Subject to Completion, Pricing Supplement dated April 8, 1999
PROSPECTUS Dated March 26, 1998 Pricing Supplement No. 68 to
PROSPECTUS SUPPLEMENT Registration Statement No. 333-46935
Dated March 26, 1998 Dated , 1999
Rule 424(b)(3)
$25,000,000
Morgan Stanley Dean Witter & Co.
MEDIUM-TERM NOTES, SERIES C
Senior Fixed Rate Notes
-----------------------
Redeemable BRIDGES Due May , 2005
Based on the
Morgan Stanley High-Technology 35 Index(SM)
Redeemable BRoad InDex Guarded Equity-linked Securities(SM)
("Redeemable BRIDGES(SM)")
The Redeemable BRIDGES will pay the principal amount of $10 at maturity. The
Redeemable BRIDGES will also pay an amount based on the percentage increase in
value, if any, over the life of these Redeemable BRIDGES of the Morgan Stanley
High-Technology 35 Index, which we refer to as the Tech-35 Index. In each
case, the payments are subject to our right to redeem (call) all of the
Redeemable BRIDGES at established prices on or after May , 2002 until
November , 2004.
o The principal amount and issue price of each Redeemable BRIDGES is $10.
o We will not pay interest on the Redeemable BRIDGES.
o At maturity, unless we have called the Redeemable BRIDGES, you will
receive the principal amount of $10 per Redeemable BRIDGES plus a
supplemental redemption amount. This amount is based on the percentage
increase in value, if any, at maturity of the Tech-35 Index. If the value
of the Tech-35 Index at the maturity of the Redeemable BRIDGES is higher
than the value of the Tech-35 Index on the day we offer the Redeemable
BRIDGES for initial sale to the public, then you will receive a
supplemental redemption amount per Redeemable BRIDGES equal to the
percentage increase of the Tech-35 Index multiplied by $10.
o However, if the value of the Tech 35 Index at maturity is not higher than
the value of the Tech-35 Index on the date we offer the Redeemable
BRIDGES for initial sale to public, then you will not receive any
supplemental redemption amount, but you will still receive the principal
amount of the Redeemable BRIDGES.
o Beginning May , 2002 and ending on November , 2004, we can call all of
the Redeemable BRIDGES and pay you a predetermined call price. The call
price will be $16 on May , 2002 and will increase by $ every six months
up to and including November , 2004, to a maximum of $ per Redeemable
BRIDGES. If we decide to call the Redeemable BRIDGES, we will give you
notice at least 30 but not more than 60 days prior to the call date
specified in the notice. If we call the Redeemable BRIDGES, you will
receive only the call price and will not be entitled to receive any
supplemental redemption amount.
o Investing in the Redeemable BRIDGES is not equivalent to investing in the
stocks included in the Tech-35 Index.
o We will apply to list the Redeemable BRIDGES to trade on the New York
Stock Exchange, Inc. under the proposed symbol "RBT," but it is not
possible to predict whether the Redeemable BRIDGES will meet the NYSE
listing requirement.
You should read the more detailed description of the Redeemable BRIDGES in
this pricing supplement. In particular, you should review and understand the
descriptions in "Summary of Pricing Supplement" and "Description of Redeemable
BRIDGES." "Redeemable BRoad Index Guarded Equity-linked Securities" and
"Redeemable BRIDGES" are our service marks. "Morgan Stanley High-Technology 35
Index" is a service mark of Morgan Stanley & Co. Incorporated.
The Redeemable BRIDGES involve risks not associated with an investment in
conventional debt securities. See "Risk Factors" beginning on PS-6.
PRICE $10 PER REDEEMABLE BRIDGES
Proceeds to
Price to Public Agent's Commissions Company
--------------- ------------------- -----------
Per Redeemable BRIDGES.... $ $ $
Total..................... $ $ $
MORGAN STANLEY DEAN WITTER
THE INFORMATION IN THIS PRICING SUPPLEMENT IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT DELIVER THESE SECURITIES UNTIL A FINAL PRICING SUPPLEMENT IS
DELIVERED. THIS PRICING SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AND
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL THESE SECURITIES AND
THEY ARE NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE
THE OFFER OR SALE IS NOT PERMITTED.
(This page intentionally left blank)
SUMMARY OF PRICING SUPPLEMENT
The following summary describes the Redeemable BRIDGES 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 Redeemable BRIDGES offered are medium-term debt securities of Morgan
Stanley Dean Witter & Co. The return on the Redeemable BRIDGES is linked to
the performance of the Morgan Stanley High-Technology 35 Index, which we refer
to as the Tech-35 Index. These Redeemable BRIDGES 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 Tech-35
Index. However, we may also call the Redeemable BRIDGES prior to maturity.
Each Redeemable BRIDGES We, Morgan Stanley Dean Witter & Co., are
costs $10 offering you Redeemable BRIDGES due May , 2005
based on the Morgan Stanley High-Technology
35 Index. The principal amount and issue
price of each Redeemable BRIDGES is $10.
Payment at Maturity Unlike ordinary debt securities, the Redeemable
BRIDGES do not pay interest. Instead, you
will receive the principal amount of $10 per
Redeemable BRIDGES plus a supplemental
redemption amount, if the value of the Tech-
35 Index increases over the life of the
Redeemable BRIDGES.
100% Principal Protection
Unless we have called the Redeemable BRIDGES,
we will pay you at least $10 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 Tech-
35 Index multiplied by $10. The supplemental
redemption amount will be calculated as
follows:
Final Index Value - Initial Index Value
$10 x ---------------------------------------
Initial Index Value
where,
Initial Index Value = the closing value of the
Tech-35 Index on the day
we offer the Redeemable
BRIDGES for initial sale
to the public
Final Index Value = the closing value of the
Tech-35 Index on the fifth
trading day prior to
May , 2005
However, if this amount is zero or less, we
will not pay you a supplemental redemption
amount. In other words, if the Tech-35 Index
does not go up over the life of the
Redeemable BRIDGES, you will not receive any
supplemental redemption amount.
Our Call Right Beginning May , 2002 and ending November , 2004,
we have the right to call all of the
Redeemable BRIDGES at the call prices listed
in the table below. If we decide to call the
Redeemable BRIDGES, we will:
o send a notice announcing that we have
decided to call the Redeemable BRIDGES;
o specify in the notice the call price that
we will pay you in exchange for each
Redeemable BRIDGES; and
o specify in the notice a call date when you
will receive the call price; that call
date will be at least 30 but not more than
60 days after the date of the notice.
The Call Price
The table below shows the call prices from
May , 2002 to November , 2002 and every six
month call date period thereafter through and
including November , 2004.
Call Date Period Call Price
---------------- ----------
May , 2002 to November , 2002....... $ 16.00
November , 2002 to May , 2003....... $
May , 2003 to November , 2003....... $
November , 2003 to May , 2004....... $
May , 2004 to November , 2004....... $
The Tech-35 Index The last reported closing value of the Tech-35
Index on the American Stock Exchange, Inc. on
the date of this pricing supplement was .
You can review the publicly-reported closing
values of Tech-35 Index since such values
were first reported on June 30, 1995 in the
"Historical Information" section of this
pricing supplement. The payment of dividends
on the stocks which compose, or underlie, the
Tech-35 Index is not reflected in the level
of the Tech-35 Index and, therefore, has no
effect on our calculation of the percentage
increase in the Tech-35 Index.
The Calculation Agent We have appointed Morgan Stanley & Co.
Incorporated, which we refer to as MS & Co.,
to act as calculation agent for The Chase
Manhattan Bank, the trustee for our senior
notes. As calculation agent, MS & Co. will
determine the percentage change in the Tech-
35 Index, the final index value and the
supplemental redemption amount.
MS & Co., on behalf of MSCI, MS & Co., on behalf of Morgan Stanley Capital
Consults on the Tech-35 International Inc., or MSCI, an indirect,
Index majority-owned subsidiary of ours which owns
the Tech-35 Index, acts as consultant to the
American Stock Exchange, Inc. in connection
with the calculation of the Tech-35 Index.
The American Stock Exchange is responsible
for the design and maintenance of the Tech-
35 Index, including decisions regarding the
calculation of the Tech-35 Index such as the
addition and deletion of constituent stocks
and other methodological modifications of the
Tech-35 Index. MS&Co. or MSCI, to the extent
that MSCI elects to act directly rather than
through MS & Co., may from time to time
suggest changes in the Tech-35 Index. The
actions and judgments of MS & Co. or MSCI may
affect the value of the Tech-35 Index, and,
consequently, could adversely affect the
value of the Redeemable BRIDGES. You should
read about certain potential conflicts that
may exist because of our affiliation with MS
& Co. and MSCI in the section called "Risk
Factors -- Potential Conflicts of Interest
Between You and MS & Co."
More Information on the The Redeemable BRIDGES are senior notes issued
Redeemable BRIDGES as part of our Series C medium-term note program.
You can find a general description of our
Series C medium-term note program in the
accompanying prospectus supplement dated
March 26, 1998. We describe the basic
features of this type of note in the sections
called "Description of Notes" 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 call provisions.
You should read the "Description of
Redeemable BRIDGES" section in this pricing
supplement for a detailed description of the
terms of the Redeemable BRIDGES. You should
also read about some of the risks involved in
investing in Redeemable BRIDGES 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 Redeemable BRIDGES.
How to Reach Us You may contact your local Morgan Stanley Dean
Witter branch office or our principal
executive offices at 1585 Broadway, New York,
New York 10036, (telephone number (212) 762-4000).
RISK FACTORS
The Redeemable BRIDGES are not secured debt and, unlike ordinary debt
securities, the Redeemable BRIDGES do not pay interest. This section describes
the most significant risks relating to the Redeemable BRIDGES. You should
carefully consider whether the Redeemable BRIDGES are suited to your
particular circumstances before you decide to purchase them.
Redeemable BRIDGES Are The terms of the Redeemable BRIDGES differ from
Not Ordinary Senior Notes those of ordinary debt securities in that we will
not pay interest on the Redeemable BRIDGES.
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 Redeemable BRIDGES
may be less than the amount which would be
paid on an ordinary debt security. The
return of only the principal amount of each
Redeemable BRIDGES 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.
Redeemable BRIDGES May If the percentage change in the Tech-35 Index is
Not Pay More than Par at equal to or less than zero, you will receive
Maturity only the par amount of $10 for each Redeemable
BRIDGES you hold at maturity.
Secondary Trading There may be little or no secondary market for
May Be Limited the Redeemable BRIDGES. Although we will apply
to list the Redeemable BRIDGES on the New
York Stock Exchange, Inc., the Redeemable
BRIDGES may not meet the requirements for
listing. Even if there is a secondary
market, it may not provide enough liquidity
to allow you to trade or sell the Redeemable
BRIDGES easily.
Market Price of the Several factors, many of which are beyond our
Redeemable BRIDGES control, will influence the value of the
Influenced by Many Redeemable BRIDGES, including:
Unpredictable Factors
o the value of the Tech-35 Index
o interest and yield rates in the market
o the volatility (frequency and magnitude of
changes in price) of the Tech-35 Index
o economic, financial, political and
regulatory or judicial events that affect
the securities underlying the Tech-35
Index or stock markets generally and which
may affect the final index value
o the time remaining to the maturity of the
Redeemable BRIDGES
o the dividend rate on the stocks underlying
the Tech-35 Index
o our creditworthiness
Some or all of these factors will influence
the price that you will receive if you sell
your Redeemable BRIDGES prior to maturity.
For example, you may have to sell your
Redeemable BRIDGES at a substantial discount
from the principal amount if at the time of
sale the Tech-35 Index 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 Tech-35 Index based on its historical
performance. We cannot guarantee that the
value of the Tech-35 Index will increase so
that you will receive at maturity an amount
in excess of the principal amount of the
Redeemable BRIDGES.
Adjustments to the The American Stock Exchange, Inc., or the
Tech-35 Index Could AMEX, in consultation with MSCI and MS & Co.,
Adversely Affect the acting on behalf of MSCI, is responsible for
Redeemable BRIDGES calculating and maintaining the Tech-35
Index. calculating and maintaining the Tech-
35 Index. The AMEX can add, delete or
substitute the stocks underlying the Tech-35
Index or make other methodological changes
that could change the value of the Tech-35
Index. The AMEX may discontinue or suspend
calculation or dissemination of the Tech-35
Index. Any of these actions could adversely
affect the value of the Redeemable BRIDGES.
Potential Conflicts of The Tech-35 Index was developed by MS & Co.
Interest between You and is owned by MSCI. The Tech-35 Index is a
and MS & Co. service mark of MS & Co. and has been
licensed for certain purposes to the AMEX in
exchange for a fee. MSCI is responsible for
advising the AMEX as the AMEX composes,
calculates and maintains the Tech-35 Index
and MSCI has delegated its responsibilities
to MS & Co. MS & Co. and MSCI each have
considerable influence over the composition
and calculation of the Tech-35 Index.
Certain judgments that MS & Co. or MSCI could
make in connection with consultation as to
the composition and calculation of the Tech-
35 Index could affect the value of the Tech-
35 Index and, consequently, the value of the
Redeemable BRIDGES. See "Description of
Redeemable BRIDGES--Morgan Stanley High-
Technology 35 Index" and "--Discontinuance of
the Tech-35 Index; Alteration of Method of
Calculation" below.
As calculation agent, MS & Co. calculates the
amount paid to you at maturity of the
Redeemable BRIDGES. MS & Co. and other
affiliates may carry out activities that
minimize our risks related to the Redeemable
BRIDGES, including trading in the individual
stocks included in the Tech-35 Index as well
as in other instruments related to the Tech-
35 Index. MS & Co. and some of our other
subsidiaries also trade the individual stocks
included in the Tech-35 Index and other
financial instruments related to the Tech-35
Index on a regular basis as part of their
general broker-dealer businesses. Any of
these activities could influence MS & Co.'s
determination of calculations made with
respect to the Redeemable BRIDGES and,
accordingly, could affect your payout on the
Redeemable BRIDGES.
Because MS & Co. and MSCI are consulted by
the AMEX concerning the Tech-35 Index
composition and calculation and because MS &
Co. also calculates the percentage change in
the Tech-35 Index, the final index value and
the supplemental redemption amount, potential
conflicts of interest may exist between MS &
Co. as calculation agent, MS & Co. or MSCI as
consultants for the calculation of the Tech-
35 Index and you as holder of a Redeemable
BRIDGES.
Investment in the The payment of dividends on the stocks which
Redeemable BRIDGES Not compose, or underlie, the Tech-35 Index has
the Same as an Investment in no effect on the calculation of the
the Tech-35 Index Stocks percentage increase in the Tech- 35 Index.
Therefore, the return on your investment
based on the percentage change in the Tech-35
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 Redeemable BRIDGES. The
Redeemable BRIDGES are best suited for
accounts (including non-U.S. accounts) not
subject to U.S. federal income taxes. U.S.
taxable investors will be subject to annual
income tax based on the comparable yield, as
defined in the accompanying prospectus
supplement, of the Redeemable BRIDGES even
though they will not receive any payments
thereon prior to maturity and at maturity may
only receive the return of the par amount of
the Redeemable BRIDGES. In addition, any
gain recognized by U.S. taxable investors on
the sale, exchange or redemption of the
Redeemable BRIDGES will be treated as
ordinary income. Please read carefully the
section "Description of Redeemable BRIDGES--
United States Federal Taxation" in this
pricing supplement.
DESCRIPTION OF REDEEMABLE BRIDGES
Capitalized terms not defined herein have the meanings given to such terms in
the accompanying prospectus supplement. The term "Redeemable BRIDGES" refers
to each $10 principal amount of any of our Redeemable BRIDGES Due May , 2005
based on the Morgan Stanley High-Technology 35 Index. In this pricing
supplement, the "Company," "we," "us" and "our" refer to Morgan Stanley Dean
Witter & Co.
Principal Amount................... $25,000,000
Original Issue Date (Settlement
Date).............................. , 1999
Maturity Date...................... May , 2005
Specified Currency................. U.S. Dollars
CUSIP.............................. 617446232
Minimum Denominations.............. $10
Issue Price........................ $10
Interest Rate...................... None
Maturity Redemption Amount......... At maturity (including as a result of
acceleration or under the terms of the
Senior Debt Indenture), you will
receive $10, the par amount of the
Redeemable BRIDGES, plus the
Supplemental Redemption Amount, if any.
Supplemental Redemption Amount..... We will pay you a Supplemental
Redemption Amount per Redeemable
BRIDGES at maturity equal to the
greater of (a) zero and (b) the product
of $10 and the Tech-35 Index 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
New York office, on which notice the
Trustee may conclusively rely, of the
Supplemental Redemption Amount, on or
prior to 11:00 a.m. on the Business Day
preceding the Maturity Date. See
"Discontinuance of the Tech-35 Index;
Alteration of Method of Calculation"
below.
The Calculation Agent will round all
percentages resulting from any
calculation with respect to the
Redeemable BRIDGES 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 resulting from such
calculation will be rounded to the
nearest cent with one-half cent being
rounded upwards.
Tech-35 Index Percent Change....... The Tech-35 Index 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 Tech-35 Index Percent
Change is described by the following
formula:
(Final Index Value - Initial Index Value)
----------------------------------------
Initial Index Value
Initial Index Value................. The Initial Index Value will be the
Index Closing Value on the day we
initially offer the Redeemable BRIDGES
for sale to the public.
Final Index Value................... The Final Index Value will be the
Index Closing Value on the fifth
scheduled Trading Day prior to the
Maturity Date.
If a Market Disruption Event occurs on
the fifth scheduled Trading Day prior
to the Maturity Date, the Final Index
Value will be determined on the
immediately succeeding Trading Day
during which no Market Disruption
Event occurred; 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 Tech-35 Index on such
date in accordance with the formula
for and method of calculating the
Tech-35 Index last in effect prior to
the commencement of the Market
Disruption Event (or prior to the non-
Trading Day), 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 or
non-Trading Day) on such date of each
security most recently constituting
the Tech-35 Index.
Index Closing Value................. The Index Closing Value will equal
the closing value of the Tech-35 Index
or any Successor Index at the regular
official weekday close of trading on a
specified date. See "--Discontinuance
of the Tech-35 Index; Alteration of
Method of Calculation."
In this "Description of Redeemable
BRIDGES," references to the Tech-35
Index will include any Successor
Index, unless the context requires
otherwise.
Call Right ......................... On or after May , 2002, and up to
and including November , 2004, we
may call the Redeemable BRIDGES, in
whole but not in part, for mandatory
exchange into cash at the applicable
Call Price as described below. We
will not pay you a Supplemental
Redemption Amount if we call the
Redeemable BRIDGES. If we call the
Redeemable BRIDGES, 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 Redeemable BRIDGES 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......................... The scheduled Trading Day on which we
issue our call notice, which must be
at least 30 but not more than 60
calendar days prior to the Call Date.
Call Date........................... The scheduled Trading Day specified
by us in our call notice on or after
May , 2002 to and including
November , 2004, on which we will
deliver the cash Call Price to you
upon mandatory exchange of the
Redeemable BRIDGES.
Call Price.......................... The table below shows the Call
Prices for each $10 principal
amount of Redeemable BRIDGES on
May , 2002 to November , 2002 and
each six month Call Date period
thereafter to and including
November , 2004.
Call Date Periods Call Price
----------------- ----------
May , 2002 to November , 2002....... $ 16.00
November , 2002 to May , 2003....... $
May , 2003 to November , 2003....... $
November , 2003 to May , 2004....... $
May , 2004 to November , 2004....... $
Trading Day......................... A day, as determined by the
Calculation Agent, on which trading is
generally conducted on the New York
Stock Exchange ("NYSE"), the AMEX, the
NASDAQ NMS, the Chicago Mercantile
Exchange, and the Chicago Board of
Options Exchange and in the over-the-
counter market for equity securities
in the United States.
Book Entry Note or Certificated
Note................................ Book Entry
Senior Note or Subordinated Note.... Senior
Trustee............................. The Chase Manhattan Bank
Agent............................... Morgan Stanley & Co. Incorporated
Market Disruption Event............. "Market Disruption Event" means with
respect to the Tech-35 Index, the
occurrence or existence of either of
the following events as determined by
the Calculation Agent:
(i) a suspension, material
limitation or absence of trading of
stocks then constituting 20% or
more, by weight, of the Tech-35
Index (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 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 Tech-35 Index (or
the relevant Successor Index)
during the last one-half hour
preceding the closing of trading on
such Relevant Exchange are
materially inaccurate; or the
suspension, material limitation or
absence of trading on any major
U.S. securities market of trading
in futures or options contracts
related to the Tech-35 Index (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 the event described
in clause (i) above materially
interfered with the ability of the
Company or any of its affiliates to
unwind all or a material portion of
the hedge with respect to the
Redeemable BRIDGES.
For the purpose of determining whether
a Market Disruption Event exists at
any time, if trading in a security
included in the Tech-35 Index is
materially suspended or materially
limited at that time, then the
relevant percentage contribution of
that security to the level of the
Tech-35 Index shall be based on a
comparison of (x) the portion of the
level of the Tech-35 Index
attributable to that security relative
to (y) the overall level of the Tech-
35 Index, 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 Tech-35 Index
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 Tech-35 Index 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 Tech-35 Index 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
U.S. organized exchange or market of
trading for any security then included
in the Tech-35 Index 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 Redeemable BRIDGES shall have
occurred and be continuing, the
Calculation Agent will determine the
amount declared due and payable upon
any acceleration of the Redeemable
BRIDGES. The amount declared due and
payable to you will be equal to $10
plus the Supplemental Redemption
Amount, if any, determined as though
the date that the Final Index Value is
to be determined is scheduled to occur
on or after such date of acceleration
were the date of acceleration.
Calculation Agent................... Morgan Stanley & Co. Incorporated
and its successors (MS & Co.)
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 Redeemable BRIDGES,
including with respect to certain
determinations and judgments that the
Calculation Agent must make in
determining the Tech-35 Index Percent
Change, the Final Index Value, the
Supplemental Redemption Amount or
whether a Market Disruption Event has
occurred. See "Discontinuance of the
Tech-35 Index; Alteration of Method
of Calculation" below and "Market
Disruption Event" above. MS & Co., 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 Redeemable
BRIDGES to restrict the use of
information relating to the
calculation of the Tech-35 Index
Percent Change, the Final Index Value
and the Supplemental Redemption Amount
prior to the dissemination of such
information. MS & Co. is obligated to
carry out its duties and functions as
Calculation Agent in good faith and
using its reasonable judgment.
Morgan Stanley High-
Technology 35 Index............... We have derived all information
contained in this pricing supplement
regarding the Tech-35 Index,
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, MSCI and
the AMEX. The Tech-35 Index was
developed by MS & Co., is owned by
MSCI, and is calculated and maintained
by AMEX in consultation with MS & Co.,
acting on behalf of MSCI. None of MS
& Co., MSCI or the AMEX has any
obligation to continue to calculate
and publish, and may discontinue
calculation and publication of, the
Tech-35 Index.
The Tech-35 Index is comprised of 35
actively traded stocks of U.S.
companies in the computer and
technology industries with large
market capitalizations. Publication
of the Tech-35 Index began on June 30,
1995, based on an initial value of 200
as of the close of trading on December
16, 1994. The Tech-35 Index is
calculated using an "equal dollar-
weighting" methodology designed to
ensure that each of the component
stocks is represented in approximately
equal dollar amounts in the Index. In
calculating the initial "equal dollar-
weighting" of component stocks, the
AMEX, using closing prices on December
16, 1994, calculated the number of
shares that would represent an
investment of $300,000 in each of the
stocks contained in the Index (to the
nearest whole share). The value of
the Tech-35 Index on any date equals
the current market value (based on
U.S. primary market prices) of the
assigned number of shares of each of
the stocks in the Tech-35 Index
divided by the current Tech-35 Index
divisor. The Tech-35 Index divisor
was initially calculated to yield a
benchmark value of 200 at the close of
trading on December 16, 1994.
Annually thereafter, following the
close of trading on the third Friday
of December, the AMEX has adjusted and
plans to continue to adjust the Tech-
35 Index portfolio, without changing
the value of the Tech- 35 Index, by
changing the number of shares of each
component stock so that each company
is again represented in "equal" dollar
amounts. If necessary, the AMEX
adjusts the divisor to ensure
continuity of the Tech-35 Index's
value. The newly adjusted portfolio
becomes the basis for the Tech-35
Index's value on the first trading day
following the annual adjustment.
Subject to the maintenance criteria
discussed below, the number of shares
of each component stock in the Tech-35
Index will remain fixed between annual
reviews except in the event of certain
types of corporate actions, such as
the payment of a dividend (other than
an ordinary cash dividend), stock
distributions, stock splits, reverse
stock splits, rights offerings,
distributions, reorganizations,
recapitalizations, or similar events
with respect to a Tech-35 Index
component stock. In a merger or
consolidation of an issuer of a
component security, if the security
remains in the Tech-35 Index, the
number of shares of that security will
be adjusted, if necessary, to the
nearest whole share, to maintain the
component's relative weight in the
Tech-35 Index at the level immediately
prior to the corporate action. In the
event of a stock replacement, the
average dollar value of the remaining
Tech-35 Index components will be
calculated and that amount invested in
the replacement stock, rounded to the
nearest whole share. In all cases,
the divisor will be adjusted, if
necessary, to ensure Tech-35 Index
continuity. The divisor and other
statistics based on the Tech-35 Index
is published and disseminated daily by
the AMEX, on Bloomberg Financial
Markets and Reuters Limited.
A current list of the issuers of the
component stocks of the Tech-35 Index
and the weighting of each component
stock as of April 6, 1999, as a
percentage of the total index
capitalization, is set forth below.
(The weighting of each stock is equal
upon annual rebalancing, but varies
throughout the year as the component
stocks rise and fall in value compared
to other component stocks.)
Stock
Company Name Exchange % Weights
------------ ------- ---------
Amazon.com Inc........................ NASDAQ 3.60%
America Online, Inc................... NYSE 6.96%
Applied Materials, Inc................ NASDAQ 3.26%
Ascend Communications, Inc............ NASDAQ 3.62%
Automatic Data Processing, Inc........ NYSE 2.27%
Cisco Systems, Inc.................... NASDAQ 2.78%
Compaq Computer Corporation........... NYSE 1.58%
Computer Associates Int'l, Inc........ NYSE 2.00%
Computer Sciences Corporation......... NYSE 1.87%
Dell Computer Corporation............. NASDAQ 3.01%
Electronic Arts, Inc.................. NASDAQ 2.35%
Electronic Data Systems Corp.......... NYSE 2.27%
EMC Corporation....................... NYSE 3.51%
First Data Corporation................ NYSE 3.22%
Hewlett-Packard Company............... NYSE 2.32%
Intel Corporation..................... NASDAQ 2.37%
International Business Machines Corp.. NYSE 2.33%
Intuit, Inc........................... NASDAQ 3.39%
Lucent Technologies, Inc.............. NYSE 2.87%
Micron Technology..................... NYSE 2.21%
Microsoft Corporation................. NASDAQ 2.98%
Motorola, Inc......................... NYSE 2.85%
Northern Telecom...................... NYSE 3.10%
Oracle Corporation.................... NASDAQ 1.97%
Parametric Technology Co.............. NASDAQ 2.48%
PeopleSoft, Inc....................... NASDAQ 1.83%
Seagate Technology Inc................ NYSE 2.00%
Solectron Corporation................. NYSE 3.12%
STMicroelectronics N.V................ NYSE 2.85%
Sun Microsystems, Inc................. NASDAQ 3.71%
Tellabs, Inc.......................... NASDAQ 3.65%
Texas Instruments, Inc................ NYSE 2.81%
3Com Corporation...................... NASDAQ 1.07%
Xilinx, Inc........................... NASDAQ 3.37%
Yahoo! Inc............................ NASDAQ 4.42%
Source: AMEX
The composition of the Tech-35 Index
is reviewed annually to ensure that
the component stocks meet certain
minimum capitalization, trading volume
and listing requirements and to ensure
that at least 90% of the Tech-35
Index's numerical value satisfies AMEX
criteria for standardized options
trading. In addition to the annual
rebalancings, if at any time between
annual rebalancing the top five
component securities, by weight,
account for more than one-third of the
weight of the Tech-35 Index, the Tech-
35 Index will be similarly rebalanced.
The component stocks of the Tech-35
Index may be changed at any time for
any reason.
None of MSDW, the AMEX, MS & Co. or
any of our affiliates guarantees the
accuracy and/or the completeness of
the Tech-35 Index or any data included
therein and neither shall have any
liability for any errors, omissions,
or interruptions therein. None of
MSDW, the AMEX, MS & Co. or any of our
affiliates makes any warranty, express
or implied, as to results to be
obtained by us, owners of the
Redeemable BRIDGES, or any other
person or entity from the use of the
Tech-35 Index or any data included
therein. The AMEX 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 Tech-35 Index or any data
included therein. Without limiting
any of the foregoing, in no event
shall any of MSDW, the AMEX, MS & Co.
or any of our affiliates 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 the AMEX and us.
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 Tech-35 Index,
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 Redeemable
BRIDGES under the securities laws.
You should undertake an independent
investigation of the issuers of the
component stocks of the Tech-35 Index
and of the Tech-35 Index to the extent
required, in your judgment, to allow
you to make an informed decision with
respect to an investment in the
Redeemable BRIDGES.
Conflicts of Interest
Because MS & Co. and MSCI are our
subsidiaries, potential conflicts of
interest may exist between MS & Co.,
MSCI and you, including with respect
to certain determinations and
judgments made in determining the
Tech-35 Index. The policies and
judgments of MS & Co. and MSCI
concerning additions, deletions and
substitutions of the stocks underlying
the Tech-35 Index and the manner in
which certain changes affecting such
underlying stocks are taken into
account in the calculation of the
Tech-35 Index may affect the value of
the Tech-35 Index. It is also
possible that the AMEX, either
independently or in consultation with
MS & Co. or MSCI, may discontinue or
suspend calculation or dissemination
of the Tech-35 Index and that,
consequently, MS & Co., as Calculation
Agent, would have to select a
successor or substitute index, or
itself calculate an index value, from
which to calculate the supplemental
redemption amount, if any. Any such
actions or judgments could adversely
affect the value of the Redeemable
BRIDGES.
MS & Co. and MSCI each maintains
policies and procedures regarding the
handling and use of confidential
proprietary information, and those
policies and procedures will be in
effect throughout the term of the
Redeemable BRIDGES to restrict the use
of information relating to the
calculation of the Tech-35 Index prior
to its dissemination. MS & Co. will
carry out its duties and functions in
connection with its determination of
the Tech-35 Index in good faith and by
exercising the diligence and
reasonableness of a prudent expert in
comparable circumstances.
It is also possible that any advisory
services that our affiliates provide
in the course of any business with the
issuers of the component stocks could
lead to actions on the part of such
underlying issuers which might
adversely affect the level of the
Tech-35 Index.
Discontinuance of the Tech-35 Index;
Alteration of Method of
Calculation....................... If the AMEX or MSCI discontinues
publication of the Tech-35 Index and
the AMEX or another entity (including
MS & Co. or MSCI) publishes a
successor or substitute index that MS
& Co. as the Calculation Agent
determines, in its sole discretion, to
be comparable to the discontinued
Tech-35 Index (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 the NYSE, the AMEX, NASDAQ
NMS or the 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 the Company and to the
holders of the Redeemable BRIDGES
within three Trading Days of such
selection.
If MS & Co. or the AMEX discontinues
publication of the Tech-35 Index prior
to, and such discontinuance is
continuing on the date that the Final
Index Value is to be determined and MS
& Co. as 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 Tech-35
Index 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 Tech-35
Index last in effect prior to such
discontinuance, using the closing
price (or, if trading in the relevant
securities has been materially
suspended or materially limited, its
good faith estimate of the closing
price that would have prevailed but
for such suspension or limitation) on
such date of each security most
recently comprising the Tech-35 Index.
Notwithstanding these alternative
arrangements, discontinuance of the
publication of the Tech-35 Index may
adversely affect the value of the
Redeemable BRIDGES.
If at any time the method of
calculating the Tech-35 Index or a
Successor Index, or the value thereof,
is changed in a material respect, or
if the Tech-35 Index or a Successor
Index is in any other way modified so
that such index does not, in the
opinion of MS & Co., as the
Calculation Agent, fairly represent
the value of the Tech-35 Index or such
Successor Index had such changes or
modifications not been made, then,
from and after such time, the
Calculation Agent will, at the close
of business in 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 Tech-35 Index or such Successor
Index, as the case may be, as if such
changes or modifications had not been
made, and calculate the Supplemental
Redemption Amount with reference to
the Tech-35 Index or such Successor
Index, as adjusted. Accordingly, if
the method of calculating the Tech-35
Index or a Successor Index is modified
so that the value of such index is a
fraction of what it would have been if
it had not been modified (e.g., due to
a split in the index), then the
Calculation Agent will adjust such
index in order to arrive at a value of
the Tech-35 Index or such Successor
Index as if it had not been modified
(e.g., as if such split had not
occurred).
Historical Information.............. The following table sets forth the
high and low daily closing values, as
well as end-of-quarter closing values,
of the Tech-35 Index for each quarter
in the period from June 30, 1995
through April 7, 1999. The Index
Closing Values listed below were
obtained from Bloomberg Financial
Markets. We believe all such
information to be accurate. The
historical values of the Tech-35 Index
should not be taken as an indication
of future performance, and no
assurance can be given that the Tech-
35 Index will increase sufficiently to
cause you to receive any Supplemental
Redemption Amount at maturity
(assuming that we have not called the
Redeemable BRIDGES prior to maturity).
Daily Index Closing Values
-----------------------------
High Low Period End
------ ------ ----------
1995
June 30, 1995............. - - 292.50
Third Quarter............. 340.07 293.33 325.83
Fourth Quarter............ 361.21 298.54 315.77
1996
First Quarter............. 353.94 284.44 316.50
Second Quarter............ 358.70 313.00 325.04
Third Quarter............. 360.78 280.53 352.54
Fourth Quarter............ 412.28 339.02 383.04
1997
First Quarter............. 421.97 348.50 354.60
Second Quarter ........... 441.01 343.99 426.23
Third Quarter............. 536.85 430.99 520.40
Fourth Quarter............ 535.31 419.22 447.52
1998
First Quarter............. 543.34 422.84 542.48
Second Quarter............ 599.75 519.22 595.80
Third Quarter............. 654.92 480.15 573.78
Fourth Quarter............ 875.45 481.04 874.47
1999
First Quarter............. 1034.26 884.83 1020.45
Second Quarter (through
April 7, 1999)......... 1095.56 1037.83 1075.37
Source: Bloomberg Financial Markets
Use of Proceeds and Hedging......... The net proceeds we receive from the
sale of the Redeemable BRIDGES 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
Redeemable BRIDGES, including hedging
market risks associated with the
Supplemental Redemption Amount. See
also "Use of Proceeds" in the
accompanying Prospectus.
On or prior to the date of this
pricing supplement, we, through our
subsidiaries or others, may hedge our
anticipated exposure in connection
with the Redeemable BRIDGES by the
purchase and sale of exchange traded
and over-the-counter options on the
Tech-35 Index, individual stocks
included in the Tech-35 Index, futures
contracts on the Tech-35 Index and
options on such futures contracts 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 or on
the value of the Tech-35 Index, we
cannot give any assurance that we will
not affect such prices as a result of
its hedging activities. Through our
subsidiaries, we are likely to modify
our hedge position throughout the life
of the Redeemable BRIDGES, 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.
Supplemental Information Concerning
Plan of Distribution................ In order to facilitate the offering
of the Redeemable BRIDGES, the Agent
may engage in transactions that
stabilize, maintain or otherwise
affect the price of the Redeemable
BRIDGES or the stocks underlying the
Tech-35 Index. Specifically, the
Agent may overallot in connection with
the offering, creating a short
position in the Redeemable BRIDGES for
its own account. In addition, to
cover allotments or to stabilize the
price of the Redeemable BRIDGES, the
Agent may bid for, and purchase, the
Redeemable BRIDGES or the stocks
underlying the Tech-35 Index in the
open market. See "Use of Proceeds and
Hedging" 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 Redeemable
BRIDGES 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
Redeemable BRIDGES are acquired
pursuant to an exemption from the
prohibited transaction rules.
The acquisition of the Redeemable
BRIDGES 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 Redeemable BRIDGES are linked to
an index and you should refer to the
discussion under "United States
Federal Taxation -- Notes -- Optionally
Exchangeable Notes" in the
accompanying Prospectus Supplement.
In connection with the discussion
thereunder, we have determined that
the "comparable yield" is an annual
rate of %, compounded annually.
Based on our determination of the
comparable yield, the "projected
payment schedule" for a Redeemable
BRIDGES (assuming a par amount of $10
or with respect to each integral
multiple thereof) consists of a
projected amount due at maturity,
equal to $ .
The following table states the amount
of interest that will be deemed to
have accrued with respect to a
Redeemable BRIDGES during each accrual
period, based upon the our
determination of the comparable yield
and the projected payment schedule:
INTEREST
INTEREST DEEMED TO
DEEMED TO HAVE ACCRUED
ACCRUE FROM ORIGINAL
DURING ISSUE DATE PER
ACCRUAL NOTE AS OF END
PERIOD (PER OF ACCRUAL
ACCRUAL PERIOD NOTE) PERIOD
--------------- ----------- ---------------
Original Issue Date through
December 31, 1999........... $ $
January 1, 2000 through
December 31, 2000........... $ $
January 1, 2001 through
December 31, 2001........... $ $
January 1, 2002 through
December 31, 2002........... $ $
January 1, 2003 through
December 31, 2003........... $ $
January 1, 2004 through
December 31, 2004........... $ $
January 1, 2005 through May , $
2005........................ $ $
The comparable yield and the projected
payment schedule are not provided for
any purpose other than the
determination of United States
Holders' interest accruals and
adjustments thereof in respect of the
Redeemable BRIDGES for federal income
tax purposes and do not constitute a
representation regarding the actual
amounts of the payments on the
Redeemable BRIDGES.
Additional Disclosure for Non-U.S.
Holders. The following discussion is
based on the opinion of Davis Polk &
Wardwell, special tax counsel to the
Company. As used herein, the term
"Non- U.S. Holder" means an owner of
a Redeemable BRIDGES that is, for
United States federal income tax
purposes, (i) a nonresident alien
individual, (ii) a foreign
corporation, (iii) a nonresident alien
fiduciary of a foreign trust or estate
or (iv) a foreign partnership one or
more of the members of which is, for
United States federal income tax
purposes, a nonresident alien
individual, a foreign corporation or a
nonresident alien fiduciary of a
foreign trust or estate. The
following summary does not deal with
persons that are not Non-U.S. Holders
or that are subject to special rules,
such as nonresident alien individuals
who have lost United States
citizenship or who have ceased to be
taxed as United States resident
aliens, corporations that are treated
as foreign personal holding companies,
controlled foreign corporations or
passive foreign investment companies,
and certain other Non-U.S. Holders
that are owned or controlled by
persons subject to United States
federal income tax. In addition,
unless otherwise noted, the following
summary does not apply to persons for
whom interest or gain on a Redeemable
BRIDGES is effectively connected with
a trade or business in the United
States. If you are considering the
purchase of the Redeemable BRIDGES,
you should consult your tax advisors
with regard to the application of the
United States federal income tax laws
to your particular situation as well
as any tax consequences arising under
the laws of any state, local or
foreign taxing jurisdiction. This
discussion is based on the Code and
administrative interpretations as of
the date hereof, all of which are
subject to change, including changes
with retroactive effect. Capitalized
terms appearing herein and not defined
have the meanings assigned to such
terms in the Prospectus Supplement.
Subject to the discussion below
concerning backup withholding,
payments of principal and the
Supplemental Redemption Amount, if
any, at maturity of a Redeemable
BRIDGES by us or a paying agent to a
Non-U.S. Holder, and gain realized on
the sale, exchange or other
disposition of such Redeemable
BRIDGES, will not be subject to United
States federal income or withholding
tax, provided that: (i) such Non-U.S.
Holder does not own, actually or
constructively, 10 percent or more of
the total combined voting power of all
classes of our stock entitled to vote,
is not a controlled foreign
corporation related, directly or
indirectly, to us through stock
ownership, and is not a bank receiving
interest described in Section
881(c)(3)(A) of the Code; (ii) the
statement required by Section 871(h)
or Section 881(c) of the Code has been
provided with respect to the
beneficial owner, as discussed below;
(iii) such Non-U.S. Holder is not an
individual who is present in the
United States for 183 days or more in
the taxable year of disposition, or
such individual does not have a "tax
home" (as defined in Section 911(d)(3)
of the Code) or an office or other
fixed place of business in the United
States; (iv) such payment and gain
are not effectively connected with the
conduct by such Holder of a trade or
business in the United States; and (v)
the securities underlying the Tech-35
Index continue to be actively traded
for U.S. federal income tax purposes.
Sections 871(h) and 881(c) of the Code
and applicable regulations require
that, in order to obtain the portfolio
interest exemption from withholding
tax, either the beneficial owner of
the Redeemable BRIDGES, or a
securities clearing organization, bank
or other financial institution that
holds customers' securities in the
ordinary course of its trade or
business (a "Financial Institution")
and that is holding the Redeemable
BRIDGES on behalf of such beneficial
owner, file a statement with the
withholding agent to the effect that
the beneficial owner of the Redeemable
BRIDGES is not a United States person.
Under United States Treasury
Regulations, such requirement will be
fulfilled if the beneficial owner of a
Redeemable BRIDGES certifies on
Internal Revenue Service Form W-8,
under penalties of perjury, that it is
not a United States person and
provides its name and address, and any
Financial Institution holding the
Redeemable BRIDGES on behalf of the
beneficial owner files a statement
with the withholding agent to the
effect that it has received such a
statement from the Holder (and
furnishes the withholding agent with a
copy thereof). With respect to
Redeemable BRIDGES held by a foreign
partnership, under current law, the
Form W-8 may be provided by the
foreign partnership. However, for
payments with respect to a Redeemable
BRIDGES after December 31, 1999,
unless the foreign partnership has
entered into a withholding agreement
with the Internal Revenue Service, a
foreign partnership will be required,
in addition to providing an
intermediary Form W-8, to attach an
appropriate certification by each
partner. If you, including foreign
partnerships and their partners, are a
prospective investor, you should
consult your tax advisors regarding
possible additional reporting
requirements.
Under Section 2105(b) of the Code, a
Redeemable BRIDGES held by an
individual who is not a citizen or
resident of the United States at the
time of his death will not be subject
to United States federal estate tax as
a result of such individual's death,
provided that the individual does not
own, actually or constructively, 10
percent or more of the total combined
voting power of all classes of our
stock entitled to vote and, at the
time of such individual's death,
payments with respect to such
Redeemable BRIDGES would not have been
effectively connected to the conduct
by such individual of a trade or
business in the United States.
Under current Treasury Regulations,
backup withholding at 31% will not
apply to payments by us or any paying
agent made on a Redeemable BRIDGES if
the certifications required by
Sections 871(h) and 881(c) are
received, provided in each case that
we or such paying agent, as the case
may be, do not have actual knowledge
that the payee is a United States
person.
Under current Treasury Regulations,
payments on the sale, exchange or
other disposition of a Redeemable
BRIDGES made to or through a foreign
office of a broker generally will not
be subject to backup withholding.
However, if such broker is a United
States person, a controlled foreign
corporation for United States tax
purposes, a foreign person 50 percent
or more of whose gross income is
effectively connected with a United
States trade or business for a
specified three-year period or, in the
case of payments made after December
31, 1999, a foreign partnership with
certain connections to the United
States, information reporting will be
required unless the broker has in its
records documentary evidence that the
beneficial owner is not a United
States person and certain other
conditions are met or the beneficial
owner otherwise establishes an
exemption. Backup withholding may
apply to any payment which such broker
is required to report if such broker
has actual knowledge that the payee is
a United States person. Payments to
or through the United States office of
a broker will be subject to backup
withholding and information reporting
unless the Holder certifies, under
penalties of perjury, that it is not a
United States person or otherwise
establishes an exemption.
If you are a Non-U.S. Holder of
Redeemable BRIDGES, you should consult
your tax advisors regarding the
application of information reporting
and backup withholding in your
particular situation, the availability
of an exemption therefrom, and the
procedure for obtaining such an
exemption, if available. Any amounts
withheld from a payment to a Non-U.S.
Holder under the backup withholding
rules will be allowed as a credit
against such Holder's United States
federal income tax liability and may
entitle such Holder to a refund,
provided that the required information
is furnished to the Internal Revenue
Service.
