<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box: [_]Confidential, For Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X]Preliminary Proxy Statement
[_]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to Rule 14a-11 (c) or Rule 14a-12
MORGAN STANLEY DEAN WITTER & CO.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]Fee computed on table below per Exchange Act Rules 14a-6(i) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_]Fee paid previously with preliminary materials:
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
1585 Broadway
New York, New York 10036
February [ ], 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of Morgan Stanley Dean Witter & Co. The meeting will be held on Thursday, April
6, 2000 at 9:00 a.m., local time, at the offices of Morgan Stanley Dean Witter
Trust FSB, Harborside Financial Center, Plaza Two, Jersey City, New Jersey
07311. We hope that you will be able to attend.
Enclosed you will find a notice setting forth the business expected to come
before the meeting, the Proxy Statement, a form of proxy and a copy of the
Company's 1999 Annual Report.
Whether or not you plan to attend the meeting in person, your shares should
be represented and voted at the meeting. After reading the enclosed Proxy
Statement, kindly complete, sign, date and promptly return the proxy in the
enclosed self-addressed envelope. No postage is required if it is mailed in the
United States. Alternatively, you may wish to submit your proxy by touch-tone
phone or the Internet as indicated on the proxy. Submitting the proxy will not
preclude you from voting in person at the meeting should you later decide to do
so.
Your cooperation in promptly submitting your proxy is greatly appreciated.
Very truly yours,
/s/ Philip J. Purcell /s/ John J. Mack
Philip J. Purcell John J. Mack
Chairman and Chief Executive Officer President and Chief Operating
Officer
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
1585 Broadway
New York, New York 10036
----------------
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
February [ ], 2000
The 2000 Annual Meeting of Stockholders of Morgan Stanley Dean Witter & Co.
(the "Company") will be held at the offices of Morgan Stanley Dean Witter Trust
FSB, Harborside Financial Center, Plaza Two, Jersey City, New Jersey 07311, on
Thursday, April 6, 2000 at 9:00 a.m., local time, for the following purposes:
1. To elect to the Board of Directors for a three-year term one class of
directors, consisting of four (4) directors;
2. To ratify the selection of Deloitte & Touche LLP as the Company's
independent auditors for the 2000 fiscal year;
3. To approve an amendment to the Company's Amended and Restated
Certificate of Incorporation to increase from 1,750,000,000 to
3,500,000,000 the total number of shares of Common Stock, par value $.01
per share, which the Company will have the authority to issue;
4. To consider two (2) stockholder proposals, if properly presented by
the respective stockholder proponents or their qualified representatives;
and
5. To transact such other business as may properly come before the
meeting.
The record date for the determination of the stockholders entitled to vote
at the Annual Meeting, or any adjournments or postponements thereof, was the
close of business on February 8, 2000. Additional information regarding the
matters to be acted on at the Annual Meeting can be found in the accompanying
Proxy Statement.
By Order of the Board of Directors,
/S/ DONALD G. KEMPF, JR.
Donald G. Kempf, Jr.
Executive Vice President,
Chief Legal Officer and Secretary
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY IN THE
ENCLOSED ENVELOPE OR SUBMIT YOUR PROXY
BY PHONE OR THE INTERNET.
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
1585 Broadway
New York, New York 10036
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF STOCKHOLDERS
April 6, 2000
----------------
INTRODUCTION
This Proxy Statement is furnished in connection with a solicitation of
proxies by the Board of Directors of Morgan Stanley Dean Witter & Co., a
Delaware corporation (the "Company"), to be used at the 2000 Annual Meeting of
Stockholders of the Company (the "Annual Meeting") on Thursday, April 6, 2000
at 9:00 a.m., local time, and at any adjournments or postponements of the
Annual Meeting. The approximate date on which this Proxy Statement and the
accompanying form of proxy are first being sent to stockholders is February
[ ], 2000.
Holders of the Company's Common Stock, par value $0.01 per share (the
"Common Stock"), as of the close of business on February 8, 2000, will be
entitled to vote at the Annual Meeting. On that date, there were shares of
Common Stock outstanding, each of which is entitled to one vote with respect
to each matter to be voted on at the Annual Meeting.
A proxy in the accompanying form that is properly executed, duly returned
and not subsequently revoked will be voted in accordance with instructions on
it. If you do not give instructions with respect to the matters to be acted
on, proxies will be voted as follows: FOR the election of the nominees for
directors named below, FOR the ratification of the appointment of Deloitte &
Touche LLP as independent auditors of the Company for the 2000 fiscal year,
FOR the approval of an amendment to the Company's Amended and Restated
Certificate of Incorporation increasing the authorized shares of Common Stock,
AGAINST each of the stockholder proposals described herein and otherwise in
accordance with the judgment of the person or persons voting the proxy on any
other matter properly brought before the meeting.
A stockholder executing a proxy (other than a proxy granted pursuant to the
Voting Agreements referred to below) may revoke it at any time before it is
exercised by giving written notice to the Executive Vice President, Chief
Legal Officer and Secretary of the Company, by subsequently filing another
proxy or by attending the Annual Meeting and voting in person. Merely
attending the Annual Meeting will not revoke your proxy.
Participants in the Dean Witter START Plan (Saving Today Affords Retirement
Tomorrow) (the "START") may, on or before April 3, 2000, instruct the trustee
of the START as to the voting of Common Stock in their accounts in the START
(the "START Common Stock"). If timely voting instructions are not received,
the trustee of the START will, subject to the requirements of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), vote all shares
for which timely instructions have not been received in direct proportion to
the voting of shares for which timely instructions are received. In addition,
participants in the Morgan Stanley Dean Witter & Co. and Subsidiaries Employee
Stock Ownership Plan (the "ESOP") may, on or before April 3, 2000, instruct
the trustee of the ESOP as to the voting of Common Stock allocated to their
ESOP accounts. The ESOP trustee will, subject to the requirements of ERISA,
vote the shares of Common Stock held by the ESOP (the "ESOP Common Stock")
that are not allocated to participant accounts in the same proportion as the
allocated shares of ESOP Common Stock for which voting instructions are
received. On February 8, 2000, there were outstanding shares of START
Common Stock and outstanding shares of ESOP Common Stock.
1
<PAGE>
The presence, in person or by proxy, of a majority in voting power of the
shares of Common Stock outstanding on February 8, 2000 shall constitute a
quorum for the transaction of business at the Annual Meeting. The election of
directors requires a plurality of the votes cast. The amendment to the
Company's Amended and Restated Certificate of Incorporation requires the
affirmative vote of a majority of the outstanding shares of Common Stock. The
affirmative vote of a majority of the shares of Common Stock represented at
the Annual Meeting and entitled to vote thereon is required to approve each of
the appointment of Deloitte & Touche LLP and the stockholder proposals.
Abstentions may be specified on all proposals except the election of
directors. Abstentions will be counted as present for purposes of the item on
which the abstention is noted and, thus, have the effect of a vote against the
proposal. With regard to the election of directors, votes may be cast in favor
of or withheld with respect to any or all nominees; votes that are withheld
will be excluded entirely from the vote and will have no effect. Under the
rules of the National Association of Securities Dealers, Inc. (the "NASD"),
member brokers generally may not vote shares held by them in street name for
customers unless they are permitted to do so under the rules of any national
securities exchange of which they are a member. Under the rules of the New
York Stock Exchange, Inc. ("NYSE"), member brokers who hold shares in street
name for customers have the authority to vote on certain items in the event
that they have not received instructions from beneficial owners. NYSE member
brokers (other than the Company's wholly-owned subsidiaries, Morgan Stanley &
Co. Incorporated ("MS&Co.") and Dean Witter Reynolds Inc. ("DWR")) who do not
receive instructions are entitled to vote on the proposals presented in this
Proxy Statement, other than the stockholder proposals. Under NYSE rules,
stockholder proposals are "non-discretionary" items, which means that NYSE
member brokers, including MS&Co. and DWR, who have not received instructions
from the beneficial owners, do not have discretion to vote on these items, and
such broker "non-votes" will not be counted in determining the outcome of the
vote on the stockholder proposals. With respect to discretionary items, under
NYSE policy, if MS&Co. and DWR do not receive instructions regarding shares
held by them in street name for customers, each is entitled to vote such
shares only in the same proportion as the shares represented by votes cast by
all record holders with respect to each such proposal. Morgan Stanley Dean
Witter Online Inc. ("MSDW Online"), a wholly-owned subsidiary of the Company,
is not a member of the NYSE or any other national securities exchange.
Accordingly, shares held by MSDW Online in street name for its customers will
only be voted if its customers vote their shares. Under applicable Delaware
law, a broker non-vote will have the same effect as a vote against the
proposed amendment to the Amended and Restated Certificate of Incorporation
and will have no effect on the outcome of the vote on the election of
directors, the appointment of Deloitte & Touche LLP or the stockholder
proposals.
The Company will pay the expenses of the preparation of proxy materials and
the solicitation of proxies for the Annual Meeting. In addition to the
solicitation of proxies by mail, solicitation may be made by certain
directors, officers or employees of the Company by telephone or other means of
communication and by Georgeson Shareholder Communications Inc. ("Georgeson").
Directors, officers and employees will receive no additional compensation for
such solicitation, and Georgeson will receive a fee of $19,000 for its
services. The Company will reimburse brokers, including MS&Co., DWR and MSDW
Online, and other nominees for costs incurred by them in mailing proxy
materials to beneficial holders in accordance with applicable rules.
On May 31, 1997, Morgan Stanley Group Inc. ("Morgan Stanley Group") merged
with and into Dean Witter, Discover & Co. ("Dean Witter Discover") in a merger
of equals (the "Merger"). At that time, Dean Witter Discover changed its
corporate name to Morgan Stanley, Dean Witter, Discover & Co. After receiving
stockholder approval at its 1998 annual meeting, the Company changed its
corporate name to Morgan Stanley Dean Witter & Co. References to the Company
include Dean Witter Discover prior to the Merger.
Prior to the Merger, Dean Witter Discover's fiscal year ended on December
31 and Morgan Stanley Group's fiscal year ended on November 30. After the
Merger, the Company adopted the fiscal year-end of November 30. As used
herein, "Fiscal 1999" refers to the twelve-month period from December 1, 1998
to November 30, 1999; "Fiscal 1998" refers to the twelve-month period from
December 1, 1997 to November 30, 1998; and "Fiscal 1997" refers to the twelve-
month period from December 1, 1996 to November 30, 1997.
2
<PAGE>
All information herein regarding the Common Stock has been adjusted to
reflect the Company's stock splits, including the most recent two-for-one
stock split effective on January 26, 2000.
The Voting Agreements
Certain stockholders hold their shares of Common Stock subject to
agreements relating to, among other things, the voting of such shares. Such
agreements include a Stockholders' Agreement dated as of February 14, 1986, as
amended (the "Stockholders' Agreement"), among Morgan Stanley Group and those
persons who were stockholders (the "Recapitalization Signatories") of Morgan
Stanley Group at that time (all of whom were Managing Directors or Principals
of MS&Co. at such time), certain agreements (the "MAS Agreements") between
Morgan Stanley Group and certain former general partners of Miller Anderson &
Sherrerd, LLP, and certain agreements (the "VK Agreements") between Morgan
Stanley Group and certain senior officers of Van Kampen Investments Inc. Such
agreements also include various voting agreements (such agreements, together
with the Stockholders' Agreement, the MAS Agreements and the VK Agreements,
the "Voting Agreements") entered into by Morgan Stanley Group and the Company
with certain employees and/or a trustee for a trust that holds shares of
Common Stock on behalf of such employees (together with the Recapitalization
Signatories, the "Signatories") in connection with certain grants to such
employees of stock awards, stock unit awards and/or option awards under the
1995 Equity Incentive Compensation Plan (the "1995 EICP") and the 1988 Equity
Incentive Compensation Plan (the "1988 EICP") and options and performance
units under other plans. Pursuant to the Merger, the Company succeeded to all
of the rights and obligations of Morgan Stanley Group under the Voting
Agreements. Shares of ESOP Common Stock and START Common Stock are not subject
to any of the Voting Agreements.
The Voting Agreements, which will cease to have further effect on May 31,
2022, provide that before any vote of the stockholders of the Company occurs,
a preliminary vote (the "Preliminary Vote") will be taken at which each
Signatory who is an employee of the Company on the date of the Preliminary
Vote may vote all of his or her shares of Common Stock subject to the Voting
Agreements in such manner as such Signatory may determine in his or her sole
discretion. A Signatory who is an employee may also direct the trustee of the
trust referred to below how to vote in the Preliminary Vote the shares of
Common Stock that are held in the trust and that correspond to stock units
awarded to the Signatory under the 1988 EICP or the 1995 EICP. At the Annual
Meeting, and at any other meeting of the stockholders called to vote with
respect to any corporate action, the shares of Common Stock of any Signatory
who participated in the Preliminary Vote will be voted in accordance with the
vote of the majority of the shares of Common Stock voted in the Preliminary
Vote, and a Signatory who was an employee of the Company at the time of the
Preliminary Vote but who did not participate in the Preliminary Vote must, if
such Signatory desires to vote the Signatory's shares of Common Stock that are
subject to the Voting Agreements, vote such shares in accordance with the vote
of the majority of the shares of Common Stock voted in the Preliminary Vote.
In addition, a trustee for a trust that holds shares of Common Stock
corresponding to stock units awarded under the 1988 EICP and the 1995 EICP
(including any such stock units awarded to former employees who do not
participate in the Preliminary Vote) must vote the shares of Common Stock that
are in the trust in accordance with the vote of the majority of the shares of
Common Stock voted in the Preliminary Vote. Signatories who are no longer
employed by the Company on the date of the Preliminary Vote are not required
to vote their shares of Common Stock in accordance with the vote of the
majority of the shares of Common Stock voted in the Preliminary Vote. At
February 8, 2000, shares of Common Stock (constituting approximately %
of the votes that are entitled to be cast at the Annual Meeting) were subject
to voting restrictions contained in the Voting Agreements. A Preliminary Vote
with respect to the proposals presented in this Proxy Statement will be taken
on or about March 17, 2000.
3
<PAGE>
ITEM 1--ELECTION OF DIRECTORS
Introduction
The Board of Directors is divided into three classes. At each annual
meeting of stockholders, the Company's stockholders elect a class of directors
for a term expiring at the third succeeding annual meeting of stockholders
after its election, to succeed that class of directors whose term then
expires. Each director holds office until his or her successor has been duly
elected and qualified, or the director's earlier resignation, death or
removal. Currently, the Board of Directors consists of thirteen (13) members.
However, Daniel B. Burke and Allen E. Murray, who are currently directors and
members of the class of directors whose term expires at the Annual Meeting,
have informed the Company that, consistent with the retirement provisions of
the Board's corporate governance policy, they will not stand for reelection at
the 2000 Annual Meeting. The Board of Directors has reduced the size of the
Board from thirteen (13) to eleven (11) and the size of the class of directors
whose term expires at the Annual Meeting from six (6) to four (4), effective
as of the election of directors at the Annual Meeting.
Based on the recommendation of its Nominating and Directors Committee, the
Board of Directors proposes the election as directors of the four (4) persons
named below under "Nominees for Election to the Board of Directors for a
Three-Year Term Expiring in 2003" to hold office for a term ending at the
annual meeting of stockholders to be held in 2003. The Company has inquired of
each nominee and has ascertained that each will serve if elected. The
remaining seven (7) directors named below will continue in office. While the
Board of Directors does not anticipate that any of the nominees will be unable
to stand for election as a director at the Annual Meeting, if that is the
case, proxies will be voted in favor of such other person or persons
designated by the Board of Directors.
All nominees are current directors of the Company. Set forth below is a
brief description of the background of the nominees for election as directors
and directors continuing in office.
Nominees for Election to the Board of Directors for a Three-Year Term Expiring
in 2003
Philip J. Purcell
Mr. Purcell, age 56, has been Chairman of the Board and Chief Executive
Officer since May 1997 and served as Chairman of the Board and Chief Executive
Officer of Dean Witter Discover from 1986 to May 1997. Mr. Purcell is a
director or trustee of approximately 95 registered investment companies for
which Morgan Stanley Dean Witter Advisors Inc., a wholly-owned subsidiary of
the Company, serves as investment manager or investment adviser. Mr. Purcell
is also a director of AMR Corporation.
John J. Mack
Mr. Mack, age 55, has been President, Chief Operating Officer and a
director since May 1997 and served as President of Morgan Stanley Group from
June 1993 to May 1997. From March 1992 until the Merger, he served as Chairman
of the Operating Committee of Morgan Stanley Group, which was responsible for
management of that corporation. Mr. Mack served as a director and a Managing
Director of Morgan Stanley Group from December 1987 to May 1997.
C. Robert Kidder
Mr. Kidder, age 55, has been a director since May 1997 and served as a
director of Dean Witter Discover from July 1993 to May 1997. Mr. Kidder has
served since January 1995 as Chairman of the Board and Chief Executive Officer
of Borden, Inc., a consumer and specialty products company. Mr. Kidder is also
a director of Electronic Data Systems Corporation.
Michael A. Miles
Mr. Miles, age 60, has been a director since May 1997 and served as a
director of Dean Witter Discover from February 1993 to May 1994 and from
January 1995 to May 1997. Mr. Miles has served since January 1995
4
<PAGE>
as a special limited partner in Forstmann Little & Co., a private investment
firm with interests in electronics, aerospace, publishing and other
industries. He is also a director of Sears, Roebuck and Co., The Allstate
Corporation, Time Warner Inc., The Interpublic Group of Companies, Inc. and
Dell Computer Corporation.
The Board of Directors recommends a vote FOR the election of all four (4)
nominees to the Board of Directors.
Directors Continuing in Office -- Term Expiring in 2001
Robert P. Bauman
Mr. Bauman, age 68, has been a director since May 1997 and served as a
director of Morgan Stanley Group from April 1996 to May 1997. Mr. Bauman is
the former Chief Executive Officer of Smithkline Beecham plc, a leading
healthcare company, having served in such capacity from 1989 to May 1994. Mr.
Bauman served as the non-executive Chairman of BTR plc., a manufacturing and
engineering business with global operations, from May 1998 until February 1999
and served as its Deputy Chairman and non-executive director from October 1997
until May 1998. He served as the non-executive Chairman of British Aerospace
PLC from May 1994 until May 1998. Mr. Bauman is a director of CIGNA
Corporation and Union Pacific Corporation and a non-executive director of BTR
plc., Reuters Holdings PLC and Invensys plc.
Edward A. Brennan
Mr. Brennan, age 66, has been a director since May 1997 and served as a
director of Dean Witter Discover from February 1993 to May 1997. Mr. Brennan
is the former Chairman of the Board, President and Chief Executive Officer of
Sears, Roebuck and Co., a leading retailer of apparel, home and automotive
products and a leading provider of credit among retailers, having served in
such capacities for more than five years until his retirement in August 1995.
Mr. Brennan is also a director of AMR Corporation, Minnesota Mining and
Manufacturing Company, The Allstate Corporation, Unicom Corporation, Dean
Foods Company and The SABRE Group Holdings, Inc.
Diana D. Brooks
Mrs. Brooks, age 49, has been a director since December 1997. Mrs. Brooks
has served since April 1994 as the President and Chief Executive Officer of
Sotheby's Holdings, Inc., the parent company of the world-renowned auction
house with global operations. She has been a director of Sotheby's Holdings,
Inc. since 1992.
Clarence B. Rogers, Jr.
Mr. Rogers, age 70, has been a director since May 1997 and served as a
director of Dean Witter Discover from February 1993 to May 1997. Mr. Rogers
served as Chief Executive Officer of Equifax Inc., a provider of information-
based administrative services, from October 1992 until December 1995 and
served from October 1992 until April 1999 as its Chairman of the Board. He is
also a director of Briggs & Stratton Corporation, Oxford Industries, Inc.,
Lanier Worldwide, Inc. and ChoicePoint Inc.
Directors Continuing in Office -- Term Expiring in 2002
Charles F. Knight
Mr. Knight, age 64, has been a director since January 1999. Mr. Knight has
served as the Chief Executive Officer of Emerson Electric Co., a manufacturer
of electronics and electrical products, since 1973 and its Chairman since
1974. Mr. Knight also served as President of that corporation from 1995 until
March 1997 and as a director since December 1972. Mr. Knight is also a
director of Anheuser-Busch Companies, Inc., International Business Machines
Corporation, SBC Communications, Inc. and BP Amoco p.l.c.
5
<PAGE>
Miles L. Marsh
Mr. Marsh, age 52, has been a director since May 1997 and served as a
director of Dean Witter Discover from December 1996 to May 1997. Mr. Marsh has
served as Chairman and Chief Executive Officer of Fort James Corporation, a
manufacturer and marketer of consumer paper products, since August 1997, when
it was created upon the merger of Fort Howard Corporation and James River
Corporation of Virginia. From January 1996 until August 1997, he served as
Chairman of James River and was James River's President and Chief Executive
Officer from October 1995 until August 1997. From March 1991 to February 1995,
Mr. Marsh served as Chairman and Chief Executive Officer of Pet Food Inc., a
leading prepared foods company. Mr. Marsh is also a director of GATX
Corporation and Whirlpool Corporation.
Laura D'Andrea Tyson
Dr. Tyson, age 52, has been a director since May 1997 and served as a
director of Morgan Stanley Group from April 1997 to May 1997. Dr. Tyson has
been the Dean of the Walter A. Haas School of Business at the University of
California, Berkeley since July 1998. She previously held the Class of 1939
Chair in Economics and Business Administration at the University from January
1997 until July 1998. Dr. Tyson served in President Clinton's first
Administration from January 1993 through March 1995 as the 16th Chair of the
White House Council of Economic Advisors, and from April 1995 through December
1996 as Chair of the President's National Economic Council and the President's
National Economic Advisor. She is also a director of Eastman Kodak Company,
Fox Entertainment Group, Inc., SBC Communications, Inc. and Human Genome
Sciences, Inc.
Board of Directors Meetings and Committees
The Board of Directors held six (6) meetings during Fiscal 1999. The
Company has standing Audit, Compensation and Nominating and Directors
Committees.
The Audit Committee, among other things, confers with the Company's
independent auditors and internal auditors concerning their respective audits
and reviews the accounting principles employed in financial reporting. Messrs.
Brennan (Chair), Kidder and Murray and Dr. Tyson are the members of the Audit
Committee. During Fiscal 1999, the Audit Committee held four (4) meetings.
The Compensation Committee, among other things, determines the compensation
policies applicable to the senior officers of the Company and of its
subsidiaries and establishes the total compensation for each senior officer in
light of these policies. The Compensation Committee also addresses questions
of interpretation, administration and application of the Company's or any
subsidiary's employee benefit plans. The members of the Compensation Committee
are Messrs. Burke (Chair), Brennan, Knight, Murray and Rogers. During Fiscal
1999, the Compensation Committee held four (4) meetings.
The Nominating and Directors Committee, among other things, evaluates and
recommends candidates for election to the Company's Board of Directors and
assesses the Board of Directors' performance not less frequently than every
three (3) years, recommends director compensation and benefits philosophy, and
periodically reviews the Company's corporate governance profile. Messrs. Miles
(Chair), Bauman and Marsh and Mrs. Brooks are the members of the Nominating
and Directors Committee. The Nominating and Directors Committee held one (1)
meeting during Fiscal 1999. The Company's current Bylaws include provisions
setting forth specific conditions under which persons may be nominated as
directors of the Company at an annual meeting of stockholders. A copy of such
provisions is available upon request to the Company's Secretary, 1585
Broadway, New York, New York 10036.
During Fiscal 1999, each of the current directors attended at least
seventy-five percent (75%) of the meetings of the Board of Directors and the
Committees on which he or she served (during the period that he or she
served), except for Mr. Bauman who attended 71.4% of such meetings.
6
<PAGE>
Director Compensation
Directors who are not employees of the Company or a Company affiliate
("Non-Employee Directors") receive annual cash retainers and meeting fees as
follows:
<TABLE>
<S> <C>
Board Member.................................................... $35,000
Committee Chair................................................. 7,500
Committee Member................................................ 5,000
Attendance at Board or Committee Meeting........................ 1,000
</TABLE>
Non-Employee Directors also participate in the Company's Directors' Equity
Capital Accumulation Plan ("DECAP"). Under DECAP, Non-Employee Directors
receive formula-based awards of stock options covering 8,000 shares of Common
Stock and a grant of 1,200 shares of Common Stock upon initially joining the
Board of Directors and after each annual meeting of stockholders after which
they continue to serve. DECAP further provides that each Non-Employee Director
may elect to receive all or a portion of his or her annual cash retainers and
meeting fees, on a current or deferred basis, in shares of Common Stock at a
fair market value equal to the cash retainers or fees that would otherwise
have been paid and may elect to defer receipt of formula-based Common Stock
grants. Each Non-Employee Director also may elect under DECAP to receive
options to purchase Common Stock in lieu of that director's annual $35,000
retainer. If a Non-Employee Director makes this election, the number of shares
of Common Stock subject to each such option will be equal to the number of
whole shares of Common Stock obtained by multiplying three (3) by the quotient
obtained by dividing $35,000 by the fair market value of a share of Common
Stock on the award date. Non-Employee Directors are not eligible to receive
retirement benefits from the Company.
The Company matches certain charitable gifts to educational institutions
made by Non-Employee Directors up to a maximum of $2,000 per year. During
Fiscal 1999, the Company matched charitable gifts in the amount of $2,000 on
behalf of each of Messrs. Rogers and Kidder.
Directors who are also employees of the Company or an affiliate receive no
compensation for serving as a director of the Company.
7
<PAGE>
STOCK OWNERSHIP
Stock Ownership of Management
The following table sets forth, as of January 12, 2000, the beneficial
ownership of the Company's capital stock by current directors, nominees for
director, the Chief Executive Officer, each of the four other named executive
officers, and all directors and executive officers of the Company as a group.
Share amounts have been adjusted to reflect the Company's two-for-one stock
split effective January 26, 2000.
<TABLE>
<CAPTION>
Amount of Common Stock
Beneficially
Name of Beneficial Owner Owned(/1/)
- ------------------------ ----------------------
<S> <C>
Philip J. Purcell(/2/)(/3/)(/4/)(/5/).................. 5,891,244
John J. Mack(/2/)(/3/)(/5/)............................ 7,559,100
Peter F. Karches(/2/)(/3/)(/5/)........................ 4,439,710
Vikram S. Pandit(/2/)(/3/)(/5/)........................ 2,121,246
Joseph R. Perella(/2/)(/3/)(/5/)....................... 1,748,925
Robert P. Bauman(/6/).................................. 34,638
Edward A. Brennan(/6/)................................. 279,026
Diana D. Brooks(/6/)................................... 29,000
Daniel B. Burke(/6/)................................... 43,456
C. Robert Kidder(/6/).................................. 65,766
Charles F. Knight(/6/)................................. 18,012
Miles L. Marsh(/6/).................................... 40,400
Michael A. Miles(/6/).................................. 79,354
Allen E. Murray(/6/)................................... 53,030
Clarence B. Rogers, Jr.(/6/)........................... 78,938
Laura D'Andrea Tyson(/6/).............................. 32,452
All executive officers and directors as a group (26
persons)(/2/)(/3/)(/7/)............................... 36,598,731
</TABLE>
- --------
(1) Each officer and director beneficially owns less than 1% of the shares
outstanding based on 1,139,379,666 shares of Common Stock, except that all
officers and directors as a group beneficially own approximately 3.21% of
the Common Stock.
(2) Except as otherwise disclosed below, the voting of the shares of Common
Stock beneficially owned by the executive officers is subject to the
Voting Agreements. See "INTRODUCTION--The Voting Agreements."
(3) Includes 368,316, 1,651,626, 1,915,906, 1,073,064, 846,490 and 9,313,090
shares of Common Stock underlying stock units awarded to Messrs. Purcell,
Mack, Karches, Pandit and Perella and all current directors and executive
officers as a group, respectively, as part of compensation. Except for
295,348 shares of Common Stock underlying the stock unit awards granted to
all current directors and executive officers as a group, all the shares of
Common Stock underlying such stock unit awards are subject to the Voting
Agreements and are held in trust to be voted in accordance with the
results of the Preliminary Vote.
(4) Includes 2,235,994 shares of Common Stock that are not subject to the
Voting Agreements. Also includes 45,364 shares of Common Stock owned by
Mr. Purcell's spouse and 12,778 shares held in custodial accounts on
behalf of Mr. Purcell's children for which he is custodian, which are not
subject to the Voting Agreements, as to which Mr. Purcell disclaims
beneficial ownership.
(5) Includes 3,228,792, 1,406,818, 1,416,688, 1,032,110 and 811,940 shares of
Common Stock subject to options that are exercisable within 60 days after
January 12, 2000 held by Messrs. Purcell, Mack, Karches, Pandit and
Perella, respectively. 2,670,032 shares subject to such options held by
Mr. Purcell will not be subject to the Voting Agreements.
(6) Includes the following shares of Common Stock subject to options that are
exercisable within 60 days after January 12, 2000: (i) 60,566 shares held
by each of Messrs. Brennan, Kidder, Miles and Rogers; (ii) 32,000 shares
held by Mr. Marsh; (iii) 28,566 shares held by each of Messrs. Bauman and
Burke and Dr. Tyson; (iv) 24,000 shares held by each of Mr. Murray and
Mrs. Brooks; and (v) 16,000 shares held by Mr. Knight.
(7) Includes 4,173,977 shares of Common Stock that are not subject to the
Voting Agreements. Includes 14,454,186 shares of Common Stock subject to
options that are exercisable within 60 days after January 12, 2000, of
which 6,692,016 shares will not be subject to the Voting Agreements.
8
<PAGE>
Principal Stockholders
The following table sets forth certain information regarding each person or
group of persons known to the Company to be the beneficial owner of more than
5% of any class of the Company's voting securities. Share amounts have been
adjusted to reflect the Company's two-for-one stock split effective January
26, 2000.
<TABLE>
<CAPTION>
Shares of Common Stock
Beneficially Owned
Name of Persons or ----------------------------------------
Identity of Group Number Percent
------------------- ------------- -----------
<S> <C> <C>
Signatories to Voting
Agreements(/1/).................... 180,865,011(/2/)(/3/)(/4/) 15.14%
Alliance Capital Management Holding
LP(/5/)............................ (/6/) %
</TABLE>
- --------
(1) The voting of the shares of Common Stock subject to the Voting Agreements
is subject to the voting restrictions contained therein. The information
provided relates to the voting power of such securities. The Signatories
to the Voting Agreements do not share dispositive power. See
"INTRODUCTION--The Voting Agreements." Information regarding Signatories
to the Voting Agreements is as of January 12, 2000.
(2) Includes 55,070,553 shares of Common Stock subject to options that are
exercisable within 60 days after January 12, 2000. Of these shares,
9,546,666 will not be subject to the Voting Agreements.
(3) Includes 77,515,666 shares of Common Stock underlying stock unit awards
granted pursuant to equity-based employee compensation plans that will be
voted in accordance with the results of the Preliminary Vote.
(4) Includes 11,249,981 shares of Common Stock, including shares underlying
stock unit awards granted pursuant to equity-based employee compensation
plans and ESOP Common Stock and START Common Stock, that are not subject
to the Voting Agreements.
(5) Alliance Capital Management Holding LP's principal office is located at
1345 Avenue of the Americas, 41st Floor, New York, NY 10105-0302.
(6) Information regarding Alliance Capital Management Holding LP is based on
the Schedule 13G Information Statement filed with the SEC on February ,
2000, reflecting shareholdings as of , 1999.
9
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table summarizes the compensation paid by the Company and its
subsidiaries to the Chief Executive Officer and the Company's four other most
highly compensated executive officers who were serving as executive officers
at November 30, 1999 (the "named executive officers") for services rendered in
all capacities to the Company and its subsidiaries for Fiscal 1999, Fiscal
1998 and Fiscal 1997. Amounts reported for Mr. Mack for Fiscal 1997 include
compensation received from Morgan Stanley Group prior to the Merger. Both
shares awarded and per share prices in the Table and the footnotes have been
adjusted to reflect the Company's two-for-one stock split effective January
26, 2000.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
----------------------------------------- --------------------------
Restricted Securities
Other Annual Stock Underlying
Name and Fiscal Compensation Award(s) Options/ All Other
Principal Position Year Salary($)(/1/) Bonus($)(/1/) ($) ($) SARs (#) Compensation
- ------------------ ------ -------------- ------------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Philip J. Purcell 1999 $775,000 $12,112,500 -- $8,184,303(/2/) 277,172(/3/) $25,500(/4/)
Chairman of the Board
and 1998 775,000 8,112,500 -- 4,435,319(/5/) 299,290(/3/) 23,100(/4/)
Chief Executive Officer 1,267,724(/6/)
---------
1,567,014
1997 775,000 9,698,750 799,996(/7/) 3,135,577(/8/) 252,252(/3/) 3,731(/10/)
660,000(/9/)
1,327,750(/6/)
---------
2,240,002
John J. Mack 1999 $775,000 $12,112,500 -- $8,184,303(/2/) 277,172(/3/) $25,500(/4/)
President and Chief 153,868(/6/)
Operating Officer 1998 775,000 8,112,500 -- 4,435,319(/5/) 299,290(/3/) 23,100(/4/)
1997 775,000 9,698,750 -- 3,135,577(/8/) 252,252(/3/) 25,500(/4/)
Peter F. Karches* 1999 $450,000 $11,775,000 -- $7,935,694(/2/) 268,754(/3/) $25,500(/4/)
President and COO
Institutional Securities
Group
Vikram S. Pandit* 1999 $300,000 $ 8,350,000 -- $5,413,195(/2/) 183,326(/3/) $25,500(/4/)
Worldwide Head of Equity
Division
Joseph R. Perella* 1999 $300,000 $ 8,350,000 -- $5,413,195(/2/) 183,326(/3/) $25,500(/4/)
Worldwide Head of
Investment Banking
</TABLE>
- --------
* Messrs. Karches, Pandit, and Perella became executive officers of the
Company in 1999.
(1) Includes amounts contributed to various deferred compensation plans of
the Company.
(2) The market value of the Common Stock underlying restricted stock units
(which generally convert into shares of Common Stock) ("RSUs") at the
date of grant, without taking into account any diminution in value
attributable to the restrictions on such RSUs. Awards of RSUs were
granted under the 1995 EICP on December 9, 1999 for performance in Fiscal
1999; the closing price per share of the Common Stock on that date as
reported on the New York Stock Exchange Composite Transaction Tape (the
"NYSE Composite Tape") was $66.4375 per share.
The aggregate number of RSUs awarded on December 9, 1999 to each of the
named executive officers is as follows: Mr. Purcell--123,188; Mr. Mack--
123,188; Mr. Karches--119,446; Mr. Pandit--81,478 and Mr. Perella--
81,478. Seventy-five percent of the RSUs vested on January 2, 2000; the
remaining 25% vest on January 2, 2005. Dividend equivalents are paid on
the RSUs at the same rate that dividends are paid on shares of Common
Stock. The RSUs are neither distributed in the form of shares of Common
Stock nor transferable for five years after the grant date and are
subject to forfeiture in certain circumstances. The RSUs provide that in
the event a "change in ownership" of the Company occurs or the recipient
terminates employment with the Company as a result of a "full career
10
<PAGE>
retirement," long-term disability or death, all such RSUs will vest and
generally convert into shares of Common Stock. In the event of a "change
in control," these RSUs will vest.
The aggregate number of RSUs (including RSUs awarded on December 9, 1999,
TDEPP Units (awards of restricted stock units made under the Company's
Tax Deferred Equity Participation Plan), and RSUs awarded prior to the
years reported) owned by each of the named executive officers and the
market value ascribed thereto as of November 30, 1999 are as follows: Mr.
Purcell--478,326 ($28,849,011); Mr. Mack--1,651,626 ($99,613,693); Mr.
Karches--1,915,906 ($115,553,081); Mr. Pandit--1,073,064 ($64,719,173)
and Mr. Perella--846,490 ($51,053,928). The value ascribed to RSUs has
been reported based on the value of the Common Stock at fiscal year-end,
in accordance with rules promulgated by the Securities and Exchange
Commission (the "SEC"). The value ascribed to RSUs awarded for Fiscal
1999 by the Compensation Committee differs from the amounts reported
herein. See also the Report of the Compensation Committee on Executive
Compensation beginning on page 15.
(3) Awards under the 1995 EICP of stock options for services performed in the
fiscal year shown. In the event of a "change in ownership" of the Company
or the recipient's termination of employment with the Company as a result
of a "full career retirement," long-term disability or death, these
options generally provide that any unvested portion of an award will vest
and become exercisable and that shares of Common Stock acquired upon
exercise of such options will no longer be subject to restrictions on
transfer. In the event of a "change in control," these options generally
provide that any unvested portion of an award will vest and become
exercisable. Restoration Option Rights ("RORs") were granted with respect
to such options. An ROR entitles the grantee in respect of an underlying
option (an "Underlying Option"), upon exercise of such Underlying Option
at a time when the grantee is an employee of the Company and upon
tendering shares of Common Stock to the Company in satisfaction of the
exercise price of such Underlying Option, to the automatic grant of an
additional option (a "Restoration Option") to acquire the number of
shares of Common Stock equal to the number of shares of Common Stock
tendered to pay the exercise price of the Underlying Option, and tendered
or withheld to pay taxes owed as a result of such exercise, at a per
share price generally equal to the closing price of a share of Common
Stock as reported on the NYSE Composite Tape on the exercise date of such
Underlying Option.
(4) Contributions made to the Deferred Profit Sharing Plan ("DPSP") and the
ESOP. For amounts reported for Fiscal 1999 and Fiscal 1997, the Company
contributed 50.2% of such amount to the DPSP and 49.8% to the ESOP. For
amounts reported for Fiscal 1998, the Company contributed 45% of such
amount to the DPSP and 55% to the ESOP.
(5) The market value of the Common Stock underlying RSUs at the date of
grant, without taking into account any diminution in value attributable
to the restrictions on such RSUs. Awards of RSUs were granted under the
1995 EICP on December 11, 1998 for performance in Fiscal 1998; the
closing price per share of the Common Stock on that date as reported on
the NYSE Composite Tape was $33.3438 per share.
The aggregate number of RSUs awarded on December 11, 1998 to each of
Messrs. Purcell and Mack was 133,018. The RSUs granted for Fiscal 1998
service have substantially the same terms as the RSUs granted for Fiscal
1999 service, except that the RSUs granted for Fiscal 1998 service vest
ratably over a three-year period which began on January 2, 1999.
(6) Restoration Options granted upon exercise of RORs.
(7) Payments received upon the exercise of options pursuant to tax benefit
rights granted in connection with such options. The tax benefit rights
entitled the optionee to an amount equal to the amount of compensation
realized upon the exercise of the option multiplied by the then
applicable federal corporate income tax rate.
(8) The market value of the Common Stock underlying RSUs at the date of
grant, without taking into account any diminution in value attributable
to the restrictions on such RSUs. Awards of RSUs were granted under the
1995 EICP on December 12, 1997 for performance in Fiscal 1997; the
closing price per share of the Common Stock on that date as reported on
the NYSE Composite Tape was $27.9688 per share.
The aggregate number of RSUs awarded on December 12, 1997 to each of each
of Messrs. Purcell and Mack was 112,110. The RSUs granted for Fiscal 1997
service have substantially the same terms as the RSUs granted for Fiscal
1999 service, except that seventy-five percent of the RSUs granted for
Fiscal 1997 service vest ratably over a three-year period which began on
January 2, 1999 and the remaining 25% vest in five equal annual
installments which began on January 2, 1999.
(9) Awards of stock options made before the Merger by Dean Witter Discover
during Fiscal 1997, consistent with historic Dean Witter Discover
compensation practices. These options provide that, in the event of a
"change in control" of the Company, any unvested portion of the award
will immediately vest and become exercisable. The Merger did not
constitute a "change in control" for purposes of these options. RORs were
granted with respect to such options.
(10) The Company's matching contribution under the START.
Compensation to employees who are not executive officers of the Company may
exceed compensation paid to the named executive officers.
11
<PAGE>
Stock Options
The table below provides information concerning stock options granted to
the named executive officers during Fiscal 1999 (giving effect to awards of
stock options on December 9, 1999 for services performed in Fiscal 1999). The
number of securities underlying the options and the exercise price of each
option have been adjusted to reflect the Company's two-for-one stock split
effective January 26, 2000.
Option Grants in the Last Fiscal Year
<TABLE>
<CAPTION>
Number of Securities Percent of
Underlying Options Total Options
Granted(#) Granted to Grant Date
------------------------- Employees Exercise Present
Restoration in Fiscal Price Expiration Value
Name Options(/1/) Options(/2/) Year ($/Sh) Date ($)(/3/)
---- ------------ ------------ ------------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Philip J. Purcell...... 277,172 1.20 60.1384 1/2/2010 5,556,250
John J. Mack........... 277,172 1.20 60.1384 1/2/2010 5,556,250
61,816 0.27 42.7800 1/2/2008 872,261
92,052 0.40 42.7800 1/2/2009 1,358,949
Peter F. Karches....... 268,754 1.16 60.1384 1/2/2010 5,387,500
Vikram S. Pandit....... 183,326 0.79 60.1384 1/2/2010 3,675,000
Joseph R. Perella...... 183,326 0.79 60.1384 1/2/2010 3,675,000
</TABLE>
- --------
(1) Awards under the 1995 EICP for services performed in Fiscal 1999. The
Compensation Committee approved the grant on December 9, 1999 with an
exercise price, determined pursuant to its authority under the 1995 EICP,
equal to the average of the closing prices of a share of Common Stock, as
reported on the NYSE Composite Tape, for the last seven trading days of
Fiscal 1999. Seventy-five percent of these stock options vested and became
exercisable on January 2, 2000. The remaining 25% vest and become
exercisable on January 2, 2005. These options are not transferable and are
subject to forfeiture under certain circumstances. Shares of Common Stock
acquired upon the exercise of such options generally may not be
transferred or sold prior to January 2, 2005, except to the extent
required to cover the exercise price and tax liability arising upon
exercise. The stock options generally provide that any unvested portion of
the award will vest and become exercisable under certain circumstances,
such as a "change in control" or "change in ownership" of the Company or
the recipient's termination of employment with the Company as a result of
a "full career retirement," long-term disability or death. In the case of
a "change in ownership," "full career retirement," long-term disability or
death, shares of Common Stock acquired upon exercise of such options will
generally no longer be subject to restrictions on transfer. RORs were
granted with respect to these options.
(2) Restoration Options received upon the exercise of RORs. Each such option
is vested upon grant and has the same expiration date and transferability
provisions as its Underlying Option. All of the Restoration Options listed
were granted on January 15, 1999, the date of exercise of the Underlying
Options.
(3) Options described in Footnote (1) were valued by the Compensation
Committee by dividing the option exercise price by 3. This value,
multiplied by the number of options set forth under the caption "Options,"
equals the grant date present value. The 3-to-1 ratio is based on the
Company's historical practices and is competitive with the compensation
practices of the Company's major competitors. These options may also be
valued using various option pricing models such as the Black-Scholes
option pricing model. The values obtained using such models depend upon
the assumptions used. For example, employing a modified Black-Scholes
option pricing model, the values could range from a value of $17.48 per
option (assuming the option life was five years and exercise at the end of
five years) to a value of $24.48 per option (assuming the option life was
equal to the term of the option and exercise at the end of the option
term). Each of the foregoing values assumes: (i) the stock price
volatility was calculated based on the daily price volatility of the
Common Stock for the eight-year period prior to the grant date; (ii) the
risk-free rate of return was the average continuous yield, calculated over
the seven trading days before the grant date, of a zero coupon U.S.
Treasury STRIPS having a remaining term equal to the assumed term of the
subject option; and (iii) the Company's estimated annualized dividend
yield on the grant date was constant over the life of the option. In
addition, for each of these valuations, a discount of 25% was applied to
reflect the transfer restrictions on the underlying Common Stock, and for
the period prior to the Merger, the volatility was determined based on an
index of the common stock of Dean Witter Discover and Morgan Stanley
Group, which, consistent with the ratio at which shares of Morgan Stanley
Group were exchanged for Dean Witter Discover common stock in connection
with the Merger, included 1.65 shares of Dean Witter Discover common stock
for every share of Morgan Stanley Group common stock. Options described in
Footnote (2) are valued using the modified Black-Scholes option pricing
model, employing the assumptions and discount utilized in reaching the
valuation of $24.48 per share.
All of the above-described values are hypothetical and there is no
assurance that any such values will be realized. The actual amount, if
any, realized upon the exercise of an option will depend upon the market
price of the Common Stock relative to the exercise price of the option at
the time it is exercised.
12
<PAGE>
Option/SAR Exercises and Fiscal Year-End Holdings
The following table provides information concerning stock option and stock
appreciation right ("SAR") exercises in Fiscal 1999 and unexercised stock
options and SARs held by each named executive officer as of November 30, 1999
(giving effect to awards of stock options on December 9, 1999 for services
performed in Fiscal 1999). The number of shares acquired or with respect to
which SARs were exercised during Fiscal 1999 and the number of securities
underlying unexercised options and SARs at fiscal year-end have been adjusted
to reflect the Company's two-for-one stock split effective January 26, 2000.
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs at In-the-Money Options/SARs at
FY-End(#)(/3/) FY-End($)(/4/)
Shares Acquired Value ------------------------------ ------------------------------
Name on Exercise(#)(/1/) Realized($)(/2/) Exercisable(/5/) Unexercisable Exercisable(/5/) Unexercisable
---- ------------------- ---------------- ---------------- ------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Philip J. Purcell....... 435,442 11,395,983 3,158,792 489,954 101,777,781 15,121,134
John J. Mack............ 175,436 1,778,161 1,286,964 756,986 44,520,773 28,535,967
Peter F. Karches........ 0 0 1,296,836 685,664 44,956,960 26,216,469
Vikram S. Pandit........ 0 0 932,234 489,300 33,427,833 18,638,941
Joseph R. Perella....... 0 0 752,016 539,932 21,688,727 20,277,780
</TABLE>
- --------
(1) Reflects the number of shares underlying options and SARs exercised in
Fiscal 1999 by the named executive officers. The actual number of shares
received from options and SARs exercised in Fiscal 1999 by each named
executive officer who exercised options or SARs during Fiscal 1999 (net of
shares surrendered to cover the exercise price and tax liability) was: Mr.
Purcell--117,728 and Mr. Mack--21,568.
(2) The difference between the market price on the exercise date and the
option exercise price or SAR base price.
(3) The sale or disposition of shares of Common Stock underlying certain of
the options and SARs is restricted.
(4) The value of unexercised, in-the-money options and SARs is based upon the
difference between the exercise prices of all such options, or base prices
of all such SARs, and $60.1384, the fair market value, as determined by
the Compensation Committee, of a share of Common Stock at the end of
Fiscal 1999, which is equal to the average of the closing prices of a
share of Common Stock, as reported on the NYSE Composite Tape, for the
last seven trading days of Fiscal 1999. The actual amount, if any,
realized upon exercise of an option or SAR will depend upon the market
price of the Common Stock relative to the exercise price of the option or
base price of the SAR at the time it is exercised. There is no assurance
that these values will be realized.
(5) Includes options and SARs awarded for service during Fiscal 1999, Fiscal
1998, Fiscal 1997 and the 1994 fiscal year that vested and became
exercisable on January 2, 2000.
13
<PAGE>
Pension Plans
The named executive officers are covered under various pension plans,
principally because of the Company's corporate history. The following
paragraphs discuss estimated annual benefits payable upon retirement to each
of the named executive officers.
Mr. Purcell. The following table indicates the estimated annual benefits
payable upon retirement as a single-life annuity to Mr. Purcell for the
specified compensation and years of service classifications under the
Company's retirement plans in which he participates, assuming that Mr. Purcell
remains in service with the Company until his retirement at age 65. Mr.
Purcell participates in retirement plans which are defined benefit pension
plans intended to qualify under Section 401(a) of the Internal Revenue Code of
1986, as amended (the "Code"), and in plans which are nonqualified, unfunded
defined benefit pension plans that provide benefits to certain key executives
of the Company.
Pension Plan Table
<TABLE>
<CAPTION>
Years of Service
Final Average -------------------------------------------------------------
Compensation 15 20 25 30 35
------------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 500,000 $ 89,399 $ 123,755 $ 156,801 $ 196,443 $ 227,785
750,000 135,639 187,769 237,890 297,999 345,499
1,000,000 181,879 251,784 318,978 399,555 463,214
1,500,000 274,360 379,813 481,156 602,667 698,643
2,000,000 366,840 507,842 643,333 805,779 934,071
2,500,000 459,320 635,871 805,510 1,008,891 1,169,500
3,000,000 551,800 763,900 967,687 1,212,003 1,404,929
3,500,000 644,281 891,928 1,129,864 1,415,114 1,640,358
4,000,000 736,761 1,019,957 1,292,041 1,618,226 1,875,787
</TABLE>
"Compensation" or "earnings" under the plans generally refers to total
annual cash compensation for services rendered to the Company and its
subsidiaries and affiliates, including pre-tax salary deferrals, but excluding
certain specified items such as incentive and long-term executive compensation
plan awards, the value of stock awards, and employer contributions to profit-
sharing plans. Current covered compensation for Mr. Purcell under the terms of
the principal nonqualified retirement plan in which he participates was
limited for 1999 to $3,200,000. As of November 30, 1999, Mr. Purcell's
credited service (rounded to the nearest whole year) under the plans was 22
years. The amounts shown in the table are prior to reduction on account of
benefits payable under retirement plans of Sears, Roebuck and Co. The offset
of Social Security benefits on plan benefits varies among the plans in which
Mr. Purcell participates and is reflected in the estimated amounts in the
table above.
Messrs. Mack, Karches, Perella and Pandit. Messrs. Mack, Karches, Perella
and Pandit are participants in retirement plans which are defined benefits
plans intended to qualify under Section 401(a) of the Code and plans which are
nonqualified, unfunded plans for certain key executives.
Assuming that the participants in the chart below are eligible for all of
the retirement plans, the following table illustrates the total estimated
annual normal retirement pension benefits payable as a single-life annuity
under the retirement plans upon normal retirement at age 65 to participants
for the specified remuneration and years of credited service classifications
set forth below. The chart below does not include benefits payable from any
plan of an unrelated employer.
14
<PAGE>
Pension Plan Table
Annual Pension Benefit Based on Years of Credited Service at Age 65.
<TABLE>
<CAPTION>
Years of Service
Final Average --------------------------------------------------------------
Compensation 5 10 15 20 25 30 35
------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 40,000 $ 60,000 $ 80,000 $100,000 $100,000 $110,000 $120,000
300,000 60,000 90,000 120,000 140,000 140,000 140,000 153,450
400,000 80,000 120,000 140,000 140,000 147,107 176,529 205,950
500,000 100,000 140,000 140,000 147,686 184,607 221,529 258,450
600,000 120,000 140,000 140,000 177,686 222,107 266,529 310,950
700,000 140,000 140,000 155,764 207,686 259,607 311,529 363,450
800,000 140,000 140,000 178,264 237,686 297,107 356,529 415,950
900,000 140,000 140,000 200,764 267,686 334,607 401,529 468,450
1,000,000 140,000 148,843 223,264 297,686 372,107 446,529 520,950
</TABLE>
The compensation of Messrs. Mack, Karches, Perella and Pandit for purposes
of determining benefits under the plans during Fiscal 1999 is the amount
reported as base salary in the Summary Compensation Table. As of November 30,
1999, the credited years of service (rounded to the nearest whole year) under
the plans for Messrs. Mack, Karches, Perella and Pandit are 27, 24, 6 and 17
years, respectively.
Set forth below is the report of the Compensation Committee of the Board of
Directors regarding executive compensation for Fiscal 1999.
Report of the Compensation Committee on Executive Compensation
Compensation Governance. The Compensation Committee consists of the five
non-employee directors listed below. We are responsible to the Company's Board
of Directors and to stockholders for establishing and administering
compensation programs for the Company's senior officers ("Senior Officers"),
including Messrs. Purcell, Mack, Karches, Pandit and Perella, the Company's
five most highly paid executive officers (the "Senior Executives"), for Fiscal
1999. We are also responsible for all awards under the Company's equity-based
employee compensation plans.
Compensation Policies. Our fundamental policy is to link total compensation
for Senior Officers closely with the achievement of annual and long-term
performance goals. We design our policies to:
. Base compensation on Company, business unit and individual performance;
. Motivate Senior Officers and employees to achieve strategic business
objectives;
. Provide total compensation comparable to that of the Company's
competitors, thereby enabling the Company to attract, recruit and retain
Senior Officers critical to the Company's long-term success; and
. Include a significant equity component in total compensation, thereby
aligning the long-term interests of Senior Officers with those of
stockholders.
We primarily employ quantitative factors, but we also utilize qualitative
factors, when determining total compensation for Senior Officers and when
awarding equity-based compensation to employees. Quantitative factors include,
among others, absolute levels of, and year-to-year changes in, return on
equity ("ROE"), net revenues, net income, profit before taxes, earnings per
share, book value per share, market share and several key business drivers.
Qualitative factors include achievement of pre-established performance goals,
client satisfaction and others. We utilize ROE as a key measure of corporate
performance. We also review the ratios of compensation to net revenues and
compensation to pre-compensation profit before taxes. We review survey data
regarding peer companies (including data from the Financial Service Companies,
as defined below), for purposes of monitoring Senior Officers' compensation
levels in relation to performance. We receive competitive information from
internally generated studies. We also utilize the services of independent
consultants who review
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management's data and provide us with independent analyses and viewpoints.
While we consider all these factors, we generally do not assign specific
weighting to the factors but determine total compensation based upon a more
subjective process, focusing on Company and business unit financial
performance on an absolute and competitive basis as well as individual
performance.
Our policy is to maximize the tax deductibility of compensation payments to
Senior Executives under Section 162(m) of the Code and the regulations
thereunder ("Section 162(m)"). Our stockholders have approved our incentive
plans designed and administered to qualify compensation awarded thereunder as
"performance-based" for that purpose. We may, however, authorize payments to
Senior Executives that may not be fully deductible if we believe such payments
are in our stockholders' interests.
Compensation Program. Our Senior Officers receive total compensation,
excluding employee benefits, composed of base salary and incentive
compensation consisting of cash bonus and equity-based components (such as
restricted stock units and stock options). Together, the base salary and
incentive compensation constitute a Senior Officer's "Total Reward." In
general, the greater the Total Reward, the greater the percentage of the total
that is in the form of non-cash, equity-based compensation.
1. Base Salaries. Base salaries are a relatively small portion of overall
compensation for Senior Officers. We consider individual experience,
responsibilities and tenure when determining base salaries. Base salaries are
generally in the range of median base salaries paid by the Financial Service
Companies to employees having duties and responsibilities comparable to those
of Senior Officers.
2. Incentive Compensation. Our Senior Officers' total compensation is
heavily weighted toward performance-based, incentive compensation. Senior
Officers are eligible for annual incentive compensation, which varies by
Company, business unit and individual performance. We believe this links
Senior Officer compensation with Company, business unit and individual
performance, and is consistent with our compensation policies discussed above.
Generally, in addition to the portion of annual incentive compensation paid in
cash, a significant portion is paid in equity-based compensation, the value of
which cannot be realized immediately and depends upon the future market value
of the Company's stock. We believe that equity-based compensation provides a
continuing incentive to Senior Officers to foster the Company's success long
after the compensation is awarded.
For Senior Executives, we award incentive compensation through the
application of performance criteria adopted in accordance with the
requirements of Section 162(m). The performance criteria include a formula
that links compensation of the Senior Executives to the Company's ROE versus
the Company's cost of equity capital and annual growth in book value per
share.
Compensation for Fiscal 1999. In determining compensation for Senior
Officers for Fiscal 1999, we reviewed the Company's achievements and financial
performance for Fiscal 1999, as well as individual and business unit
performance. We also compared the Company's and its business units' financial
performance to the financial performance of the Financial Service Companies
(and subdivisions thereof) and certain other competitors. In addition, we
considered the compensation levels of executives of the Financial Service
Companies and other competitors when we determined Total Rewards for Senior
Officers. These factors were not, however, the sole factors we considered and
we did not attempt to set Total Rewards in a range established by a comparison
of the financial performance of, or compensation levels of, the Financial
Service Companies or the other competitors operating in the same or similar
businesses as the Company. For purposes of this Report, the term "Financial
Service Companies" refers collectively to the following companies (or
subdivisions thereof) in the financial services industry: A.G. Edwards, Inc.;
American Express Company; American International Group, Inc.; Bank One
Corporation; The Bear Stearns Companies Inc.; Capital One Financial
Corporation; The Charles Schwab Corporation; Citigroup Inc.; Credit Suisse
First Boston, Inc.; Deutsche Bank A.G.; Donaldson, Lufkin & Jenrette, Inc.;
Eaton Vance Corp.; Franklin Resources, Inc.; The Goldman Sachs Group, Inc.;
J.P. Morgan & Co. Incorporated; Legg Mason, Inc.; Lehman Brothers Holdings
Inc.; MBNA Corporation; Merrill Lynch & Co., Inc.; The John Nuveen Company;
Paine Webber Group Inc.; T. Rowe Price Associates, Inc.; UBS AG; and United
Asset Management Corporation.
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We believe the Company performed very well in Fiscal 1999 in a generally
favorable global securities market and a highly competitive credit services
market.
The Company achieved record earnings in Fiscal 1999 for the third
consecutive year since the Merger due to strong results in all of its core
businesses. The Company's business and revenue diversification and its global
presence were reflected in its earnings, both on an absolute basis and
relative to its key competitors.
The Company continued to leverage the benefits of the Merger to grow its
core businesses and enhance its competitive positions. The combined strength
of the Company's origination and distribution capabilities has driven
significant market share gains in key aspects of the securities business since
the Merger. The Company maintained or improved its market share in several key
areas in 1999 over 1998, including a top one or two ranking in worldwide
equity underwritings, global IPO underwritings and global M&A. The Company
continued to expand its global franchise, particularly in Europe where it
achieved substantial growth and market share gains in its institutional
securities businesses. The Private Client Group improved its market share of
domestic retail revenues and financial advisors ("FAs") by a record amount and
maintained a number two rank in number of FAs. The worldwide securities
business continued to benefit from strong equity research with coverage of
over 2,000 companies and a number two ranking on a weighted average basis in
the Institutional Investor 1999 All-America poll.
In October, the Company combined its on-line and full service individual
securities businesses with the launch of ichoiceSM, an innovative service
platform that enables investors to choose the financial relationship that best
meets their needs. This platform leverages the Company's existing capabilities
in full-service individual advisory and online brokerage to better serve
individual investors. As part of the ichoice initiative, Discover Brokerage
Direct Inc. was renamed Morgan Stanley Dean Witter Online Inc. and its
services are available through an integrated website.
The Company made important strides in Fiscal 1999 in the global expansion
of its credit services and individual securities and asset management
businesses. The Company launched the Morgan Stanley Dean Witter Card in the
U.K., its first credit card issued outside the U.S. It also formed the
International Private Client Group ("IPCG") to pursue global opportunities in
retail securities and asset management. IPCG's strategic initiatives in Fiscal
1999 included: the acquisition of AB Asesores, the largest independent
financial services firm in Spain; an alliance with Sanwa Bank to provide
investment products and services to Japanese retail customers; and entering
into an agreement to acquire a minority stake in Area S.p.A., a leading
Italian independent financial advisory firm.
Senior Company executives played a significant leadership role in the
recent passage of the federal financial services reform legislation. During
Fiscal 1999, senior Company executives continued to have extensive dialogue
with regulators and the principal U.S. exchanges with the objective of
restructuring domestic markets to ensure continuing liquidity, fair pricing
and global competitiveness.
The Company's overall financial performance was excellent in a generally
favorable market environment characterized by periods of high volatility in
the fixed income and equity markets. Net operating income of $4.8 billion was
$1.7 billion more than Fiscal 1998, an increase of 57%, primarily due to
results in the securities business. The Company achieved a record operating
return on equity of 32.6%, an increase of 9.9% from Fiscal 1998, and well
above the target range of 18-20% over a business cycle. The Company continued
to generate substantial capital internally and repurchased approximately $2.4
billion of Common Stock while maintaining a strong financial position. The
Company carries a double-A credit rating from five rating agencies, and
Standard & Poor's placed its senior debt rating (A+) on Positive Outlook in
1999.
We certified in accordance with Section 162(m) that the Company's financial
results for Fiscal 1999 satisfied the performance criteria set in accordance
with Section 162(m) for Fiscal 1999. After an analysis of the considerations
set forth above, we awarded Total Rewards to the Senior Executives for Fiscal
1999 that were equal to or below the Total Rewards yielded by the application
of the compensation formula contained in the
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performance criteria. We awarded incentive compensation to the Senior
Officers, including the Senior Executives, partly in cash and partly in the
form of long-term equity components (restricted stock units and options). We
awarded an average of approximately 46.3% of each Senior Executive's Total
Reward in long-term equity. The value we ascribed to restricted stock units
was based on a 25% discount from the fair market value of the Common Stock in
order to compensate for the vesting characteristics and the restrictions on
disposition of the Common Stock corresponding to these units. Accordingly, the
value we ascribed to these units differs from the amounts reported in the
Summary Compensation Table under the column headed "Restricted Stock Awards"
because the amounts contained in the Table are based on the price of Common
Stock on the date of grant. We awarded stock options at a ratio of three (3)
options per share of the Company's Common Stock (2.25:1 with a 25% discount to
reflect the vesting and transfer restrictions on the Common Stock). The ratio
is based upon the Company's historical practices and is competitive with the
compensation practices of the Company's major competitors.
CEO and President Compensation for Fiscal 1999. The CEO and the President
each received the same salary in Fiscal 1999 as in Fiscal 1998. The base
salary reflects their positions' duties and responsibilities and is based on
the criteria described in this report. Based upon competitive data, we did not
increase the salary of either the CEO or the President for Fiscal 1999. Year-
end incentive compensation makes up a large percentage of their Total Reward.
We kept all elements of the CEO's and the President's compensation equal.
We determined the incentive compensation for Mr. Purcell and Mr. Mack in
accordance with the policies described above relating to all Senior Executives
based on substantially the same factors and Section 162(m) performance
criteria as for the other Senior Executives. We approved equal annual
incentive compensation for Mr. Purcell and Mr. Mack in an amount equal to or
below the amounts of Total Reward yielded by the application of the
compensation formula containing the performance criteria. Based on their
individual and Company performance, we decided to award Mr. Purcell and Mr.
Mack equal incentive compensation consisting of $12,112,500, 123,188
restricted stock units and options to acquire 277,172 shares of Common Stock
(after adjustment to reflect the Company's stock split effective January 26,
2000), an increase of 52.5% from Fiscal 1998. The equity-based awards contain
the terms and conditions discussed above in footnote 2 of the Summary
Compensation Table found on page 10 and in footnote 1 of the Option Grant
Table found on page 12. We note that 47.8% of such incentive compensation was
equity-based and therefore subject to the vesting characteristics discussed
previously. The value of such compensation, therefore, is at risk because it
is tied to the Company's future performance. Such compensation reflects the
leadership and management exhibited throughout the year as the Company
recorded record financial results, gained market share in several of its key
businesses and maintained its financial strength.
Conclusion. We believe that attracting and retaining management and
employees of high caliber is essential to maintaining a high-performing
organization that creates long-term value for its stockholders. We also
believe offering a competitive, performance-based compensation program with a
large equity component helps to achieve this objective by aligning the
interests of executives and other key employees with those of stockholders. We
believe that the Company's compensation program during Fiscal 1999 met these
objectives.
Respectfully submitted,
Daniel B. Burke, Chair
Edward A. Brennan
Charles F. Knight
Allen E. Murray
Clarence B. Rogers, Jr.
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Stock Performance Graph
The following performance graph compares the cumulative total stockholder
returns on the Company's Common Stock, the Standard & Poor's 500 Stock Index
(S&P 500) and the Standard & Poor's Financial Index (S&P Financial) for the
last five fiscal years of the Company. The graph assumes $100 invested on
November 30, 1994 in the Company's Common Stock (NYSE ticker symbol MWD) and
each of the indices, and reinvestment of dividends on the date of payment
without commissions, and is rounded to the nearest whole dollar.
Cumulative Total Returns
November 30, 1994 to November 30, 1999
MWD S&P 500 S&P Financial
--- ------ -------------
Nov. 94 100 100 100
Nov. 95 147.71 136.93 153.85
Nov. 96 201.1 175.06 216.21
Nov. 97 322.42 223.09 299.57
Nov. 98 418.03 278.2 411.74
Nov. 99 731.53 336.33 521.02
Section 16(a) Beneficial Ownership Reporting Compliance
The Company believes that, under the SEC's rules for reporting of securities
transactions by directors and executive officers, all required reports have
been timely filed.
Certain Transactions
The Company and its subsidiaries extend, and in the ordinary course of its
business during Fiscal 1999 the Company's subsidiaries extended, credit to
certain directors, officers and employees of the Company, as well as to members
of their immediate families, in connection with margin account loans, mortgage
loans, credit cards, revolving lines of credit and other extensions of credit
by the Company's subsidiaries. Such extensions of credit were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and they
did not involve more than the normal risk of collectability or present other
unfavorable features. To the extent that officers and employees of the
Company's securities and asset management businesses (and members of their
immediate families living in the same household) wish to purchase securities in
brokerage transactions, they are ordinarily required to do so through MS&Co.,
DWR or MSDW Online, each of which may offer them discounts on its standard
commission rate. MS&Co. and DWR also, from time to time and in the ordinary
course of its business, enter into transactions involving the purchase or sale
of securities from or to certain directors, officers and employees of the
Company and members of their immediate families, as principal. Such purchases
and sales of securities on a principal basis are effected at a discount from
the dealer mark-up or mark-down, as the case may be, charged to non-affiliated
third parties. Pursuant to stock repurchase authorizations in effect from time
to time, the Company also may repurchase or acquire shares of Common Stock in
the open market and in privately negotiated transactions, including
transactions with directors, executive officers and employees. Such
transactions are in the ordinary course of business and at prevailing market
prices.
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The Company, from time to time, may also make advances to certain of its
directors, officers and employees against commissions and other compensation
that would otherwise be payable to them in the ordinary course of business and
loans in connection with housing, relocation and other expenses. In some
cases, the Company does not charge interest on such advances and loans.
During Fiscal 1999, the Company and its subsidiaries engaged in
transactions in the ordinary course of business with Alliance Capital
Management Holding, LP, which is a beneficial owner of more than 5% of the
outstanding shares of Common Stock, and certain of its affiliates. Such
transactions were on substantially the same terms as those prevailing at the
time for comparable transactions with unrelated third parties.
ITEM 2--RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Based on the recommendation of the Audit Committee, the Board of Directors
has appointed Deloitte & Touche LLP as independent auditors to examine the
consolidated financial statements of the Company for the fiscal year ending
November 30, 2000 and to perform other appropriate accounting services.
A proposal will be presented at the Annual Meeting to ratify the
appointment of Deloitte & Touche LLP as the Company's independent auditors. A
representative of Deloitte & Touche LLP is expected to be present at the
meeting and will be available to respond to appropriate questions and make
statements if the representative so desires. If the stockholders do not ratify
this appointment, the Board of Directors will reconsider the appointment.
The Board of Directors recommends a vote FOR ratification of the
appointment of Deloitte & Touche LLP as the Company's independent auditors.
ITEM 3--APPROVAL OF AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION TO INCREASE AUTHORIZED COMMON STOCK
General
The Board of Directors has declared advisable an amendment to the Company's
Amended and Restated Certificate of Incorporation to increase the aggregate
number of authorized shares of Common Stock from 1,750,000,000 to
3,500,000,000 (the "Amendment") and has directed that the Amendment be
submitted to the stockholders at the Annual Meeting.
The Amended and Restated Certificate of Incorporation presently authorizes
the issuance of 1,750,000,000 shares of Common Stock and 30,000,000 shares of
Preferred Stock. The Amendment would increase the authorized number of shares
of Common Stock to 3,500,000,000. No change is proposed in the number of
authorized shares of Preferred Stock.
Proposed Amendment
If the Amendment is approved, the text of the first sentence of Article IV
of the Amended and Restated Certificate of Incorporation would read in its
entirety as follows:
The total number of shares of stock which the Corporation shall
have the authority to issue is three billion five hundred thirty
million (3,530,000,000), consisting of thirty million
(30,000,000) shares of Preferred Stock, par value $0.01 per
share (hereinafter referred to as "Preferred Stock"), and three
billion five hundred million (3,500,000,000) shares of Common
Stock, par value $0.01 per share (hereinafter referred to as
"Common Stock").
General Effect of Proposed Amendment and Reasons for Approval
Of the Company's 1,750,000,000 authorized shares of Common Stock, [ ]
were issued and outstanding as of February 8, 2000. At February 8, 2000, after
taking into account the most recent stock split,
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Common Stock underlying outstanding stock options and the reservation of
Common Stock for issuance under the Company's equity-based compensation plans,
approximately of the 1,750,000,000 shares authorized in the Amended and
Restated Certificate of Incorporation remain available for issuance. The Board
of Directors believes the Amendment is advisable in order to maintain the
Company's financing and capital-raising flexibility, to facilitate future
stock splits, to have shares available for use in employee benefit plans and
other corporate purposes, and to generally maintain the Company's flexibility
in today's competitive, fast-changing environment. There are no present
agreements, understandings or plans for the issuance of any of the additional
shares that would be authorized by the Amendment.
Adoption of the Amendment would enable the Board from time to time to issue
additional shares of Common Stock for such purposes and such consideration as
the Board may approve without further approval of the Company's stockholders,
except as may be required by law or the rules of any national securities
exchange on which the shares of Common Stock are at the time listed. As is
true for shares presently authorized, Common Stock authorized by the Amendment
may, among other things, have a dilutive effect on earnings per share and on
the equity and voting power of existing holders of Common Stock.
There are no preemptive rights with respect to Common Stock. The additional
authorized shares of Common Stock would have the identical powers, preferences
and rights as the shares now authorized. Under the Delaware law, stockholders
will not have any dissenters' or appraisal rights in connection with the
Amendment. If the Amendment is approved by the stockholders, it will become
effective upon executing, acknowledging and filing a Certificate of Amendment
required by the General Corporation Law of Delaware.
The Board of Directors recommends a vote FOR the approval of the Amendment
to the Company's Amended and Restated Certificate of Incorporation.
ITEM 4--STOCKHOLDER PROPOSALS
In accordance with SEC rules, the Company has set forth below two (2)
stockholder proposals and their supporting statements, for which the Board of
Directors and the Company accept no responsibility. Each of these proposals is
required to be voted upon at the Annual Meeting only if properly presented at
the Annual Meeting by the stockholder proponent or the proponent's qualified
representative. The proposals are set forth in turn, with the Board of
Directors' recommendation immediately following each.
First Proposal
Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Ave. NW, Suite
215, Washington, D.C. 20037, owner of 200 shares of Common Stock, has notified
the Company that she intends to present the following proposal and related
supporting statement at the Annual Meeting.
Proposal
"RESOLVED: "That the stockholders of Morgan Stanley Dean Witter recommend
that the Board of Directors take the necessary steps to instate the
election of directors ANNUALLY, instead of the stagger system which was
adopted."
REASONS:
"The great majority of New York Stock Exchange listed corporations
elect all their directors each year."
"This insures that ALL directors will be more accountable to ALL
shareholders each year and to a certain extent prevents the self-
perpetuation of the Board."
"Last year the owners of 362,692,554 shares, representing approximately
41.4% of shares voting, voted FOR this proposal."
"If you AGREE, please mark your proxy FOR this resolution." "
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Directors' Recommendation
THE BOARD OF DIRECTORS RECOMMENDS VOTING AGAINST THIS PROPOSAL.
This proposal, which was submitted by this proponent at last year's annual
meeting, was opposed by the Board and was defeated by stockholders by the vote
of approximately 60% of the votes cast at last year's meeting.
The Board of Directors opposes this proposal because it believes the
Company's policy of electing directors for staggered, three-year terms ensures
that a majority of directors will always be familiar with the Company's
global, complex business. The proposal suggests that annual elections of all
directors "to a certain extent" prevent the self-perpetuation of the Board and
make directors more accountable. The Company's directors are already fully
accountable to stockholders and annual elections of all directors are not
necessary to prevent self-perpetuation of the Board.
Staggered elections enable the directors to gain, over time, greater
familiarity with the Company's business. This knowledge assists directors in
fulfilling their duties to stockholders. Staggered terms also give new
directors an opportunity to gain knowledge about the Company's business from
continuing directors. If all directors were elected annually, a majority of
directors could be replaced each year, resulting in directors unfamiliar with
the Company. This could jeopardize long-term strategies and growth plans.
It is the Board's responsibility to promote sustained, long-term returns to
the Company's stockholders. The Board believes electing directors to three-
year terms can also benefit stockholders if the Company faces a hostile,
coercive takeover attempt. First, it can provide the Board with the time
needed to evaluate any takeover proposal. Second, it encourages potential
acquirers to negotiate with the Board and allows the Board time to review
alternatives with a goal of maximizing stockholder value. Finally, it reduces
an outsider's ability to effect a sudden change in the Company's directors
without Board support. Electing directors for three-year terms does not,
however, preclude a takeover offer.
Electing directors to three-year terms does not reduce their accountability
to stockholders. All directors have the same duties to stockholders regardless
of their term. The directors' compensation program fosters accountability by
aligning the directors' own interests with the interests of the stockholders.
A substantial portion of all directors' compensation is equity-based, in the
form of stock and options to acquire the Company's Common Stock. This long-
term, equity-based compensation provides a continuing incentive to the
directors to promote the Company's long-term success.
Stockholder approval of this proposal would not result in annual elections
of directors because it is only a recommendation. Annual elections of
directors could only occur if the Board and then the stockholders, in a
separate stockholder vote, approved an amendment to the Company's Amended and
Restated Certificate of Incorporation.
The Board of Directors recommends a vote AGAINST this proposal. The proxy
holders will vote all proxies received AGAINST this proposal unless otherwise
instructed.
Second Proposal
Trillium Asset Management Corporation, on behalf of Ms. Sarah Mustin and
Mr. Craig Stockwell, each of whom is a stockholder of the Company, has given
notice of its intention to present the following proposal and related
supporting statement at the Annual Meeting. Ms. Mustin and Mr. Stockwell own
300 and 350 shares of Common Stock, respectively. Their address is c/o
Trillium Asset Management Corporation, 711 Atlantic Avenue, Boston,
Massachusetts 02111-2809.
Proposal
"WHEREAS: In January 1997 and again in May 1999, Morgan Stanley Dean Witter
underwrote bonds for the China Development Bank, whose second largest
unfunded loan commitment, according to the bond prospectuses, was to the
Three Gorges Development Corporation;
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Morgan Stanley Dean Witter owns a 35% stake in its joint venture, the China
International Capital Corporation (CICC), and has transferred to CICC
technology and expertise, including MSDW chief executives and key
department heads;
CICC is reportedly drawing up plans for a possible bond and/or stock issues
for the Three Gorges Project Corporation and/or other entities related to
the Three Gorges Dam;
Despite being imprisoned for ten months for speaking out against the
project, the Chinese journalist and author Dai Qing has compiled and
published numerous essays and field reports from Chinese scientists and
intellectuals that outline the irreversible economic and environmental
impacts, technical problems, loss of cultural antiquities, and potential
catastrophic failure of the Three Gorges Dam;
In February 1995, Human Rights Watch reported how the Chinese government
has planned to suppress dissent and forcibly relocate nearly two million
people to make way for the Three Gorges Dam;
In a memo dated September 1995, the US National Security Council advised
the US Export-Import Bank not to finance contracts connected to the Three
Gorges Dam because of environmental problems and human rights abuses
connected to the project, and because it was "concerned about the project's
financial strength."
In March 1998, Chinese sociologist Wu Ming revealed significant corruption
and falsification of resettlement figures as well as a lack of sufficient
farmland, money or employment for the nearly two million people that must
be moved to make way for the Three Gorges Dam, thus indicating that the
Chinese government may well require military force to relocate the people;
Amid tremendous economic and political upheaval in Asia, Standard & Poor's
Rating Services, in July 1988 [sic], warned of a possible downgrade in
China's credit worthiness if economic conditions worsen and social tensions
increase;
Even through indirect involvement in the Three Gorges Dam, Morgan Stanley
Dean Witter risks exposing itself to negative publicity and possible
boycotts of its consumer business, such as its brokerage services and the
Discover Card;
BankAmerica [sic] has pledged not to commit any direct lending to the Three
Gorges Project and not to finance an entity whose primary business is
construction of the Three Gorges project [sic];
Over 100 financial institutions have endorsed the United Nations
Environmental Program (UNEP) Statement by Banks on the Environment, which
states that "we recognize that identifying and quantifying environmental
risks should be part of the normal process of risk assessment and
management, both in domestic and international operations."
BE IT RESOLVED: the shareholders request the Board to issue a report to
shareholders by October 2000, reviewing the underwriting criteria of Morgan
Stanley Dean Witter with the view to incorporating and fully disclosing
criteria related to a transaction's impact on the environment, human rights
and risk to the company's reputation."
Directors' Recommendation
THE BOARD OF DIRECTORS RECOMMENDS VOTING AGAINST THIS PROPOSAL.
This proposal was submitted by this proponent at last year's annual
meeting, was opposed by the Board and was defeated by stockholders by the vote
of approximately 95% of the votes cast at last year's meeting.
As discussed in last year's Proxy Statement, the Board of Directors opposes
this proposal because it could damage the Company's competitive position and
interfere with its business without addressing the proponents' concerns.
The proposal would require the Board to issue a report detailing the
criteria the Company uses to evaluate its investment banking transactions.
Whenever the Company reviews a transaction, the most important consideration
is whether the transaction will create value for the Company and its
stockholders. In determining
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this, the Company considers many complex factors, including the management,
financial condition, industry, and prospects of the particular issuer. It also
considers legal and regulatory issues, prevailing market conditions, customer
demands and many other factors. All the factors the Company considers reflect
the flexibility the Company needs to conduct its business. Limitations on this
flexibility could damage the Company's ability to conduct its business. In
addition, a report discussing the factors could damage the Company's
competitive position and profitability, since its competitors do not disclose
this information.
The proposal's requirement to issue a report would not address the
proponents' concerns. Based on their supporting statement, the proponents'
primary concern is alleged abuses related to the Three Gorges Dam Project in
China. However, the Company has not been directly involved in financing the
Three Gorges Dam Project. In addition, the proposal would not require the
Company to take any action regarding that project.
The Company also believes the proposal's supporting statement is misleading
because it suggests the Company controls China International Capital
Corporation ("CICC"). The Company does not control CICC. CICC is an
independent investment banking firm, based in the People's Republic of China.
Although the Company owns a minority interest (35%) in CICC, the Company does
not control CICC, does not control CICC's decisions on what business to pursue
or accept and has no veto power over such decisions.
The Board of Directors recommends a vote AGAINST this proposal. The proxy
holders will vote all proxies received AGAINST this proposal unless otherwise
instructed.
SUBMITTING PROXIES AND VOTING INSTRUCTIONS BY PHONE OR INTERNET
If you are a registered stockholder (you hold your stock in your own name),
you may submit a proxy by touch-tone telephone or through the Internet. If you
are a beneficial stockholder (you hold your stock through a nominee, such as a
broker), your nominee can advise you whether you will be able to submit voting
instructions by telephone or through the Internet. Some nominees participate
in the telephone or Internet voting programs provided by ADP Investor
Communication Services. Procedures to submit proxies or voting instructions by
telephone or through the Internet are designed to authenticate stockholder
identities, to allow stockholders to submit their proxies or voting
instructions and to confirm that such proxies or voting instructions have been
properly recorded. If you submit a proxy or voting instructions through the
Internet, you may be required to bear associated costs, such as usage charges
from Internet access providers and telephone companies.
If you are a registered stockholder, you may submit your proxy by touch-
tone telephone by calling 1-800-690-6903 in the United States and following
the directions provided. You may also submit your proxy by following the
directions provided at the following addresses on the World Wide Web:
www.msdwt.com or www.proxyvote.com. Proxies must be received by the deadline
set forth on the proxy card you receive. The Company has been advised by
counsel that these procedures for the submission of proxies by telephone and
through the Internet are consistent with the requirements of applicable law.
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 2001 annual
meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as
amended, must be received by the Secretary of the Company, 1585 Broadway, New
York, New York 10036, not later than October 25, 2000 to be considered for
inclusion in the Company's proxy materials for that meeting.
A stockholder that intends to present business at the 2001 annual meeting
other than pursuant to Rule 14a-8 must comply with the requirements set forth
in the Company's Bylaws. To bring business before an annual meeting, the
Company's Bylaws require, among other things, that the stockholder submit
written notice thereof complying with the Bylaws to the Secretary of the
Company not less than 90 days nor more than 120 days prior
24
<PAGE>
to the anniversary of the preceding year's annual meeting. Therefore, the
Company must receive notice of a stockholder proposal submitted other than
pursuant to Rule 14a-8 no sooner than December 7, 2000 and no later than
January 6, 2001. If the notice is received before December 7, 2000 or after
January 6, 2001, it will be considered untimely and the Company will not be
required to present such proposal at the 2001 annual meeting.
OTHER MATTERS
On the date of this Proxy Statement, management did not know of any other
matters to be brought before the Annual Meeting other than those described in
this Proxy Statement. If any matters properly come before the Annual Meeting
that are not specifically set forth on the proxy card and in this Proxy
Statement, the persons appointed as proxies will vote thereon in accordance
with their best judgment.
ADDITIONAL INFORMATION
The Company will furnish without charge to each person whose proxy is being
solicited, upon the written request of any such person, a copy of the
Company's Annual Report on Form 10-K for the fiscal year ended November 30,
1999, including the financial statements and schedules thereto. Requests for
copies should be directed to the Company's Office of Investor Relations, 1221
Avenue of the Americas, 33rd Floor, New York, New York 10020 (Telephone 800-
733-2307).
25
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 2000 ANNUAL MEETING OF STOCKHOLDERS, APRIL 6, 2000
The undersigned hereby appoints Donald G. Kempf, Jr., Robert G. Scott and
Ronald T. Carman, and each of them, attorneys and proxies, with full power of
substitution, to represent and to vote on behalf of the undersigned all of the
shares of common stock of the Company which the undersigned is entitled in any
capacity to vote if personally present at the 2000 Annual Meeting of
Stockholders to be held on April 6, 2000 at 9:00 A.M., local time, at the
offices of Morgan Stanley Dean Witter Trust FSB, Harborside Financial Center,
Plaza Two, Jersey City, New Jersey, and at any adjournments or postponements
thereof, in accordance with the instructions set forth in this Proxy and with
the same effect as though the undersigned were present in person and voting such
shares. The proxies are authorized in their discretion to vote for the election
of a person to the Board of Directors if any nominee named herein becomes unable
to serve or for good cause will not serve, upon all matters incident to the
conduct of the Annual Meeting, and upon such other business as may properly come
before the Annual Meeting.
PLEASE FOLLOW THE INSTRUCTIONS ON THE BACK OF THIS CARD TO
GRANT YOUR PROXY BY PHONE OR BY INTERNET, OR RETURN THIS PROXY
CARD IN THE ACCOMPANYING ENVELOPE AFTER SIGNING AND DATING IT
ON THE OTHER SIDE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
- --------------------------------------------------------------------------------
YOU MAY GRANT A PROXY BY TOUCH-TONE PHONE OR BY INTERNET
- -----------------------------------------------------------
(See enclosed insert for further instructions)
TO GRANT A PROXY BY PHONE, call Toll-Free in the U.S.: 1-800-690-6903
- ------------------------------------------------------------------------
TO GRANT A PROXY BY INTERNET, visit the Website(s): WWW.MSDWT.COM or
- -----------------------------------------------------------------------
WWW.PROXYVOTE.COM
- -----------------
OR
PLEASE MARK VOTES AS
IN THE EXAMPLE USING
BLACK OR BLUE INK [ X ]
THIS PROXY WILL BE VOTED AS DIRECTED. IF THIS PROXY IS SIGNED, BUT NO DIRECTION
IS MADE, IT WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE MORGAN
STANLEY DEAN WITTER & CO. BOARD OF DIRECTORS AS SET FORTH BELOW:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1, 2 AND 3.
-----
FOR ALL
FOR WITHHOLD EXCEPT
1. To elect as directors all nominees listed [ ] [ ] [ ]
(except as marked to the contrary
below):
01 Philip J. Purcell 02 John J. Mack 03 C. Robert Kidder 04 Michael A. Miles
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"For All Except" box and strike a line through the nominee's name.
FOR AGAINST ABSTAIN
2. To ratify the appointment of Deloitte & [ ] [ ] [ ]
Touche LLP as the Company's independent
auditors for the fiscal year ending
November 30, 2000.
FOR AGAINST ABSTAIN
3. To approve an amendment to the Company's [ ] [ ] [ ]
Amended and Restated Certificate of
Incorporation to increase the number of
authorized shares of common stock from
1,750,000,000 shares to 3,500,000,000 shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" STOCKHOLDER PROPOSALS 4 AND
-------
5.
FOR AGAINST ABSTAIN
4. Stockholder proposal to declassify the [ ] [ ] [ ]
Board of Directors.
FOR AGAINST ABSTAIN
5. Stockholder proposal to issue a report [ ] [ ] [ ]
by October 2000 reviewing the Company's
underwriting criteria with the view to
incorporating and fully disclosing
criteria related to a transaction's
impact on the environment, human rights
and the Company's reputation.
Please sign exactly as imprinted (do not print). If shares are held jointly,
EACH holder should sign. Executors, administrators, trustees, guardians and
others signing in a representative capacity should indicate the capacity in
which they sign. An authorized officer may sign on behalf of a corporation and
should indicate the name of the corporation and his or her capacity.
Please make sure to sign and date
this card. Dated _____________, 2000
- --------------------------------- ------------------------------------
Signature Co-Owner (if any) Signature
- --------------------------------------------------------------------------------
PLEASE DETACH AT PERFORATION ALONG DOTTED LINES
MORGAN STANLEY DEAN WITTER & CO.
- --------------------------------------------------------------------------------
IMPORTANT
USE ONE OF THREE EASY WAYS TO ENSURE RECEIPT OF YOUR PROXY NO
LATER THAN 5:00 P.M. ON APRIL 5, 2000
1. BY INTERNET. GO TO THE "VOTE YOUR PROXY HERE" LINK ON THE WEBSITE
WWW.MSDWT.COM OR GO DIRECTLY TO WWW.PROXYVOTE.COM. ENTER YOUR 12-DIGIT
------------- -----------------
CONTROL NUMBER LOCATED ON YOUR PROXY CARD AND FOLLOW THE SIMPLE
INSTRUCTIONS.
2. BY TELEPHONE. IN THE U.S. CALL 1-800-690-6903 ON A TOUCH-TONE PHONE. ENTER
YOUR 12-DIGIT CONTROL NUMBER LOCATED ON YOUR PROXY CARD AND FOLLOW THE
SIMPLE RECORDED INSTRUCTIONS.
3. BY MAIL. PLEASE DATE, SIGN AND RETURN YOUR PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
- --------------------------------------------------------------------------------
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
2000 VOTING INSTRUCTION FORM ("VIF")
Morgan Stanley Dean Witter Trust FSB, as custodian (the "Custodian") for
certain shares beneficially owned by the undersigned, is hereby directed to
vote, as indicated on the reverse side of this VIF, in person or by proxy, all
of the undersigned's shares of common stock of Morgan Stanley Dean Witter & Co.
(the "Company") in the undersigned's account with the Custodian, not subject to
any voting agreement, at the 2000 Annual Meeting of Stockholders of the Company
(the "Annual Meeting") to be held on April 6, 2000 at 9:00 A.M., local time, and
at any and all adjournments or postponements thereof, upon the proposals listed
on the reverse side of this VIF and more fully described in the Company's Notice
of Annual Meeting of Stockholders dated February [ ], 2000 and the accompanying
Proxy Statement and, in its (or the proxies') discretion, for the election of a
person to the Board of Directors if any nominee named herein becomes unable to
serve or for good cause will not serve, upon all matters incident to the conduct
of the Annual Meeting, and upon such other business as may properly come before
the Annual Meeting. The undersigned understands that this VIF or the telephone
or Internet voting instructions, properly completed, must be received not later
than 5:00 P.M. on April 5, 2000 or the Custodian will not vote the stock.
PLEASE FOLLOW THE INSTRUCTIONS ON THE BACK OF THIS CARD TO DIRECT
YOUR VOTE BY PHONE OR BY INTERNET, OR RETURN THIS VIF AFTER
SIGNING AND DATING IT ON THE OTHER SIDE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
- --------------------------------------------------------------------------------
YOU MAY DIRECT YOUR VOTE BY TOUCH-TONE PHONE OR BY INTERNET
- -----------------------------------------------------------
(See enclosed insert for further instructions)
TO DIRECT YOUR VOTE BY PHONE, call Toll-Free in the U.S.: 1-800-690-6903
- ------------------------------------------------------------------------
TO DIRECT YOUR VOTE BY INTERNET, visit the Website(s): WWW.MSDWT.COM or
- -----------------------------------------------------------------------
WWW.PROXYVOTE.COM
- -----------------
OR
PLEASE MARK VOTES AS
IN THE EXAMPLE USING
BLACK OR BLUE INK [ X ]
THE MORGAN STANLEY DEAN WITTER & CO. BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" PROPOSALS 1, 2 AND 3.
---
FOR ALL
FOR WITHHOLD EXCEPT
1. To elect as directors all nominees listed [ ] [ ] [ ]
(except as marked to the contrary
below):
01 Philip J. Purcell 02 John J. Mack 03 C. Robert Kidder 04 Michael A. Miles
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"For All Except" box and strike a line through the nominee's name.
FOR AGAINST ABSTAIN
2. To ratify the appointment of Deloitte & [ ] [ ] [ ]
Touche LLP as the Company's independent
auditors for the fiscal year ending
November 30, 2000.
FOR AGAINST ABSTAIN
3. To approve an amendment to the Company's [ ] [ ] [ ]
Amended and Restated Certificate of
Incorporation to increase the number of
authorized shares of common stock from
1,750,000,000 shares to 3,500,000,000 shares.
THE MORGAN STANLEY DEAN WITTER & CO. BOARD OF DIRECTORS RECOMMENDS A VOTE
"AGAINST" STOCKHOLDER PROPOSALS 4 AND 5.
-------
FOR AGAINST ABSTAIN
4. Stockholder proposal to declassify the [ ] [ ] [ ]
Board of Directors.
FOR AGAINST ABSTAIN
5. Stockholder proposal to issue a report [ ] [ ] [ ]
by October 2000 reviewing the Company's
underwriting criteria with the view to
incorporating and fully disclosing
criteria related to a transaction's
impact on the environment, human rights
and the Company's reputation.
Please sign exactly as imprinted (do not print). If shares are held jointly,
EACH holder should sign. Executors, administrators, trustees, guardians and
others signing in a representative capacity should indicate the capacity in
which they sign. An authorized officer may sign on behalf of a corporation and
should indicate the name of the corporation and his or her capacity.
Please make sure to sign and date
this card. Dated _____________, 2000
- --------------------------------- ------------------------------------
Signature Co-Owner (if any) Signature
- --------------------------------------------------------------------------------
PLEASE DETACH AT PERFORATION ALONG DOTTED LINES
MORGAN STANLEY DEAN WITTER & CO.
- --------------------------------------------------------------------------------
IMPORTANT
USE ONE OF THREE EASY WAYS TO SUBMIT YOUR VOTING INSTRUCTIONS TO
ENSURE RECEIPT NO LATER THAN 5:00 P.M. ON APRIL 5, 2000
1. BY INTERNET. GO TO THE "VOTE YOUR PROXY HERE" LINK ON THE WEBSITE
WWW.MSDWT.COM OR GO DIRECTLY TO WWW.PROXYVOTE.COM. ENTER YOUR 12-DIGIT
------------- -----------------
CONTROL NUMBER LOCATED ON YOUR VIF AND FOLLOW THE SIMPLE INSTRUCTIONS.
2. BY TELEPHONE. IN THE U.S. CALL 1-800-690-6903 ON A TOUCH-TONE PHONE. ENTER
YOUR 12-DIGIT CONTROL NUMBER LOCATED ON YOUR VIF AND FOLLOW THE SIMPLE
RECORDED INSTRUCTIONS.
3. BY MAIL. PLEASE DATE, SIGN AND RETURN YOUR VIF IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
- --------------------------------------------------------------------------------
<PAGE>
PROXY/VOTING DIRECTIVE
MORGAN STANLEY DEAN WITTER & CO.
THIS PROXY/VOTING DIRECTIVE IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
AND RELATES TO THE 2000 ANNUAL MEETING OF STOCKHOLDERS, APRIL 6, 2000
For purposes of a preliminary vote and in accordance with and pursuant to
(i) Article IV, Section 4.1 of the Stockholders' Agreement dated as of February
14, 1986, as amended, among Morgan Stanley Dean Witter & Co. (as successor to
Morgan Stanley Group Inc.), a Delaware corporation (the "Company"), and the
persons listed on Appendix A thereto and/or (ii) certain agreements entered into
between the Company and certain former general partners of Miller Anderson &
Sherrerd, LLP and/or (iii) certain agreements entered into between the Company
and certain officers of Van Kampen Investments Inc. and/or (iv) Appendix A to
the Company's 1986 Stock Option Plan, as amended, and/or (v) Appendix A to the
Company's Performance Unit Plan, as amended, and/or (vi) Appendix A to the award
agreements or certificates entered into pursuant to the Company's 1988 Equity
Incentive Compensation Plan, as amended (the "1988 EICP") and/or (vii) Appendix
A to the award agreements or certificates entered into pursuant to the Company's
1995 Equity Incentive Compensation Plan, as amended (the "1995 EICP") and/or
(viii) Exhibit B to the Trust Agreement (the "Trust Agreement") dated as of
March 5, 1991, as amended, between the Company and State Street Bank and Trust
Company, as trustee (collectively, the "Voting Agreements"), the undersigned,
being subject to voting restrictions in one or more of such Voting Agreements,
does hereby (A) vote the shares of common stock of the Company held by the
undersigned which have been issued pursuant to, or are subject to, one or more
of the Voting Agreements (other than the number of such shares that corresponds
to the number of stock units awarded to the undersigned under the 1988 EICP and
the 1995 EICP (the "Trust Shares") and are held by the trustee referred to above
(the "Trustee")) in accordance with any instructions on the reverse side, and
(B) instruct the Trustee to vote the Trust Shares in the preliminary vote in
accordance with any instructions on the reverse side.
With respect to shares of common stock (other than Trust Shares) of the
Company held by the undersigned which have been issued pursuant to, or are
subject to, one or more of the Voting Agreements (other than the Trust
Agreement), the undersigned hereby appoints Donald G. Kempf, Jr., Robert G.
Scott and Ronald T. Carman, and each of them, attorneys and proxies of the
undersigned, with full power of substitution, to vote the number of such shares
of common stock of the Company which shares the undersigned has the power to
vote at the 2000 Annual Meeting of Stockholders of the Company (the "Annual
Meeting") to be held on Thursday, April 6, 2000 at 9:00 A.M., local time, at the
offices of Morgan Stanley Dean Witter Trust FSB, Harborside Financial Center,
Plaza Two, Jersey City, New Jersey, and at any adjournments or postponements
thereof, in accordance with the results of the preliminary vote referred to
above, irrespective of the instructions on the reverse side, and with the same
effect as though the undersigned were present in person and voting such
shares. The proxies are authorized in their discretion to vote for the election
of a person to the Board of Directors if any nominee named herein becomes unable
to serve or for good cause will not serve, upon all matters incident to the
conduct of the Annual Meeting, and upon such other business as may properly come
before the Annual Meeting.
I hereby agree that all power and authority hereby conferred is coupled
with an interest and is irrevocable and, to the extent not prohibited by law,
shall not be terminated by any act of the undersigned or by operation of law or
by the occurrence of any event whatsoever, including, without limitation, the
death, incapacity, dissolution, liquidation, termination, bankruptcy,
dissolution of marital relationship or insolvency of the undersigned or any
similar event. If, after the execution of this document, any such event shall
occur before the completion of the actions contemplated hereby, the
above-designated attorneys and Trustee are nevertheless authorized and directed
to complete all of such actions to the extent required by the Voting Agreements.
In the event that the undersigned has executed this document, but has not
indicated his or her vote on any of the proposals on the reverse, the number of
his or her shares (other than Trust Shares) subject to the Voting Agreements or
held on his or her behalf will be voted in accordance with the Board of
Directors' recommendations as to each proposal, as indicated on the reverse side
of this card, for purposes of the preliminary vote among employee stockholders
of the Company who are subject to one or more Voting Agreements.
<PAGE>
- --------------------------------------------------------------------------------
YOU MAY DIRECT YOUR VOTE/GRANT BY TOUCH-TONE PHONE OR BY INTERNET
- -----------------------------------------------------------------
(See enclosed insert for further instructions)
TO DIRECT YOUR VOTE/GRANT BY PHONE, call Toll-Free in the U.S.: 1-800-690-6903
- ------------------------------------------------------------------------------
TO DIRECT YOUR VOTE/GRANT BY INTERNET, visit the Website(s): WWW.MSDWT.COM or
- -----------------------------------------------------------------------------
WWW.PROXYVOTE.COM
- -----------------
OR
PLEASE MARK VOTES AS
IN THE EXAMPLE USING
BLACK OR BLUE INK [ X ]
THIS PROXY/VOTING DIRECTIVE CARD WILL BE VOTED AS DIRECTED IN THE PRELIMINARY
VOTE. IF THIS PROXY/VOTING DIRECTIVE CARD IS SIGNED AND RETURNED, BUT NO
DIRECTION IS MADE, SHARES OF COMMON STOCK (OTHER THAN THE TRUST SHARES) WILL BE
VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE MORGAN STANLEY DEAN WITTER &
CO. BOARD OF DIRECTORS AS SET FORTH BELOW:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" PROPOSALS 1, 2 AND 3.
--- FOR ALL
FOR WITHHOLD EXCEPT
1. To elect as directors all nominees listed [ ] [ ] [ ]
(except as marked to the contrary
below):
01 Philip J. Purcell 02 John J. Mack 03 C. Robert Kidder 04 Michael A. Miles
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"For All Except" box and strike a line through the nominee's name.
FOR AGAINST ABSTAIN
2. To ratify the appointment of Deloitte & [ ] [ ] [ ]
Touche LLP as the Company's independent
auditors for the fiscal year ending
November 30, 2000.
FOR AGAINST ABSTAIN
3. To approve an amendment to the Company's [ ] [ ] [ ]
Amended and Restated Certificate of
Incorporation to increase the number of
authorized shares of common stock from
1,750,000,000 shares to 3,500,000,000 shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"AGAINST" STOCKHOLDER PROPOSALS 4 AND 5.
-------
FOR AGAINST ABSTAIN
4. Stockholder proposal to declassify the [ ] [ ] [ ]
Board of Directors.
FOR AGAINST ABSTAIN
5. Stockholder proposal to issue a report [ ] [ ] [ ]
by October 2000 reviewing the Company's
underwriting criteria with the view to
incorporating and fully disclosing
criteria related to a transaction's
impact on the environment, human rights
and the Company's reputation.
Please sign exactly as imprinted (do not print). If shares are held jointly,
EACH holder should sign. Executors, administrators, trustees, guardians and
others signing in a representative capacity should indicate the capacity in
which they sign. An authorized officer may sign on behalf of a corporation and
should indicate the name of the corporation and his or her capacity.
Please make sure to sign and date
this card. Dated _____________, 2000
- --------------------------------- ------------------------------------
Signature Co-Owner (if any) Signature
- --------------------------------------------------------------------------------
PLEASE DETACH AT PERFORATION ALONG DOTTED LINES
MORGAN STANLEY DEAN WITTER & CO.
- --------------------------------------------------------------------------------
IMPORTANT
USE ONE OF THREE EASY WAYS TO SUBMIT YOUR VOTING INSTRUCTIONS
TO ENSURE RECEIPT NO LATER THAN 5:00 P.M. ON MARCH 17, 2000
1. BY INTERNET. GO TO THE "VOTE YOUR PROXY HERE" LINK ON THE WEBSITE
WWW.MSDWT.COM OR GO DIRECTLY TO WWW.PROXYVOTE.COM. ENTER YOUR 12-DIGIT
------------- -----------------
CONTROL NUMBER LOCATED ON YOUR PROXY/VOTING DIRECTIVE CARD AND FOLLOW THE
SIMPLE INSTRUCTIONS.
2. BY TELEPHONE. IN THE U.S. CALL 1-800-690-6903 ON A TOUCH-TONE PHONE. ENTER
YOUR 12-DIGIT CONTROL NUMBER LOCATED ON YOUR PROXY/VOTING DIRECTIVE CARD
AND FOLLOW THE SIMPLE RECORDED INSTRUCTIONS.
3. BY MAIL. PLEASE DATE, SIGN AND RETURN YOUR PROXY/VOTING DIRECTIVE CARD IN
YOUR ENCLOSED POSTAGE-PAID ENVELOPE.
- --------------------------------------------------------------------------------
<PAGE>
MORGAN STANLEY DEAN WITTER & CO.
2000 VOTING INSTRUCTION FORM ("VIF") FOR MORGAN STANLEY DEAN WITTER &
CO. BENEFIT PLAN PARTICIPANTS
The undersigned hereby directs the following to vote, as indicated on the
reverse side of this VIF, in person or by proxy, all of the shares of common
stock of Morgan Stanley Dean Witter & Co. (the "Company"), in the undersigned's
plan account(s) with any of the following at the 2000 Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held on April 6, 2000
at 9:00 A.M., local time, and at any and all adjournments or postponements
thereof, upon the proposals listed on the reverse side of this VIF and more
fully described in the Company's Notice of Annual Meeting of Stockholders dated
February [ ], 2000 and the accompanying Proxy Statement and, in its (or the
proxies') discretion, for the election of a person to the Board of Directors if
any nominee named herein becomes unable to serve or for good cause will not
serve, upon all matters incident to the conduct of the Annual Meeting, and upon
such other business as may properly come before the Annual Meeting.
o Morgan Stanley Dean Witter Trust FSB, as custodian (the "Custodian") under
the (i) Dean Witter Reynolds Inc. Financial Advisor Productivity
Compensation Plan, (ii) Dean Witter Reynolds Inc. Branch Manager
Compensation Plan, and/or (iii) Morgan Stanley Dean Witter & Co. Employee
Stock Purchase Plan. The undersigned understands that the Custodian will
not vote or grant proxies with respect to the shares in my account if I do
not sign, date and return this VIF. The undersigned also understands that,
if I sign, date and return this VIF, the Custodian or its proxy intends to
vote in accordance with the Board of Directors' recommendation as to each
proposal for which I do not give voting instructions and in its discretion
on all other matters that may properly come before the Annual Meeting.
o Mellon Bank, N.A., as trustee (the "START Trustee") under the Dean Witter
START Plan (Saving Today Affords Retirement Tomorrow). The undersigned
understands that (A) unless otherwise required by law, the START Trustee
intends to vote or grant proxies with respect to all undirected shares held
under the plan in the same proportion as the shares of all plan
participants of the Dean Witter START Plan who have timely delivered
properly executed voting instructions, (B) the START Trustee or its proxy
will vote in its discretion on all other matters that may properly come
before the Annual Meeting and (C) the START Trustee will hold my voting
instructions in the strictest confidence.
o The Northern Trust Company, as trustee (the "ESOP Trustee") under the
Morgan Stanley Dean Witter & Co. and Subsidiaries Employee Stock Ownership
Plan (the "ESOP Plan"). The undersigned understands that, subject to the
terms of its trust agreement, the ESOP Trustee will not vote or grant
proxies with respect to any shares for which no instruction is received.
The undersigned further understands that the ESOP Trustee intends to vote
or grant proxies with respect to all unallocated shares held under the ESOP
Plan in the same proportion as the shares of all ESOP Plan participants who
have timely delivered properly executed voting instructions (with neither
an abstention nor noninstruction being deemed a voting instruction to the
ESOP Trustee for this purpose), unless otherwise required by law.
o State Street Bank and Trust Company, as trustee (the "Award Trustee") under
the Trust Agreement dated as of April 1, 1994, as amended, in connection
with the Company's 1988 Equity Incentive Compensation Plan, as amended, the
Company's 1995 Equity Incentive Compensation Plan, as amended, and the
Company's Employees' Equity Accumulation Plan, as amended. The undersigned
understands that, subject to the terms of its trust agreement, the Award
Trustee will not vote or grant proxies with respect to any shares for which
no instruction is received.
The undersigned further understands that this VIF or the telephone or Internet
voting instructions, properly completed, must be received no later that 5:00
P.M. on April 3, 2000 for my shares to be voted in accordance with my
instructions.
PLEASE FOLLOW THE INSTRUCTIONS ON THE BACK OF THIS CARD TO DIRECT YOUR VOTE BY
PHONE OR BY INTERNET, OR RETURN THIS VIF AFTER SIGNING AND DATING IT ON THE
OTHER SIDE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
- --------------------------------------------------------------------------------
YOU MAY DIRECT YOUR VOTE BY TOUCH-TONE PHONE OR BY INTERNET
- -----------------------------------------------------------
(See enclosed insert for further instructions)
TO DIRECT YOUR VOTE BY PHONE, call Toll-Free in the U.S.: 1-800-690-6903
- ------------------------------------------------------------------------
TO DIRECT YOUR VOTE BY INTERNET, visit the Website(s): WWW.MSDWT.COM or
- -----------------------------------------------------------------------
WWW.PROXYVOTE.COM
- -----------------
OR
PLEASE MARK VOTES AS
IN THE EXAMPLE USING
BLACK OR BLUE INK [ X ]
THE MORGAN STANLEY DEAN WITTER & CO. BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" PROPOSALS 1, 2 AND 3.
---
FOR ALL
FOR WITHHOLD EXCEPT
1. To elect as directors all nominees listed [ ] [ ] [ ]
(except as marked to the contrary
below):
01 Philip J. Purcell 02 John J. Mack 03 C. Robert Kidder 04 Michael A. Miles
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"For All Except" box and strike a line through the nominee's name.
FOR AGAINST ABSTAIN
2. To ratify the appointment of Deloitte & [ ] [ ] [ ]
Touche LLP as the Company's independent
auditors for the fiscal year ending
November 30, 2000.
FOR AGAINST ABSTAIN
3. To approve an amendment to the Company's [ ] [ ] [ ]
Amended and Restated Certificate of
Incorporation to increase the number of
authorized shares of common stock from
1,750,000,000 shares to 3,500,000,000 shares.
THE MORGAN STANLEY DEAN WITTER & CO. BOARD OF DIRECTORS RECOMMENDS A VOTE
"AGAINST" STOCKHOLDER PROPOSALS 4 AND 5.
-------
FOR AGAINST ABSTAIN
4. Stockholder proposal to declassify the [ ] [ ] [ ]
Board of Directors.
FOR AGAINST ABSTAIN
5. Stockholder proposal to issue a report [ ] [ ] [ ]
by October 2000 reviewing the Company's
underwriting criteria with the view to
incorporating and fully disclosing
criteria related to a transaction's
impact on the environment, human rights
and the Company's reputation.
Please sign exactly as imprinted (do not print). If shares are held jointly,
EACH holder should sign. Executors, administrators, trustees, guardians and
others signing in a representative capacity should indicate the capacity in
which they sign. An authorized officer may sign on behalf of a corporation and
should indicate the name of the corporation and his or her capacity.
Please make sure to sign and date
this card. Dated _____________, 2000
- --------------------------------- ------------------------------------
Signature Co-Owner (if any) Signature
- --------------------------------------------------------------------------------
PLEASE DETACH AT PERFORATION ALONG DOTTED LINES
MORGAN STANLEY DEAN WITTER & CO.
- --------------------------------------------------------------------------------
IMPORTANT
USE ONE OF THREE EASY WAYS TO SUBMIT YOUR VOTING INSTRUCTIONS TO ENSURE
RECEIPT NO LATER THAN 5:00 P.M. ON APRIL 3, 2000
1. BY INTERNET. GO TO THE "VOTE YOUR PROXY HERE" LINK ON THE WEBSITE
WWW.MSDWT.COM OR GO DIRECTLY TO WWW.PROXYVOTE.COM. ENTER YOUR 12-DIGIT
------------- -----------------
CONTROL NUMBER LOCATED ON YOUR VIF AND FOLLOW THE SIMPLE INSTRUCTIONS.
2. BY TELEPHONE. IN THE U.S. CALL 1-800-690-6903 ON A TOUCH-TONE PHONE. ENTER
YOUR 12-DIGIT CONTROL NUMBER LOCATED ON YOUR VIF AND FOLLOW THE SIMPLE
RECORDED INSTRUCTIONS.
3. BY MAIL. PLEASE DATE, SIGN AND RETURN YOUR VIF IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY DEAN WITTER & CO.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 2000 ANNUAL MEETING OF STOCKHOLDERS, APRIL 6, 2000
The undersigned hereby appoints Donald G. Kempf, Jr., Robert G. Scott and
Ronald T. Carman, and each of them, attorneys and proxies, with full power of
substitution, to represent and to vote on behalf of the undersigned all of the
shares of common stock of the Company which the undersigned is entitled in any
capacity to vote if personally present at the 2000 Annual Meeting of
Stockholders to be held on April 6, 2000 at 9:00 A.M., local time, at the
offices of Morgan Stanley Dean Witter Trust FSB, Harborside Financial Center,
Plaza Two, Jersey City, New Jersey, and at any adjournments or postponements
thereof, in accordance with the instructions set forth in this Proxy and with
the same effect as though the undersigned were present in person and voting such
shares. The proxies are authorized in their discretion to vote for the election
of a person to the Board of Directors if any nominee named herein becomes unable
to serve or for good cause will not serve, upon all matters incident to the
conduct of the Annual Meeting, and upon such other business as may properly come
before the Annual Meeting.
PLEASE RETURN THIS PROXY CARD IN THE ACCOMPANYING ENVELOPE AFTER
SIGNING AND DATING IT ON THE OTHER SIDE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
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<PAGE>
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PLEASE MARK VOTES AS
IN THE EXAMPLE USING
BLACK OR BLUE INK [X]
THIS PROXY WILL BE VOTED AS DIRECTED. IF THIS PROXY IS SIGNED, BUT NO DIRECTION
IS MADE, IT WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE MORGAN
STANLEY DEAN WITTER & CO. BOARD OF DIRECTORS AS SET FORTH BELOW:
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST"
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PROPOSALS 1, 2 AND 3. FOR ALL STOCKHOLDER PROPOSALS 4 AND 5.
FOR WITHHOLD EXCEPT FOR AGAINST ABSTAIN
<S> <C>
1. To elect as directors all nominees listed (except 4. Stockholder proposal to [_] [_] [_]
as marked to the contrary below): [_] [_] [_] declassify the Board of
Directors.
01 Philip J. Purcell 02 John J. Mack 03 C. Robert Kidder 04 Michael A.
Miles FOR AGAINST ABSTAIN
INSTRUCTION: To withhold authority to vote for any individual nominee, 5. Stockholder proposal to [_] [_] [_]
mark "For All Except" box and strike a line through the nominee's name. issue a report by October
2000 reviewing the
FOR AGAINST ABSTAIN Company's underwriting
2. To ratify the appointment of Deloitte & Touche criteria with the view to
LLP as the Company's independent auditors for [_] [_] [_] incorporating and fully
the fiscal year ending November 30, 2000. disclosing criteria related
to a transaction's impact on
FOR AGAINST ABSTAIN the environment, human
3. To approve an amendment to the Company's rights and the Company's
Amended and Restated Certificate of [_] [_] [_] reputation.
Incorporation to increase the number of
authorized shares of common stock from
1,750,000,000 shares to 3,500,000,000
shares.
Please sign exactly as imprinted (do not print).
Executors, administrators, trustees, guardians and
others signing in a representative capacity should
indicate the capacity in which they sign. An
authorized officer may sign on behalf of a
corporation and should indicate the name of the
corporation and his or her capacity.
Please make sure to sign
and date this card. Dated___________, 2000
_____________________ ____________________________
Signature Co-Owner (if any) Signature
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</TABLE>
PLEASE DETACH AT PERFORATION ALONG DOTTED LINES
MORGAN STANLEY DEAN WITTER & CO.
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IMPORTANT
PLEASE DATE, SIGN AND RETURN YOUR PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE SO THAT IT IS RECEIVED NO LATER THAN 5:00 P.M. ON APRIL 5, 2000.
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