PROSPECTUS SUPPLEMENT
(To Prospectus dated May 18, 2000)
U.S.$15,708,077,477
Morgan Stanley Dean Witter & Co.
GLOBAL MEDIUM-TERM NOTES, SERIES D AND E
GLOBAL UNITS, SERIES D AND E
-----------------------
We, Morgan Stanley Dean Witter & Co., may offer from time to time global
medium-term notes, either alone or as part of a unit. The specific terms of any
notes that we offer will be included in a pricing supplement. The notes will
have the following general terms:
o The notes will mature more than nine months from the date of issue.
o The notes will bear interest at either a fixed rate, which may be zero, or
a floating rate. Floating rates will be based on rates specified in the
applicable pricing supplement.
o The notes will pay interest, if any, on the dates stated in the applicable
pricing supplement.
o The notes will be either senior or subordinated. o The applicable pricing
supplement will specify whether the notes will be denominated in U.S.
dollars or some other currency.
o The notes will be issued in fully registered form, in bearer form, or
in any combination of registered and bearer forms.
The pricing supplement may also specify that the notes will have additional
terms, including the following:
o The notes may be optionally or mandatorily exchanged for securities of an
issuer that is not affiliated with us, into a basket or index of those
securities or for the cash value of those securities. In the event
exchangeable notes are submitted for listing to the UK Listing Authority,
supplemental Listing Particulars will be prepared.
o Payments on the notes may be linked to currency prices, commodity prices,
single securities, baskets of securities or indices.
o The notes may be either callable by us or puttable by you.
Units may include any combination of notes, universal warrants or purchase
contracts. Each universal warrant will either entitle or require you to
purchase or sell, and each purchase contract will require you to purchase or
sell, (1) securities of an entity not affiliated with us, a basket of those
securities, an index or indices of those securities or any combination of the
above, (2) currencies or (3) commodities. The specific terms of any units we
offer will be included in the applicable pricing supplement.
Application has been made to the UK Listing Authority for Series D notes only,
for an aggregate principal amount outstanding at any time of up to
U.S.$15,708,077,477 offered by this prospectus supplement during the twelve
months after the date of this prospectus supplement, to be admitted to the
Official List of the UK Listing Authority. We may make application from time to
time for issues of Series D units to be admitted to the Official List of the UK
Listing Authority, in connection with which further listing particulars will be
produced. Application will, in certain circumstances as described in this
prospectus supplement, be made to list Series D notes and Series D units on the
Parisbourse SBF SA, which we refer to as the Paris Bourse. For the sole purpose
of listing Series D notes and Series D units on the Paris Bourse, this
prospectus supplement and the accompanying prospectus have been submitted to
the clearance procedures of the Commission des Operations de Bourse, which we
refer to as the COB, and have been registered by the COB under no. P00-243 on
May 17, 2000. However, the listing of certain types of notes and units, in
particular CD, commercial paper and federal funds rate notes, on the Paris
Bourse may be subject to prior approval from the COB. The Series E notes and
Series E units will not be listed on any stock exchange.
-----------------------
Investing in the notes or units involves risks. See "Foreign Currency Risks"
beginning on page S-8.
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<TABLE>
Price to Agent's Proceeds to
------- ----------- ----------
<S> <C> <C> <C>
Per note or unit.. 100% .125%-.750% 99.875% -99.250%
Total............. $15,708,077,477 $19,635,097 - $117,810,581 $15,688,442,380 - $15,590,266,896
</TABLE>
The United States Securities and Exchange Commission and state securities
regulators have not approved or disapproved these securities, or determined if
this prospectus supplement or the accompanying prospectus is truthful or
complete. Any representation to the contrary is a criminal offense. Morgan
Stanley & Co. International Limited, Bank Morgan Stanley AG, Morgan Stanley
S.A., and Morgan Stanley Bank AG, each of which is our affiliate, have agreed
to use reasonable efforts to solicit offers to purchase these securities as our
agents. The agents may also purchase these securities as principal at prices to
be agreed upon at the time of sale. The agents may resell any securities they
purchase as principal at prevailing market prices, or at other prices, as the
agents determine.
The agents may use this prospectus supplement and the accompanying prospectus
in connection with offers and sales of the securities in market-making
transactions.
-----------------------
MORGAN STANLEY DEAN WITTER
May 19, 2000
<PAGE>
o A copy of this prospectus supplement, the accompanying prospectus
dated May 18, 2000, our Annual Report on Form 10-K for the fiscal
year ended November 30, 1999, pages 4 and 22 through 90 from our 1999
Annual Report to Shareholders, pages 4 through 15 (excluding the
material included under the heading "Report of the Compensation
Committee on Executive Compensation") and 19 (beginning at the
heading "Section 16(a) Beneficial Ownership Reporting Compliance")
through 20 from the Proxy Statement for our 2000 Annual Meeting of
Stockholders, our Quarterly Report on Form 10-Q for the quarter ended
February 29, 2000 and our Current Reports on Form 8-K dated December
20, 1999 (3 reports) and March 23, 2000 which together comprise
listing particulars, which we refer to in this document as the UK
Listing Authority Listing Particulars, with regard to the issuance by
us of the Series D notes in compliance with the rules of the UK
Listing Authority and in accordance with Part IV of the Financial
Services Act 1986, will be delivered for registration to the
Registrar of Companies in England and Wales as required by Section
149 of the Financial Services Act of 1986.
o Each Sterling note, as defined below, will be either a shorter term
debt security issued in accordance with regulations made under
Section 4 of the Banking Act 1987 or a longer term debt security
issued in accordance with regulations made under Section 4 of the
Banking Act 1987. References to "Sterling notes" are to shorter term
debt securities and longer term debt securities, as defined in the
Banking Act 1987 (Exempt Transactions) Regulations 1997. References
to "Sterling" are to the lawful currency of the United Kingdom.
o The issuance of notes or units listed on the Paris Bourse, which we
refer to as "French notes" and "French units" and collectively as
"French instruments," will comply with the Principes Generaux etablis
par la Commission des Operations de Bourse et le Conseil des Marches
Financiers relatifs aux warrants et aux titres de creances complexes,
which we refer to as the "General Principles." In this prospectus
supplement, we refer to the Commission des Operations de Bourse as
the "COB" and the Conseil des Marches Financiers as the "CMF."
o Paris listed French instruments will be issued subject to the
requirements of the Paris Bourse. So long as any notes or units are
listed on the Paris Bourse, copies of this prospectus supplement and
the accompanying prospectus, and all publicly available documents
incorporated by reference in this prospectus supplement, will be
available from the principal office of Morgan Stanley S.A. as the
listing agent for notes and units listed on the Paris Bourse.
o Morgan Stanley Dean Witter accepts responsibility for the information
contained in the UK Listing Authority Listing Particulars. To the
best of the knowledge and belief of Morgan Stanley Dean Witter (which
has taken all reasonable care to ensure that such is the case), the
information contained in the UK Listing Authority Listing Particulars
is in accordance with the facts and does not omit anything likely to
affect the import of such information.
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TABLE OF CONTENTS
Page
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Prospectus Supplement
Summary......................................................................S-5
Foreign Currency Risks.......................................................S-8
Description of Notes........................................................S-10
Description of Units........................................................S-37
United States Federal Taxation..............................................S-40
Plan of Distribution........................................................S-43
Legal Matters...............................................................S-45
Capitalization..............................................................S-46
Board of Directors..........................................................S-47
General Information.........................................................S-47
Paris Listing Information...................................................S-49
Paris Bourse Responsibility Statement.......................................S-50
Prospectus
Summary........................................................................3
Where You Can Find More Information ...........................................7
Consolidated Ratios of Earnings to Fixed Charges and Earnings to Fixed
Charges and Preferred Stock Dividends........................................8
Morgan Stanley Dean Witter.....................................................9
Use of Proceeds................................................................9
Description of Debt Securities................................................10
Description of Units..........................................................18
Description of Warrants.......................................................23
Description of Purchase Contracts.............................................26
Description of Capital Stock..................................................27
Forms of Securities...........................................................40
Plan of Distribution..........................................................43
Legal Matters.................................................................44
Experts.......................................................................44
ERISA Matters for Pension Plans and Insurance
Companies...................................................................45
You should rely only on the information contained or incorporated by reference
in this prospectus supplement, the prospectus and any pricing supplement.
However the information incorporated by reference in the prospectus supplement,
the prospectus and any pricing supplement has not been submitted to the
clearance procedure of the COB, and should consequently not be relied upon in
the case of notes and units listed on the Paris Bourse. Documents incorporated
by reference and not included in the UK Listing Authority Listing Particulars
do not form part of the UK Listing Authority Listing Particulars. We have not
authorized anyone else to provide you with different or additional information.
We are offering to sell these securities and seeking offers to buy these
securities only in jurisdictions where offers and sales are permitted.
Pursuant to the UK Financial Services Act, in order to obtain a listing on the
Official List, we are obliged to prepare listing particulars that contain all
information which investors and their professional advisers would reasonably
require and reasonably expect to find there, in order to make an informed
assessment of our assets and liabilities, financial position, profits and
losses and prospects and the rights attaching to these notes. In determining
what information is so required or is so expected, regard may be had to (1) the
nature of the notes, (2) the nature of persons likely to consider their
acquisition and (3) certain information available to investors and their
professional advisers. In order to satisfy this obligation, we are not
permitted to rely upon information incorporated by reference into the document
that constitutes listing particulars.
We have determined that the prospectus, prospectus supplement, our Annual
Report on Form 10-K for the fiscal year ended November 30, 1999, our Quarterly
Report on Form 10-Q for the quarter ended February 29, 2000, pages 4 and 22
through 90 from our 1999 Annual Report to Shareholders, pages 4 through 15
(excluding the material included under the heading "Report of the Compensation
Committee on Executive Compensation") and 19 (beginning at the heading "Section
16(a) Beneficial Ownership Reporting Compliance") through 20 from the Proxy
Statement for our 2000 Annual Meeting of Stockholders and our Current Reports
on Form 8-K dated December 20, 1999 (3 reports) and March 23, 2000, excluding
any other information incorporated herein by reference, comprises listing
particulars and satisfies the requirements of the UK Financial Services Act
referred to above. Accordingly, any reference in this prospectus and prospectus
supplement to "listing particulars" means the prospectus, prospectus
supplement, our Annual Report on Form 10-K for the fiscal year ended November
30, 1999, our Quarterly Report on Form 10-Q for the quarter ended February 29,
2000, pages 4 and 22 through 90 from our 1999 Annual Report to Shareholders,
pages 4 through 15 (excluding the material included under
S-3
<PAGE>
the heading "Report of the Compensation Committee on Executive Compensation")
and 19 (beginning at the heading "Section 16(a) Beneficial Ownership Reporting
Compliance") through 20 from the Proxy Statement for our 2000 Annual Meeting of
Stockholders and our Current Reports on Form 8-K dated December 20, 1999 (3
reports) and March 23, 2000 excluding any information incorporated by reference
in such materials. We have determined that any information incorporated by
reference in the materials that comprise our listing particulars, including any
such information to which readers of this document are expressly referred in
the text of the listing particulars, does not need to be included in the
listing particulars to satisfy the requirements of the UK Financial Services
Act referred to above. We believe that none of the information incorporated
herein by reference conflicts in any material respect with the information
included in the listing particulars.
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<PAGE>
SUMMARY
The following summary describes the notes and units we are offering under
this program in general terms only. You should read the summary together with
the more detailed information contained in this prospectus supplement, in the
accompanying prospectus and in the applicable pricing supplement.
We, Morgan Stanley Dean Witter & Co., may offer from time to time up to
U.S.$15,708,077,477, or the equivalent of this amount in other currencies, of
the medium-term notes and units described in this prospectus supplement. We
will sell the notes and the units primarily outside the United States, but we
may also sell them in the United States or both in and outside the United
States simultaneously. We refer to the notes and units offered under this
prospectus supplement as our Series D and Series E medium-term notes and our
Series D and Series E units. We refer to the offering of the Series D and
Series E medium-term notes and the Series D and Series E units as our "Series D
and Series E program."
General terms of the notes o The notes will mature more than nine months
from the date of issuance and will pay
interest, if any, on the dates specified in the
applicable pricing supplement.
o The notes will bear interest at either a fixed
rate, which may be zero, or a floating rate.
o The notes will be issued in U.S. dollars unless
we specify otherwise in the applicable pricing
supplement.
o The notes will be either senior or subordinated.
o The notes may be either callable by us or
puttable by you. o Payments on the notes will
generally be increased by the amount of any
deduction for United States withholding taxes
unless the notes are redeemed by us at our
option.
o Early redemption of the notes will be permitted
or required in some instances if there are
specified changes in United States taxation or
information reporting requirements.
o The notes may be optionally or mandatorily
exchanged for securities of an issuer that is
not affiliated with us, into a basket or index
of those securities or for the cash value of
those securities.
o Payments of principal and/or interest on the
notes may be linked to currency prices,
commodity prices, single securities, baskets of
securities or indices.
o We may issue amortizing notes that pay a level
amount in respect of both interest and
principal amortized over the life of the note.
o The notes may be issued either alone or as a
part of a unit with any combination of other
securities.
o The notes will be issued in bearer form, in
fully registered form, or in any combination of
registered and bearer forms.
o We have applied to list the Series D notes on
the London Stock Exchange Limited and the Paris
Bourse. The Series D notes listed on the Paris
Bourse will be issued in compliance with the
General Principles. We may also apply to list
the Series D units on the London Stock Exchange
Limited. The Series E notes and the Series E
units will not be listed on any securities
exchange.
General terms of units o Units may include any combination of notes,
universal warrants or purchase contracts.
S-5
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o Universal warrants will entitle or require you
to purchase from us or sell to us:
o securities of an entity not affiliated with
us, a basket of those securities, an index or
indices of those securities or any
combination of the above;
o currencies; or
o commodities.
The pricing supplement will explain how we or,
if specified, you may satisfy any obligations
under the universal warrants through the
delivery of the underlying securities,
currencies or commodities or, in the case of
underlying securities or commodities, the cash
value of the underlying securities or
commodities.
o Purchase contracts included in units will
require you to purchase or sell:
o securities of an entity not affiliated with
us, a basket of those securities, an index or
indices of those securities or any
combination of the above;
o currencies; or
o commodities.
A purchase contract issued as part of a unit
may be either prepaid or paid at settlement.
The applicable pricing supplement will explain
the methods by which you may purchase or sell
the specified securities, currencies or
commodities at the settlement of the purchase
contract and any acceleration, cancellation or
termination provisions or other provisions
relating to the settlement of the purchase
contract.
o The applicable pricing supplement will indicate
whether and under what circumstances securities
included in a unit may be separated from the
other securities comprising that unit.
Forms of securities The securities that we offer under our Series D and
Series E program may be issued in bearer form or
in fully registered form and, in each case, in
definitive form or global form, or in any
combination of the above.
Bearer notes initially will be represented by a
temporary global bearer note that we will deposit
with a common depositary for Morgan Guaranty Trust
Company of New York, Brussels office, as operator
of the Euroclear System, Clearstream Banking,
societe anonyme, and/or any other relevant
clearing system. Interests in each temporary
global bearer note will be exchangeable for
interests in permanent global bearer notes or for
definitive registered or bearer notes. Securities
issued in fully registered form will be
represented either by a global security registered
in the name of a common depositary, or by
certificates issued in definitive form, as set
forth in the applicable pricing supplement. Any
note purchased on original issuance by or on
behalf of a United States person must, subject to
some exceptions, be a registered note.
S-6
<PAGE>
How to reach us You may contact us at our principal executive
offices at 1585 Broadway, New York, New York 10036
(telephone number (212) 761-4000).
S-7
<PAGE>
FOREIGN CURRENCY RISKS
You should consult your financial and legal advisors as to any specific
risks entailed by an investment in notes, units or any of the securities
included in units that are denominated or payable in, or the payment of which
is linked to the value of, a currency other than the currency of the country in
which you are resident or in which you conduct your business, which we refer to
as your "home currency." These notes, units or other securities are not
appropriate investments for investors who are not sophisticated in foreign
currency transactions. We disclaim any responsibility to advise prospective
purchasers who are residents of countries other than the United States of any
matters arising under non-U.S. law that may affect the purchase of or holding
of, or the receipt of payments on, the notes, units or any securities included
in the units. These persons should consult their own legal and financial
advisors concerning these matters.
Exchange Rates and Exchange Controls May Affect Securities' Value or Return
Securities Involving Foreign Currencies Are Subject to General Exchange
Rate and Exchange Control Risks. An investment in a note, unit or any security
included in a unit that is denominated or payable in, or the payment of which
is linked to the value of, currencies other than your home currency entails
significant risks. These risks include the possibility of significant changes
in rates of exchange between your home currency and the relevant foreign
currencies and the possibility of the imposition or modification of exchange
controls by the relevant governmental entities. These risks generally depend on
economic and political events over which we have no control.
Exchange Rates Will Affect Your Investment. In recent years, rates of
exchange between some currencies have been highly volatile and this volatility
may continue in the future. Fluctuations in any particular exchange rate that
have occurred in the past are not necessarily indicative, however, of
fluctuations that may occur during the term of any note, unit or security
included in a unit. Depreciation against your home currency of the currency in
which a note, unit or security included in a unit is payable would result in a
decrease in the effective yield of the note below its coupon rate or in the
payout of the unit or security included in the unit and could result in an
overall loss to you on a home currency basis. In addition, depending on the
specific terms of a currency-linked note, changes in exchange rates relating to
any of the relevant currencies could result in a decrease in its effective
yield and in your loss of all or a substantial portion of the value of that
note.
There May Be Specific Exchange Rate Risks Applicable to Warrants and
Purchase Contracts. Fluctuations in the rates of exchange between your home
currency and any other currency (a) in which the exercise price of a warrant or
the purchase price of a purchase contract is payable, (b) in which the value of
the property underlying a warrant or purchase contract is quoted or (c) to be
purchased or sold by exercise of a warrant or pursuant to a purchase contract
or in the rates of exchange among any of these currencies may change the value
of a warrant, a purchase contract or a unit that includes a warrant or purchase
contract. You could lose money on your investment as a result of these
fluctuations, even if the spot price of the property underlying the warrant or
purchase contract were such that the warrant or purchase contract appeared to
be "in the money."
We Have No Control Over Exchange Rates. Currency exchange rates can either
float or be fixed by sovereign governments. Exchange rates of most economically
developed nations are permitted to fluctuate in value relative to each other.
However, from time to time governments may use a variety of techniques, such as
intervention by a country's central bank or the imposition of regulatory
controls or taxes, to influence the exchange rates of their currencies.
Governments may also issue a new currency to replace an existing currency or
alter the exchange rate or relative exchange characteristics by a devaluation
or revaluation of a currency. These governmental actions could change or
interfere with currency valuations and currency fluctuations that would
otherwise occur in response to economic forces, as well as in response to the
movement of currencies across borders.
As a consequence, these government actions could adversely affect yields
or payouts in your home currency for (a) notes denominated or payable in
currencies other than U.S. dollars, (b) currency-linked notes, (c) warrants or
purchase contracts where the exercise price or the purchase price is
denominated in a currency differing from your home currency or where the value
of the property underlying the warrants or purchase contracts is quoted in a
currency other than your home currency and (d) warrants or purchase contracts
to purchase or sell foreign currency.
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We will not make any adjustment or change in the terms of the notes, units
or any security included in a unit in the event that exchange rates should
become fixed, or in the event of any devaluation or revaluation or imposition
of exchange or other regulatory controls or taxes, or in the event of other
developments affecting your home currency or any applicable foreign currency.
You will bear those risks.
Some Foreign Currencies May Become Unavailable. Governments have imposed
from time to time, and may in the future impose, exchange controls that could
also affect the availability of a specified currency. Even if there are no
actual exchange controls, it is possible that the applicable currency for any
security would not be available when payments on that security are due.
Alternative Payment Method Used if Payment Currency Becomes Unavailable.
If a payment currency is unavailable, we would make required payments in U.S.
dollars on the basis of the market exchange rate. However, if the applicable
currency for any security is not available because the euro has been
substituted for that currency, we would make the payments in euro. The
mechanisms for making payments in these alternative currencies are explained in
"Description of Notes--Interest and Principal Payments" below.
Currency Conversions May Affect Payments on Some Securities
The applicable pricing supplement may provide for (1) payments on a
non-U.S. dollar denominated note, unit or any security included in a unit to be
made in U.S. dollars or (2) payments on a U.S. dollar denominated note, unit or
any security included in a unit to be made in a currency other than U.S.
dollars. In these cases, Morgan Stanley & Co. International Limited, in its
capacity as exchange rate agent, or a different exchange rate agent identified
in the pricing supplement, will convert the currencies. You will bear the costs
of conversion through deductions from those payments.
Exchange Rates May Affect the Value of a New York Judgment Involving Non-U.S.
Dollar Securities
The notes, units, universal warrants and purchase contracts will be
governed by and construed in accordance with the laws of the State of New York.
Unlike many courts in the United States outside the State of New York, the
courts in the State of New York customarily enter judgments or decrees for
money damages in the foreign currency in which notes, units, universal warrants
and purchase contracts are denominated. These amounts would then be converted
into U.S. dollars at the rate of exchange in effect on the date the judgment or
decree is entered. You would bear the relevant currency risk during litigation.
Additional risks specific to particular securities issued under our Series
D and Series E program will be detailed in the applicable pricing supplements.
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DESCRIPTION OF NOTES
Investors should carefully read the general terms and provisions of our
debt securities in "Description of Debt Securities" in the prospectus. This
section supplements that description. The pricing supplement will add specific
terms for each issuance of notes and may modify or replace any of the
information in this section and in "Description of Debt Securities" in the
prospectus. If a note is offered as part of a unit, investors should also
review the information in "Description of Units" in the prospectus and in this
prospectus supplement.
The following terms used in this section are defined in the indicated
sections of the accompanying prospectus:
o Capital Units ("Description of Capital Stock -- Outstanding Capital
Stock")
o Senior Debt Indenture ("Description of Debt Securities --
Indentures")
o senior indebtedness ("Description of Debt Securities --
Subordination Provisions")
o Subordinated Debt Indenture ("Description of Debt Securities --
Indentures")
General Terms of Notes
We may issue notes under the Senior Debt Indenture or the Subordinated
Debt Indenture. The Series D and Series E medium-term notes issued under each
indenture, together with our Series C global medium-term notes, referred to
below under "Plan of Distribution," will constitute a single series under that
indenture, together with any medium-term notes we issue in the future under
that indenture that we designate as being part of that series.
Outstanding Indebtedness of MSDW. Neither indenture limits the amount of
additional indebtedness that we may incur. At February 29, 2000, we had
approximately $28.9 billion aggregate principal amount of debt securities
outstanding under the Senior Debt Indenture and approximately $90.0 million
aggregate principal amount of debt securities outstanding under the
Subordinated Debt Indenture. For the purposes of this paragraph, these amounts
include, (1) for any debt security sold with original issue discount, the issue
price of that debt security plus all discount accreted as of February 29, 2000
and (2) for any debt security denominated in a foreign currency, the U.S.
dollar equivalent on February 29, 2000 of the issue price of that debt
security.
Ranking. Notes issued under the Senior Debt Indenture will rank on a
parity with all other senior indebtedness of MSDW and with all other unsecured
and unsubordinated indebtedness of MSDW, subject to statutory exceptions in the
event of liquidation upon insolvency. Notes issued under the Subordinated Debt
Indenture will rank on a parity with all other subordinated indebtedness of
MSDW and, together with all other subordinated indebtedness, will be
subordinated in right of payment to the prior payment in full of our senior
indebtedness. See "Description of Debt Securities -- Subordination Provisions"
in the prospectus. At February 29, 2000, we had outstanding approximately $61.3
billion of senior indebtedness (not including approximately $10.2 billion of
additional, senior indebtedness consisting of guaranteed obligations of the
indebtedness of subsidiaries), approximately $90.0 million of subordinated
indebtedness and approximately $439 million of Capital Units.
Terms Specified in Pricing Supplements. A pricing supplement will specify
the following terms of any issuance of our Series D and Series E medium-term
notes to the extent applicable (which terms shall, for the sole purpose of
Series D notes listed on the Paris Bourse, comply with the General Principles):
o the specific designation of the notes;
o the issue price (price to public);
o the aggregate principal amount;
o the denominations or minimum denominations;
o the original issue date;
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o whether the notes are senior or subordinated;
o the stated maturity date and any terms related to any extension of the
maturity date;
o whether the notes are fixed rate notes, floating rate notes, notes
with original issue discount and/or amortizing notes;
o for fixed rate notes, the rate per year at which the notes will bear
interest, if any, or the method of calculating that rate and the
dates on which interest will be payable;
o for floating rate notes, the base rate, the index maturity, the
spread, the spread multiplier, the initial interest rate, the
interest reset periods, the interest payment dates, the maximum
interest rate, the minimum interest rate and any other terms relating
to the particular method of calculating the interest rate for the
note;
o if the note is an amortizing note, the amortization schedule;
o whether the notes may be redeemed, in whole or in part, at our option
or repaid at your option, prior to the stated maturity date, and the
terms of any redemption or repayment;
o whether the notes are currency-linked notes and/or notes linked to
commodity prices, single securities, baskets of securities or
indices;
o the terms on which early redemption of the notes will be permitted or
required in some instances if there are specified changes in United
States taxation or information reporting requirements;
o whether payments on the notes will be increased by the amount of any
deduction for United States withholding taxes;
o the terms on which holders of the notes may convert or exchange them
into or for stock or other securities of entities not affiliated with
us or any other property, any specific terms relating to the
adjustment of the conversion or exchange feature and the period
during which the holders may effect the conversion or exchange;
o if any note is not denominated and payable in U.S. dollars, the
currency or currencies in which the principal, premium, if any, and
interest, if any, will be paid, which we refer to as the "specified
currency," along with any other terms relating to the non-U.S. dollar
denomination, including exchange rates as against the U.S. dollar at
selected times during the last five years and any exchange controls
affecting that specified currency;
o whether the notes will be issued in bearer form, in fully registered
form, or in any combination of registered and bearer forms;
o whether the notes will be listed on any stock exchange;
o in the case of notes listed on the Paris Bourse, the principal
characteristics of the notes so issued in French, the Sicovam (as
defined under "Forms of Notes - Global Bearer Notes" below) number,
the Paying Agent in France, the Paris address where documents
incorporated by reference (or otherwise required to be made available
for inspection) may be inspected, a list of the documents available
for inspection and the Paris Bourse Responsibility Statement; and
o any other terms on which we will issue the notes.
Some Definitions. We have defined some of the terms that we use frequently
in this prospectus supplement below:
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A "business day" means any day, other than a Saturday or Sunday, (a) that
is neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close (x) in The City of New
York or in The City of London or (y) for notes denominated in a specified
currency other than U.S. dollars, Australian dollars or euro, in the principal
financial center of the country of the specified currency or (z) for notes
denominated in Australian dollars, in Sydney, and (b) for notes denominated in
euro, that is also a day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer System, which is commonly referred to as "TARGET,"
is operating.
"Clearstream, Luxembourg" means Clearstream Banking, societe anonyme.
"Euro LIBOR notes" means LIBOR notes for which the index currency is
euros.
"Euroclear operator" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
An "interest payment date" for any note means a date on which, under the
terms of that note, regularly scheduled interest is payable.
"London banking day" means any day on which dealings in deposits in the
relevant index currency are transacted in the London interbank market.
The "record date" for any interest payment date for a registered note is
the date 15 calendar days prior to that interest payment date, whether or not
that date is a business day.
"TARGET Settlement Day" means any day on which the Trans-European
Automated Real-time Gross Settlement Express Transfer System is open.
References in this prospectus supplement to "U.S. dollars" or "U.S.$" or
"$" are to the currency of the United States of America.
References in this prospectus supplement to "euro" are to the single
currency of participating members states which was introduced on 1st January,
1999 at the commencement of the third stage of European Economic and Monetary
Union by which date the euro became the legal currency in eleven member states
of the European Union pursuant to the Treaty on European Union. References
during the transitional period following the introduction of the euro on 1st
January, 1999 up to the end of the transitional period on 31st December, 2001
to "French francs" or "FRF" or "FF" or to "Deutsche marks" or "DEM" or "DM" or
to other currencies replaced by the euro are, in each case, to the non- decimal
denominations of the euro as defined by the conversion rates irrevocably fixed
in accordance with Article 109 L (4) sentence 1 of the Treaty on European
Union.
Forms of Notes
We will offer the notes on a continuing basis and will issue notes, either
alone or as part of a unit, in:
o definitive bearer form with coupons attached or in temporary or
permanent global bearer form without coupons attached;
o fully registered definitive or global form without coupons; or
o any combination of registered and bearer forms.
References to "bearer notes" will, except where otherwise indicated, include
permanent or temporary global bearer notes, as well as definitive bearer notes
and any attached coupons.
Global Bearer Notes. If we issue notes in bearer form, each bearer note
will be represented initially by a temporary global bearer note, without
attached coupons. We will deposit each temporary global bearer note with a
common
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depositary for the Euroclear operator, Clearstream, Luxembourg and/or any other
relevant clearing system, including Sicovam S.A., which we refer to as Sicovam,
and the Intermediaires Financiers Habilites, authorized to maintain accounts
with that common depositary. The Euroclear operator and Clearstream, Luxembourg
or, as applicable, any other relevant clearing system, will credit the account
designated by or on behalf of the subscriber of those bearer notes with a
principal amount of notes equal to the principal amount for which it has
subscribed and paid. The interests of the beneficial owner or owners in a
temporary global bearer note will be exchangeable for interests in a permanent
global bearer note in accordance with the procedures we describe in the next
paragraph. A common depositary for the Euroclear operator, Clearstream,
Luxembourg or, as applicable, any other relevant clearing system will hold the
permanent global bearer note for credit to the accounts designated by or on
behalf of the beneficial owners.
Exchange of Temporary Global Bearer Notes for Permanent Global Bearer
Notes. An interest in a temporary global bearer note may be exchanged for an
interest in a permanent global bearer note on or after the exchange date
described below if our paying agent receives an ownership certificate required
under the United States Treasury regulations. The "exchange date" for a
temporary global bearer note will normally be the 40th day after the date on
which we receive the proceeds of the sale of the note. However, if an agent
holds a note as part of an unsold allotment or subscription for more than 40
days after the closing date for the note, the exchange date will be the day
after the date on which the agent sells the note. The substance of the required
ownership certificate and an explanation of how it is delivered to our paying
agent is described under "--Interest and Principal Payments" below.
Exchange of Permanent Global Bearer Notes for Definitive Notes. The
beneficial owner of a note represented by a permanent global bearer note may
exchange that interest for a definitive bearer note. The beneficial owner must
give 30 days' written notice of exchange to the principal paying agent through
either the Euroclear operator, Clearstream, Luxembourg or, as applicable, any
other relevant clearing system. When the principal paying agent receives an
initial request to exchange an interest in a permanent global bearer note for a
definitive bearer note or notes, all other interests in that permanent global
bearer note will be exchanged for definitive notes, although interests in the
definitive notes may continue to be held through the Euroclear operator,
Clearstream, Luxembourg or, as applicable, any other relevant clearing system.
All definitive bearer notes will be serially numbered, with coupons, if any,
attached.
In addition, we will exchange all interests in a permanent global bearer
note for definitive bearer notes of any authorized denominations if:
o any note represented by the permanent global bearer note is
accelerated following an Event of Default, or
o either Euroclear or Clearstream, Luxembourg or any other relevant
clearing system is closed for business for a continuous period of
fourteen days, other than by reason of public holidays, or announces
an intention to cease business permanently or in fact does so.
In the event of any exchange of interests in a permanent global rate for
definitive notes, the common depositary for the Euroclear operator,
Clearstream, Luxembourg and, as applicable, any other relevant clearing system
will instruct the principal paying agent regarding the aggregate principal
amount and denominations of definitive bearer notes that must be authenticated
and delivered to the Euroclear operator, Clearstream, Luxembourg or, as
applicable, any other relevant clearing system. These exchanges will occur at
no expense to the beneficial owners, as soon as practicable after the receipt
of the initial request for definitive bearer notes or of a notice of
acceleration or clearing system closure. No bearer notes will be delivered in
the United States.
Legend. Each bearer note and coupon, if any, will bear the following
legend: "Any United States person who holds this obligation will be subject to
limitations under the United States income tax laws, including the limitations
provided in sections 165(j) and 1287(a) of the Internal Revenue Code."
Denominations. MSDW will issue the notes:
o for U.S. dollar-denominated notes, in denominations of U.S.$1,000 or
any amount greater than U.S.$1,000 that is an integral multiple of
U.S.$1,000; or
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o for notes denominated in a specified currency other than U.S.
dollars, in denominations of the equivalent of U.S.$1,000, rounded to
an integral multiple of 1,000 units of the specified currency, or any
larger integral multiple of 1,000 units of the specified currency, as
determined by reference to the market exchange rate, as defined under
"--Interest and Principal Payments--Unavailability of Foreign
Currency" below, on the business day immediately preceding the date
of issuance.
New York Law to Govern. The notes will be governed by, and construed in
accordance with, the laws of the State of New York.
Exchange and Transfer
Definitive bearer notes and any coupons are transferable by delivery. You
may exchange definitive bearer notes for other bearer notes in other authorized
denominations and in an equal aggregate principal amount. The exchange will
take place at the offices of the principal paying agent in London, England or
at the office of any transfer agent that we designate for that purpose. The
terms of, and procedures established under, the indenture govern any exchange
of the definitive bearer notes.
We have designated The Chase Manhattan Bank, London Branch, as a transfer
and paying agent for the notes and as our principal paying agent for the notes
outside the United States. We may at any time appoint additional transfer
agents for the notes and may appoint additional paying agents for the notes
outside the United States. As long as the Series D notes are listed on the
London Stock Exchange and the UK Listing Authority requires it, we will
maintain a transfer agent and a paying agent in London. As long as any Series D
notes or Series D units are listed on the Paris Bourse and the Paris Bourse
requires it, we will maintain a paying agent in Paris.
You may present registered notes for registration of transfer or exchange
at the offices of the registrar or at the offices of any transfer agent that we
designate. We have initially designated The Chase Manhattan Bank (formerly
known as Chemical Bank), acting through its principal corporate trust office in
the Borough of Manhattan, The City of New York, as our registrar and transfer
agent for the registered notes and as our paying agent for registered notes in
the United States. All references to a registrar will include any successor
registrar that we appoint. We can rescind our initial designation of the
registrar or a transfer agent at any time. However, so long as any notes remain
outstanding, we will maintain in the Borough of Manhattan, The City of New
York, one or more offices or agencies where registered notes may be presented
for registration of transfer and exchange.
We will not be required to:
o register the transfer of or exchange notes to be redeemed for a
period of fifteen calendar days preceding the first publication or
other transmission, if applicable, of the relevant notice of
redemption, or if registered notes are outstanding and there is no
publication, the mailing of the relevant notice of redemption;
o register the transfer of or exchange any registered note selected for
redemption or surrendered for optional repayment, in whole or in
part, except the unredeemed or unpaid portion of that registered note
being redeemed or repaid in part; or
o exchange any bearer note selected for redemption or surrendered for
optional repayment, except that the bearer note may be exchanged for
a registered note representing the same principal amount as the
bearer note so exchanged if that registered note is simultaneously
surrendered for either redemption or repayment.
No service charge will be made for any registration of transfer or
exchange of notes, but we may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection with the registration of
transfer or exchange of notes.
Exchange of Definitive Bearer Notes for Registered Notes. If the
applicable pricing supplement so specifies, you may elect to exchange
definitive bearer notes, with all unmatured coupons, and all matured coupons,
if any, in default, for registered notes. The registered notes must be of
authorized denominations and in an equal aggregate principal
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amount. The exchange will take place at the office of the registrar or at the
office of any transfer agent that we may designate for that purpose. Definitive
bearer notes that you surrender in exchange for registered notes (1) after the
close of business at any designated office on any record date for the payment
of interest on a registered note and (2) before the opening of business at the
designated office on the relevant interest payment date will be surrendered
without the coupon related to the payment of interest on that interest payment
date. You can exchange registered notes for registered notes in other
authorized denominations and in an equal aggregate principal amount in
accordance with the provisions of the indentures. You may not exchange
registered notes for bearer notes.
Interest and Principal Payments
Global Bearer Notes. The paying agent will pay interest on a temporary
global bearer note to the Euroclear operator, Clearstream, Luxembourg or, as
applicable, any other relevant clearing system on that portion of the temporary
global bearer note held for its account. The paying agent will pay interest to
the Euroclear operator, Clearstream, Luxembourg or, as applicable, any other
relevant clearing system only on that portion of the principal amount of the
relevant temporary global bearer note for which it receives an ownership
certificate signed by the Euroclear operator, Clearstream, Luxembourg or, as
applicable, any other relevant clearing system, as described in the following
paragraph. The ownership certificate must be dated no earlier than the interest
payment date. The ownership certificate will be based on ownership certificates
provided to the Euroclear operator, Clearstream, Luxembourg or, as applicable,
any other relevant clearing system by its participants. The Euroclear operator,
Clearstream, Luxembourg or, as applicable, any other relevant clearing system
will credit interest received to the accounts of the participants for the
beneficial owners of those accounts only if the participants have furnished
ownership certificates.
The person entitled to receive the principal of or interest on a temporary
global bearer note must furnish an ownership certificate through the broker or
other direct or indirect participant in the clearing systems through which it
holds its interest in order to receive any principal or interest. An ownership
certificate is a signed certificate in writing, or an electronic certificate
described in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(3)(ii), stating that on the date the bearer note is:
o owned by a person that is not a United States person; or
o owned by a United States person that is:
o a foreign branch of a United States financial institution, as
defined in the applicable United States Treasury Regulations,
purchasing for its own account or for resale, or
o acquiring the bearer note through a foreign branch of a United
States financial institution and who holds the bearer note
through the financial institution through that date,
in either case, each United States financial institution must agree,
on its own behalf or through its agent, that MSDW may be advised that
it will comply with the requirements of Section 165(j)(3)(A), (B) or
(C) of the Internal Revenue Code of 1986, as amended, and the
applicable United States Treasury Regulations; or
o owned by a United States or foreign financial institution for the
purposes of resale during the restricted period, as defined in United
States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7);
in addition, if the owner of the bearer note is a United States or
foreign financial institution described in this third clause, whether
or not also described in the previous clauses, the financial
institution must certify that it has not acquired the bearer note for
purposes of resale directly or indirectly to a United States person
or to a person within the United States or its possessions.
On the exchange date and upon receipt of the required ownership
certificates, the paying agent will exchange interests in a temporary global
bearer note to the related permanent global bearer note. The paying agent will
pay the principal, premium, if any, and interest, if any, on the permanent
global bearer note to the Euroclear operator, Clearstream, Luxembourg or, as
applicable, any other relevant clearing system with respect to that portion of
the
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permanent global bearer note held for its account. At maturity, redemption or
repayment or on an interest payment date, the Euroclear operator, Clearstream,
Luxembourg or, as applicable, any other relevant clearing system will credit
the principal, premium, if any, and any interest, if any, received to the
respective accounts of the beneficial owners of the permanent global bearer
note. Payment of principal, premium, if any, and interest, if any, made on any
permanent global bearer note will be made to the Euroclear operator,
Clearstream, Luxembourg or, as applicable, any other relevant clearing system
in immediately available funds, subject to any applicable laws and regulations.
If a registered note is issued in exchange for any portion of a permanent
global bearer note after the close of business at the office or agency where
the exchange occurs on any record date and before the opening of business at
the office or agency on the relevant interest payment date, the paying agent
will not pay that interest to the beneficial owner of the registered note at
that time. Instead, the paying agent will pay that interest to the Euroclear
operator, Clearstream, Luxembourg or, as applicable, any other relevant
clearing system only. The Euroclear operator, Clearstream, Luxembourg or, as
applicable, any other relevant clearing system will credit the interest to the
account of the beneficial owner of that portion of the permanent global bearer
note on the record date.
Definitive Bearer Notes. The paying agent will pay principal, premium, if
any, and interest, if any, on a definitive bearer note at maturity or upon
redemption or repayment only if the notes and any coupons are presented and
surrendered. The definitive bearer notes must be presented and surrendered at
the offices of a paying agent outside the United States. The holder has the
option to receive payment (1) by check or (2) by wire transfer of immediately
available funds to an account maintained by the payee with a bank located
outside the United States. To elect the second option, the paying agent must
receive appropriate wire transfer instructions not less than 15 calendar days
prior to an applicable payment date. Payment of interest on a definitive bearer
note due on any interest payment date will be made only if the coupon relating
to that interest payment date is presented and surrendered. Payment will be
made in immediately available funds, subject to any applicable laws and
regulations.
All Bearer Notes. Payment on any bearer note will be not made:
o at any office or agency of ours in the United States,
o by check mailed to any address in the United States, or
o by wire transfer to an account maintained with a bank located in the
United States.
Despite these general prohibitions, payments of principal, premium, if
any, and interest, if any, on bearer notes payable in U.S. dollars will be made
at the office of our paying agent in the Borough of Manhattan, The City of New
York, if and only if:
o the payment of the full amount in U.S. dollars at all offices or
agencies outside the United States is illegal or effectively precluded
by exchange controls or other similar restrictions, and
o under applicable law and regulations, the paying agent in the Borough
of Manhattan, The City of New York, would be able to make the
payment.
Registered Notes. The paying agent will pay interest on a registered note
to the person in whose name the note is registered at the close of business on
the applicable record date. However, upon maturity, redemption or repayment,
the paying agent will pay any interest due to the person to whom it pays the
principal of the registered note. The paying agent will make the payment of
interest on the date of maturity, redemption or repayment, whether or not that
date is an interest payment date. The paying agent will make the initial
interest payment on a registered note on the first interest payment date
falling after the date of issuance, unless the date of issuance is less than 15
calendar days before an interest payment date. In that case, the paying agent
will pay interest or, in the case of an amortizing note, principal and
interest, on the next succeeding interest payment date to the holder of record
on the record date corresponding to the succeeding interest payment date.
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Except as indicated below for payments of interest at maturity, redemption
or repayment, the paying agent will make U.S. dollar payments of interest on a
registered note either:
o by check mailed to the address of the person entitled to payment as
shown on the note register; or
o for a holder of at least U.S.$10,000,000 in aggregate principal
amount of registered notes having the same interest payment date, by
wire transfer of immediately available funds, if the holder has given
written notice to the paying agent not later than 15 calendar days
prior to the applicable interest payment date.
U.S. dollar payments of principal, premium, if any, and interest, if any, upon
maturity, redemption or repayment on a registered note will be made in
immediately available funds against presentation and surrender of the note.
Unavailability of Foreign Currency. The relevant specified currency may
not be available to us for making payments of principal of, premium, if any, or
interest, if any, on any note. This could occur due to the imposition of
exchange controls or other circumstances beyond our control or if the specified
currency is no longer used by the government of the country issuing that
currency or by public institutions within the international banking community
for the settlement of transactions. If the specified currency is unavailable,
we may satisfy our obligations to holders of the notes by making those payments
on the date of payment in U.S. dollars on the basis of the noon dollar buying
rate in The City of New York for cable transfers of the currency or currencies
in which a payment on any note was to be made, published by the Federal Reserve
Bank of New York, which we refer to as the "market exchange rate." If that rate
of exchange is not then available or is not published for that particular
payment currency, the market exchange rate will be based on the highest bid
quotation in The City of New York received by the exchange rate agent at
approximately 11:00 a.m., New York City time, on the second business day
preceding the applicable payment date from three recognized foreign exchange
dealers for the purchase by the quoting dealer:
o of the specified currency for U.S. dollars for settlement on the
payment date;
o in the aggregate amount of the specified currency payable to those
holders or beneficial owners of notes; and
o at which the applicable dealer commits to execute a contract.
One of the dealers providing quotations may be the exchange rate agent
unless the exchange rate agent is our affiliate. If those bid quotations are
not available, the exchange rate agent will determine the market exchange rate
at its sole discretion. All determinations made by the exchange rate agent
will, in the absence of manifest error, be conclusive for all purposes and
binding on MSDW and the holders of the notes. The exchange rate agent will be
Morgan Stanley & Co. International Limited.
These provisions do not apply if a specified currency is unavailable
because it has been replaced by the euro. If the euro has been substituted for
a specified currency, MSDW may at its option, or will, if required by
applicable law, without the consent of the holders of the affected notes, pay
the principal of, premium, if any, or interest, if any, on any note denominated
in the specified currency in euro instead of the specified currency, in
conformity with legally applicable measures taken pursuant to, or by virtue of,
the treaty establishing the European Community, as amended by the treaty on
European Union. Any payment made in U.S. dollars or in euro as described above
where the required payment is in an unavailable specified currency will not
constitute an event of default.
Determination of Exchange Rate for Payments in U.S. Dollars for Notes
Denominated in a Foreign Currency. If any applicable pricing supplement
provides that all or a portion of payments of interest or principal on a
non-U.S. dollar denominated note may be made, at the option of the holder of
the note, in U.S. dollars, procedures for making that election will be
described in the pricing supplement. If the election is made, the exchange rate
agent will convert the specified currency into U.S. dollars. The conversion
will be based on the highest bid quotation in The City of New York received by
the exchange rate agent at approximately 11:00 a.m., New York City time, on the
second business day preceding the applicable payment date from three recognized
foreign exchange dealers for the purchase by the quoting dealer:
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o of the specified currency for U.S. dollars for settlement on the
payment date;
o in the aggregate amount of the specified currency payable to those
holders or beneficial owners of notes; and
o at which the applicable dealer commits to execute a contract.
One of the dealers providing quotations may be the exchange rate agent unless
the exchange rate agent is our affiliate. If those bid quotations are not
available, payments will be made in the specified currency. The holders of
notes will pay all currency exchange costs by deductions from the amounts
payable on the notes.
Unclaimed Principal, Premium or Interest. If money is paid by us and held
by the applicable trustee or any paying agent for payment of the principal,
premium, if any, or interest, if any, on any notes that remain unclaimed at the
end of two years after that principal, premium, if any, or interest, if any,
has become due and payable, whether at maturity or upon call for redemption or
otherwise:
o the trustee or the paying agent will notify the holders of the notes
that money will be repaid to us and any person claiming that money
will thereafter look only to us for payment, and
o that money will be repaid to us.
Upon repayment, the trustee or the paying agent for that money will not be
liable for the money. However, MSDW's obligation to pay the principal of,
premium, if any, or interest on, the notes as they become due will not be
limited in any way.
Discount Notes. Some notes may be considered to be issued with original
issue discount, which must be included in income for United States federal
income tax purposes at a constant yield. If the principal of any note that is
considered to be issued with original issue discount is declared to be due and
payable immediately as described under "Description of Debt Securities--Events
of Default" in the prospectus, the amount of principal due and payable on that
note will be limited to:
o the aggregate principal amount of the note multiplied by the sum of
o its issue price, expressed as a percentage of the aggregate principal
amount, plus
o the original issue discount amortized from the date of issue to the
date of declaration, expressed as a percentage of the aggregate
principal amount.
The amortization will be calculated using the "interest method," computed in
accordance with generally accepted accounting principles in effect on the date
of declaration. See the applicable pricing supplement for any special
considerations applicable to these notes.
Fixed Rate Notes
Each fixed rate note will bear interest from the date of issuance at the
annual rate stated on its face until the principal is paid or made available
for payment.
How Interest Is Calculated. Interest on fixed rate notes will be computed
on the basis of a 360-day year of twelve 30-day months.
How Interest Accrues. Interest on fixed rate notes will accrue from and
including the most recent interest payment date to which interest has been paid
or duly provided for, or, if no interest has been paid or duly provided for,
from and including the issue date or any other date specified in a pricing
supplement on which interest begins to accrue. Interest will accrue to but
excluding the next interest payment date, or, if earlier, the date on which the
principal has been paid or duly made available for payment, except as described
below under "If a Payment Date is Not a Business Day."
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When Interest Is Paid. Payments of interest on fixed rate notes will be
made on the interest payment dates specified in the applicable pricing
supplement. However, if the first interest payment date is less than 15 days
after the date of issuance, interest will not be paid on the first interest
payment date, but will be paid on the second interest payment date.
Amount of Interest Payable. Interest payments for fixed rate notes will
include accrued interest from and including the date of issue or from and
including the last date in respect of which interest has been paid, as the case
may be, to but excluding the relevant interest payment date or date of maturity
or earlier redemption or repayment, as the case may be.
If a Payment Date is Not a Business Day. If any scheduled interest payment
date is not a business day, MSDW will pay interest on the next business day,
but interest on that payment will not accrue during the period from and after
the scheduled interest payment date. If the scheduled maturity date or date of
redemption or repayment is not a business day, MSDW may pay interest and
principal and premium, if any, on the next succeeding business day, but
interest on that payment will not accrue during the period from and after the
scheduled maturity date or date of redemption or repayment.
Amortizing Notes. A fixed rate note may pay a level amount in respect of
both interest and principal amortized over the life of the note. Payments of
principal and interest on amortizing notes will be made on the interest payment
dates specified in the applicable pricing supplement, and at maturity or upon
any earlier redemption or repayment. Payments on amortizing notes will be
applied first to interest due and payable and then to the reduction of the
unpaid principal amount. We will provide to the original purchaser, and will
furnish to subsequent holders upon request to us, a table setting forth
repayment information for each amortizing note.
Floating Rate Notes
Each floating rate note will mature on the date specified in the
applicable pricing supplement.
Each floating rate note will bear interest at a floating rate determined
by reference to an interest rate or interest rate formula, which we refer to as
the "base rate." The base rate may be one or more of the following:
o the CD rate,
o the commercial paper rate,
o EURIBOR,
o the federal funds rate,
o LIBOR,
o the prime rate,
o the Treasury rate,
o the CMT rate, or
o any other rate or interest rate formula specified in the applicable
pricing supplement and in the floating rate note.
Formula for Interest Rates. The interest rate on each floating rate note
will be calculated by reference to:
o the specified base rate based on the index maturity,
o plus or minus the spread, if any, and/or
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o multiplied by the spread multiplier, if any.
For any floating rate note, "index maturity" means the period of maturity
of the instrument or obligation from which the base rate is calculated and will
be specified in the applicable pricing supplement. The "spread" is the number
of basis points (one one-hundredth of a percentage point) specified in the
applicable pricing supplement to be added to or subtracted from the base rate
for a floating rate note. The "spread multiplier" is the percentage specified
in the applicable pricing supplement to be applied to the base rate for a
floating rate note.
Limitations on Interest Rate. A floating rate note may also have either or
both of the following limitations on the interest rate:
o a maximum limitation, or ceiling, on the rate of interest which may
accrue during any interest period, which we refer to as the "maximum
interest rate;"
o a minimum limitation, or floor, on the rate of interest that may
accrue during any interest period, which we refer to as the "minimum
interest rate."
Any applicable maximum interest rate or minimum interest rate will be set forth
in the pricing supplement.
In addition, the interest rate on a floating rate note may not be higher
than the maximum rate permitted by New York law, as that rate may be modified
by United States law of general application. Under current New York law, the
maximum rate of interest, subject to some exceptions, for any loan in an amount
less than U.S.$250,000 is 16% and for any loan in the amount of U.S.$250,000 or
more but less than U.S.$2,500,000 is 25% per annum on a simple interest basis.
These limits do not apply to loans of U.S.$2,500,000 or more.
How Floating Interest Rates Are Reset. The interest rate in effect from
the date of issue to the first interest reset date for a floating rate note
will be the initial interest rate specified in the applicable pricing
supplement. We refer to this rate as the "initial interest rate." The interest
rate on each floating rate note may be reset daily, weekly, monthly, quarterly,
semiannually or annually. This period is the "interest reset period" and the
first day of each interest reset period is the "interest reset date." The
"interest determination date" for any interest reset date is the day the
calculation agent will refer to when determining the new interest rate at which
a floating rate note will reset, and is applicable as follows:
o for CD rate notes, commercial paper rate notes, federal funds rate
notes, prime rate notes and CMT rate notes, the interest
determination date will be the second business day prior to the
interest reset date;
o for EURIBOR notes or Euro LIBOR notes, the interest determination
date will be the second TARGET Settlement Day, as defined under
"--General Terms of Notes--Some Definitions," prior to the interest
reset date;
o for LIBOR notes (other than Euro LIBOR notes), the interest
determination date will be the second London banking day prior to the
interest reset date, except that the interest determination date
pertaining to an interest reset date for a LIBOR note for which the
index currency is pounds sterling will be the interest reset date;
and
o for Treasury rate notes, the interest determination date will be the
day of the week in which the interest reset date falls on which
Treasury bills would normally be auctioned.
Treasury bills are normally sold at auction on Monday of each week, unless that
day is a legal holiday, in which case the auction is normally held on the
following Tuesday, but the auction may be held on the preceding Friday. If, as
the result of a legal holiday, the auction is held on the preceding Friday,
that Friday will be the interest determination date pertaining to the interest
reset date occurring in the next succeeding week. If an auction falls on a day
that is an interest reset date, that interest reset date will be the next
following business day.
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The interest reset dates will be specified in the applicable pricing
supplement. If an interest reset date for any floating rate note falls on a day
that is not a business day, it will be postponed to the following business day,
except that, in the case of a EURIBOR note or a LIBOR note, if that business
day is in the next calendar month, the interest reset date will be the
immediately preceding business day.
The interest rate in effect for the ten calendar days immediately prior to
maturity, redemption or repayment will be the one in effect on the tenth
calendar day preceding the maturity, redemption or repayment date.
In the detailed descriptions of the various base rates which follow, the
"calculation date" pertaining to an interest determination date means the
earlier of (1) the tenth calendar day after that interest determination date,
or, if that day is not a business day, the next succeeding business day, and
(2) the business day preceding the applicable interest payment date or maturity
date or, for any principal amount to be redeemed or repaid, any redemption or
repayment date.
How Interest Is Calculated. Interest on floating rate notes will accrue
from and including the most recent interest payment date to which interest has
been paid or duly provided for, or, if no interest has been paid or duly
provided for, from and including the issue date or any other date specified in
a pricing supplement on which interest begins to accrue. Interest will accrue
to but excluding the next interest payment date or, if earlier, the date on
which the principal has been paid or duly made available for payment, except as
described below under "If a Payment Date is Not a Business Day."
The applicable pricing supplement will specify a calculation agent for any
issue of floating rate notes. Upon the request of the holder of any floating
rate note, the calculation agent will provide the interest rate then in effect
and, if determined, the interest rate that will become effective on the next
interest reset date for that floating rate note. The calculation agent will
notify the UK Listing Authority, in the case of the Series D notes listed on
the London Stock Exchange, and the paying agents of each determination of the
interest rate applicable to any floating rate note promptly after the
determination is made.
For a floating rate note, accrued interest will be calculated by
multiplying the principal amount of the floating rate note by an accrued
interest factor. This accrued interest factor will be computed by adding the
interest factors calculated for each day in the period for which interest is
being paid. The interest factor for each day is computed by dividing the
interest rate applicable to that day:
o by 360, in the case of CD rate notes, commercial paper rate notes,
EURIBOR notes, federal funds rate notes, LIBOR notes, except for
LIBOR notes denominated in pounds sterling, and prime rate notes;
o by 365, in the case of LIBOR notes denominated in pounds sterling; or
o by the actual number of days in the year, in the case of Treasury rate
notes and CMT rate notes.
For these calculations, the interest rate in effect on any interest reset date
will be the applicable rate as reset on that date. The interest rate applicable
to any other day is the interest rate from the immediately preceding interest
reset date or, if none, the initial interest rate.
All percentages used in or resulting from any calculation of the rate of
interest on a floating rate note will be rounded, if necessary, to the nearest
one hundred-thousandth of a percentage point (.0000001), with five
one-millionths of a percentage point rounded upward, and all U.S. dollar
amounts used in or resulting from these calculations on floating rate notes
will be rounded to the nearest cent, with one-half cent rounded upward.
When Interest Is Paid. MSDW will pay interest on floating rate notes on
the interest payment dates specified in the applicable pricing supplement.
However, if the first interest payment date is less than 15 days after the date
of issuance, interest will not be paid on the first interest payment date, but
will be paid on the second interest payment date.
If a Payment Date is Not a Business Day. If any scheduled interest payment
date, other than the maturity date or any earlier redemption or repayment date,
for any floating rate note falls on a day that is not a business day, it will
be postponed to the following business day, except that, in the case of a
EURIBOR note or a LIBOR note, if that business
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day would fall in the next calendar month, the interest payment date will be
the immediately preceding business day. If the scheduled maturity date or any
earlier redemption or repayment date of a floating rate note falls on a day
that is not a business day, the payment of principal, premium, if any, and
interest, if any, will be made on the next succeeding business day, but
interest on that payment will not accrue during the period from and after the
maturity, redemption or repayment date.
Base Rates
CD Rate Notes
CD rate notes will bear interest at the interest rates specified in the CD
rate notes and in the applicable pricing supplement. Those interest rates will
be based on the CD rate and any spread and/or spread multiplier and will be
subject to the minimum interest rate and the maximum interest rate, if any.
"CD rate" means, for any interest determination date, the rate on that
date for negotiable certificates of deposit having the index maturity specified
in the applicable pricing supplement as published by the Board of Governors of
the Federal Reserve System in "Statistical Release H.15(519), Selected Interest
Rates," or any successor publication of the Board of Governors of the Federal
Reserve System ("H.15(519)") under the heading "CDs (Secondary Market)."
The following procedures will be followed if the CD rate cannot be
determined as described above:
o If the above rate is not published in H.15(519) by 9:00 a.m., New
York City time, on the calculation date, the CD rate will be the rate
on that interest determination date set forth in the daily update of
H.15(519), available through the world wide website of the Board of
Governors of the Federal Reserve System at
http://www.bog.frb.fed.us/releases/h15/update, or any successor site
or publication, which is commonly referred to as the "H.15 Daily
Update," for the interest determination date for certificates of
deposit having the index maturity specified in the applicable pricing
supplement, under the caption "CDs (Secondary Market)."
o If the above rate is not yet published in either H.15(519) or the H.15
Daily Update by 3:00 p.m., New York City time, on the calculation
date, the calculation agent will determine the CD rate to be the
arithmetic mean of the secondary market offered rates as of 10:00
a.m., New York City time, on that interest determination date of
three leading nonbank dealers in negotiable U.S. dollar certificates
of deposit in The City of New York selected by the calculation agent,
after consultation with us, for negotiable certificates of deposit of
major United States money center banks of the highest credit standing
in the market for negotiable certificates of deposit with a remaining
maturity closest to the index maturity specified in the applicable
pricing supplement in an amount that is representative for a single
transaction in that market at that time.
o If the dealers selected by the calculation agent are not quoting as
set forth above, the CD rate will remain the CD rate for the
immediately preceding interest reset period, or, if there was no
reset period, the rate of interest payable will be the initial
interest rate.
Commercial Paper Rate Notes
Commercial paper rate notes will bear interest at the interest rates
specified in the commercial paper rate notes and in the applicable pricing
supplement. Those interest rates will be based on the commercial paper rate and
any spread and/or spread multiplier and will be subject to the minimum interest
rate and the maximum interest rate, if any.
The "commercial paper rate" means, for any interest determination date,
the money market yield, calculated as described below, of the rate on that date
for commercial paper having the index maturity specified in the applicable
pricing supplement, as that rate is published in H.15(519), under the heading
"Commercial Paper -- Nonfinancial."
The following procedures will be followed if the commercial paper rate
cannot be determined as described above:
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o If the above rate is not published by 9:00 a.m., New York City time,
on the calculation date, then the commercial paper rate will be the
money market yield of the rate on that interest determination date
for commercial paper of the index maturity specified in the
applicable pricing supplement as published in the H.15 Daily Update
under the heading "Commercial Paper -- Nonfinancial."
o If by 3:00 p.m., New York City time, on that calculation date the
rate is not yet published in either H.15(519) or the H.15 Daily
Update, then the calculation agent will determine the commercial
paper rate to be the money market yield of the arithmetic mean of the
offered rates as of 11:00 a.m., New York City time, on that interest
determination date of three leading dealers of commercial paper in
The City of New York selected by the calculation agent, after
consultation with us, for commercial paper of the index maturity
specified in the applicable pricing supplement, placed for an
industrial issuer whose bond rating is "AA," or the equivalent, from
a nationally recognized statistical rating agency.
o If the dealers selected by the calculation agent are not quoting as
mentioned above, the commercial paper rate for that interest
determination date will remain the commercial paper rate for the
immediately preceding interest reset period, or, if there was no
reset period, the rate of interest payable will be the initial
interest rate.
The "money market yield" will be a yield calculated in accordance with the
following formula:
D x 360
money market yield = --------------- x 100
360 - (D x M)
where "D" refers to the applicable per year rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
EURIBOR Notes
EURIBOR notes will bear interest at the interest rates specified in the
EURIBOR notes and in the applicable pricing supplement. That interest rate will
be based on EURIBOR and any spread and/or spread multiplier and will be subject
to the minimum interest rate and the maximum interest rate, if any.
"EURIBOR" means, for any interest determination date, the rate for
deposits in euros as sponsored, calculated and published jointly by the
European Banking Federation and ACI - The Financial Market Association, or any
company established by the joint sponsors for purposes of compiling and
publishing those rates, for the index maturity specified in the applicable
pricing supplement as that rate appears on the display on Bridge Telerate,
Inc., or any successor service, on page 248 or any other page as may replace
page 248 on that service, which is commonly referred to as "Telerate Page 248,"
as of 11:00 a.m. (Brussels time).
The following procedures will be followed if the rate cannot be determined
as described above:
o If the above rate does not appear, the calculation agent will request
the principal Euro-zone office of each of four major banks in the
Euro-zone interbank market, as selected by the calculation agent,
after consultation with us, to provide the calculation agent with its
offered rate for deposits in euros, at approximately 11:00 a.m.
(Brussels time) on the interest determination date, to prime banks in
the Euro-zone interbank market for the index maturity specified in
the applicable pricing supplement commencing on the applicable
interest reset date, and in a principal amount not less than the
equivalent of U.S.$1 million in euro that is representative of a
single transaction in euro, in that market at that time. If at least
two quotations are provided, EURIBOR will be the arithmetic mean of
those quotations.
o If fewer than two quotations are provided, EURIBOR will be the
arithmetic mean of the rates quoted by four major banks in the
Euro-zone, as selected by the calculation agent, after consultation
with us, at approximately 11:00 a.m. (Brussels time), on the
applicable interest reset date for loans in euro to leading European
banks for a period of time equivalent to the index maturity specified
in the applicable pricing supplement
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commencing on that interest reset date in a principal amount not less
than the equivalent of U.S.$1 million in euro.
o If the banks so selected by the calculation agent are not quoting as
mentioned in the previous bullet point, the EURIBOR rate in effect
for the applicable period will be the same as EURIBOR for the
immediately preceding interest reset period, or, if there was no
interest reset period, the rate of interest payable will be the
initial interest rate.
"Euro-zone" means the region comprised of member states of the European
Union that have adopted the single currency in accordance with the treaty
establishing the European Community, as amended by the treaty on European
Union.
Federal Funds Rate Notes
Federal funds rate notes will bear interest at the interest rates
specified in the federal funds rate notes and in the applicable pricing
supplement. Those interest rates will be based on the federal funds rate and
any spread and/or spread multiplier and will be subject to the minimum interest
rate and the maximum interest rate, if any.
The "federal funds rate" means, for any interest determination date, the
rate on that date for federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)" as displayed on Bridge Telerate, Inc., or any
successor service, on page 120 or any other page as may replace the applicable
page on that service, which is commonly referred to as "Telerate Page 120."
The following procedures will be followed if the federal funds rate cannot
be determined as described above:
o If the above rate is not published by 9:00 a.m., New York City time,
on the calculation date, the federal funds rate will be the rate on
that interest determination date as published in the H.15 Daily
Update under the heading "Federal Funds/Effective Rate."
o If that rate is not yet published in either H.15(519) or the H.15
Daily Update by 3:00 p.m., New York City time, on the calculation
date, the calculation agent will determine the federal funds rate to
be the arithmetic mean of the rates for the last transaction in
overnight federal funds by each of three leading brokers of federal
funds transactions in The City of New York selected by the
calculation agent, after consultation with us, prior to 9:00 a.m.,
New York City time, on that interest determination date.
o If the brokers selected by the calculation agent are not quoting as
mentioned above, the federal funds rate relating to that interest
determination date will remain the federal funds rate for the
immediately preceding interest reset period, or, if there was no
reset period, the rate of interest payable will be the initial
interest rate.
LIBOR Notes
LIBOR notes will bear interest at the interest rates specified in the
LIBOR notes and in the applicable pricing supplement. That interest rate will
be based on London interbank offered rate, which is commonly referred to as
"LIBOR," and any spread and/or spread multiplier and will be subject to the
minimum interest rate and the maximum interest rate, if any.
The calculation agent will determine "LIBOR" for each interest
determination date as follows:
o As of the interest determination date, LIBOR will be either:
o if "LIBOR Reuters" is specified in the applicable pricing
supplement, the arithmetic mean of the offered rates for
deposits in the index currency having the index maturity
designated in the applicable pricing supplement, commencing on
the second London banking day immediately following that
interest determination date, that appear on the Designated LIBOR
Page, as defined below, as of 11:00 a.m.,
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London time, on that interest determination date, if at least
two offered rates appear on the Designated LIBOR Page; except
that if the specified Designated LIBOR Page, by its terms
provides only for a single rate, that single rate will be used;
or
o if "LIBOR Telerate" is specified in the applicable pricing
supplement, the rate for deposits in the index currency having
the index maturity designated in the applicable pricing
supplement, commencing on the second London banking day
immediately following that interest determination date or, if
pounds sterling is the index currency, commencing on that
interest determination date, that appears on the Designated
LIBOR Page at approximately 11:00 a.m., London time, on that
interest determination date.
o If (1) fewer than two offered rates appear and "LIBOR Reuters" is
specified in the applicable pricing supplement, or (2) no rate
appears and the applicable pricing supplement specifies either (x)
"LIBOR Telerate" or (y) "LIBOR Reuters" and the Designated LIBOR Page
by its terms provides only for a single rate, then the calculation
agent will request the principal London offices of each of four major
reference banks in the London interbank market, as selected by the
calculation agent after consultation with us, to provide the
calculation agent with its offered quotation for deposits in the
index currency for the period of the index maturity specified in the
applicable pricing supplement commencing on the second London banking
day immediately following the interest determination date or, if
pounds sterling is the index currency, commencing on that interest
determination date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on that interest determination
date and in a principal amount that is representative of a single
transaction in that index currency in that market at that time.
o If at least two quotations are provided, LIBOR determined on that
interest determination date will be the arithmetic mean of those
quotations. If fewer than two quotations are provided, LIBOR will be
determined for the applicable interest reset date as the arithmetic
mean of the rates quoted at approximately 11:00 a.m., London time, or
some other time specified in the applicable pricing supplement, in
the applicable principal financial center for the country of the
index currency on that interest reset date, by three major banks in
that principal financial center selected by the calculation agent,
after consultation with us, for loans in the index currency to
leading European banks, having the index maturity specified in the
applicable pricing supplement and in a principal amount that is
representative of a single transaction in that index currency in that
market at that time.
o If the banks so selected by the calculation agent are not quoting as
mentioned in the previous bullet point, LIBOR in effect for the
applicable period will be the same as LIBOR for the immediately
preceding interest reset period, or, if there was no interest reset
period, the rate of interest payable will be the initial interest
rate.
The "index currency" means the currency specified in the applicable
pricing supplement as the currency for which LIBOR will be calculated, or, if
the euro is substituted for that currency, the index currency will be the euro.
If that currency is not specified in the applicable pricing supplement, the
index currency will be U.S. dollars.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is designated
in the applicable pricing supplement, the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank rates of major
banks for the applicable index currency or its designated successor, or (b) if
"LIBOR Telerate" is designated in the applicable pricing supplement, the
display on Bridge Telerate Inc., or any successor service, on the page
specified in the applicable pricing supplement, or any other page as may
replace that page on that service, for the purpose of displaying the London
interbank rates of major banks for the applicable index currency.
If neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable
pricing supplement, LIBOR for the applicable index currency will be determined
as if LIBOR Telerate were specified, and, if the U.S. dollar is the index
currency, as if Page 3750, had been specified.
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Prime Rate Notes
Prime rate notes will bear interest at the interest rates specified in the
prime rate notes and in the applicable pricing supplement. That interest rate
will be based on the prime rate and any spread and/or spread multiplier, and
will be subject to the minimum interest rate and the maximum interest rate, if
any.
The "prime rate" means, for any interest determination date, the rate on
that date as published in H.15(519) under the heading "Bank Prime Loan."
The following procedures will be followed if the prime rate cannot be
determined as described above:
o If the rate is not published prior to 9:00 a.m., New York City time,
on the calculation date, then the prime rate will be the rate on that
interest determination date as published in H.15 Daily Update under
the heading "Bank Prime Loan."
o If the rate is not published prior to 3:00 p.m., New York City time,
on the calculation date in either H.15(519) or the H.15 Daily Update,
then the calculation agent will determine the prime rate to be the
arithmetic mean of the rates of interest publicly announced by each
bank that appears on the Reuters Screen USPRIME 1 Page, as defined
below, as that bank's prime rate or base lending rate as in effect
for that interest determination date.
o If fewer than four rates appear on the Reuters Screen USPRIME 1 Page
for that interest determination date, the calculation agent will
determine the prime rate to be the arithmetic mean of the prime rates
quoted on the basis of the actual number of days in the year divided
by 360 as of the close of business on that interest determination
date by at least three major banks in The City of New York selected
by the calculation agent, after consultation with us.
o If the banks selected are not quoting as mentioned above, the prime
rate will remain the prime rate for the immediately preceding
interest reset period, or, if there was no reset period, the rate of
interest payable will be the initial interest rate.
"Reuters Screen USPRIME 1 Page" means the display designated as page
"USPRIME 1" on the Reuters Monitor Money Rates Service, or any successor
service, or any other page as may replace the USPRIME 1 Page on that service
for the purpose of displaying prime rates or base lending rates of major United
States banks.
Treasury Rate Notes
Treasury rate notes will bear interest at the interest rates specified in
the Treasury rate notes and in the applicable pricing supplement. That interest
rate will be based on the Treasury rate and any spread and/or spread multiplier
and will be subject to the minimum interest rate and the maximum interest rate,
if any.
"Treasury rate" means:
o the rate from the auction held on the applicable interest
determination date, which we refer to as the "auction," of direct
obligations of the United States, which are commonly referred to as
"Treasury Bills," having the index maturity specified in the
applicable pricing supplement as that rate appears under the caption
"INVESTMENT RATE" on the display on Bridge Telerate, Inc., or any
successor service, on page 56 or any other page as may replace page
56 on that service, which we refer to as "Telerate Page 56," or page
57 or any other page as may replace page 57 on that service, which we
refer to as "Telerate Page 57," or
o if the rate described in the first bullet point is not published by
3:00 p.m., New York City time, on the calculation date, the bond
equivalent yield of the rate for the applicable Treasury Bills as
published in the H.15 Daily Update, or other recognized electronic
source used for the purpose of displaying the applicable rate, under
the caption "U.S. Government Securities/Treasury Bills/Auction High,"
or
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o if the rate described in the second bullet point is not published by
3:00 p.m., New York City time, on the related calculation date, the
bond equivalent yield of the auction rate of the applicable Treasury
Bills, announced by the United States Department of the Treasury, or
o in the event that the rate referred to in the third bullet point is
not announced by the United States Department of the Treasury, or if
the auction is not held, the bond equivalent yield of the rate on the
applicable interest determination date of Treasury Bills having the
index maturity specified in the applicable pricing supplement
published in H.15(519) under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market," or
o if the rate referred to in the fourth bullet point is not so
published by 3:00 p.m., New York City time, on the related
calculation date, the rate on the applicable interest determination
date of the applicable Treasury Bills as published in H.15 Daily
Update, or other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market," or
o if the rate referred to in the fifth bullet point is not so published
by 3:00 p.m., New York City time, on the related calculation date,
the rate on the applicable interest determination date calculated by
the calculation agent as the bond equivalent yield of the arithmetic
mean of the secondary market bid rates, as of approximately 3:30
p.m., New York City time, on the applicable interest determination
date, of three primary United States government securities dealers,
which may include the agent or its affiliates, selected by the
calculation agent, for the issue of Treasury Bills with a remaining
maturity closest to the index maturity specified in the applicable
pricing supplement, or
o if the dealers selected by the calculation agent are not quoting as
mentioned in the sixth bullet point, the Treasury rate for the
immediately preceding interest reset period, or, if there was no
reset period, the rate of interest payable will be the initial
interest rate.
The "bond equivalent yield" means a yield calculated in accordance with
the following formula and expressed as a percentage:
D x N
bond equivalent yield = --------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on
a bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest
is being calculated.
CMT Rate Notes
CMT rate notes will bear interest at the interest rates specified in the
CMT rate notes and in the applicable pricing supplement. That interest rate
will be based on the CMT rate and any spread and/or spread multiplier and will
be subject to the minimum interest rate and the maximum interest rate, if any.
The "CMT rate" means, for any interest determination date, the rate
displayed on the Designated CMT Telerate Page, as defined below, under the
caption "... Treasury Constant Maturities ... Federal Reserve Board Release
H.15... Mondays Approximately 3:45 p.m.," under the column for the Designated
CMT Maturity Index, as defined below, for:
o the rate on that interest determination date, if the Designated CMT
Telerate Page is 7051; and
o the week or the month, as applicable, ended immediately preceding the
week in which the related interest determination date occurs, if the
Designated CMT Telerate Page is 7052.
The following procedures will be followed if the CMT rate cannot be
determined as described above:
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o If that rate is no longer displayed on the relevant page, or if not
displayed by 3:00 p.m., New York City time, on the related
calculation date, then the CMT rate will be the Treasury Constant
Maturity rate for the Designated CMT Maturity Index as published in
the relevant H.15(519).
o If the rate described in the immediately preceding sentence is no
longer published, or if not published by 3:00 p.m., New York City
time, on the related calculation date, then the CMT rate will be the
Treasury Constant Maturity rate for the Designated CMT Maturity Index
or other United States Treasury rate for the Designated CMT Maturity
Index on the interest determination date as may then be published by
either the Board of Governors of the Federal Reserve System or the
United States Department of the Treasury that the calculation agent
determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in the relevant H.15(519).
o If the information described in the immediately preceding sentence is
not provided by 3:00 p.m., New York City time, on the related
calculation date, then the calculation agent will determine the CMT
rate to be a yield to maturity, based on the arithmetic mean of the
secondary market closing offer side prices as of approximately 3:30
p.m., New York City time, on the interest determination date,
reported, according to their written records, by three leading
primary United States government securities dealers, which we refer
to as a "reference dealer," in The City of New York, which may
include an agent or other affiliates of ours, selected by the
calculation agent as described in the following sentence. The
calculation agent will select five reference dealers, after
consultation with us, and will eliminate the highest quotation or, in
the event of equality, one of the highest, and the lowest quotation
or, in the event of equality, one of the lowest, for the most
recently issued direct noncallable fixed rate obligations of the
United States, which are commonly referred to as "Treasury notes,"
with an original maturity of approximately the Designated CMT
Maturity Index and a remaining term to maturity of not less than that
Designated CMT Maturity Index minus one year. If two Treasury notes
with an original maturity as described above have remaining terms to
maturity equally close to the Designated CMT Maturity Index, the
quotes for the Treasury note with the shorter remaining term to
maturity will be used.
o If the calculation agent cannot obtain three Treasury notes
quotations as described in the immediately preceding sentence, the
calculation agent will determine the CMT rate to be a yield to
maturity based on the arithmetic mean of the secondary market offer
side prices as of approximately 3:30 p.m., New York City time, on the
interest determination date of three reference dealers in The City of
New York, selected using the same method described in the immediately
preceding sentence, for Treasury notes with an original maturity
equal to the number of years closest to but not less than the
Designated CMT Maturity Index and a remaining term to maturity
closest to the Designated CMT Maturity Index and in an amount of at
least $100,000,000.
o If three or four (and not five) of the reference dealers are quoting
as described above, then the CMT rate will be based on the arithmetic
mean of the offer prices obtained and neither the highest nor the
lowest of those quotes will be eliminated.
o If fewer than three reference dealers selected by the calculation
agent are quoting as described above, the CMT rate will be the CMT
rate for the immediately preceding interest reset period, or, if
there was no reset period, the rate of interest payable will be the
initial interest rate.
"Designated CMT Telerate Page" means the display on Bridge Telerate, Inc.,
or any successor service, on the page designated in the applicable pricing
supplement or any other page as may replace that page on that service for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no page is specified in the applicable pricing supplement, the Designated CMT
Telerate Page will be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities, which is either 1, 2, 3, 5, 7, 10, 20 or 30
years, specified in an applicable pricing supplement for which the CMT rate
will be calculated. If no maturity is specified in the applicable pricing
supplement, the Designated CMT Maturity Index will be two years.
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Exchangeable Notes
MSDW may issue notes, which we refer to as "exchangeable notes," that are
optionally or mandatorily exchangeable into:
o the securities of an entity not affiliated with MSDW;
o a basket of those securities;
o an index or indices of those securities; or
o any combination of the above.
The exchangeable notes may or may not bear interest or be issued with
original issue discount or at a premium. The general terms of the exchangeable
notes are described below.
Optionally Exchangeable Notes. The holder of an optionally exchangeable
note may, during a period, or at specific times, exchange the note for the
underlying property at a specified rate of exchange. If specified in the
applicable pricing supplement, MSDW will have the option to redeem the
optionally exchangeable note prior to maturity. If the holder of an optionally
exchangeable note does not elect to exchange the note prior to maturity or any
applicable redemption date, the holder will receive the principal amount of the
note plus any accrued interest at maturity or upon redemption.
Mandatorily Exchangeable Notes. At maturity, the holder of a mandatorily
exchangeable note must exchange the note for the underlying property at a
specified rate of exchange, and, therefore, depending upon the value of the
underlying property at maturity, the holder of a mandatorily exchangeable note
may receive less than the principal amount of the note at maturity. If so
indicated in the applicable pricing supplement, the specified rate at which a
mandatorily exchangeable note may be exchanged may vary depending on the value
of the underlying property so that, upon exchange, the holder participates in a
percentage, which may be less than, equal to, or greater than 100% of the
change in value of the underlying property. Mandatorily exchangeable notes may
include notes where MSDW has the right, but not the obligation, to require
holders of notes to exchange their notes for the underlying property.
Payments upon Exchange. The pricing supplement will specify if upon
exchange, at maturity or otherwise, the holder of an exchangeable note may
receive, at the specified exchange rate, either the underlying property or the
cash value of the underlying property. The underlying property may be the
securities of either U.S. or foreign entities or both. The exchangeable notes
may or may not provide for protection against fluctuations in the exchange rate
between the currency in which that note is denominated and the currency or
currencies in which the market prices of the underlying security or securities
are quoted. Exchangeable notes may have other terms, which will be specified in
the applicable pricing supplement. Exchangeable notes for which a holder may
receive the underlying property will not be listed on the London Stock Exchange
unless listing particulars about the underlying property have been approved by
the UK Listing Authority.
Special Requirements for Exchange of Global Securities. If an optionally
exchangeable note is represented by a global bearer note or by definitive notes
that remain on deposit with a common depositary for the Euroclear operator
Clearstream, Luxembourg or, as applicable, any other relevant clearing system,
the beneficial owner must exercise the right to exchange through the Euroclear
operator, Clearstream, Luxembourg or, as applicable, any other relevant
clearing system. In order to ensure that the Euroclear operator, Clearstream,
Luxembourg or, as applicable, any other relevant clearing system will timely
exercise a right to exchange a particular note or any portion of a particular
note, the beneficial owner of the note must instruct the broker or other direct
or indirect participant through which it holds an interest in that note to
notify the Euroclear operator, Clearstream, Luxembourg or, as applicable, any
other relevant clearing system of its desire to exchange in accordance with the
then applicable operating procedures of the Euroclear operator, Clearstream,
Luxembourg or, as applicable, any other relevant clearing system. Different
firms have different deadlines for accepting instructions from their customers.
Each beneficial owner should consult the broker or other participant through
which it holds an interest in a note in order to ascertain the deadline for
ensuring that timely notice
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will be delivered to the Euroclear operator, Clearstream, Luxembourg or, as
applicable, any other relevant clearing system.
Payments upon Acceleration of Maturity or upon Tax Redemption. If the
principal amount payable at maturity of any exchangeable note is declared due
and payable prior to maturity, or is redeemed as set forth below under "Tax
Redemption," the amount payable on:
o an optionally exchangeable note will equal the face amount of the
note plus accrued interest, if any, to but excluding the date of
payment, except that if a holder has exchanged an optionally
exchangeable note prior to the date of declaration without having
received the amount due upon exchange, the amount payable will be the
amount due upon exchange and will not include any accrued but unpaid
interest; and
o a mandatorily exchangeable note will equal an amount determined as if
the date of declaration or tax redemption were the maturity date plus
accrued interest, if any, to but excluding the date of payment.
Notes Linked to Commodity Prices, Single Securities, Baskets of Securities or
Indices
MSDW may issue notes with the principal amount payable on any principal
payment date and/or the amount of interest payable on any interest payment date
to be determined by reference to one or more commodity prices, securities of
entities not affiliated with us, a basket of those securities or an index or
indices of those securities. These notes may include other terms, which will be
specified in the relevant pricing supplement. Each issue of index-linked French
notes which are listed on the Paris Bourse must be made in compliance with the
General Principles, or any other general principles that could replace those
General Principles.
Currency-Linked Notes
MSDW may issue notes with the principal amount payable on any principal
payment date and/or the amount of interest payable on any interest payment date
to be determined by reference to the value of one or more currencies as
compared to the value of one or more other currencies, which we refer to as
"currency-linked notes." The pricing supplement will specify the following:
o information as to the one or more currencies to which the principal
amount payable on any principal payment date or the amount of
interest payable on any interest payment date is linked or indexed;
o the currency in which the face amount of the currency-linked note is
denominated, which we refer to as the "denominated currency;"
o the currency in which principal on the currency-linked note will be
paid, which we refer to as the "payment currency;"
o the interest rate per annum and the dates on which MSDW will make
interest payments;
o specific historic exchange rate information and any currency risks
relating to the specific currencies selected; and
o additional tax considerations, if any.
The denominated currency and the payment currency may be the same currency
or different currencies. Interest on currency-linked notes will be paid in the
denominated currency.
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Redemption and Repurchase of Notes
Optional Redemption by MSDW. The pricing supplement will indicate either
that the notes cannot be redeemed prior to maturity, other than as provided
under "Tax Redemption" below, or will indicate the terms of our option to
redeem the notes, except that each issue of Sterling notes will comply with all
applicable laws and regulations, as amended from time to time, of United
Kingdom authorities. See "General Information--The Banking Act 1987 (Exempt
Transactions) Regulations 1997" below.
Sterling notes that are described as shorter term debt securities are, for
purposes of the Regulations, required to have a minimum maturity of the first
anniversary from the date of issue and a maximum maturity of prior to the third
anniversary from the date of issue. Shorter term Sterling notes may not be
redeemed in whole or in part, other than in the case of a tax redemption or
following an event of default, until the first anniversary of the date of issue
and must be redeemed before the third anniversary of the date of issue. Longer
term Sterling notes are, for purposes of the Regulations, required to have a
minimum maturity of three years from the date of issue. Longer term Sterling
notes may not be redeemed in whole or in part, other than in the case of a tax
redemption or following an event of default, until the third anniversary of the
date of issue.
Notice of Redemption. MSDW will provide notice of redemption to holders of
bearer notes, in the manner described under "Notices" below, once in each of
three successive calendar weeks. The first publication will be not less than 30
nor more than 60 days prior to the date fixed for redemption or will be within
the redemption notice period designated in the applicable pricing supplement.
Notice to the holders of bearer notes held only in global form will be made
through the customary notice procedures of the Euroclear operator, Clearstream,
Luxembourg or, as applicable, any other relevant clearing system. MSDW will
provide notice of redemption to holders of registered notes in the manner
described under "Notices" below, not less than 30 days and not more than 60
days prior to the date fixed for redemption or within the redemption notice
period designated in the applicable pricing supplement. The notes, except for
amortizing notes, will not be subject to any sinking fund.
Repayment at Option of Holder. If applicable, the pricing supplement
relating to each note will indicate that the holder has the option to have MSDW
repay the note on a date or dates specified prior to its maturity date. In the
case of Deutsche Marks, the holder's option of repayment may not occur during
the first two years after issuance. The repayment price will be equal to 100%
of the principal amount of the note, together with accrued interest to the date
of repayment. For notes issued with original issue discount, the pricing
supplement will specify the amount payable upon repayment.
For MSDW to repay a note, the principal paying agent must receive at least
15 days but not more than 30 days prior to the repayment date:
o the note with the form entitled "Option to Elect Repayment" on the
reverse of the note duly completed, together with any unmatured
coupons; or
o a telegram, telex, facsimile transmission or a letter from a member of
a national securities exchange, or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the
United States, Western Europe or Japan setting forth the name of the
holder of the note in the case of a registered note only, the
principal amount of the note, the principal amount of the note to be
repaid, the certificate number or a description of the tenor and
terms of the note, a statement that the option to elect repayment is
being exercised and a guarantee that the note to be repaid, together
with the duly completed form entitled "Option to Elect Repayment" on
the reverse of the note, with any unmatured coupons, will be received
by the principal paying agent not later than the fifth business day
after the date of that telegram, telex, facsimile transmission or
letter. However, the telegram, telex, facsimile transmission or
letter will only be effective if that note and form duly completed
are received by the paying agent by the fifth business day after the
date of that telegram, telex, facsimile transmission or letter.
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Exercise of the repayment option by the holder of a note will be
irrevocable. The holder may exercise the repayment option for less than the
entire principal amount of the note but, in that event, the principal amount of
the note remaining outstanding after repayment must be an authorized
denomination.
Open Market Purchases by MSDW. MSDW may purchase notes at any price in the
open market or otherwise. Notes so purchased by MSDW may, at the discretion of
MSDW, be held or resold or surrendered to the relevant trustee for
cancellation.
Tax Redemption
All Notes. The notes may be redeemed as a whole at our option at any time
prior to maturity, if we determine that, as a result of:
o any change in or amendment to the laws, or any regulations or rulings
promulgated under the laws, of the United States or of any political
subdivision or taxing authority of or in the United States affecting
taxation, or
o any change in official position regarding the application or
interpretation of the laws, regulations or rulings referred to above,
which change or amendment becomes effective on or after the date of the pricing
supplement in connection with the issuance of the notes or any other date
specified in the applicable pricing supplement, we are or will become obligated
to pay additional amounts with respect to the notes as described below under
"Payment of Additional Amounts." The redemption price will be equal to 100% of
the principal amount of the notes, except as otherwise specified in the
applicable pricing supplement or unless the note is a mandatorily exchangeable
note, together with accrued interest to the date fixed for redemption. See
"Description of Notes--Exchangeable Notes--Mandatorily Exchangeable Notes" for
information on mandatorily exchangeable notes.
MSDW will give notice of any tax redemption. Notice of redemption will be
given not less than 30 nor more than 60 days prior to the date fixed for
redemption or within the redemption notice period specified in the applicable
pricing supplement. The date and the applicable redemption price will be
specified in the notice, which will be given in accordance with "Notices"
below.
Prior to giving notice of redemption under this paragraph, MSDW will
deliver to the applicable trustee:
o a certificate stating that MSDW is entitled to effect the redemption
and setting forth a statement of facts showing that the conditions
precedent to the right of MSDW to so redeem have occurred; and
o an opinion of counsel satisfactory to the trustee to that effect based
on the statement of facts.
However, no notice of redemption will be given earlier than 60 days prior to
the earliest date on which we would be obligated to pay the additional amounts
if a payment on the notes were then due. We refer to the date on which the
certificate is delivered to the trustee is the "redemption determination date."
If any date fixed for redemption is a date prior to the exchange date,
definitive bearer notes will be issuable on and after the redemption date as if
the redemption date had been the exchange date. Receipt of ownership
certificates, described above under "--Interest and Principal Payments" is a
condition to the delivery of definitive bearer notes.
Special Tax Redemption of Bearer Notes. If we determine that any payment
of principal, premium, if any, or interest, if any, due on any bearer note or
coupon that we or the paying agent made outside the United States would, under
any present or future laws or regulations of the United States, be subject to
any certification, identification or other information reporting requirement of
any kind, which would disclose to us, any paying agent or any governmental
authority the nationality, residence or identity of a beneficial owner of a
bearer note or coupon who is a United States Alien, as defined below in
"--Payment of Additional Amounts," other than a requirement that:
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o would not be applicable to a payment made by us or any paying agent
o directly to the beneficial owner or
o to a custodian, nominee or other agent of the beneficial owner,
unless the payment by the custodian, nominee or agent to the
beneficial owner would otherwise be subject to any similar
requirement, or
o can be satisfied by the custodian, nominee or other agent certifying
to the effect that the beneficial owner is a United States Alien,
unless the payment by the custodian, nominee or agent to the
beneficial owner would otherwise be subject to any similar
requirement,
then we will (1) redeem the bearer notes, as a whole, at a redemption price
equal to 100% of the principal amount thereof, together with accrued interest
to the date fixed for redemption, or (2) at our election, if the conditions
described below in "--Election to Pay Additional Amounts Rather than Redeem,"
are satisfied, pay the additional amounts specified in that paragraph.
We will make the determination and election described above as soon as
practicable and publish or transmit, as applicable, prompt notice, which we
refer to as the "determination notice," stating:
o the effective date of the certification, identification or other
information reporting requirements,
o whether we will redeem the bearer notes or have elected to pay the
additional amounts specified in "--Election to Pay Additional Amounts
Rather than Redeem," and
o if we elect to redeem, the last date by which the redemption of the
bearer notes must take place.
If we redeem the bearer note for this reason, the redemption will take place on
a date, not later than one year after the publication of the determination
notice. We will elect the date fixed for redemption by notice to the applicable
trustee at least 60 days prior to the date fixed for redemption or within the
redemption notice period specified in the applicable pricing supplement. Notice
of the redemption of the bearer notes will be given to the holders of the
bearer notes not more than 60 nor less than 30 days prior to the date fixed for
redemption or within the redemption notice period designated in the applicable
pricing supplement. The redemption notice will include a statement as to the
last date by which the bearer notes to be redeemed may be exchanged for
registered notes.
Notwithstanding the foregoing, we will not redeem the bearer notes if we
subsequently determine, not less than 30 days prior to the date fixed for
redemption, or prior to the last day of the specified redemption notice period
in the applicable pricing supplement, that subsequent payments would not be
subject to any certification, identification or other information reporting
requirement, in which case we will publish or transmit, as applicable, prompt
notice of the determination and revoke any earlier redemption notice.
The right, if any, of the holders of bearer notes called for tax
redemption as described above to exchange bearer notes for registered notes
will terminate at the close of business of the principal paying agent on the
fifteenth day prior to the date fixed for redemption, and no further exchanges
of bearer notes for registered notes will be permitted.
Election to Pay Additional Amounts Rather than Redeem. If and so long as
the certification, identification or other information reporting requirements
referred to in "--Special Tax Redemption for Bearer Notes" would be fully
satisfied by payment of a backup withholding tax or similar charge, we may
elect to pay additional amounts as defined below under "--Payment of Additional
Amounts" as may be necessary so that every net payment made outside the United
States following the effective date of the requirements by us or any paying
agent of principal, premium, if any, or interest, if any, due in respect of any
bearer note or any coupon of which the beneficial owner is a United States
Alien will not be less than the amount provided for in the bearer note or
coupon to be then due and payable:
o after deduction or withholding for or on account of the backup
withholding tax or similar charge, other than a backup withholding
tax or similar charge that
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o would not be applicable in the circumstances referred to in the
bullet points in the first paragraph following the heading
"Special Tax Redemption of Bearer Notes," or
o is imposed as a result of presentation of the bearer note or
coupon for payment more than 15 days after the date on which the
payment becomes due and payable or on which payment thereof is
duly provided for, whichever occurs later.
Our ability to elect to pay additional amounts as described in this paragraph
is conditioned on there not being a requirement that the nationality, residence
or identity of the beneficial owner be disclosed to us, any paying agent or any
governmental authority, as a result of the payment of the additional amounts.
If we elect to pay any additional amounts as described in "--Election to
Pay Additional Amounts Rather than Redeem," we will have the right to redeem
the bearer notes as a whole at any time by meeting the same conditions
described in "--Special Tax Redemption for Bearer Notes," and the redemption
price of the bearer notes will not be reduced for applicable withholding taxes.
If we elect to pay additional amounts as described in this "--Election to Pay
Additional Amounts Rather than Redeem," and the condition specified in the
first sentence of this "--Election to Pay Additional Amounts Rather than
Redeem," should no longer be satisfied, then we will redeem the bearer notes as
a whole under the applicable provisions of "--Special Tax Redemption for Bearer
Notes."
Payment of Additional Amounts
Subject to the exceptions and limitations set forth below, we will pay any
additional amounts, which we refer to as the "additional amounts," to the
holder of any note or of any coupon issued with a bearer note who is a United
States Alien as may be necessary in order that every net payment of the
principal of and interest on the note and any 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 that payment
by the United States, or any political subdivision or taxing authority of the
United States, will not be less than the amount provided for in the note or
coupon to be then due and payable.
We will not, however, make any payment of additional amounts to any holder
who is a United States Alien on account of:
o any present or future tax, assessment or other governmental charge
that would not have been so imposed but for
o the existence of any present or former connection between the
holder, or between a fiduciary, settlor, beneficiary, member or
shareholder of the holder, if the holder is an estate, a trust,
a partnership or a corporation, and the United States and its
possessions, including, without limitation, the holder, or such
fiduciary, settlor, beneficiary, member or shareholder, being or
having been a citizen or resident of the United States or being
or having been engaged in a trade or business or present in the
United States or having, or having had, a permanent
establishment in the United States, or
o the presentation by the holder of any note or coupon for payment
on a date more than 15 days after the date on which payment
became due and payable or the date on which payment thereof is
duly provided for, whichever occurs later;
o any estate, inheritance, gift, sales, transfer or personal property
tax or any similar tax, assessment or governmental charge;
o any tax, assessment or other governmental charge imposed by reason of
the holder's past or present status as a personal holding company or
foreign personal holding company or controlled foreign corporation or
passive foreign investment company with respect to the United States
or as a corporation that accumulates earnings to avoid United States
federal income tax or as a private foundation or other tax-exempt
organization;
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o any tax, assessment or other governmental charge that is payable
otherwise than by withholding from payments on or in respect of any
note;
o any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of, or
interest on, any note, if payment can be made without the required
withholding by any other paying agent in a city in Western Europe;
o any tax, assessment or other governmental charge that would not have
been imposed but for the failure to comply with certification,
information or other reporting requirements concerning the
nationality, residence or identity of the holder or beneficial owner
of the note, if compliance is required by statute or by regulation of
the United States or of any political subdivision or taxing authority
of or in the United States as a precondition to relief or exemption
from tax, assessment or other governmental charge;
o any tax, assessment or other governmental charge imposed by reason of
the holder's past or present status as the actual or constructive
owner of 10% or more of the total combined voting power of all
classes of our stock entitled to vote or as a direct or indirect
subsidiary of ours; or
o any combination of the items listed above.
Nor will we pay additional amounts with respect to any payment on a note to a
United States Alien who is a fiduciary or partnership or other than the sole
beneficial owner of the payment to the extent the payment would be required by
the laws of the United States, or any political subdivision of the United
States, to be included in the income, for tax purposes, of a beneficiary of, or
settlor to the fiduciary or a member of the partnership or a beneficial owner
who would not have been entitled to the additional amounts had that
beneficiary, settlor, member or beneficial owner been the holder of the note.
The term "United States Alien" means any person who, for United States
federal income tax purposes, is a foreign corporation, a nonresident alien
individual, a nonresident alien fiduciary of a foreign estate or trust, or a
foreign partnership one or more of the members of which is a foreign
corporation, a nonresident alien individual or a nonresident alien fiduciary of
a foreign estate or trust.
Replacement of Notes and Interest Coupons
At the expense of the holder, we will replace any notes or coupons that
become mutilated, destroyed, lost or stolen or are apparently destroyed, lost
or stolen. The mutilated notes or coupons must be delivered to the applicable
trustee, the principal paying agent or the registrar, in the case of registered
notes, or satisfactory evidence of the destruction, loss or theft of the notes
or coupons must be delivered to us, the principal paying agent, the registrar,
in the case of registered notes, and the applicable trustee. At the expense of
the holder, an indemnity that is satisfactory to us, the principal paying
agent, the registrar, in the case of registered notes, and the applicable
trustee may be required before a replacement note or coupon will be issued.
Notices
Notice to Holders of Bearer Notes. Except as provided in the next
sentence, we will publish notices to holders of bearer notes in a newspaper in
the English language of general circulation in the Borough of Manhattan, The
City of New York, and in The City of London, and, if required by Luxembourg law
or stock exchange regulation, in Luxembourg. We may give notice to the
beneficial owners of bearer notes held only in global form through the
customary notice procedures of the Euroclear operator, Clearstream, Luxembourg
or, as applicable, any other relevant clearing system, in which case we will
not publish the notice in a newspaper unless required to by law or stock
exchange regulation. We will publish notice to holders of notes listed on the
Paris Bourse, as long as that publication is required by the Paris Bourse, in a
French language daily newspaper published in Paris, which is expected to be
either Les Echos or la Tribune or, if that publication is not practicable, in a
French language newspaper with general circulation in Europe.
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Notices will be deemed to have been given on the date of publication, or
other transmission, as applicable, or, if published in newspapers or
transmitted on different dates, on the date of the first publication or
transmission.
Notices to Holders of Registered Notes. We will mail notice to each holder
of a registered note by first class mail, postage prepaid. The notice will be
mailed to the respective address of each holder as that address appears upon
our books.
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DESCRIPTION OF UNITS
Investors should carefully read the general terms and provisions of our
units in "Description of Units" in the prospectus. This section supplements
that description. The pricing supplement will add specific terms for each
issuance of units and may modify or replace any of the information in this
section and in "Description of Debt Securities" in the prospectus. If a note is
offered as part of a unit, investors should also review the information in
"Description of Debt Securities" in the prospectus and in "Description of
Notes" in this prospectus supplement. If a universal warrant is offered as part
of a unit, investors should also review the information in "Description of
Warrants" in the prospectus. If a purchase contract is offered as part of a
unit, investors should also review the information in "Description of Purchase
Contracts" in the prospectus.
The following terms used in this section are defined in the indicated
sections of the accompanying prospectus:
o purchase contract ("Description of Purchase Contracts")
o purchase contract property ("Description of Purchase Contracts")
o Unit Agreement ("Description of Units")
o universal warrant ("Description of Warrants -- Offered Warrants")
o universal warrant agent ("Description of Warrants -- Provisions of the
Universal Warrant Agreement")
o warrant property ("Description of Warrants -- Offered Warrants")
Further Information on Units
Terms Specified in Pricing Supplement. MSDW may issue from time to time
units that may include one or more notes, universal warrants or purchase
contracts. The applicable pricing supplement will describe:
o the designation and the terms of the units and of the notes,
universal warrants, purchase contracts, or any combination of notes,
universal warrants or purchase contracts, included in those units,
including whether and under what circumstances those notes, universal
warrants or purchase contracts may be separately traded;
o any additional terms of the Unit Agreement; and
o any additional provisions for the issuance, payment, settlement,
transfer or exchange of the units, or of the securities comprised by
those units.
Units will be issued only in fully registered form, in denominations of
whole units only, with face amounts as indicated in the applicable pricing
supplement.
Universal warrants will entitle or require you to purchase from us or sell
to us:
o securities of an entity not affiliated with us, a basket of those
securities, an index or indices of those securities or any
combination of the above;
o currencies; or
o commodities.
Purchase contracts included in Series D or Series E units will require you
to purchase or sell:
o securities of an entity not affiliated with us, a basket of those
securities, an index or indices of those securities or any
combination of the above;
o currencies; or
o commodities.
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Payments on Units and Securities Comprised by Units. At the office of the
unit agent in the Borough of Manhattan, The City of New York, maintained by us
for that purpose, and, for units in bearer form, at the office of The Chase
Manhattan Bank, London Branch, as unit agent and collateral agent for the units
outside of the United States, the holder may:
o present the units, accompanied by each of the securities then
comprised by that unit, for payment or delivery of warrant property
or purchase contract property or any other amounts due;
o register the transfer of the units; and
o exchange the units, except that global bearer units will be
exchangeable only in the manner and to the extent set forth below.
We may at any time appoint additional unit agents or other agents with
respect to the units outside the United States. The holder will not pay a
service charge for any registration of transfer or exchange of the units or of
any security included in a unit or interest in the unit or security included in
a unit, except for any tax or other governmental charge that may be imposed.
Form of Units
The units will be issued in the form corresponding to the form of the
notes comprised by the units and, will be issued
o in definitive bearer form or in temporary or permanent global bearer
form, or
o in fully registered definitive form, or
o in any combination of the above bearer or registered forms.
Each other security comprised by a unit will be in the corresponding form.
Units will be issued in denominations of a single unit and any integral
multiple thereof, with face amounts as indicated in the applicable pricing
supplement, generally corresponding to the principal amount of the notes
comprised by the units. See "Description of Notes--Forms of Notes" above.
Exchanging Units. Registered units will be exchangeable for registered
units in other authorized denominations, in an equal aggregate principal
amount. Bearer units will not be issuable in exchange for registered units.
Registered units may be presented for registration of transfer or exchange at
the offices of the unit agent or at the offices of any other agent designated
by us for that purpose. Bearer units may be presented for exchange in the
manner set forth below. No service charge will be made for any registration of
transfer or exchange of units, but we may require payment of a sum sufficient
to cover any tax or other governmental charge. Bearer units, together with the
securities comprised by the unit, will be transferable by delivery.
Global Bearer Units. If we issue units in bearer form, each bearer unit
will be represented initially by a temporary global bearer unit. Each temporary
global bearer unit will be deposited with a common depositary for the Euroclear
operator, Clearstream, Luxembourg or, as applicable, any other relevant
clearing system. The Euroclear operator, Clearstream, Luxembourg or, as
applicable, any other relevant clearing system will credit the account
designated by or on behalf of the subscriber with a number, and specified face
amount, if applicable, of units equal to the number, and specified face amount,
if applicable, for which it has subscribed and paid. The interests of the
beneficial owner or owners in a temporary global bearer unit, and in the
temporary global form of any universal warrant or purchase contract comprised
by the unit, will be exchangeable for an interest in a permanent global bearer
unit. The exchange will be made at the time, and to the extent, of the exchange
of the interest in the temporary global bearer note comprised by the unit, in
accordance with procedures described above under "Description of Notes--Forms
of Notes." If no note is included in a unit, the applicable pricing supplement
will describe any applicable exchange procedure. The permanent global bearer
unit will be held by a common depositary for the Euroclear operator,
Clearstream, Luxembourg, or, as
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applicable, any other relevant clearing system for credit to the account
designated by or on behalf of the beneficial owner. The temporary global bearer
unit can be exchanged for a permanent global bearer unit 40 days after the date
on which MSDW receives the proceeds of the sale of the note comprised by the
unit.
Exchange of Global Bearer Units for Definitive Bearer Units. The
beneficial owner of a unit represented by a permanent global bearer unit may
exchange the interest in the permanent global bearer unit for a definitive
bearer unit, consisting of the definitive forms of each security included in
the unit. If the applicable pricing supplement so discloses, the beneficial
owner of a temporary global bearer unit may also exchange its interest in the
temporary global bearer unit for a definitive registered unit, comprised of the
definitive registered forms of each security included in the unit, of any
authorized denominations. The beneficial owner must give 30 days' written
notice of exchange to the principal paying agent through either the Euroclear
operator, Clearstream, Luxembourg or, as applicable, any other relevant
clearing system. Upon receipt by the unit agent of an initial request to
exchange an interest in a permanent global bearer unit for a definitive bearer
unit, all other interests in that permanent global bearer unit will be
exchanged for definitive units, consisting of the definitive forms of each
security included in the unit. All definitive bearer units will be serially
numbered. The common depositary for the Euroclear operator, Clearstream,
Luxembourg or, as applicable, any other relevant clearing system will instruct
the unit agent regarding the aggregate principal amount and denominations of
definitive bearer units that must be authenticated and delivered to the
Euroclear operator, Clearstream, Luxembourg or, as applicable, any other
relevant clearing system. These exchanges will occur at no expense to the
beneficial owners, as soon as practicable after the receipt of the initial
request for definitive bearer units or of a notice of acceleration or clearing
system closure. No bearer unit will be delivered in the United States. The
holder can exchange definitive bearer units in other authorized denominations
and in an equal aggregate number. The exchange will take place at the offices
of the unit agent or at the office of any other agent designated by MSDW for
that purpose.
Special Requirements for Exercise of Rights for Global Units. If a unit
represented by a global bearer unit or by definitive units that remain on
deposit with a common depositary for Euroclear operator, Clearstream,
Luxembourg or, as applicable, any other relevant clearing system:
o includes a universal warrant entitling the holder to exercise the
universal warrant to purchase or sell warrant property,
o includes any note or purchase contract that entitles the holder to
redeem, accelerate or take any other action concerning that note or
purchase contract, or
o otherwise entitles the holder of the unit to take any action under the
unit or any security included in that unit,
then, in each of the cases listed above, the holder must exercise those rights
through the Euroclear operator, Clearstream, Luxembourg or, as applicable, any
other relevant clearing system.
In order to ensure that the Euroclear operator, Clearstream, Luxembourg
or, as applicable, any other relevant clearing system will timely exercise a
right conferred by a unit or by the securities included in that unit, the
beneficial owner of that unit must instruct the broker or other direct or
indirect participant through which it holds an interest in that unit to notify
the Euroclear operator, Clearstream, Luxembourg or, as applicable, any other
relevant clearing system of its desire to exercise that right. Different firms
have different deadlines for accepting instructions from their customers. Each
beneficial owner should consult the broker or other direct or indirect
participant through which it holds an interest in a unit in order to ascertain
the deadline for ensuring that timely notice will be delivered to the common
depositary.
S-39
<PAGE>
UNITED STATES FEDERAL TAXATION
In the opinion of Brown & Wood LLP, counsel to MSDW, the following summary
accurately describes the principal United States federal income and estate tax
consequences of ownership and disposition of the securities by a foreign
holder, as defined below. This summary is based on the United States Internal
Revenue Code of 1986, as amended, which we refer to as the "Code," and existing
and proposed Treasury regulations, revenue rulings, administrative
interpretations and judicial decisions, all as currently in effect and all of
which are subject to change, possibly with retroactive effect. This summary
does not discuss all of the tax consequences that may be relevant to holders in
light of their particular circumstances or to holders subject to special rules,
such as nonresident alien individuals who have lost United States citizenship
or who have ceased to be treated as resident aliens, corporations that are
treated as foreign or domestic personal holding companies, controlled foreign
corporations, or passive foreign investment companies and foreign holders that
are owned or controlled by persons subject to United States federal income tax.
Persons considering the purchase of the securities should consult their own tax
advisors with regard to the application of the United States federal income and
estate tax laws to their particular situations as well as to any tax
consequences arising under the laws of any state, local or foreign
jurisdiction.
As used in this prospectus supplement, the term "foreign holder" means a
beneficial owner of a program security who or that is:
o a nonresident alien individual for United States federal income tax
purposes,
o a corporation or partnership, including an entity treated as a
corporation or partnership for United States federal income tax
purposes, that was not created or organized in or under the laws of
the United States, any state of the United States or the District of
Columbia,
o an estate the income of which is not subject to United States federal
income tax on a net basis, or
o a trust if either
o primary supervision over the administration of the trust is
unable to be exercised by a United States court, or
o the authority to control all substantial decisions of the trust
does not rest with one or more United States persons.
Income Taxes
Notes
Except as otherwise discussed below, a foreign holder will generally not
be subject to United States federal income tax, including withholding tax, on
payments of principal or premium, if any, or interest (including original issue
discount, if any) on a note or coupon, or proceeds from the sale or disposition
of a note or coupon, provided that
o the payments or proceeds are not effectively connected with the
conduct of a trade or business by the foreign holder within the
United States,
o the foreign holder does not own, directly or by attribution, ten
percent or more of the total combined voting power of all classes of
stock of MSDW entitled to vote,
o the foreign holder 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, and
o in the case of a note issued in registered form, required
certification of the foreign holder's non-United States status is
provided to MSDW or the agent (generally on IRS Form W-8 or IRS Form
W-8 BEN).
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<PAGE>
Optionally Exchangeable Notes
A foreign holder will generally not be subject to United States federal
income tax, including withholding tax, with regard to an optionally
exchangeable note if
o the optionally exchangeable note is treated as indebtedness of MSDW
for United States federal income tax purposes,
o the optionally exchangeable note is exchangeable only into securities
that are actively traded, into a basket of securities that are
actively traded or an index or indices of securities that are
actively traded, and
o the requirements for exemption from tax listed above under "--Notes"
are met.
With regard to the above requirements, optionally exchangeable notes for
which the principal amount payable in cash equals or exceeds the issue price,
i.e., the initial offering price to the public at which price a substantial
amount of the respective optionally exchangeable notes is sold, will be treated
as indebtedness of MSDW for United States federal income tax purposes. No
opinion is expressed in this prospectus supplement as to the impact of the
"United States real property holding company" rules, which could affect the
taxation of foreign holders. Persons considering the purchase of optionally
exchangeable notes should refer to the discussion relating to United States
federal taxation in the applicable pricing supplement for disclosure, if any is
deemed necessary, concerning the applicability of these rules. For information
regarding the United States federal income tax consequence of ownership and
disposition of the property received in exchange for an optionally exchangeable
note, please refer to the publicly available documents described in the
applicable pricing supplement.
Mandatorily Exchangeable Notes
Under current United States federal income tax law, it is unclear how a
mandatorily exchangeable note will be treated. Accordingly, nothing in this
prospectus supplement should be construed to describe how mandatorily
exchangeable notes are treated with regard to foreign holders. Prospective
purchasers of mandatorily exchangeable notes are urged to review the applicable
pricing supplement and consult with their tax advisors.
Notes Linked to Commodity Prices, Single Securities, Baskets of Securities
or Indices
The United States federal income tax consequences to a foreign holder of
the ownership and disposition of notes that have principal or interest
determined by reference to commodity prices, securities of entities
unaffiliated with MSDW, baskets of these securities or indices may vary
depending upon the exact terms of the notes and related factors. Notes
containing these features may be subject to rules that differ from the general
rules discussed above under "-- Notes." In these circumstances, persons
intending to purchase these notes should refer to the discussion relating to
United States federal taxation in the applicable pricing supplement for
additional disclosure, if any is deemed necessary.
Units
Under current United States federal income tax law, the treatment of a
foreign holder of a unit, including a foreign holder of the note and/or the
universal warrants or purchase contracts comprising a unit, is unclear.
Prospective purchasers of units are urged to review the discussion relating to
United States federal taxation in the applicable pricing supplement and consult
with their tax advisors.
Backup Withholding
A foreign holder of a bearer note or coupon will generally not be subject
to backup withholding or information reporting with respect to payments on, and
to proceeds of the sale before maturity of, the bearer note or coupon. Backup
withholding and information reporting requirements will likewise generally not
apply to those payments made on a registered note if required certification of
the holder's non-United States status is provided to MSDW or the agent.
S-41
<PAGE>
Foreign holders of securities should consult their tax advisors regarding
the application of information reporting and backup withholding requirements or
rules to their particular situations, the availability of an exemption from the
information reporting and backup withholding requirements, and the procedure
for obtaining an exemption, if available. Any amounts withheld from a payment
to a foreign holder under the backup withholding rules will be allowed as a
credit against the foreign holder's United States federal income tax liability
and may entitle the foreign holder to a refund except that the required
information is furnished to the United States Internal Revenue Service.
On October 6, 1997, the Treasury Department issued regulations which make
modifications to the withholding, backup withholding and information reporting
rules described above. These regulations attempt to unify certification
requirements and modify reliance standards. These regulations will generally be
effective for payments made after December 31, 2000, subject to transition
rules. Prospective investors are urged to consult their own tax advisors
regarding these regulations.
Estate Taxes
A note (other than a mandatorily exchangeable note) held by an individual
who at the time of his or her death is not a citizen or domiciliary of the
United States will generally not be subject to United States federal estate tax
as a result of the individual's death, unless (i) income derived by the
individual on the note would have been subject to United States federal income
tax because the note was held in connection with a trade or business in the
United States or (ii) an applicable estate tax treaty provides otherwise. If an
applicable estate tax treaty provides otherwise, the fair market value of
securities, other than notes that were not issued as part of a unit, may be
includable in the gross estate of a non- resident alien individual for United
States federal estate tax purposes. With respect to mandatorily exchangeable
notes, holders should consult the applicable pricing supplement and their tax
advisors.
The United States federal income and estate tax discussion set forth above
is included for general information only and may not be applicable depending on
a foreign holder's particular situation. Persons considering the purchase of
notes or units should consult their own tax advisors with regard to the tax
consequences to them of the ownership and disposition of notes or units.
S-42
<PAGE>
PLAN OF DISTRIBUTION
MSDW is offering the Series D and Series E notes, and the Series D and
Series E units on a continuing basis exclusively through Morgan Stanley & Co.
International Limited, Bank Morgan Stanley AG, Morgan Stanley S.A. and Morgan
Stanley AG, which we refer to individually as an "agent" and, together, as the
"agents," who have agreed to use reasonable efforts to solicit offers to
purchase these securities. MSDW will have the sole right to accept offers to
purchase these securities and may reject any offer in whole or in part. Each
agent may reject, in whole or in part, any offer it solicited to purchase
securities. Unless otherwise specified in the applicable pricing supplement,
MSDW will pay an agent, in connection with sales of these securities resulting
from a solicitation that agent made or an offer to purchase that agent
received, a commission ranging from .125% to .750% of the initial offering
price of the securities to be sold, depending upon the maturity of the
securities. MSDW and the agent will negotiate commissions for securities with a
maturity of 30 years or greater at the time of sale.
MSDW may also sell these securities to an agent as principal for its own
account at discounts to be agreed upon at the time of sale. That agent may
resell these securities to investors and other purchasers at a fixed offering
price or at prevailing market prices, or prices related thereto at the time of
resale or otherwise, as that agent determines and as we will specify in the
applicable pricing supplement. An agent may offer the securities it has
purchased as principal to other dealers. That agent may sell the securities to
any dealer at a discount and, unless otherwise specified in the applicable
pricing supplement, the discount allowed to any dealer will not be in excess of
the discount that agent will receive from MSDW. After the initial public
offering of securities that an agent is to resell on a fixed public offering
price basis, the agent may change the public offering price, concession and
discount.
In compliance with United States federal income tax laws and regulations,
MSDW and each agent has agreed that it will not, in connection with the
original issuance of any bearer notes either alone or as part of a unit or
during the restricted period, offer, sell, resell or deliver, directly or
indirectly, any bearer notes either alone or as part of a unit in the United
States or its possessions or to United States persons, other than as permitted
by the applicable Treasury Regulations. In addition, each agent has represented
and agreed that it will have in effect procedures reasonably designed to ensure
that its employees or agents who are directly engaged in selling bearer notes
are aware of the above restrictions on the offering, sale, resale or delivery
of bearer notes.
Each of the agents may be deemed to be an "underwriter" within the meaning
of the United States Securities Act of 1933. MSDW and the agents have agreed to
indemnify each other against certain liabilities, including liabilities under
the Securities Act, or to contribute to payments made in respect of those
liabilities. MSDW has also agreed to reimburse the agents for specified
expenses.
MSDW estimates that it will spend approximately $5,516,000 for printing,
rating agency, trustee's and legal fees and other expenses allocable to the
offering.
With respect to securities to be offered or sold in the United Kingdom,
each agent, underwriter, dealer, other agent and remarketing firm participating
in the distribution of the securities has represented and agreed, or will
represent and agree, that:
(1) in relation to securities which have a maturity of one year or
more and in respect of which admission to the listing in accordance
with Part IV of the Financial Services Act 1986 (the "Act") is to be
sought, it has not offered or sold and will not offer or sell any of
those securities to persons in the United Kingdom prior to admission
of those securities to the listing except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing
of investments, as principal or agent, for the purposes of their
businesses or otherwise in circumstances which have not resulted and
will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations
1995 or the Act;
(2) in relation to securities which have a maturity of one year or
more and in respect of which admission to the listing is not to be
sought, it has not offered or sold and, prior to the expiry of the
period of six months from the date of issue of those securities, will
not offer or sell any of those securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or
S-43
<PAGE>
disposing of investments, as principal or agent, for the purposes of
their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities
Regulations 1995;
(3) it has complied and will comply with all applicable provisions of
the Act with respect to anything done by it in relation to the
securities in, from or otherwise involving the United Kingdom; and
(4) it has only issued or passed on and will only issue or pass on in
the United Kingdom any document received by it in connection with the
issue of the securities, other than any document which consists of or
any part of listing particulars, supplementary listing particulars or
any other document required or permitted to be published by the
listing rules under Part IV of the Act, to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996, as amended, or
is a person to whom the document may otherwise lawfully be issued or
passed on.
The securities have not been, and will not be, registered under the
Securities and Exchange Law of Japan. Accordingly, the securities may not be
offered or sold, directly or indirectly, in Japan or to, or for the benefit of,
any resident of Japan or to others for the reoffering or resale, directly or
indirectly, in Japan or to a resident of Japan except pursuant to an exemption
from the registration requirements of, and otherwise in compliance with, the
Securities and Exchange Law of Japan and other relevant laws and regulations of
Japan. As used in this section, a resident of Japan refers to any person
resident in Japan including any corporation or other entity organized under the
laws of Japan.
The securities may not be offered or sold in the Federal Republic of
Germany other than in compliance with the provisions of the German Sales
Prospectus Act (Wertpapier-Verkaufsprospektgesetz) of December 13, 1990, as
amended, and of any other laws applicable in the Federal Republic of Germany
governing the issue, offering and sale of securities.
Securities denominated or payable in or indexed to Swiss francs may only
be offered and sold from time to time by us through Bank Morgan Stanley AG,
acting as agent for us or as lead manager in a syndicated transaction. The
issuance of securities denominated or payable in or indexed to Swiss francs
will take place in compliance with Swiss law and the relevant regulations of
the Swiss National Bank in effect from time to time.
We and Morgan Stanley S.A. each have represented and agreed, and any
dealers will represent and agree, that securities will be issued outside of the
Republic of France and that we, Morgan Stanley S.A. and any dealers will not
offer or sell any securities in the Republic of France, in connection with
their initial distribution, and will not distribute or cause to be distributed
in the Republic of France this prospectus supplement or the prospectus or any
other offering material relating to the securities, except to (i) qualified
investors (investisseurs qualifies) and/or (ii) within a restricted circle of
investors (cercle restreint d'investisseurs), all as defined in and in
accordance with Article 6 of Ordinance no 67-833 dated 28th September, 1967 (as
amended) and Decree no 98-880 dated 1st October, 1998.
Morgan Stanley & Co. International Limited, Bank Morgan Stanley AG, Morgan
Stanley S.A. and Morgan Stanley Bank AG are each an affiliate of ours. We have
been advised by the agents that they intend to make a market in these
securities or, if separable, any other securities included in units, as
applicable laws and regulations permit. The agents are not obligated to do so,
however, and the agents may discontinue making a market at any time without
notice. No assurance can be given as to the liquidity of any trading market for
these securities or if separable, any other securities included in any units.
In order to facilitate the offering of these securities, the agents may
engage in transactions that stabilize, maintain or otherwise affect the price
of these securities or of any other securities the prices of which may be used
to determine payments on these securities. Specifically, the agents may
overallot in connection with any offering of these securities, creating a short
position in these securities for their own accounts. In addition, to cover
overallotments or to stabilize the price of these securities or of any other
securities, the agents may bid for, and purchase, these securities or any other
securities in the open market. Finally, in any offering of these securities
through a syndicate of underwriters, the underwriting syndicate may reclaim
selling concessions allowed to an underwriter or a dealer for distributing
these securities in the offering if the syndicate repurchases previously
distributed securities in transactions to cover syndicate
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<PAGE>
short positions, in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market price of these securities above
independent market levels. The agents are not required to engage in these
activities, and may end any of these activities at any time.
Concurrently with the offering of these securities through the agents, we
may issue other debt securities under the indentures referred to in this
prospectus supplement or other units similar to those described in this
prospectus supplement. Those debt securities may include medium-term notes and
units under our Series C prospectus supplement. We refer to those notes as
"Series C medium-term notes" and those units as "Series C units." The Series C
medium-term notes and Series C units may have terms substantially similar to
the terms of the securities offered under this prospectus supplement. The
Series C medium-term notes and Series C units may be offered concurrently with
the offering of these securities, on a continuing basis in the United States by
MSDW, under a distribution agreement with Morgan Stanley & Co. Incorporated and
Dean Witter Reynolds Inc., as agents for MSDW. The terms of that distribution
agreement, which we refer to as the U.S. Distribution Agreement, are
substantially similar to the terms of the distribution agreement for the
offering of securities in the Series D and E program, except for selling
restrictions specified in that distribution agreement. Any Series C medium-term
note or Series C unit sold under the U.S. Distribution Agreement, and any debt
securities, debt warrants or pre-paid purchase contracts issued by MSDW under
the indentures or any preferred stock, warrants or purchase contracts issued by
MSDW will reduce the aggregate offering price of the securities that may be
offered under this prospectus supplement, any pricing supplement and the
accompanying prospectus.
LEGAL MATTERS
The validity of the notes, the units and any securities included in the
units will be passed upon for MSDW by Brown & Wood LLP, or other counsel who is
satisfactory to the agents and who may be an officer of MSDW. Davis Polk &
Wardwell will pass upon some legal matters relating to the notes, units and any
securities included in the units for the agents. Davis Polk & Wardwell has in
the past represented MSDW and continues to represent MSDW on a regular basis
and in a variety of matters, including in connection with its private equity
and leveraged capital activities.
S-45
<PAGE>
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization
and indebtedness of MSDW as of February 29, 2000 based on MSDW's unaudited
condensed consolidated financial statements for the quarter ended February 29,
2000.
The following information should be read in conjunction with MSDW's
audited consolidated financial statements for its 1999, 1998 and 1997 fiscal
years, the related notes thereto, and Management's Discussion and Analysis of
Financial Condition and Results of Operations, all as contained in MSDW's
Annual Report on Form 10-K dated November 30, 1999 and MSDW's unaudited
condensed consolidated financial statements for the quarter ended February 29,
2000 and Management's Discussion and Analysis of Financial Condition and
Results of Operations, all as contained in MSDW's Quarterly Report on Form 10-Q
for the quarter ended February 29, 2000, which Annual Report on Form 10-K and
Quarterly Report on Form 10-Q form part of the UK Listing Authority Listing
Particulars.
February 29, 2000
-------------------
(In millions,
except share data)
Short-term borrowings...............................................U.S.$48,019
-----------
Current portion of long-term borrowings............................. 8,040
-----------
Total (2)(4)................................................U.S.$56,059
===========
Long-term borrowings (1)(2)(4)......................................U.S.$24,850
Capital Units ...................................................... 439
Preferred Securities issued by subsidiaries......................... 400
Shareholders' equity:
Preferred stock, par value $0.01 per share; authorized
30,000,000 shares:
7-3/4% Cumulative Preferred Stock, stated value U.S.$200;
outstanding 1,000,000 shares.............................. 200
Series A Fixed/Adjustable Rate Cumulative Preferred Stock,
stated value U.S.$200; outstanding 1,725,000 shares....... 345
Common stock, U.S.$0.01 par value; authorized 1,750,000,000
shares; issued 1,211,685,904 shares; outstanding
1,134,181,285 shares (3)...................................... 12
Paid-in capital.................................................. 3,253
Retained earnings................................................ 17,592
Employee stock trust............................................. 2,414
-----------
Cumulative translation adjustments............................... (39)
Subtotal.................................................... 23,777
Note receivable related to sale of preferred stock to ESOP.... (55)
Common stock held in treasury, at cost 77,504,619 shares...... (3,456)
-----------
Common stock issued to employee trust......................... (2,414)
-----------
Total shareholders' equity............................... 17,852
Total capitalization (4).................................U.S.$43,541
===========
- -------------------
(1) Subsequent to February 29, 2000 and through May 18, 2000, additional
senior notes aggregating U.S.$5,191,609,099 were issued. MSDW currently
has effective registration statements pursuant to which it may issue up to
an aggregate of U.S.$15,708,077,477 of debt securities, warrants,
preferred stock, depositary shares, purchase contracts and units.
(2) As of February 29, 2000, MSDW guaranteed $10.2 billion of indebtedness of
its subsidiaries. As of the date hereof, all of MSDW's indebtedness is
unsecured and not guaranteed by any third party, with the exception of
approximately $1.0 billion of such indebtedness that is secured. In
accordance with U.S. GAAP, MSDW's contingent liabilities where a liability
is less than probable or cannot be reasonably estimated are discussed in
Note 7 to each of MSDW's Condensed Consolidated Financial Statements in
the Quarterly Report on Form 10-Q for the quarter ended February 29, 2000
and MSDW's Consolidated Financial Statements in the Annual Report on Form
10-K for the fiscal year ended November 30, 1999.
(3) On April 6, 2000, MSDW's shareholders approved an amendment to increase
the number of authorized common stock shares to 3.5 billion, and MSDW
amended its Certificate of Incorporation on April 11, 2000 to effect such
amendment.
(4) As of the date hereof and except as disclosed in these footnotes to the
preceding table, there has been no material change in the capitalization,
indebtedness and contingent liabilities of MSDW or in the amount of
indebtedness guaranteed by MSDW since February 29, 2000.
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<PAGE>
BOARD OF DIRECTORS
The current Directors of MSDW and their principal occupations are listed
below. The business address of each director is 1585 Broadway, New York, New
York 10036. You may refer to our Proxy Statement for our 2000 Annual Meeting of
Stockholders for further information about each director.
Philip J. Purcell................Chairman of the Board and
Chief Executive Officer
John J. Mack.....................President, Chief Operating Officer and Director
Robert P. Bauman.................Director
Edward A. Brennan................Director
C. Robert Kidder.................Director
Charles F. Knight................Director
Miles L. Marsh...................Director
Michael A. Miles.................Director
Clarence B. Rogers, Jr...........Director
Laura D'Andrea Tyson.............Director
GENERAL INFORMATION
The listing of the Series D notes by the UK Listing Authority will be
expressed as a percentage of their principal amount excluding accrued interest.
Listing and admission to trading of the Series D notes offered by this
prospectus supplement is expected to be granted by the UK Listing Authority and
the London Stock Exchange, respectively, on or about May 23, 2000 subject only
to issuance of Series D notes, including temporary global notes. The listing
agent with respect to the application for the listing of the Series D notes by
the UK Listing Authority is Morgan Stanley & Co. International Limited.
Deloitte & Touche LLP, independent auditors, have audited the consolidated
statements of financial condition of MSDW as of November 30, 1999 and 1998 and
the related consolidated statements of income, comprehensive income, cash flows
and changes in shareholders' equity for the fiscal years ended November 30,
1999, 1998 and 1997 and an unqualified opinion has been reported thereon.
Brown & Wood LLP has given and not withdrawn its written consent to the
inclusion in this prospectus supplement of its opinion under "United States
Federal Taxation" and has authorized the contents of that part of the listing
particulars for the purposes of Section 152(1)(e) of the Financial Services Act
1986.
The obligation of a prospective purchaser, including the agents, to pay
for any notes or units it has agreed to purchase is subject to the satisfaction
of certain conditions which, if not satisfied or waived, would result in the
purchaser having no obligation to pay for any of those notes or units.
The issuance of the notes, the units, the universal warrants and the
purchase contracts was authorized pursuant to resolutions adopted at meetings
of the Board of Directors of MSDW held on March 16, 1999 and March 21, 2000.
MSDW is incorporated in Delaware, U.S.A., and its registered office is
located at The Corporation Trust Center, 1209 Orange Street in the City of
Wilmington, County of New Castle.
Except as disclosed in this prospectus supplement, the prospectus and
MSDW's Annual Report on Form 10-K for the fiscal year ended November 30, 1999,
Quarterly Report on Form 10-Q for the quarter ended February 29, 2000 and
Current Reports on Form 8-K dated December 20, 1999 (3 reports) and March 23,
2000 all of which comprise the UK Listing Authority Listing Particulars, since
November 30, 1999, the date of the latest published audited financial
statements, there has been no significant change in the financial or trading
position of MSDW and its consolidated subsidiaries nor any material adverse
change in the financial or business position of MSDW and its consolidated
subsidiaries.
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<PAGE>
Except as disclosed under "Item 3. Legal Proceedings" of MSDW's Annual
Report on Form 10-K dated November 30, 1999 and "Item 1. Legal Proceedings" of
MSDW's Quarterly Report on Form 10-Q for the quarter ended February 29, 2000,
as of the date hereof, there are no, nor have there been any, legal,
arbitration or administrative proceedings including any pending or, to MSDW's
knowledge, threatened involving MSDW or any of its consolidated subsidiaries
which may have or have had during the previous 12 months a material effect on
MSDW's consolidated financial condition.
Deloitte & Touche LLP, certified public accountants, the auditors of MSDW
have given and have not withdrawn their written consent to the inclusion in
these listing particulars of their report in the form and context in which it
is included and have authorized the contents of that part of the listing
particulars for the purpose of Section 152 (l)(e) of the Financial Services Act
1986.
The notes and, subject to certain limitations, units have been accepted
for clearance through the Euroclear operator, Clearstream, Luxembourg and, in
the case of (i) French notes, (ii) French units and (iii) purchase contracts
and universal warrants included in any French unit, which we refer to
collectively as "French securities," Sicovam. The appropriate code for each
issue allocated by the Euroclear operator, Clearstream, Luxembourg and, in the
case of French securities, Sicovam will be contained in the applicable pricing
supplement. Transactions will normally be effected for settlement not earlier
than two business days after the date of the transaction.
Copies of the Euro Distribution Agreement dated May 19, 2000 among MSDW
and the agents, the U.S. Distribution Agreement dated May 18, 2000 among MSDW,
Morgan Stanley & Co. Incorporated and Dean Witter Reynolds Inc., each of the
Indentures, the opinion of Brown & Wood LLP referred to in the first paragraph
under "United States Federal Taxation" on page S-40, MSDW's Annual Report on
Form 10-K for the fiscal years ended November 30, 1998 and November 30, 1999,
MSDW's Quarterly Reports on Form 10-Q for 1998 and 1999, Dean Witter Discover's
Quarterly Reports on Form 10-Q for 1997 (each excluding exhibits), Morgan
Stanley Group Inc.'s Quarterly Reports on Form 10-Q for 1997 (each excluding
exhibits), MSDW's listing particulars, all of MSDW's future Annual, Quarterly
and Current Reports, supplementary listing particulars and pricing supplements
and MSDW's Certificate of Incorporation and Amended and Restated By-laws, will,
from the date hereof and so long as any note, unit, universal warrant or
purchase contract is outstanding and throughout the term of the medium-term
note program, which we refer to as the "Program," be available for inspection
during business hours at the corporate trust office of each of the trustees in
The City of New York, the office of each paying agent and the principal
executive offices of MSDW specified in the accompanying prospectus. MSDW's
Quarterly Reports on Form 10-Q contain unaudited quarterly financial
statements.
Documents incorporated by reference in this prospectus supplement and any
part of the Registration Statement not included in this prospectus supplement
do not form part of the listing particulars.
Any statement contained in this prospectus supplement or in a document
incorporated or deemed to be incorporated by reference in this prospectus
supplement will be deemed to be modified or superseded for purposes of this
prospectus supplement, but not the listing particulars, to the extent that a
statement contained in this prospectus supplement or in any subsequently filed
document that also is or is deemed to be incorporated by reference in this
prospectus supplement modifies or supersedes the statement. Any statement so
modified or superseded will not be deemed, except as so modified or superseded,
to constitute a part of this prospectus supplement.
The Banking Act 1987 (Exempt Transactions) Regulations 1997
MSDW is not an authorized institution as defined in the Banking Act 1987
or a European authorized institution as defined by regulation 3 of the Banking
Coordination (Second Council Directive) Regulations 1992. Repayment of the
principal and payment of any interest or premium in connection with the
Sterling notes has not been guaranteed. In relation to any Sterling notes which
are to be exempt transactions under regulation 13(3) of the Regulations where
the notes would fall within regulation 13(4)(a) or (b) of the Regulations: (a)
MSDW confirms that as at the date hereof, it has complied with its obligations
under the relevant rules (as defined in the Regulations) in relation to the
admission to and continuing listing of the Programme and of any previous issues
made under it and listed on the same exchange as the Programme; (b) MSDW will
confirm in the applicable pricing supplement relating to the notes that it has
complied with its obligations under the relevant rules in relation to the
admission to listing of the debt securities falling within regulation 13(4)(a)
or (b) of the Regulations or, where the notes have not yet been admitted to
listing, will have complied
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<PAGE>
with the obligations by the time when the notes are so admitted; and (c) MSDW
confirms that as at the date hereof, it has not, since the last publication, if
any, in compliance with the relevant rules of information about the Program,
any previous issues made under it and listed on the same exchange as the
Program, or any debt securities falling within regulation 13(4)(a) or (b) of
the Regulations, having made all reasonable enquiries, become aware of any
change in circumstances which could reasonably be regarded as significantly and
adversely affecting its ability to meet its obligations as issuer in respect of
the debt securities falling within regulation 13(4)(a) or (b) of the
Regulations as they fall due.
PARIS LISTING INFORMATION
It is strongly recommended by the French Minister of Economy, Finance and
Industry that notes and units denominated in French Francs or in euro should be
listed on the Paris Bourse, particularly, but not exclusively, where such notes
and units are to be offered publicly in France. The following procedures will
apply, inter alia, to notes and units which are to be listed on the Paris
Bourse.
Commission des Operations de Bourse ("COB")
Prior to listing of any Series D notes and Series D units on the Paris
Bourse, the COB is required to approve this prospectus supplement and the
accompanying prospectus. In addition, the pricing supplement applicable to each
issue of Series D notes and Series D units to be listed on the Paris Bourse is
currently required to be approved at the time of the relevant issue. The
relevant approval in relation to the program will be evidenced by the issue of
a registration number by the COB, which will be disclosed in this prospectus
supplement. The relevant approval in relation to each issue will be evidenced
by the issue of a visa number, which will be disclosed in the pricing
supplement applicable to the relevant Series D notes and Series D units.
Parisbourse SBF SA ("SBF")
The listing of Series D notes and Series D units on the Paris Bourse is
subject to approval by the SBF. Approval will be evidenced by publication in
the Decisions et avis de Parisbourse SBF SA.
Bulletin des Annonces Legales Obligatoires ("BALO")
Series D notes and Series D units may not be listed on the Paris Bourse
before details of the program and the relevant Series D notes and Series D
units, in the form of a notice legale, have been published in the BALO.
Documents available for inspection
In the case of Series D notes and Series D units listed on the Paris
Bourse, the applicable pricing supplement will specify the additional places in
Paris at which documents incorporated by reference in this prospectus
supplement or otherwise required to be made available for inspection may be
inspected during normal business hours. We have undertaken to make the
documents available as so required.
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<PAGE>
PARIS BOURSE RESPONSIBILITY STATEMENT
PERSONNES QUI ASSUMENT
LA RESPONSABILITE DU "PROSPECTUS" ET DU "PROSPECTUS SUPPLEMENT"
EN CE QUI CONCERNE LES TITRES QUI SERONT ADMIS A LA NEGOCIATION AU COMPARTIMENT
INTERNATIONAL DU PREMIER MARCHE DE LA BOURSE DE PARIS
AU NOM DE L'EMETTEUR ET DE LA BANQUE PRESENTATRICE
A la connaissance de l'emetteur et de la banque presentatrice, les donnees des
presents documents denommes "prospectus" et "prospectus supplement" sont
conformes a la realite et ne comportent pas d'omission de nature a en alterer
la portee.
- ----------------------------------- ------------------------------------
Pour la banque representatrice Pour l'emetteur
Harry Stanley Alexander C. Frank
Attorney-in-fact Treasurer
Morgan Stanley S.A. Morgan Stanley Dean Witter & Co.
LA COMMISSION DES OPERATIONS DE BOURSE
En vue de la cotation a Paris des titres eventuellement emis dans le cadre
de ce present Programme, et par application des articles 6 et 7 de l'ordonnance
No. 67-833 du 28 septembre 1967 telle que modifiee, la Commission des
Operations de Bourse a enregistre les documents denommes "prospectus" et
"prospectus supplement" sous le No. P00- 243 en date du 17 mai 2000.
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<PAGE>
RINCIPAL EXECUTIVE OFFICES REGISTERED OFFICE OF THE
OF THE COMPANY COMPANY IN DELAWARE
1585 Broadway The Corporation Trust Center
New York, New York 10036 1209 Orange Street
U.S.A. Wilmington, Delaware 19801
U.S.A.
TRUSTEES
(Senior Notes) (Subordinated Notes)
The Chase Manhattan Bank Bank One Trust Company, N.A.
450 West 33rd Street 1 Bank One Plaza
New York, New York 10001 Chicago, Illinois 60670
U.S.A. U.S.A.
PRINCIPAL PAYING AGENT, EXCHANGE AGENT AND
TRANSFER AGENT FOR BEARER NOTES AND REGISTERED NOTES
UNIT AGENT AND COLLATERAL AGENT FOR UNITS
WARRANT AGENT FOR UNIVERSAL WARRANTS
The Chase Manhattan Bank
Trinity Tower
9 Thomas More Street
London E19YT
England
Attention: Global Trust Services
OTHER PAYING AGENT AND TRANSFER
AGENT FOR REGISTERED NOTES
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
U.S.A.
LEGAL ADVISORS TO THE COMPANY LEGAL ADVISORS TO THE AGENTS
Brown & Wood LLP Davis Polk & Wardwell
One World Trade Center 450 Lexington Avenue
New York, New York 10048 New York, New York 10017
U.S.A. U.S.A.
LISTING AGENT
Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
England
PARIS LISTING AGENT
Morgan Stanley S.A.
25, rue Balzac
75008 Paris
France
AUDITORS OF THE COMPANY
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
U.S.A.
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