Subject to Completion, Pricing Supplement dated December 18, 1998
PROSPECTUS Dated March 26, 1998 Pricing Supplement No. 47 to
PROSPECTUS SUPPLEMENT Registration Statement No. 333-46935
Dated March 26, 1998 Dated December , 1998
Rule 424(b)(3)
$25,000,000
Morgan Stanley Dean Witter & Co.
MEDIUM-TERM NOTES, SERIES C
Senior Fixed Rate Notes
----------
Exchangeable Notes Due December , 2005
Exchangeable for Shares of Common Stock of
JOHNSON & JOHNSON
----------
The notes will not pay any interest but will be issued at a discount and thus
have a minimum yield to maturity of %. Beginning March , 1999, you will
be able to exchange your notes for a number of shares of Johnson & Johnson
common stock, subject to our right to call all of the notes on or after
December , 2001.
o The price of each note is $ ( % of the $1,000 principal
amount at maturity). This issue price represents a yield to maturity of
% each year.
o We will not make any coupon interest payments on the notes.
o Beginning March , 1999, you will have the right to exchange each Note
for shares of Johnson & Johnson common stock. If you exchange, we
will have the right to deliver either the actual shares or the cash value
of such shares to you. You will not receive any accrued original issue
discount.
o Beginning December , 2001, we have the right to call all of the notes
and pay you the call price, which will be this issue price of $
plus accrued original issue discount, or OID, to the call date. However,
if the market value of shares of Johnson & Johnson common stock on
the last trading day before we send our call notice is greater than the
call price, we will deliver shares of Johnson & Johnson common
stock to you instead.
o If we decide to call the notes, we will give you notice at least 30 but
not more than 60 days before the call date specified in the notice. If we
notify you that we will be delivering shares of Johnson & Johnson Stock on
the call date, rather than the cash call price, you will still be able to
exercise your exchange right on any day prior to the call date.
o If you hold the notes to maturity, we will pay you $1,000 per note.
o Johnson & Johnson is not involved in this offering of the notes in any way
and will have no financial obligation with respect to the notes.
o We will apply to list the notes to trade on the New York Stock Exchange,
Inc., but it is not possible to predict whether the notes will meet the
NYSE listing requirements.
You should read the more detailed description of the notes in this Pricing
Supplement. In particular, you should review and understand the descriptions
in "Summary of Pricing Supplement" and "Description of Notes."
The notes have risks not associated with an investment in conventional debt
securities. See "Risk Factors" beginning on PS-6.
----------
PRICE % PER NOTE
----------
<TABLE>
<CAPTION>
Price to Public Agent's Commissions Proceeds to Company
--------------- ------------------- -------------------
<S> <C> <C> <C>
Per Note. % % %
Total.... $ $ $
</TABLE>
MORGAN STANLEY DEAN WITTER
The information in this pricing supplement is not complete and may be changed.
We may not deliver these securities until a final pricing supplement is
delivered. This pricing supplement and the accompanying prospectus and
prospectus supplement do not constitute an offer to sell these securities and
they are not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
(This page intentionally left blank)
SUMMARY OF PRICING SUPPLEMENT
The following summary describes the notes we are offering to
you in general terms only. You should read the summary together with the more
detailed information that is contained in the rest of this pricing supplement
and in the accompanying prospectus and prospectus supplement. You should
carefully consider, among other things, the matters set forth in "Risk
Factors."
The Notes
Each note costs $ We, Morgan Stanley Dean Witter & Co., are
offering you Exchangeable Notes due December
, 2005, which you may exchange for Johnson
&Johnson common stock ("Johnson & Johnson
Stock") beginning on March , 1999. The price
of each note is $ ( % of the $1,000
principal amount at maturity). We will not
pay interest on the notes. If you hold the
notes to maturity, which is December , 2005,
we will pay you $1,000 per note. This payment
represents your $ purchase price plus a yield
to maturity of % per year compounded
semi-annually.
Your Exchange Right
The initial exchange ratio Beginning March , 1999, you may exchange
is [ ] each note for a number of shares of Johnson &
Johnson Stock equal to the exchange ratio.
The initial exchange ratio is [ ] shares of
Johnson & Johnson Stock per note. When you
exchange your notes, Morgan Stanley & Co.
Incorporated ("MS & Co."), acting as
calculation agent, will determine the exact
number of shares you will receive based on
the principal amount of the notes you
exchange and the exchange ratio as it may
have been adjusted through the time of the
exchange.
To exchange a note on any day, you must
instruct your broker or other person with
whom you hold your notes to take the
following steps through normal clearing
system channels:
o fill out an Official Notice of Exchange,
which is attached as Annex A to this
Pricing Supplement;
o deliver your Official Notice of Exchange to
us before 11:00 a.m. (New York City time)
on that day; and
o deliver your note certificate to The Chase
Manhattan Bank, as trustee for our senior
notes, on that day.
If you give us your Official Notice of
Exchange after 11:00 a.m. (New York City
time) on any day or on a day when the stock
markets are closed, your notice will not
become effective until the next day that the
stock markets are open.
We can choose to pay you We will pay you, at our option, within 3
cash or Johnson & Johnson business days after you give us your Official
Stock if you elect to Notice of Exchange, either:
exchange your notes
o shares of Johnson & Johnson Stock, or
o the cash value of such shares.
We will not pay any accrued interest when you
elect to exchange your notes.
Our right to call the notes may affect your
ability to exchange your notes.
Our Call Right
Beginning December , 2001, we have the right
to call all of the notes. If we call the
notes, we will do the following:
o send you a notice telling you that we have
decided to call the notes;
o specify in the notice a call date when you
will receive payment in exchange for
delivering your notes to the trustee; that
call date will not be less than 30 or more
than 60 days after the date of the notice;
and
o specify in the notice the number of shares
of Johnson & Johnson Stock or the cash call
price that we will pay you in exchange for
each note, as explained in the next
paragraph.
We may call the notes for On the last trading day before the date of
stock or cash, depending on our call notice, the calculation agent will
the price of Johnson & determine the value of the shares of Johnson
Johnson Stock & Johnson Stock that a noteholder would
receive upon exchange of a note. That value
is referred to as parity. If parity is less
than the call price (the sum of the purchase
price of $ plus the yield that will have
accrued on the note to the call date), then
we will pay the call price to you in cash. If
we notify you that we will give you cash on
the call date, you will no longer be able to
exercise your exchange right.
If, however, parity as so determined is equal
to or greater than the call price, then we
will deliver the shares of Johnson & Johnson
Stock instead. In that case, you will still
have the right to exercise your exchange
right on any day prior to the call date.
Price of Johnson & Johnson Stock
Johnson & Johnson Stock is The last reported sales price on the New York
currently $ a share Stock Exchange of Johnson & Johnson Stock on
the date of this Pricing Supplement was $ .
You can review the publicly-reported prices
of Johnson & Johnson Stock for the last three
years in the "Historical Information" section
of this Pricing Supplement.
The Calculation Agent
We have appointed MS & Co. to act as
calculation agent for The Chase Manhattan
Bank, the trustee for our senior notes. As
calculation agent, MS & Co. will determine
the exchange ratio and calculate the amount
of Johnson & Johnson Stock or cash that you
receive if you exercise your exchange right
or if we call the notes. As calculation
agent, MS & Co. will also adjust the exchange
ratio for certain corporate events that could
affect the price of the Johnson & Johnson
Stock and that we describe in the section
called "Description of Notes--Antidilution
Adjustments" in this Pricing Supplement.
No Affiliation with Johnson & Johnson
Johnson & Johnson is not an affiliate of ours
and is not involved with this offering in any
way. The notes are obligations of Morgan
Stanley Dean Witter and not of Johnson &
Johnson.
More Information on the Notes
The notes are senior notes issued as part of
our Series C medium-term note program. You
can find a general description of our Series
C medium-term note program in the
accompanying Prospectus Supplement dated
March 26, 1998. We describe the basic
features of this type of note in the sections
called "Description of Notes-- Fixed Rate
Notes" and "--Exchangeable Notes."
For a detailed description of terms of the
notes, including the specific requirements
for the exercise of your exchange right and
of our call right, you should read the
"Description of Notes" section in this
Pricing Supplement. You should also read
about some of the risks involved in investing
in the notes in the section called "Risk
Factors."
How to reach us
Please contact Morgan Stanley Dean Witter at
our principal executive offices at 1585
Broadway, New York, New York 10036, telephone
number (212) 761-4000.
RISK FACTORS
The notes are not secured debt and are riskier investments than
ordinary debt securities. This section describes the most significant risks
relating to the notes. You should carefully consider whether the notes are
suited to your particular circumstances before you decide to purchase them.
Yield to Maturity Less Than These notes have a yield to maturity of %
Interest on Ordinary Notes per year based on the issue price of $
and computed on a semi-annual bond-equivalent
basis. This yield to maturity is lower than
the rate of interest that we would pay on
non- exchangeable senior notes maturing at
the same time as the notes. If you exchange
your notes for Johnson & Johnson common
stock, you will not receive accrued original
issue discount.
Notes May Not Be Actively There may be little or no secondary market
Traded for the notes. Although we will apply to list
the notes on the New York Stock Exchange,
Inc., we may not meet the requirements for
listing. Even if there is a secondary market,
it may not provide significant liquidity. MS
& Co. currently intends to act as a market
maker for the notes but is not required to do
so.
Market Price of Notes Several factors, including many of which are
Influenced by Many beyond our control, will influence the value
Unpredictable Factors of the notes.
o the market price of Johnson & Johnson Stock
o the volatility (frequency and magnitude of
changes in price) of the Johnson & Johnson
Stock
o the dividend rate on the Johnson & Johnson
Stock
o economic, financial, regulatory and
political events that affect stock markets
generally and which may affect the market
price of the Johnson & Johnson Stock
o interest and yield rates in the market
o the time remaining until (1) you can
exchange your notes for stock, (2) we can
call the notes and (3) the notes mature
o our creditworthiness
These factors will influence the price you
will receive if you sell your notes prior to
maturity. For example, you may have to sell
your notes at a substantial discount from
your purchase price if the market price of
the Johnson & Johnson Stock is at, below or
not sufficiently above the price of Johnson &
Johnson Stock on the day we offer the notes
for initial sale to the public.
You cannot predict the future performance of
Johnson & Johnson Stock based on its
historical performance.
No Affiliation with Johnson We are not affiliated with Johnson & Johnson.
& Johnson We do not have any non-public information
about Johnson & Johnson as of the date of
this Pricing Supplement, although we or our
affiliates may presently or from time to time
engage in business with Johnson & Johnson,
including extending loans to, or making
equity investments in, Johnson & Johnson or
providing investment advisory services to
Johnson & Johnson, including merger and
acquisition advisory services. Moreover, we
have no ability to control or predict the
actions of Johnson & Johnson, including any
corporate actions of the type that would
require the calculation agent to adjust the
exchange ratio. Johnson & Johnson is not
involved in the offering of the notes in any
way and has no obligation to consider your
interest as a holder of these notes in taking
any corporate actions that might affect the
value of your notes. None of the money you
pay for the notes will go to Johnson &
Johnson.
You Have No Shareholder As a holder of notes, you will not have
Rights voting right or the right to receive
dividends or other distributions or any other
rights with respect to Johnson & Johnson
Stock.
Limited Antidilution MS & Co., as calculation agent, will adjust
Adjustments the exchange ratio for certain events
affecting the Johnson & Johnson Stock, such
as stock splits and stock dividends, and
certain other corporate actions involving
Johnson & Johnson, such as mergers. However,
the calculation agent is not required to make
an adjustment for every corporate event that
can affect Johnson & Johnson Stock. For
example, the calculation agent is not
required to make any adjustments if Johnson &
Johnson or anyone else makes a partial tender
offer or a partial exchange offer for Johnson
& Johnson Stock. If an event occurs that does
not require the calculation agent to adjust
the exchange rate, the market price of the
notes may be materially and adversely
affected. In addition, the Calculation Agent
may in good faith adjust the exchange ratio
for corporate events other than those
contemplated in this Pricing Supplement if it
determines that it is appropriate. Such
adjustments will be made to reflect the
consequences of events but not with the aim
of changing investment risk. Adjustments may
materially and adversely affect the market
price of the notes.
Potential Conflicts of As calculation agent, MS & Co. will calculate
Interest between You and how many shares of Johnson & Johnson Stock
the Calculation Agent and you will receive in exchange for your notes
Other Affiliates of Ours and what adjustments should be made to the
exchange ratio to reflect certain corporate
and other events. MS & Co. and other
affiliates may carry out hedging activities
related to the notes, including trading in
Johnson & Johnson Stock as well as in other
instruments related to Johnson & Johnson
Stock. MS & Co. and some of our subsidiaries
also trade Johnson & Johnson Stock on a
regular basis as part of their general
broker-dealer businesses. Any of these
activities and MS & Co.'s affiliation with us
could influence MS & Co.'s determinations as
calculation agent, including with respect to
adjustments to the exchange ratio, and,
accordingly, the amount of stock or cash that
you receive when you exchange the notes or
when we call the notes. In addition, such
trading activity could potentially affect the
price of Johnson & Johnson Stock and,
thereby, the value of the Johnson & Johnson
Stock or cash you will receive upon exchange
or redemption.
Tax Treatment You should also consider the tax consequences
of investing in the notes. If you are a U.S.
taxable investor, you will be subject to
annual income tax based on the comparable
yield of the notes, even though you will not
receive any periodic interest payments and at
maturity may only receive the return of the
principal amount of the notes. Please read
carefully the section "Description of
Notes--United States Federal Taxation" in
this Pricing Supplement.
DESCRIPTION OF NOTES
Capitalized terms not defined herein have the meanings given to
such terms in the accompanying Prospectus Supplement.
Principal Amount.............. $25,000,000
Maturity Date................. December , 2005
Specified Currency............ U.S. Dollars
Issue Price................... $ ( % of the principal amount
at maturity)
Stated OID.................... % per annum computed on a semi-annual
bond-equivalent basis
Original Issue Date
(Settlement Date)........... December , 1998
CUSIP......................... 617446DD8
Minimum Denominations......... $1,000
Initial Market Price.......... $
Exchange Right................ On any Exchange Date, you will be entitled
upon (i) your completion and delivery to us
and the Calculation Agent of an Official
Notice of Exchange (in the form of Annex A
attached hereto) prior to 11:00 a.m. New York
City time on such date and (ii) delivery on
such date of such Notes to the Trustee, to
exchange each $1,000 principal amount of
Notes for shares (the "Exchange
Ratio") of Johnson & Johnson Stock, subject
to adjustment as described under
"--Antidilution Adjustments" below. You will
not, however, be entitled to exchange your
Notes if we have previously called the Notes
for the cash Call Price as described under
"--Company Call Right" below.
Upon any such exchange, we may, at our sole
option, either deliver such shares of Johnson
& Johnson Stock or pay an amount in cash
equal to the Exchange Ratio times the Market
Price of Johnson & Johnson Stock on the
Exchange Date, as determined by the
Calculation Agent, in lieu of such shares.
Such delivery or payment will be made 3
Business Days after any Exchange Date,
subject to delivery of such Notes to the
Trustee on the Exchange Date.
Upon any exercise of the Exchange Right, you
shall not be entitled to receive any cash
payment representing any accrued Stated OID.
Such accrued Stated OID will be deemed paid
by the Johnson & Johnson Stock or cash
received by you upon exercise of the Exchange
Right.
Morgan Stanley Dean Witter & Co. (referred to
in the first person plural or as the
"Company" in this Pricing Supplement) shall,
or shall cause the Calculation Agent to,
deliver such shares of Johnson & Johnson
Stock or cash to the Trustee for delivery to
the holders.
No Fractional Shares ......... If upon any exchange of the Notes we deliver
shares of Johnson & Johnson Stock, we will
pay cash in lieu of delivering fractional
shares of Johnson & Johnson Stock in an
amount equal to the corresponding fractional
Market Price of Johnson & Johnson Stock as
determined by the Calculation Agent on such
Exchange Date.
Exchange Ratio ............... , subject to adjustment for certain
corporate events. See "--Antidilution
Adjustments" below.
Exchange Date................. Any Trading Day that falls during the period
beginning March , 1999 and ending on the
day prior to the earliest of (i) the Maturity
Date, (ii) the Call Date and (iii) in the
event of a call for the cash Call Price as
described under "--Company Call Right" below,
the Company Notice Date.
Company Call Right ........... On or after December , 2001, we may call
the Notes, in whole but not in part, for
mandatory exchange into Johnson & Johnson
Stock at the Exchange Ratio; provided that,
if Parity on the Trading Day immediately
preceding the Company Notice Date, as
determined by the Calculation Agent, is less
than the applicable Call Price for such
Company Notice Date, we will (under those
circumstances only) pay such applicable Call
Price in cash on the Call Date. If we call
the Notes for mandatory exchange, then,
unless you subsequently exercise the Exchange
Right (the exercise of which will not be
available to you following a call for cash in
an amount equal to the Call Price), the
Johnson & Johnson Stock or (in the event of a
call for cash, as described above) cash to be
delivered to you will be delivered on the
Call Date fixed by us and set forth in our
notice of mandatory exchange, upon delivery
of such Notes to the Trustee. We shall, or
shall cause the Calculation Agent to, deliver
such shares of Johnson & Johnson Stock or
cash to the Trustee for delivery to you.
Upon an exchange by us (whether payment is to
be made in Johnson & Johnson Stock or by
payment of the cash Call Price, as
applicable), you will not receive any
additional cash payment representing any
accrued Stated OID. Such accrued Stated OID
will be deemed paid by the delivery of
Johnson & Johnson Stock or cash.
On or after the Company Notice Date (other
than with respect to a call of the Notes for
the cash Call Price by the Company) you will
continue to be entitled to exercise the
Exchange Right and receive any amounts
described under "--Exchange Right" above.
Company Notice Date........... Any Trading Day on or after December , 2001
on which we issue our notice of mandatory
exchange.
Call Date..................... A day specified by us in our notice of
mandatory exchange, not less than 30 nor more
than 60 days after the Company Notice Date, on
which we will deliver Johnson & Johnson Stock
or cash to holders of the Notes for mandatory
exchange.
Parity........................ With respect to any Trading Day, an amount
equal to the Exchange Ratio times the Market
Price (as defined below) of Johnson & Johnson
Stock on such Trading Day.
Call Price.................... The table below shows indicative Call Prices
for each $1,000 principal amount of Notes on
December , 2001 and at each December
thereafter to and including the
Maturity Date. The Call Price for each $1,000
principal amount of Notes called for
mandatory exchange on Call Dates between such
indicative dates would include an additional
amount reflecting Stated OID accrued from the
next preceding date in the table through the
applicable Call Date at a rate of % per
annum. Such additional accreted amount of
Stated OID will be determined by the
Calculation Agent and will be calculated on a
semiannual bond-equivalent basis based on the
Call Price for the immediately preceding Call
Date indicated in the table below.
<TABLE>
<S> <C>
Call Date Call Price
December , 2001....................... $
December , 2002....................... $
December , 2003....................... $
December , 2004....................... $
Maturity................................ $1,000.00
</TABLE>
Market Price.................. If Johnson & Johnson Stock (or any other
security for which a Market Price must be
determined) is listed on a U.S. securities
exchange registered under the Securities
Exchange Act of 1934 as amended (the
"Exchange Act"), is a security of The Nasdaq
National Market ("NASDAQ NMS") or is included
in the OTC Bulletin Board Service ("OTC
Bulletin Board") operated by the National
Association of Securities Dealers, Inc. (the
"NASD"), the Market Price for one share of
Johnson & Johnson Stock (or one unit of any
such other security) on any Trading Day means
(i) the last reported sale price, regular
way, on such day on the principal securities
exchange on which Johnson & Johnson Stock (or
any such other security) is listed or
admitted to trading or (ii) if not listed or
admitted to trading on any such securities
exchange or if such last reported sale price
is not obtainable, the last reported sale
price on the over-the-counter market as
reported on the NASDAQ NMS or OTC Bulletin
Board on such day. If the last reported sale
price is not available pursuant to clause (i)
or (ii) of the preceding sentence, the Market
Price for any Trading Day shall be the mean,
as determined by the Calculation Agent, of
the bid prices for Johnson & Johnson Stock
(or any such other security) obtained from
as many dealers in such security (which may
include MS & Co. or any of our other
subsidiaries or affiliates), but not
exceeding three, as will make such bid prices
available to the Calculation Agent. A
"security of the NASDAQ NMS" shall include a
security included in any successor to such
system and the term "OTC Bulletin Board
Service" shall include any successor service
thereto.
Trading Day................... A day, as determined by the Calculation
Agent, on which trading is generally
conducted on the New York Stock Exchange, Inc.
("NYSE"), the American Stock Exchange, Inc.,
the NASDAQ NMS, the Chicago Mercantile
Exchange and the Chicago Board of Options
Exchange and in the over-the-counter market
for equity securities in the United States
and on which a Market Disruption Event has not
occurred.
Book Entry Note or
Certificated Note............ Book Entry, DTC
Senior Note or
Subordinated Note............ Senior
Trustee....................... The Chase Manhattan Bank
Agent for this Underwritten
Offering of Notes............ Morgan Stanley & Co. Incorporated and its
successors (MS & Co.)
Calculation Agent............. Morgan Stanley & Co. Incorporated and its
successors (MS & Co.)
Because the Calculation Agent is our
affiliate, potential conflicts of interest
may exist between the Calculation Agent and
you as a holder of the Notes, including with
respect to certain determinations and
judgments that the Calculation Agent must
make in making adjustments to the Exchange
Ratio or determining the Market Price or
whether a Market Disruption Event has
occurred. See "Antidilution Adjustments" and
"Market Disruption Event" below. MS & Co. is
obligated to carry out its duties and
functions as Calculation Agent in good faith
and using its reasonable judgment.
Antidilution Adjustments...... The Exchange Ratio will be adjusted as
follows:
1. If Johnson & Johnson Stock is subject to a
stock split or reverse stock split, then once
such split has become effective, the Exchange
Ratio will be adjusted to equal the product
of the prior Exchange Ratio and the number of
shares issued in such stock split or reverse
stock split with respect to one share of
Johnson & Johnson Stock.
2. If Johnson & Johnson Stock is subject (i)
to a stock dividend (issuance of additional
shares of Johnson & Johnson Stock) that is
given ratably to all holders of shares of
Johnson & Johnson Stock or (ii) to a
distribution of Johnson & Johnson Stock as a
result of the triggering of any provision of
the corporate charter of Johnson & Johnson,
then once the dividend has become effective
and Johnson & Johnson Stock is trading
ex-dividend, the Exchange Ratio will be
adjusted so that the new Exchange Ratio shall
equal the prior Exchange Ratio plus the
product of (i) the number of shares issued
with respect to one share of Johnson &
Johnson Stock and (ii) the prior Exchange
Ratio.
3. There will be no adjustments to the
Exchange Ratio to reflect cash dividends or
other distributions paid with respect to
Johnson & Johnson Stock other than
distributions described in paragraph 6 below
and Extraordinary Dividends as described
below. A cash dividend or other distribution
with respect to Johnson & Johnson Stock will
be deemed to be an "Extraordinary Dividend"
if such dividend or other distribution
exceeds the immediately preceding
non-Extraordinary Dividend for Johnson &
Johnson Stock (as adjusted for any subsequent
corporate event requiring an adjustment
hereunder, such as a stock split or reverse
stock split) by an amount equal to at least
10% of the Market Price of Johnson & Johnson
Stock on the Trading Day preceding the
ex-dividend date for the payment of such
Extraordinary Dividend (the "ex-dividend
date"). If an Extraordinary Dividend occurs
with respect to Johnson & Johnson Stock, the
Exchange Ratio with respect to Johnson &
Johnson Stock will be adjusted on the
ex-dividend date with respect to such
Extraordinary Dividend so that the new
Exchange Ratio will equal the product of (i)
the then current Exchange Ratio and (ii) a
fraction, the numerator of which is the
Market Price on the Trading Day preceding the
ex-dividend date, and the denominator of which
is the amount by which the Market Price on
the Trading Day preceding the ex-dividend
date exceeds the Extraordinary Dividend
Amount. The "Extraordinary Dividend Amount"
with respect to an Extraordinary Dividend for
Johnson & Johnson Stock will equal (i) in the
case of cash dividends or other distributions
that constitute quarterly dividends, the
amount per share of such Extraordinary
Dividend minus the amount per share of the
immediately preceding non-Extraordinary
Dividend for Johnson & Johnson Stock or (ii)
in the case of cash dividends or other
distributions that do not constitute
quarterly dividends, the amount per share of
such Extraordinary Dividend. To the extent
an Extraordinary Dividend is not paid in
cash, the value of the non-cash component
will be determined by the Calculation Agent,
whose determination shall be conclusive. A
distribution on the Johnson & Johnson Stock
described in paragraph 6 below that also
constitutes an Extraordinary Dividend shall
only cause an adjustment to the Exchange
Ratio pursuant to paragraph 6.
4. If Johnson & Johnson is being liquidated
or is subject to a proceeding under any
applicable bankruptcy, insolvency or other
similar law (including, without limitation,
any law providing for nationalization), the
Notes will continue to be exchangeable into
Johnson & Johnson Stock so long as a Market
Price for Johnson & Johnson Stock is
available. If a Market Price is no longer
available for Johnson & Johnson Stock for
whatever reason, including the liquidation of
Johnson & Johnson or the subjection of
Johnson & Johnson to a proceeding under any
applicable bankruptcy, insolvency or other
similar law, then the value of Johnson &
Johnson Stock will equal zero for so long as
no Market Price is available.
5. If there occurs any reclassification or
change of Johnson & Johnson Stock, or if
Johnson & Johnson has been subject to a
merger, combination or consolidation and is
not the surviving entity, or if there occurs
a sale or conveyance to another corporation
of the property and assets of Johnson &
Johnson as an entirety or substantially as an
entirety, in each case as a result of which
the holders of Johnson & Johnson Stock shall
be entitled to receive stock, other
securities or other property or assets
(including, without limitation, cash or other
classes of stock of Johnson & Johnson)
("Exchange Property") with respect to or in
exchange for such Johnson & Johnson Stock,
then the holders of the Notes then
outstanding will be entitled thereafter to
exchange such Notes into the kind and amount
of Exchange Property that they would have
owned or been entitled to receive upon such
reclassification, change, merger,
combination, consolidation, sale or
conveyance had such holders exchanged such
Notes for Johnson & Johnson Stock immediately
prior to any such corporate event, but
without interest thereon. At such time, no
adjustment will be made to the Exchange Ratio.
6. If Johnson & Johnson issues to all of its
shareholders equity securities of an issuer
other than Johnson & Johnson (other than in
a transaction described in paragraph 5
above), then the holders of the Notes then
outstanding will be entitled to receive such
new equity securities upon exchange of such
Notes. The Exchange Ratio for such new
equity securities will equal the product of
the Exchange Ratio in effect for Johnson &
Johnson Stock at the time of the issuance of
such new equity securities times the number
of shares of the new equity securities issued
with respect to one share of Johnson &
Johnson Stock.
7. No adjustments to the Exchange Ratio will
be required other than those specified above.
However, we may, at our sole discretion,
cause the Calculation Agent to make
additional changes to the Exchange Ratio to
reflect changes occurring in relation to the
Johnson & Johnson Stock (or other Exchange
Property) in other circumstances where we
determine in good faith that it is
appropriate, but only to reflect such
changes, and not with the aim of spreading
investment risk.
No adjustments to the Exchange Ratio will be
required unless such adjustment would require
a change of at least 0.1% in the Exchange
Ratio then in effect. The Exchange Ratio
resulting from any of the adjustments
specified above will be rounded to the
nearest one hundredth-thousandth with five
one-millionths being rounded upward.
The Exchange Ratio will not be adjusted to
take into account the accrual of Stated OID.
The Calculation Agent shall be solely
responsible for the determination and
calculation of any adjustments to the Exchange
Ratio and of any related determinations and
calculations with respect to any
distributions of stock, other securities or
other property or assets (including cash) in
connection with any corporate event described
in paragraph 5 or 6 above, and its
determinations and calculations with respect
thereto shall be conclusive.
The Calculation Agent will provide
information as to any adjustments to the
Exchange Ratio upon written request by any
holder of the Notes.
Market Disruption Event....... "Market Disruption Event" means, with respect
to Johnson & Johnson Stock:
(i) a suspension, absence or material
limitation of trading of Johnson & Johnson
Stock on the primary market for Johnson &
Johnson Stock for more than two hours of
trading or during the one-half hour period
preceding the close of trading in such
market; or a breakdown or failure in the
price and trade reporting systems of the
primary market for Johnson & Johnson Stock
as a result of which the reported trading
prices for Johnson & Johnson Stock during
the last one-half hour preceding the
closing of trading in such market are
materially inaccurate; or the suspension,
absence or material limitation on the
primary market for trading in options
contracts related to Johnson & Johnson
Stock, if available, during the one-half
hour period preceding the close of trading
in the applicable market, in each case as
determined by the Calculation Agent in its
sole discretion; and
(ii) a determination by the Calculation
Agent in its sole discretion that the
event described in clause (i) above
materially interfered with the ability of
the Company or any of its affiliates to
unwind all or a material portion of the
hedge with respect to the Notes.
For purposes of determining whether a Market
Disruption Event has occurred: (1) a
limitation on the hours or number of days of
trading will not constitute a Market
Disruption Event if it results from an
announced change in the regular business
hours of the relevant exchange, (2) a
decision to permanently discontinue trading
in the relevant option contract will not
constitute a Market Disruption Event, (3)
limitations pursuant to New York Stock
Exchange Rule 80A (or any applicable rule or
regulation enacted or promulgated by the
NYSE, any other self-regulatory organization
or the Securities and Exchange Commission of
similar scope as determined by the
Calculation Agent) on trading during
significant market fluctuations shall
constitute a suspension, absence or material
limitation of trading, (4) a suspension of
trading in an options contract on Johnson &
Johnson Stock by the primary securities
market trading in such options, if available,
by reason of (x) a price change exceeding
limits set by such securities exchange or
market, (y) an imbalance of orders relating
to such contracts or (z) a disparity in bid
and ask quotes relating to such contracts
will constitute a suspension, absence or
material limitation of trading in options
contracts related to Johnson & Johnson Stock
and (5) a suspension, absence or material
limitation of trading on the primary
securities market on which options contracts
related to Johnson & Johnson Stock are traded
will not include any time when such
securities market is itself closed for
trading under ordinary circumstances.
Alternate Exchange
Calculation in case
of an Event of Default........ In case an Event of Default with respect to
the Notes shall have occurred and be
continuing, the amount declared due and
payable upon any acceleration of any Note
shall be determined by MS & Co., as
Calculation Agent, and shall be equal to the
Issue Price of a Note plus the accrued Stated
OID to but not including the date of
acceleration; provided that if (x) the holder
of a Note has submitted an Official Notice of
Exchange to the Company in accordance with
the Exchange Right or (y) the Company has
called the Notes, other than a call for the
cash Call Price, in accordance with the
Company Call Right, the amount declared due
and payable upon any such acceleration shall
be an amount in cash for each $1,000 principal
amount of a Note equal to the Exchange Ratio
times the Market Price of one share of
Johnson & Johnson Stock, determined by the
Calculation Agent as of the Exchange Date or
as of the date of acceleration, respectively,
and shall not include any accrued Stated OID
thereon; provided further that if the Issuer
has called the Notes for cash in an amount
equal to the Call Price, in accordance with
the Company Call Right, the amount declared
due and payable upon any such acceleration
shall be an amount in cash for each $1,000
principal amount of a Note equal to the
applicable Call Price. See "--Call Price"
above.
Johnson & Johnson Stock;
Public Information............ Johnson & Johnson is engaged in the
manufacture and sale of a broad range of
products in the health care field in many
countries of the world. Johnson & Johnson
Stock is registered under the Exchange Act.
Companies with securities registered under the
Exchange Act are required to file
periodically certain financial and other
information specified by the Securities and
Exchange Commission (the "Commission").
Information provided to or filed 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, information provided to or filed
with the Commission electronically can be
accessed through a Website maintained by the
Commission. The address of the Commission's
Website is http:/www.sec.gov. Information
provided to or filed with the Commission by
Johnson & Johnson pursuant to the Exchange
Act of 1934 can be located by reference to
Commission file number 1-3215. In addition,
information regarding Johnson & Johnson may
be obtained from other sources including, but
not limited to, press releases, newspaper
articles and other publicly disseminated
documents. We make no representation or
warranty as to the accuracy or completeness
of such reports.
This pricing supplement relates only to the
Notes offered hereby and does not relate to
Johnson & Johnson Stock or other securities
of Johnson & Johnson. We have derived all
disclosures contained in this pricing
supplement regarding Johnson & Johnson from
the publicly available documents described in
the preceding paragraph. Neither we nor the
Agent has participated in the preparation of
such documents or made any due diligence
inquiry with respect to Johnson & Johnson in
connection with the offering of the Notes.
Neither we nor the Agent makes any
representation that such publicly available
documents or any other publicly available
information regarding Johnson & Johnson are
accurate or complete. Furthermore, we cannot
give any assurance that all events occurring
prior to the date hereof (including events
that would affect the accuracy or completeness
of the publicly available documents described
in the preceding paragraph) that would affect
the trading price of Johnson & Johnson Stock
(and therefore the Initial Market Price and
the Exchange Ratio) have been publicly
disclosed. Subsequent disclosure of any such
events or the disclosure of or failure to
disclose material future events concerning
Johnson & Johnson could affect the value
received on any Exchange Date or Call Date
with respect to the Notes and therefore the
trading prices of the Notes.
Neither we nor any of our affiliates makes
any representation to you as to the
performance of Johnson & Johnson Stock.
We or our affiliates may presently or from
time to time engage in business with Johnson
& Johnson, including extending loans to, or
making equity investments in, Johnson &
Johnson or providing advisory services to
Johnson & Johnson, including merger and
acquisition advisory services. In the course
of such business, we or our affiliates may
acquire non-public information with respect to
Johnson & Johnson and, in addition, one or
more of our affiliates may publish research
reports with respect to Johnson & Johnson.
The statement in the preceding sentence is
not intended to affect the rights of holders
of the Notes under the securities laws. As a
prospective purchaser of a Note, you should
undertake such independent investigation of
Johnson & Johnson as in your judgment is
appropriate to make an informed decision with
respect to an investment in Johnson & Johnson
Stock.
Historical Information........ The following table sets forth the published
high and low Market Price during 1995, 1996,
1997 and during 1998 through December 17,
1998. The Market Price on December 17, 1998
was $79 15/16. We obtained the Market
Prices listed below from Bloomberg Financial
Markets and we believe such information to be
accurate. You should not take the historical
prices of Johnson & Johnson Stock as an
indication of future performance. We cannot
give any assurance that the price of Johnson
& Johnson Stock will increase sufficiently to
cause the beneficial owners of the Notes to
receive an amount in excess of the principal
amount on any Exchange Date or Call Date.
<TABLE>
<CAPTION>
Dividends
Per
Johnson & Johnson High Low Share
- ----------------- ---- --- ----------
<S> <C> <C> <C>
(CUSIP #478160104)
1995
First Quarter................ 31 3/16 26 7/8 0.145
Second Quarter............... 35 9/16 29 1/2 0.165
Third Quarter................ 37 5/16 32 7/16 0.165
Fourth Quarter............... 45 3/4 36 3/4 0.165
1996
First Quarter................ 49 9/16 41 7/8 0.165
Second Quarter............... 50 43 11/16 0.19
Third Quarter................ 53 1/8 46 0.19
Fourth Quarter............... 53 3/4 47 1/8 0.19
1997
First Quarter................ 62 5/8 49 5/8 0.19
Second Quarter............... 66 3/8 52 3/8 0.22
Third Quarter ............... 65 3/8 55 15/16 0.22
Fourth Quarter............... 66 15/16 55 0.22
1998
First Quarter................ 76 64 0.22
Second Quarter............... 77 3/4 67 7/8 0.25
Third Quarter................ 80 69 0.25
Fourth Quarter
(through December 17, 1998). 88 7/8 75 5/8 0.25
</TABLE>
Historical prices have been adjusted for a 2
for 1 stock split of Johnson & Johnson Stock,
which became effective in the second quarter
of 1996.
We make no representation as to the amount of
dividends, if any, that Johnson & Johnson
will pay in the future. In any event, as a
holder of a Note, you will not be entitled to
receive dividends, if any, that may be
payable on Johnson & Johnson Stock.
Use of Proceeds and Hedging... The net proceeds we receive from the sale of
the Notes will be used for general corporate
purposes and, in part, by us or by one or more
of our affiliates in connection with hedging
our obligations under the Notes. See also
"Use of Proceeds" in the accompanying
Prospectus.
On or prior to the date of this Pricing
Supplement, we, through our subsidiaries and
others, may hedge our anticipated exposure in
connection with the Notes by taking positions
in Johnson & Johnson Stock, in options
contracts on Johnson & Johnson Stock listed on
major securities markets or positions in any
other instruments that we may wish to use in
connection with such hedging. In the event
that we pursue such a hedging strategy, the
price at which we are able to purchase such
positions may be a factor in determining the
pricing of the Notes. Our purchase activity
could potentially increase the price of
Johnson & Johnson Stock, and therefore
effectively increase the level to which
Johnson & Johnson Stock must rise before you
would receive an amount of Johnson & Johnson
Stock worth as much or more than the accreted
principal amount on any Exchange Date or Call
Date. Although we have no reason to believe
that our hedging activity or other trading
activities that we, or any of our affiliates,
may engage in will have a material impact on
the price of Johnson & Johnson Stock, we
cannot give any assurance that we will not
affect such price as a result of our hedging
or trading activities. Through our
subsidiaries, we are likely to modify our
hedge position throughout the life of the
Notes by purchasing and selling the
securities and instruments that we may wish
to use in connection with such hedging.
Supplemental Information
Concerning Plan of
Distribution.................. In order to facilitate the offering of the
Notes, the Agent may engage in transactions
that stabilize, maintain or otherwise affect
the price of the Notes or the Johnson & Johnson
Stock. Specifically, the Agent may overallot in
connection with the offering, creating a short
position in the Notes for its own account. In
addition, to cover allotments or to stabilize
the price of the Notes, the Agent may bid for,
and purchase, the Notes or the Johnson &
Johnson Stock in the open market. See "Use of
Proceeds and Hedging" above.
We have agreed to indemnify the Agent against
certain liabilities under the Securities Act
of 1933, as amended.
ERISA Matters for
Pension Plans And
Insurance Companies........... The Company and certain affiliates of the
Company, including MS & Co. and Dean Witter
Reynolds Inc. ("DWR"), may each be considered
a "party in interest" within the meaning of
the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or a
"disqualified person" within the meaning of
the Code with respect to many employee
benefit plans. Prohibited transactions
within the meaning of ERISA or the Internal
Revenue Code of 1986, as amended (the "Code")
may arise, for example, if the Notes are
acquired by or with the assets of a pension
or other employee benefit plan with respect
to which MS & Co., DWR or any of their
affiliates is a service provider, unless the
Notes are acquired pursuant to an exemption
from the prohibited transaction rules.
The acquisition of the Notes may be eligible
for one of the exemptions noted below if such
acquisition:
(a) (i) is made solely with the assets of a
bank collective investment fund and (ii)
satisfies the requirements and conditions of
Prohibited Transaction Class Exemption
("PTCE") 91-38 issued by the Department of
Labor ("DOL");
(b) (i) is made solely with assets of an
insurance company pooled separate account and
(ii) satisfies the requirements and
conditions of PTCE 90-1 issued by the DOL;
(c) (i) is made solely with assets managed by
a qualified professional asset manager and
(ii) satisfies the requirements and
conditions of PTCE 84-14 issued by the DOL;
(d) is made solely with assets of a
governmental plan (as defined in Section
3(32) of ERISA) which is not subject to the
provisions of Section 401 of the Code;
(e) (i) is made solely with assets of an
insurance company general account and (ii)
satisfies the requirements and conditions of
PTCE 95-60 issued by the DOL; or
(f) (i) is made solely with assets managed by
an in-house asset manager and (ii) satisfies
the requirements and conditions of PTCE 96-23
issued by the DOL.
The assets of a pension or other employee
benefit plan may include assets held in the
general account of an insurance company that
are deemed to be "plan assets" under ERISA.
In addition, employee benefit plans subject
to ERISA (or insurance companies deemed to
be investing ERISA plan assets) purchasing
the Notes should consider the possible
implications of owning the Johnson & Johnson
Stock in the event of settlement by physical
delivery. Any insurance company or pension
or employee benefit plan proposing to invest
in the Notes should consult with its legal
counsel.
United States Federal
Taxation ..................... The Notes are Optionally Exchangeable Notes and
investors should refer to the discussion under
"United States Federal Taxation--Notes--
Optionally Exchangeable Notes" in the
accompanying Prospectus Supplement. In
connection with the discussion thereunder, the
Company has determined that the "comparable
yield" is an annual rate of %, compounded
semi-annually. Based on the Company's
determination of the comparable yield, the
"projected payment schedule" for a Note
(assuming a par amount of $1,000 or with
respect to each integral multiple thereof)
consists of a projected amount due at maturity,
equal to $ .
The comparable yield and the projected
payment schedule are not provided for any
purpose other than the determination of United
States Holders' interest accruals and
adjustments in respect of the Notes, and the
Company makes no representation regarding the
actual amounts of the payments on a Note.
In addition, the effective date of the New
Regulations (as defined in "United States
Federal Taxation -- Backup Withholding" in the
accompanying Prospectus Supplement) has been
changed so that the New Regulations will
apply to payments made after December 31,
1999.
ANNEX A
OFFICIAL NOTICE OF EXCHANGE
Dated: [On or after March , 1999]
Morgan Stanley Dean Witter & Co.
1585 Broadway
New York, New York 10036
Morgan Stanley & Co. Incorporated, as
Calculation Agent
1585 Broadway
New York, New York 10036
Fax No.: (212) 761-0674
(Attn: Lily Lam)
Dear Sirs:
The undersigned holder of the Medium Term Notes, Series C,
Senior Fixed Rate Notes due December , 2005 (Exchangeable for Shares of
Common Stock of Johnson & Johnson) of Morgan Stanley Dean Witter & Co. (CUSIP
No. 617446DD8) (the "Notes") hereby irrevocably elects to exercise with
respect to the principal amount of the Notes indicated below, as of the date
hereof (or, if this letter is received after 11:00 a.m. on any Trading Day, as
of the next Trading Day), provided that such day is prior to the earliest of
(i) December , 2005, (ii) the Call Date and (iii) in the event of a call for
cash, the Company Notice Date, the Exchange Right as described in Pricing
Supplement No. 47 dated December , 1998 (the "Pricing Supplement") to the
Prospectus Supplement dated March 26, 1998 and the Prospectus dated March 26,
1998 related to Registration Statement No. 333-46935. Capitalized terms not
defined herein have the meanings given to such terms in the Pricing
Supplement. Please date and acknowledge receipt of this notice in the place
provided below on the date of receipt, and fax a copy to the fax number
indicated, whereupon the Company will deliver, at its sole option, shares of
the Common Stock of Johnson & Johnson or cash 3 Business Days after the
Exchange Date in accordance with the terms of the Notes, as described in the
Pricing Supplement.
Very truly yours,
____________________________________
[Name of Holder]
By:________________________________
[Title]
____________________________________
[Fax No.]
$___________________________________
Principal Amount of Notes
surrendered for exchange
Receipt of the above Official
Notice of Exchange is hereby acknowledged
MORGAN STANLEY DEAN WITTER & CO., as Issuer
MORGAN STANLEY & CO. INCORPORATED, as Calculation Agent
By MORGAN STANLEY & CO. INCORPORATED, as Calculation Agent
By:____________________________________________
Title:
Date and time of acknowledgment________________
