PROSPECTUS Dated May 18, 2000 Pricing Supplement No. 16 to
PROSPECTUS SUPPLEMENT Registration Statement No. 333-34392
Dated May 18, 2000 Dated July 14, 2000
Rule 424(b)(3)
$12,800,000
Morgan Stanley Dean Witter & Co.
MEDIUM-TERM NOTES, SERIES C
Senior Fixed Rate Notes
-----------------------
0.25% Exchangeable Notes due July 30, 2007
Exchangeable for American Depositary Receipts Representing
Ordinary Shares of
CHINA MOBILE (HONG KONG) LIMITED
-----------------------
Beginning October 18, 2000, you will be able to exchange your notes for a
number of American Depositary Receipts representing China Mobile ordinary
shares, subject to our right to call all of the notes on or after January 18,
2003. We refer to these American Depositary Receipts as the China Mobile ADRs.
Each China Mobile ADR represents five ordinary shares of China Mobile.
o The principal amount and issue price of each note is $1,000.
o We will pay interest at the rate of 0.25% per year on the $1,000 principal
amount of each note. Interest will be paid semi-annually on each January
30 and July 30, beginning January 30, 2001.
o Beginning October 18, 2000, you will have the right to exchange each note
for 15.35816 China Mobile ADRs. If you exchange, we will have the right to
deliver either the actual China Mobile ADRs or the cash value of such
China Mobile ADRs to you. You will not receive any accrued but unpaid
interest.
o Beginning January 18, 2003, we have the right to call all of the notes and
pay to you the call price of $1,000. However, if the market value of
15.35816 China Mobile ADRs on the last trading day before we send our call
notice is equal to or greater than $1,000, we will deliver to you 15.35816
China Mobile ADRs per note instead.
o If we decide to call the notes, we will give you notice at least 30 but
not more than 60 days before the call date specified in the notice. If we
notify you that we will be delivering China Mobile ADRs on the call date,
rather than the cash call price, you will still be able to exercise your
exchange right on any day prior to the fifth scheduled trading day prior
to the call date.
o If you hold the notes to maturity, we will pay $1,000 per note to you.
o China Mobile is not involved in this offering of the notes in any way and
will have no financial obligation with respect to the notes.
You should read the more detailed description of the notes in this pricing
supplement. In particular, you should review and understand the descriptions in
"Summary of Pricing Supplement" and "Description of Notes."
The notes involve risks not associated with an investment in conventional debt
securities. See "Risk Factors" beginning on PS-6.
-----------------------
PRICE 100% AND ACCRUED INTEREST
-----------------------
Price to Public Agent's Commissions Proceeds to Company
--------------- ------------------- -------------------
Per Note........ 100% 0.25% 99.75%
Total........... $12,800,000 $32,000 $12,768,000
MORGAN STANLEY DEAN WITTER
<PAGE>
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PS-2
<PAGE>
SUMMARY OF PRICING SUPPLEMENT
The following summary describes the notes we are offering to you in
general terms only. You should read the summary together with the more detailed
information that is contained in the rest of this pricing supplement and in the
accompanying prospectus and prospectus supplement. You should carefully
consider, among other things, the matters set forth in "Risk Factors."
The Notes
Each note costs $1,000 We, Morgan Stanley Dean Witter & Co., are
offering our 0.25% Exchangeable Notes due
July 30, 2007, which you may exchange for
China Mobile ADRs beginning on October 18,
2000. Each American Depositary Receipt
evidences the American Depositary Shares of
China Mobile (Hong Kong) Limited and
represents five (5) ordinary shares, par
value HK$.10 per share, of China Mobile
(Hong Kong) Limited. The principal amount
and issue price of each note is $1,000. If
you hold the notes to maturity, which is
July 30, 2007, we will pay $1,000 per note
to you.
0.25% interest on the We will pay interest on the notes, at the
principal amount rate of 0.25% of the principal amount per
year, semi-annually on each January 30 and
July 30, beginning January 30, 2001.
Your Exchange Right
The exchange ratio Beginning October 18, 2000, you may exchange
is 15.35816 each note for a number of China Mobile ADRs
equal to the exchange ratio. The exchange
ratio is 15.35816 China Mobile ADRs per
note, subject to adjustment for certain
corporate events relating to China Mobile
(Hong Kong) Limited ("China Mobile"). When
you exchange your notes, Morgan Stanley &
Co. Incorporated or its successors, which we
refer to as MS & Co., acting as calculation
agent, will determine the exact number of
China Mobile ADRs you will receive based on
the principal amount of the notes you
exchange and the exchange ratio as it may
have been adjusted through the time of the
exchange.
To exchange a note on any day, you must
instruct your broker or other person with
whom you hold your notes to take the
following steps through normal clearing
system channels:
o fill out an Official Notice of Exchange,
which is attached as Annex A to this
pricing supplement;
o deliver your Official Notice of Exchange
to us before 11:00 a.m. (New York City
time) on that day; and
o deliver your note certificate to The Chase
Manhattan Bank, as trustee for our senior
notes, on that day.
If you give us your Official Notice of
Exchange after 11:00 a.m. (New York City
time) on any day or on a day when the stock
markets are closed, your notice will not
become effective until the next day that the
stock markets are open.
PS-3
<PAGE>
We can choose to pay to you We will pay to you, at our option, within 3
cash or China Mobile ADRs if business days after you give us your
you elect to exchange your Official Notice of Exchange, either:
notes
o China Mobile ADRs, or
o the cash value of such China Mobile ADRs.
We will not pay any accrued but unpaid
interest if you elect to exchange your
notes.
Our right to call the notes may affect your
ability to exchange your notes.
Our Call Right Beginning January 18, 2003, we have the
right to call all of the notes. If we call
the notes, we will do the following:
o send a notice announcing that we have
decided to call the notes;
o specify in the notice a call date when you
will receive payment in exchange for
delivering your notes to the trustee; that
call date will not be less than 30 or more
than 60 days after the date of the notice;
and
o specify in the notice the number of China
Mobile ADRs or the cash call price that we
will pay to you in exchange for each note,
as explained in the next paragraph.
We may call the notes On the last trading day before the date of
for China Mobile ADRs or our call notice, the calculation agent will
cash, depending on the price of determine the value of the China Mobile ADRs
the China Mobile ADRs that a noteholder would receive upon
exchange of a note. That value is referred
to as parity. If parity is less than the
call price of $1,000, then we will pay the
call price to you in cash. If pay the call
price to you in cash. If we notify you that
we will give you cash on the call date, you
will no longer be able to exercise your
exchange right.
If, however, parity as so determined is
equal to or greater than the call price,
then we will deliver the China Mobile ADRs
instead. In that case, you will still have
the right to exercise your exchange right on
any day prior to the fifth scheduled trading
day prior to the call date. The procedures
described in this paragraph will be modified
if China Mobile ADRs are no longer listed or
quoted in the United States.
China Mobile ADRs are The last reported sales price of China
currently $48 5/8 a share Mobile ADRs on the New York Stock Exchange,
Inc. on the date of this pricing supplement
was $48 5/8. You can review the
publicly-reported prices of China Mobile
ADRs for the last three years in the
"Historical Information" section of this
pricing supplement.
The Calculation Agent We have appointed MS & Co. to act as
calculation agent for The Chase Manhattan
Bank, the trustee for our senior notes. As
calculation agent, MS & Co. will determine
the exchange ratio and calculate the amount
of China Mobile ADRs or cash that you
receive if you exercise your exchange right
or if we call the notes. As calculation
agent, MS & Co. will also adjust the
exchange ratio for certain corporate events
that could affect the price of the China
Mobile ADRs and that we describe in the
section called "Description of
Notes--Antidilution Adjustments" in this
pricing supplement.
No Affiliation with China Mobile is not an affiliate of ours and
China Mobile is not involved with this offering in any
way. The notes are obligations of Morgan
Stanley Dean Witter & Co. and not of China
Mobile.
PS-4
<PAGE>
More Information The notes are senior notes issued as part of
on the Notes our Series C medium-term note program. You
can find a general description of our Series
C medium-term note program in the
accompanying prospectus supplement dated May
18, 2000. We describe the basic features of
this type of note in the sections called
"Description of Notes--Fixed Rate Notes" and
"--Exchangeable Notes."
Because this is a summary, it does not
contain all of the information that may be
important to you, including the specific
requirements for the exercise of your
exchange right and of our call right. You
should read the "Description of Notes"
section in this pricing supplement for a
detailed description of the terms of the
notes. You should also read about some of
the risks involved in investing in the notes
in the section called "Risk Factors." We
urge you to consult with your investment,
legal, accounting and other advisors with
regards to any investment in the notes.
How to reach us You may contact us at our principal
executive offices at 1585 Broadway, New
York, New York 10036 (telephone number (212)
762-4000).
PS-5
<PAGE>
RISK FACTORS
The notes are not secured debt and are riskier than ordinary debt
securities. This section describes the most significant risks relating to the
notes. You should carefully consider whether the notes are suited to your
particular circumstances before you decide to purchase them.
Yield to Maturity Less Than These notes pay interest at the rate of
Interest on Ordinary Notes 0.25% of the principal amount per year. This
interest rate is lower than the interest
rate that we would pay on non-exchangeable
senior notes maturing at the same time as
the notes. If you exchange your notes or if
we call the notes, you will not receive any
accrued but unpaid interest.
Notes May Not Be There may be little or no secondary market
Actively Traded for the notes. Even if there is a secondary
market, it may not provide enough liquidity
to allow you to trade or sell the notes
easily. MS & Co. currently intends to act as
a market maker for the notes, but is not
required to do so.
Market Price of Notes Several factors, many of which are beyond our
Influenced by Many control, will influence the value of the
Unpredictable Factors notes, including:
o the market price of China Mobile ADRs or
ordinary shares
o the volatility (frequency and magnitude of
changes in price) of the China Mobile ADRs
or ordinary shares
o the dividend rate on the China Mobile ADRs
or ordinary shares
o economic, financial, political and
regulatory or judicial events that affect
stock markets generally and which may
affect the market price of the China Mobile
ADRs
o interest and yield rates in the market
o the time remaining until (1) you can
exchange your notes for China Mobile ADRs,
(2) we can call the notes and (3) the notes
mature
o our creditworthiness
These factors will influence the price that
you will receive if you sell your notes
prior to maturity. For example, you may have
to sell your notes at a substantial discount
from the issue price if the market price of
the China Mobile ADRs is at, below or not
sufficiently above the price of China Mobile
ADRs at pricing.
You cannot predict the future performance of
China Mobile ADRs or ordinary shares based
on their historical performance.
PS-6
<PAGE>
The Notes are also subject to Fluctuations in the exchange rate between
currency exchange rate risk the Hong Kong dollar and the U.S. dollar
will affect the U.S. dollar equivalent of
the Hong Kong dollar price of China Mobile
ordinary shares on the Hong Kong Stock
Exchange and, as a result, will affect the
ADR Market Price, which may consequently
affect the market value of the Notes. See
"Description of Notes--Currency Exchange
Rate Information" below.
The currencies of some countries in the
Asian region have been subject to
significant fluctuations against the U.S.
dollar in recent years, including as a
result of devaluations of such currencies
and other governmental actions with respect
to such currencies, and may be subject to
significant fluctuations in the future.
Previous fluctuations or periods of relative
stability in the exchange rates of those
currencies or the Hong Kong dollar are not
necessarily indicative of fluctuations or
periods of relative stability in those rates
that may occur over the term of the Notes.
The exchange rate between Hong Kong dollars
and U.S. dollars is the result of the supply
of, and the demand for, those currencies.
Changes in the exchange rates result over
time from the interaction of many factors
directly or indirectly affecting economic
and political conditions in the People's
Republic of China (the "PRC") as a whole,
the Hong Kong Special Administrative Region
of the PRC ("Hong Kong") and the United
States of America, including economic and
political developments in other countries.
No guarantee that the If the China Mobile ADRs are not listed or
China Mobile ADRs traded on any U.S. national securities
will be listed exchange or through the facilities of a U.S.
national securities system, pricing
information for the China Mobile ADRs may be
more difficult to obtain, and the liquidity
and market prices of the notes may be
adversely affected. No assurance may be
given that the China Mobile ADRs will not be
delisted.
No Affiliation with We are not affiliated with China Mobile.
China Mobile Although we do not have any non-public
information about China Mobile as of the
date of this pricing supplement, we or our
affiliates may presently or from time to
time engage in business with China Mobile,
including extending loans to, or making
equity investments in, China Mobile or
providing investment advisory services to
China Mobile, including merger and
acquisition advisory services. Moreover, we
have no ability to control or predict the
actions of China Mobile, including any
corporate actions of the type that would
require the calculation agent to adjust the
exchange ratio. China Mobile is not involved
in the offering of the notes in any way and
has no obligation to consider your interest
as an owner of these notes in taking any
corporate actions that might affect the
value of your notes. None of the money you
pay for the notes will go to China Mobile.
You Have No As an owner of notes, you will
Shareholder Rights not have voting rights or the right to
receive dividends or other distributions or
any other rights with respect to China
Mobile ADRs or ordinary shares. You will not
be able to exchange your notes for China
Mobile ordinary shares.
PS-7
<PAGE>
Limited Antidilution MS & Co., as calculation agent, will adjust
Adjustments the exchange ratio for certain events
affecting the China Mobile ADRs or ordinary
shares, such as stock splits and stock
dividends, and certain other corporate
actions involving China Mobile, such as
mergers. However, the calculation agent is
not required to make an adjustment for every
corporate event that can affect China Mobile
ADRs or ordinary shares. For example, the
calculation agent is not required to make
any adjustments if China Mobile or anyone
else makes a partial tender offer or a
partial exchange offer for China Mobile ADRs
or ordinary shares. If an event occurs that
does not require the calculation agent to
adjust the exchange rate, the market price
of the notes may be materially and adversely
affected. In addition, the calculation agent
may, but is not required to, make
adjustments for corporate events that can
affect the China Mobile ADRs or ordinary
shares other than those contemplated in this
pricing supplement. Such adjustments will be
made to reflect the consequences of events
but not with the aim of changing relative
investment risk. The determination by the
calculation agent to adjust, or not to
adjust, the exchange ratio may materially
and adversely affect the market price of the
notes. We may, at our sole discretion, cause
the Calculation Agent to alter the specified
antidilution adjustments, if we determine
that such existing adjustments would not
properly take into account the consequences
of the event enumerated in such antidilution
adjustments.
Potential Conflicts of As calculation agent, MS & Co. will
Interest between You and calculate how many China Mobile ADRs or
what the Calculation Agent and equivalent cash amount you will receive in
Other Affiliates of Ours exchange for your notes and and other
events. MS & Co. and other affiliates may
adjustments should be made to the exchange
ratio to reflect certain corporatecarry out
hedging activities related to the notes or
to other instruments, including trading in
China Mobile ADRs or ordinary shares as well
as in other instruments related to China
Mobile ADRs or ordinary shares. MS & Co. and
some of our subsidiaries also trade China
Mobile ADRs or ordinary shares on a regular
basis as part of their general broker-dealer
businesses. Any of these activities and MS &
Co.'s affiliation with us could influence MS
& Co.'s determinations as calculation agent,
including with respect to adjustments to the
exchange ratio, and, accordingly, the amount
of stock or cash that you receive when you
exchange the notes or when we call the
notes. In addition, such trading activity
could potentially affect the price of China
Mobile ADRs or ordinary shares and, thereby,
the value of the China Mobile ADRs or cash
you will receive upon exchange or
redemption.
Tax Treatment You should also consider the tax
consequences of investing in the notes. If
you are a U.S. taxable investor, you will be
subject to annual income tax based on the
comparable yield of the notes, which will be
higher than 0.25% interest rate you will
receive on the notes. In addition, any gain
recognized by U.S. taxable investors on the
sale, exchange or retirement of the notes
will be treated as ordinary income. Please
read carefully the section "Description of
Notes--United States Federal Taxation" in
this pricing supplement.
PS-8
<PAGE>
DESCRIPTION OF NOTES
Terms not defined herein have the meanings given to such terms in the
accompanying prospectus supplement. The term "Note" refers to each $1,000
principal amount of our 0.25% Exchangeable Notes due July 30, 2007
(Exchangeable for American Depositary Receipts Representing Ordinary Shares of
China Mobile (Hong Kong) Limited). In this pricing supplement, the terms
"MSDW," "we," "us" and "our" refer to Morgan Stanley Dean Witter & Co.
Principal Amount...................$12,800,000
Maturity Date......................July 30, 2007
Specified Currency.................U.S. Dollars
Issue Price........................100%
Interest Rate......................0.25% per annum
Interest Payment Dates.............January 30 and July 30, beginning January
30, 2001
Original Issue Date
(Settlement Date)..................July 19, 2000
CUSIP..............................617446DZ9
Minimum Denominations..............$1,000
Initial China Mobile ADRs Price....$46.8431 per share
Exchange Right.....................On any Exchange Date, you will be entitled
upon (i) your completion and delivery to us
and the Calculation Agent of an Official
Notice of Exchange (in the form of Annex A
attached hereto) prior to 11:00 a.m. New
York City time on such date and (ii)
delivery on such date of such Notes to the
Trustee, to exchange each Note for China
Mobile ADRs at the Exchange Ratio. You will
not, however, be entitled to exchange your
Notes if we have previously called the Notes
for the cash Call Price as described under
"--MSDW Call Right" below.
Upon any such exchange, we may, at our sole
option, either deliver such China Mobile
ADRs or pay an amount in cash equal to the
Exchange Ratio times the ADR Market Price of
China Mobile ADRs on the Exchange Date, as
determined by the Calculation Agent, in lieu
of such China Mobile ADRs. See "--ADR Market
Price."
Such delivery or payment will be made 3
Business Days after any Exchange Date,
subject to delivery of such Notes to the
Trustee on the Exchange Date.
Upon any exercise of the Exchange Right, you
will not be entitled to receive any cash
payment representing any accrued but unpaid
interest on the notes. If you exchange your
Notes after a record date for the payment of
interest and prior to the next succeeding
Interest Payment Date, the Notes that you
exchange must be accompanied by funds equal
to the interest payable on the succeeding
Interest Payment Date on the principal
amount that you exchange.
PS-9
<PAGE>
If on any Exchange Date, China Mobile ADRs
are no longer traded in the United States
(and the ordinary shares of China Mobile are
not listed on a United States national
exchange), then upon any such exchange, in
lieu of delivering China Mobile ADRs, MSDW
will pay an amount in cash equal to the
Exchange Ratio times the ADR Equivalent
Market Price, each as determined by the
Calculation Agent on the Exchange Trading
Day immediately following such Exchange
Date. Any such payment will be made 3
Business Days after such immediately
succeeding Exchange Trading Day.
We will, or will cause the Calculation Agent
to, deliver such China Mobile ADRs or cash
to the Trustee for delivery to you.
No Fractional Shares ..............If upon any exchange of the Notes we deliver
China Mobile ADRs, we will pay cash in lieu
of delivering fractional China Mobile ADRs
in an amount equal to the corresponding
fractional Market Price of China Mobile ADRs
as determined by the Calculation Agent on
such Exchange Date.
Exchange Ratio ....................15.35816, subject to adjustment for certain
corporate events relating to China Mobile.
See "--Antidilution Adjustments" below.
Exchange Date......................Any NYSE Trading Day that falls during the
period beginning October 18, 2000 and ending
on the day prior to the earliest of (i) the
last scheduled NYSE Trading Day prior to the
Maturity Date, (ii) the fifth scheduled NYSE
Trading Day prior to the Call Date and (iii)
in the event of a call for the cash Call
Price as described under "--MSDW Call Right"
below, the last scheduled NYSE Trading Day
prior to the MSDW Notice Date.
MSDW Call Right ...................On or after January 18, 2003, we may call
the Notes, in whole but not in part, for
mandatory exchange into China Mobile ADRs at
the Exchange Ratio; provided that, if Parity
on the NYSE Trading Day immediately
preceding the MSDW Notice Date, as
determined by the Calculation Agent, is less
than the Call Price, we will pay the Call
Price in cash on the Call Date. If we call
the Notes for mandatory exchange, then,
unless you subsequently exercise the
Exchange Right (the exercise of which will
not be available to you following a call for
cash in an amount equal to the Call Price),
the China Mobile ADRs or (in the event of a
call for cash, as described above) cash to
be delivered to you will be delivered on the
Call Date fixed by us and set forth in our
notice of mandatory exchange, upon delivery
of your Notes to the Trustee. We will, or
will cause the Calculation Agent to, deliver
such China Mobile ADRs or cash to the
Trustee for delivery to you. You will not
receive any accrued but unpaid interest on
the Notes.
On or after the MSDW Notice Date (other than
with respect to a call of the Notes for the
cash Call Price by MSDW) you will continue
to be entitled to exercise the Exchange
Right and receive any amounts described
under "--Exchange Right" above.
If on any Call Date (other than with respect
to a call of the Notes for the cash Call
Price), China Mobile ADRs are no longer
traded in the
PS-10
<PAGE>
United States (and the ordinary shares of
China Mobile are not listed on a United
States national securities exchange), and
you have not exercised your Exchange Right
subsequent to the MSDW Notice Date, then, in
lieu of delivering China Mobile ADRs to you
on the Call Date, MSDW will pay an amount in
cash equal to the Exchange Ratio times the
ADR Equivalent Market Price, each as
determined by the Calculation Agent on the
fourth scheduled Exchange Trading Day prior
to the Call Date; provided that if there is
a Market Disruption Event on such fourth
scheduled Exchange Trading Day, such
determination will be made on the third
scheduled Exchange Trading Day prior to the
Call Date whether or not a Market Disruption
Event exists on such date.
MSDW Notice Date...................The scheduled NYSE Trading Day on which we
issue our notice of mandatory exchange,
which must be at least 30 but no more than
60 days prior to the Call Date.
Call Date..........................The scheduled NYSE Trading Day on or after
January 18, 2003 specified by us in our
notice of mandatory exchange on which we
will deliver China Mobile ADRs or cash to
holders of the Notes for mandatory exchange.
Parity.............................With respect to any NYSE Trading Day, an
amount equal to the Exchange Ratio times the
ADR Market Price of China Mobile ADRs on
such NYSE Trading Day.
Call Price.........................$1,000 per Note
ADR Market Price...................If China Mobile ADRs (or any other security
for which an ADR Market Price must be
determined) is listed on a national
securities exchange, is a security of The
Nasdaq National Market or is included in the
OTC Bulletin Board Service ("OTC Bulletin
Board") operated by the National Association
of Securities Dealers, Inc. (the "NASD"),
the ADR Market Price for one share of China
Mobile ADRs (or one unit of any such other
security) on any NYSE Trading Day means (i)
the last reported sale price, regular way,
on such day on the principal United States
securities exchange registered under the
Securities Exchange Act of 1943, as modified
(the "Exchange Act"), on which China Mobile
ADRs (or any such other security) are listed
or admitted to trading or (ii) if not listed
or admitted to trading on any such
securities exchange or if such last reported
sale price is not obtainable (even if China
Mobile ADRs (or other such security) is
listed or admitted to trading on such
securities exchanges), the last reported
sale price on the over-the-counter market as
reported on the Nasdaq National Market or
OTC Bulletin Board on such day. If the last
reported sale price is not available
pursuant to clause (i) or (ii) of the
preceding sentence because of a Market
Disruption or otherwise, the ADR Market
Price for any NYSE Trading Day shall be the
mean, as determined by the Calculation
Agent, of the bid prices for China Mobile
ADRs (or any such other security) obtained
from as many dealers in such security (which
may include MS & Co. or any of our other
subsidiaries or affiliates), but not
exceeding three, as will make such bid
prices available to the Calculation Agent.
If the ADR Market Price is not available in
accordance with the two preceding
PS-11
<PAGE>
sentences because China Mobile ADRs are no
longer listed or quoted at the time of such
determination (and the ordinary shares of
China Mobile are not listed on a United
States national securities exchange), the
ADR Market Price for any Exchange Date shall
be the ADR Equivalent Market Price (as
defined below) for such Exchange Date as
determined by the Calculation Agent. A
"security of the Nasdaq National Market"
shall include a security included in any
successor to such system and the term "OTC
Bulletin Board Service" shall include any
successor service thereto.
NYSE Trading Day:..................A day on which trading is generally
conducted in the over-the-counter market for
equity securities in the United States and
on the NYSE, as determined by the
Calculation Agent, and on which a Market
Disruption Event has not occurred.
Exchange Trading Day:..............Any NYSE Trading Day on which trading in
equity securities is also generally
conducted on the Hong Kong Stock Exchange,
as determined by the Calculation Agent, and
on which a Market Disruption Event has not
occurred.
Business Day:......................Any day, other than a Saturday or Sunday
that is neither a legal holiday nor a day on
which banking institutions are authorized or
required by law or regulation to close in
The City of New York or Hong Kong.
ADR Equivalent Market Price: ......The ADR Equivalent Market Price, for any
Exchange Date, shall be the product of (x)
five (5) (as such multiple may have been
adjusted by the depositary for the China
Mobile ADRs) and (y) the Ordinary Share
Market Price as determined on the Exchange
Trading Day immediately following such
Exchange Date, which product shall be
converted from Hong Kong dollar into U.S.
dollars at the spot buying rate prevailing
on such immediately following Exchange
Trading Day as determined by the Calculation
Agent.
Ordinary Share Market Price: ......If ordinary shares are listed on the Hong
Kong Stock Exchange, the Ordinary Share
Market Price on any Exchange Trading Day
shall be the closing price on the Hong Kong
Stock Exchange of the ordinary shares on
such day, not being subject to any special
provisions (or, if no sale occurs on such
day, the closing bid price on such day). If
ordinary shares are not listed on the Hong
Kong Exchange (or are subject to any special
provisions), the Ordinary Share Market Price
for the ordinary shares, for any Exchange
Trading Day, shall be the equivalent price
by reference to such stock exchange or other
securities market on which ordinary shares
are principally traded, as the Calculation
Agent shall determine in its sole
discretion, on such day, not being subject
to any special provisions, or, if such day
is not a Business Day, the next succeeding
Business Day that is also an Exchange
Trading Day, converted (if necessary) into
Hong Kong dollars at the spot buying rate
prevailing on such date as determined by the
Calculation Agent. For purposes of the
immediately preceding sentence, a "Business
Day" shall be a day on which banks are open
for business in the city in which the
relevant stock exchange is located and on
which such stock exchange is open for
business. If the Ordinary Share Market Price
cannot be determined in accordance
PS-12
<PAGE>
with the above provisions, then such
Ordinary Share Market Price shall be deemed
to be the value, for any Exchange Trading
Day (converted (if necessary), into Hong
Kong dollars, as aforesaid) as determined by
the Calculation Agent whose determination
shall be conclusive.
Book Entry Note or Certificated
Note...............................Book Entry, DTC
Senior Note or Subordinated Note...Senior
Trustee............................The Chase Manhattan Bank
Agent for this Underwritten
Offering of Notes..................MS & Co.
Calculation Agent..................MS & Co.
All determinations made by the Calculation
Agent will be at the sole discretion of the
Calculation Agent and will, in the absence
of manifest error, be conclusive for all
purposes and binding on you and on us.
Because the Calculation Agent is our
affiliate, potential conflicts of interest
may exist between the Calculation Agent and
you as an owner of the Notes, including with
respect to certain determinations and
judgments that the Calculation Agent must
make in making adjustments to the Exchange
Ratio or other antidilution adjustments or
determining the ADR Market Price, the
Ordinary Share Market Price or whether a
Market Disruption Event has occurred. See
"Antidilution Adjustments" and "Market
Disruption Event" below. MS & Co. is
obligated to carry out its duties and
functions as Calculation Agent in good faith
and using its reasonable judgment.
Antidilution Adjustments...........The Exchange Ratio will be adjusted as
follows:
1. If China Mobile ordinary shares are
subject to a stock split or reverse stock
split, then once such split has become
effective, the Exchange Ratio will be
proportionately adjusted; provided, however
that if China Mobile and the depositary for
the China Mobile ADRs have adjusted the
number of China Mobile ordinary shares
represented by each China Mobile ADR so that
the price of such China Mobile ADR would not
be affected by such stock split or reverse
stock split, no adjustment of the Exchange
Ratio shall be made.
2. If China Mobile ordinary shares are
subject (i) to a stock dividend (issuance of
additional China Mobile ordinary shares)
that is given ratably to all holders of
China Mobile ordinary shares or (ii) to a
distribution of China Mobile ordinary shares
as a result of the triggering of any
provision of the corporate charter of China
Mobile, then once the dividend has become
effective with respect to China Mobile ADRs
and China Mobile ADRs are trading
ex-dividend, the Exchange Ratio will be
proportionately adjusted; provided, however
that if China Mobile and the depositary for
the China Mobile ADRs
PS-13
<PAGE>
have adjusted the number of China Mobile
ordinary shares represented by each China
Mobile ADR so that the price of such China
Mobile ADR would not be affected by such
stock dividend, no adjustment of the
Exchange Ratio shall be made.
3. There will be no adjustments to the
Exchange Ratio to reflect cash dividends or
other distributions paid with respect to
China Mobile ordinary shares other than
distributions described in paragraph 6 below
and Extraordinary Underlying Dividends as
described below. A cash dividend or other
distribution with respect to China Mobile
ordinary shares will be deemed to be an
"Extraordinary Underlying Dividend" if such
dividend or other distribution exceeds the
immediately preceding non-Extraordinary
Dividend for China Mobile ordinary shares
(as adjusted for any subsequent corporate
event requiring an adjustment hereunder,
such as a stock split or reverse stock
split) by an amount equal to at least 10% of
the Ordinary Share Market Price on the
Exchange Trading Day preceding the
ex-dividend date for the payment of such
Extraordinary Underlying Dividend (the
"ex-dividend date") on the China Mobile
ordinary shares. If an Extraordinary
Underlying Dividend occurs with respect to
China Mobile ordinary shares, the Exchange
Ratio with respect to China Mobile ADRs will
be adjusted on the ex-dividend date with
respect to such Extraordinary Dividend so
that the new Exchange Ratio will equal the
product of (i) the then current Exchange
Ratio and (ii) a fraction, the numerator of
which is the Ordinary Share Market Price on
the Exchange Trading Day preceding the
ex-dividend date, and the denominator of
which is the amount by which the Ordinary
Share Market Price on the Exchange Trading
Day preceding the ex-dividend date exceeds
the Extraordinary Underlying Dividend
Amount. The "Extraordinary Underlying
Dividend Amount" with respect to an
Extraordinary Underlying Dividend will equal
(i) in the case of cash dividends or other
distributions that constitute quarterly
dividends, the amount per share of such
Extraordinary Underlying Dividend minus the
amount per ordinary share of the immediately
preceding non-Extraordinary Underlying
Dividend or (ii) in the case of cash
dividends or other distributions that do not
constitute quarterly dividends, the amount
per ordinary share of such Extraordinary
Underlying Dividend. To the extent an
Extraordinary Underlying Dividend is not
paid in cash, the value of the non-cash
component will be determined by the
Calculation Agent, whose determination shall
be conclusive. A distribution on the China
Mobile ADRs described in paragraph 6 below
that also constitutes an Extraordinary
Underlying Dividend shall only cause an
adjustment to the Exchange Ratio pursuant to
paragraph 6.
4. If China Mobile is being liquidated or is
subject to a proceeding under any applicable
bankruptcy, insolvency or other similar law,
the Notes will continue to be exchangeable
into China Mobile ADRs so long as an ADR
Market Price for China Mobile ADRs is
available. If either an ADR Market Price or
a price for the ordinary shares of China
Mobile (if such ordinary shares are listed
on a United States national securities
exchange) is no longer available for
whatever reason, including the liquidation
of China Mobile or the subjection
PS-14
<PAGE>
of China Mobile to a proceeding under any
applicable bankruptcy, insolvency or other
similar law, then the value of China Mobile
ADRs will equal zero for so long as no ADR
Market Price is available.
5. If there occurs any reclassification or
change of China Mobile ordinary shares,
including, without limitation, as a result
of the issuance of tracking stock by China
Mobile, or if China Mobile has been subject
to a merger, combination or consolidation
and is not the surviving entity, or if there
occurs a sale or conveyance to another
corporation of the property and assets of
China Mobile as an entirety or substantially
as an entirety, in each case as a result of
which the holders of China Mobile ordinary
shares shall be entitled to receive stock,
other securities or other property or assets
(including cash) ("Exchange Property") with
respect to or in exchange for such China
Mobile ADRs, then the holders of the Notes
then outstanding will be entitled thereafter
to exchange such Notes into the kind and
amount of Exchange Property that they would
have owned or been entitled to receive upon
such reclassification, change, merger,
combination, consolidation, sale or
conveyance had such holders exchanged such
Notes for China Mobile ADRs and exchanged
the China Mobile ADRs for China Mobile
ordinary shares immediately prior to any
such corporate event, but without interest
thereon. At such time, no adjustment will be
made to the Exchange Ratio.
6. If China Mobile issues to all holders of
China Mobile ordinary shares (and
consequently of China Mobile ADRs) equity
securities of an issuer other than China
Mobile (other than in a transaction
described in paragraph 5 above), then the
holders of the Notes then outstanding will
be entitled to receive such new equity
securities upon exchange of such Notes. The
Exchange Ratio for such new equity
securities will equal the product of the
Exchange Ratio in effect for the China
Mobile ADRs at the time of the issuance of
such new equity securities times the product
of (x) five (5) (as such multiple may have
been adjusted by the depositary as described
in paragraphs 1 and 2 above) and (y) the
number of shares of the new equity
securities issued with respect to one China
Mobile ordinary share.
7. In the event that China Mobile and the
depositary for the China Mobile ADRs elect,
in the absence of any of the events
described in paragraph 1, 2, or 3 above, to
change the number of ordinary shares that
are represented by each China Mobile ADR,
the Exchange Ratio on any Exchange Trading
Day after the change becomes effective will
be proportionately adjusted.
8. No adjustments to the Exchange Ratio will
be required other than those specified
above. The adjustments specified above do
not cover all of the events that could
affect the ADR Market Price. However, we
may, at our sole discretion, cause the
Calculation Agent to make additional changes
to the Exchange Ratio upon the occurrence of
corporate or other similar events that
affect or could potentially affect market
prices of, or shareholders' rights in, the
China Mobile ADRs
PS-15
<PAGE>
(or other Exchange Property) but only to
reflect such changes, and not with the aim
of changing relative investment risk.
In addition, we may, in our sole discretion,
cause the Calculation Agent to alter the
specific adjustments set forth above in
paragraphs 1 through 7 upon the occurrence
of one or more of the events enumerated in
paragraphs 1 through 7, if we determine that
such adjustments would not properly reflect
the consequences of the events enumerated in
such paragraphs or would not preserve the
relative investment risks.
No adjustments to the Exchange Ratio will be
required unless such adjustment would
require a change of at least 0.1% in the
Exchange Ratio then in effect. The Exchange
Ratio resulting from any of the adjustments
specified above will be rounded to the
nearest one hundred-thousandth with five
one-millionths being rounded upward.
The Calculation Agent shall be solely
responsible for the determination and
calculation of any adjustments to the
Exchange Ratio and of any related
determinations and calculations with respect
to any distributions of stock, other
securities or other property or assets
(including cash) in connection with any
corporate event described in paragraph 5 or
6 above, and its determinations and
calculations with respect thereto shall be
conclusive.
The Calculation Agent will provide
information as to any adjustments to the
Exchange Ratio upon written request by any
holder of the Notes.
Market Disruption Event............"Market Disruption Event" means, with
respect to China Mobile ADRs (or, if
applicable, the ordinary shares of China
Mobile), the occurrence or existence of any
of the following events as determined by the
Calculation Agent:
(i) a suspension, absence or material
limitation of trading of China Mobile ADRs
or ordinary shares on the primary market
for China Mobile ADRs or ordinary shares
for more than two hours of trading or
during the one-half hour period preceding
the close of trading in such market; or a
breakdown or failure in the price and
trade reporting systems of the primary
market for China Mobile ADRs or ordinary
shares as a result of which the reported
trading prices for China Mobile ADRs or
ordinary shares during the last one-half
hour preceding the closing of trading in
such market are materially inaccurate; or
the suspension, absence or material
limitation on the primary market for
trading in options contracts related to
China Mobile ADRs or ordinary shares, if
available, during the one-half hour period
preceding the close of trading in the
applicable market; and
(ii) a determination by the Calculation
Agent in its sole discretion that any
event described in clause (i) above
materially interfered with the ability of
MSDW or any of its affiliates to unwind
all or a material portion of the hedge
with respect to the Notes.
PS-16
<PAGE>
For purposes of determining whether a Market
Disruption Event has occurred: (1) a
limitation on the hours or number of days of
trading will not constitute a Market
Disruption Event if it results from an
announced change in the regular business
hours of the relevant exchange, (2) a
decision to permanently discontinue trading
in the relevant option contract will not
constitute a Market Disruption Event, (3)
limitations pursuant to NYSE Rule 80A (or
any applicable rule or regulation enacted or
promulgated by the NYSE, any other
self-regulatory organization, the Securities
and Exchange Commission or the Hong Kong
Stock Exchange or any other exchange
relevant to the determination of the ADR
Market Price or the Ordinary Share Market
Price, as applicable, of similar scope as
determined by the Calculation Agent) on
trading during significant market
fluctuations shall constitute a suspension,
absence or material limitation of trading,
(4) a suspension of trading in an options
contract on China Mobile ADRs or ordinary
shares by the primary securities market
trading in such options, if available, by
reason of (x) a price change exceeding
limits set by such securities exchange or
market, (y) an imbalance of orders relating
to such contracts or (z) a disparity in bid
and ask quotes relating to such contracts
will constitute a suspension, absence or
material limitation of trading in options
contracts related to China Mobile ADRs or
ordinary shares and (5) a suspension,
absence or material limitation of trading on
the primary securities market on which
options contracts related to China Mobile
ADRs or ordinary shares are traded will not
include any time when such securities market
is itself closed for trading under ordinary
circumstances.
Alternate Exchange Calculation
in case of an Event of Default.....In case an Event of Default with respect to
the Notes shall have occurred and be
continuing, the amount declared due and
payable upon any acceleration of any Note
shall be determined by MS & Co., as
Calculation Agent, and shall be equal to the
principal amount of a Note plus any accrued
and unpaid interest at the Interest Rate to
but not including the date of acceleration;
provided that if (x) the owner of a Note has
submitted an Official Notice of Exchange to
us in accordance with the Exchange Right or
(y) we have called the Notes, other than a
call for the cash Call Price, in accordance
with the MSDW Call Right, the amount
declared due and payable upon any such
acceleration shall be an amount in cash for
each $1,000 principal amount of a Note equal
to the Exchange Ratio times the ADR Market
Price, determined by the Calculation Agent
as of the Exchange Date or as of the date of
acceleration, respectively, and shall not
include any accrued and unpaid interest
thereon; provided further that if the Issuer
has called the Notes for cash in an amount
equal to the Call Price, in accordance with
the MSDW Call Right, the amount declared due
and payable upon any such acceleration shall
be an amount in cash for each $1,000
principal amount of a Note equal to the
applicable Call Price. See "--Call Price"
above.
China Mobile ADRs;
Public Information.................China Mobile (Hong Kong) Limited is a
provider of cellular telecommunications
services in several provinces of the
People's Republic of China. China Mobile
ADRs are registered under the
PS-17
<PAGE>
Exchange Act. Companies with securities
registered under the Exchange Act are
required to file periodically certain
financial and other information specified by
the Securities and Exchange Commission (the
"Commission"). Information provided to or
filed with the Commission can be inspected
and copied at the public reference
facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at its Regional
Offices located at Suite 1400, Citicorp
Center, 500 West Madison Street, Chicago,
Illinois 60661 and at Seven World Trade
Center, 13th Floor, New York, New York
10048, and copies of such material can be
obtained from the Public Reference Section
of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
In addition, information provided to or
filed with the Commission electronically can
be accessed through a website maintained by
the Commission. The address of the
Commission's website is http://www.sec.gov.
Information provided to or filed with the
Commission by China Mobile pursuant to the
Exchange Act can be located by reference to
Commission file number 1-14696. In addition,
information regarding China Mobile may be
obtained from other sources including, but
not limited to, press releases, newspaper
articles and other publicly disseminated
documents. We make no representation or
warranty as to the accuracy or completeness
of such reports.
This pricing supplement relates only to the
Notes offered hereby and does not relate to
China Mobile ADRs or ordinary shares. We
have derived all disclosures contained in
this pricing supplement regarding China
Mobile from the publicly available documents
described in the preceding paragraph.
Neither we nor the Agent has participated in
the preparation of such documents or made
any due diligence inquiry with respect to
China Mobile in connection with the offering
of the Notes. Neither we nor the Agent makes
any representation that such publicly
available documents or any other publicly
available information regarding China Mobile
are accurate or complete. Furthermore, we
cannot give any assurance that all events
occurring prior to the date hereof
(including events that would affect the
accuracy or completeness of the publicly
available documents described in the
preceding paragraph) that would affect the
trading price of China Mobile ADRs (and
therefore the Initial China Mobile ADR Price
and the Exchange Ratio) have been publicly
disclosed. Subsequent disclosure of any such
events or the disclosure of or failure to
disclose material future events concerning
China Mobile could affect the value received
on any Exchange Date or Call Date with
respect to the Notes and therefore the
trading prices of the Notes.
Neither we nor any of our affiliates makes
any representation to you as to the
performance of China Mobile ADRs or ordinary
shares.
We or our affiliates may presently or from
time to time engage in business with China
Mobile, including extending loans to, or
making equity investments in, China Mobile
or providing advisory services
PS-18
<PAGE>
to China Mobile, including merger and
acquisition advisory services. In the course
of such business, we or our affiliates may
acquire non- public information with respect
to China Mobile and, in addition, one or
more of our affiliates may publish research
reports with respect to China Mobile. The
statement in the preceding sentence is not
intended to affect the rights of holders of
the Notes under the securities laws. As a
prospective purchaser of a Note, you should
undertake an independent investigation of
China Mobile as in your judgment is
appropriate to make an informed decision
with respect to an investment in China
Mobile ADRs.
Historical Information.............The following tables set forth the published
high and low ADR Market Prices and the high
and low Ordinary Share Market Prices during
1997, 1998, 1999 and during 2000 through
July 14, 2000. The ADR Market Price on July
14, 2000 was $48 5/8. We obtained the market
prices listed below from Bloomberg Financial
Markets and we believe such information to
be accurate. You should not take the
historical prices of China Mobile ADRs or
China Mobile Ordinary Shares as an
indication of future performance. We cannot
give any assurance that the price of China
Mobile ADRs will increase sufficiently to
cause the beneficial owners of the Notes to
receive an amount in excess of the principal
amount on any Exchange Date or Call Date.
China Mobile ADRs High Low
----------------- ---- ---
(CUSIP 16941M109)
1997 U.S. dollars
Fourth Quarter (since October 22, 1997)...... 9 1/2 6 29/32
1998
First Quarter................................ 10 21/32 6 29/32
Second Quarter............................... 10 27/64 7 17/32
Third Quarter................................ 9 5 47/64
Fourth Quarter............................... 10 15/64 7 3/16
1999
First Quarter................................ 10 8 3/32
Second Quarter............................... 14 25/64 8 35/64
Third Quarter................................ 17 5/32 13 9/64
Fourth Quarter............................... 32 5/32 15 3/8
2000
First Quarter................................ 50 47/64 27 13/32
Second Quarter............................... 49 29/32 30 51/64
Third Quarter 48 5/8 43 3/8
(through July 14, 2000)...................
Historical prices have been adjusted for a 4
for 1 split of China Mobile ADRs, which
became effective in the third quarter of
2000.
PS-19
<PAGE>
China Mobile Ordinary Shares High Low
---------------------------- ---- ---
1997 Hong Kong dollars
Fourth Quarter (since October 23, 1997)...... 14.40 10.55
1998
First Quarter................................ 16.25 10.30
Second Quarter............................... 16.15 11.40
Third Quarter................................ 13.70 8.90
Fourth Quarter............................... 15.90 11.65
1999
First Quarter................................ 15.50 12.60
Second Quarter............................... 22.45 13.05
Third Quarter................................ 26.70 21.00
Fourth Quarter............................... 48.60 24.00
2000
First Quarter................................ 79.00 41.70
Second Quarter............................... 72.25 47.90
Third Quarter 74.40 67.75
(through July 14, 2000)...................
We make no representation as to the amount
of dividends, if any, that China Mobile will
pay in the future. In any event, as an owner
of a Note, you will not be entitled to
receive dividends, if any, that may be
payable on China Mobile ADRs.
Currency Exchange Rate Information.The following table sets forth, for the
periods indicated, the high, low and
period-ending Hong Kong dollar/U.S. dollar
exchange rate. We obtained the exchange
rates listed below from Bloomberg Financial
Markets, and we believe such information to
be accurate.
Hong Kong dollar/U.S. dollar Exchange Rates
------------------------------------------------------------------
High Low Period-end
---- --- ----------
1995.................... 7.7625 7.7262 7.7325
1996.................... 7.7422 7.7260 7.7385
1997.................... 7.7501 7.7252 7.7485
1998.................... 7.7499 7.7350 7.7460
1999.................... 7.7751 7.7460 7.7735
2000(1)................. 7.7965 7.7758 7.7963
-------------------
(1) Through July 14, 2000
The information presented in this pricing
supplement relating to the exchange rate of
the U.S. dollar as compared to the Hong Kong
dollar is furnished as a matter of
information only. The Hong Kong dollar has
been subject to fluctuations in the past and
may be subject to significant fluctuations
in the future. The fluctuations or periods
of relative stability in the U.S.
dollar/Hong Kong dollar exchange rate that
have occurred in the past are not
necessarily indicative of fluctuations or
periods of relative stability in that rate
that may occur over the term of the Notes.
The spot exchange rates between the Hong
Kong dollar and U.S. dollar are at any
moment a result of the supply of and demand
for the currencies being compared, and
changes in the exchange rates result over
time from the interaction of many factors
directly or indirectly affecting economic
and political developments in other
countries. Of particular importance are
rates of inflation, interest rate levels,
the
PS-20
<PAGE>
balance of payments and the extent of
governmental surpluses of deficits in the
PRC and the United States, all of which are
in turn sensitive to the monetary, fiscal
and trade policies pursued by the
governments of the PRC, the United States
and other jurisdictions important to
international trade and finance.
Use of Proceeds and Hedging........The net proceeds we receive from the sale of
the Notes will be used for general corporate
purposes and, in part, by us or one or more
of our affiliates in connection with hedging
our obligations under the Notes. See also
"Use of Proceeds" in the accompanying
prospectus.
On or prior to the date of this pricing
supplement, we, through our subsidiaries and
others, hedged our anticipated exposure in
connection with the Notes by taking
positions in China Mobile ADRs or ordinary
shares and positions in other instruments in
connection with such hedging. Such hedging
was carried out in a manner designed to
minimize any impact on the price of China
Mobile ADRs. Our purchase activity could
potentially have increased the price of
China Mobile ADRs or ordinary shares, and
therefore effectively have increased the
level to which China Mobile ADRs or ordinary
shares must rise before you would receive an
amount of China Mobile ADRs worth as much or
more than the accreted principal amount of
your Notes on any Exchange Date or Call
Date. Through our subsidiaries, we are
likely to modify our hedge position
throughout the life of the Notes by
purchasing and selling China Mobile ADRs or
ordinary shares or options contracts on
China Mobile ADRs or ordinary shares listed
on major securities markets or positions in
other securities or instruments that we may
wish to use in connection with such hedging.
Although we have no reason to believe that
our hedging activity or other trading
activities that we, or any of our
affiliates, engaged in or may engage in has
had or will have a material impact on the
price of China Mobile ADRs or ordinary
shares, we cannot give any assurance that we
have not or will not affect such price as a
result of our hedging or trading activities.
Supplemental Information
Concerning Plan of Distribution....In order to facilitate the offering of the
Notes, the Agent may engage in transactions
that stabilize, maintain or otherwise affect
the price of the Notes or the China Mobile
ADRs. Specifically, the Agent may overallot
in connection with the offering, creating a
short position in the Notes for its own
account. In addition, to cover allotments or
to stabilize the price of the Notes, the
Agent may bid for, and purchase, the Notes
or the China Mobile ADRs in the open market.
See "Use of Proceeds and Hedging" above.
We have agreed to indemnify the Agent
against certain liabilities under the
Securities Act of 1933, as amended.
ERISA Matters for Pension Plans
And Companies..................... We and certain of our affiliates, including
MS & Co. and Dean Witter Reynolds Inc.
("DWR"), are considered "parties in
interest" within the meaning of the Employee
Retirement Income Security Act of 1974, as
amended ("ERISA"), or "disqualified persons"
within the
PS-21
<PAGE>
meaning of the Internal Revenue Code of
1986, as amended (the "Code") with respect
to many employee benefit plans. Prohibited
transactions within the meaning of ERISA or
the Code would likely arise, for example, if
the Notes are acquired by or with the assets
of a pension or other employee benefit plan
with respect to which MS & Co., DWR or any
of their affiliates is a service provider,
unless the Notes are acquired pursuant to an
exemption from the prohibited transaction
rules.
The acquisition of the Notes may be eligible
for one of the exemptions noted below if
such acquisition:
(a) (i) is made solely with the assets of a
bank collective investment fund and (ii)
satisfies the requirements and conditions of
Prohibited Transaction Class Exemption
("PTCE") 91-38 issued by the Department of
Labor ("DOL");
(b) (i) is made solely with assets of an
insurance company pooled separate account
and (ii) satisfies the requirements and
conditions of PTCE 90-1 issued by the DOL;
(c) (i) is made solely with assets managed
by a qualified professional asset manager
and (ii) satisfies the requirements and
conditions of PTCE 84-14 issued by the DOL;
(d) is made solely with assets of a
governmental plan (as defined in Section
3(32) of ERISA) which is not subject to the
provisions of Section 401 of the Code;
(e) (i) is made solely with assets of an
insurance company general account and (ii)
satisfies the requirements and conditions of
PTCE 95-60 issued by the DOL; or
(f) (i) is made solely with assets managed
by an in-house asset manager and (ii)
satisfies the requirements and conditions of
PTCE 96-23 issued by the DOL.
Under ERISA, assets of a pension or other
employee benefit plan may include assets
held in the general account of an insurance
company which has issued an insurance policy
to such plan or assets of an entity in which
the plan has invested. In addition to
considering the consequences of holding the
Notes, employee benefit plans subject to
ERISA (or insurance companies deemed to be
investing ERISA plan assets) purchasing the
Notes should consider the possible
implications of owning the China Mobile
ADRs. Thus, any insurance company, pension
or employee benefit plan or entity holding
assets of such a plan proposing to invest in
the Notes should consult with its legal
counsel prior to such investment. Purchasers
of the Notes have exclusive responsibility
for assuring that their purchase and holding
of the Notes and China Mobile ADRs do not
violate the prohibited transaction rules of
ERISA or the Code.
United States Federal Taxation.....The Notes are Optionally Exchangeable Notes
and investors should refer to the discussion
under "United States Federal
PS-22
<PAGE>
Taxation--Notes--Optionally Exchangeable
Notes" in the accompanying prospectus
supplement. In connection with the
discussion thereunder, we have determined
that the "comparable yield" is an annual
rate of 7.181%, compounded semi-annually.
Based on our determination of the comparable
yield, the "projected payment schedule" for
a Note (assuming a par amount of $1,000 or
with respect to each integral multiple
thereof) consists of the semi- annual
coupons and an additional projected amount
due at maturity, equal to $1619.81.
The comparable yield and the projected
payment schedule are not provided for any
purpose other than the determination of
United States Holders' interest accruals and
adjustments in respect of the Notes, and we
make no representation regarding the actual
amounts of the payments on a Note.
PS-23
<PAGE>
ANNEX A
OFFICIAL NOTICE OF EXCHANGE
Dated: [On or after October 18, 2000]
Morgan Stanley Dean Witter & Co.
1585 Broadway
New York, New York 10036
Morgan Stanley & Co. Incorporated, as
Calculation Agent
1585 Broadway
New York, New York 10036
Fax No.: (212) 761-0674
(Attn: Meghan Maloney)
Dear Sirs:
The undersigned holder of the Medium Term Notes, Series C, Senior Fixed
Rate Notes, 0.25% Exchangeable Notes due July 30, 2007 (Exchangeable for
American Depositary Receipts Representing Ordinary Shares of China Mobile (Hong
Kong) Limited) of Morgan Stanley Dean Witter & Co. (CUSIP No. 617446DZ9) (the
"Notes") hereby irrevocably elects to exercise with respect to the principal
amount of the Notes indicated below, as of the date hereof (or, if this letter
is received after 11:00 a.m. on any NYSE Trading Day or on any day that is not
an NYSE Trading Day, as of the next Trading Day), provided that such day to the
earliest of (i) the last scheduled NYSE Trading Day prior to July 30, 2007,
(ii) the fifth scheduled NYSE Trading Day prior to the Call Date and (iii) in
the event of a call for the cash Call Price, the last scheduled NYSE Trading
Day prior to the MSDW Notice Date, the Exchange Right as described in Pricing
Supplement No. 16 dated July 14, 2000 (the "Pricing Supplement") to the
Prospectus Supplement dated May 18, 2000 and the Prospectus dated May 18, 2000
related to Registration Statement No. 333-34392. Terms not defined herein have
the meanings given to such terms in the Pricing Supplement. Please date and
acknowledge receipt of this notice in the place provided below on the date of
receipt, and fax a copy to the fax number indicated, whereupon MSDW will
deliver, at its sole option, China Mobile ADRs or cash 3 Business Days after
the Exchange Date in accordance with the terms of the Notes, as described in
the Pricing Supplement.
Very truly yours,
---------------------------------------
[Name of Holder]
By:
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[Title]
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[Fax No.]
$
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Principal Amount of Notes surrendered
for exchange
Receipt of the above Official
Notice of Exchange is hereby acknowledged
MORGAN STANLEY DEAN WITTER & CO., as Issuer
MORGAN STANLEY & CO. INCORPORATED, as Calculation Agent
By MORGAN STANLEY & CO. INCORPORATED, as Calculation Agent
By:
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Title:
Date and time of acknowledgment
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