PROSPECTUS Dated May 5, 1999 Pricing Supplement No. 15 to
PROSPECTUS SUPPLEMENT Registration Statement No. 333-75289
Dated May 6, 1999 Dated June 30, 1999
Rule 424(b)(3)
$10,550,000
Morgan Stanley Dean Witter & Co.
MEDIUM-TERM NOTES, SERIES D
EQUITY-LINKED NOTES DUE JULY 15, 2002
based on the Nikkei Stock Average
Each note will pay 100% of its principal amount of $1,000 at maturity. The
notes will also pay a supplemental redemption amount, which may be zero. The
supplemental redemption amount will be based on the percentage increase in
value, if any, over the life of the notes of the Nikkei Stock Average, which
we refer to as the Nikkei 225. Your right to receive the supplemental
redemption amount is subject to our right to redeem (call) all of the notes at
established prices on July 31, 2000 and July 31, 2001.
o The issue price of each note is $1,000 (100% of the principal amount).
o We will not pay interest on the notes.
o At maturity, unless we have called the notes, you will receive the principal
amount of $1,000 per note plus any supplemental redemption amount.
o The supplemental redemption amount is based on the percentage increase in
value, if any, at maturity of the Nikkei 225. If the value of the Nikkei 225
at the maturity of the notes is higher than 17,529.74, which is the value of
the Nikkei 225 on June 30, 1999, the date we offered the notes for initial
sale to the public, then you will receive a supplemental redemption amount per
note equal to the percentage increase of the Nikkei 225 times $1,000.
o However, if the value of the Nikkei 225 at maturity is not higher than
17,529.74, then you will not receive any supplemental redemption amount, but
you will still receive the principal amount of the notes.
o On July 31, 2000 and July 31, 2001, we can call all of the notes and pay you
a predetermined call price. The call price will be $1,225 on July 31, 2000
and $1,275 on July 31, 2001. If we decide to call the notes on July 31, 2000,
we will give you notice on any day commencing June 20, 2000 to and including
June 30, 2000. If we decide to call the notes on July 31, 2001, we will give
you notice on any day commencing June 20, 2001 to and including June 30, 2001.
If we call the notes, you will receive only the call price and will not be
entitled to receive any supplemental redemption amount.
Investing in the notes is not equivalent to investing in the stocks included
in the Nikkei 225.
We will apply to the London Stock Exchange Limited for the notes to be
admitted to the Official List.
We will issue the notes in bearer form only. You may not exchange notes in
bearer form at any time for notes in registered form. Notes in bearer form
are subject to U.S. tax law requirements and you may not offer, sell, resell
or deliver the notes within the United States or its possessions or to a U.S.
person, except in certain transactions permitted by U.S. tax regulations.
You should read the more detailed description of the notes in this pricing
supplement. In particular, you should review and understand the descriptions
in "Summary of Pricing Supplement" and "Description of Notes."
The notes involve risks not associated with an investment in conventional debt
securities. See "Risk Factors" beginning on PS-6.
---------------
PRICE 100%
---------------
Agent's Proceeds to
Price to Public Commissions the Company
--------------- ----------- -----------
Per note...... 100% 1.0% 99.0%
Total......... $10,550,000 $105,500 $10,444,500
If you purchase at least $1,500,000 principal amount of the notes in any
single transaction, the price for these notes will be 99.00% of the issue
price. In that case, the agent's commissions will be reduced to zero.
MORGAN STANLEY DEAN WITTER
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PS-2
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SUMMARY OF PRICING SUPPLEMENT
The following summary describes the notes we are offering to you in
general terms only. You should read the summary together with the more detailed
information that is contained in the rest of this pricing supplement and in the
accompanying prospectus and prospectus supplement. You should carefully
consider, among other things, the matters set forth in "Risk Factors."
The notes offered are medium-term debt securities of Morgan Stanley Dean
Witter & Co. The return on the notes is linked to the performance of the Nikkei
Stock Average, which we refer to as the Nikkei 225. These notes combine
features of debt and equity by offering at maturity 100% protection of the
issue price with the opportunity to participate in the upside potential of the
underlying Nikkei 225. However, we may also call the notes prior to maturity.
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The Notes
Each note costs $1,000 We, Morgan Stanley Dean Witter & Co., are offering our Equity-Linked Notes
due July 15, 2002 based on the Nikkei Stock Average. The principal amount
and issue price of each note is $1,000. We will pay you at least the principal
amount of $1,000 at maturity.
Payment at maturity Unlike ordinary debt securities, the notes do not pay interest. Instead, you will
receive the principal amount of $1,000 per note plus a supplemental redemption
amount, if the value of the Nikkei 225 increases over the life of the notes.
100% Principal Protection
Unless we have called the notes, we will pay you at least $1,000 at maturity,
plus the supplemental redemption amount, if any.
The Supplemental Redemption Amount
The supplemental redemption amount will be equal to the percentage increase
of the Nikkei 225 multiplied by $1,000. The supplemental redemption amount
will be calculated as follows:
Final Index Value - Initial Index Value
$1,000 x ---------------------------------------
Initial Index Value
where,
Initial Index Value = 17,529.74, which is the closing value of the
Nikkei 225 on June 30, 1999, the date we
offered the notes for initial sale to the public
Final Index Value = the closing value of the Nikkei 225
on July 1, 2002
However, if this amount is zero or less, we will not pay you a supplemental
redemption amount. In other words, if the Nikkei 225 does not go up over the
life of the notes, you will not receive any supplemental redemption amount.
No coupon interest payments We will not pay interest on the notes.
PS-3
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Form of notes We will issue the notes in bearer form only. You may not exchange notes in
bearer form at any time for notes in registered form. Notes in bearer form are
subject to U.S. tax law requirements and you may not offer, sell, resell or
deliver the notes within the United States or its possessions or to a U.S. person,
except in certain transactions permitted by U.S. tax regulations. You should
review the discussion in the accompanying prospectus supplement under
"Description of Notes -- Forms of Notes" and in the accompanying prospectus
under "Forms of Securities -- Limitations on the Issuance of Bearer Securities
and Bearer Debt Warrants."
Our Call Right On July 31, 2000 and July 31, 2001, we have the right to call all of the notes.
The call price will be $1,225 on July 31, 2000 and $1,275 on July 31, 2001. If
we decide to call the notes, we will:
o send a notice on any day commencing June 20, 2000 to and including June
30, 2000 for the July 31, 2000 call date or commencing June 20, 2001 to
and including June 30, 2001 for the July 31, 2001 call date, announcing
that we have decided to call the notes;
o specify in the notice the call price that we will pay to you in exchange for
each note; and
o specify in the notice the call date when you will receive the call price.
Nikkei 225 is currently The last reported value of the Nikkei 225, as published by Nihon Keizai
at 17,529.74 Shimbun, Inc. was 17,529.74. You can review the publicly reported closing
values of the Nikkei 225 since 1994 in the "Historical Information" section of
this Pricing Supplement. The payment of dividends on the stocks which
compose, or underlie, the Nikkei 225 is not reflected in the level of the Nikkei
225 and, therefore, has no effect on our calculation of the percentage increase
in the Nikkei 225. The historical performance of the Nikkei 225 should not be
taken as an indication of what its value will be at maturity.
The Calculation Agent We have appointed Morgan Stanley & Co. International Limited, which we
refer to as MSIL, to act as calculation agent for The Chase Manhattan Bank
(London Branch), the trustee for our senior notes. As calculation agent, MSIL
will determine the percentage change in the Nikkei 225, the final index value
and the supplemental redemption amount.
No Affiliation with Nihon Nihon Keizai Shimbun, Inc., the publisher of the Nikkei 225, is not an affiliate
Keizai Shimbun, Inc. of ours and is not involved with this offering in any way. The obligations
represented by these equity-linked notes are obligations of Morgan Stanley
Dean Witter & Co. and not of Nihon Keizai Shimbun, Inc.
More information on The notes are senior notes issued as part of our Series D medium-term note
the notes program. You can find a general description of our Series D medium-term note
program in the accompanying prospectus supplement dated May 6, 1999. We
describe the basic features of this type of note in the sections called
"Description of Notes -- Fixed Rate Notes" and " -- Notes Linked to
Commodity Prices, Single Securities, Baskets of Securities or Indices."
PS-4
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Because this is a summary, it does not contain all of the information that
may be important to you, including the specific mechanics and timing of
the call provisions, the calculation of the final index value, the percentage
change in the index and the supplemental redemption amount. You
should read the "Description of Notes" section in this pricing supplement
for a detailed description of the terms of the notes. You should also read
about some of the risks involved in investing in notes in the section called
"Risk Factors." We urge you to consult with your investment, legal,
accounting and other advisors with regard to any investment in the notes.
How to reach us You may contact us at our principal executive offices at 1585 Broadway, New
York, New York 10036 (telephone number (212) 762-4000).
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PS-5
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RISK FACTORS
The notes are not secured debt and unlike ordinary debt securities do not
pay interest. This section describes the most significant risks relating to the
notes. You should carefully consider whether the notes are suited to your
particular circumstances before you decide to purchase them.
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Notes are not ordinary The terms of the notes differ from those of ordinary debt securities in that we
senior notes will not pay interest on the notes. Because the supplemental redemption amount
due at maturity may be equal to zero, the return on your investment (the
effective yield to maturity) in the notes may be less than the amount that would
be paid on an ordinary debt security. The return of only the principal amount of
each note at maturity will not compensate you for any loss in value due to
inflation and other factors relating to the value of money over time.
Notes may not If the percentage change in the Nikkei 225 is equal to or less than zero, you will
pay more than receive only the par amount of $1,000 for each note that you hold at maturity.
par at maturity
Secondary trading There may be little or no secondary market for the notes. Although we will
may be limited apply to admit the notes to the Official List of the London Stock Exchange
Limited, the secondary market may not provide enough liquidity to allow you to
trade or sell the notes easily.
Market price of the notes Several factors, many of which are beyond our control, will influence the value
influenced by many of the notes, including:
unpredictable factors
o the value of the Nikkei 225
o interest and yield rates in the market
o the volatility (frequency and magnitude of changes in price) of the Nikkei
225
o economic, financial, political and regulatory or judicial events that affect
the securities underlying the Nikkei 225 or stock markets generally and
which may affect the final index value
o the time remaining to the maturity of the notes
o the dividend rate on the stocks underlying the Nikkei 225
o our creditworthiness
Some or all of these factors will influence the price that you will receive if you
sell your notes prior to maturity. For example, you may have to sell your notes
at a substantial discount from the principal amount if at the time of sale the
Nikkei 225 is at, below, or not sufficiently above the initial index value or if
market interest rates rise.
You cannot predict the future performance of the Nikkei 225 based on its
historical performance. We cannot guarantee that the value of the Nikkei 225
will increase so that you will receive at maturity an amount in excess of the
principal amount of the notes.
PS-6
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Adjustments to the Nikkei Nihon Keizai Shimbun, Inc., which we refer to as NIKKEI, is responsible for
225 could adversely affect calculating and maintaining the Nikkei 225. NIKKEI can add, delete or
the notes substitute the stocks underlying the Nikkei 225 or make other methodological
changes that could change the value of the Nikkei 225. NIKKEI may
discontinue or suspend calculation or dissemination of the Nikkei 225. Any of
these actions could adversely affect the value of the notes.
Potential conflicts of As calculation agent, MSIL will calculate the amount paid to you at maturity of
interest between you the notes. MSIL and other affiliates may carry out activities that minimize our
and the Calculation risks related to notes, including trading in the individual stocks included in the
Agent Nikkei 225 as well as in other instruments related to the Nikkei 225. MSIL and
some of our other subsidiaries also trade the individual stocks included in the
Nikkei 225 and other financial instruments related to the Nikkei 225 on a regular
basis as part of their general broker-dealer businesses. Any of these activities
could influence MSIL's determination of calculations made with respect to the
notes and, accordingly, could affect your payout on the notes.
Because MSIL calculates the percentage change in the Nikkei 225, the final
index value and the supplemental redemption amount, potential conflicts of
interest may exist between MSIL as calculation agent and you as an owner of
the notes.
Investment in the notes The payment of dividends on the stocks which compose, or underlie, the Nikkei
not the same as an 225 has no effect on the calculation of the percentage change in the Nikkei 225.
investment in the Therefore, the return on your investment based on the percentage change in the
Nikkei 225 stocks Nikkei 225 is not the same as the total return based on the purchase of those
underlying stocks held for a similar period.
Potential risks of investing An investment in the notes involves considerations that may not be associated
in a security linked to with a security linked to an index of stocks issued by companies organized in
foreign common stock your local jurisdiction. These considerations relate to foreign market factors
generally and may include, for example, different accounting requirements and
regulations, different securities trading rules and conventions, different and in
some cases more adverse economic environments, like the recession experienced
by the Japanese economy and other Asian economies, and greater governmental
involvement in the economy and, in some cases, greater volatility and
unpredictability.
Tax treatment You should also consider the tax consequences of investing in the notes. Please
read carefully the section "Description of Notes--United States Federal Taxation"
in this pricing supplement.
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PS-7
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DESCRIPTION OF NOTES
Terms not defined herein have the meanings given to such terms in the
accompanying prospectus supplement. The term "Note" refers to each $1,000
principal amount of any of our Equity-Linked Notes due July 15, 2002 based on
the Nikkei Stock Average. In this pricing supplement, the terms "MSDW," "we,"
"us" and "our" refer to Morgan Stanley Dean Witter & Co.
Principal Amount.............. $10,550,000
Maturity Date................. July 15, 2002
Interest Rate................. We will not make periodic payments of
interest on the Notes.
Specified Currency............ U.S. Dollars
Issue Price................... $1,000 per Note
Original Issue Date
(Settlement Date)............. July 14, 1999
Common Code................... 9944818
ISIN.......................... XS0099448184
Minimum Denominations......... $1,000
Maturity Redemption Amount.... At maturity (including as a result of
acceleration or under the terms of the Senior
Debt Indenture), you will receive $1,000, the
par amount of each Note, plus the
Supplemental Redemption Amount, if any.
Supplemental Redemption Amount We will pay to you a Supplemental Redemption
Amount per Note at maturity equal to the
greater of (a) zero and (b) the product of
$1,000 and the Nikkei 225 Percent Change.
The Calculation Agent will calculate the
Supplemental Redemption Amount on the date
the Final Index Value is determined.
The Calculation Agent will provide written
notice to the Trustee at its London office,
on which notice the Trustee may conclusively
rely, of the Supplemental Redemption Amount,
on or prior to 11:00 a.m. on the Business Day
preceding the Maturity Date. See
"Discontinuance of the Nikkei 225; Alteration
of Method of Calculation" below.
The Calculation Agent will round all
percentages resulting from any calculation
with respect to the Notes 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)). All dollar amounts used in or
resulting from such calculation will be
rounded to the nearest tenth of a cent with
five tenths of a cent being rounded upwards.
PS-8
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Nikkei 225 Percent Change..... The Nikkei 225 Percent Change is a fraction,
the numerator of which will be the Final
Index Value less the Initial Index Value and
the denominator of which will be the Initial
Index Value. The Nikkei 225 Percent Change
is described by the following formula:
(Final Index Value - Initial Index Value)
-----------------------------------------
Initial Index Value
Initial Index Value........... 17,529.74
Final Index Value............. The Final Index Value will be the Index
Closing Value on July 1, 2002.
If a Market Disruption Event occurs on July
1, 2002 or if that day is not a Trading Day,
the Final Index Value will be determined on
the immediately succeeding Trading Day during
which no Market Disruption Event occurs;
provided that the Final Index Value will not
be determined on a date later than the second
scheduled Trading Day preceding the Maturity
Date, and if such date is not a Trading Day,
or if there is a Market Disruption Event on
such date, the Calculation Agent will
determine the value of the Nikkei 225 on such
date in accordance with the formula for and
method of calculating the Nikkei 225 in
effect on the last Trading Day on which no
Market Disruption Event occurred, 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 date of each security
most recently constituting the Nikkei 225.
Index Closing Value........... The Index Closing Value will equal the
closing value (afternoon session) of the
Nikkei 225, published by NIKKEI, on a
specified date. See "--Discontinuance of the
Nikkei 225; Alteration of Method of
Calculation."
In this "Description of Notes," references to
the Nikkei 225 will include any Successor
Index, unless the context requires otherwise.
Call Right ................... On July 31, 2000 or July 31, 2001, we may
call the Notes, in whole but not in part, for
mandatory exchange into cash at the applicable
Call Price as described below. We will not
pay a Supplemental Redemption Amount to you
if we call the Notes. If we call the Notes,
then the cash to be delivered to you will be
delivered on the Call Date fixed by us and
set forth in our call notice, upon delivery
of your Notes to the Trustee in accordance
with the delivery instructions. We shall, or
shall cause the Calculation Agent to, deliver
the cash to the Trustee for delivery to you.
Notice Date................... Any day commencing June 20, 2000 to and
including June 30, 2000 for the July 31,
2000 Call Date or commencing June 20, 2001 to
and including June 30, 2001 for the July 31,
2001 Call Date, on which we issue our call
notice.
PS-9
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Call Date..................... July 31, 2000 or July 31, 2001, as specified
by us in our call notice, on which date we
will deliver the cash Call Price to you upon
mandatory exchange of the Notes.
Call Price.................... The call price will be $1,225 on July 31,
2000 and $1,275 on July 31, 2001.
Trading Day................... A day, as determined by the Calculation
Agent, on which trading is generally
conducted (i) on the Tokyo Stock Exchange
("TSE") and (ii) on any exchange on which
futures or options contracts related to the
Nikkei 225 are traded, other than a day on
which trading on any such exchange is
scheduled to close prior to its regular final
weekday closing time.
Book Entry Note or
Certificated Note............. Book Entry
Senior Note or Subordinated
Note.......................... Senior
Trustee....................... The Chase Manhattan Bank
Agent for this offering of
Notes......................... Morgan Stanley & Co. International Limited
and its successors ("MSIL")
Market Disruption Event....... "Market Disruption Event" means with respect
to the Nikkei 225, the occurrence or
existence of any of the following events as
determined by the Calculation Agent:
(i) a suspension, absence or material
limitation of trading of stocks then
constituting 20% or more, by weight, of
the Nikkei 225 (or the relevant Successor
Index) on the Relevant Exchanges for such
securities for more than two hours of
trading or during the one-half hour period
preceding the close of trading (afternoon
session) in such market or a breakdown or
failure in the price and trading systems
of any Relevant Exchange as a result of
which the reported trading prices for
stocks then constituting 20% or more, by
weight, of the Nikkei 225 (or the relevant
Successor Index) during the last one-half
hour preceding the closing of trading
(afternoon session) on such Relevant
Exchange are materially inaccurate; or the
suspension, material limitation or absence
of trading on any major securities
exchange or market of trading in futures or
options contracts related to the Nikkei
225 (or the relevant Successor Index) for
more than two hours of trading or during
the one-half hour period preceding the
close of trading on such market; and
(ii) a determination by the Calculation
Agent in its sole discretion that any
event described in clause (i) above
materially interfered with the ability of
MSDW or any of its affiliates to unwind
all or a material portion of the hedge
with respect to the Notes.
For the purpose of determining whether a
Market Disruption Event exists at any time,
if trading in a security included in the
Nikkei 225
PS-10
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is materially suspended or materially limited
at that time, then the relevant percentage
contribution of that security to the level of
the Nikkei 225 shall be based on a comparison
of (x) the portion of the level of the Nikkei
225 attributable to that security relative to
(y) the overall level of the Nikkei 225, in
each case immediately before that suspension
or limitation.
For purposes of determining whether a Market
Disruption Event has occurred: (1) a
limitation on the hours or number of days of
trading will not constitute a Market
Disruption Event if it results from an
announced change in the regular business
hours of the relevant exchange or market, (2)
a decision to permanently discontinue trading
in the relevant futures or options contract
will not constitute a Market Disruption
Event, (3) limitations pursuant to the rules
of any Relevant Exchange similar to NYSE Rule
80A (or any applicable rule or regulation
enacted or promulgated by any other
self-regulatory organization or any
government agency of similar scope as
determined by the Calculation Agent) on
trading during significant market
fluctuations will constitute a suspension,
absence or material limitation of trading,
(4) a suspension of trading in a futures or
options contract on the Nikkei 225 by the
primary securities market related to such
contract by reason of (a) a price change
exceeding limits set by such exchange or
market, (b) an imbalance of orders relating
to such contracts or (c) a disparity in bid
and ask quotes relating to such contracts
will constitute a suspension or material
limitation of trading in futures or options
contracts related to the Nikkei 225 and (5) a
suspension, absence or material limitation
of trading on any Relevant Exchange or on the
primary market on which futures or options
contracts related to the Nikkei 225 are
traded will not include any time when such
market is itself closed for trading under
ordinary circumstances.
Relevant Exchange............. "Relevant Exchange" means the primary
organized exchange or market of trading for
any security then included in the Nikkei 225
or any Successor Index.
Alternative Calculation of the
Final Index Value in case of
an Event of Default .......... If an Event of Default with respect to any
Notes shall have occurred and be continuing,
the Calculation Agent will determine the
amount declared due and payable upon any
acceleration of the Notes, which will be
equal to $1,000 plus the Supplemental
Redemption Amount, if any, determined as
though the date on which the Final Index Value
is scheduled to be determined were the date
of acceleration.
Calculation Agent............. 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 you and on us.
Because the Calculation Agent is our
affiliate, potential conflicts of interest
may exist between the Calculation Agent, and
you as the
PS-11
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owner of the Notes, including with respect to
certain determinations and judgments that the
Calculation Agent must make in determining the
Nikkei 225 Percent Change, the Final Index
Value, the Supplemental Redemption Amount or
whether a Market Disruption Event has
occurred. See "Discontinuance of the Nikkei
225; Alteration of Method of Calculation"
below and "Market Disruption Event" above.
MSIL, as a registered broker-dealer, is
required to maintain policies and procedures
regarding the handling and use of confidential
proprietary information, and such policies and
procedures will be in effect throughout the
term of the Notes to restrict the use of
information relating to the calculation of the
Nikkei 225 Percent Change, the Final Index
Value and the Supplemental Redemption Amount
prior to the dissemination of such
information. MSIL is obligated to carry out
its duties and functions as Calculation Agent
in good faith and using its reasonable
judgment.
Nikkei 225 Index.............. We have derived all information regarding the
Nikkei 225 contained in this pricing
supplement, including, without limitation,
its make-up, method of calculation and
changes in its components, from publicly
available information. Such information
reflects the policies of, and is subject to
change by, the Nihon Keizai Shimbun, Inc.,
which is commonly referred to as NIKKEI.
NIKKEI has no obligation to continue to
publish, and may discontinue publication of,
the Nikkei 225.
The Nikkei 225 is a stock index calculated,
published and disseminated by NIKKEI that
measures the composite price performance of
selected Japanese stocks. The Nikkei 225
currently is based on 225 highly capitalized
underlying stocks (the "Underlying Stocks")
trading on the TSE representing a broad cross-
section of Japanese industries. All 225
Underlying Stocks are stocks listed in the
First Section of the TSE. Domestic stock
admitted to the TSE are assigned to either the
First Section or Second Section. Stocks listed
in the First Section are among the most
actively traded stocks on the TSE. At the end
of each business year, the TSE examines each
First Section stock to determine whether it
continues to meet the criteria for inclusion
in the First Section and each Second Section
stock to determine whether it may qualify for
inclusion in the First Section.
The Nikkei 225 is a modified, price-weighted
index (i.e., an Underlying Stock's weight in
the index is based on its price per share
rather than the total market capitalization
of the issuer) which is calculated by (i)
multiplying the per share price of each
Underlying Stock by the corresponding
weighting factor for such Underlying Stock (a
"Weight Factor"), (ii) calculating the sum of
all these products and (iii) dividing such
sum by a divisor (the "Divisor"). The
Divisor was initially set at 225 for the date
of May 16, 1949 using historical numbers
from May 16, 1949, the date on which the
Tokyo Stock Exchange was reopened. The
Divisor was 10.74327 as of June 29, 1999 and
is subject to periodic adjustments as set
forth below. Each Weight Factor is computed
by dividing Yen50 by the par value of the
relevant Underlying Stock, so that the share
price of
PS-12
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each Underlying Stock when multiplied by its
Weight Factor corresponds to a share price
based on a uniform par value of Yen50. The
stock prices used in the calculation of the
Nikkei 225 are those reported by a primary
market for the Underlying Stocks (currently
the TSE). The level of the Nikkei 225 is
calculated once per minute during TSE trading
hours.
In order to maintain continuity in the Nikkei
225 in the event of certain changes due to
non-market factors affecting the Underlying
Stocks, such as the addition or deletion of
stocks, substitution of stocks, stock splits
or distributions of assets to stockholders,
the Divisor used in calculating the Nikkei
225 is adjusted in a manner designed to
prevent any instantaneous change or
discontinuity in the level of the Nikkei 225.
Thereafter, the Divisor remains at the new
value until a further adjustment is necessary
as the result of another change. As a result
of such change affecting any Underlying Stock,
the Divisor is adjusted in such a way that
the sum of all share prices immediately after
such change multiplied by the applicable
Weight Factor and divided by the new Divisor
(i.e., the level of the Nikkei 225
immediately after such change) will equal the
level of the Nikkei 225 immediately prior to
the change.
An Underlying Stock may be deleted or added
by NIKKEI. Any stock becoming ineligible for
listing in the First Section of the TSE due
to any of the following reasons will be
deleted from the Underlying Stocks: (i)
bankruptcy of the issuer, (ii) merger of the
issuer with, or acquisition of the issuer by,
another company, (iii) delisting of such
stock, (iv) transfer of such stock to the
"Seiri-Post" because of excess debt of the
issuer or because of any other reason (v)
transfer of such stock to the "Kanri-Post"
(Posts for stocks under supervision) or (vi)
transfer of such stock to the Second Section.
In addition, Underlying Stocks with
relatively low liquidity, based on trading
volume and price fluctuation over the past
ten years, may be deleted by NIKKEI subject
to a maximum of six such deletions by reason
of low liquidity per year. Upon deletion of
a stock from the Underlying Stocks, NIKKEI
will select a replacement for such deleted
Underlying Stock in accordance with certain
criteria. In an exceptional case, a newly
listed stock in the First Section of the TSE
that is recognized by NIKKEI to be
representative of a market may be added to
the Underlying Stocks. In such a case, an
existing Underlying Stock with low trading
volume and deemed not to be representative of
a market will be deleted by NIKKEI.
A list of the issuers of the Underlying
Stocks constituting Nikkei 225 is available
from the Nikkei Economic Electronic Databank
System and from the Stock Market Indices Data
Book published by NIKKEI. NIKKEI may delete,
add or substitute any stock underlying the
Nikkei 225.
NIKKEI first calculated and published the
Nikkei 225 in 1970. The following table sets
forth the high, the low and the closing
values of the Nikkei 225 for each quarter in
the period from January 1, 1994 through June
29, 1999, as published by NIKKEI. The
historical performance of the Nikkei 225
should not be taken as an indication
PS-13
<PAGE>
of future performance, and no assurance can be
given that such performance, taken together
with the performance of the stocks underlying
the Nikkei 225, will cause the holders of the
Notes to receive any Supplemental Redemption
Amount under the formula for determining the
Supplemental Redemption Amount.
<TABLE>
Nikkei 225 Closing Values
-------------------------
High Low Close
---- --- -----
<S> <C> <C> <C>
1994
First Quarter ............ 20,677.77 17,369.74 19,111.92
Second Quarter ........... 21,552.81 19,122.22 20,643.93
Third Quarter ............ 20,862.77 19,468.89 19,563.81
Fourth Quarter ........... 20,148.83 18,666.93 19,723.06
1995
First Quarter ............ 19,684.04 15,749.77 16,139.95
Second Quarter ........... 17,103.69 14,507.17 14,517.40
Third Quarter ............ 18,758.55 14,485.41 17,913.06
Fourth Quarter ........... 20,011.76 17,337.19 19,868.15
1996
First Quarter ............ 21,406.85 19,734.70 21,406.85
Second Quarter ........... 22,666.80 21,171.82 22,530.75
Third Quarter ............ 22,455.50 20,107.15 21,556.40
Fourth Quarter ........... 21,612.30 19,161.77 19,361.35
1997
First Quarter ............ 19,446.00 17,303.77 18,003.40
Second Quarter ........... 20,681.07 17,485.75 20,604.96
Third Quarter ............ 17,887.71 17,683.27 17,887.71
Fourth Quarter ........... 17,842.16 14,775.22 15,258.74
1998
First Quarter ............ 17,264.34 14,664.44 16,527.17
Second Quarter ........... 16,536.66 14,715.38 15,830.27
Third Quarter ............ 16,731.92 13,406.39 13,406.39
Fourth Quarter ........... 15,207.77 12,879.97 13,842.17
1999
First Quarter ............ 15,779.60 13,232.74 15,779.60
Second Quarter
(through June 29, 1999)... 17,782.79 15,972.68 17,782.79
</TABLE>
Source: Bloomberg
We or our affiliates may presently or from
time to time engage in business with one or
more of the issuers of the component stocks of
the Nikkei 225, including selling products
and/or services to, purchasing products
and/or services from, extending loans to or
making equity investments in any of such
issuers or providing advisory services to
such issuers, including merger and acquisition
advisory services. In the course of such
business, we, or our affiliates, may acquire
non-public information with respect to such
companies and, in addition, one or more of
our affiliates may publish research reports
with respect to such issuers. The statements
in the preceding sentence are not intended to
affect the right of holders of the Notes
under the securities laws. You should
undertake an independent investigation of the
issuers of the component stocks of
PS-14
<PAGE>
the Nikkei 225 and of the Nikkei 225 to the
extent required, in your judgment, to allow
you to make an informed decision with respect
to an investment in the Notes.
Discontinuance of the
Nikkei 225; Alteration of
Method of Calculation......... If NIKKEI discontinues publication of the
Nikkei 225 and NIKKEI or another entity
publishes a successor or substitute index
that the Calculation Agent determines, in its
sole discretion, to be comparable to the
discontinued the Nikkei 225 (such index being
referred to herein as a "Successor Index"),
then any subsequent Index Closing Value will
be determined by reference to the value of
such Successor Index at the close of trading
on relevant exchange or market for the
Successor Index on the date that the Final
Index Value is to be determined.
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 MSDW and to the
holders of the Notes within three Trading
Days of such selection.
If NIKKEI discontinues publication of the
Nikkei 225 prior to, and such discontinuance
is continuing on, the date that the Final
Index Value is to be determined and the
Calculation Agent determines that no
Successor Index is available at such time,
then on such date, the Calculation Agent will
determine the Index Closing Value that would
be used in computing the Nikkei 225 Percent
Change on such date. The Index Closing Value
will be computed by the Calculation Agent in
accordance with the formula for and method of
calculating the Nikkei 225 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 date of each security most recently
comprising the Nikkei 225. Notwithstanding
these alternative arrangements,
discontinuance of the publication of the
Nikkei 225 may adversely affect the value of
the Notes.
If at any time the method of calculating the
Nikkei 225 or a Successor Index, or the value
thereof, is changed in a material respect, or
if the Nikkei 225 or a Successor Index is in
any other way modified so that such index
does not, in the opinion of the Calculation
Agent, fairly represent the value of the
Nikkei 225 or such Successor Index had such
changes or modifications not been made, then,
from and after such time, the Calculation
Agent will, at the close of business in New
York City on the date that the Final Index
Value is to be determined make such
calculations and adjustments as, in the good
faith judgment of the Calculation Agent, may
be necessary in order to arrive at a value of
a stock index comparable to the Nikkei 225 or
such Successor Index, as the case may be, as
if such changes or modifications had not been
made, and calculate the Supplemental
Redemption Amount with reference to the
Nikkei 225 or such Successor Index, as
adjusted. Accordingly, if the method of
calculating the Nikkei 225 or a Successor
Index is modified so that the value of such
index is a fraction of what it
PS-15
<PAGE>
would have been if it had not been modified
(e.g., due to a split in the index), then the
Calculation Agent will adjust such index in
order to arrive at a value of the Nikkei 225
or 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 we receive from the sale of
the Notes will be used for general corporate
purposes and, in part, by us or one or more of
our affiliates in connection with hedging our
obligations under the Notes, including
hedging market risks associated with the
Supplemental Redemption Amount.
On the date of this pricing supplement, we,
through our subsidiaries or others, hedged
our anticipated exposure in connection with
the Notes by the purchase and sale of
exchange traded and over-the-counter options
on the Nikkei 225, individual stocks included
in the Nikkei 225, futures contracts on the
Nikkei 225 and options on such futures
contracts or by taking positions in any other
instruments that we wished to use in
connection with such hedging. Through our
subsidiaries, we are likely to modify our
hedge position throughout the life of the
Notes, including on the date that the Final
Index Value is to be determined, by
purchasing and selling the securities and
instruments listed above and any other
available securities and instruments that we
may wish to use in connection with our
hedging activity. Although we have no reason
to believe that our hedging activity had or
will have a material impact on the price of
such options, stocks, futures contracts, and
options on futures contracts or on the value
of the Nikkei 225, we cannot give any
assurance that we did not, or in the future
will not, affect such prices as a result of
our hedging activities.
Supplemental Information
Concerning Plan of
Distribution.................. In order to facilitate the offering of the
Notes, the Agent may engage in transactions
that stabilize, maintain or otherwise affect
the price of the Notes or the stocks
underlying the Nikkei 225. Specifically, the
Agent may overallot in connection with the
offering, creating a short position in the
Notes for its own account. In addition, to
cover allotments or to stabilize the price of
the Notes, the Agent may bid for, and
purchase, the Notes or the stocks underlying
the Nikkei 225 in the open market. See "Use
of Proceeds and Hedging" above.
The Agent proposes initially to offer the
Notes directly to the public at the public
offering price set forth on the cover page
hereof; provided that the price will be 99%
of the Issue Price and the underwriting
discounts and commissions will be reduced to
zero for purchasers of greater than or equal
to $1,500,000 principal amount of the Notes
in any single transaction.
In The Netherlands, these Notes are offered
exclusively to one single investor (the
"Dutch Investor") on the basis of bilateral
negotiations between such Dutch Investor and
the Agent and no other investor or potential
investor in The Netherlands: (i) has been
approached by such Agent or by MSDW or (ii)
may acquire these Notes or any direct or
indirect interest in these Notes. This
pricing supplement and the accompany
prospectus and prospectus supplement will be
PS-16
<PAGE>
distributed in The Netherlands solely to the
Dutch Investor for its own information and
not for redistribution. By acquiring such
Notes, the Dutch Investor will undertake with
the Agent and MSDW to hold legal and
beneficial title to such Notes for their
entire term to maturity unless redeemed or
repurchased by MSDW or the Agent in
accordance with the terms of such Notes.
See also "Plan of Distribution" in the
accompanying prospectus supplement.
License Agreement between
NIKKEI and MSDW............... The use of and reference to the Nikkei 225 in
connection with the Notes has been consented
to by NIKKEI, the publisher of the Nikkei
225. NIKKEI has the copyright to the Nikkei
Stock Average. All rights to the Nikkei 225
are owned by NIKKEI. We, the Calculation
Agent and the Trustee disclaim all
responsibility for the calculation or other
maintenance of or any adjustments to the
Nikkei 225. NIKKEI has the right to change
the contents of the Nikkei 225 and to cease
compilation and publication of the Nikkei
225. In addition, NIKKEI has no relationship
to us or the Notes; it does not sponsor,
endorse, authorize, sell or promote the
Notes, and has no obligation or liability in
connection with the administration, marketing
or trading of the Notes or with the
calculation of the Initial Index Value or the
Final Index Value, as described above.
ERISA Matters for Pension
Plans and Insurance
Companies..................... We and certain of our affiliates, including
Morgan Stanley & Co. Incorporated ("MS&Co.")
and Dean Witter Reynolds Inc. ("DWR"), may
each be considered a "party in interest"
within the meaning of the Employee Retirement
Income Security Act of 1974, as amended
("ERISA"), or a "disqualified person" within
the meaning of the Internal Revenue Code of
1986, as amended (the "Code") with respect to
many employee benefit plans. Prohibited
transactions within the meaning of ERISA or
the Code may arise, for example, if the Notes
are acquired by or with the assets of a
pension or other employee benefit plan with
respect to which MS & Co., DWR or any of
their affiliates is a service provider,
unless the Notes are acquired pursuant to an
exemption from the prohibited transaction
rules.
The acquisition of the Notes may be eligible
for one of the exemptions noted below if such
acquisition:
(a) (i) is made solely with the assets of a
bank collective investment fund and (ii)
satisfies the requirements and conditions of
Prohibited Transaction Class Exemption
("PTCE") 91-38 issued by the Department of
Labor ("DOL");
(b) (i) is made solely with assets of an
insurance company pooled separate account and
(ii) satisfies the requirements and
conditions of PTCE 90-1 issued by the DOL;
(c) (i) is made solely with assets managed
by a qualified professional asset manager and
(ii) satisfies the requirements and
conditions of PTCE 84-14 issued by the DOL;
PS-17
<PAGE>
(d) is made solely with assets of a
governmental plan (as defined in Section
3(32) of ERISA) which is not subject to the
provisions of Section 401 of the Code;
(e) (i) is made solely with assets of an
insurance company general account and (ii)
satisfies the requirements and conditions of
PTCE 95-60 issued by the DOL; or
(f) (i) is made solely with assets managed
by an in-house asset manager and (ii)
satisfies the requirements and conditions of
PTCE 96-23 issued by the DOL.
Under ERISA, the assets of a pension or other
employee benefit plan may include assets held
in the general account of an insurance
company which has issued an insurance policy
to such plan or assets of an entity in which
the plan has invested.
United States Federal
Taxation...................... The investor should refer to the discussion
under "United States Federal Taxation" in the
accompanying Prospectus Supplement.
PS-18
