PROSPECTUS Dated March 26, 1998 Pricing Supplement No. 59 to
PROSPECTUS SUPPLEMENT Registration Statement No. 333-46935
Dated April 6, 1998 Dated March 15, 1999
Rule 424(b)(3)
$26,400,000
Morgan Stanley Dean Witter & Co.
MEDIUM-TERM NOTES, SERIES D
------------------
EQUITY-LINKED NOTES DUE APRIL 14, 2005
based on the
Dow Jones Euro STOXX 50[SM] and the Nikkei Stock Average
Each note will pay 100% of its principal amount of $3,000 on the maturity
date. The notes will also pay a supplemental redemption amount, which may be
zero. The supplemental redemption amount will be based on the performance
over the life of the notes of a basket of indices consisting of the Dow Jones
Euro STOXX 50[SM] and the Nikkei Stock Average, weighted equally. The
performance of each index will be based on the arithmetic average of its
values on 24 quarterly determination dates compared to its value on the day we
issue the notes. We refer to the Dow Jones Euro STOXX 50 as the DJES 50 and
to the Nikkei Stock Average as the Nikkei 225 Index.
o The issue price of each note is $2,790 (93.0% of the principal amount).
o We will not pay interest on the notes.
o At maturity, you will receive the principal amount of $3,000 per note plus
any supplemental redemption amount.
o The supplemental redemption amount will be based on the performance over the
life of the notes of a basket of indices, consisting of the DJES 50 and the
Nikkei 225 Index, weighted equally. The performance of the basket will be
measured by the percentage change (positive or negative) of each index. The
percentage change of each index will be calculated by comparing the
arithmetic average of the index's values on 24 quarterly determination
dates to the index's value on the day we issue the notes.
o If the percentage change in the basket is positive, we will pay you a
supplemental redemption amount equal to $3,000 times the percentage
change in the basket. If the percentage change in the basket is negative
or if there is no change, then you will not receive any supplemental
redemption amount.
o Investing in this note is not equivalent to investing in the stocks included
in the DJES 50 and the Nikkei 225 Index.
o 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.
o We will apply to the London Stock Exchange Limited for the notes to be
admitted to the Official List.
We may not redeem these notes prior to the maturity date other than under the
circumstance described under "Description of Notes--Tax Redemption--Special
Tax Redemption of Bearer Notes" in the accompanying prospectus supplement. We
will not redeem the notes under the circumstances described under "Description
of Notes -- Tax Redemption -- All Notes" in the accompanying prospectus
supplement, nor will we pay any additional amounts to the holder under the
circumstances described under "Description of Notes--Payment of Additional
Amounts" in the accompanying prospectus supplement.
The effective date of the New Regulations (as defined in "United States
Federal Taxation--Backup Withholding" in the accompanying Prospectus
Supplement) has been changed so that the New Regulations will apply to
payments made after December 31, 1999.
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." "Dow Jones Euro
STOXX 50" is a service mark of Dow Jones & Company, Inc.
The notes involve risks not associated with an investment in conventional debt
securities. See "Risk Factors" beginning on PS-5.
PRICE 93.0% PER NOTE
--------------------
MORGAN STANLEY DEAN WITTER
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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."
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The Notes
Each note costs $2,790 We, Morgan Stanley Dean Witter & Co., are offering you our Equity-Linked Notes due
April 14, 2005 based on the Dow Jones Euro STOXX 50 and the Nikkei Stock Average.
The issue price of each note is $2,790. The principal amount of each
note is $3,000. We will pay you at least the principal amount of $3,000 at
maturity.
If the aggregate value of the At maturity, we will pay a supplemental redemption amount based on the
two indices goes up, you will performance over the life of the notes of a basket of two indices consisting of
receive an additional the DJES 50 and the Nikkei 225 Index, weighted equally. The performance of
amount at maturity the basket will be measured by the percentage change (positive or negative) of
each index. The percentage change of each index will be calculated by
comparing the arithmetic average of the index's values on 24 quarterly
determination dates to the index's value on the day we issue the notes.
If the percentage change in the basket is positive, we will pay you a
supplemental redemption amount equal to $3,000 times the percentage change in
the basket. If the percentage change in the basket is negative or if there is no
change, then you will not receive any supplemental redemption amount, but you
will still receive 100% of the principal amount of the note.
Because the percentage change of each index is calculated separately, increases
in one index could be offset by decreases in the other index.
The supplemental redemption amount can be calculated using the following
formula:
[ ( DJES 50 DJES 50 ) (Nikkei 225 Index Nikkei 225 Index )]
[ (Average Index Value - Initial Value ) (Average Index Value - Initial Value )]
$3,000 x [1/2 (------------------------------------) + 1/2 (--------------------------------------- )]
[ ( DJES 50 Initial Value ) ( Nikkei 225 Index Initial Value )]
; provided that the supplemental redemption amount will not be less than zero.
The initial value of each index will be the closing value of that index on the day
we issue the notes.
The average index value of each index will equal the arithmetic average of the
closing values of that index on 24 quarterly determination dates. The
determination dates are each January 30, April 30, July 30 and October 30,
beginning April 30, 1999 and ending January 30, 2005.
No coupon interest We will not pay you interest on the notes.
payments
Value of the Dow Jones Euro STOXX 50 and the Nikkei Stock Average
DJES 50 is The last reported closing value of the DJES 50 on Bloomberg, LP on the date of
currently at 3,582.78 this Pricing Supplement was 3,582.78. You can review the publicly-reported
closing values of DJES 50 since such values were first reported on February 26,
1998 in the "Historical Information" section of this Pricing Supplement.
Nikkei 225 Index is The last reported value of the Nikkei 225 Index, as published by Nihon Keizai
currently at 15,779.60 Shimbun, Inc. was 15,779.60. You can review the publicly reported closing
values of the Nikkei 225 Index since 1994 in the "Historical Information"
section of this Pricing Supplement.
The historical performance of the indices should not be taken as an indication of
what their values will be on the date the notes are issued or on any of the
quarterly determination dates.
The Calculation Agent
We have appointed Morgan Stanley & Co. International Limited ("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
average index value of each index, the percentage change in the each of the
DJES 50 and the Nikkei 225 Index and the supplemental redemption amount.
No Affiliation with STOXX Ltd. or Nihon Keizai Shimbun, Inc.
Neither STOXX Ltd., the publisher of DJES 50, nor or Nihon Keizai Shimbun,
Inc., the publisher of the Nikkei 225 Index, is an affiliate of ours and neither 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 STOXX Ltd. or Nihon Keizai Shimbun, Inc.
More Information on the Notes
The notes are senior notes issued as part of our Series D medium-term note
program. You can find a general description of our Series D medium-term note
program in the accompanying prospectus supplement dated April 6, 1998. 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."
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 calculations of the average index value of each index, the percentage
changes in the indices and the basket, and the supplemental redemption
amount. You should read the "Description of Notes" section in this Pricing
Supplement for 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."
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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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 which
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 Pay More If the percentage change of either of the two indices is negative and the
than Par at Maturity percentage change of the other index is negative or insufficiently positive to
counteract the negative percentage change of the first index, then the
supplemental redemption amount will be zero.
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 each of the DJES 50 and the Nikkei 225 Index
o interest and yield rates in the market
o the volatility (frequency and magnitude of changes in price) of the
securities underlying each of the DJES 50 and the Nikkei 225 Index
o economic, financial, political and regulatory or judicial events that affect
the securities underlying each of the DJES 50 and the Nikkei 225 Index or
stock markets generally and which may affect the average index value of
each index
o the time remaining to each determination date and to the maturity of the
notes
o the dividend rate on the stocks underlying each of the DJES 50 and the
Nikkei 225 Index
o our creditworthiness
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 average of the
percentage changes (positive or negative) in the DJES 50 and the Nikkei 225
Index (based on determination dates occurring prior to that time) is equal to, less
than, or insufficiently higher than, zero or if market interest rates rise.
You cannot predict the future performance of either the DJES 50 or the Nikkei
225 Index based on its historical performance. We cannot guarantee that the
value of either the DJES 50 or the Nikkei 225 Index will increase, or increase
sufficiently to offset any decrease in the other index, so that you will receive at
maturity an amount in excess of the principal amount of the notes.
Adjustments to STOXX Ltd. is responsible for calculating and maintaining the DJES 50.
each of DJES 50 and the STOXX Ltd. can add, delete or substitute the stocks underlying the DJES 50 or
Nikkei 225 Index make other methodological changes that could change the value of the DJES 50.
Could Adversely Affect STOXX Ltd. may discontinue or suspend calculation or dissemination of the
the Notes DJES 50. Any of these actions could adversely affect the value of the notes.
Nihon Keizai Shimbun, Inc., or NKS, is responsible for calculating and
maintaining the Nikkei 225 Index. NKS can add, delete or substitute the stocks
underlying the Nikkei 225 Index or make other methodological changes that
could change the value of the Nikkei 225 Index. NKS may discontinue or
suspend calculation or dissemination of the Nikkei 225 Index. 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 and the notes. MSIL and other affiliates may carry out activities that minimize our
the Calculation Agent risks related to notes, including trading in the individual stocks included in the
DJES 50 or the Nikkei 225 Index as well as in other instruments related to the
DJES 50 or the Nikkei 225 Index. MSIL and some of our other subsidiaries
also trade the individual stocks included in the DJES 50 or the Nikkei 225 Index
and other financial instruments related to the DJES 50 or the Nikkei 225 Index
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.
Investment in the Notes Not The payment of dividends on the stocks which compose, or underlie, the DJES
the Same as an Investment in 50 or the Nikkei 225 Index will have no effect on the calculation of the
either the DJES 50 or the percentage change in either the DJES 50 or the Nikkei 225 Index. Therefore,
Nikkei 225 Index Stocks the return on your investment based on the percentage change in each of the
DJES 50 and the Nikkei 225 Index is not the same as the total return based on
the purchase of those underlying stocks held for a similar period.
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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DESCRIPTION OF NOTES
Capitalized terms not defined herein have the meanings given to
such terms in the accompanying Prospectus Supplement. In this Pricing
Supplement, the "Company," "we," "us" and "our" refer to Morgan Stanley Dean
Witter & Co.
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Principal Amount.............. $26,400,000
Maturity Date................. April 14, 2005
Interest Rate................. We will not make periodic payments of
interest on the Note.
Specified Currency............ U.S. Dollars
Issue Price................... $2,790 per Note (93.0% of the principal
amount)
Original Issue Date
(Settlement Date)........... April 14, 1999
Common Code................... 9518185
ISIN.......................... XS0095181854
Senior Note or Subordinated
Note........................ Senior
Minimum Denominations......... $3,000
Maturity Redemption Amount.... On the Maturity Date, you will receive (1)
$3,000, the par amount of such Note, plus (2)
the Supplemental Redemption Amount, if any.
In this "Description of the Notes," the term
"Note" refers to each $3,000 principal amount
of any of our Equity-Linked Notes Due April
14, 2005 based on the Dow Jones Euro STOXX
50, and the Nikkei 225 Index.
Supplemental Redemption Amount We will pay you a Supplemental Redemption
Amount per Note at maturity equal to the
greater of (a) zero and (b) the product of
$3,000 and the Basket Change Percentage. The
Supplemental Redemption Amount is described
by the following formula:
[ ( DJES 50 DJES 50 ) ( Nikkei 225 Index Nikkei 225 Index )]
[ (Average Index Value - Initial Value ) (Average Index Value - Initial Value )]
$3,000 x [1/2 (------------------------------------) + 1/2 (--------------------------------------- )]
[ ( DJES 50 Initial Value ) ( Nikkei 225 Index Initial Value )]
; provided that the Supplemental Redemption
Amount may not be less than zero.
The Calculation Agent will calculate the
Supplemental Redemption Amount on the last of
the Determination Dates. 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
Underlying Indices; Adjustments to Underlying
Indices" below.
All calculations with respect to the Notes
will be rounded to the nearest one
hundred-thousandth, with five one-millionths
rounded upwards (e.g., 9.876545% (or
.9876545) would be rounded to 9.87655% (or
.987655)), and all dollar amounts used in or
resulting from such calculation will be
rounded to the nearest tenths of a cent with
five tenths of a cent being rounded upwards.
Basket Change Percentage...... The sum of (A) 1/2 times the DJES 50 Index
Change Percentage plus (B) 1/2 times the
Nikkei 225 Index Change Percentage.
DJES 50 Index Change Percentage The amount (positive or negative) by which
(A) the Average Index Value of the DJES 50
Index differs from (B) the Initial Value of
the DJES 50 Index, expressed as a percentage
of such Initial Value.
Nikkei 225 Index Change
Percentage.................. The amount (positive or negative) by which
(A) the Average Index Value of the Nikkei 225
Index differs from (B) the Initial Value of
the Nikkei 225 Index, expressed as a
percentage of such Initial Value.
Initial Value................. With respect to any Underlying Index, the
Initial Value will be equal to the value of
such Underlying Index on the Initial Index
Date with respect to such Underlying Index.
Initial Index Date............ The "Initial Index Date" with respect to each
Underlying Index is April 14, 1999 or if such
date is not a Trading Day, the next following
Trading Day, unless there is a Market
Disruption Event on that date. If a Market
Disruption Event with respect to an
Underlying Index occurs on April 14, 1999 (or
if that day is not a Trading Day, on the next
succeeding Trading Day), then the next
succeeding Trading Day during which no Market
Disruption Event will have occurred with
respect to such Underlying Index shall be
an Initial Index Date in lieu of such date;
provided that if a Market Disruption Event,
with respect to such Underlying Index, has
occurred on each of the five Trading Days
immediately succeeding April 14, 1999, then
(1) such fifth succeeding Trading Day will be
deemed to be an Initial Index Date for such
Underlying Index, notwithstanding the
occurrence of a Market Disruption Event on
such day and (2) 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.
Average Index Value........... With respect to any Underlying Index, the
Average Index 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 (i) the Initial Index Date or
(ii) any Determination Date, will equal (a)
with respect to the DJES 50 or any Successor
Index (as defined below), the officially
published closing price and (b) with respect
to the Nikkei 255 Index or any Successor
Index (as defined below), the level at the
regular official weekday close of trading, in
each case, on such Initial Index Date or
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.............. Either 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 Calculation 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 Underlying
Index Used Herein Exchange Index Publisher
---------- ----------- -------- ---------------
Dow Jones Euro DJES 50 Eurex Stock Exchange STOXX Ltd.
STOXX 50 ("Eurex")
Nikkei Stock Nikkei 225 Index Nihon Keizai NKS
Average Shimbun, Inc. ("NKS")
Exchange...................... Either of the exchanges listed in the third
column of the table above or their successors.
Underlying Index Publisher.... Either 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 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 thirtieth
day of each January, April, July and October,
commencing April 30, 1999 and ending January
30, 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.
Acceleration of the Notes..... In case an Event of Default with respect to
any Note 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 100% of the principal
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.
Book Entry Note or
Certificated Note........... Book Entry
Senior Note or Subordinated
Note........................ Senior
Trustee....................... The Chase Manhattan Bank (London Branch)
Agent......................... Morgan Stanley & Co. International Limited
and its successors ("MSIL")
Market Disruption Event....... "Market Disruption Event" means, with respect
to each Underlying Index, the occurrence or
existence of either of the following events
on any Trading Day during the one-half hour
period prior to closing on the Initial Index
Date or on any Determination Date as
determined by the Calculation Agent, any
suspension of or limitation imposed on
trading (by reason of movements in price
exceeding limits permitted by the Relevant
Exchange or otherwise), (i) on the Relevant
Exchange(s) in securities that comprise 20
percent, or more of the level of the relevant
Underlying Index, or (ii) in options
contracts or future contracts on the relevant
Underlying Index on any other exchange if, in
any such case, such suspension or limitation
is, in the determination of the Calculation
Agent, material.
For the purpose of determining whether a
Market Disruption Event exists at any time,
if trading in a security included in the
Underlying Index is materially suspended or
materially limited at that time, then the
relevant percentage contribution of that
security to the level of the Underlying Index
shall be based on a comparison of (x) the
portion of the level of the Underlying Index
attributable to that security relative to (y)
the overall level of the Underlying Index, in
each case immediately before that suspension
or limitation.
The Calculation Agent shall as soon as
reasonably practicable under the
circumstances notify the parties of the
existence of a Market Disruption Event on any
day that but for the occurrence or existence
of a Market Disruption Event would have been
a Determination Date or Initial Index Date.
Relevant Exchange............. "Relevant Exchange" means the primary
exchange or market of trading for any
security then included in the DJES 50, the
Nikkei 225 Index or any Successor Index to
either the DJES 50 or the Nikkei 225 Index.
Tax Redemption................ The Notes will be redeemable only for an
event that would trigger a mandatory
redemption of the Notes under the
circumstances described under "Description of
Notes--Tax Redemption--Special Tax Redemption
of Bearer Notes" in the accompanying
Prospectus Supplement. The Notes will not be
redeemable for an event that would trigger a
discretionary redemption of the Notes under
the circumstances described under
"Description of Notes -- Tax Redemption --
All Notes" in the accompanying Prospectus
Supplement.
No Payment of Additional Amounts MSDW will not pay any Additional Amounts, as
defined under "Description of Notes--Payment
of Additional Amounts" in the accompanying
Prospectus Supplement, to the holder of the
Notes if the net payment of the principal of
and interest on the Notes and other amounts
payable on the Note, after withholding for or
on account of any present or future tax,
assessment or governmental charge imposed
upon or as a result of a payment by the
United States (or any political subdivision
or taxing authority thereof or therein), is
less than the amount provided for in the
Notes then due and payable.
Calculation Agent............. Morgan Stanley & Co. International Limited
and its successors ("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 holder of the Notes, including
with respect to certain determinations and
judgments that the Calculation Agent must
make in determining the Average Index 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 Note to restrict
the use of information relating to the
calculation of the Basket Change Percentage,
each Average 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.
Underlying Indices............ We have derived all information regarding the
DJES 50 Index and the Nikkei 225 Index
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
respective Underlying Index Publishers. None
of the Underlying Index Publishers has any
obligation to continue to publish, and may
discontinue publication of, its respective
Underlying Index.
We or our 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 selling
products and/or services to, purchasing
products and/or services from, extending
loans to making equity investments in any of
such issuers or providing services to such
issuers including merger and acquisition
services. In the course of such business
with issuers, we or our affiliates may
acquire non-public information about
those 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 the Underlying
Indices and with respect to the
competency of their respective publishers
to formulate and calculate the applicable
Underlying Index as in its judgment is
appropriate to make an informed decision
with respect to an investment in the
Notes.
The DJES 50 Index
In order to provide a definitive standard for
measuring the stock market performance of the
blue chip companies in the countries that
joined EMU at its inception, a new index, the
DJES 50 was launched on February 26, 1998.
The DJES 50 consists of 50 stocks that are
among the largest in market capitalization,
highest in liquidity and are the leaders of
their industrial sectors. Set forth below
are the country weightings and industrial
sector weightings of the securities currently
included in the DJES 50 as of March 15, 1999:
Country Weightings Industrial Sector Weightings
-------------------------------- ----------------------------------
Germany 29.73% Telecom 18.84%
France 23.30% Insurance 12.77%
The Netherlands 21.57% Energy 12.32%
Italy 10.36% Technology 8.73%
Spain 6.73% Bank 8.32%
Finland 3.74% Auto 6.53%
Belgium 3.34% Utility 6.19%
Ireland 0.79% Financial Services 5.43%
Portugal 0.45% Consumer non-cyclical 3.74%
Industrial 3.31%
Conglomerates 2.87%
Chemical 2.82%
Retail 2.82%
Food & Beverage 2.61%
Pharmaceutical 0.93%
Construction 0.80%
Media 0.52%
Consumer cyclical 0.46%
Source: http://www.stoxx.com
The DJES 50 was created by STOXX Ltd.
("STOXX"), a company jointly founded by
Schweizer Borse, SBF-Bourse de Paris, Deutsche
Borse and Dow Jones. Publication of the DJES
50 began on February 26, 1998, based on an
initial DJES 50 value of 1,000 at December
31, 1991. The DJES 50 is published in The
Wall Street Journal.
The DJES 50 is calculated by (i) multiplying
the per share price of each stock included in
the DJES 50 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) (ii) calculating the sum of all
these products (such sum being hereinafter
the "DJES 50 Aggregate Market
Capitalization") and (iii) dividing the DJES
50 Aggregate Market Capitalization by a
divisor which represents the DJES 50
Aggregate Market Capitalization on the base
date of the DJES 50 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 DJES 50. 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 DJES 50 than will
movements in share prices of companies with
relatively smaller market capitalization.
A current list of the issuers of the DJES 50,
as of March 15, 1999, is set forth below.
Current
Weight in Industry
Issuer of Component Stock Country DJES 50 Sector
------------------------- ------- --------- --------
ABN-AMRO Hldg NV The Netherlands 1.59% Bank
Aegon NV The Netherlands 3.34% Insurance
Air Liquide SA France 0.68% Chemical
Akzo Nobel The Netherlands 0.58% Chemical
Alcatel Alsthom SA France 1.45% Technology
Allianz AG Germany 4.55% Insurance
Allied Irish Banks Plc Ireland 0.79% Bank
Assicurazioni Generali Italy 2.30% Insurance
S.p.A.
AXA-UAP France 2.58% Insurance
Banco Bilbao Vizcaya SA Spain 1.73% Bank
Bayer AG Germany 1.55% Chemical
Carrefour Supermarche France 1.57% Retail
Daimler Chrysler AG Germany 5.87% Auto
Deutsche Bank AG Germany 1.69% Bank
Deutsche Telecom AG Germany 6.51% Telecom
Electrabel SA Belgium 1.17% Utility
ELF Aquitaine France 1.92% Energy
Elsevier NV The Netherlands 0.52% Media
Endesa SA Spain 1.41% Utility
ENI S.p.A. Italy 2.84% Energy
Fiat S.p.A. Italy 0.66% Auto
Fortis (B) Belgium 1.51% Financial
Services
France Telecom France 4.94% Telecom
ING Groep NV The Netherlands 2.94% Financial
Services
Koninklijke Ahold NV The Netherlands 1.35% Consumer non-
cyclical
Koninklijke KPN NV The Netherlands 1.20% Telecom
L'Oreal France 2.39% Consume non-
cyclical
Lufthansa -B- Germany 0.46% Consumer
Cyclical
LVMH Moet-Hennesey France 1.21% Conglomerates
Mannesmann AG Germany 2.84% Industrial
Metro AG Germany 1.25% Retail
Nokia Oj A Finland 3.74% Technology
Paribas France 0.98% Financial
Services
Petrofina SA Belgium 0.66% Energy
Philips Electronics NV The Netherlands 1.43% Technology
Portugal Telecom SA -R- Portugal 0.45% Telecom
Repsol SA Spain 0.90% Energy
Rhone-Poulenc France 0.93% Pharmaceutical
Royal Dutch Petroleum The Netherlands 6.00% Energy
RWE AG Germany 1.27% Utility
Saint Gobain France 0.80% Construction
Schneider SA France 0.47% Industrial
Siemens AG Germany 2.11% Technology
Societe Generale -A- France 1.02% Bank
Telecom Italia S.p.A. Italy 3.06% Telecom
Telefonica de Espana Spain 2.68% Telecom
UniCredito Italiano Italy 1.50% Bank
Unilever NV The Netherlands 2.61% Food &
Beverage
Veba AG Germany 1.66% Conglomerate
Vivendi France 2.34% Utility
(Source: http://www.stoxx.com)
The composition of the DJES 50 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 DJES 50 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 DJES 50 are made entirely by STOXX
Ltd. without consultation with the
corporations represented in the DJES 50 or
us. The DJES 50 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 DJES
50 may be changed at any time for any reason.
Neither STOXX Ltd. nor any of its founders is
affiliated with us 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.
Impact on
Events Adjustment Factor base value
------ ----------------- ----------
p before dividend - dividend Decrease
Cash dividend (applied for adj. for p = ----------------------------
total returns index only) p before dividend
p before dividend - dividend Decrease
Special cash dividend (from adj. for p = ----------------------------
non-operating income) p before dividend
1 None
Stock Dividend & Split (the adj. for p = -------------------------
same security) 1 + no. of new shares (%)
adj. for q = 1 + no. of new shares (%)
1 None
Reverse Split adj. for p = -------------------------
1 - no. of new shares (%)
adj. for q = 1 - no. of new shares (%)
p before distribution - cash equivalent Decrease
Stock Dividend of a adj. for p = ---------------------------------------
different company security p before distribution
cash equivalent = other sec.p x no. of
distributed stocks (%)
adj.p Increase
Rights Offering adj. for p = -----------------
last cum rights p
last cum rights p+subscription p x rights(%)
adj. p = --------------------------------------------
1 + rights (%)
adj. for q = 1 + rights (%)
If the new shares have a dividend
disadvantage, then the subscription price will
be adjusted.
adj.p Increase
Combination: stock adj. for p = --------------------------
distribution (stock dividend last cum rights p
or split) and rights offering
-- one action applicable to last cum rights p + subscription p x (1 + stock
other (if rights applicable subscription (%)) x rights (%)
after stock distribution) adj. p = -----------------------------------------------
(1 + stock distribution (%)) (1 + rights (%))
adj. for q = (1 + stock distribution (%)) (1 + rights (%))
adj.p Increase
Combination: stock adj. for p = --------------------------
distribution (stock dividend last cum rights p
or split) and rights offering
-- one action applicable to last cum rights p - (subscription p x rights(%))
other (if stock distribution adj. p = ------------------------------------------------
applicable after rights) (1 + rights (%)) x (1 + stock distribution (%))
adj. for q = (1 + stock distribution (%))(1 + rights (%))
adj.p Increase
Combination: stock adj. for p = --------------------------
distribution (stock dividend last cum rights p
or split) and rights issues --
neither action is applicable last cum rights p + subscription p x rights(%)
to the other adj. p = ----------------------------------------------
(1 + rights (%)) + stock distribution (%))
adj. for q = (1 + stock distribution (%) + rights (%))
p before spinoff - cash equivalent Decrease
Spin-off adj. for p = ----------------------------------
p before spinoff
cash equivalent = spunoff stock p x no. of
spunoff stocks (in %)
p after tender Decrease
Repurchase shares-self adj. for p = ---------------
tender p before tender
(p before tender) x (no. of q before tender ) -
p after (tender p x no. of tendered q)
tender = ---------------------------------------------
(no. of q before tender) x no. of tendered q
no. of q after tender
adj. q = ----------------------
no. of q before tender
The following table sets forth the high and
low daily closing values, as well as
end-of-quarter closing values, of the DJES 50
(price return) for each quarter in the period
from January 1, 1994 through March 15, 1999.
(Although publication of the DJES 50 began on
February 26, 1998, historical levels of the
index have been calculated by STOXX from a
base date of December 31, 1991.) The
historical values of the DJES 50 should not
be taken as an indication of future
performance, and no assurance can be given as
to the level of the DJES 50 as of any
Determination Date.
Daily Closing Values
-----------------------------
High Low Period End
---- --- ----------
1994
First Quarter 1459.27 1347.84 1365.74
Second Quarter 1441.33 1272.00 1284.60
Third Quarter 1401.79 1286.05 1302.53
Fourth Quarter 1344.61 1268.62 1320.59
1995
First Quarter 1348.10 1274.57 1300.13
Second Quarter 1400.60 1298.18 1362.52
Third Quarter 1469.19 1371.32 1419.60
Fourth Quarter 1509.91 1367.15 1506.82
1996
First Quarter 1612.24 1507.65 1612.24
Second Quarter 1691.04 1619.33 1665.90
Third Quarter 1694.51 1563.32 1694.51
Fourth Quarter 1859.10 1693.99 1850.32
1997
First Quarter 2169.71 1824.52 2137.28
Second Quarter 2438.38 2026.91 2398.41
Third Quarter 2699.78 2407.58 2581.36
Fourth Quarter 2641.68 2241.21 2531.99
1998
First Quarter 3179.72 2466.81 3153.32
Second Quarter 3443.76 3061.04 3406.82
Third Quarter 3670.82 2670.97 2670.97
Fourth Quarter 3354.71 2419.23 3342.32
1999
First Quarter
(through
March 15, 1999) 3685.36 3325.56 3582.78
(Source: Bloomberg)
Nikkei 225 Index
The Nikkei 225 Index is a stock index
calculated, published and disseminated by NKS
that measures the composite price performance
of selected Japanese stocks. The Nikkei 225
Index 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. Stocks listed
in the First Section are among the most
actively traded stocks on the TSE.
The Nikkei 225 Index 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, initially set in
1949 at 225, was 10.052 as of March 1, 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 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 Index are those
reported by a primary market for the
Underlying Stocks (currently the TSE). The
level of the Nikkei 225 Index is calculated
once per minute during TSE trading hours.
In order to maintain continuity in the Nikkei
225 Index 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 Index is adjusted in a manner
designed to prevent any instantaneous change
or discontinuity in the level of the Nikkei
225 Index. 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 Index immediately after such
change) will equal the level of the Nikkei
225 Index immediately prior to the change.
An Underlying Stock may be deleted or added
by NKS. 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 or (v)
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 NKS subject to a
maximum of six such deletions by reason of low
liquidity per year. Upon deletion of a stock
from the Underlying Stocks, NKS will select a
suitable 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 NKS 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 not representative of a market
will be deleted by NKS.
A list of the issuers of the Underlying
Stocks constituting the Nikkei 225 Index is
available from the Nikkei Economic Electronic
Databank System and from the Stock Market
Indices Data Book published by NKS. NKS may
delete, add or substitute any stock
underlying the Nikkei 225 Index.
NKS first calculated and published the Nikkei
225 Index in 1970. The following table sets
forth the high, the low and the closing
values of the Nikkei 225 Index for each
quarter in the period from January 1, 1994
through March 15, 1999, as published by NKS.
The historical performance of the Nikkei 225
Index should not be taken as an indication of
future performance, and no assurance can be
given that such performance, taken together
with the performance of the Basket Stocks,
will cause the holders of the Notes to
receive any Supplemental Redemption Amount
under the formula for determining such
Supplemental Redemption Amount.
Nikkei 225 Closing Values
------------------------------
High Low Period End
------ ----- ----------
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
(through
March 15, 1999) 15,779.60 13,232.74 15,779.60
Source: Bloomberg
Discontinuance of Underlying
Indices; Adjustments to
Underlying Indices........... If an Underlying Index is (i) not calculated
and announced by the Underlying Index
Publisher but is calculated and announced by a
successor publisher (such successor publisher
being referred to as the "Successor Index
Publisher") acceptable to the Calculation
Agent , or (ii) replaced by a successor index
using, in the determination of the
Calculation Agent, the same or a
substantially similar formula for and method
of calculation as used in the calculation of
that Index (such successor index being
referred to as the "Successor Index"), then
that Underlying Index will be deemed to be
the index so calculated and announced by that
Successor Index Publisher or that Successor
Index, as the case may be.
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 you, as the
holders of the Notes and to us within three
Trading Days of such selection.
If (i) on or prior to the Initial Index Date
or any Determination Date, a relevant
Underlying Index Publisher makes a material
change in the formula for or the method of
calculating that Underlying Index or in any
other way materially modifies that Underlying
Index (other than a modification prescribed
in that formula or method to maintain that
Underlying Index in the event of changes in
constituent stock and capitalization and
other routine events) or (ii) on the Initial
Index Date or any Determination Date, the
Underlying Index Publisher fails to calculate
and announce a relevant Underlying Index,
then the Calculation Agent shall calculate
the relevant Index Closing Value, as the case
may be, using, in lieu of a published level
for that Index, the level for that Underlying
Index at the Initial Index Date or any
Determination Date as determined by the
Calculation Agent in accordance with the
formula for and method of calculating that
Underlying Index last in effect prior to that
change or failure, but using only those
securities that comprised that Underlying
Index immediately prior to that change or
failure (other than those securities that
have since ceased to be listed on any Relevant
Exchange).
If the Calculation Agent calculates any Index
Closing Values in accordance with the
preceding paragraph, it will cause notice of
each Index Closing Value to be provided to
you, as holders of the Notes, on each
succeeding Determination Date until and
including January 30, 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.
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 the our 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 or prior to the Original Issue Date, we,
through our subsidiaries or others, will
hedge our anticipated exposure in connection
with the Notes by the purchase or sale of
exchange traded and over-the-counter
derivatives contracts on the DJES 50 or
the Nikkei 225 Index or by taking
positions in any other instruments that
we may wish to use in connection with
such hedging. Although we have no reason
to believe that our hedging activity will
have a material impact on the price of
such options, stocks, futures contracts,
and options on futures contracts, we can
give no assurance that we will not affect
such prices as a result of our hedging
activities. Through our subsidiaries, we
are likely to modify our hedge position
throughout the life of the Notes,
including on each Determination Date, by
purchasing or selling such derivatives
contracts and any other available
securities and instruments.
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 either the DJES 50 or the Nikkei
225 Index. 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 either the
DJES 50 or the Nikkei 225 Index in the open
market. See "Use of Proceeds and Hedging"
above.
License Agreement between
STOXX Ltd. and MS & Co........ STOXX Ltd. and Morgan Stanley & Co.,
Incorporated, or MS & Co., an affiliate of
MSIL, 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 DJES 50, 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 MS & Co. 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
us 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 MSDW, MS & CO., 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 MS & CO.
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 MS & Co. and its
affiliates. [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 MS & Co. and its
affiliates. [Copyright] 1998 by Dow Jones &
Company, Inc. All rights reserved.
License Agreement between NKS
and MSDW.................... The use of and reference to the Nikkei 225
Index in connection with the Notes has been
consented to by NKS, the publisher of the
Nikkei 225. NKS has the copyright to the
Nikkei Stock Average. All rights to the
Nikkei 225 Index are owned by NKS. We, the
Calculation Agent and the Trustee disclaim
all responsibility for the calculation or
other maintenance of or any adjustments to
the Nikkei 225 Index. NKS has the right to
change the contents of the Nikkei 225 Index
and to cease compilation and publication of
the Nikkei 225 Index. In addition, NKS 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
Value or the Average Index Value of the
Nikkei 225 Index, as described above.
ERISA Matters for Pension Plans
and Insurance Companies..... We and certain of our affiliates, including
MS & Co. and Dean Witter Reynolds Inc.
("DWR"), may each be considered a "party in
interest" within the meaning of the Employee
Retirement Income Security Act of 1974, as
amended ("ERISA"), or a "disqualified person"
within the meaning of the 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;
(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 --
Income Taxes -- Notes" in the accompanying
Prospectus Supplement.
</TABLE>
