PROSPECTUS Dated March 26, 1998 Pricing Supplement No. 39 to
PROSPECTUS SUPPLEMENT Registration Statement No. 333-46935
Dated March 26, 1998 Dated August 7, 1998
Rule 424(b)(3)
$15,000,000
Morgan Stanley Dean Witter & Co.
MEDIUM-TERM NOTES, SERIES C
Senior Fixed Rate Notes
EXCHANGEABLE NOTES DUE AUGUST 15, 2006
Exchangeable For Shares of Common Stock of
Merrill Lynch & Co.
The Exchangeable Notes due August 15, 2006 (the "Notes"), are
Medium-Term Notes, Series C (Senior Fixed Rate Notes) of Morgan Stanley Dean
Witter & Co. (the "Company"), as further described below and in the Prospectus
Supplement under "Description of Notes--Fixed Rate Notes" and "--
Exchangeable Notes." The issue price of each Note will be $980.204
(98.0204)% of the principal amount at maturity) (the "Issue Price"), and
there will be no periodic payments of interest. The Issue Price represents
a yield to maturity of 0.25% per annum computed on a semi-annual bond-
equivalent basis based on the Issue Price calculated from the date of
issuance (the "Original Issue Date"), subject to a call of the Notes by the
Company (as described below). The Notes are issued in minimum
denominations of $1,000 and will mature on August 15, 2006.
On any Exchange Date (as defined herein), the holder of a Note
will have the right (the "Exchange Right"), subject to a prior call of the
Notes for cash by the Company (as described in the immediately succeeding
paragraph) and upon completion by the holder and delivery to the Company and
the Calculation Agent of an Official Notice of Exchange prior to 11:00 a.m.
New York City time on such date, to exchange each $1,000 principal amount of
such Note for 9.13825 shares (the "Exchange Ratio") of the common stock par
value $1.33(1)/(3) ("Merrill Lynch Stock"), of Merrill Lynch & Co. ("Merrill
Lynch"), subject to the Company's right to pay cash in an amount equal to the
Exchange Ratio times the Market Price (as defined herein) of Merrill Lynch
Stock on the Exchange Date in lieu of such shares. The Exchange Ratio will be
adjusted for certain corporate events, but will not be adjusted to take into
account the accrual of the original issue discount ("Stated OID") of the
Notes. See "Adjustments to Exchange Ratio" in this Pricing Supplement. Upon
any exchange, the holder will not receive any cash payment representing any
accrued Stated OID. Such accrued Stated OID will be deemed paid by the
Merrill Lynch Stock or cash received by the holder upon exercise of the
Exchange Right. An Exchange Date will be any Trading Day (as defined herein)
that falls during the period beginning November 9, 1998 and ending on the day
prior to the earliest of the Maturity Date, the Call Date (as defined below)
and, in the event of a call for cash as described under "Company Exchange
Right" herein, the Company Notice Date (as defined herein).
On or after August 7, 2001, the Company may call the Notes, in
whole but not in part, for mandatory exchange into Merrill Lynch Stock at the
Exchange Ratio; provided that, if Parity (as defined herein) as determined on
the Trading Day immediately prior to the Company Notice Date is less than the
applicable Call Price (as defined herein) for such Company Notice Date, the
Company will pay such applicable Call Price in cash on the date (the "Call
Date") not less than 30 nor more than 60 days after the Company Notice Date,
as specified by the Company. If the Notes are so called for mandatory
exchange, the Merrill Lynch Stock or cash to be delivered to holders of Notes
will be delivered on the Call Date.
Merrill Lynch is neither affiliated with the Company nor
involved in this offering of the Notes. The Market Price of the Merrill Lynch
Stock on the date of this Pricing Supplement was $90.1875 (the "Initial Market
Price"). See "Historical Information" in this Pricing Supplement for
information on the range of Market Prices for Merrill Lynch Stock.
The Company will cause Parity and any adjustments to the
Exchange Ratio to be determined by the Calculation Agent for The Chase
Manhattan Bank (formerly known as Chemical Bank) as Trustee under the Senior
Debt Indenture.
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 and PS-7 herein.
Application will be made to list the Notes on the New York
Stock Exchange ("NYSE"), subject to meeting the NYSE listing requirements. It
is not possible to predict whether the Notes will meet the NYSE listing
requirements or trade in the secondary market or if such market will be liquid
or illiquid.
-------------------
PRICE 98.0204%
-------------------
Price to Public Agent's Commissions(2) Proceeds to Company
--------------- ---------------------- -------------------
Per Note. 98.0204% 0.25% 97.7704%
Total.... $14,703,060 $37,500 $14,665,560
- -------------
(1) The Company has agreed to indemnify the Agent against certain liabilities,
including liabilities under the Securities Act of 1933.
MORGAN STANLEY DEAN WITTER
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CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF MERRILL LYNCH STOCK.
SPECIFICALLY, THE AGENT MAY OVERALLOT IN CONNECTION WITH THE OFFERING, AND MAY
BID FOR, AND PURCHASE MERRILL LYNCH STOCK IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "USE OF PROCEEDS AND HEDGING" IN THIS
PRICING SUPPLEMENT AND "PLAN OF DISTRIBUTION" IN THE ACCOMPANYING PROSPECTUS
SUPPLEMENT.
Capitalized terms not defined herein have the meanings given to such terms in
the accompanying Prospectus Supplement.
Principal Amount.............. $15,000,000
Maturity Date................. August 15, 2006
Specified Currency............ U.S. Dollars
Issue Price................... $980.204 (98.0204% of the principal amount at
maturity)
Original Issue Date
(Settlement Date)............. August 14, 1998
CUSIP......................... 617446DA4
Book Entry Note or
Certificated Note............. Book Entry, DTC
Senior Note or
Subordinated Note............. Senior
Minimum Denominations......... $1,000
Agent......................... Morgan Stanley & Co. Incorporated
Trustee....................... The Chase Manhattan Bank
Exchange Right................ On any Exchange Date, subject to a prior call
of the Notes for cash in an amount equal to
the Call Price by the Company as described
under "Company Exchange Right" below, the
holders of Notes will be entitled upon (i)
completion by the holder and delivery to the
Company 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 9.13825 shares (the
"Exchange Ratio") of Merrill Lynch Stock,
subject to adjustment as described under
"Adjustments to the Exchange Ratio" below.
Upon any such exchange, the Company may, at
its sole option, deliver such shares of
Merrill Lynch Stock or pay an amount in cash
equal to the Exchange Ratio times the Market
Price of Merrill Lynch 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, holders of such exchanged Notes shall
not be entitled to receive accrued but unpaid
interest thereon.
The Company shall, or shall cause the
Calculation Agent to, deliver such shares
of Merrill Lynch Stock or cash to the
Trustee for delivery to the holders.
No Fractional Shares ......... If upon any exchange of the Notes the Company
chooses to deliver shares of Merrill Lynch
Stock, the Company will pay cash in lieu of
delivering fractional shares of Merrill Lynch
Stock in an amount equal to the corresponding
fractional Market Price of Merrill Lynch
Stock as determined by the Calculation Agent
on such Exchange Date.
Exchange Ratio................ 9.13825, subject to adjustment for certain
corporate events. See "Adjustments to
Exchange Ratio" below.
Exchange Date................. Any Trading Day that falls during the period
beginning November 9, 1998 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 cash as described under
"Company Exchange Right" below, the Company
Notice Date.
Company Exchange Right ....... On or after August 7, 2001, the Company may
call the Notes, in whole but not in part, for
mandatory exchange into Merrill Lynch 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, the Company will pay
such applicable Call Price in cash on the
Call Date. If the Notes are so called for
mandatory exchange by the Company, then,
unless a holder subsequently exercises the
Exchange Right (the exercise of which will
not be available to the holder following a
call for cash in an amount equal to the Call
Price), the Merrill Lynch Stock or cash to
be delivered to holders of Notes will be
delivered on the Call Date fixed by the
Company and set forth in its notice of
mandatory exchange, upon delivery of such
Notes to the Trustee. Upon an exchange by
the Company (whether payment is to be made in
Merrill Lynch Stock or cash), the holder will
not receive any additional cash payment
representing any accrued Stated OID. Such
accrued Stated OID will be deemed paid by the
delivery of Merrill Lynch Stock or cash. The
Company shall, or shall cause the Calculation
Agent to, deliver such shares of Merrill
Lynch Stock or cash to the Trustee for
delivery to the holders.
On or after the Company Notice Date (other
than with respect to a call of the Notes for
cash by the Company) holders of the Notes 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 August 7, 2001 on
which the Company issues its notice of
mandatory exchange.
Parity........................ With respect to any Trading Day, an amount
equal to the Exchange Ratio times the Market
Price (as defined below) of Merrill Lynch
Stock on such Trading Day.
Call Price.................... The table below shows indicative Call Prices
for each $1,000 principal amount of Notes on
August 7, 2001 and at each August 7
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 0.25% 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.
Call Date Call Price
--------- ----------
August 7, 2001........................ $ 987.53
August 7, 2002........................ $ 990.00
August 7, 2003........................ $ 992.48
August 7, 2004........................ $ 994.96
August 7, 2005........................ $ 997.45
August 7, 2006........................ $ 999.94
Maturity.............................. $1,000.00
Market Price.................. If Merrill Lynch Stock (or any other security
for which a Market Price must be determined)
is listed on a national securities exchange,
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 Merrill Lynch
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 United States
securities exchange registered under the
Securities Exchange Act of 1934, as amended
(the "Exchange Act"), on which Merrill Lynch
Stock (or any other such 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 Merrill Lynch Stock (or
any such other security) obtained from as
many dealers in such security, but not
exceeding three, as will make such bid prices
available to the Calculation Agent. The term
"NASDAQ NMS security" 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 on which trading is generally conducted
on the New York Stock Exchange ("NYSE"), the
AMEX, the NASDAQ NMS, the Chicago Mercantile
Exchange and the Chicago Board of Options
Exchange, as determined by the Calculation
Agent, and on which a Market Disruption Event
(as defined below) has not occurred.
Calculation Agent............. Morgan Stanley & Co. Incorporated ("MS & Co.")
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 making adjustments to the Exchange Ratio
or determining the Market Price or whether a
Market Disruption Event has occurred. See
"Adjustment to the Exchange Ratio" 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.
All percentages resulting from any
calculation on 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 .09876545) would be rounded to
9.87655% (or .0987655)), and all dollar
amounts used in or resulting from such
calculation will be rounded to the nearest
one hundredth of a cent with five one
thousandths of a cent being rounded upwards
(e.g., $.09875 would be rounded to $.0988).
Risk Factors.................. An investment in the Notes entails
significant risks not associated with similar
investments in a conventional debt security,
including the following:
The yield to maturity is less than would be
payable on a non-exchangeable debt security
if the Company were to issue such a security
at the same time it issues the Notes.
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. The
market value for the Notes will be affected
by a number of factors independent of the
creditworthiness of the Company and the value
of Merrill Lynch Stock, including, but not
limited to, the volatility of Merrill Lynch
Stock, the dividend rate on Merrill Lynch
Stock, market interest and yield rates and
the time remaining to the first Exchange
Date, any Call Date or the maturity of the
Notes. In addition, the value of Merrill
Lynch Stock depends on a number of
interrelated factors, including economic,
financial and political events, over which
the Company has no control. The market value
of the Notes is expected to depend primarily
on the extent of the appreciation, if any, of
the Market Price of Merrill Lynch Stock above
the Initial Market Price. The price at which
a holder will be able to sell Notes prior to
maturity may be at a discount, which could
be substantial, from the accreted principal
amount thereof, if, at such time, the Market
Price of Merrill Lynch Stock is below, equal
to or not sufficiently above the Initial
Market Price. The historical Market Prices
of Merrill Lynch Stock should not be taken as
an indication of Merrill Lynch Stock's future
performance during the term of any Note.
The Company is not affiliated with Merrill
Lynch and, although the Company as of the
date of this Pricing Supplement does not have
any material non-public information
concerning Merrill Lynch, corporate events of
Merrill Lynch, including those described below
in "Adjustments to the Exchange Ratio," are
beyond the Company's ability to control and
are difficult to predict.
Merrill Lynch is not involved in the offering
of the Notes and has no obligations with
respect to the Notes, including any
obligation to take the interests of the
Company or of holders of Notes into
consideration for any reason. Merrill Lynch
will not receive any of the proceeds of the
offering of the Notes made hereby and is not
responsible for, and has not participated in,
the determination of the timing of, prices
for or quantities of, the Notes offered
hereby.
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 adjustments to the
Exchange Ratio that may influence the
determination of Parity or of the amount of
stock or cash receivable upon exercise of the
Exchange Right or the Company Exchange Right.
See "Adjustments to the Exchange Ratio" and
"Market Disruption Event."
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.
Adjustments to the Exchange
Ratio......................... The Exchange Ratio will be adjusted as
follows:
1. If Merrill Lynch 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
Merrill Lynch Stock.
2. If Merrill Lynch Stock is subject to a
stock dividend (issuance of additional shares
of Merrill Lynch Stock that is given ratably
to all holders of shares of Merrill Lynch
Stock), then once the dividend has become
effective and Merrill Lynch 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 Merrill Lynch
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
Merrill Lynch Stock other than distributions
described in paragraph 6 below and
Extraordinary Dividends as described below.
A cash dividend or other distribution with
respect to Merrill Lynch Stock will be deemed
to be an "Extraordinary Dividend" if such
dividend or other distribution exceeds the
immediately preceding non-Extraordinary
Dividend for Merrill Lynch Stock by an amount
equal to at least 10% of the Market Price of
Merrill Lynch 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 Merrill Lynch
Stock, the Exchange Ratio with respect to
Merrill Lynch 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 Merrill Lynch
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 Merrill Lynch 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 Merrill Lynch 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 Merrill Lynch is being liquidated or is
subject to a proceeding under any applicable
bankruptcy, insolvency or other similar law,
the Notes will continue to be exchangeable
into Merrill Lynch Stock so long as a Market
Price for Merrill Lynch Stock is available.
If a Market Price is no longer available for
Merrill Lynch Stock for whatever reason,
including the liquidation of Merrill Lynch or
the subjection of Merrill Lynch to a
proceeding under any applicable bankruptcy,
insolvency or other similar law, then the
value of Merrill Lynch Stock will equal zero
for so long as no Market Price is available.
5. If there occurs any reclassification or
change of Merrill Lynch Stock, or if Merrill
Lynch 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 Merrill Lynch as an
entirety or substantially as an entirety, in
each case as a result of which the holders of
Merrill Lynch Stock shall be entitled to
receive stock, other securities or other
property or assets (including cash) with
respect to or in exchange for such Merrill
Lynch Stock, then the holders of the Notes
then outstanding will be entitled thereafter
to exchange such Notes into the kind and
amount of shares of stock, other securities
or other property or assets 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 Merrill Lynch Stock immediately
prior to any such corporate event. At such
time, no adjustment will be made to the
Exchange Ratio.
6. If Merrill Lynch issues to all of its
shareholders equity securities of an issuer
other than Merrill Lynch (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 Merrill
Lynch 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 Merrill Lynch
Stock.
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 thousandth with five
ten-thousandths being rounded upward.
No adjustments to the Exchange Ratio will be
made other than those specified above. The
adjustments specified above do not cover all
events that could affect the Market Price of
the Merrill Lynch Stock.
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 Merrill Lynch Stock:
(i) a suspension, absence or material
limitation of trading of Merrill Lynch
Stock on the primary market for Merrill
Lynch Stock for more than two hours of
trading or during the one-half hour period
preceding the close of trading in such
market; or the suspension, absence or
material limitation on the primary market
for trading in options contracts related
to Merrill Lynch 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 New
York Stock Exchange, 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 Merrill
Lynch 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 or material
limitation of trading in options contracts
related to Merrill Lynch Stock and (5) a
"suspension, absence or material limitation
of trading" on the primary securities market
on which options contracts related to Merrill
Lynch 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 Issuer in accordance with the
Exchange Right or (y) the Issuer has called
the Notes, other than a call for cash, in
accordance with the Company Exchange 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 Merrill Lynch 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 Exchange 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.
Merrill Lynch Stock;
Public Information............ Merrill Lynch is a holding company that,
through its subsidiaries and affiliates,
provides investment, financing, advisory,
insurance and related services worldwide.
Merrill Lynch 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
Merrill Lynch pursuant to the Exchange Act of
1934 can be located by reference to
Commission file number 1-7182. In addition,
information regarding Merrill Lynch may be
obtained from other sources including, but
not limited to, press releases, newspaper
articles and other publicly disseminated
documents. The Company makes 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
MERRILL LYNCH STOCK OR OTHER SECURITIES OF
MERRILL LYNCH. ALL DISCLOSURES CONTAINED IN
THIS PRICING SUPPLEMENT REGARDING MERRILL
LYNCH ARE DERIVED FROM THE PUBLICLY AVAILABLE
DOCUMENTS DESCRIBED IN THE PRECEDING
PARAGRAPH. NEITHER THE COMPANY NOR THE AGENT
HAS PARTICIPATED IN THE PREPARATION OF SUCH
DOCUMENTS OR MADE ANY DUE DILIGENCE INQUIRY
WITH RESPECT TO MERRILL LYNCH IN CONNECTION
WITH THE OFFERING OF THE NOTES. NEITHER THE
COMPANY NOR THE AGENT MAKES ANY
REPRESENTATION THAT SUCH PUBLICLY AVAILABLE
DOCUMENTS OR ANY OTHER PUBLICLY AVAILABLE
INFORMATION REGARDING MERRILL LYNCH ARE
ACCURATE OR COMPLETE. FURTHERMORE, THERE CAN
BE NO 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 MERRILL LYNCH 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 MERRILL
LYNCH 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 THE COMPANY NOR ANY OF ITS AFFILIATES
MAKES ANY REPRESENTATION TO ANY PURCHASER OF
NOTES AS TO THE PERFORMANCE OF MERRILL LYNCH
STOCK.
The Company or its affiliates may presently
or from time to time engage in business with
Merrill Lynch including extending loans to,
or making equity investments in, Merrill
Lynch or providing advisory services to
Merrill Lynch, including merger and
acquisition advisory services. In the course
of such business, the Company or its
affiliates may acquire non-public information
with respect to Merrill Lynch and, in
addition, one or more affiliates of the
Company may publish research reports with
respect to Merrill Lynch. The statement in
the preceding sentence is not intended to
affect the rights of holders of the Notes
under the securities laws. Any prospective
purchaser of a Note should undertake an
independent investigation of Merrill Lynch as
in its judgment is appropriate to make an
informed decision with respect to an
investment in Merrill Lynch Stock.
Historical Information........ The following table sets forth the high and
low Market Price during 1995, 1996, 1997 and
during 1998 through August 7, 1998. The
Market Price on August 7, 1998 was $90.1875.
The Market Prices listed below were obtained
from Bloomberg Financial Markets. The
Company believes all such information to be
accurate. The historical prices of Merrill
Lynch Stock should not be taken as an
indication of future performance, and no
assurance can be given that the price of
Merrill Lynch 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.
Dividends Per
Merrill Lynch High Low Share
------------- ---- --- -------------
(CUSIP # 590188108)
1995
First Quarter..... 22 3/8 17 3/8 $0.115
Second Quarter.... 26 1/2 21 9/16 0.13
Third Quarter..... 31 3/4 26 1/8 0.13
Fourth Quarter.... 32 1/16 25 0.13
1996
First Quarter..... 30 15/16 24 11/16 0.13
Second Quarter.... 33 1/2 28 1/8 0.15
Third Quarter..... 33 1/4 28 1/8 0.15
Fourth Quarter.... 42 1/8 33 1/2 0.15
1997
First Quarter..... 51 39 13/16 0.15
Second Quarter.... 62 3/4 42 15/16 0.20
Third Quarter..... 74 3/16 60 7/16 0.20
Fourth Quarter.... 77 13/16 63 3/4 0.20
1998
First Quarter..... 87 61 1/8 0.20
Second Quarter.... 99 83 3/8 0.24
Third Quarter
(through August
7, 1998)....... 107 15/16 87 1/2 0.24
Historical prices have been adjusted for a 2
for 1 stock split of Merrill Lynch Stock,
which became effective in the second quarter
of 1997.
The Company makes no representation as to the
amount of dividends, if any, that Merrill
Lynch will pay in the future. In any event,
holders of the Notes will not be entitled to
receive dividends, if any, that may be
payable on Merrill Lynch Stock.
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. See
also "Use of Proceeds" in the accompanying
Prospectus.
On the date of this Pricing Supplement, the
Company, through its subsidiaries and others,
hedged its anticipated exposure in connection
with the Notes by taking positions in Merrill
Lynch Stock and positions in other
instruments in connection with such hedging.
Such hedging was carried out in a manner
designed to minimize any impact on the price
of Merrill Lynch Stock. Purchase activity
could potentially have increased the price of
Merrill Lynch Stock, and therefore
effectively have increased the level to which
Merrill Lynch Stock must rise before a holder
of a Note would receive more than the
accreted principal amount on any Exchange
Date or Call Date. The Company, through its
subsidiaries, may modify the hedge position
noted above throughout the life of the Notes.
Although the Company has no reason to believe
that its hedging activity has had or will
have a material impact on the price of
Merrill Lynch Stock, there can be no
assurance that the Company has not or will
not affect such price as a result of its
hedging activities.
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 6.07%, 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 $1,581.78.
THE COMPARABLE YIELD, THE PROJECTED PAYMENT
SCHEDULE AND THE PROJECTED AMOUNT 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.
ANNEX A
OFFICIAL NOTICE OF EXCHANGE
Dated: [On or after November 9, 1998]
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 August 15, 2006 (Exchangeable for Shares of Common
Stock of Merrill Lynch & Co.) of Morgan Stanley Dean Witter & Co. (CUSIP No.
617446DA4) (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) August
15, 2006, (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.
39 dated August 7, 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 Merrill Lynch 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
--------------
