PROSPECTUS Dated March 26, 1998 Pricing Supplement No. 14 to
PROSPECTUS SUPPLEMENT Registration Statement No. 333-46935
Dated April 6, 1998 Dated April 29, 1998
Rule 424(b)(3)
LIT 25,000,000,000
Morgan Stanley Dean Witter & Co.
MEDIUM-TERM NOTES, SERIES D
EQUITY LINKED NOTES DUE 2006
----------------
The Equity Linked Notes due 2006 (the "Notes" ) are Medium-
Term Notes, Series D of Morgan Stanley Dean Witter & Co. (the "Company" ),
as further described herein and in the Prospectus Supplement under
"Description of Notes--Fixed Rate Notes" and "--Notes Linked to Commodity
Prices, Single Securities, Baskets of Securities or Indices." The Notes are
being issued in minimum denominations of Italian lire ("LIT ") 50,000,000
and will mature on June 2, 2006 (the "Maturity Date"). The Issue Price of
each Note will be LIT 45,450,000 (90.9% of the principal amount) (the
"Issue Price"), and there will be no payments of interest prior to the
maturity of the Notes.
The Notes will not be redeemable by the Company in whole or in
part prior to the Maturity Date other than under the circumstances described
under "Description of Notes--Tax Redemption" in the accompanying Prospectus
Supplement. The Notes will be issued only in bearer form, which form is
further described under "Description of Notes--Forms, Denominations,
Exchange and Transfer" in the accompanying Prospectus Supplement. Notes in
bearer form will not be exchangeable at any time for Notes in registered
form.
On the Maturity Date, the holder of each Note will receive (i)
the par amount of such Note (LIT 50,000,000) ("Par") plus (ii) an amount (the
"Supplemental Redemption Amount") based on the percentage increase, if any, in
the value of a basket of indices that includes the S&P 500 Composite Stock Price
Index (the "S&P 500 Index"), as calculated by Standard & Poor's ("S&P"), a
division of the McGraw-Hill Companies, Inc., the Swiss Market Index ("SMI"), as
calculated by the Zurich, Geneva and Basel stock exchanges (the "Swiss
Exchange"), and the Dow Jones Euro STOXX 50 (price return) ("DJES50"), as
calculated by STOXX Ltd. (together, the "Underlying Indices" and each an
"Underlying Index").
The Supplemental Redemption Amount payable with respect to each
Note at maturity will equal the product of (i) the par amount of such Note and
(ii) the greater of (x) 16% and (y) 80% of the Basket Change Percentage. The
Basket Change Percentage will be the sum of (A) 1/3 times the S&P 500 Index
Change Percentage, (B) 1/3 times the SMI Change Percentage and (C) 1/3 times
the DJES50 Change Percentage. The S&P 500 Index Change Percentage is the
amount (positive or negative) by which the Final Average Value of the S&P 500
Index differs from the Initial Value of the S&P 500 Index, expressed as a
percentage of such Initial Value. The SMI Change Percentage is the amount
(positive or negative) by which the Final Average Value of the SMI differs
from the Initial Value of the SMI, expressed as a percentage of such Initial
Value. The DJES50 Change Percentage is the amount (positive or negative) by
which the Final Average Value of the DJES50 differs from the Initial Value of
the DJES50, expressed as a percentage of such Initial Value. The Initial
Value of each Underlying Index will be the value of such Underlying Index on
June 2, 1998. The Final Average Value of each Underlying Index will equal the
arithmetic average of the closing values of such Underlying Index on the
second day of each month, commencing July 2, 1998, and ending June 2, 2005 (the
"Determination Dates"), except in the case of certain Market Disruption
Events.
Due to the method of calculation, the Notes will not be subject
to currency risk related to fluctuations in the Italian lire value of the S&P
500 Index, which is quoted in U.S. Dollars, the SMI, which is quoted in Swiss
Francs or the DJES50, which is quoted in ECU and will be quoted in Euro
commencing January 1, 1999.
For information as to the calculation of the Supplemental
Redemption Amount and certain tax consequences to beneficial owners of the
Notes, see "Supplemental Redemption Amount," "Final Average Value,"
"Determination Dates" and "United States Federal Taxation" in this Pricing
Supplement.
The Company will cause the "Supplemental Redemption Amount" to
be determined by Morgan Stanley & Co. International Limited (the "Calculation
Agent") for The Chase Manhattan Bank, as Trustee under the Senior Debt
Indenture.
Application has been made to the London Stock Exchange Limited
(the "London Stock Exchange") for the Notes to be admitted to the Official
List.
An investment in the Notes entails risks not associated with similar
investments in a conventional debt security, as described under "Risk Factors"
on PS-6 through PS-8 herein.
MORGAN STANLEY DEAN WITTER
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES OR THE
INDIVIDUAL STOCKS UNDERLYING THE S&P 500 INDEX, THE SMI AND/OR THE DJES50.
SPECIFICALLY, THE AGENT MAY OVERALLOT IN CONNECTION WITH THE OFFERING, AND MAY
BID FOR, AND PURCHASE, THE NOTES OR INDIVIDUAL STOCKS UNDERLYING THE S&P 500
INDEX, THE SMI AND/OR THE DJES50 IN THE OPEN MARKET. FOR A DESCRIPTION OF
THESE ACTIVITIES SEE "USE OF PROCEEDS AND HEDGING."
Capitalized terms not defined herein have the meanings given to such terms in
the accompanying Prospectus Supplement.
Principal Amount.............. LIT 25,000,000,000
Maturity Date................. June 2, 2006.
Interest Rate................. There will be no periodic payments of
interest. See "Supplemental Redemption
Amount."
Specified Currency............ Italian lire ("LIT")
Price to Public............... 90.9%
Settlement Date (Original
Issue Date)................. June 2, 1998
Common Code................... 8705771
ISIN.......................... XS0087057716
Senior Note or Subordinated
Note........................ Senior
Minimum Denominations......... LIT 50,000,000
Agent......................... Morgan Stanley & Co. International Limited
Trustee....................... The Chase Manhattan Bank
Maturity Redemption Amount.... On the Maturity Date, the holder of each Note
will receive (i) the par amount of such Note
LIT 50,000,000 ("Par") plus (ii) the
Supplemental Redemption Amount.
Supplemental Redemption Amount The Supplemental Redemption Amount payable
with respect to each Note at maturity will be
an amount equal to the product of (i) the par
amount of such Note and (ii) the greater of
(x) 16% and (y) 80% of the Basket Change
Percentage. The Supplemental Redemption
Amount is described by the following formula:
<TABLE>
<CAPTION>
<S> <C> <C>
[ ]
[ [1/3 (Final Average Value of the S&P 500 Index - Initial Value of the S&P 500 Index)] ]
[ [ -------------------------------------------------------------------------------] ]
[ [ Initial Value of the S&P 500 Index ] ]
PAR x MAX [ 16%, 80% x
[
[ [+ 1/3 (Final Average Value of the SMI - Initial Value of the SMI) ] ]
[ [ ----------------------------------------------------------- ] ]
[ [ Initial Value of the SMI ] ]
[
[
[ [+ 1/3 (Final Average Value of the DJES50 - Initial Value of the DJES50) ] ]
[ [ ----------------------------------------------------------------- ] ]
[ [ Initial Value of the DJES50 ] ]
The Company will cause the Calculation Agent
to provide written notice to the Trustee at
its New York office, on which notice the
Trustee may conclusively rely, of the
Supplemental Redemption Amount, on or prior
to 11:00 a.m. on the Business Day preceding
the Maturity Date. See "Discontinuance of
Underlying Indices; Adjustments to Underlying
Indices" below.
All percentages resulting from any
calculation with respect to the Notes will
be rounded to the nearest one hundred-
thousandth of a percentage point, with
five one-millionths of a percentage point
rounded upwards (e.g., 9.876545% (or
.9876545) would be rounded to 9.87655% (or
.987655)), and all lira amounts used in or
resulting from such calculation will be
rounded to the nearest lira with one-half
lira being rounded upwards.
Basket Change Percentage:..... The sum of (A) 1/3 times the S&P 500 Index
Change Percentage, (B) 1/3 times the SMI
Change Percentage and (C) 1/3 times the
DJES50 Change Percentage.
S&P 500 Index Change Percentage: The amount (positive or negative) by which
(A) the Final Average Value of the S&P 500
Index differs from (B) the Initial Value of
the S&P 500 Index, expressed as a percentage
of such Initial Value.
SMI Change Percentage:........ The amount (positive or negative) by which
(A) the Final Average Value of the SMI
differs from (B) the Initial Value of the
SMI, expressed as a percentage of such
Initial Value.
DJES50 Change Percentage:..... The amount (positive or negative) by which
(A) the Final Average Value of the DJES50
differs from (B) the Initial Value of the
DJES50, expressed as a percentage of such
Initial Value.
Initial Value:................ With respect to any Underlying Index, the
Initial Value will be the value of such
Underlying Index on June 2, 1998.
Final Average Value:.......... With respect to any Underlying Index, the
Final Average Value will be the arithmetic
average of the Index Closing Values of such
Underlying Index on each of the Determination
Dates, as determined by the Calculation Agent.
Index Closing Value........... The Index Closing Value of any Underlying
Index, as of any Determination Date, will
equal the closing value of such Underlying
Index or any Successor Index (as defined
below) at the regular official weekday close
of trading on such Determination Date. See
"Discontinuance of the Underlying Indices;
Adjustments to Underlying Indices."
References herein to any Underlying Index
will be deemed to include any Successor Index
to such Underlying Index, unless the context
requires otherwise.
Underlying Index.............. Any of the indices listed in the first column
of the table below (which are further
described herein) or any replacement index as
may be chosen by the Determination Agent as
provided under "Discontinuance of Underlying
Indices; Adjustments to Underlying Indices."
Each such index shall herein be referred to
by the term in the second column.
Underlying Name Primary Underlying
Index Used Herein Exchange Index Publisher
- ------------ ------------- ------------------- ---------------
S&P 500 SP 500 Index The New York Standard &
Composite Stock Exchange Poor's
Stock Price ("NYSE")
Index
- --------------------------------------------------------------------------
Swiss Market SMI Zurich, Geneva and Swiss
Index Basel stock Exchange
exchanges (the
"Swiss Exchange")
- --------------------------------------------------------------------------
Dow Jones DJES50 The Frankfurt Stock STOXX Ltd.
Euro Stoxx 50 Exchange ("FSE")
Exchange...................... Any of the primary exchanges listed in the
third column of the table above or their
successors.
Underlying Index Publisher.... Any of the publishers listed in the fourth
column of the table above or their successors.
Trading Day................... With respect to each Underlying Index, a day on
which trading is generally conducted (i) on the
Exchange of such Underlying Index and (ii) on
any exchange on which futures or options
contracts related to such Underlying Index are
traded, other than a day on which trading on
such primary exchange is scheduled to close
prior to its regular weekday closing time, as
determined by the Calculation Agent.
Determination Dates........... The Determination Dates will be the second
day of each month, commencing July 2, 1998
and ending June 2, 2005, and, if any such
date is not a Trading Day with respect to any
Underlying Index, the Determination Date with
respect to such Underlying Index shall be the
next succeeding Trading Day, unless there is
a Market Disruption Event on any such Trading
Day. If a Market Disruption Event, with
respect to any Underlying Index, occurs on
any such Trading Day, such Determination Date
for the disrupted Underlying Index will be
the immediately succeeding Trading Day during
which no Market Disruption Event, related to
such Underlying Index, will have occurred;
provided that if a Market Disruption Event,
with respect to such Underlying Index, has
occurred on each of the five Trading Days
immediately succeeding any of the scheduled
Determination Dates, then (i) such fifth
succeeding Trading Day will be deemed to be
the relevant Determination Date for such
Underlying Index, notwithstanding the
occurrence of a Market Disruption Event on
such day and (ii) with respect to any such
fifth Trading Day on which a Market
Disruption Event occurs, the Calculation
Agent will determine the value of the
disrupted Underlying Index on such fifth
Trading Day in accordance with the formula
for and method of calculating the disrupted
Underlying Index last in effect prior to the
commencement of the Market Disruption Event,
using the closing price (or, if trading in the
relevant securities has been materially
suspended or materially limited, its good
faith estimate of the closing price that
would have prevailed but for such suspension
or limitation) on such Trading Day of each
security most recently comprising the
disrupted Underlying Index.
In case an Event of Default with respect to
any Notes shall have occurred and be
continuing, the amount declared due and
payable upon any acceleration of the Notes
will be determined by the Calculation Agent
and will be equal to the par amount plus the
Supplemental Redemption Amount determined as
though each of the Determination Dates
scheduled to occur on or after such date of
acceleration were the date of acceleration.
Market Disruption Event:...... With respect to any Underlying Index, "Market
Disruption Event" means the occurrence or
existence of either of the following events
on a Determination Date as determined by the
Calculation Agent:
(i) a suspension, material limitation or
absence of trading on the relevant
Exchange of stocks then constituting 20% or
more, by weight, of such Underlying Index
(or the relevant Successor Index) during
the one-half hour period preceding the
close of trading on such Exchange; or
(ii) the suspension or material limitation
on any major securities market of trading
in futures or options contracts related to
such Underlying Index (or the relevant
Successor Index) during the one-half hour
period preceding the close of trading on
such market.
For the purpose of determining whether a
Market Disruption Event exists at any time,
if trading in a security included in any
Underlying Index is materially suspended or
materially limited at that time, then the
relevant percentage contribution of that
security to the level of such Underlying
Index shall be based on a comparison of (x)
the portion of the level of such Underlying
Index attributable to that security relative
to (y) the overall level of such Underlying
Index, in each case immediately before that
suspension or limitation.
Calculation Agent............. Morgan Stanley & Co. International Limited
("MSIL")
All determinations made by the Calculation
Agent will be at the sole discretion of the
Calculation Agent and will, in the absence of
manifest error, be conclusive for all
purposes and binding on the Company and
holders of the Notes.
Because the Calculation Agent is an affiliate
of the Company, potential conflicts of interest
may exist between the Calculation Agent and the
holders of the Notes, including with respect to
certain determinations and judgments that the
Calculation Agent must make in determining the
Final Average Values or whether a Market
Disruption Event has occurred. See
"Discontinuance of Underlying Indices;
Adjustments to Underlying Indices" below and
"Market Disruption Event" above. MSIL is
required to maintain policies and procedures
regarding the handling and use of confidential
proprietary information, and such policies and
procedures will be in effect throughout the
term of the Notes to restrict the use of
information relating to the calculation of the
Final Average Value of an Underlying Index that
the Calculation Agent may be required to make
prior to its dissemination. MSIL is obligated
to carry out its duties and functions as
Calculation Agent in good faith and using its
reasonable judgment.
Risk Factors:................. An investment in the Notes entails
significant risks not associated with similar
investments in a conventional debt security
including the following.
Because the Final Average Value of each
Underlying Index will be based upon an
average of closing values for each such
Underlying Index on specified days (the
Determination Dates), a significant increase
in any Underlying Index as measured on the
Determination Date in the final month, or in
any earlier month, may be substantially or
entirely offset by the values of such
Underlying Index on the Determination Dates
in other months.
Neither the S&P 500 Index, the SMI nor the
DJES50 reflects the payment of dividends on
the stocks underlying it and therefore the
yield to maturity of the Notes based on the
S&P 500 Index, the SMI and the DJES50 will
not produce the same yield as if such
underlying stocks were purchased and held for
a similar period. Furthermore, an investment
in the underlying stocks would, unlike the
calculation of the Supplemental Redemption
Percentage with respect to the Notes, be
affected by any fluctuations in the exchange
rate between the U.S. Dollars, Swiss Francs
or other currencies in European countries, as
the case may be, and the Italian lire.
There can be no assurance as to how the Notes
will trade in the secondary market or whether
such market will be liquid or illiquid. It
is expected that the secondary market value
for the Notes will be affected by the
creditworthiness of the Company and by a
number of factors, including, but not limited
to, the volatility of each Underlying Index,
dividend rates on the stocks comprising each
Underlying Index, the time remaining to the
Determination Dates and to the maturity of
the Notes and market interest rates in the
United States and Europe. In addition, the
Final Average Value of each Underlying Index
depends on a number of interrelated factors,
including economic, financial and political
events, over which the Company has no
control. The historical experiences of the
Underlying Indices should not be taken as an
indication of their future performances
during the term of any Note.
The underlying stocks that constitute the S&P
500 Index, the SMI and the DJES50 have been
issued by companies in the United States and
various European countries. Investments in
securities indexed to the value of such
country's equity securities involve certain
risks associated with the securities market
in such country, including the risks of
volatility in such markets, government
intervention in such markets,
cross-shareholdings in companies in certain
countries, legal requirements concerning
public information about companies in
European countries that are less exhaustive
than similar requirements concerning
companies that file reports with the United
States Securities and Exchange Commission
(the "SEC") and accounting and financial
standards that differ from country to country
and from those applicable to companies in the
United States.
Securities prices in each country are subject
to political, economic, financial and social
factors in that country that could negatively
affect securities markets in such country.
Moreover, the economies in such countries may
differ favorably or unfavorably from
economies in the United States in such
respects as growth of gross national product,
rate of inflation, capital reinvestment,
resources and self-sufficiency.
The historical values of an Underlying Index
should not be taken as an indication of the
future performance of such Underlying Index
during the term of the Notes. While the
trading prices of the stocks comprising an
Underlying Index will determine the value of
such Underlying Index, it is impossible to
predict whether the value of such Underlying
Index will fall or rise. Trading prices of
the stocks comprising an Underlying Index
will be influenced by both the complex and
interrelated political, economic, financial
and other factors that can affect the capital
markets generally and the equity trading
markets on which the such stocks are traded,
and by various circumstances that can
influence the values of stocks in a specific
market segment or of a particular stock.
The policies of an Exchange concerning
additions, deletions and substitutions of the
stocks comprising an Underlying Index and the
manner in which an Exchange takes account of
certain changes affecting such underlying
stocks may affect the value of such
Underlying Index. The policies of an
Exchange with respect to the calculation of
an Underlying Index could also affect the
value of such Underlying Index. An Exchange
may discontinue or suspend calculation or
dissemination of an Underlying Index. Any
such actions could affect the value of the
Notes. See "Underlying Indices" and
"Discontinuance of Underlying Indices;
Adjustments to Underlying Indices" below.
Because the Calculation Agent is an affiliate
of the Company, potential conflicts of
interest may exist between the Calculation
Agent and the holders of the Notes, including
with respect to certain determinations and
judgments that the Calculation Agent must make
in determining the Final Average Value of an
Underlying Index or whether a Market
Disruption Event has occurred. See
"Discontinuance of Underlying Indices;
Adjustments to Underlying Indices" below and
"Market Disruption Event" above.
It is suggested that prospective investors
who consider purchasing the Notes should
reach an investment decision only after
carefully considering the suitability of the
Notes in light of their particular
circumstances.
Investors should also consider the tax
consequences of investing in the Notes. See
"United States Federal Taxation" below.
Underlying Indices............ All information regarding the S&P 500 Index,
the SMI and the DJES50 set forth herein,
including, without limitation, its make-up,
method of calculation and changes in its
components, has been derived from publicly
available information. Such information
reflects the policies of, and are subject to
change by, the respective publishers of the
Underlying Indices. None of the publishers
has any obligation to continue to publish,
and may discontinue publication of, its
respective Underlying Index.
The Company or its affiliates may presently or
from time to time engage in business with any
of the publishers, owners, founders or creators
of any of the Underlying Indices or any of
their successors or one or more of the issuers
of the component stocks of any of the
Underlying Indices, including extending loans
to, making equity investments in or providing
advisory services, including merger and
acquisition advisory services, to any of such
publishers, their successors, founders or
creators or to any of such issuers. In the
course of such business with issuers, the
Company or its affiliates may acquire
non-public information with respect to such
issuers. The Company may also act as market
maker for the common stocks of such issuers.
The Company does not make any representation to
any purchaser of Notes with respect to any
matters whatsoever relating to any of such
publishers, their successors, founders or
creators or to any of such issuers. Any
prospective purchaser of Notes should undertake
such an independent investigation of the
issuers of the component stocks of the
Underlying Indices and with respect to the
competency of their respective publishers to
formulate and calculate the applicable Index as
in its judgment is appropriate to make an
informed decision with respect to an investment
in the Notes. The composition of the
Underlying Indices does not reflect any
investment or sell recommendations of the
Company or its affiliates.
S&P 500 Index
The S&P 500 Index is published by S&P and is
intended to provide a performance benchmark
for the U.S. equity markets. The calculation
of the value of the S&P 500 Index (discussed
below in further detail) is based on the
relative value of the aggregate Market Value
(as defined below) of the common stocks of
500 companies (the "Component Stocks") as of
a particular time as compared to the
aggregate average Market Value of the common
stocks of 500 similar companies during the
base period of the years 1941 through 1943.
The "Market Value" of any Component Stock is
the product of the market price per share and
the number of the then outstanding shares of
such Component Stock. The 500 companies are
not the 500 largest companies listed on the
NYSE and not all 500 companies are listed on
such exchange. S&P chooses companies for
inclusion in the S&P 500 Index with an aim of
achieving a distribution by broad industry
groupings that approximates the distribution
of these groupings in the common stock
population of the U.S. equity market. S&P
may from time to time, in its sole
discretion, add companies to, or delete
companies from, the S&P 500 Index to achieve
the objectives stated above. Relevant
criteria employed by S&P include the
viability of the particular company, the
extent to which that company represents the
industry group to which it is assigned, the
extent to which the company's common stock is
widely-held and the Market Value and trading
activity of the common stock of that company.
The S&P 500 Index is calculated using a
base-weighted aggregate methodology: the
level of the Index reflects the total Market
Value of all 500 Component Stocks relative to
the S&P 500 Index's base period of 1941-43
(the "Base Period").
An indexed number is used to represent the
results of this calculation in order to make
the value easier to work with and track over
time.
The actual total Market Value of the
Component Stocks during the Base Period has
been set equal to an indexed value of 10.
This is often indicated by the notation
1941-43=10. In practice, the daily
calculation of the S&P 500 Index is computed
by dividing the total Market Value of the
Component Stocks by a number called the Index
Divisor. By itself, the Index Divisor is an
arbitrary number. However, in the context of
the calculation of the S&P 500 Index, it is
the only link to the original base period
value of the Index. The Index Divisor keeps
the Index comparable over time and is the
manipulation point for all adjustments to the
S&P 500 Index ("Index Maintenance").
Index Maintenance includes monitoring and
completing the adjustments for company
additions and deletions, share changes, stock
splits, stock dividends, and stock price
adjustments due to company restructurings or
spinoffs.
To prevent the value of the Index from
changing due to corporate actions, all
corporate actions which affect the total
Market Value of the Index require an Index
Divisor adjustment. By adjusting the Index
Divisor for the change in total Market Value,
the value of the S&P 500 Index remains
constant. This helps maintain the value of
the Index as an accurate barometer of stock
market performance and ensures that the
movement of the Index does not reflect the
corporate actions of individual companies in
the Index. All Index Divisor adjustments are
made after the close of trading and after the
calculation of the closing value of the S&P
500 Index. Some corporate actions, such as
stock splits and stock dividends, require
simple changes in the common shares
outstanding and the stock prices of the
companies in the Index and do not require
Index Divisor adjustments.
The table below summarizes the types of S&P
500 Index maintenance adjustments and
indicates whether or not an Index Divisor
adjustment is required.
Divisor
Type of Adjustment
Corporate Action Adjustment Factor Required
---------------- ----------------- --------
Stock split Shares Outstanding No
(i.e. 2x1) multiplied by 2;
Stock Price divided by 2
Share issuance Shares Outstanding plus Yes
(i.e. Change > 5%) newly issued Shares
Share repurchase Shares Outstanding minus Yes
(i.e. Change > 5%) Repurchased Shares
Special cash Share Price minus Special Yes
dividends Dividend
Company change Add new company Market Yes
Value minus old company
Market Value
Rights offering Price of parent company Yes
minus
(Price of Rights)
(---------------)
( Right Ratio )
Spinoffs Price of parent company Yes
minus
(Price of Spinoff Co.)
(--------------------)
(Share Exchange Ratio)
Stock splits and stock dividends do not
affect the Index Divisor of the S&P 500
Index, because following a split or dividend
both the stock price and number of shares
outstanding are adjusted by S&P so that there
is no change in the Market Value of the
Component Stock. All stock split and
dividend adjustments are made after the close
of trading on the day before the ex-date.
Each of the corporate events exemplified in
the table requiring an adjustment to the
Index Divisor has the effect of altering the
Market Value of the Component Stock and
consequently of altering the aggregate Market
Value of the Component Stocks (the "Post-Event
Aggregate Market Value"). In order that the
level of the Index (the "Pre-Event Index
Value") not be affected by the altered Market
Value (whether increase or decrease) of the
affected Component Stock, a new Index Divisor
("New Divisor") is derived as follows:
Post-Event Aggregate Market Value
--------------------------------- = Pre-Event Index Value
New Divisor
Post-Event Aggregate Market Value
New Divisor = ---------------------------------
Pre-Event Index Value
A large part of the S&P 500 Index maintenance
process involves tracking the changes in the
number of shares outstanding of each of the
S&P 500 Index companies. Four times a year,
on a Friday close to the end of each calendar
quarter, the share totals of companies in the
Index are updated as required by any changes
in the number of shares outstanding. After
the totals are updated, the Index Divisor is
adjusted to compensate for the net change in
the total Market Value of the Index. In
addition, any changes over 5% in the current
common shares outstanding for the S&P 500
Index companies are carefully reviewed on a
weekly basis, and when appropriate, an
immediate adjustment is made to the Index
Divisor.
The following table sets forth the high and
low daily closing values, as well as
end-of-quarter values, of the S&P 500 Index
for each quarter in the period from January
1, 1993 through April 29, 1998. All
historical data presented in the following
table are based on actual data from the S&P.
The historical values of the S&P 500 Index
should not be taken as an indication of
future performance, and no assurance can be
given as to the level of the S&P 500 Index
as of any Determination Date.
Daily Closing Values in U.S. Dollars
------------------------------------
End of
High Low Quarter
---- --- -------
1993:
First Quarter..... 456.34 429.05 451.67
Second Quarter.... 453.85 433.54 450.53
Third Quarter..... 463.56 441.43 458.93
Fourth Quarter.... 470.94 457.48 466.45
1994:
First Quarter..... 482.00 445.55 445.76
Second Quarter.... 462.37 438.92 444.27
Third Quarter..... 476.07 446.13 462.71
Fourth Quarter.... 473.77 445.45 459.27
1995:
First Quarter..... 503.90 459.11 500.71
Second Quarter.... 551.07 501.85 544.75
Third Quarter..... 586.77 547.09 584.41
Fourth Quarter.... 621.69 576.72 615.93
1996:
First Quarter..... 661.45 598.48 645.50
Second Quarter.... 678.51 631.18 670.63
Third Quarter..... 687.31 626.65 687.31
Fourth Quarter.... 757.03 689.08 740.74
1997:
First Quarter..... 816.29 737.01 757.12
Second Quarter.... 898.70 737.65 885.14
Third Quarter..... 960.32 891.03 947.28
Fourth Quarter.... 983.79 876.98 970.43
1998:
1st Quarter....... 1105.65 927.69 1101.75
2nd Quarter (through
April 29, 1998)... 1130.54 1085.11 1094.63
(Source: DataStream)
Swiss Market Index
The SMI is a capitalization-weighted index
which measures the composite price performance
of stocks of 20 highly capitalized Swiss
companies listed on the Zurich, Geneva and
Basel stock exchanges (the "Swiss Exchange").
The SMI is calculated by the Swiss Exchange and
is disseminated on [Bloomberg Financial Markets
and Reuters]. Publication of weighted SMI
values began in October 24, 1988, based on an
initial SMI value of 1,500 on June 30, 1988.
An historic series of indexes with daily
closing prices and high and low monthly prices
has existed since December 30, 1987.
The SMI is calculated by (i) multiplying the
per share price of each stock included in the
SMI (the "SMI Underlying Stocks") by the
number of shares listed on the SMI as of the
date of the most recent, semi-annual
weighting adjustment, (ii) multiplying, for
each SMI Underlying Stock, the product
obtained in (i) above by a stock-specific
Capital Factor that keeps the index
standardized to its base level and is used
to adjust for corporate actions and (iii)
calculating the sum of the products
obtained for each Underlying Stock in (ii)
above. Because the SMI is weighted by
capitalization, movements in share prices
of companies with relatively larger market
capitalization will have a greater effect
on the level of the entire SMI than will
movements in share prices of companies
with relatively smaller market
capitalization.
The SMI Underlying Stocks are selected by the
Index Commission and revised semi-annually
from the stocks listed on the Swiss Exchange.
In principle, the index committee is
reluctant to change the structure of the
index and only proposes adjustments if
long-term shifts in the market are clearly
in evidence and if the changes will make
the SMI more meaningful. The liquidity of
the security in question is the dominant
criterion for the decision to implement a
change. Under certain circumstances, the
sector mix of the SMI and the market
capitalization of the security concerned
may also play a role. As a rule, changes
are only implemented on July 1st of any
year, after advance notice of at least six
months has been given. A current list of
the issuers of the SMI Underlying Stocks,
as of April 29, 1998, is set forth below.
Current Weight
Company in SMI
------- --------------
Alusuisse Lonza Holding AG 1.540%
Asea Brown Boveri AG (B) 2.648%
Baloise Holding 0.896%
Ciba Specialty Chemicals Holding Inc. 1.658%
Clariant AG 1.495%
Credit Suisse Group 11.127%
Ems-Chemie Holding AG 0.436%
Holderbank Financiere Glarus SA 1.091%
Nestle SA 15.276%
Novartis SA (Bearer) 2.127%
Novartis SA (Registered) 20.156%
Roche Holding AG 14.106%
Schweizerische Rueckversicherung 6.292%
Schweizerischer Bankverein 5.496%
SGS Surveillance 0.348%
SMH AG (Registered) 0.453%
SMH AG (Bearer) 0.486%
Sulzer AG 0.524%
Union Bank of Switzerland (Bearer) 6.910%
Union Bank of Switzerland (Registered) 1.437%
Zurich Insurance Company (Registered) 5.506%
(Source: Bloomberg)
The SMI is reviewed annually by the Swiss
Exchange in order to maintain its
representative status as reflective of the
Swiss economy. The Underlying Stocks may be
replaced, if necessary, in accordance with
deletion/addition rules which provide
generally for the deletion of a stock from
the SMI if such stock ceases to meet the
criteria for inclusion. Stocks deleted will
be replaced by stocks listed on the Swiss
Exchange.
The following table sets forth the high and
low daily closing values of the SMI for each
quarter, in the period from January 1, 1993
through April 29, 1998, as published and/or
calculated by the Swiss Exchange. All
historical data presented in the following
table are based on actual data from the SMI.
The historical experience of the SMI should
not be taken as an indication of its future
performance, and no assurance can be given as
to the level of the SMI as of any
Determination Date.
Daily Closing Values in Swiss
Francs
--------------------------------
End of
High Low Quarter
---- --- -------
1993:
1st Quarter....... 2190.30 2049.50 2190.30
2nd Quarter....... 2376.70 2122.90 2376.70
3rd Quarter....... 2502.40 2315.10 2473.10
4th Quarter....... 2972.60 2481.60 2957.60
1994:
1st Quarter....... 3178.40 2768.50 2794.80
2nd Quarter....... 2887.80 2544.20 2608.80
3rd Quarter....... 2674.50 2474.50 2534.40
4th Quarter....... 2673.50 2458.60 2628.80
1995:
1st Quarter....... 2642.40 2450.30 2508.90
2nd Quarter....... 2845.60 2508.90 2825.30
3rd Quarter....... 3045.50 2781.30 3014.80
4th Quarter....... 3317.10 3014.80 3297.70
1996:
1st Quarter....... 3677.00 3191.40 3646.50
2nd Quarter....... 3732.90 3521.60 3732.90
3rd Quarter....... 3810.00 3482.60 3736.40
4th Quarter....... 3948.30 3723.10 3942.20
1997:
1st Quarter....... 4684.40 3922.90 4659.20
2nd Quarter....... 5700.30 4463.90 5620.60
3rd Quarter....... 6012.60 5216.70 5673.60
4th Quarter....... 6267.60 5279.70 6265.50
1998:
1st Quarter....... 7585.50 6062.10 7585.50
2nd Quarter (through
April 29, 1998). 7827.70 7053.50 7241.80
(Source: Data Stream)
Dow Jones Euro STOXX 50
The DJES50 is a capitalization-weighted index
which measures the composite price
performance of stocks of the 50 largest
companies (determined on the basis of market
capitalization) included in the Dow Jones
Euro STOXX, a broad index consisting of
companies from those countries in Western
Europe which will likely be part of the EMU.
Dow Jones Euro STOXX is a subset of Dow Jones
STOXX, which seeks to include in its index
the largest and most liquid securities in
Western Europe. The DJES50, the Dow Jones
Euro STOXX and the Dow Jones STOXX are
indices created by STOXX Ltd. ("STOXX"), a
company jointly founded by Schwizer Borse,
SBF- Bourse de Paris, Deutsche Borse and Dow
Jones & Company, Inc. ("Dow Jones").
Publication of the DJES50 began on December
31, 1991, based on an initial DJES50 value of
1,000.
The DJES50 is calculated by (i) multiplying
the per share price of each stock included in
the DJES50 by the number of outstanding
shares (and, if the stock is not quoted in
euro, then multiplied by the country currency
and an exchange factor which reflects the
exchange rate between the country currency
and the euro (or, prior to January 1, 1999,
the ECU)) (ii) calculating the sum of all
these products (such sum being hereinafter
the "DJES50 Aggregate Market Capitalization")
and (iii) dividing the DJES50 Aggregate Market
Capitalization by a divisor which represents
the DJES50 Aggregate Market Capitalization on
the base date of the DJES50 and which can be
adjusted to allow changes in the issued share
capital of individual underlying stocks
(including the deletion and addition of
stocks, the substitution of stocks, stock
dividends and stock splits) to be made
without distorting the DJES50. Because of
such capitalization weighting, movements in
share prices of companies with relatively
greater market capitalization will have a
greater effect on the level of the entire
DJES50 than will movements in share prices of
companies with relatively smaller market
capitalization. In addition, other
statistics based on the DJES50 may be found
in a variety of publicly available sources.
A current list of the issuers of the DJES50,
as of April 29, 1998, is set forth below.
Current
Issuer of Component Stock Weight in
Stock Exchange DJES50
- ------------------------------ ------------------------------ ---------
ABN-AMRO Hldg NV Amsterdam Stock Exchange 2.327%
Aegon NV Amsterdam Stock Exchange 2.598%
Ahold NV Amsterdam Stock Exchange 1.062%
Air Liquide SA Paris Bourse 0.891%
Akzo Nobel Amsterdam Stock Exchange 0.972%
Alcatel Alsthom SA Paris Bourse 2.069%
Allianz AG Frankfurt Stock Exchange 5.008%
Allied Irish Bank PLC London Stock Exchange 0.770%
Assicurazioni Generali S.p.A. Milan Stock Exchange 2.090%
AXA-UAP SA Amsterdam Stock Exchange 2.631%
Banco Bilbao Vizcaya SA SIBE 2.238%
Bayer AG Frankfurt Stock Exchange 2.041%
Carrefour Paris Bourse 1.437%
Credito Italiano S.p.A. Milan Stock Exchange 1.022%
Daimler-Benz AG Frankfurt Stock Exchange 3.363%
Deutsche Telecom Frankfurt Stock Exchange 4.595%
Lufthansa Frankfurt Stock Exchange 0.587%
Deutsche Bank Frankfurt Stock Exchange 2.780%
Compaigne Generale de Eaux Paris Bourse 1.657%
Electrabel SA Brussels Stock Exchange 0.942%
ELF Aquitaine Paris Bourse 2.334%
Elsevier NV Amsterdam Stock Exchange 0.648%
Endesa SA SIBE 1.627%
ENI S.p.A. Milan Stock Exchange 3.577%
Fiat S.p.A. Milan Stock Exchange 0.983%
Fortis AG Brussels Stock Exchange 0.781%
France Telecom Paris Bourse 3.507%
ING Groep NV Amsterdam Stock Exchange 3.648%
Koninklijke PTT NV Amsterdam Stock Exchange 1.729%
LVMH Moet-Hennesey
Louis Vuitton Paris Bourse 1.206%
L'Oreal Paris Bourse 2.117%
Mannesmann AG Frankfurt Stock Exchange 1.961%
Metro AG Frankfurt Stock Exchange 0.727%
Nokia Ab Oy A Helsinki Stock Exchange 1.957%
Paribas Paris Bourse 1.148%
Petrofina SA Brussels Stock Exchange 0.598%
Philips Electronics NV Amsterdam Stock Exchange 2.116%
Portugal Telecom SA Lisbon 0.673%
Repsol SA SIBE 1.059%
Rhone Poulenc A Paris Bourse 1.195%
Royal Dutch Petroleum Amsterdam Stock Exchange 7.994%
RWE AG Frankfurt Stock Exchange 1.103%
Schneider SA Paris Bourse 0.762%
Siemens AG Frankfurt Stock Exchange 2.166%
Societe Generale Paris Bourse 1.331%
Cie de St-Gobain Paris Bourse 1.000%
Telecom Italia Milan Stock Exchange 2.654%
Telefonica de Espana SIBE 2.834%
Unilever NV Amsterdam Stock Exchange 3.207%
Veba AG Frankfurt Stock Exchange 2.255%
(Source: Bloomberg)
The composition of the DJES50 is reviewed
annually, and changes are implemented on the
third Friday in September, using market data
from the end of July as the basis for the
review process. Changes in the composition
of the DJES50 are made to ensure that the
index includes those companies which, within
the eligible countries and within each
industry sector, have the greatest market
capitalization. Changes in the composition
of the DJES50 are made entirely by STOXX Ltd.
without consultation with the corporations
represented in the DJES50 or the Company.
The DJES50 is also reviewed on an ongoing
basis, and change in the composition of the
index may be necessary if there have been
extraordinary events for one of the index
companies (e.g. delisting, bankruptcy,
merger, takeover etc.) In these cases, the
event is taken into account as soon as it is
effective. The component stocks of the
DJES50 may be changed at any time for any
reason. Neither STOXX Ltd. nor any of its
founders is affiliated with the Company and
has participated in any way in the creation
of the Notes.
The table below summarizes the adjustments to
any component stock made for corporate
actions and the effect of such adjustment on
the base value, where "p" is the price of
such component stock and "q" is the number of
shares of such stock.
</TABLE>
<TABLE>
<CAPTION>
Impact
on
base
Events Adjustment Factor value
<S> <C> <C>
Special cash adj. for p = p before dividend - dividend Decrease
dividend (from ----------------------------
non-operating p before dividend
income)
Stock Dividend & 1 None
Split (the same ----------------------------
security) adj. for p = 1 + no. of new shares (%)
adj. for q = 1+no. of new shares (%)
Reverse Split 1 None
----------------------------
adj. for p = 1 - no. of new shares (%)
adj. for q = 1 - no. of new shares (%)
Stock Dividend of a adj. for p = p before distribution - cash equivalent Decrease
different company ---------------------------------------
security p before distribution
cash equivalent = other sec.p no. of distributed stocks (%)
Rights Offering adj. for p = adj. p Increase
-------------------
last cum rights p
adj. p = last cum rights p + subscription p rights (%)
----------------------------------------------
1 + rights (%)
adj. for q = 1 + rights (%)
If the new shares have a dividend disadvantage, then the
subscription price will be adjusted.
Combination: adj. for p = adj. p Increase
------------------
stock distribution last cum rights p
(stock dividend or
split) and rights adj. p = last cum rights p + subscription p (1 + stock
offering -- one subscription (%)) rights (%)
action applicable to ----------------------------------------------
other (if rights (1 + stock distribution (%)) (1 + rights (%))
applicable after
stock distribution) adj. for q = (1 + stock distribution (%)) (1 + rights (%))
Combination: stock adj. p Increase
------------------
distribution (stock adj. for p = last cum rights p
dividend or split)
and rights offering adj. p = last cum rights p - subscription p rights (%)
- -- one action ----------------------------------------------------
applicable to other (1 + rights (%)) (1 + stock distribution (%))
(if stock
distribution adj. for q = (1 + stock distribution (%))(1 + rights (%))
applicable after
rights)
Combination: stock adj. p Increase
distribution (stock ------------------
dividend or split) adj. for p = last cum rights p
and rights issues --
neither action is adj. p = last cum rights p + subscription p rights (%)
applicable to the ----------------------------------------------------
other (1 + rights (%) + stock distribution (%))
adj. for q = (1 + stock distribution (%) + rights (%))
Spin-off adj. for p = p before spinoff - cash equivalent Decrease
----------------------------------------------------
p before spinoff
cash equivalent = spinoff stock p no. of spinoff stocks (in %)
Repurchase shares- adj. for p = p after tender Decrease
self tender ------------------
p before tender
p after
tender = (p before tender) (no. of q before tender )
(tender p no. of tendered q)
(no. of q before tender) no. of tendered q
no. of q after tender
---------------------
ad. q = no. of q before tender
</TABLE>
The following table sets forth the high and low
daily closing values, as well as end-of-quarter
closing values, of the DJES50 (price return)
for each quarter in the period from January 1,
1993 through April 29, 1998. The historical
values of the DJES50 should not be taken as an
indication of future performance, and no
assurance can be given as to the level of the
DJES50 as of any Determination Date.
Daily Closing Values In ECU
------------------------------------
High Low Period End
---- --- ----------
1993
1st Quarter....... 1148.63 1014.66 1140.82
2nd Quarter....... 1161.96 1102.94 1157.58
3rd Quarter....... 1321.88 1144.93 1285.92
4th Quarter....... 1433.34 1287.49 1433.34
1994
1st Quarter....... 1459.27 1347.84 1365.74
2nd Quarter....... 1441.33 1272.00 1284.60
3rd Quarter....... 1401.79 1286.05 1320.53
4th Quarter....... 1344.61 1268.62 1320.59
1995
1st Quarter....... 1348.10 1274.57 1300.13
2nd Quarter....... 1400.60 1298.18 1362.52
3rd Quarter....... 1469.19 1362.52 1419.60
4th Quarter....... 1509.91 1367.15 1506.82
1996
1st Quarter....... 1612.24 1507.65 1612.24
2nd Quarter....... 1691.04 1619.33 1665.90
3rd Quarter....... 1694.51 1563.32 1694.51
4th Quarter....... 1859.10 1693.99 1850.32
1997
1st Quarter....... 2169.71 1824.52 2137.28
2nd Quarter....... 2438.38 2026.91 2398.41
3rd Quarter....... 2699.78 2407.58 2581.36
4th Quarter....... 2641.68 2241.21 2531.99
1998
1st Quarter....... 3179.72 2466.81 3153.32
2nd Quarter (through
April 29, 1998). 3345.86 3061.04 3118.37
(Source: DataStream)
Discontinuance of Underlying
Indices; Adjustments to
Underlying Indices:.......... If an Underlying Index Publisher
discontinues publication of an Underlying
Index and such Underlying Index Publisher or
another entity publishes a successor or
substitute index that the Calculation Agent
determines, in its sole discretion, to be
comparable to the discontinued Underlying
Index (such index being referred to herein
as a "Successor Index"), then the relevant
Index Closing Value for such Underlying Index
will be determined by reference to the value
of such Successor Index at the close of
trading on the relevant exchange or market
for the Successor Index on the Determination
Dates.
Upon any selection by the Calculation Agent
of a Successor Index, the Calculation Agent
will cause written notice thereof to be
furnished to the Trustee, to the Company and
to the holders of the Notes within three
Trading Days of such selection.
If an Underlying Index Publisher discontinues
publication of an Underlying Index prior to,
and such discontinuance is continuing on, any
of the Determination Dates and the Calculation
Agent determines that no Successor Index is
available at such time, then on each
Determination Date until a determination by the
Calculation Agent that a Successor Index is
available, the Calculation Agent will determine
the Index Closing Value of such Underlying
Index that would be used in computing the
Supplemental Redemption Amount on each
Determination Date. The Index Closing Value of
such Underlying Index will be computed by the
Calculation Agent in accordance with the
formula for and method of calculating such
Underlying Index last in effect prior to such
discontinuance, using the closing price (or, if
trading in the relevant securities has been
materially suspended or materially limited, its
good faith estimate of the closing price that
would have prevailed but for such suspension or
limitation) on such Determination Date of each
security most recently comprising such
Underlying Index. The Calculation Agent will
cause notice of each such Index Closing Value
to be provided to the holders of the Notes on
each succeeding Determination Date until and
including June 2, 2005 (unless a Successor
Index is prior thereto determined to be
available). Notwithstanding these alternative
arrangements, discontinuance of the publication
of an Underlying Index may adversely affect the
value of the Notes.
If at any time the method of calculating an
Underlying Index or a Successor Index, or the
value thereof, is changed in a material
respect, or if an Underlying Index or a
Successor Index is in any other way modified
so that such index does not, in the opinion
of the Calculation Agent, fairly represent
the value of such Underlying Index or such
Successor Index had such changes or
modifications not been made, then, from and
after such time, the Calculation Agent will,
at the close of business in London on each
Determination Date on which an Index Closing
Value is to be calculated, make such
calculations and adjustments as, in the good
faith judgment of the Calculation Agent, may
be necessary in order to arrive at a value of
a stock index comparable to such Underlying
Index or such Successor Index, as the case
may be, as if such changes or modifications
had not been made, and calculate the
Supplemental Redemption Amount with reference
to such Underlying Index or such Successor
Index, as adjusted. Accordingly, if the
method of calculating an Underlying Index or
a Successor Index is modified so that the
value of such index is a fraction of what it
would have been if it had not been modified
(e.g., due to a split in the index), then the
Calculation Agent will adjust such index in
order to arrive at a value of such Underlying
Index such Successor Index as if it had not
been modified (e.g., as if such split had not
occurred).
Use of Proceeds and
Hedging:................... The net proceeds to be received by the
Company from the sale of the Notes will be
used for general corporate purposes and, in
part, by the Company or one or more of its
affiliates in connection with hedging the
Company's obligations under the Notes,
including hedging market risks associated
with the Supplemental Redemption Amount.
Such hedging may involve the purchase or sale
of exchange traded or over the counter
options on the S&P 500 Index, the SMI, or the
DJES50 or individual stocks included in the
S&P 500 Index, the SMI, or the DJES50,
futures contracts on the S&P 500 Index, the
SMI, or the DJES50 and options on such
futures contracts or any other instruments
that it may wish to use in connection with
such hedging. The Company, through its
subsidiaries, is likely to modify its hedge
position throughout the life of the Notes by
purchasing and selling such instruments.
Although the Company has no reason to believe
that its hedging activity will have a
material impact on the price of such options,
stocks, futures contracts, and options on
futures contracts, there can be no assurance
that the Company will not affect such prices
as a result of its hedging activities. See
also "Use of Proceeds" in the accompanying
Prospectus.
License Agreements............ License Agreement for the S&P 500 Index
S&P and Morgan Stanley & Co. Incorporated ("MS
& Co.") have entered into a non-exclusive
license agreement providing for the license to
MS & Co., and any of its affiliated or
subsidiary companies, in exchange for a fee, of
the right to use the S&P 500 Index, which is
owned and published by S&P, in connection with
certain securities, including the Notes.
The license agreement between S&P and MS &
Co. provides that the following language must
be set forth in this Pricing Supplement:
The Notes are not sponsored, endorsed, sold
or promoted by S&P. S&P makes no
representation or warranty, express or
implied, to the holders of the Notes or any
member of the public regarding the
advisability of investing in securities
generally or in the Notes particularly or the
ability of the S&P 500 Index to track general
stock market performance. S&P's only
relationship to the Company is the licensing
of certain trademarks and trade names of S&P
and of the S&P 500 Index, which is
determined, composed and calculated by S&P
without regard to the Company or the Notes.
S&P has no obligation to take the needs of
the Company or the holders of the Notes into
consideration in determining, composing or
calculating the S&P 500 Index. S&P is not
responsible for and has not participated in
the determination of the timing of, prices
at, or quantities of the Notes to be issued
or in the determination or calculation of the
equation by which the Notes are to be
converted into cash. S&P has no obligation
or liability in connection with the
administration, marketing or trading of the
Notes.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR
THE COMPLETENESS OF THE S&P 500 INDEX OR ANY
DATA INCLUDED THEREIN. S&P MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO
BE OBTAINED BY THE COMPANY, HOLDERS OF THE
NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF THE S&P INDEX OR ANY DATA INCLUDED
THEREIN IN CONNECTION WITH THE RIGHTS
LICENSED UNDER THE LICENSE AGREEMENT
DESCRIBED HEREIN OR FOR ANY OTHER USE. S&P
MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND
HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR USE WITH RESPECT TO THE S&P 500
INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT
SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL,
PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES
(INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.
"Standard & Poor's[Registered]",
"S&P[Registered]", "S&P 500[Registered]",
"Standard & Poor's 500," and "500" are
trademarks of McGraw-Hill, Inc. and have been
licensed for use by MS & Co.
License Agreement for the SMI
The use of and reference to the SMI in
connection with the Notes has been consented to
by the Swiss Exchange, the publisher of the
SMI, providing that the following language must
be set forth in this Pricing Supplement:
The Notes are not in any way sponsored,
endorsed, sold or promoted by the Swiss
Exchange and the Swiss Exchange makes no
warranty or representation whatsoever,
express or implied, either as to the results
to be obtained from the use of the SMI and/or
the figure at which the said index stands at
any particular time on any particular day or
otherwise. The SMI is compiled and calculated
solely by the Swiss Exchange. However, the
Swiss Exchange shall not be liable (whether
in negligence or otherwise) to any person for
any error in the SMI and the Swiss Exchange
shall not be under any obligation to advise
any person of any error therein.
SMI[Registered] is a registered trademark of
the Swiss Exchange.
License Agreement for the DJES50
STOXX Ltd. and MS & Co. have entered into a
non-exclusive license agreement providing for
the license to MS & Co., in exchange for a
fee, of the right to use the DJES50, which is
owned and published by STOXX, in connection
with certain securities, including the Notes.
The license agreement between STOXX and MS &
Co. provides that the following language must
be set forth in the Pricing Supplement:
The Notes are not sponsored, endorsed, sold
or promoted by STOXX or Dow Jones. Neither
STOXX nor Dow Jones makes any representation
or warranty, express or implied, to the
owners of the Notes or any member of the
public regarding the advisability of
investing in securities generally or in the
Notes particularly. The only relationship of
STOXX to the Company is as the licensor of the
Dow Jones Euro STOXX 50(TM) and of certain
trademarks, trade names and service marks of
STOXX, and as the sublicensor of the Dow
Jones STOXX(SM), the Dow Jones Euro STOXX(SM)
and of certain trademarks, trade names and
service marks of Dow Jones. The
aforementioned Indexes are determined,
composed and calculated by STOXX or Dow
Jones, as the case may be, without regard to
the Company or the Notes. Neither STOXX nor
Dow Jones is responsible for or has
participated in the determination of the
timing of, prices at, or quantities of the
Notes to be issued or in the determination or
calculation of the equation by which the
Notes are to be converted into cash. Neither
STOXX nor Dow Jones has any obligation or
liability in connection with the
administration, marketing or trading of the
Notes.
NEITHER STOXX NOR DOW JONES GUARANTEES THE
ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN AND
NEITHER SHALL HAVE ANY LIABILITY FOR ANY
ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
NEITHER STOXX NOR DOW JONES MAKES ANY
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS
TO BE OBTAINED BY THE COMPANY, OWNERS OF THE
NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF THE INDEXES OR ANY DATA INCLUDED
THEREIN. DOW JONES MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS
ALL WARRANTIES, OR MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE WITH RESPECT
TO THE INDEXES OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL EITHER STOXX OR DOW JONES HAVE
ANY LIABILITY FOR ANY LOST PROFITS OR
INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL
DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY
THEREOF. THERE ARE NO THIRD PARTY
BENEFICIARIES OF ANY AGREEMENTS OR
ARRANGEMENTS BETWEEN STOXX AND THE COMPANY.
The Dow Jones Euro STOXX 50 is owned by STOXX
Ltd. and is a service mark of Dow Jones &
Company, Inc., and has been licensed for
certain purposes by the Company. [Copyright]
1998 by STOXX Ltd. All rights reserved.
The Dow Jones STOXX and the Dow Jones Euro
STOXX are service marks of Dow Jones &
Company, Inc., and have been licensed for
certain purposes by the Company. [Copyright]
1998 by Dow Jones & Company, Inc. All rights
reserved.
United States Federal Taxation The investor should refer to the discussion
under "United States Federal Taxation" in the
accompanying Prospectus Supplement.
