EXHIBIT 4-aa
[FORM OF FACE OF SECURITY]
Senior S&P Indexed (Bull) Note
CUSIP NO. ________
REGISTERED REGISTERED
No. __________ $___________
Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "ORIGINAL YIELD TO
MATURITY" AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE
METHOD) SET FORTH BELOW HAVE BEEN COMPLETED SOLELY FOR THE PURPOSES OF
APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES C
(S&P Indexed (Bull) Note)
Morgan Stanley, Dean Witter, Discover & Co., a Delaware
corporation (together with its successors and assigns, the "Issuer"), for
value received, hereby promises to pay to Cede & Co., a nominee of The
Depository Trust Company, or registered assigns, the Repayment Amount as
determined by the Calculation Agent in U.S. dollars, as set forth above and as
defined on the reverse hereof, on the Maturity Date specified above.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE
SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Senior Indenture, as
defined on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
DATED: MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By:
------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred
to in the within-mentioned
Senior Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
-------------------------------
Authorized Officer
REVERSE OF SECURITY
1. General. This Note is one of a duly authorized issue of
Senior Global Medium-Term Notes, Series C, having maturities more than nine
months from the date of issue (the "Notes") of the Issuer. The Notes are
issuable under a Senior Indenture, dated as of April 15, 1989, as
supplemented by a First Supplemental Senior Indenture dated as of May 15,
1991, and a Second Supplemental Senior Indenture dated as of April 15, 1996
between Morgan Stanley Group Inc. (as predecessor of the Issuer) and The
Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (the
"Trustee," which term includes any successor trustee under the Senior
Indenture) as further supplemented by a Third Supplemental Senior Indenture
dated as of June 1, 1997 between the Issuer and the Trustee (as so
supplemented, the "Senior Indenture") , to which Senior Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities of the
Issuer, the Trustee and Holders of the Notes and the terms upon which the
Notes are, and are to be, authenticated and delivered.
Payment of the principal of this Note and the interest due, if
any, at the Maturity Date will be made in immediately available funds upon
surrender of this Note at the office or agency of the Paying Agent, as defined
below, maintained for that purpose in the Borough of Manhattan, The City of New
York, or at such other paying agency as the Issuer may determine.
The Issuer has appointed The Chase Manhattan Bank (formerly
known as Chemical Bank) at its corporate trust office in The City of New York
as the paying agent (the "Paying Agent," which term includes any additional or
successor Paying Agent appointed by the Issuer) with respect to the Notes.
The Issuer has appointed Morgan Stanley & Co. Incorporated as
the Calculation Agent (the "Calculation Agent," which term includes any
additional or successor Calculation Agent appointed by the Issuer) with
respect to the Notes. The terms of individual Notes may vary with respect to
interest rates, interest rate formulas, issue dates, maturity dates, or
otherwise, all as provided in the Senior Indenture. To the extent not
inconsistent herewith, the terms of the Senior Indenture are hereby
incorporated by reference herein.
2. Repayment Amount. The Holder of this Note will be
entitled to receive an amount (the "Repayment Amount") at the Maturity Date
equal to the Principal Amount plus interest, if any (the "Interest
Payment), calculated in accordance with the following sentence. The
Interest Payment will be equal to the greater of (i) zero and (ii)
Principal x Leverage Factor x (Initial Value - Final Value)
Amount (if any) ----------------------------
Initial Value
where Initial Value and Leverage Factor are specified on the face hereof
and Final Value is the closing value of the Standard & Poor's 500 Composite
Stock Price Index ("S&P 500 Index") (such value as calculated by Standard
& Poor's ("S&P") and published in the Wall Street Journal) at the market
close on the Determination Date specified on the face hereof. If the Final
Value is equal to or less than the Initial Value, a Holder of this Note
will be repaid 100% of the Principal Amount of this Note, but the Holder
will not receive any Interest Payment.
"Business Day," for purposes of this Note, is a day on which
the New York Stock Exchange, Inc. (the "New York Stock Exchange") is open for
trading.
If any payment under this Note is to be made on a day on which
commercial banks in The City of New York are authorized or required by law or
regulation to close, the obligation to make such payment will be satisfied if
it is made on the next succeeding day on which commercial banks in The City of
New York are not authorized or required by law or regulation to close, and no
interest will accrue as a result of such delayed payment.
If S&P discontinues publication of the S&P 500 Index and S&P or
another entity publishes a successor or substitute index that the Calculation
Agent determines, in its sole discretion, to be comparable to the discontinued
S&P 500 Index (such index being referred to hereinafter as a "Successor
Index"), then, upon the Calculation Agent's notification of such determination
to the Trustee and the Issuer, the Interest Payment shall be determined by
reference to the value of such Successor Index at the close of trading on the
New York Stock Exchange, the American Stock Exchange, Inc. (the "Amex") or the
relevant exchange or market for the Successor Index on the Determination Date.
Notwithstanding the foregoing, if the Calculation Agent
determines that a Market Disruption Event) as hereinafter defined) with
respect to the S&P 500 Index (or a Successor Index) has occurred and is
continuing on the Determination Date, then the Final Value shall be the value
of the S&P 500 Index (or the Successor Index) at the close of trading on the
New York Stock Exchange and Amex (or on the relevant exchange or market for
any Successor Index) on the next preceding Business Day on which there was no
Market Disruption Event.
"Market Disruption Event" in respect of the S&P 500 Index (or
Successor Index) means either of the following events:
(i) the suspension or material limitation of trading in
100 or more of the securities included in the S&P 500 Index (or
Successor Index), or
(ii) the imposition of material adverse limitations on
the prices of 100 or more of the securities included in the S&P 500
Index (or Successor Index),
in either case, on the exchange on which or in the market in
which such securities are primarily traded, provided, that a limitation on the
hours in a trading day and/or number of days of trading will not constitute a
Market Disruption Event if it results from an announced change in the regular
business hours of the relevant exchange or market.
All determinations made by the Calculation Agent and the Issuer
shall be at the sole discretion of the respective parties and shall, in the
absence of manifest error, be conclusive for all purposes and binding on the
Issuer, beneficial owners and Holders of this Note.
If the publication of the S&P 500 Index is discontinued and S&P
or another entity does not publish a Successor Index on the Determination
Date, the amount of the Interest Payment, if any, due on the Maturity Date
will be computed by the Calculation Agent which will determine a Final Value
by reference to the following formula:
(1) determining the component stocks of the S&P 500
Index or any Successor Index (the "Component Stocks") as of the last
date on which either of such indices was calculated by S&P or another
entity and quoted on any quotation system (each such Component Stock a
"Last Component Stock");
(2) for each Last Component Stock, calculating as of
the relevant Business Day, the product of the market price per share
and the number of the then outstanding shares (such product referred
to as the "Market Value" of such stock), by reference to (a) the
closing market price per share of such Last Component Stock as quoted
by the New York Stock Exchange or the Amex or any other nationally
recognized stock exchange, or if no such quotation is available, then
the National Association of Securities Dealers Automated Quotation
National Market System ("NASDAQ") together with the NASDAQ, the
"Exchanges") and (b) the most recent publicly available statement of
the number of outstanding shares of such Last Component Stock;
(3) aggregating the Market Values obtained in clause
(2) for all Last Component Stocks;
(4) determining the Base Value (as defined in the
Company's Pricing Supplement referred to on the face hereof to the
Registration Statement referred to on the face hereof (the "Pricing
Supplement") under "Standard & Poor's 500 Composite Stock Price Index
-- Computation of the S&P 500 Index") as of the last day on which
either the S&P 500 Index or any Successor Index was published by S&P
or another entity, as adjusted thereafter as described below;
(5) dividing the aggregate Market Value of all Last
Component Stocks by the Base Value (adjusted as aforesaid); and
(6) multiplying the resulting quotient (expressed in
decimals) by ten.
If any Last Component Stock is no longer publicly traded on any
nationally recognized stock exchange, major regional stock exchange or in the
over-the-counter market, the last available market price per share for such
Last Component Stock as quoted by any exchange, and the number of outstanding
shares thereof at such time, will be used in computing the last available
Market Value of such Last Component Stock.
If a company that has issued a Last Component Stock and another
company that has issued a Last Component Stock are consolidated to form a new
company, the common stock of such new company will be considered a Last
Component Stock and the common stocks of the constituent companies will no
longer be considered Last Component Stocks. If any company that has issued a
Last Component Stock merges with, or acquires, a company that has not issued a
Last Component Stock, the common stock of the surviving corporation will, upon
the effectiveness of such merger or acquisition, be considered a Last
Component Stock. However, in each case, the Base Value will be adjusted in
accordance with the formula set forth in the Pricing Supplement in the last
paragraph under "Standard & Poor's 500 Composite Stock Price Index --
Computation of the S&P 500 Index." As a result of this adjustment, the Base
Value immediately after such consolidation, merger or acquisition will equal
(a) the Base Value immediately prior to such event, multiplied by (b) the
quotient of the aggregate Market Value of all Last Component Stocks
immediately after such event, dividend by the aggregate Market Value for all
Last Component Stocks immediately prior to such event.
If a company that has issued a Last Component Stock issues a
stock dividend, declares a stock split or issues new shares pursuant to the
acquisition of another company, then, in each case, the Base Value will be
adjusted (in accordance with the formula described below) so that, immediately
after the time the particular Last Component Stock commences trading
ex-dividend, the time the stock split becomes effective or the time new shares
of such Last Component Stock commence trading, the Base Value equals (a) the
Base Value immediately prior to such event, multiplied by (b) the quotient of
the aggregate Market Value for all Last Component Stocks immediately after
such event, dividend by the aggregate Market Value of all Last Component Stocks
immediately prior to such event. The Base Value may not be adjusted by the
Calculation Agent in all cases in which S&P, in its discretion, would have
adjusted the Base Value.
If at any time the method of calculating the S&P 500 Index or a
Successor Index, or the value thereof, is changed in a material respect, or if
the S&P 500 Index or a Successor Index is in any other way modified so that
such index does not, in the opinion of the Calculation Agent, fairly represent
the value of the S&P 500 Index or such Successor Index had such changes or
modifications not been made, then, from and after such time, the Calculation
Agent shall, at the close of business in New York City on each date the
closing value with respect to the Final Value is to be calculated, make such
calculations and adjustments as, in the good faith judgment of the Calculation
Agent, may be necessary in order to arrive at a value of a stock index
comparable to the S&P 500 Index or such Successor Index, as the case may be,
as if such changes or modifications had not been made, and calculate the
Interest Payment with reference to the S&P 500 Index or such Successor Index,
as adjusted. Accordingly, if the method of calculating the S&P 500 Index or a
Successor Index is modified so that the value of such Index is a fraction of
what it would have been if it had not been modified (e.g., due to a split in
the index), then the Calculation Agent shall adjust such index in order to
arrive at a value of the S&P 500 Index or such Successor Index as if it had
not been modified (e.g., as if such split had not occurred).
Upon any selection by the Calculation Agent of a Successor
Index, the Calculation Agent shall cause written notice thereof to be
furnished to the registered Holder of this Note within three Business Days of
such selection. If S&P discontinues publication of the S&P 500 Index prior to
the Determination Date and the Calculation Agent determines that no Successor
Index is available at such time, then on each Business Day until the earlier
to occur of (i) the Determination Date and (ii) a determination by the
Calculation Agent that a Successor Index is available, the Calculation Agent
shall determine the value that would be used in computing the Interest Payment
as if such day were the Determination Date. The Calculation Agent shall cause
notice of each such value to be provided to the registered Holder of this Note
on each succeeding Business Day until and including the Determination Date
(unless a Successor Index is prior thereto determined to be available).
Notwithstanding these alternative arrangements, discontinuance of the
publication of the S&P 500 Index may adversely affect the value of this Note.
3. Acceleration upon Event of Default. In case an Event of
Default with respect to this Note shall have occurred and be continuing,
the amount declared due and payable upon any acceleration of this Note will
be determined by the Calculation Agent and will be equal to the sum of (i)
the "issue price" of the "noncontingent debt instrument" plus "original
issue discount" accrued to the date of acceleration and (ii) the "exercise
price" of the "property right" determined as though the Determination Date
were the date of acceleration. For these purposes, "issue price,"
"noncontingent debt instrument," "original issue discount," "exercise
price" and "property right" have the meanings and values assigned to them
under "Certain Federal Income Tax Considerations" in the Pricing Supplement
and apply to any and all Holders of the Note including Holders who are not
United States Holders as defined in the Pricing Supplement.
4. Other Provisions. Unless otherwise provided on the face
hereof, this Note will not be subject to any sinking fund and will not be
redeemable or subject to repayment at the option of the Holder or the
Issuer prior to the Maturity Date.
This Note and all the obligations of the Issuer hereunder are
direct, unsecured obligations of the Issuer and rank without preference or
priority among themselves and pari passu with all other existing and future
unsecured and unsubordinated indebtedness of the Issuer, subject to certain
statutory exceptions in the event of liquidation upon insolvency.
This Note, and any Note or Notes issued upon transfer or
exchange hereof, is issuable only in fully registered form, without coupons,
and is issuable only in denominations of U.S. $1,000 and any integral multiple
of U.S. $1,000 in excess thereof.
The Trustee has been appointed registrar for the Notes, and the
Trustee will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and duly executed by the registered Holder hereof in person or by the
Holder's attorney duly authorized in writing, and thereupon the Trustee shall
issue in the name of the transferee or transferees, in exchange herefor, a new
Note or Notes having identical terms and provisions and having a like
aggregate principal amount in authorized denominations, subject to the terms
and conditions set forth herein. Notes are exchangeable at said office for
other Notes of other authorized denominations of equal aggregate principal
amount having identical terms and provisions. All such exchanges and transfers
of Notes will be free of charge, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge in connection
therewith. All Notes surrendered for exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee and
executed by the registered Holder in person or by the Holder's attorney duly
authorized in writing. The date of registration of any Note delivered upon any
exchange or transfer of Notes shall be such that no gain or loss of interest
results from such exchange or transfer.
In case any Note shall at any time become mutilated, defaced or
be destroyed, lost or stolen and such Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, a new Note of like tenor will be issued by the
Issuer in exchange for the Note so mutilated or defaced, or in lieu of the
Note so destroyed or lost or stolen, but, in the case of any destroyed or lost
or stolen Note, only upon receipt of evidence satisfactory to the Trustee and
the Issuer that such Note was destroyed or lost or stolen and, if required,
upon receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.
The Senior Indenture provides that, (a) if an Event of Default
(as defined in the Senior Indenture) due to the default in payment of
principal of, premium, if any, or interest on, any series of debt securities
issued under the Senior Indenture, including the series of Senior Medium-Term
Notes of which this Note forms a part, or due to the default in the
performance or breach of any other covenant or warranty of the Issuer
applicable to the debt securities of such series but not applicable to all
outstanding debt securities issued under the Senior Indenture shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of the debt securities of each affected series (voting
as a single class) may then declare the principal of all debt securities of
all such series and interest accrued thereon to be due and payable immediately
and (b) if an Event of Default due to a default in the performance of any
other of the covenants or agreements in the Senior Indenture applicable to all
outstanding debt securities issued thereunder, including this Note, or due to
certain events of bankruptcy, insolvency and reorganization of the Issuer,
shall have occurred and be continuing, either the Trustee or the holders of
not less than 25% in principal amount of all debt securities issued under the
Senior Indenture then outstanding (treated as one class) may declare the
principal of all such debt securities and interest accrued thereon to be due
and payable immediately, but upon certain conditions such declarations may be
annulled and past defaults may be waived (except a continuing default in
payment of principal (or premium, if any) or interest on such debt securities)
by the holders of a majority in principal amount of the debt securities of all
affected series then outstanding.
The Senior Indenture permits the Issuer and the Trustee, with
the consent of the holders of not less than a majority in aggregate principal
amount of the debt securities of all series issued under the Senior Indenture
then outstanding and affected (voting as one class), to execute supplemental
indentures adding any provisions to or changing in any matter the rights of
the holders of each series so affected; provided that the Issuer and the
Trustee may not, without the consent of the holder of each outstanding debt
security affected thereby, (a) extend the final maturity of any such debt
security, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any amount payable on
redemption or repayment thereof, or change the currency of payment thereof, or
impair or affect the rights of any holder to institute suit for the payment
thereof without the written consent of the holder of each debt security so
affected or (b) reduce the aforesaid percentage in principal amount of debt
securities the consent of the holders of which is required for any such
supplemental indenture.
So long as this Note shall be outstanding, the Issuer will
cause to be maintained an office or agency for the payment of the principal of
and premium, if any, and interest on this Note as herein provided in the
Borough of Manhattan, The City of New York, and an office or agency in said
Borough of Manhattan for the registration, transfer and exchange as aforesaid
of the Notes. The Issuer may designate other agencies for the payment of said
principal, premium and interest at such place or places (subject to applicable
laws and regulations) as the Issuer may decide. So long as there shall be such
an agency, the Issuer shall keep the Trustee advised of the names and
locations of such agencies, if any are so designated.
With respect to moneys paid by the Issuer and held by the
Trustee or any Paying Agent for payment of the principal of or interest or
premium, if any, on any Notes that remain unclaimed at the end of two years
after such principal, interest or premium shall have become due and payable
(whether at maturity or upon call for redemption or otherwise), (i) the
Trustee or such Paying Agent shall notify the Holders of such Notes that such
moneys shall be repaid to the Issuer and any person claiming such moneys shall
thereafter look only to the Issuer for payment thereof and (ii) such moneys
shall be so repaid to the Issuer. Upon such repayment all liability of the
Trustee or such Paying Agent with respect to such moneys shall thereupon
cease, without, however, limiting in any way any obligation that the Issuer
may have to pay the principal of or interest or premium, if any, of this Note
as the same shall become due.
No provision of this Note or of the Senior Indenture shall
alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal and interest, if any, on this Note at the
time, place, and rate, and in the coin or currency, herein prescribed unless
otherwise agreed between the Issuer and the registered Holder of this Note.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the Holder in whose name this Note is registered as the owner hereof
for all purposes whether or not this Note be overdue, and none of the Issuer,
the Trustee or any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal or
the interest, if any, on this Note, for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Senior Indenture or any
indenture supplemental thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
This Note shall for all purposes be governed by, and construed
in accordance with, the laws of the State of New York.
All terms used in this Note which are defined in the Senior
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Senior Indenture.
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written
out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - ________________ Custodian ________________
(Cust) (Minor)
Under Uniform Gifts to Minors Act _________________________
(State)
Additional abbreviations may also be used though not in the
above list.
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FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
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[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]
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[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.
Dated:
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NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Note in every particular without
alteration or enlargement or any change whatsoever.
[FORM OF FACE OF SECURITY]
Senior S&P Indexed (Bull) Note
CUSIP NO. ________
REGISTERED REGISTERED
No. __________ $___________
Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "ORIGINAL YIELD TO
MATURITY" AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE
METHOD) SET FORTH BELOW HAVE BEEN COMPLETED SOLELY FOR THE PURPOSES OF
APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES C
(S&P Indexed (Bull) Note)
Morgan Stanley, Dean Witter, Discover & Co., a Delaware
corporation (together with its successors and assigns, the "Issuer"), for
value received, hereby promises to pay to Cede & Co., a nominee of The
Depository Trust Company, or registered assigns, the Repayment Amount as
determined by the Calculation Agent in U.S. dollars, as set forth above and as
defined on the reverse hereof, on the Maturity Date specified above.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE
SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Senior Indenture, as
defined on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
DATED: MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By:
------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred
to in the within-mentioned
Senior Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
-------------------------------
Authorized Officer
REVERSE OF SECURITY
1. General. This Note is one of a duly authorized issue of
Senior Global Medium-Term Notes, Series C, having maturities more than nine
months from the date of issue (the "Notes") of the Issuer. The Notes are
issuable under a Senior Indenture, dated as of April 15, 1989, as
supplemented by a First Supplemental Senior Indenture dated as of May 15,
1991, and a Second Supplemental Senior Indenture dated as of April 15, 1996
between Morgan Stanley Group Inc. (as predecessor of the Issuer) and The
Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (the
"Trustee," which term includes any successor trustee under the Senior
Indenture) as further supplemented by a Third Supplemental Senior Indenture
dated as of June 1, 1997 between the Issuer and the Trustee (as so
supplemented, the "Senior Indenture") , to which Senior Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities of the
Issuer, the Trustee and Holders of the Notes and the terms upon which the
Notes are, and are to be, authenticated and delivered.
Payment of the principal of this Note and the interest due, if
any, at the Maturity Date will be made in immediately available funds upon
surrender of this Note at the office or agency of the Paying Agent, as defined
below, maintained for that purpose in the Borough of Manhattan, The City of New
York, or at such other paying agency as the Issuer may determine.
The Issuer has appointed The Chase Manhattan Bank (formerly
known as Chemical Bank) at its corporate trust office in The City of New York
as the paying agent (the "Paying Agent," which term includes any additional or
successor Paying Agent appointed by the Issuer) with respect to the Notes.
The Issuer has appointed Morgan Stanley & Co. Incorporated as
the Calculation Agent (the "Calculation Agent," which term includes any
additional or successor Calculation Agent appointed by the Issuer) with
respect to the Notes. The terms of individual Notes may vary with respect to
interest rates, interest rate formulas, issue dates, maturity dates, or
otherwise, all as provided in the Senior Indenture. To the extent not
inconsistent herewith, the terms of the Senior Indenture are hereby
incorporated by reference herein.
2. Repayment Amount. The Holder of this Note will be
entitled to receive an amount (the "Repayment Amount") at the Maturity Date
equal to the Principal Amount plus interest, if any (the "Interest
Payment), calculated in accordance with the following sentence. The
Interest Payment will be equal to the greater of (i) zero and (ii)
Principal x Leverage Factor x (Initial Value - Final Value)
Amount (if any) ----------------------------
Initial Value
where Initial Value and Leverage Factor are specified on the face hereof
and Final Value is the closing value of the Standard & Poor's 500 Composite
Stock Price Index ("S&P 500 Index") (such value as calculated by Standard
& Poor's ("S&P") and published in the Wall Street Journal) at the market
close on the Determination Date specified on the face hereof. If the Final
Value is equal to or less than the Initial Value, a Holder of this Note
will be repaid 100% of the Principal Amount of this Note, but the Holder
will not receive any Interest Payment.
"Business Day," for purposes of this Note, is a day on which
the New York Stock Exchange, Inc. (the "New York Stock Exchange") is open for
trading.
If any payment under this Note is to be made on a day on which
commercial banks in The City of New York are authorized or required by law or
regulation to close, the obligation to make such payment will be satisfied if
it is made on the next succeeding day on which commercial banks in The City of
New York are not authorized or required by law or regulation to close, and no
interest will accrue as a result of such delayed payment.
If S&P discontinues publication of the S&P 500 Index and S&P or
another entity publishes a successor or substitute index that the Calculation
Agent determines, in its sole discretion, to be comparable to the discontinued
S&P 500 Index (such index being referred to hereinafter as a "Successor
Index"), then, upon the Calculation Agent's notification of such determination
to the Trustee and the Issuer, the Interest Payment shall be determined by
reference to the value of such Successor Index at the close of trading on the
New York Stock Exchange, the American Stock Exchange, Inc. (the "Amex") or the
relevant exchange or market for the Successor Index on the Determination Date.
Notwithstanding the foregoing, if the Calculation Agent
determines that a Market Disruption Event) as hereinafter defined) with
respect to the S&P 500 Index (or a Successor Index) has occurred and is
continuing on the Determination Date, then the Final Value shall be the value
of the S&P 500 Index (or the Successor Index) at the close of trading on the
New York Stock Exchange and Amex (or on the relevant exchange or market for
any Successor Index) on the next preceding Business Day on which there was no
Market Disruption Event.
"Market Disruption Event" in respect of the S&P 500 Index (or
Successor Index) means either of the following events:
(i) the suspension or material limitation of trading in
100 or more of the securities included in the S&P 500 Index (or
Successor Index), or
(ii) the imposition of material adverse limitations on
the prices of 100 or more of the securities included in the S&P 500
Index (or Successor Index),
in either case, on the exchange on which or in the market in
which such securities are primarily traded, provided, that a limitation on the
hours in a trading day and/or number of days of trading will not constitute a
Market Disruption Event if it results from an announced change in the regular
business hours of the relevant exchange or market.
All determinations made by the Calculation Agent and the Issuer
shall be at the sole discretion of the respective parties and shall, in the
absence of manifest error, be conclusive for all purposes and binding on the
Issuer, beneficial owners and Holders of this Note.
If the publication of the S&P 500 Index is discontinued and S&P
or another entity does not publish a Successor Index on the Determination
Date, the amount of the Interest Payment, if any, due on the Maturity Date
will be computed by the Calculation Agent which will determine a Final Value
by reference to the following formula:
(1) determining the component stocks of the S&P 500
Index or any Successor Index (the "Component Stocks") as of the last
date on which either of such indices was calculated by S&P or another
entity and quoted on any quotation system (each such Component Stock a
"Last Component Stock");
(2) for each Last Component Stock, calculating as of
the relevant Business Day, the product of the market price per share
and the number of the then outstanding shares (such product referred
to as the "Market Value" of such stock), by reference to (a) the
closing market price per share of such Last Component Stock as quoted
by the New York Stock Exchange or the Amex or any other nationally
recognized stock exchange, or if no such quotation is available, then
the National Association of Securities Dealers Automated Quotation
National Market System ("NASDAQ") together with the NASDAQ, the
"Exchanges") and (b) the most recent publicly available statement of
the number of outstanding shares of such Last Component Stock;
(3) aggregating the Market Values obtained in clause
(2) for all Last Component Stocks;
(4) determining the Base Value (as defined in the
Company's Pricing Supplement referred to on the face hereof to the
Registration Statement referred to on the face hereof (the "Pricing
Supplement") under "Standard & Poor's 500 Composite Stock Price Index
-- Computation of the S&P 500 Index") as of the last day on which
either the S&P 500 Index or any Successor Index was published by S&P
or another entity, as adjusted thereafter as described below;
(5) dividing the aggregate Market Value of all Last
Component Stocks by the Base Value (adjusted as aforesaid); and
(6) multiplying the resulting quotient (expressed in
decimals) by ten.
If any Last Component Stock is no longer publicly traded on any
nationally recognized stock exchange, major regional stock exchange or in the
over-the-counter market, the last available market price per share for such
Last Component Stock as quoted by any exchange, and the number of outstanding
shares thereof at such time, will be used in computing the last available
Market Value of such Last Component Stock.
If a company that has issued a Last Component Stock and another
company that has issued a Last Component Stock are consolidated to form a new
company, the common stock of such new company will be considered a Last
Component Stock and the common stocks of the constituent companies will no
longer be considered Last Component Stocks. If any company that has issued a
Last Component Stock merges with, or acquires, a company that has not issued a
Last Component Stock, the common stock of the surviving corporation will, upon
the effectiveness of such merger or acquisition, be considered a Last
Component Stock. However, in each case, the Base Value will be adjusted in
accordance with the formula set forth in the Pricing Supplement in the last
paragraph under "Standard & Poor's 500 Composite Stock Price Index --
Computation of the S&P 500 Index." As a result of this adjustment, the Base
Value immediately after such consolidation, merger or acquisition will equal
(a) the Base Value immediately prior to such event, multiplied by (b) the
quotient of the aggregate Market Value of all Last Component Stocks
immediately after such event, dividend by the aggregate Market Value for all
Last Component Stocks immediately prior to such event.
If a company that has issued a Last Component Stock issues a
stock dividend, declares a stock split or issues new shares pursuant to the
acquisition of another company, then, in each case, the Base Value will be
adjusted (in accordance with the formula described below) so that, immediately
after the time the particular Last Component Stock commences trading
ex-dividend, the time the stock split becomes effective or the time new shares
of such Last Component Stock commence trading, the Base Value equals (a) the
Base Value immediately prior to such event, multiplied by (b) the quotient of
the aggregate Market Value for all Last Component Stocks immediately after
such event, dividend by the aggregate Market Value of all Last Component Stocks
immediately prior to such event. The Base Value may not be adjusted by the
Calculation Agent in all cases in which S&P, in its discretion, would have
adjusted the Base Value.
If at any time the method of calculating the S&P 500 Index or a
Successor Index, or the value thereof, is changed in a material respect, or if
the S&P 500 Index or a Successor Index is in any other way modified so that
such index does not, in the opinion of the Calculation Agent, fairly represent
the value of the S&P 500 Index or such Successor Index had such changes or
modifications not been made, then, from and after such time, the Calculation
Agent shall, at the close of business in New York City on each date the
closing value with respect to the Final Value is to be calculated, make such
calculations and adjustments as, in the good faith judgment of the Calculation
Agent, may be necessary in order to arrive at a value of a stock index
comparable to the S&P 500 Index or such Successor Index, as the case may be,
as if such changes or modifications had not been made, and calculate the
Interest Payment with reference to the S&P 500 Index or such Successor Index,
as adjusted. Accordingly, if the method of calculating the S&P 500 Index or a
Successor Index is modified so that the value of such Index is a fraction of
what it would have been if it had not been modified (e.g., due to a split in
the index), then the Calculation Agent shall adjust such index in order to
arrive at a value of the S&P 500 Index or such Successor Index as if it had
not been modified (e.g., as if such split had not occurred).
Upon any selection by the Calculation Agent of a Successor
Index, the Calculation Agent shall cause written notice thereof to be
furnished to the registered Holder of this Note within three Business Days of
such selection. If S&P discontinues publication of the S&P 500 Index prior to
the Determination Date and the Calculation Agent determines that no Successor
Index is available at such time, then on each Business Day until the earlier
to occur of (i) the Determination Date and (ii) a determination by the
Calculation Agent that a Successor Index is available, the Calculation Agent
shall determine the value that would be used in computing the Interest Payment
as if such day were the Determination Date. The Calculation Agent shall cause
notice of each such value to be provided to the registered Holder of this Note
on each succeeding Business Day until and including the Determination Date
(unless a Successor Index is prior thereto determined to be available).
Notwithstanding these alternative arrangements, discontinuance of the
publication of the S&P 500 Index may adversely affect the value of this Note.
3. Acceleration upon Event of Default. In case an Event of
Default with respect to this Note shall have occurred and be continuing,
the amount declared due and payable upon any acceleration of this Note will
be determined by the Calculation Agent and will be equal to the sum of (i)
the "issue price" of the "noncontingent debt instrument" plus "original
issue discount" accrued to the date of acceleration and (ii) the "exercise
price" of the "property right" determined as though the Determination Date
were the date of acceleration. For these purposes, "issue price,"
"noncontingent debt instrument," "original issue discount," "exercise
price" and "property right" have the meanings and values assigned to them
under "Certain Federal Income Tax Considerations" in the Pricing Supplement
and apply to any and all Holders of the Note including Holders who are not
United States Holders as defined in the Pricing Supplement.
4. Other Provisions. Unless otherwise provided on the face
hereof, this Note will not be subject to any sinking fund and will not be
redeemable or subject to repayment at the option of the Holder or the
Issuer prior to the Maturity Date.
This Note and all the obligations of the Issuer hereunder are
direct, unsecured obligations of the Issuer and rank without preference or
priority among themselves and pari passu with all other existing and future
unsecured and unsubordinated indebtedness of the Issuer, subject to certain
statutory exceptions in the event of liquidation upon insolvency.
This Note, and any Note or Notes issued upon transfer or
exchange hereof, is issuable only in fully registered form, without coupons,
and is issuable only in denominations of U.S. $1,000 and any integral multiple
of U.S. $1,000 in excess thereof.
The Trustee has been appointed registrar for the Notes, and the
Trustee will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and duly executed by the registered Holder hereof in person or by the
Holder's attorney duly authorized in writing, and thereupon the Trustee shall
issue in the name of the transferee or transferees, in exchange herefor, a new
Note or Notes having identical terms and provisions and having a like
aggregate principal amount in authorized denominations, subject to the terms
and conditions set forth herein. Notes are exchangeable at said office for
other Notes of other authorized denominations of equal aggregate principal
amount having identical terms and provisions. All such exchanges and transfers
of Notes will be free of charge, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge in connection
therewith. All Notes surrendered for exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee and
executed by the registered Holder in person or by the Holder's attorney duly
authorized in writing. The date of registration of any Note delivered upon any
exchange or transfer of Notes shall be such that no gain or loss of interest
results from such exchange or transfer.
In case any Note shall at any time become mutilated, defaced or
be destroyed, lost or stolen and such Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, a new Note of like tenor will be issued by the
Issuer in exchange for the Note so mutilated or defaced, or in lieu of the
Note so destroyed or lost or stolen, but, in the case of any destroyed or lost
or stolen Note, only upon receipt of evidence satisfactory to the Trustee and
the Issuer that such Note was destroyed or lost or stolen and, if required,
upon receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.
The Senior Indenture provides that, (a) if an Event of Default
(as defined in the Senior Indenture) due to the default in payment of
principal of, premium, if any, or interest on, any series of debt securities
issued under the Senior Indenture, including the series of Senior Medium-Term
Notes of which this Note forms a part, or due to the default in the
performance or breach of any other covenant or warranty of the Issuer
applicable to the debt securities of such series but not applicable to all
outstanding debt securities issued under the Senior Indenture shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of the debt securities of each affected series (voting
as a single class) may then declare the principal of all debt securities of
all such series and interest accrued thereon to be due and payable immediately
and (b) if an Event of Default due to a default in the performance of any
other of the covenants or agreements in the Senior Indenture applicable to all
outstanding debt securities issued thereunder, including this Note, or due to
certain events of bankruptcy, insolvency and reorganization of the Issuer,
shall have occurred and be continuing, either the Trustee or the holders of
not less than 25% in principal amount of all debt securities issued under the
Senior Indenture then outstanding (treated as one class) may declare the
principal of all such debt securities and interest accrued thereon to be due
and payable immediately, but upon certain conditions such declarations may be
annulled and past defaults may be waived (except a continuing default in
payment of principal (or premium, if any) or interest on such debt securities)
by the holders of a majority in principal amount of the debt securities of all
affected series then outstanding.
The Senior Indenture permits the Issuer and the Trustee, with
the consent of the holders of not less than a majority in aggregate principal
amount of the debt securities of all series issued under the Senior Indenture
then outstanding and affected (voting as one class), to execute supplemental
indentures adding any provisions to or changing in any matter the rights of
the holders of each series so affected; provided that the Issuer and the
Trustee may not, without the consent of the holder of each outstanding debt
security affected thereby, (a) extend the final maturity of any such debt
security, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any amount payable on
redemption or repayment thereof, or change the currency of payment thereof, or
impair or affect the rights of any holder to institute suit for the payment
thereof without the written consent of the holder of each debt security so
affected or (b) reduce the aforesaid percentage in principal amount of debt
securities the consent of the holders of which is required for any such
supplemental indenture.
So long as this Note shall be outstanding, the Issuer will
cause to be maintained an office or agency for the payment of the principal of
and premium, if any, and interest on this Note as herein provided in the
Borough of Manhattan, The City of New York, and an office or agency in said
Borough of Manhattan for the registration, transfer and exchange as aforesaid
of the Notes. The Issuer may designate other agencies for the payment of said
principal, premium and interest at such place or places (subject to applicable
laws and regulations) as the Issuer may decide. So long as there shall be such
an agency, the Issuer shall keep the Trustee advised of the names and
locations of such agencies, if any are so designated.
With respect to moneys paid by the Issuer and held by the
Trustee or any Paying Agent for payment of the principal of or interest or
premium, if any, on any Notes that remain unclaimed at the end of two years
after such principal, interest or premium shall have become due and payable
(whether at maturity or upon call for redemption or otherwise), (i) the
Trustee or such Paying Agent shall notify the Holders of such Notes that such
moneys shall be repaid to the Issuer and any person claiming such moneys shall
thereafter look only to the Issuer for payment thereof and (ii) such moneys
shall be so repaid to the Issuer. Upon such repayment all liability of the
Trustee or such Paying Agent with respect to such moneys shall thereupon
cease, without, however, limiting in any way any obligation that the Issuer
may have to pay the principal of or interest or premium, if any, of this Note
as the same shall become due.
No provision of this Note or of the Senior Indenture shall
alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal and interest, if any, on this Note at the
time, place, and rate, and in the coin or currency, herein prescribed unless
otherwise agreed between the Issuer and the registered Holder of this Note.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the Holder in whose name this Note is registered as the owner hereof
for all purposes whether or not this Note be overdue, and none of the Issuer,
the Trustee or any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal or
the interest, if any, on this Note, for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Senior Indenture or any
indenture supplemental thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
This Note shall for all purposes be governed by, and construed
in accordance with, the laws of the State of New York.
All terms used in this Note which are defined in the Senior
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Senior Indenture.
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written
out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - ________________ Custodian ________________
(Cust) (Minor)
Under Uniform Gifts to Minors Act _________________________
(State)
Additional abbreviations may also be used though not in the
above list.
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FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
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[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]
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[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.
Dated:
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NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Note in every particular without
alteration or enlargement or any change whatsoever.