. However, if similar legislation to the Tax Proposal is enacted in the
future with retroactive effect with respect to the Junior Subordinated
Debentures, the Company would not be entitled to an interest deduction with
respect to the Junior Subordinated Debentures. There can be no assurance
that future legislation similar to the Tax Proposal enacted after the date
hereof, if any, will not otherwise adversely affect the ability of the
Company to deduct the interest payable on the Junior Subordinated Debentures.
Accordingly, there can be no assurance that a Tax Event will not occur. See
"Description of the Capital Securities--Redemption" in this Prospectus
Supplement.

NON-US HOLDERS

The following discussion applies to a Non-US Holder.

Payments to a holder of a Capital Security which is a Non-US Holder will
generally not be subject to withholding of income tax, provided that (a) the
beneficial owner of the Capital Security does not (directly or indirectly,
actually or constructively) own 10% or more of the total combined voting
power of all classes of stock of the Company entitled to vote, (b) the
beneficial owner of the Capital Security is not a controlled foreign
corporation that is related to the Company through stock ownership, and (c)
either (i) the beneficial owner of the Capital Securities certifies to the
Issuer Trust or its agent, under penalties of perjury, that it is a Non-US
Holder and provides its name and address, or (ii) 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 holds the Capital Security in such capacity, certifies to
the Issuer Trust or its agent, under penalties of perjury, that such a
statement has been received from the beneficial owner by it or by another
Financial Institution between it and the beneficial owner in the chain of
ownership, and furnishes the Issuer Trust or its agent with a copy thereof.

As discussed above (see "--Proposed Tax Law Changes" above), changes in
legislation affecting the income tax consequences of the Junior Subordinated
Debentures are possible, and could adversely affect the ability of the
Company to deduct the interest payable on the Junior Subordinated Debentures.
Moreover, any such legislation could adversely affect Non-US Holders by
characterizing income derived from the Junior Subordinated Debentures as
dividends, generally subject to a 30% withholding tax (or a lower rate
pursuant to an applicable treaty) when paid to a Non-US Holder, rather than
as interest which, as discussed above, is generally exempt from income tax in
the hands of a Non-US Holder.

A Non-US Holder of a Capital Security will generally not be subject to
withholding of income tax on any gain realized upon the sale or other
disposition of a Capital Security unless, in the case of certain Non-US
Holders who are nonresident alien individuals, such individuals are present
in the United States for 183 or more days in the taxable year of disposition
and certain other requirements are met.

A Non-US Holder which holds the Capital Securities in connection with
the active conduct of a United States trade or business will be subject to
income tax on all income and gains recognized with respect to its
proportionate share of the Junior Subordinated Debentures.

INFORMATION REPORTING

In general, information reporting requirements will apply to payments
made on, and proceeds from the sale of, the Capital Securities held by a
noncorporate US Holder within the United States. In addition, payments made
on, and payments of the proceeds from the sale of, the Capital Securities to
or through the United States office of a broker are subject to information
reporting unless the holder thereof certifies as to its Non-United States
status or otherwise establishes an exemption from information reporting and
backup withholding. See "--Backup Withholding" below. Taxable income on the
Capital Securities for a calendar year should be reported to US Holders on
the appropriate form by the following January 31st.

BACKUP WITHHOLDING

Payments made on, and proceeds from the sale of, the Capital Securities
may be subject to a "backup" withholding tax of 31% unless the holder
complies with certain identification or exemption requirements. Any amounts
so withheld will be allowed as a credit against the holder's income tax
liability, or refunded, provided the required information is provided to the
IRS.

NEW WITHHOLDING REGULATIONS

On October 6, 1997, the Treasury Department issued new regulations (the
"New Regulations") which make certain modifications to the withholding,
backup withholding and information reporting rules described above. The New
Regulations attempt to unify certification requirements and modify reliance
standards. The New Regulations will generally be effective for payments made
after December 31, 1998, subject to certain transition rules. Prospective
investors are urged to consult their own tax advisors regarding the New
Regulations.

THE PRECEDING DISCUSSION IS ONLY A SUMMARY AND DOES NOT ADDRESS THE
CONSEQUENCES TO A PARTICULAR HOLDER OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE CAPITAL SECURITIES. POTENTIAL HOLDERS OF THE CAPITAL
SECURITIES ARE URGED TO CONTACT THEIR OWN TAX ADVISORS TO DETERMINE THEIR
PARTICULAR TAX CONSEQUENCES.

CERTAIN ERISA CONSIDERATIONS

Before authorizing an investment in the Capital Securities, fiduciaries
of pension, profit sharing or other employee benefit plans subject to ERISA
("Plans") should consider, among other matters, (a) ERISA's fiduciary
standards (including its prudence and diversification requirements), (b)
whether such fiduciaries have authority to make such investment in the
Capital Securities under the applicable Plan investment policies and
governing instruments, and (c) rules under ERISA and the Code that prohibit
Plan fiduciaries from causing a Plan to engage in a "prohibited transaction."

Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as
well as individual retirement accounts and Keogh plans subject to Section
4975 of the Code (also "Plans"), from, among other things, engaging in
certain transactions involving "plan assets" with persons who are "parties in
interest" under ERISA or "disqualified persons" under the Code (collectively,
"Parties in Interest") with respect to such Plan. A violation of these
"prohibited transaction" rules may result in an excise tax or other
liabilities under ERISA and/or Section 4975 of the Code for such persons,
unless exemptive relief is available under an applicable statutory or
administrative exemption. Such administrative exemptions include prohibited
transaction class exemption ("PTCE"). PTCE 96-23 (for certain transactions
determined by in-house asset managers), PTCE 91-38 (for certain transactions
involving bank collective investment funds), PTCE 95-60 (for certain
transactions involving insurance company general accounts), PTCE 90-1 (for
certain transactions involving insurance company pooled separate accounts),
and PTCE 84-14 (for certain transactions determined by independent qualified
asset managers).

The Department of Labor has issued a regulation (29 C.F.R. section
2510.3-101) (the "Plan Assets Regulation") concerning the definition of what
constitutes the assets of a Plan. The Plan Assets Regulation provides that,
as a general rule, the underlying assets and properties of corporations,
partnerships, trusts and certain other entities in which a Plan makes an
"equity" investment will be deemed, for purposes of ERISA, to be assets of
the investing Plan unless certain exceptions apply.

Pursuant to an exception contained in the Plan Assets Regulation, the
assets of the Trust would not be deemed to be "plan assets" of investing
Plans if the equity interests acquired by employee benefit plans are
"publicly-offered securities" --that is, they are (1) widely held (i.e.,
owned by more than 100 investors independent of the issuer and of each
other), (2) freely transferable and (3) sold as part of an offering pursuant
to an effective registration statement under the Securities Act and then
timely registered under Section 12(b) or 12(g) of the Exchange Act. It is
expected that the Capital Securities will meet the criteria of "publicly-
offered securities" above. The Underwriters expect that the Capital
Securities will be held by at least 100 independent investors at the
conclusion of the offering; there are no restrictions imposed on the transfer
of the Capital Securities and the Capital Securities will be sold as part of
an offering pursuant to an effective registration statement under the
Securities Act, and then will be timely registered under the Exchange Act.

Although it is expected that the assets of the Issuer Trust should not
be deemed to be "plan assets" of an investing Plan, if the Company or the
Trust is a Party in Interest with respect to the Plan, in the absence of an
applicable exemption, the Plan's purchase of the Capital Securities from the
Company would likely constitute a prohibited transaction under Section
406(a)(1)(A) of ERISA and Section 4975(c)(1)(A) of the Code. In addition, in
the absence of an applicable exemption, certain other transactions coincident
to the Capital Securities may involve a prohibited transaction, such as a
distribution of the Junior Subordinated Debentures from the Issuer Trust to a
Plan investor.

Any plans or other entities whose assets include Plan assets subject to
ERISA or Section 4975 of the Code proposing to acquire Capital Securities
should consult with their own counsel to confirm that such investment will
not result in a prohibited transaction that is not subject to an exemption
and will satisfy any other applicable requirements of ERISA and the Code.
Each purchaser using assets of a Plan to acquire Capital Securities will be
deemed to have represented that its purchase and holding of such Capital
Securities will not result in a non-exempt prohibited transaction under ERISA
or the Code and will be covered by the exemptive relief provided by PTCE 96-
23, 95-60, 91-38, 90-1 or 84-14 or another applicable exemption.

Governmental Plans and certain church plans are not subject to ERISA,
and are also not subject to the prohibited transaction provisions of Section
4975 of the Code. However, state laws or regulations governing the
investment and management of the assets of such plans may contain fiduciary
and prohibited transaction provisions similar to those under ERISA and the
Code discussed above. Accordingly, fiduciaries of governmental and church
plans, in consultation with their advisers, should consider the impact of
their respective state laws on investments in the Capital Securities and the
considerations discussed above to the extent applicable.

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting
Agreement dated March 5, 1998 (the "Underwriting Agreement") among the
Company, the Issuer Trust, and each of the underwriters named therein (the
"Underwriters"), the Issuer Trust has agreed to sell to the Underwriters, and
the Underwriters have agreed to purchase, severally but not jointly, the
respective number of the Capital Securities set forth opposite their names
below:
NUMBER
UNDERWRITERS OF CAPITAL SECURITIES
- ------------ ---------------------

Morgan Stanley & Co.
Incorporated . . . . . . . . . . . . . . 2,170,000
A.G. Edwards & Sons, Inc. . . . . . . . . . 2,130,000
Goldman, Sachs & Co. . . . . . . . . . . . 2,130,000
PaineWebber Incorporated . . . . . . . . . 2,130,000
Prudential Securities
Incorporated . . . . . . . . . . . . . 2,130,000
Salomon Smith Barney Inc. . . . . . . . . 2,130,000
BT Alex Brown Incorporated . . . . . . . . . 120,000
Bear, Stearns & Co. Inc. . . . . . . . . . . 120,000
CIBC Oppenheimer Corp. . . . . . . . . . . . 120,000
Credit Suisse First Boston
Corporation. . . . . . . . . . . . . . . . 120,000
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . 120,000
Lehman Brothers Inc. . . . . . . . . . . . . 120,000
Piper Jaffray Inc. . . . . . . . . . . . . . . 120,000
Wheat First Securities, Inc. . . . . . . . . . 120,000
Advest, Inc... . . . . . . . . . . . . . . . . 60,000
Robert W. Baird & Co.
Incorporated . . . . . . . . . . . . . . . 60,000
J.C. Bradford & Co. . . . . . . . . . . . . . . . 60,000
Blaylock & Partners, L.P... . . . . . . . . . . . 60,000
Cowen & Company. . . . . . . . . . . . . . . . 60,000
Craigie Incorporated . . . . . . . . . . . . . . 60,000
Crowell, Weedon & Co. . . . . . . . . . . . . . 60,000
Dain Rauscher Incorporated . . . . . . . . . . . 60,000
Davenport & Company LLC. . . . . . . . . . . . 60,000
Fahnestock & Co. Inc. . . . . . . . . . . . . . 60,000
Fidelity Capital Markets
A Division of National Financial
Services Corporation. . . . . . . . . . . . 60,000
First Albany Corporation . . . . . . . . . . . . 60,000
First of Michigan Corporation . . . . . . . . . 60,000
H.J. Meyers & Co., Inc. . . . . . . . . . . . . . 60,000
Interstate/Johnson Lane
Corporation . . . . . . . . . . . . . . . . 60,000
J.J.B. Hilliard, W.L. Lyons,
Inc. . . . . . . . . . . . . . . . . . . . . 60,000
Janney Montgomery Scott Inc. . . . . . . . . . . 60,000
Legg Mason Wood Walker,
Incorporated... . . . . . . . . . . . . . 60,000
McDonald & Company Securities,
Inc. ... . . . . . . . . . . . . . . . . . . 60,000
McGinn, Smith & Co., Inc. ... . . . . . . . . . . 60,000
Mesirow Financial, Inc. ... . . . . . . . . 60,000
Morgan Keegan & Company, Inc. . . . . . . . . . 60,000
Muriel Siebert & Co., Inc. . . . . . . . . . . 60,000
NationsBanc Montgomery
Securities LLC ... . . . . . . . . . . . . . 60,000
The Ohio Company.. . . . . . . . . . . . . . . . 60,000
Olde Discount Corporation.. . . . . . . . . . . 60,000
Raymond James & Associates,
Inc... . . . . . . . . . . . . . . . . . . 60,000
The Robinson-Humphrey
Company, LLC . . . . . . . . . . . . . . . 60,000
Roney & Co., L.L.C. . . . . . . . . . . . . . . . 60,000
Scott & Stringfellow, Inc. . . . . . . . . . . 60,000
Sterne, Agee & Leach, Inc. . . . . . . . . . . . 60,000
Stifel, Nicolaus & Company,
Incorporated . . . . . . . . . . . . . . . . 60,000
Sutro & Co. Incorporated . . . . . . . . . 60,000
TD Securities (USA) Inc. . . . . . . . . . . . 60,000
Tucker Anthony Incorporated . . . . . . . . . . 60,000
U.S. Clearing Corp. . . . . . . . . . . . . . . . 60,000
Wedbush Morgan Securities . . . . . . . . . . . 60,000
-------------
Total . . . . . . . . . . . . . . . . . . . 16,000,000

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Capital Securities are
subject to the approval of certain legal matters by their counsel and to
certain other conditions. The Underwriters are committed to take and pay for
all the Capital Securities if any are taken.

The initial purchase price for the Capital Securities will be the
initial offering price set forth on the cover page of this Prospectus
Supplement (the "Capital Securities Offering Price"). The Underwriters
propose to offer the Capital Securities at the Capital Securities Offering
Price, and all or part to certain dealers at a price that represents a
concession not in excess of $0.50 per Capital Security. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $0.40 per
Capital Security to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be changed
by the Underwriters named on the cover page hereof.

The Issuer Trust has granted to the Underwriters, an option, exercisable
for 30 days from the date of this Prospectus Supplement, to purchase up to
2,400,000 additional Capital Securities at the public offering price set
forth on the cover page hereof. The Underwriters may exercise such options
solely for the purpose of covering over-allotments, if any, incurred in the
sale of Capital Securities offered hereby.

In view of the fact that the proceeds from the sale of the Capital
Securities will be used to purchase the Junior Subordinated Debentures issued
by the Company, the Underwriting Agreement provides that the Company will pay
as compensation for the Underwriters arranging the investment therein of such
proceeds an amount of $0.7875 per Capital Security (or $12,600,000 in the
aggregate or $14,490,000 in the aggregate if the Underwriters' option to
purchase additional Capital Securities is exercised in full) for the accounts
of the Underwriters.

Prior to this offering, there has been no public market for the Capital
Securities. The Capital Securities have been approved for listing on the
NYSE, subject to official notice of issuance, and trading of the Capital
Securities on the NYSE is expected to commence within a 30-day period after
the initial delivery of the Capital Securities. The NYSE symbol for the
Capital Securities is "MWC." The Underwriters have advised the Company that
they intend to make a market in the Capital Securities prior to commencement
of trading on the NYSE, but they are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Capital Securities.

In order to meet one of the requirements for listing the Capital
Securities on the NYSE, the Underwriters will undertake to sell lots of 100
or more Capital Securities to a minimum of 400 beneficial holders.

The Company and the Issuer Trust have agreed that, during the period
beginning on the date of the Underwriting Agreement and continuing to and
including the closing under the Underwriting Agreement, neither will offer,
sell, contract to sell or otherwise dispose of any securities of the Company
or the Issuer Trust that are substantially similar to the Capital Securities,
or that are convertible into or exchangeable for, or otherwise represent a
right to acquire, any such securities, except in the offering or with the
prior written consent of the Underwriters.

The Company and the Issuer Trust have agreed to indemnify the
Underwriters and certain other persons against certain liabilities, including
liabilities under the Securities Act and to contribute to payments the
Underwriters may be required to make in respect thereof.

In connection with the offering of the Capital Securities, the
Underwriters and any selling group members and their respective affiliates
may engage in transactions to stabilize, maintain or otherwise affect the
market price of the Capital Securities. Specifically, the Underwriters may
overallot by selling more Capital Securities than they are committed to
purchase from the Issuer Trust. In such a case, to cover all or part of the
short position, the Underwriters may purchase Capital Securities in the open
market following completion of the initial offering of the Capital
Securities. The Underwriters also may engage in stabilizing transactions in
which they bid for, and purchase, Capital Securities at a level above that
which might otherwise prevail in the open market for the purpose of
preventing or retarding a decline in the market price of the Capital
Securities. The Underwriters also may reclaim any selling concessions
allowed to an Underwriter or a dealer if the Underwriters repurchase Capital
Securities distributed by that Underwriter or dealer. Any of the foregoing
transactions may result in the maintenance of a price for the Capital
Securities at a level above that which might otherwise prevail in the open
market. Neither the Company nor any Underwriter makes any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the Capital Securities.
The Underwriters are not required to engage in any of the foregoing
transactions and, if commenced, such transactions may be discontinued at any
time without notice.

Certain of the Underwriters or their affiliates have provided from time
to time, and expect to provide in the future, investment or financial
services to the Company and its affiliates, for which such Underwriters or
their affiliates have received or will receive customary fees and
commissions. The Administrators appointed by the Company are officers of
Morgan Stanley & Co. Incorporated.

The Underwriters and any dealers utilized in the sale of Capital
Securities do not intend to confirm sales to accounts over which they
exercise discretionary authority.

PROSPECTUS

$1,500,000,000
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
DEBT SECURITIES

MSDW CAPITAL TRUST I
MSDW CAPITAL TRUST II
MSDW CAPITAL TRUST III
MSDW CAPITAL TRUST IV
MSDW CAPITAL TRUST V
CAPITAL SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY

MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.

Morgan Stanley, Dean Witter, Discover & Co. (the "Company") may offer
and issue from time to time its debt securities ("Debt Securities") in one or
more series with such terms as are described herein and in the applicable
Prospectus Supplement.

MSDW Capital Trust I, MSDW Capital Trust II, MSDW Capital Trust III,
MSDW Capital Trust IV and MSDW Capital Trust V, each a trust created under
the laws of the State of Delaware (each, an "Issuer Trust," and collectively,
the "Issuer Trusts"), may severally offer and issue from time to time equity
securities (the "Capital Securities") representing preferred beneficial
ownership interests in such Issuer Trust with such terms as are described
herein and in the applicable Prospectus Supplement. The Company will be the
owner, directly or indirectly, of the common securities (the "Common
Securities" and, together with the Capital Securities, the "Trust
Securities") representing common beneficial ownership interests in each
Issuer Trust. Payment to holders of Capital Securities of cash distributions
thereon ("Distributions"), and amounts payable upon redemption thereof,
liquidation of the applicable Issuer Trust or otherwise, will be guaranteed
by the Company to the extent described herein and in the applicable
Prospectus Supplement (each, a "Guarantee"). The only assets of an Issuer
Trust will be Debt Securities purchased from the Company with the proceeds
from the issuance of its Trust Securities. Each Guarantee will rank pari
passu with the Debt Securities purchased with the proceeds of the Capital
Securities covered by such Guarantee. If specified in the applicable
Prospectus Supplement, such Debt Securities may be distributed pro rata to
holders of Trust Securities at such times as may be described herein or in
such Prospectus Supplement.

The Debt Securities, the Capital Securities and the Guarantees are
sometimes herein referred to individually as a "Security" and collectively as
the "Securities." This Prospectus may not be used to consummate sales of
Securities unless accompanied by a Prospectus Supplement.
(continued on next page)

-----------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

-----------------------------

Securities may be offered through dealers, underwriters or agents
designated from time to time, as set forth in the accompanying Prospectus
Supplement. Net proceeds to the Company will be the purchase price in the
case of sales to a dealer, the public offering price less discount in the
case of sales to an underwriter or the purchase price less commission in the
case of sales through an agent -- in each case, less other expenses
attributable to issuance and distribution. See "Plan of Distribution" for
possible indemnification arrangements for dealers, underwriters and agents.

Following the initial distribution of a series of Securities, affiliates
of the Company may offer and sell previously issued Securities in the course
of their businesses as broker-dealers (subject, in the case of any Securities
listed on a stock exchange or quoted on an automatic quotation system, to
obtaining any necessary approval of the applicable stock exchange or
quotation system for any such offers and sales). Such affiliates may act as
a principal or agent in such transactions. This Prospectus and the
accompanying Prospectus Supplement may be used by such 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

February 25, 1998

(continued from the previous page)

The aggregate initial public offering price of all Debt Securities
(other than Debt Securities purchased by Issuer Trusts) and Capital
Securities issued pursuant to the Registration Statement of which this
Prospectus forms a part shall not exceed $1,500,000,000 or the equivalent
thereof in any foreign currency or composite currency. Unless specified in
the applicable Prospectus Supplement, the Debt Securities and the Capital
Securities will be issued in registered form without coupons.

Certain specific terms of the Securities in respect of which this
Prospectus is being delivered will be described in the accompanying
Prospectus Supplement, including without limitation and where applicable, (a)
in the case of the Debt Securities, series designation, ranking, aggregate
principal amount, denominations, maturity date (including any provisions for
the shortening or extension thereof), interest payment dates, interest rate
(which may be fixed or variable) or method of calculating interest, if any,
interest deferral terms, if any, place or places where and currency or
currency units in which principal, premium, if any, and interest, if any,
will be payable, any terms of redemption, any sinking fund provisions, terms
for any conversion or exchange into other securities, initial offering or
purchase price, methods of distribution and any other special terms, and (b)
in the case of Capital Securities, the identity of the Issuer Trust, title,
aggregate stated liquidation amount, number of securities, Distribution rate
or method of calculating such rate, Distribution payment dates, applicable
Distribution deferral terms, if any, place or places where and currency or
currency units in which Distributions and other amounts will be payable, any
terms of redemption, exchange, initial offering or purchase price, methods of
distribution and any other special terms.

The applicable Prospectus Supplement also will contain information, as
applicable, about certain United States federal income tax consequences
relating to the Securities and will set forth the name of and compensation to
each dealer, underwriter or agent (if any) involved in the sale of the
Securities being offered and the managing underwriters with respect to any
Securities sold to or through underwriters. Any such underwriters (and any
representative thereof), dealers or agents in the United States will include
Morgan Stanley & Co. Incorporated ("MS & Co.") and/or Dean Witter Reynolds
Inc. ("DWR") and any such underwriters (and any representative thereof),
dealers or agents outside the United States will include Morgan Stanley & Co.
International Limited ("MSIL") or other affiliates of the Company.

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE ISSUER TRUSTS OR ANY UNDERWRITER, DEALER OR
AGENT. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY SECURITIES BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company (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 233 South
Beaudry Avenue, Los Angeles, California 90012.

This Prospectus constitutes a part of a Registration Statement filed by
the Company and the Issuer Trusts 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 to the related exhibits for
further information with respect to the Company, the Issuer Trusts 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.

No separate financial statements of any Issuer Trust have been included
herein. The Company and the Issuer Trusts do not consider that such
financial statements would be material to holders of the Capital Securities
because each Issuer Trust is a newly formed special purpose entity, has no
operating history or independent operations and is not engaged in and does
not propose to engage in any activity other than holding Debt Securities as
trust assets and issuing the Trust Securities. See "The Issuer Trusts,"
"Description of Capital Securities," "Description of Debt Securities" and
"Description of Guarantees." In addition, the Company does not expect that
any of the Issuer Trusts will be filing reports under the Exchange Act with
the Commission.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents 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 year ended November 30,
1997; and

(b) Current Reports on Form 8-K December 8, 1997, January 7, 1998 and
February 12, 1998.

All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the later of (i) the termination of the offering of the Securities
and (ii) the date on which MS & Co., MSIL, DWR 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).

THE COMPANY

Morgan Stanley, Dean Witter, Discover & Co. (the "Company") 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") and was formed pursuant to a merger of equals that was
effected on May 31, 1997 in which Morgan Stanley was merged with and into
Dean Witter Discover (the "Merger"). The Company combines three well
recognized brands in the financial services industry: Morgan Stanley, Dean
Witter and Discover(Registered Trademark) Card. The Company combines global
strength in investment banking (including in the origination of quality
underwritten public offerings and in mergers and acquisitions advice) and
institutional sales and trading, with strength in providing investment and
global asset management products and services and, primarily through its
Discover Card brand, quality consumer credit products.

At November 30, 1997, the Company had the third largest account
executive sales organization in the United States, with 9,946 professional
account executives and 399 branches, and one of the largest global asset
management operations of any full-service securities firm, with total assets
under management and administration of approximately $338 billion. In
addition, based on its approximately 40 million general purpose credit card
accounts as of November 30, 1997, the Company was the nation's largest credit
card issuer as measured by number of accounts and cardmembers.

The Company conducts its business from its headquarters in New York
City, its regional offices and branches throughout the United States, and its
principal offices in London, Tokyo, Hong Kong and throughout the world. 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. At November 30, 1997, the Company
had 47,277 employees.

The Company, through its subsidiaries, provides a wide range of
financial and securities services on a global basis and provides credit and
transaction services nationally. Its securities businesses ("Securities
Services") include securities underwriting, distribution and trading; merger,
acquisition, restructuring, real estate, project finance and other corporate
finance advisory activities; full-service brokerage; research services; the
trading of foreign exchange and commodities as well as derivatives on a broad
range of asset categories, rates and indices; and securities lending. The
Company's asset management businesses ("Asset Management") include providing
global asset management advice and services to individual and institutional
investors through well-recognized brand names, including Dean Witter
InterCapital, Van Kampen American Capital, Morgan Stanley Asset Management
and Miller Anderson & Sherrerd; global custody and securities clearance; and
principal investment activities. The Company's credit and transaction
services businesses include the operation of the NOVUS(Registered Trademark)
Network, a proprietary network of merchant and cash access locations, and the
issuance of the Discover Card and other proprietary general purpose credit
cards. The Company's services are provided to a large and diversified group
of clients and customers including corporations, governments, financial
institutions and individuals.

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.

THE ISSUER TRUSTS

Each Issuer Trust is a statutory business trust created under Delaware
law pursuant to the filing of a certificate of trust with the Delaware
Secretary of State on February 12, 1998. Each Issuer Trust will be governed
by an amended and restated trust agreement (each, a "Trust Agreement") among
the Company, as Depositor, The Bank of New York (Delaware), as Delaware
Trustee, The Bank of New York, as Property Trustee (together with the
Delaware Trustee, the "Issuer Trustees") and two individuals selected by the
holders of the Common Securities to act as administrators with respect to
such Issuer Trust (the "Administrators") and the holders, from time to time,
of the Trust Securities. The Company, as the holder of the Common
Securities, intends to select two individuals who are employees or officers
of or affiliated with the Company to serve as the Administrators. Each
Issuer Trust exists for the exclusive purposes of (i) issuing and selling its
Trust Securities, (ii) using the proceeds from the sale of such Trust
Securities to invest in a series of Debt Securities and (iii) engaging in
only those other activities necessary, convenient or incidental thereto (such
as registering the transfer of Trust Securities). Accordingly, Debt
Securities will be the sole assets of each Issuer Trust, and payments under
the Debt Securities owned by an Issuer Trust will be the sole revenue of such
Issuer Trust.

All of the Common Securities of each Issuer Trust will be owned directly
or indirectly by the Company. The Common Securities of an Issuer Trust will
rank pari passu, and payments will be made thereon pro rata, with the Capital
Securities of such Issuer Trust, except that upon the occurrence and
continuance of a Debenture Event of Default (as defined herein) arising as a
result of any failure by the Company to pay any amounts in respect of the
Debt Securities owned by such Issuer Trust when due, the rights of the
Company as holder of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Capital Securities of such
Issuer Trust. See "Description of Capital Securities--Subordination of
Common Securities." Unless otherwise specified in the applicable Prospectus
Supplement, the Company will acquire, directly or indirectly, Common
Securities in an aggregate liquidation amount equal to at least 3% of the
total capital of each Issuer Trust. Unless otherwise specified in the
applicable Prospectus Supplement, each Issuer Trust will have a term of
approximately 40 years from the date on which it initially issues its Capital
Securities, but may dissolve earlier as provided in the applicable Trust
Agreement and described in the applicable Prospectus Supplement. Unless
otherwise specified in the applicable Prospectus Supplement, the name and
address of the Delaware Trustee for each Issuer Trust will be The Bank of New
York (Delaware), White Clay Center, Newark, Delaware 19711, and the name and
address of the Property Trustee, the Guarantee Trustee and the Debt
Securities Trustee for each Issuer Trust will be The Bank of New York, 101
Barclay Street, Floor 21 West, New York, New York 10286.

It is anticipated that no Issuer Trust will be subject to the reporting
requirements under the Exchange Act.

USE OF PROCEEDS

The Issuer Trusts will use all proceeds from the sale of Trust
Securities to purchase Debt Securities from the Company. Unless otherwise
set forth in the applicable Prospectus Supplement, the Company intends to use
the net proceeds from the sale of its Debt Securities (including Debt
Securities issued to the Issuer Trusts) for general corporate purposes, which
may include additions to working capital, the redemption of outstanding
preferred stock, the repurchase of outstanding common stock and the repayment
of indebtedness or for such other purposes as are set forth in the applicable
Prospectus Supplement. The Company anticipates that it will raise additional
funds from time to time through equity or debt financing, including
borrowings under revolving credit agreements, to finance its businesses
worldwide.

CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

The following table sets forth the consolidated ratios of earnings to
fixed charges and earnings to fixed charges and preferred stock dividends for
the Company for the periods indicated. The fiscal year information for 1996,
1995, 1994 and 1993 combines the historical financial information of Dean
Witter Discover for the years ended December 31, 1996, 1995, 1994 and 1993
with the historical financial information of Morgan Stanley for the fiscal
years ended November 30, 1996, 1995, 1994 and 1993. Subsequent to the
Merger, the Company adopted a fiscal year end of November 30. The fiscal
year information for 1997 reflects the change in fiscal year end.

Fiscal Year
-----------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Ratio of earnings to
fixed charges . . . . 1.4 1.3 1.3 1.3 1.4
Ratio of earnings to fixed
charges and preferred
stock dividends . . . 1.4 1.3 1.3 1.3 1.4

For the purpose of calculating the ratio of earnings to fixed charges
and the ratio of earnings to fixed charges and preferred stock dividends,
earnings consist of income before income taxes and fixed charges (exclusive
of preferred stock dividends). For the purposes of calculating both ratios,
fixed charges include interest expense, capitalized interest and that portion
of rent expense estimated to be representative of the interest factor.
Additionally, for the purposes of calculating the ratio of earnings to fixed
charges and preferred stock dividends, preferred stock dividends (on a pre-
tax basis) are included in the denominator of the ratio.

DESCRIPTION OF DEBT SECURITIES

The Debt Securities will constitute either senior or subordinated debt
of the Company and will be issued, in the case of Debt Securities that will
be senior debt, under a Senior Indenture dated as of April 15, 1989, as
supplemented by a First Supplemental Senior Indenture dated as of May 15,
1991 and a Second Supplemental Senior Indenture dated as of April 15,1996,
each between Morgan Stanley (as predecessor to the Company) and The Chase
Manhattan Bank (formerly known as Chemical Bank), as Trustee, and by a Third
Supplemental Senior Indenture dated as of June 1, 1997, between the Company
and The Chase Manhattan Bank, as Trustee (as so supplemented and as further
supplemented from time to time, the "Senior Debt Indenture"), and, in the
case of Debt Securities that will be subordinated debt, under either (i) a
Subordinated Indenture dated as of April 15,1989, as supplemented by a First
Supplemental Subordinated Indenture dated as of May 15, 1991 and a Second
Supplemental Subordinated Indenture dated as of April 15, 1996 each between
Morgan Stanley (as predecessor to the Company) and The First National Bank of
Chicago, as Trustee, and by a Third Supplemental Subordinated Indenture dated
as of June 1, 1997, between the Company and The First National Bank of
Chicago, as Trustee (as so supplemented and as further supplemented from time
to time, the "Senior Subordinated Debt Indenture") or (ii) a Junior
Subordinated Indenture to be entered into between the Company and The Bank of
New York, as Trustee (the "Junior Subordinated Debt Indenture"). The Senior
Debt Indenture, the Senior Subordinated Debt Indenture and Junior
Subordinated Debt Indenture are sometimes hereinafter referred to
individually as an "Indenture" and collectively as the "Indentures." The
Chase Manhattan Bank, The First National Bank of Chicago and The Bank of New
York are hereinafter referred to individually as a "Debt Securities Trustee"
and collectively as the "Debt Securities Trustees."

The following summaries of certain provisions of the Indentures and the
Debt Securities do not purport to be complete and are subject to the detailed
provisions of the applicable Indenture and Debt Securities to which reference
is hereby made for a full description of such provisions, including the
definition of certain terms used herein, and for other information regarding
the Debt Securities. Numerical references in parentheses below are to
sections in the applicable Indenture. Wherever particular sections or
defined terms of the applicable Indenture are referred to, such sections or
defined terms are incorporated herein by reference as part of the statement
made, and the statement is qualified in its entirety by such reference. The
Indentures are substantially identical, except for the provisions relating to
subordination and the Company's negative pledge. See "--Subordinated Debt"
and "--Certain Covenants" below. As used under this caption and the captions
"Description of Capital Securities," "Global Securities" and "Description of
Guarantees," the term Company means Morgan Stanley, Dean Witter, Discover &
Co.

GENERAL

None of the Indentures limits the amount of additional indebtedness that
the Company or any of its subsidiaries may incur. The Debt Securities will
be unsecured senior or subordinated obligations of the Company. Most of the
assets of the Company are owned by its subsidiaries. Therefore, the
Company's rights and the rights of its creditors, including holders of Debt
Securities, to participate in the assets of any subsidiary upon such
subsidiary's liquidation or recapitalization will be subject to the prior
claims of such subsidiary's creditors, except to the extent that the Company
may itself be a creditor with recognized claims against the subsidiary. In
addition, dividends, loans and advances from certain subsidiaries to the
Company are restricted by legal requirements, including (in the case of MS &
Co. and DWR) net capital requirements under the Exchange Act and under rules
of certain exchanges and other regulatory bodies and (in the case of
Greenwood Trust Company, a Delaware chartered bank and an indirect wholly
owned subsidiary of the Company, and other bank subsidiaries) by banking
regulations.

The Indentures provide that Debt Securities may be issued from time to
time in one or more series and may be denominated and payable in foreign
currencies, including the euro, or units based on or relating to foreign
currencies, including European Currency Units ("ECUs"). Special United
States federal income tax considerations applicable to any Debt Securities so
denominated will be described in the applicable Prospectus Supplement.

Reference is made to the applicable Prospectus Supplement for the
following terms of and information relating to the Debt Securities offered
hereby and thereby (to the extent such terms are applicable to such Debt
Securities): (i) classification as senior, senior subordinated or junior
subordinated Debt Securities, the specific designation, aggregate principal
amount, purchase price and denomination; (ii) currency or units based on or
relating to currencies in which such Debt Securities are denominated and/or
in which principal (and premium, if any) and/or interest will or may be
payable; (iii) any date of maturity, including any provisions for the
shortening or extension thereof; (iv) interest rate or rates (or the method
by which such rate or rates will be determined), if any; (v) the date or
dates on which any such interest will be payable; (vi) any provisions
relating to the deferral of interest payments at the option of the Company or
otherwise; (vii) the place or places where the principal of, premium, if any,
and interest, if any, on such Debt Securities will be payable; (viii) any
repayment, redemption, prepayment or sinking fund provisions; (ix) whether
such Debt Securities will be issuable in registered form or bearer form
("Bearer Securities") or both and, if Bearer Securities are issuable, any
restrictions applicable to the exchange of one form for another and to the
offer, sale and delivery of Bearer Securities; (x) the terms, if any, on
which such Debt Securities may be converted into or exchanged for stock or
other securities of the Company or other entities, any specific terms
relating to the adjustment thereof and the period during which such Debt
Securities may be so converted or exchanged; (xi) if applicable, any
securities exchange or quotation system on which such Debt Securities may be
listed or quoted, as the case may be; (xii) any applicable United States
federal income tax consequences, including whether and under what
circumstances the Company will pay additional amounts on such Debt Securities
held by a person who is not a U.S. person (as defined in the applicable
Prospectus Supplement) in respect of any tax, assessment or governmental
charge withheld or deducted and, if so, whether the Company will have the
option to redeem such Debt Securities rather than pay such additional
amounts; and (xiii) any other specific terms of such 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
applicable Prospectus Supplement. Such services will be provided without
charge, other than any tax or other governmental charge payable in connection
therewith, but subject to the limitations provided in the applicable
Indenture and Debt Securities. Debt Securities in bearer form and the
coupons, if any, appertaining thereto will be transferable by delivery.

Debt Securities will bear interest at a fixed rate (a "Fixed Rate
Security") or a floating rate (a "Floating Rate Security"). Debt Securities
bearing no interest or interest at a rate that at the time of issuance is
below the prevailing market rate will be sold at a discount below their
stated principal amount. Special United States federal income tax
considerations applicable to any such discounted Debt Securities or to
certain Debt Securities issued at par which are treated as having been issued
at a discount for United States federal income tax purposes will be described
in the applicable Prospectus Supplement.

Debt Securities may be issued, from time to time, with the principal
amount payable on any principal payment date, or the amount of interest
payable on any interest payment date, to be determined by reference to one or
more currency exchange rates, securities or baskets of securities, commodity
prices or indices. Holders of such Debt Securities may receive a payment of
principal on any principal payment date, or a payment of interest on any
interest payment date, that is greater than or less than the amount of
principal or interest otherwise payable on such dates, depending upon the
value on such dates of the applicable currency, security or basket of
securities, commodity or index. Information as to the methods for
determining the amount of principal or interest payable on any date, the
currencies, securities or baskets of securities, commodities or indices to
which the amount payable on such date is linked and certain additional tax
considerations will be set forth in the applicable Prospectus Supplement.

SENIOR DEBT

Debt Securities and, in the case of Bearer Securities, any coupons
appertaining thereto (the "Coupons"), that will constitute part of the senior
debt of the Company will be issued under the Senior Debt Indenture and will
rank pari passu with all other unsecured and unsubordinated debt of the
Company.

SUBORDINATED DEBT

Debt Securities and Coupons that will constitute part of the
subordinated debt of the Company will be issued under the Senior Subordinated
Debt Indenture or the Junior Subordinated Debt Indenture (hereinafter
referred to individually as a "Subordinated Debt Indenture" and collectively
as "Subordinated Debt Indentures").

Senior Subordinated Debt

Debt Securities and Coupons issued under the Senior Subordinated
Debenture will be subordinate and junior in right of payment, to the extent
and in the manner set forth in the Senior Subordinated Debt Indenture, to all
"Senior Indebtedness," as defined therein, of the Company. The Senior
Subordinated Debt Indenture defines "Senior Indebtedness" as obligations
(other than nonrecourse obligations, the Debt Securities issued under the
Senior Subordinated Debt Indenture and any other obligations specifically
designated as being subordinate in right of payment to such Senior
Indebtedness) of, or guaranteed or assumed by, the Company for borrowed money
or evidenced by bonds, debentures, notes or other similar instruments, and
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligations. (Senior Subordinated Debt Indenture, Section
1.01)

In the event (a) of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or a substantial part of its property, or (b) that (i)
a default shall have occurred with respect to the payment of principal of
(and premium, if any) or any interest on or other monetary amounts due and
payable on any Senior Indebtedness (as defined in the Senior Subordinated
Debt Indenture) or (ii) there shall have occurred an event of default (other
than a default in the payment of principal, premium, if any, or interest, or
other monetary amounts due and payable) with respect to any Senior
Indebtedness, as defined in the Senior Subordinated Debt Indenture 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 Debt Securities
issued under the Senior Subordinated Debt Indenture shall have been declared
due and payable upon an Event of Default pursuant to Section 5.01 of the
Senior Subordinated Debt Indenture and such declaration shall not have been
rescinded and annulled as provided therein, then the holders of all Senior
Indebtedness (as defined in the Senior Subordinated Debt Indenture) 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 Debt Securities or Coupons issued under the Senior
Subordinated Debt Indenture 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 Debt Securities or such Coupons. (Senior Subordinated Debt
Indenture, Section 13.01) If this Prospectus is being delivered in connection
with a series of Debt Securities issued under the Senior Subordinated Debt
Indenture, the accompanying Prospectus Supplement or the information
incorporated herein by reference will set forth the approximate amount of
Senior Indebtedness (as defined in the Senior Subordinated Debt Indenture)
outstanding as of the end of the most recent fiscal quarter.

Junior Subordinated Debt

Debt Securities and Coupons issued pursuant to the Junior Subordinated
Debt Indenture will be subordinate and junior in right of payment, to the
extent and in the manner set forth in the Junior Subordinate Debt Indenture,
to all "Senior Indebtedness," as defined therein, of the Company. The Junior
Subordinated Debt Indenture defines "Senior Indebtedness" as any Debt
Securities or Coupons issued under the Senior Debt Indenture or the Senior
Subordinated Debt Indenture and any other obligations (other than nonrecourse
obligations, Debt Securities issued under the Junior Subordinated Debt
Indenture or any other obligations specifically designated as being
subordinate in right of payment to such Senior Indebtedness) of, or
guaranteed or assumed by, the Company for borrowed money or evidenced by
bonds, debentures, notes or other similar instruments, and amendments,
renewals, extensions, modifications and refundings of any such indebtedness
or obligations. (Junior Subordinated Debt Indenture, Section 1.01)

In the event (a) of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceeding in
respect of the Company or a substantial part of its property, or of any
proceedings for liquidation, dissolution or other winding up of 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
Senior Indebtedness (as defined in the Junior Subordinated Debt Indenture) or
(ii) there shall have occurred an event of default (other than a default in
the payment of principal, premium, if any, or interest, or other monetary
amounts due and payable) with respect to any Senior Indebtedness, as defined
in the Junior Subordinated Debt Indenture 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 Debt Securities issued under the Junior
Subordinated Debt Indenture shall have been declared due and payable upon an
Event of Default pursuant to Section 5.01 of the Junior Subordinated Debt
Indenture and such declaration shall not have been rescinded and annulled as
provided therein, then the holders of all Senior Indebtedness (as defined in
the Junior Subordinated Debt Indenture) 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 Debt
Securities or Coupons issued under the Junior Subordinated Debt Indenture 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 Debt Securities or
such Coupons. (Junior Subordinated Debt Indenture, Section 13.01) If this
Prospectus is being delivered in connection with a series of Debt Securities
issued under the Junior Subordinated Debt Indenture, the accompanying
Prospectus Supplement or the information incorporated herein by reference
will set forth the approximate amount of Senior Indebtedness (as defined in
the Junior Subordinated Debt Indenture) outstanding as of the end of the most
recent fiscal quarter.

CERTAIN COVENANTS

Negative Pledge. The Senior Debt Indenture provides that the Company
and any successor corporation will not, and will not permit any Subsidiary
(as defined below) to, create, assume, incur or guarantee any indebtedness
for borrowed money secured by a pledge, lien or other encumbrance (except for
certain liens specifically permitted by such Indenture) on (i) the Voting
Securities (as defined below) of MS & Co., MSIL, DWR, Greenwood Trust
Company, or any Subsidiary succeeding to any substantial part of the business
now conducted by any of such corporations (collectively, the "Principal
Subsidiaries") or (ii) Voting Securities of a Subsidiary that owns, directly
or indirectly, Voting Securities of any of the Principal Subsidiaries (other
than directors' qualifying shares) without making effective provisions
whereby the Debt Securities issued under such Indenture will be secured
equally and ratably with such secured indebtedness. "Subsidiary" means any
corporation, partnership or other entity of which at the time of
determination the Company owns or controls directly or indirectly more than
50% of the shares of the voting stock or equivalent interest. "Voting
Securities" means stock of any class or classes having general voting power
under ordinary circumstances to elect a majority of the board of directors,
managers or trustees of the Subsidiary in question, provided that, for the
purposes hereof, stock which carries only the right to vote conditionally on
the happening of an event shall not be considered voting stock whether or not
such event shall have happened. (Senior Debt Indenture, Section 3.06)

Merger, Consolidation, Sale, Lease or Conveyance. Each Indenture
provides that the Company will not merge or consolidate with any other person
and will not sell, lease or convey all or substantially all its assets to any
person, unless the Company shall be the continuing corporation, or the
successor corporation or person that acquires all or substantially all the
assets of the Company shall be a corporation organized under the laws of the
United States or a state thereof or the District of Columbia and shall
expressly assume all obligations of the Company under the Indenture and the
Debt Securities issued thereunder, and immediately after such merger,
consolidation, sale, lease or conveyance, the Company, such person or such
successor corporation shall not be in default in the performance of the
covenants and conditions of such Indenture to be performed or observed by the
Company. (Indentures, Section 9.01) This covenant would not apply to a
recapitalization transaction, a change of control of the Company or a highly
leveraged transaction unless such transactions or change of control were
structured to include a merger or consolidation or sale, lease or conveyance
of all or substantially all of the assets of the Company.

Except as may be described in a Prospectus Supplement applicable to a
particular series of Debt Securities, there are no covenants or other
provisions in the Indentures providing for a put or increased interest or
otherwise that would afford holders of Debt Securities additional protection
in the event of a recapitalization transaction, a change of control of the
Company or a highly leveraged transaction.

If the Company issues Debt Securities to an Issuer Trust, the Company
will agree to pay certain obligations, expenses and taxes of the Issuer
Trust. See also "Description of Capital Securities--Expenses and Taxes."

EVENTS OF DEFAULT

An Event of Default is defined under each Indenture with respect to Debt
Securities of any series issued under such Indenture as being: (a) default in
payment of any principal of the Debt Securities of such series, either at
maturity (or upon any redemption), by declaration or otherwise; (b) default
for 30 days in payment of any interest on any Debt Securities of such series
provided, however, that a valid extension of an interest payment period by
the Company in accordance with the terms of the Debt Securities of any such
series shall not constitute a default in the payment of interest for this
purpose; (c) default for 60 days after written notice in the observance or
performance of any other covenant or agreement in the Debt Securities of such
series or such Indenture other than a covenant included in such Indenture
solely for the benefit of a series of Debt Securities other than such series;
(d) certain events of bankruptcy, insolvency or reorganization; (e) failure
by the Company to make any payment at maturity, including any applicable
grace period, in respect of indebtedness, which term as used in each of the
Indentures means obligations (other than nonrecourse obligations or the Debt
Securities of such series issued under such Indenture) of, or guaranteed or
assumed by, the Company for borrowed money or evidenced by bonds, debentures,
notes or other similar instruments ("Indebtedness") in an amount in excess of
$10,000,000 and continuance of such failure for a period of 30 days after
written notice thereof to the Company by the Trustee, or to the Company and
the Debt Securities Trustee by the holders of not less than 25% in principal
amount of such outstanding Debt Securities (treated as one class) issued
under such Indenture; or (f) default with respect to any Indebtedness, which
default results in the acceleration of Indebtedness in an amount in excess of
$10,000,000 without such Indebtedness having been discharged or such
acceleration having been cured, waived, rescinded or annulled for a period of
30 days after written notice thereof to the Company by the Debt Securities
Trustee, or to the Company and the Debt Securities Trustee by the holders of
not less than 25% in principal amount of such outstanding Debt Securities
(treated as one class) issued under such Indenture; provided, however, that
if any such failure, default or acceleration referred to in clause (e) or
clause (f) above shall cease or be cured, waived, rescinded or annulled, then
the Event of Default by reason thereof shall be deemed likewise to have been
thereupon cured. (Indentures, Section 5.01) Any additions to or
modification of the definition of "Event of Default" with respect to a series
of Debt Securities will be described in the applicable Prospectus Supplement.

Each Indenture provides that (a) if an Event of Default due to the
default in payment of principal of, premium, if any, or interest on, any
series of Debt Securities issued under such Indenture or due to the default
in the performance or breach of any other covenant or warranty of the Company
applicable to the Debt Securities of such series but not applicable to all
outstanding Debt Securities issued under such Indenture shall have occurred
and be continuing, either the Debt Securities Trustee or the holders of not
less than 25% in principal amount of such Debt Securities of each such
affected series (treated as one class) issued under such Indenture and then
outstanding may then declare the principal of all Debt Securities of each
such affected series and interest accrued thereon to be due and payable
immediately; and (b) if an Event of Default due to a default in the
performance of any other of the covenants or agreements in such Indenture
applicable to all outstanding Debt Securities issued under such Indenture and
then outstanding or due to certain events of bankruptcy, insolvency or
reorganization of the Company shall have occurred and be continuing, either
the Debt Securities Trustee or the holders of not less than 25% in principal
amount of all Debt Securities issued under such Indenture and then
outstanding (treated as one class) may declare the principal of all such Debt
Securities and interest accrued thereon to be due and payable immediately,
but upon certain conditions such declarations may be annulled and past
defaults may be waived (except a continuing default in payment of principal
of (or premium, if any) or interest on such Debt Securities) by the holders
of a majority in principal amount of the Debt Securities of all such affected
series then outstanding. (Indentures, Sections 5.01 and 5.10)

Each Indenture contains a provision entitling the Debt Securities
Trustee, subject to the duty of the Debt Securities Trustee during a default
to act with the required standard of care, to be indemnified by the holders
of Debt Securities (treated as one class) issued under such Indenture before
proceeding to exercise any right or power under such Indenture at the request
of such holders. (Indentures, Section 6.02) Subject to such provisions in
each Indenture for the indemnification of the Debt Securities 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 Debt Securities Trustee, or exercising any
trust or power conferred on the Debt Securities Trustee. (Indentures,
Section 5.09)

Each Indenture provides that no holder of Debt Securities issued under
such Indenture may institute any action against the Company under such
Indenture (except actions for payment of overdue principal or interest)
unless such holder previously shall have given to the Debt Securities 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 Debt Securities Trustee to institute
such action and shall have offered the Debt Securities Trustee reasonable
indemnity, the Debt Securities Trustee shall not have instituted such action
within 60 days of such request and the Debt Securities Trustee shall not have
received direction inconsistent with such written request by the holders of a
majority in principal amount of the Debt Securities of each affected series
(treated as one class) issued under such Indenture and then outstanding.
(Indentures, Sections 5.06 and 5.09)

Each Indenture contains a covenant that the Company will file annually
with the Debt Securities Trustee a certificate of no default or a certificate
specifying any default that exists. (Indentures, Section 3.05)

DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE

The Company can discharge or defease its obligations under an Indenture
as set forth below. (Indentures, Section 10.01)

Under terms satisfactory to the Debt Securities Trustee, the Company may
discharge certain obligations to holders of any series of Debt Securities
issued under such Indenture which have not already been delivered to the Debt
Securities 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 Debt
Securities Trustee cash or, in the case of Debt Securities payable only in
U.S. dollars, U.S. Government Obligations (as defined in such Indenture), as
trust funds in an amount certified to be sufficient to pay at maturity (or
upon redemption) the principal of and interest on such Debt Securities.

The Company may also discharge any and all of the obligations to holders
of any series of Debt Securities issued under an Indenture at any time
("defeasance"), but may not thereby avoid any duty to register the transfer
or exchange of such series of Debt Securities, to replace any mutilated,
defaced, destroyed, lost, or stolen Debt Securities of such series or to
maintain an office or agency in respect of such series of Debt Securities.
Under terms satisfactory to the relevant Debt Securities Trustee, the Company
may instead be released with respect to any outstanding series of Debt
Securities issued under the relevant Indenture from the obligations imposed
by Sections 3.06 (in the case of the Senior Debt Indenture) and 9.01 (which
Sections contain the covenants described above limiting liens and
consolidations, mergers, asset sales and leases), and elect not to comply
with such Sections without creating an Event of Default ("covenant
defeasance"). Defeasance or covenant defeasance may be effected only if,
among other things: (i) the Company irrevocably deposits with the relevant
Debt Securities Trustee cash or, in the case of Debt Securities payable only
in U.S. dollars, U.S. Government Obligations, as trust funds in an amount
certified to be sufficient to pay at maturity (or upon redemption) the
principal of and interest on all outstanding Debt Securities of such series
issued under such Indenture; (ii) the Company delivers to the relevant Debt
Securities Trustee an opinion of counsel to the effect that the holders of
such series of Debt Securities will not recognize income, gain or loss for
United States federal income tax purposes as a result of such defeasance or
covenant defeasance and that defeasance or covenant defeasance will not
otherwise alter such holders' United States federal income tax treatment of
principal and interest payments on such series of Debt Securities (in the
case of a defeasance, such opinion must be based on a ruling of the Internal
Revenue Service or a change in United States federal income tax law occurring
after the date of such Indenture, since such a result would not occur under
current tax law); and (iii) in the case of a Subordinated Debt Indenture (a)
no event or condition shall exist that, pursuant to certain provisions
described under "Subordinated Debt" above, would prevent the Company from
making payments of principal of (and premium, if any) and interest on the
Debt Securities issued pursuant to a Subordinated Debt Indenture at the date
of the irrevocable deposit referred to above or at any time during the period
ending on the 91st day after such deposit date and (b) the Company delivers
to the Debt Securities Trustee for such Subordinated Debt Indenture an
opinion of counsel to the effect that (1) the trust funds will not be subject
to any rights of holders of Senior Indebtedness (as defined for purposes of
such Indenture) and (2) after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, except that if a court were to rule under any such law in any case
or proceeding that the trust funds remained property of the Company, then the
relevant Debt Securities Trustee and the holders of such Debt Securities
would be entitled to certain rights as secured creditors in such trust funds.

MODIFICATION OF THE INDENTURES

Each Indenture provides that the Company and the Debt Securities Trustee
may enter into supplemental indentures without the consent of the holders of
Debt Securities to: (a) secure any Debt Securities, (b) evidence the
assumption by a successor corporation of the obligations of the Company, (c)
add covenants for the protection of the holders of Debt Securities, (d) cure
any ambiguity or correct any inconsistency in such Indenture, (e) establish
the forms or terms of Debt Securities of any series and (f) evidence the
acceptance of appointment by a successor trustee. (Indentures, Section 8.01)

Each Indenture also contains provisions permitting the Company and the
Debt Securities 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, except as
described herein or the applicable Prospectus Supplement, the Company and the
Debt Securities Trustee may not, without the consent of the holder of each
outstanding Debt Security affected thereby, (a) extend the stated maturity of
the principal of any Debt Security, or reduce the principal amount thereof or
reduce the rate or extend the time of payment of interest thereon, or reduce
any amount payable on redemption thereof or change the currency in which the
principal thereof (including any amount in respect of original issue
discount), premium, if any, or interest thereon is payable or reduce the
amount of any original issue discount security payable upon acceleration or
provable in bankruptcy or alter certain provisions of such Indenture relating
to the Debt Securities issued thereunder not denominated in U.S. dollars or
impair the right to institute suit for the enforcement of any payment on any
Debt Security when due or (b) reduce the aforesaid percentage in principal
amount of Debt Securities of any series issued under such Indenture, the
consent of the holders of which is required for any such modification
provided that, if such Debt Securities are owned by an Issuer Trust, none of
the modifications described in clauses (a) and (b) above may be made without
the prior written consent of all the holders of Capital Securities of such
Issuer Trust. (Indentures, Section 8.02)

No Subordinated Debt Indenture may be amended to alter the subordination
of any outstanding Debt Securities issued thereunder without the written
consent of each holder of Senior Indebtedness (as defined therein) then
outstanding that would be adversely affected thereby. (Subordinated Debt
Indentures, Section 8.06)

CONCERNING THE DEBT SECURITIES TRUSTEES

The Chase Manhattan Bank, The First National Bank of Chicago and The
Bank of New York are three 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.

GOVERNING LAW

The Debt Securities and the Indentures will be governed by and construed
in accordance with the laws of the State of New York.

DESCRIPTION OF CAPITAL SECURITIES

Each Issuer Trust will issue only one series of Capital Securities and
one series of Common Securities. The Trust Agreement for each Issuer Trust
will be qualified as an indenture under the Trust Indenture Act of 1939 (the
"Trust Indenture Act"). The Capital Securities will have such terms and will
be subject to such conditions as shall be set forth in the Trust Agreement or
made a part thereof by the Trust Indenture Act. This summary of certain
provisions of the Capital Securities and each Trust Agreement does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, all the provisions of each Trust Agreement, including the
definitions therein of certain terms. Wherever particular defined terms of a
Trust Agreement are referred to herein, such defined terms are incorporated
herein by reference. A copy of the form of the Trust Agreement is available
upon request from the Issuer Trustees.

GENERAL

The Capital Securities will represent preferred undivided beneficial
interests in the assets of the applicable Issuer Trust. The only assets of
an Issuer Trust, and its only source of its revenues, will be the Debt
Securities purchased by such Issuer Trust with the proceeds from the issuance
of its Trust Securities. Accordingly, Distributions and other payment dates
for such Trust Securities will correspond with the interest and other payment
dates for such Debt Securities. See "Description of Debt Securities" in this
Prospectus and in the applicable Prospectus Supplement for a description of
such Debt Securities. If the Company does not make payments on such Debt
Securities in accordance with their terms, such Issuer Trust will not have
funds available to pay Distributions or other amounts payable on the Trust
Securities issued by such Issuer Trust in accordance with their terms. The
Capital Securities issued by an Issuer Trust will rank pari passu, and
payments thereon will be made thereon pro rata, with the Common Securities
issued by such Issuer Trust except as described below under "--Subordination
of Common Securities" and in the applicable Prospectus Supplement. Capital
Securities will be fully and unconditionally guaranteed by the Company, to
the extent described herein under "Description of Guarantees" and in the
applicable Prospectus Supplement.

Reference is made to the applicable Prospectus Supplement for the
following terms of and information relating to the Capital Securities offered
hereby and thereby (to the extent such terms are applicable to such Capital
Securities): (i) the specific designation, stated amount per Capital Security
(the "Liquidation Amount"), number to be issued by the applicable Issuer
Trust and purchase price; (ii) the currency or units based on or relating to
currencies in which Distributions and other payments thereon will or may be
payable; (iii) the Distribution rate or rates (or the method by which such
rate or rates will be determined), if any; (iv) the date or dates on which
any such Distributions will be payable; (v) any provisions relating to
deferral of Distribution payments; (vi) the place or places where
Distributions and other amounts payable on such Capital Securities will be
payable; (vii) any repayment, redemption, prepayment or sinking fund
provisions; (viii) the voting rights, if any, of holders of such Capital
Securities; (ix) the terms and conditions, if any, upon which the assets of
such Issuer Trust may be distributed to holders of such Capital Securities;
(x) any applicable United States federal income tax consequences; and (xi)
any other specific terms of such Capital Securities.

DISTRIBUTIONS

Distributions on the Capital Securities will be cumulative.
Distributions will accumulate from and including the date of original
issuance and will be payable on such dates as specified in the applicable
Prospectus Supplement. The amount of Distributions payable for any period
less than a full Distribution period will be computed on the basis of a
360-day year of twelve 30-day months and the actual days elapsed in a partial
month in such period, unless otherwise specified in the applicable Prospectus
Supplement. Distributions payable for each full Distribution period will be
computed by dividing the rate per annum by four, unless otherwise specified
in the applicable Prospectus Supplement.

SUBORDINATION OF COMMON SECURITIES

Payment of Distributions on, and other amounts payable under the Capital
Securities and Common Securities issued by an Issuer Trust shall be made pro
rata based on the liquidation amount of such Capital Securities and Common
Securities. However, unless otherwise provided in the applicable Prospectus
Supplement, if on any date on which Distributions or other amounts are
payable with respect to such Capital Securities and Common Securities, an
"Event of Default" with respect to the Debt Securities owned by such Issuer
Trust (a "Debenture Event of Default") has occurred and is continuing as a
result of any failure by the Company to pay any amounts in respect of such
Debt Securities when due, no payment of any Distribution on or other amounts
payable under such Common Securities shall be made unless payment in full in
cash of all accumulated amounts then due and payable with respect to all of
such Issuer Trust's outstanding Capital Securities shall have been made or
provided for, and all funds immediately available to the Property Trustee
shall first be applied to the payment in full in cash of all Distributions
on, and all other amounts with respect to, Capital Securities then due and
payable.

In the case of any Capital Securities Event of Default (as defined
below) resulting from a Debenture Event of Default, the holders of the
applicable Issuer Trust's Common Securities will be deemed to have waived any
right to act with respect to any such Capital Securities Event of Default
under the applicable Trust Agreement until the effects of such Debenture
Event of Default with respect to such Capital Securities have been cured,
waived or otherwise eliminated. See "--Capital Securities Events of Default;
Notice" and "Description of Debt Securities--Events of Default." Until all
such Capital Securities Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will act solely on behalf of the
holders of the Capital Securities and not on behalf of the holders of the
Common Securities, and only the holders of the Capital Securities will have
the right to direct the Property Trustee to act on their behalf.

LIQUIDATION DISTRIBUTION UPON DISSOLUTION

The amount payable on Capital Securities in the event of any liquidation
of a Issuer Trust will be the stated amount per Capital Security or such
other amount as specified in the applicable Prospectus Supplement plus
accumulated and unpaid Distributions, which, if specified in the applicable
Prospectus Supplement, may be in the form of a distribution of the Debt
Securities owned by such Issuer Trust.

The holders of all the outstanding Common Securities of an Issuer Trust
will have the right at any time to dissolve such Issuer Trust and, after
satisfaction of liabilities to creditors of such Issuer Trust as provided by
applicable law, cause the Debt Securities owned by such Issuer Trust to be
distributed to the holders of the Capital Securities and Common Securities in
liquidation of such Issuer Trust as described in the applicable Prospectus
Supplement. Other terms for the dissolution of an Issuer Trust and the
distribution or liquidation of its assets to holders of Trust Securities will
be set forth in the applicable Prospectus Supplement.

CAPITAL SECURITIES EVENTS OF DEFAULT; NOTICE

Any one of the following events constitutes an "Event of Default" under
a Trust Agreement (a "Capital Securities Event of Default") with respect to
the Capital Securities issued pursuant thereto (whatever the reason for such
Capital Securities Event of Default and whether it is voluntary or
involuntary or effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

(i) the occurrence of an Event of Default with respect to the Debt
Securities in which the proceeds of the Capital Securities have been invested
(see "Description of Debt Securities-- Events of Default" and the applicable
Prospectus Supplement); or

(ii) default by the applicable Issuer Trust or the Property Trustee in
the payment of any Distribution on such Capital Securities when it becomes
due and payable, and continuation of such default for a period of 30 days; or

(iii) default by an Issuer Trust or the Property Trustee in the payment
of any redemption price of any Trust Security issued pursuant to such Trust
Agreement when it becomes due and payable; or

(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the applicable Issuer Trustees (other than a
covenant or warranty, a default in the performance of which or the breach of
which is dealt with in clause (ii) or (iii) above), and continuation of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to such Issuer Trustees and the Company by the
holders of at least 25% in aggregate Liquidation Amount of such Capital
Securities outstanding, a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice of
Default" under the applicable Trust Agreement; or

(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee or all or substantially all of its property
if a successor Property Trustee has not been appointed within 90 days
thereof.

Within ten Business Days after the occurrence of any Capital Securities
Event of Default actually known to the Property Trustee, the Property Trustee
will transmit notice of such Event of Default to the holders of the
applicable Trust Securities and the Administrators, unless such Capital
Securities Event of Default has been cured or waived. The Company, as
Depositor, and the Administrators are required to file annually with the
Property Trustee a certificate as to whether or not they are in compliance
with all the conditions and covenants applicable to them under each Trust
Agreement.

If a Debenture Event of Default has occurred and is continuing as a
result of any failure by the Company to pay any amounts in respect of the
Debt Securities owned by an Issuer Trust when due, the Capital Securities
issued by such Issuer Trust will have a preference over the Common Securities
issued by such Issuer Trust with respect to payments of any amounts in
respect of such Capital Securities as described above. See "--Subordination
of Common Securities."

REMOVAL OF ISSUER TRUSTEES; APPOINTMENT OF SUCCESSORS

The holders of at least a majority in aggregate Liquidation Amount of
the outstanding Capital Securities may remove an Issuer Trustee for cause or,
if a Debenture Event of Default has occurred and is continuing, with or
without cause. If an Issuer Trustee is removed by the holders of the
outstanding Capital Securities, the successor may be appointed by the holders
of at least 25% in Liquidation Amount of Capital Securities. If an Issuer
Trustee resigns, such Issuer Trustee will appoint its successor. If an
Issuer Trustee fails to appoint a successor, the holders of at least 25% in
Liquidation Amount of the outstanding Capital Securities may appoint a
successor. If a successor has not been appointed by the holders, any holder
of Capital Securities or Common Securities or another Issuer Trustee may
petition a court of competent jurisdiction to appoint a successor. Any
Delaware Trustee must meet the applicable requirements of Delaware law. Any
Property Trustee must be a national- or state-chartered bank, and at the time
of appointment have capital and surplus of at least $50,000,000. No
resignation or removal of an Issuer Trustee and no appointment of a successor
trustee shall be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the applicable Trust
Agreement.

MERGER OR CONSOLIDATION OF ISSUER TRUSTEES

Any entity into which an Issuer Trustee may be merged or converted or
with which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which such Issuer Trustee is a party, or any
entity succeeding to all or substantially all the corporate trust business of
such Issuer Trustee, will be the successor of such Issuer Trustee under each
Trust Agreement, provided such entity is otherwise qualified and eligible.

MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUER TRUSTS

An Issuer Trust may not merge with or into, consolidate, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any entity, except as described below or as
otherwise set forth in the applicable Trust Agreement. An Issuer Trust may,
at the request of the holders of the Common Securities and with the consent
of the holders of at least a majority in aggregate Liquidation Amount of its
outstanding Capital Securities, merge with or into, consolidate, amalgamate,
or be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of
any State, so long as (i) such successor entity either (a) expressly assumes
all the obligations of the Issuer Trust with respect to the Issuer Trust's
Capital Securities or (b) substitutes for the Issuer Trust's Capital
Securities other securities having substantially the same terms as the Issuer
Trust's Capital Securities (the "Successor Securities") so long as the
Successor Securities have the same priority as the Issuer Trust's Capital
Securities with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) a trustee of such successor entity, possessing
the same powers and duties as the Property Trustee, is appointed to hold the
corresponding Debt Securities, (iii) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Issuer Trust's Capital Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of
the holders of the Issuer Trust's Capital Securities (including any Successor
Securities) in any material respect, (v) such successor entity has a purpose
substantially identical to that of the Issuer Trust, (vi) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Issuer Trust has received an opinion from independent counsel
experienced in such matters to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of the holders of
the Issuer Trust's Capital Securities (including any Successor Securities) in
any material respect and (b) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the Issuer
Trust nor such successor entity will be required to register as an investment
company under the Investment Company Act, and (vii) the Company or any
permitted successor or assignee owns, directly or indirectly, all the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent
provided by the related Guarantee. Notwithstanding the foregoing, an Issuer
Trust may not, except with the consent of holders of 100% in aggregate
Liquidation Amount of the Issuer Trust's Capital Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to, any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Issuer Trust or the successor
entity to be taxable as a corporation for United States federal income tax
purposes.

VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENTS

Except as provided below and under "--Removal of Issuer Trustees;
Appointment of Successors" and "Description of Guarantees--Amendments and
Assignment" and as otherwise required by law and the applicable Trust
Agreement, the holders of the Capital Securities will have no voting rights.

Each Trust Agreement may be amended from time to time by the holders of
a majority in aggregate Liquidation Amount of the Common Securities and the
Property Trustee, without the consent of the holders of the Capital
Securities, (i) to cure any ambiguity, correct or supplement any provisions
in such Trust Agreement that may be inconsistent with any other provision, or
to make any other provisions with respect to matters or questions arising
under such Trust Agreement, provided that any such amendment does not
adversely affect in any material respect the interests of any holder of Trust
Securities, or (ii) to modify, eliminate or add to any provisions of such
Trust Agreement to such extent as may be necessary to ensure that the Issuer
Trust will not be taxable as a corporation for United States federal income
tax purposes at any time that any Trust Securities are outstanding or to
ensure that the Issuer Trust will not be required to register as an
"investment company" under the Investment Company Act, and any such
amendments of such Trust Agreement will become effective when notice of such
amendment is given to the holders of Trust Securities. Each Trust Agreement
may be amended by the holders of a majority in aggregate Liquidation Amount
of the Common Securities and the Property Trustee with (i) the consent of
holders representing not less than a majority in aggregate Liquidation Amount
of the outstanding Capital Securities and (ii) receipt by the Issuer Trustees
of an opinion of counsel to the effect that such amendment or the exercise of
any power granted to the Issuer Trustees in accordance with such amendment
will not cause the Issuer Trust to be taxable as a corporation for United
States federal income tax purposes or affect the Issuer Trust's exemption
from status as an "investment company" under the Investment Company Act,
except that, without the consent of each holder of Trust Securities affected
thereby, a Trust Agreement may not be amended to (i) change the amount or
timing of any Distribution on the Trust Securities or otherwise adversely
affect the amount of any Distribution required to be made in respect of the
Trust Securities as of a specified date or (ii) restrict the right of a
holder of Trust Securities to institute suit for the enforcement of any such
payment on or after such date.

So long as any Debt Securities are held by an Issuer Trust, the Property
Trustee will not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debt Securities Trustee, or
execute any trust or power conferred on the Property Trustee with respect to
the Debt Securities, (ii) waive any past default that may be waived under
Section 5.10 of such applicable Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal amount of such Debt
Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the such Indenture or Debt Securities, where
such consent shall be required, without, in each case, obtaining the prior
approval of the holders of at least a majority in aggregate Liquidation
Amount of the outstanding Capital Securities, except that, if a consent under
such Indenture would require the consent of each holder of such Debt
Securities affected thereby, no such consent will be given by the Property
Trustee without the prior consent of each holder of the such Capital
Securities. The Property Trustee may not revoke any action previously
authorized or approved by a vote of the holders of such Capital Securities
except by subsequent vote of the holders of Capital Securities issued by such
Issuer Trust. The Property Trustee will notify each holder of such Capital
Securities of any notice of default with respect to such Debt Securities. In
addition to obtaining the foregoing approvals of the holders of such Capital
Securities, before taking any of the foregoing actions, the Property Trustee
will obtain an opinion of counsel experienced in such matters to the effect
that the Issuer Trust will not be taxable as a corporation for United States
federal income tax purposes on account of such action.

Any required approval of holders of Capital Securities may be given at a
meeting of holders of Capital Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Capital Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be
taken, to be given to each registered holder of Capital Securities in the
manner set forth in each Trust Agreement.

No vote or consent of the holders of Capital Securities will be required
to redeem and cancel Capital Securities in accordance with the applicable
Trust Agreement.

Notwithstanding that holders of Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Company, the Issuer Trustees or any
affiliate of the Company or any Issuer Trustees, will, for purposes of such
vote or consent, be treated as if they were not outstanding.

EXPENSES AND TAXES

In the Debt Securities owned by an Issuer Trust, the Company, as
borrower, will agree to pay all debts and other obligations (other than with
respect to the Capital Securities issued by such Issuer Trust) and all costs
and expenses of such Issuer Trust (including costs and expenses relating to
the organization of such Issuer Trust, the fees and expenses of the Issuer
Trustees for such Issuer Trust and the costs and expenses relating to the
operation of such Issuer Trust) and to pay any and all taxes and all costs
and expenses with respect thereto (other than United States withholding
taxes) to which such Issuer Trust might become subject. The foregoing
obligations of the Company under the Debt Securities owned by an Issuer Trust
are for the benefit of, and shall be enforceable by, any person to whom any
such debts, obligations, costs, expenses and taxes are owed (a "Creditor")
whether or not such Creditor has received notice thereof. Any such Creditor
may enforce such obligations of the Company directly against the Company, and
the Company will irrevocably waive any right or remedy to require that any
such Creditor take any action against such Issuer Trust or any other person
before proceeding against the Company. The Company will also agree in the
Debt Securities owned by an Issuer Trust to execute such additional
agreements as may be necessary or desirable to give full effect to the
foregoing.

PAYMENT AND PAYING AGENCY

The applicable Prospectus Supplement will specify the manner in which
payments in respect of the Capital Securities will be made. The paying agent
(the "Paying Agent") for Capital Securities will initially be the Property
Trustee and any co-paying agent chosen by the Property Trustee and acceptable
to the Administrators. The Paying Agent will be permitted to resign as
Paying Agent upon 30 days' written notice to the Property Trustee and the
Administrators. If the Property Trustee is no longer the Paying Agent, the
Property Trustee will appoint a successor (which must be a bank or trust
company reasonably acceptable to the Administrators) to act as Paying Agent.

REGISTRAR AND TRANSFER AGENT

Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Capital
Securities.

Registration of transfers of Capital Securities will be effected without
charge by or on behalf of each Issuer Trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any
transfer or exchange. The Issuer Trusts will not be required to register or
cause to be registered the transfer of their Capital Securities after such
Capital Securities have been called for redemption.

INFORMATION CONCERNING THE PROPERTY TRUSTEE

The Property Trustee, other than during the occurrence and continuance
of a Capital Securities Event of Default, undertakes to perform only such
duties as are specifically set forth in each Trust Agreement and, after such
Capital Securities Event of Default, must exercise the same degree of care
and skill as a prudent person would exercise or use in the conduct of his or
her own affairs. Subject to this provision, the Property Trustee is under no
obligation to exercise any of the powers vested in it by the applicable Trust
Agreement at the request of any holder of Capital Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.

For information concerning the relationships between The Bank of New
York, the Property Trustee, and the Company, see "Description of Debt
Securities--Information Concerning the Debt Securities Trustees."

MISCELLANEOUS

The Administrators and the Property Trustee are authorized and directed
to conduct the affairs of and to operate the Issuer Trusts in such a way that
the Issuer Trusts will not be deemed to be an "investment company" required
to be registered under the Investment Company Act or taxable as a corporation
for United States federal income tax purposes and so that the Debt Securities
owned by the Issuer Trusts will be treated as indebtedness of the Company for
United States federal income tax purposes. In this connection, the Property
Trustee and the holders of Common Securities are authorized to take any
action, not inconsistent with applicable law, the certificate of trust of
each Issuer Trust or each Trust Agreement, that the Property Trustee and the
holders of Common Securities determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the related Capital
Securities.

Holders of the Capital Securities have no preemptive or similar rights.

The Issuer Trusts may not borrow money or issue debt or mortgage or
pledge any of their assets.

GOVERNING LAW

Each Trust Agreement will be governed by and construed in accordance
with the laws of the State of Delaware.

GLOBAL SECURITIES

The registered Debt Securities and Capital Securities of any series may
be issued in the form of one or more fully registered global Securities (a
"Registered Global Security") that will be deposited with a depository (a
"Depository") or with a nominee for a Depository identified in the Prospectus
Supplement relating to such series and registered in the name of such
Depository or nominee thereof. In such case, one or more Registered Global
Securities will be issued in a denomination or aggregate denominations equal
to the portion of the aggregate principal or face amount of outstanding
registered Securities of the series to be represented by such Registered
Global Securities. Unless and until it is exchanged in whole for Securities
in definitive registered form, a Registered Global Security may not be
transferred except as a whole by the Depository for such Registered Global
Security to a nominee of such Depository or by a nominee of such Depository
to such Depository or another nominee of such Depository or by such
Depository or any such nominee to a successor of such Depository or a nominee
of such successor.

The specific terms of the depository arrangement with respect to any
portion of a series of Securities to be represented by a Registered Global
Security will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will apply to
all depository arrangements.

Ownership of beneficial interests in a Registered Global Security will
be limited to persons that have accounts with the Depository for such
Registered Global Security ("participants") or persons that may hold
interests through participants. Upon the issuance of a Registered Global
Security, the Depository for such Registered Global Security will credit, on
its book-entry registration and transfer system, the participants' accounts
with the respective principal or face amounts of the Securities represented
by such Registered Global Security beneficially owned by such participants.
The accounts to be credited shall be designated by any dealers, underwriters
or agents participating in the distribution of such Securities. Ownership of
beneficial interests in such Registered Global Security will be shown on, and
the transfer of such ownership interests will be effected only through,
records maintained by the Depository for such Registered Global Security
(with respect to interests of participants) and on the records of
participants (with respect to interests of persons holding through
participants). The laws of some states may require that certain purchasers
of securities take physical delivery of such securities in definitive form.
Such limits and such laws may impair the ability to own, transfer or pledge
beneficial interests in Registered Global Securities.

So long as the Depository for a Registered Global Security, or its
nominee, is the registered owner of such Registered Global Security, such
Depository or such nominee, as the case may be, will be considered the sole
owner or holder of the Securities represented by such Registered Global
Security for all purposes under the applicable Indenture or Trust Agreement.
Except as set forth below, owners of beneficial interests in a Registered
Global Security will not be entitled to have the Securities represented by
such Registered Global Security registered their names, will not receive or
be entitled to receive physical delivery of such Securities in definitive
form and will not be considered the owners or holders thereof under the
applicable Indenture or Trust Agreement. Accordingly, each person owning a
beneficial interest in a Registered Global Security must rely on the
procedures of the Depository for such Registered Global Security and, if such
person is not a participant, on the procedures of the participant through
which such person owns its interest, to exercise any rights of a holder under
the applicable Indenture or Trust Agreement. The Company understands that
under existing industry practices, if it requests any action of holders or if
an owner of a beneficial interest in a Registered Global Security desires to
give or take any action which a holder is entitled to give or take under the
applicable Indenture or Trust Agreement, the Depository for such Registered
Global Security would authorize the participants holding the relevant
beneficial interests to give or take such action, and such participants would
authorize beneficial owners owning through such participants to give or take
such action or would otherwise act upon the instructions of beneficial owners
holding through them.

Principal, premium, if any, and interest payments on Debt Securities,
and any payments to holders with respect to Capital Securities, represented
by a Registered Global Security registered in the name of a Depository or its
nominee will be made to such Depository or its nominee, as the case may be,
as the registered owner of such Registered Global Security. None of the
Company, the Debt Securities Trustees, the Issuer Trustees or any other agent
of the Company, agent of the applicable Issuer Trust or agent of any such
Trustees, as the case may be, will have any responsibility or liability for
any aspect of the records relating to or payments made on account of
beneficial ownership interests in such Registered Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.

The Company and the Issuer Trusts expect that the Depository for any
Securities represented by a Registered Global Security, upon receipt of any
payment of principal, premium, interest or other distribution of underlying
securities to holders in respect of such Registered Global Security, will
immediately credit participants' accounts in amounts proportionate to their
respective beneficial interests in such Registered Global Security as shown
on the records of such Depository. The Company and the Issuer Trusts also
expect that payments by participants to owners of beneficial interests in
such Registered Global Security held through such participants will be
governed by standing customer instructions and customary practices, as is now
the case with the securities held for the accounts of customers in bearer
form or registered in "street name", and will be the responsibility of such
participants.

If the Depository for any Securities represented by a Registered Global
Security is at any time unwilling or unable to continue as Depository or
ceases to be a clearing agency registered under the Exchange Act, and a
successor Depository registered as a clearing agency under the Exchange Act
is not appointed by the Company or the applicable Issuer Trust, as the case
may be, within 90 days, the Company or the applicable Issuer Trust, as the
case may be, will issue such Securities in definitive form in exchange for
such Registered Global Security. In addition, the Company or the applicable
Issuer Trust, as the case may be, may at any time and in its sole discretion
determine not to have any of the Securities of a series represented by one or
more Registered Global Securities and, in such event, will issue Securities
of such series in definitive form in exchange for all of the Registered
Global Security or Securities representing such Securities. Any Securities
issued in definitive form in exchange for a Registered Global Security will
be registered in such name or names as the Depository shall instruct the
relevant Trustee or other relevant agent of the Company, the applicable
Issuer Trust or such Trustee. It is expected that such instructions will be
based upon directions received by the Depository from participants with
respect to ownership of beneficial interests in such Registered Global
Security.

The Debt Securities of a series may also be issued in the form of one or
more bearer global Securities (a "Bearer Global Security") that will be
deposited with a common depository for the Euroclear System, currently
operated by Morgan Guaranty Trust Company of New York, Brussels Office, or
its successor as operator of the Euroclear System ("Euroclear") and Cedel
Bank, soci t anonyme or its successor ("Cedel Bank") or with a nominee for
such depository identified in the Prospectus Supplement relating to such
series. The specific terms and procedures, including the specific terms of
the depository arrangement, with respect to any portion of a series of
Securities to be represented by a Bearer Global Security will be described in
the Prospectus Supplement relating to such series.

DESCRIPTION OF GUARANTEES

A Guarantee will be executed and delivered by the Company concurrently
with the issuance by each Issuer Trust of its Capital Securities for the
benefit of the holders from time to time of such Capital Securities. This
summary of certain provisions of the Guarantees does not purport to be
complete and is subject to, and qualified in its entirety by reference to,
all the provisions of each Guarantee, including the definitions therein of
certain terms. A copy of the form of the Guarantee is available upon request
from the Guarantee Trustee. The Guarantee Trustee will hold each Guarantee
for the benefit of the holders of the related Issuer Trust's Capital
Securities.

GENERAL

Pursuant to a Guarantee, the Company will irrevocably and
unconditionally agree to pay in full, to the extent set forth therein, the
Guarantee Payments (as defined below) to the holders of the Capital
Securities covered by such Guarantee, as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer Trust that issued
such Capital Securities may have or assert other than the defense of payment.
The following payments with respect to Capital Securities, to the extent not
paid by or on behalf of the Issuer Trust that issued such Capital Securities
(the "Guarantee Payments"), will be subject to the Guarantee thereon: (i) any
accumulated and unpaid Distributions required to be paid on such Capital
Securities, to the extent that such Issuer Trust has funds on hand available
therefor at such time, if any, (ii) the redemption price with respect to any
Capital Securities called for redemption, including all accumulated and
unpaid Distributions thereon (the "Redemption Price"), to the extent that
such Issuer Trust has funds on hand available therefor at such time, and
(iii) upon a voluntary or involuntary dissolution, winding-up or liquidation
of such Issuer Trust (unless the Debt Securities owned by such Issuer Trust
are distributed to holders of such Capital Securities in accordance with the
terms thereof), the lesser of (a) the aggregate of the Liquidation Amount and
all accumulated and unpaid Distributions to the date of payment, and (b) the
amount of assets of such Issuer Trust remaining available for distribution to
holders of Capital Securities on liquidation of such Issuer Trust. The
Company's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Company to the holders of the Capital
Securities or by causing the applicable Issuer Trust to pay such amounts to
such holders.

Each Guarantee will be an irrevocable guarantee of the related Issuer
Trust's obligations under the Capital Securities covered thereby, but will
apply only to the extent that such Issuer Trust has funds sufficient to make
such payments, and is not a guarantee of collection.

If the Company does not make payments on the Debt Securities owned by an
Issuer Trust, such Issuer Trust will not be able to pay any amounts payable
in respect of its Capital Securities and will not have funds legally
available therefor and, in such event, holders of the Capital Securities
would not be able to rely upon the Guarantee for payment of such amounts.
Each Guarantee will have the same ranking as the Debt Securities owned by the
Issuer Trust that issues the Capital Securities covered thereby. See "--
Status of the Guarantees." No Guarantee will limit the incurrence or
issuance of other secured or unsecured debt of the Company.

STATUS OF THE GUARANTEES

Each Guarantee will constitute an unsecured obligation of the Company
and will rank pari passu in right of payment with the Debt Securities owned
by the Issuer Trust that issues the Capital Securities covered thereby.

Each Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other person or
entity). Each Guarantee will be held by the Guarantee Trustee for the
benefit of the holders of the related Capital Securities. Each Guarantee
will not be discharged except by payment of the Guarantee Payments in full to
the extent not paid by the Issuer Trust or, if applicable, distribution to
the holders of the Capital Securities of the Debt Securities owned by such
Issuer Trust.

AMENDMENTS AND ASSIGNMENT

Except with respect to any changes which do not materially adversely
affect the rights of holders of the Capital Securities issued by an Issuer
Trust (in which case no vote will be required), the Guarantee that covers
such Capital Securities may not be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of
the such Capital Securities outstanding. The manner of obtaining any such
approval will be as set forth under "Description of the Capital Securities--
Voting Rights; Amendment of Trust Agreements" and in the applicable
Prospectus Supplement. All guarantees and agreements contained in each
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders
of the covered Capital Securities then outstanding.

EVENTS OF DEFAULT

An event of default under each Guarantee will occur upon the failure of
the Company to perform any of its payment obligations thereunder, or to
perform any non-payment obligation if such non-payment default remains
unremedied for 30 days. The holders of not less than a majority in aggregate
Liquidation Amount of the outstanding Capital Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of such Guarantee or to direct
the exercise of any trust or power conferred upon the Guarantee Trustee under
such Guarantee.

Any registered holder of Capital Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee thereon without first instituting a legal proceeding against the
Issuer Trust, the Guarantee Trustee or any other person or entity.

The Company, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under the
Guarantees.

INFORMATION CONCERNING THE GUARANTEE TRUSTEE

The Guarantee Trustee, other than during the occurrence and continuance
of a default by the Company in performance of any Guarantee, undertakes to
perform only such duties as are specifically set forth in the Guarantee and,
after the occurrence of an event of default with respect to the Guarantee,
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Guarantee Trustee is under no obligation to exercise any of
the powers vested in it by any Guarantee at the request of any holder of the
Capital Securities covered thereby unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.

For information concerning the relationship between The Bank of New
York, the Guarantee Trustee, and the Company, see "Description of Debt
Securities--Information Concerning the Debt Securities Trustees."

TERMINATION OF THE GUARANTEE

Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the Capital Securities covered
thereby, upon full payment of the amounts payable with respect to such
Capital Securities upon liquidation of the related Issuer Trust or upon
distribution of the Debt Securities owned by such Issuer Trust to the holders
of such Capital Securities. Each Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of such
Capital Securities must repay any sums with respect to such Capital
Securities or such Guarantee.

GOVERNING LAW

Each Guarantee will be governed by and construed in accordance with the
laws of the State of New York.

PLAN OF DISTRIBUTION

The Company may sell Debt Securities and an Issuer Trust may sell the
Capital Securities being offered hereby in three ways: (i) through agents,
(ii) through underwriters and (iii) through dealers. Any such underwriters,
dealers or agents in the United States will include MS & Co. and/or DWR and
any such underwriters, dealers or agents outside the United States will
include MSIL or other affiliates of the Company.

Offers to purchase Securities may be solicited by agents designated by
the Company and/or an Issuer Trust, as the case may be, from time to time.
Any such agent, who may be deemed to be an underwriter as that term is
defined in the Securities Act, involved in the offer or sale of the
Securities in respect of which this Prospectus is delivered will be named,
and any commissions payable by the Company to such agent will be set forth,
in the Prospectus Supplement. Any such agent will be acting on a reasonable
efforts basis for the period of its appointment or, if indicated in the
applicable Prospectus Supplement, on a firm commitment basis.

If any underwriters are utilized in the sale of the Securities in
respect of which this Prospectus is delivered, the Company and/or an Issuer
Trust, as the case may be, will enter into an underwriting agreement with
such underwriters at the time of sale to them and the names of the
underwriters and the terms of the transaction will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales
of the Securities in respect of which this Prospectus is delivered to the
public.

If a dealer is utilized in the sale of the Securities in respect of
which the Prospectus is delivered, the Company and/or an Issuer Trust, as the
case may be, will sell such Securities to the dealer, as principal. The
dealer may then resell such Securities to the public at varying prices to be
determined by such dealer at the time of resale.

In order to facilitate the offering of the Securities, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Securities or any other securities the prices of which may be
used to determine payments on such Securities. Specifically, the
underwriters may overallot in connection with the offering, creating a short
position in the Securities for their own accounts. In addition, to cover
overallotments or to stabilize the price of the Securities or of any such
other securities, the underwriters may bid for, and purchase, the Securities
or any such other securities in the open market. Finally, in any offering of
the Securities through a syndicate of underwriters, the underwriting
syndicate may reclaim selling concessions allowed to an underwriter or a
dealer for distributing the Securities in the offering if the syndicate
repurchases previously distributed Securities in transactions to cover
syndicate short positions, in stabilization transactions or otherwise. Any
of these activities may stabilize or maintain the market price of the
Securities above independent market levels. The underwriters are not
required to engage in these activities, and may end any of these activities
at any time.

Securities may also be offered and sold, if so indicated in the
applicable Prospectus Supplement, in connection with a remarketing upon their
purchase, in accordance with their terms, by one or more firms, including MS
& Co., MSIL and DWR ("remarketing firms"), acting as principals for their own
accounts or as agents for the Company and/or an Issuer Trust, as the case may
be. Any remarketing firm will be identified and the terms of its agreement,
if any, with the Company and/or an Issuer Trust, as the case may be, and its
compensation will be described in the applicable Prospectus Supplement.

Remarketing firms, agents, underwriters and dealers may be entitled
under agreements which may be entered into with the Company and/or an Issuer
Trust, as the case may be, to indemnification by the Company and/or an Issuer
Trust, as the case may be, against certain civil liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company and/or an Issuer Trust,
as the case may be, in the ordinary course of business.

If so indicated in the Prospectus Supplement, the Company and/or an
Issuer Trust, as the case may be, will authorize agents, underwriters or
dealers to solicit offers by certain purchasers to purchase Securities from
the Company at the public offering price set forth in the Prospectus
Supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. Such contracts will be subject
to only those conditions set forth in the Prospectus Supplement, and the
Prospectus Supplement will set forth the commission payable for solicitation
of such offers.

Any underwriter, agent or dealer utilized in the initial offering of
Securities will not confirm sales to accounts over which it exercises
discretionary authority without the prior specific written approval of its
customer.

MS & Co., MSIL and DWR are wholly owned subsidiaries of the Company.
Each initial offering of Securities will be conducted in compliance with the
requirements of Rule 2720 of the National Association of Securities Dealers,
Inc. (the "NASD") regarding a NASD member firm's distributing the securities
of an affiliate. Following the initial distribution of any Securities, MS &
Co., MSIL, DWR and other affiliates of the Company may offer and sell such
Securities in the course of their business as broker-dealers (subject, in the
case of any securities listed on a stock exchange or quoted on an automated
quotation system, to obtaining any necessary approval of the applicable stock
exchange or quotation system for any such offers and sales). MS & Co., MSIL,
DWR and such other affiliates may act as principals or agents in such
transactions. This Prospectus may be used by MS & Co., MSIL, DWR 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 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.

VALIDITY OF SECURITIES

The validity of the Capital Securities will be passed on for the Issuer
Trusts by Richards, Layton & Finger, P.A. The validity of the Debt
Securities and the Guarantees will be passed upon for the Company by Brown &
Wood LLP. Certain legal matters relating to the Securities will be passed
upon for the Underwriters by Davis Polk & Wardwell. Davis Polk & Wardwell
has in the past represented Morgan Stanley and continues to represent the
Company on a regular basis and in a variety of matters, including in
connection with its merchant banking and leveraged capital activities.

EXPERTS

The consolidated financial statements and financial statement schedules
of the Company and its subsidiaries as of fiscal year end 1997 and 1996 and
for each of the three years in the period ended fiscal year end 1997 included
or incorporated by reference in the Company's Annual Report on Form 10-K
dated November 30, 1997 have been audited by Deloitte & Touche LLP,
independent auditors, as set forth in their reports thereon and incorporated
herein by reference. The financial statements and financial statement
schedule of Morgan Stanley as of November 30, 1996 and for each of the two
years in the period ended November 30, 1996 have been audited by Ernst &
Young LLP, independent auditors, as stated in their report and relied upon by
Deloitte & Touche LLP in their reports incorporated herein by reference.
Such consolidated financial statements 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.