RULE NO. 424(b)(5)
REGISTRATION NO. 333-68747
PROSPECTUS
MERRILL LYNCH & CO., INC.
RUSSELL 2000(R) INDEX* MARKET INDEX TARGET-TERM SECURITIES(R)
DUE SEPTEMBER 30, 2004
"MITTS(R) SECURITIES"
$10 PRINCIPAL AMOUNT PER UNIT
This prospectus is to be used by Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, our wholly-owned subsidiary, when making
offers and sales related to market-making transactions in the MITTS Securities.
THE MITTS SECURITIES:
o 100% principal protection at maturity
o No payments before the maturity date
o Senior unsecured debt securities of Merrill Lynch & Co. Inc.
o Linked to the value of the Russell 2000 Index
o The MITTS Securities are listed on the American Stock Exchange under
the symbol "RUM"
PAYMENT AT MATURITY:
o On the maturity date, for each unit of the MITTS Securities you own, we
will pay you an amount equal to the sum of the principal amount of each
unit and an additional amount based on the percentage increase, if any, in
the value of the Russell 2000 Index above a benchmark value of 494.36, as
described in this prospectus
o You will receive no less than the principal amount of your MITTS Securities
INVESTING IN THE MITTS SECURITIES INVOLVES RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 3.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
The sale price of the MITTS Securities will be the prevailing market
price at the time of sale.
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MERRILL LYNCH & CO.
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The date of this prospectus is June 24, 1999.
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*The use of, reference to, the terms "Russell 2000 Index" in this prospectus
has been consented to by Frank Russell Company.
"MITTS" and "Market Index Target-Term Securities" are registered service marks
owned by Merrill Lynch & Co., Inc.
TABLE OF CONTENTS
PAGE
RISK FACTORS..................................................................3
MERRILL LYNCH & CO., INC......................................................7
RATIO OF EARNINGS TO FIXED CHARGES............................................8
DESCRIPTION OF THE MITTS SECURITIES...........................................9
THE INDEX....................................................................16
OTHER TERMS..................................................................17
PROJECTED PAYMENT SCHEDULE...................................................20
WHERE YOU CAN FIND MORE INFORMATION..........................................21
INCORPORATION OF INFORMATION WE FILE WITH THE SEC............................22
PLAN OF DISTRIBUTION.........................................................23
EXPERTS......................................................................23
RISK FACTORS
Your investment in MITTS Securities will involve risks. You should
carefully consider the following discussion of risks before investing in the
MITTS Securities. In addition, you should reach an investment decision with
regard to the MITTS Securities only after consulting with your legal and tax
advisers and considering the suitability of the MITTS Securities in the light
of your particular circumstances.
YOU MAY NOT EARN A RETURN ON YOUR INVESTMENT.
You should be aware that at maturity we will pay you no more than $10
for each unit of the MITTS Securities you own if the average value of the index
over five trading days shortly before the maturity date the index value does
not exceed 449.42 by more than 10%. This will be true even if at some time
during the life of the MITTS Securities, the value of the Russell 2000 Index,
as adjusted, was higher than that amount, 494.36, but later falls below 494.36.
YOUR YIELD MAY BE LOWER THAN THE YIELD ON A STANDARD DEBT SECURITY OF
COMPARABLE MATURITY.
The amount we pay you at maturity may be less than the return you
could earn on other investments. Your yield may be less than the yield you
would earn if you bought a standard senior non-callable debt security of
Merrill Lynch & Co., Inc. with the same maturity date. Your investment may not
reflect the full opportunity cost to you when you take into account inflation
and other factors that affect the time value of money.
YOUR RETURN WILL NOT REFLECT THE RETURN OF OWNING THE STOCKS INCLUDED IN THE
INDEX.
Your return will not reflect the return you would realize if you
actually owned the stocks underlying the index and received the dividends paid
on those stocks. This is because the value of the index is calculated by
reference to the prices of the common stocks included in the index without
taking into consideration the value of dividends paid on those stocks.
YOUR RETURN WILL NOT REFLECT THE PAYMENT OF DIVIDENDS.
The index is calculated with reference to the prices of the common
stocks comprising the index without taking into consideration the value of
dividends paid on those stocks. Therefore, the return you earn on your MITTS
Securities, if any, will not be the same as the return that you would earn if
you actually owned each of the common stocks underlying the index and received
the dividends paid on those stocks.
INVESTMENTS IN SMALL CAPITALIZATION STOCKS INVOLVE RISKS.
The underlying stocks that constitute the index have been issued by
corporations domiciled in the U.S. and its territories and traded on the NYSE,
on the AMEX or in the over-the-counter market. If a successor index is
substituted for the index as described below, any successor index would also be
based upon stocks issued by corporations domiciled in the U.S. and its
territories and traded on the NYSE, on the AMEX or in the over-the-counter
market. You should be aware that investments in securities indexed to the value
of small capitalization companies involve risks. In general, the stocks
comprising the index have smaller market capitalizations, less trading
liquidity and greater price volatility than stocks in other larger
capitalization indexes which are designed to measure the broad movement of the
U.S. stock markets. You should understand that these factors could adversely
affect the value of the index and your MITTS Securities.
THERE MAY BE AN UNCERTAIN TRADING MARKET FOR THE MITTS SECURITIES IN THE
FUTURE.
Although the MITTS Securities are listed on the NYSE under the symbol
"RUM," you cannot assume that a trading market will continue to exist for the
MITTS Securities. If a trading market in the MITTS Securities continues to
exist, you cannot assume that there will be liquidity in the trading market.
The continued existence of a trading market for the MITTS Securities will
depend on our financial performance and other factors such as the appreciation,
if any, of the value of the index.
If the trading market for the MITTS Securities is limited and you do
not wish to hold your investment until maturity, there may be a limited number
of buyers for your MITTS Securities. This may affect the price you receive if
you sell before maturity.
MANY FACTORS AFFECT THE TRADING VALUE OF THE MITTS SECURITIES; THESE FACTORS
INTERRELATE IN COMPLEX WAYS AND THE EFFECT OF ANY ONE FACTOR MAY OFFSET OR
MAGNIFY THE EFFECT OF ANOTHER FACTOR.
The trading value of the MITTS Securities will be affected by factors
that interrelate in complex ways. It is important for you to understand that
the effect of one factor may offset the increase in the trading value of the
MITTS Securities caused by another factor and that the effect of one factor may
magnify the decrease in the trading value of the MITTS Securities caused by
another factor. For example, an increase in U.S. interest rates may offset some
or all of any increase in the trading value of the MITTS Securities
attributable to another factor, such as an increase in the value of the index.
The following paragraphs describe the expected impact on the market value of
the MITTS Securities given a change in a specific factor, assuming all other
conditions remain constant.
THE VALUE OF THE INDEX IS EXPECTED TO AFFECT THE TRADING VALUE OF THE
MITTS SECURITIES. We expect that the market value of the MITTS Securities will
depend substantially on the value of the index relative to the benchmark index
value. If you choose to sell your MITTS Securities when the value of the index
exceeds the benchmark index value, you may receive substantially less than the
amount that would be payable at maturity based on that index value because of
the expectation that the index will continue to fluctuate until shortly before
the maturity date when the average value of the index is determined. If you
choose to sell your MITTS Securities when the value of the index is below the
benchmark index value, you may receive less than the $10 principal amount per
unit of MITTS Securities. In general, rising U.S. dividend rates, i.e.,
dividends per share, may increase the value of the index, while falling U.S.
dividend rates may decrease the value of the index. Political, economic and
other developments that affect the stocks underlying the index may also affect
the value of the index and the value of the MITTS Securities.
CHANGES IN THE LEVELS OF U.S. INTEREST RATES ARE EXPECTED TO AFFECT
THE TRADING VALUE OF THE MITTS SECURITIES. Because we will pay, at a minimum,
the principal amount per unit of the MITTS Securities at maturity, we expect
that changes in interest rates will affect the trading value of the MITTS
Securities. In general, if U.S. interest rates increase, we expect that the
trading value of the MITTS Securities will decrease, and conversely, if U.S.
interest rates decrease, we expect the trading value of the MITTS Securities
will increase. Interest rates may also affect the U.S. economy and, in turn,
the value of the index. Rising interest rates may lower the value of the index
and, thus, the MITTS Securities. Falling interest rates may increase the value
of the index and, thus, may increase the value of the MITTS Securities.
CHANGES IN THE VOLATILITY OF THE INDEX ARE EXPECTED TO AFFECT THE
TRADING VALUE OF THE MITTS Securities. Volatility is the term used to describe
the size and frequency of market fluctuations. Generally if the volatility of
the index increases, we expect that the trading value of the MITTS Securities
will increase. If the volatility of the index decreases, we expect that the
trading value of the MITTS Securities will decrease.
AS THE TIME REMAINING TO MATURITY OF THE MITTS SECURITIES DECREASES,
THE "TIME PREMIUM" ASSOCIATED WITH THE MITTS SECURITIES WILL DECREASE. The
MITTS Securities may trade at a value above that which would be expected based
on the level of interest rates and the index. This difference will reflect a
"time premium" due to expectations concerning the value of the index during the
period prior to maturity of the MITTS Securities. However, as the time
remaining to maturity of the MITTS Securities decreases, we expect that this
time premium will decrease, lowering the trading value of the MITTS Securities.
CHANGES IN DIVIDEND YIELDS OF THE STOCKS INCLUDED IN THE INDEX ARE
EXPECTED TO AFFECT THE TRADING VALUE OF THE MITTS SECURITIES. If dividend
yields on the stocks comprising the index increase, we expect that the value of
the MITTS Securities will decrease. Conversely, if dividend yields on the stock
comprising the index decrease, we expect that the value of the MITTS Securities
will increase.
CHANGES IN OUR CREDIT RATINGS MAY AFFECT THE TRADING VALUE OF THE
MITTS SECURITIES. Our credit ratings are an assessment of our ability to pay
our obligations. Consequently, real or anticipated changes in our credit
ratings may affect the trading value of the MITTS Securities. However, because
your return on your MITTS Securities is dependent upon factors in addition to
our ability to pay our obligations under the MITTS Securities, such as the
percentage increase in the value of the index at maturity, an improvement in
our credit ratings will not reduce investment risks related to the MITTS
Securities.
In general, assuming all relevant factors are held constant, we expect
that the effect on the trading value of the MITTS Securities of a given change
in most of the factors listed above will be less if it occurs later in the term
of the MITTS Securities than if it occurs earlier in the term of the MITTS
Securities except that we expect that the effect on the trading value of the
MITTS Securities of a given increase in the value of the index will be greater
if it occurs later in the term of the MITTS Securities than if it occurs
earlier in the term of the MITTS Securities.
AMOUNTS PAYABLE ON THE MITTS SECURITIES MAY BE LIMITED BY STATE LAW.
New York State laws govern the indenture, under which the MITTS
Securities are issued. New York has usury laws that limit the amount of
interest that can be charged and paid on loans, which includes debt securities
like the MITTS Securities. Under present New York law, the maximum rate of
interest is 25% per annum on a simple interest basis. This limit may not apply
to debt securities in which $2,500,000 or more has been invested.
While we believe that New York law would be given effect by a state or
Federal court sitting outside of New York, many other states also have laws
that regulate the amount of interest that may be charged to and paid by a
borrower. We will promise, for the benefit of the MITTS holders, to the extent
permitted by law, not to voluntarily claim the benefits of any laws concerning
usurious rates of interest.
PURCHASES AND SALES BY US AND OUR AFFILIATES MAY AFFECT YOUR RETURN.
We and our affiliates may from time to time buy or sell the stocks
underlying the index for their own accounts for business reasons or in
connection with hedging our obligations under the MITTS Securities. These
transactions could affect the price of these stocks and the value of the index
in a manner that would be adverse to your investment in the MITTS Securities.
POTENTIAL CONFLICTS OF INTEREST.
Our subsidiary, Merrill Lynch, Pierce, Fenner & Smith Incorporated or
MLPF&S, is our agent for the purposes of calculating the value of the index and
the amount payable to you at maturity. In some circumstances, MLPF&S's role as
our subsidiary and its responsibilities as calculation agent for the MITTS
Securities could give rise to conflicts of interests. These conflicts could
occur, for instance, in connection with its determination as to whether the
value of the index can be calculated on a particular trading day, or in
connection with judgments that it would be required to make in the event of a
discontinuance of the index. See "Description of the MITTS
Securities--Adjustments to the index; Market Disruption Events" and
"--Discontinuance of the index" in this prospectus. MLPF&S is required to carry
out its duties as calculation agent in good faith and using its reasonable
judgment. However, you should be aware that because we control MLPF&S,
potential conflicts of interest could arise.
We have entered into an arrangement with one of our a subsidiaries to
hedge the market risks associated with our obligation to pay amounts due at
maturity on the MITTS Securities. This subsidiary expects to make a profit in
connection with this arrangement. We did not seek competitive bids for this
arrangement from unaffiliated parties.
MERRILL LYNCH & CO., INC.
We are a holding company that, through our U.S. and non-U.S.
subsidiaries and affiliates such as Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Merrill Lynch Government Securities Inc., Merrill Lynch Capital
Services, Inc., Merrill Lynch International, Merrill Lynch Capital Markets Bank
Ltd., Merrill Lynch Asset Management L.P. and Merrill Lynch Mercury Asset
Management, provides investment, financing, advisory, insurance, and related
products on a global basis, including:
o securities brokerage, trading and underwriting;
o investment banking, strategic services, including mergers and
acquisitions and other corporate finance advisory activities;
o asset management and other investment advisory and recordkeeping
services;
o trading and brokerage of swaps, options, forwards, futures and other
derivatives;
o securities clearance services;
o equity, debt and economic research;
o banking, trust and lending services, including mortgage lending and
related services; and
o insurance sales and underwriting services.
We provide these products and services to a wide array of clients, including
individual investors, small businesses, corporations, governments, governmental
agencies and financial institutions.
Our principal executive office is located at World Financial Center,
North Tower, 250 Vesey Street, New York, New York 10281; our telephone number
is (212) 449-1000.
If you want to find more information about us, please see the sections
entitled "Where You Can Find More Information" and "Incorporation of
Information We File with the SEC" in this prospectus.
In this prospectus, "ML&Co.", "we", "us" and "our" refer specifically
to Merrill Lynch & Co., Inc., the holding company. ML&Co. is the issuer of the
MITTS Securities described in this prospectus.
RATIO OF EARNINGS TO FIXED CHARGES
In 1998, we acquired the outstanding shares of Midland Walwyn Inc.,
in a transaction accounted for as a pooling-of-interests. The following
information for the fiscal years 1994 through 1997 has been restated as if the
two entities had always been combined.
The following table sets forth our historical ratios of earnings to
fixed charges for the periods indicated:
FOR THE THREE
YEAR ENDED LAST FRIDAY IN DECEMBER MONTHS ENDED
1994 1995 1996 1997 1998 MARCH 26, 1999
---- ---- ---- ---- ---- --------------
Ratio of earnings to fixed charges(a)......... 1.2 1.2 1.2 1.2 1.1 1.3
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(a) The effect of combining Midland Walwyn did not change the ratios reported for the fiscal years 1994
through 1997.
For the purpose of calculating the ratio of earnings to fixed charges,
"earnings" consist of earnings from continuing operations before income taxes
and fixed charges, excluding capitalized interest and preferred security
dividend requirements of subsidiaries. "Fixed charges" consist of interest
costs, the interest factor in rentals, amortization of debt issuance costs,
preferred security dividend requirements of subsidiaries, and capitalized
interest.
DESCRIPTION OF THE MITTS SECURITIES
On September 29, 1997, ML&Co. issued an aggregate principle amount of
$167,500,000 or 16,750,000 units of the MITTS Securities.
The MITTS Securities were issued as a series of senior debt securities
under the 1983 Indenture which is more fully described in this prospectus.
The MITTS Securities will mature on September 30, 2004.
While at maturity a beneficial owner of a MITTS Security will receive
the principal amount of each MITTS Security plus the Supplemental Redemption
Amount described below, if any, there will be no other payment of interest,
periodic or otherwise. See "- Payment at Maturity" below.
The MITTS Securities are not subject to redemption by ML&Co. or at the
option of any beneficial owner before maturity. Upon the occurrence of an Event
of Default with respect to the MITTS Securities, beneficial owners of the MITTS
Securities may accelerate the maturity of the MITTS Securities, as described
under "- Events of Default and Acceleration" and "Other Terms - Events of
Default" in this prospectus.
The MITTS Securities were issued in denominations of whole units.
PAYMENT AT MATURITY
At the maturity date, a beneficial owner of a MITTS Security will be
entitled to receive the principal amount of each unit plus the Supplemental
Redemption Amount, if any, all as provided below. If the Supplemental
Redemption Amount is not greater than zero, a beneficial owner of a MITTS
Security will be entitled to receive only the principal amount of its MITTS
Securities.
The "SUPPLEMENTAL REDEMPTION AMOUNT" for a MITTS Security will be
determined by the calculation agent and will equal:
Principal amount of each MITTS Security ( Starting Value) - Ending Value)
($10 per Unit) X (------------------------------ )
( Starting Value )
provided, however, that in no event will the Supplemental Redemption
Amount be less than zero.
The "STARTING VALUE" equals 494.36 which was determined on the Pricing
Date by multiplying 449.82, the value of the index on the pricing date by 110%.
The "ENDING VALUE" will be determined by the calculation agent and
will equal the average, or arithmetic mean, of the closing values of the Index
determined on each of the first five Calculation Days during the Calculation
Period. If there are fewer than five Calculation Days, then the Ending Value
will equal the average or arithmetic mean of the closing values of the Index on
these Calculation Days, and if there is only one Calculation Day, then the
Ending Value will equal the closing value of the Index on that Calculation Day.
If no Calculation Days occur during the Calculation Period because of Market
Disruption Events, then the Ending Index Value will equal the closing value of
the Index determined on the last scheduled Index Business Day in the
Calculation Period, regardless of the occurrences of a Market Disruption Event
on that day.
The "CALCULATION PERIOD" means the period from and including the
seventh scheduled Index Business Day prior to the maturity date to and
including the second scheduled Index Business Day prior to the maturity date.
"CALCULATION DAY" means any Index Business Day during the Calculation
Period on which a Market Disruption Event has not occurred.
An "INDEX BUSINESS DAY" is a day on which the NYSE and the AMEX are
open for trading and the Index or any Successor Index, as defined on page 10
below, is calculated and published.
All determinations made by the calculation agent shall be at the sole
discretion of the calculation agent and, absent a determination by the
calculation agent of a manifest error, shall be conclusive for all purposes and
binding on ML&Co. and beneficial owners of the MITTS Securities.
S
HYPOTHETICAL RETURNS
The following table illustrates, for a range of hypothetical Ending
Values:
o the percentage change from the Starting Value to the Ending Value;
o the total amount payable per Unit of MITTS Securities;
o the total rate of return on the MITTS Securities;
o the pretax annualized rate of return on the MITTS Securities; and
o the pretax annualized rate of return of the stocks underlying the
Index, which includes an assumed aggregate dividend yield of 1.15% per
annum, as more fully described below.
PRETAX
TOTAL AMOUNT ANNUALIZED
PAYABLE AT MATURITY TOTAL RATE OF RATE PRETAX ANNUALIZED
PERCENTAGE CHANGE PER $10 PRINCIPAL RETURN ON OF RETURN ON RATE OF RETURN OF
HYPOTHETICAL OVER THE STARTING AMOUNT OF MITTS THE MITTS THE MITTS STOCKS UNDERLYING THE
ENDING VALUE VALUE SECURITIES SECURITIES SECURITIES(1) INDEX(1)(2)
- ------------ ----- ---------- ---------- ------------- -----------
179.77 -60.00% $10.00 0.00% 0.00% -11.69%
224.71 -50.00% $10.00 0.00% 0.00% -8.61%
269.65 -40.00% $10.00 0.00% 0.00% -6.08%
314.59 -30.00% $10.00 0.00% 0.00% -3.92%
359.54 -20.00% $10.00 0.00% 0.00% -2.03%
404.48 -10.00% $10.00 0.00% 0.00% -0.36%
449.42(3) 0.00% $10.00 0.00% 0.00% 1.15%
494.36 10.00% $10.00 0.00% 0.00% 2.52%
539.30 20.00% $10.91 9.09% 1.25% 3.77%
584.25 30.00% $11.82 18.18% 2.40% 4.93%
629.19 40.00% $12.73 27.27% 3.48% 6.01%
674.13 50.00% $13.64 36.36% 4.48% 7.02%
719.07 60.00% $14.55 45.45% 5.43% 7.96%
764.01 70.00% $15.45 54.55% 6.32% 8.85%
808.96 80.00% $16.36 63.64% 7.16% 9.69%
853.90 90.00% $17.27 72.73% 7.96% 10.49%
898.84 100.00% $18.18 81.82% 8.73% 11.25%
943.78 110.00% $19.09 90.91% 9.45% 11.98%
988.72 120.00% $20.00 100.00% 10.15% 12.67%
1,033.67 130.00% $20.91 109.09% 10.82% 13.33%
1,078.61 140.00% $21.82 118.18% 11.46% 13.97%
1,123.55 150.00% $22.73 127.27% 12.08% 14.58%
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(1) The annualized rates of return specified in the preceding table are
calculated on a semiannual bond equivalent basis.
(2) This rate of return assumes:
(a) a constant dividend yield of 1.15% per annum, paid quarterly from the
date of initial delivery of MITTS Securities, applied to the value of
the Index at the end of each quarter, assuming this value increases
or decreases linearly from the Starting Value to the hypothetical
Ending Value;
(b) no transaction fees or expenses;
(c) the term of the MITTS Securities is from September 29, 1997 to
September 30, 2004;
(d) the aggregate dividend yield of the stocks underlying
the Index as of September 23, 1997 was approximately 1.15%.
(e) a final Index value equal to the hypothetical Ending Value.
(3) The Starting Value of the Index.
The above figures are for purposes of illustration only. The actual
investment term, Supplemental Redemption Amount received by investors, and the
respective resulting total and pretax annualized rate of return will depend
entirely on the actual Ending Value determined by the calculation agent as
provided in this prospectus.
ADJUSTMENTS TO THE INDEX; MARKET DISRUPTION EVENTS
If at any time the method of calculating the Index, or its value, is
changed in any material respect, or if the Index is in any other way modified
so that the Index does not, in the opinion of the calculation agent, fairly
represent the value of the Index had the changes or modifications not been
made, then, from and after that time, the calculation agent shall, at the close
of business in New York, New York, on each date that the closing value with
respect to the Ending Value is to be calculated, make any adjustments as, in
the good faith judgment of the calculation agent, may be necessary in order to
arrive at a calculation of a value of a stock Index comparable to the Index as
if any changes or modifications had not been made, and calculate the closing
value with reference to the Index, as adjusted. Accordingly, if the method of
calculating the Index is modified so that the value of the Index is a fraction
or a multiple of what it would have been if it had not been modified, for
example, due to a split in the Index, then the calculation agent shall adjust
the Index in order to arrive at a value of the Index as if it had not been
modified, for example, as if the split had not occurred.
"MARKET DISRUPTION EVENT" means either of the following events, as
determined by the calculation agent:
(a) the suspension or material limitation on trading for more than
two hours of trading, or during the one-half hour period
preceding the close of trading on the applicable exchange, each
case, in 20% or more of the stocks which then comprise the Index;
or
(b) the suspension or material limitation, in each case, for more
than two hours of trading, whether by reason of movements in
price otherwise exceeding levels permitted by the relevant
exchange or otherwise, in
(A) futures contracts related to the Index which are traded on
the Chicago Mercantile Exchange or
(B) option contracts related to the Index which are traded on
the Chicago Board Options Exchange, Inc.
For the purposes of clause (a) above, any limitations on
trading during significant market fluctuations under New York Stock
Exchange Rule 80A, or any applicable rule or regulation enacted or
promulgated by the NYSE or any other self regulatory organization or
the SEC of similar scope as determined by the calculation agent, will
be considered "material".
In some circumstances, the duties of MLPF&S as calculation agent in determining
the existence of Market Disruption Events could conflict with the interests of
MLPF&S as a subsidiary of ML&Co.
DISCONTINUANCE OF THE INDEX
If FRC discontinues publication of the Index and FRC or another entity
publishes a successor or substitute Index that the calculation agent
determines, in its sole discretion, to be comparable to the Index, referred to
as a "SUCCESSOR INDEX", then, upon the calculation agent's notification of its
determination to the trustee and ML&Co., the calculation agent will substitute
the Successor Index as calculated by FRC or any other entity for the Index and
calculate the Ending Value as described above under "-Payment at Maturity".
Upon any selection by the calculation agent of a Successor Index, ML&Co. shall
cause notice to be given to holders of the MITTS Securities.
If FRC discontinues publication of the Index and a Successor Index is
not selected by the calculation agent or is no longer published on any of the
Calculation Days, the value to be substituted for the Index for any Calculation
Day used to calculate the Supplemental Redemption Amount at maturity will be a
value computed by the calculation agent for each Calculation Day in accordance
with the procedures last used to calculate the Index before any discontinuance.
If a Successor Index is selected or the calculation agent calculates a value as
a substitute for the Index as described below, the Successor Index or value
shall be substituted for the Index for all purposes, including for purposes of
determining whether a Market Disruption Event exists. If the calculation agent
calculates a value as a substitute for the Index, "Calculation Day" shall mean
any day on which the calculation agent is able to calculate the value.
If FRC discontinues publication of the Index before the period during
which the Supplemental Redemption Amount is to be determined and the
calculation agent determines that no Successor Index is available at that time,
then on each Business Day until the earlier to occur of:
o the determination of the Ending Value and
o 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 Supplemental Redemption Amount as described in the preceding paragraph as
if that day were a Calculation Day. The calculation agent will cause notice of
each value to be published not less often than once each month in THE WALL
STREET JOURNAL (or another newspaper of general circulation), and arrange for
information with respect to these values to be made available by telephone.
Notwithstanding these alternative arrangements, discontinuance of the
publication of the Index may adversely affect trading in the MITTS Securities.
EVENTS OF DEFAULT AND ACCELERATION
In case an Event of Default with respect to any MITTS Securities has
occurred and is continuing, the amount payable to a beneficial owner of a MITTS
Security upon any acceleration permitted by the MITTS Securities, with respect
to each $10 principal amount per unit, will be equal to the principal amount
per unit and the Supplemental Redemption Amount, if any, calculated as though
the date of early repayment were the stated maturity date of the MITTS
Securities. See "- Payment at Maturity" in this prospectus. If a bankruptcy
proceeding is commenced in respect of ML&Co., the claim of the beneficial owner
of a MITTS Security may be limited, under Section 502(b)(2) of Title 11 of the
United States Code, to the principal amount per unit of the MITTS Security plus
an additional amount of contingent interest calculated as though the date of
the commencement of the proceeding were the maturity date of the MITTS
Securities.
In case of default in payment of the MITTS Securities, whether at the
stated maturity or upon acceleration, from and after the maturity date the
MITTS Securities shall bear interest, payable upon demand of the beneficial
owners of the MITTS Securities, at the rate of 6.39% per annum, to the extent
that payment of any interest shall be legally enforceable, on the unpaid amount
due and payable on that date in accordance with the terms of the MITTS
Securities to the date payment of any amount has been made or duly provided
for.
GLOBAL SECURITIES
DESCRIPTION OF THE GLOBAL SECURITIES
Beneficial owners of the MITTS Securities may not receive physical
delivery of the MITTS Securities nor may they be entitled to have the MITTS
Securities registered in their names. The MITTS Securities currently are
represented by one or more fully registered global securities. Each global
security was deposited with, or on behalf of, The Depository Trust Company or
DTC (DTC, together with any successor to DTC, being a "depositary"), as
depositary, registered in the name of Cede & Co., DTC's partnership nominee.
Unless and until it is exchanged in whole or in part for MITTS Securities in
definitive form, no global security may be transferred except as a whole by the
depositary to a nominee of the depositary or by a nominee of the depositary to
the depositary or another nominee of the depositary or by the depositary or any
nominee to a successor of the depositary or a nominee of that successor.
So long as DTC, or its nominee, is a registered owner of a global
security, DTC or its nominee, as the case may be, will be considered the sole
owner or holder of the MITTS Securities represented by a global security for
all purposes under the 1983 Indenture. Except as provided below, the beneficial
owners of the MITTS Securities represented by a global security will not be
entitled to have the MITTS Securities represented by the global security
registered in their names, will not receive or be entitled to receive physical
delivery of the MITTS Securities in definitive form and will not be considered
the owners or holders under the 1983 Indenture, including for purposes of
receiving any reports delivered by ML&Co. or the trustee under the 1983
Indenture. Accordingly, each person owning a beneficial interest in a global
security must rely on the procedures of DTC and, if that person is not a
participant of DTC on the procedures of the participant through which that
person owns its interest, to exercise any rights of a holder under the 1983
Indenture. ML&Co. understands that under existing industry practices, in the
event that ML&Co. requests any action of holders or that an owner of a
beneficial interest in a global security desires to give or take any action
which a holder is entitled to give or take under the 1983 Indenture, DTC would
authorize the participants holding the relevant beneficial interests to give or
take any action, and the participants would authorize beneficial owners owning
through those participants to give or take action or would otherwise act upon
the instructions of beneficial owners. Conveyance of notices and other
communications by DTC to participants, by participants to indirect participants
and by participants and indirect participants to beneficial owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
DTC PROCEDURES
The following is based on information furnished by DTC:
DTC is the securities depositary for the MITTS Securities. The MITTS
Securities were issued as fully registered securities registered in the name of
Cede & Co., DTC's partnership nominee. One or more fully registered global
securities were issued for the MITTS Securities in the aggregate principal
amount of the MITTS Securities, and were deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered under to the provisions of Section 17A of the Securities and
Exchange Act of 1934, as amended. DTC holds securities that its participants
deposit with DTC. DTC also facilitates the settlement among participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct participants of DTC include securities brokers and dealers, banks, trust
companies, clearing corporations and other organizations. DTC is owned by a
number of its direct participants and by the NYSE, the AMEX and the National
Association of Securities Dealers, Inc. Access to DTC's system is also
available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a direct
participant, either directly or indirectly. The rules applicable to DTC and its
participants are on file with the SEC.
Purchases of MITTS Securities under DTC's system must be made by or
through direct participants, which will receive a credit for the MITTS
Securities on DTC's records. The ownership interest of each beneficial owner is
in turn to be recorded on the records of direct and indirect participants.
Beneficial owners will not receive written confirmation from DTC of their
purchase, but beneficial owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the direct participants or indirect participants through which
the beneficial owner entered into the transaction. Transfers of ownership
interests in the MITTS Securities are to be accomplished by entries made on the
books of participants acting on behalf of beneficial owners.
To facilitate subsequent transfers, all MITTS Securities deposited
with DTC are registered in the name of DTC's partnership nominee, Cede & Co.
The deposit of MITTS Securities with DTC and their registration in the name of
Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual beneficial owners of the MITTS Securities; DTC's records reflect
only the identity of the direct participants to whose accounts the MITTS
Securities are credited, which may or may not be the beneficial owners. The
participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
and indirect participants to beneficial owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the
MITTS Securities. Under its usual procedures, DTC mails an omnibus proxy to
ML&Co. as soon as possible after the applicable record date. The omnibus proxy
assigns Cede & Co.'s consenting or voting rights to those direct participants
identified in a listing attached to the omnibus proxy to whose accounts the
MITTS Securities are credited on the record date identified in a listing
attached to the omnibus proxy.
Principal, premium, if any, and/or interest, if any, payments on the
MITTS Securities will be made in immediately available funds to DTC. DTC's
practice is to credit direct participants' accounts on the applicable payment
date in accordance with their respective holdings shown on the depositary's
records unless DTC has reason to believe that it will not receive payment on
that date. Payments by participants to beneficial owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name", and will be the responsibility of the participant and not of DTC, the
trustee or ML&Co., subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of principal, premium, if any, and/or
interest, if any, to DTC is the responsibility of ML&Co. or the trustee,
disbursement of payments to direct participants is the responsibility of DTC,
and disbursement of payments to the beneficial owners is the responsibility of
direct and indirect participants.
EXCHANGE FOR CERTIFICATED SECURITIES
If:
o the depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by ML&Co.
within 60 days,
o ML&Co. executes and delivers to the trustee a company order to
the effect that the global securities shall be exchangeable, or
o an Event of Default under the 1983 Indenture has occurred and is
continuing with respect to the MITTS Securities,
the global securities will be exchangeable for MITTS Securities in definitive
form of like tenor and of an equal aggregate principal amount, in denominations
of $10 and integral multiples of $10. The definitive MITTS Securities will be
registered in the name or names as the depositary shall instruct the trustee.
It is expected that instructions may be based upon directions received by the
depositary from participants with respect to ownership of beneficial interests
in the global securities.
In addition, ML&Co. may decide to discontinue use of the system of
book-entry transfers through the depositary. In that event, MITTS Securities in
definitive form will be printed and delivered.
The information in this section concerning DTC and DTC's system has
been obtained from sources that ML&Co. believes to be reliable, but ML&Co.
takes no responsibility for its accuracy.
SAME-DAY SETTLEMENT AND PAYMENT
ML&Co. will make all payments of principal and the Supplemental
Redemption Amount, if any, in immediately available funds so long as the MITTS
Securities are maintained in book-entry form.
THE INDEX
Unless otherwise stated, all information in this prospectus on the
Index is derived from FRC or other publicly available sources. This information
reflects the policies of FRC as stated in these sources and these policies are
subject to change by FRC. FRC is under no obligation to continue to publish the
Index and may discontinue publication of the Index at any time.
The Index is an index calculated, published and disseminated by FRC,
and measures the composite price performance of stocks of 2,000 companies
domiciled in the U.S. and its territories. All 2,000 stocks are traded on
either the NYSE or the AMEX or in the over-the-counter market and form a part
of the Russell 3000(R) Index. The Russell 3000 Index is composed of the 3,000
largest U.S. companies as determined by market capitalization and represents
approximately 98% of the investable U.S. equity market.
The Index consists of the smallest 2,000 companies included in the
Russell 3000 Index. The Index is designed to track the performance of the small
capitalization segment of the U.S. equity market.
Only common stocks belonging to corporations domiciled in the U.S. and
its territories are eligible for inclusion in the Russell 3000 Index and the
Index. Stocks traded on U.S. exchanges but domiciled in other countries are
excluded. Preferred stock, convertible preferred stock, participating preferred
stock, paired shares, warrants and rights are also excluded. Trust receipts,
Royalty Trusts, limited liability companies, OTC Bulletin Board companies, pink
sheets, closed-end mutual funds, and limited partnerships that are traded on
U.S. exchanges, are also ineligible for inclusion. Real Estate Investment
Trusts and Beneficial Trusts are eligible for inclusion, however. Generally,
only one class of securities of a company is allowed in the Russell 3000 Index,
although exceptions to this general rule have been made where FRC has
determined that each class of securities acts independent of the other.
The primary criteria used to determine the initial list of securities
eligible for the Russell 3000 Index is total market capitalization, which is
defined as the price of the shares times the total number of shares
outstanding. Based on closing values on May 31 of each year, FRC reconstitutes
the composition of the Russell 3000 Index using the then existing market
capitalizations of eligible companies. As of June 30 of each year, the Index is
adjusted to reflect the reconstitution of the Russell 3000 Index for that year.
Publication of the Index began on January 1, 1987.
As a capitalization-weighted Index, the Russell 2000 Index reflects
changes in the capitalization (market value) of the component stocks relative
to the capitalization on a base date. The current Index value is calculated by
adding the market values of the Index's component stocks, which are derived by
multiplying the price of each stock by the number of shares outstanding, to
arrive at the total market capitalization of the 2,000 stocks. The total market
capitalization is then divided by a divisor, which represents the "adjusted"
capitalization of the Index on the base date of December 31, 1986. To calculate
the Index, last sale prices will be used for exchange-traded and NASDAQ stocks.
If a component stock is not open for trading, the most recently traded price
for that security will be used in calculating the Index. In order to provide
continuity for the Index's value, the divisor is adjusted periodically to
reflect events including changes in the number of common shares outstanding for
component stocks, company additions or deletions, corporate restructurings and
other capitalization changes.
The value of the Index is reported on the AMEX under the symbol "RTY",
on Bloomberg under the symbol "RTY" and on Reuters under the symbol ".RTY".
All disclosure contained in this prospectus regarding the Index, or
its publisher, is derived from publicly available information. All copyrights
and other intellectual property rights relating to the Index are owned by FRC.
FRC has no relationship with ML&Co., Inc. or the MITTS Securities; it does not
sponsor, endorse, authorize, sell or promote the MITTS Securities, and has no
obligation or liability in connection with the administration, marketing or
trading of the MITTS Securities.
OTHER TERMS
ML&Co. issued the MITTS Securities as a series of senior debt
securities under the 1983 Indenture, dated as of April 1, 1983, as amended and
restated, between ML&Co. and The Chase Manhattan Bank, as trustee. A copy of
the 1983 Indenture is filed as an exhibit to the registration statement
relating to the MITTS Securities of which this prospectus is a part. The
following summaries of the material provisions of the 1983 Indenture are not
complete and are subject to, and qualified in their entirety by reference to,
all provisions of the 1983 Indenture, including the definitions of terms in the
1983 Indenture.
ML&Co. may issue series of senior debt securities from time to time
under the 1983 Indenture, without limitation as to aggregate principal amount,
in one or more series and upon terms as ML&Co. may establish under the
provisions of the 1983 Indenture.
The 1983 Indenture and the MITTS Securities are governed by and
construed in accordance with the laws of the State of New York.
ML&Co. may issue senior debt securities with terms different from
those of senior debt securities previously issued, and issue additional senior
debt securities of a previously issued series of senior debt securities.
The senior debt securities are unsecured and rank equally with all
other unsecured and unsubordinated indebtedness of ML&Co. However, because
ML&Co. is a holding company, the rights of ML&Co. and its creditors, including
the holders of senior debt securities, to participate in any distribution of
the assets of any subsidiary upon its liquidation or reorganization or
otherwise are necessarily subject to the prior claims of creditors of the
subsidiary, except to the extent that a bankruptcy court may recognize claims
of ML&Co. itself as a creditor of the subsidiary. In addition, dividends, loans
and advances from certain subsidiaries, including MLPF&S, to ML&Co. are
restricted by net capital requirements under the Exchange Act, and under rules
of exchanges and other regulatory bodies.
LIMITATIONS UPON LIENS
ML&Co. may not, and may not permit any majority-owned subsidiary to,
create, assume, incur or permit to exist any indebtedness for borrowed money
secured by a pledge, lien or other encumbrance, other than those liens
specifically permitted by the 1983 Indenture, on the Voting Stock owned
directly or indirectly by ML&Co. of any majority-owned subsidiary, other than a
majority-owned subsidiary which, at the time of the incurrence of the secured
indebtedness, has a net worth of less than $3,000,000, unless the outstanding
senior debt securities are secured equally and ratably with the secured
indebtedness.
"Voting Stock" is defined in the 1983 Indenture as the stock of the
class or classes having general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation provided that, for the purposes of the 1983 Indenture, stock that
carries only the right to vote conditionally on the occurrence of an event is
not considered voting stock whether or not the event has happened.
LIMITATION ON DISPOSITION OF VOTING STOCK OF, AND MERGER AND
SALE OF ASSETS BY, MLPF&S
ML&Co. may not sell, transfer or otherwise dispose of any Voting Stock
of MLPF&S or permit MLPF&S to issue, sell or otherwise dispose of any of its
Voting Stock, unless, after giving effect to any transaction, MLPF&S remains a
Controlled Subsidiary.
"Controlled Subsidiary" is defined in the 1983 Indenture to mean a
corporation more than 80% of the outstanding shares of Voting Stock of which
are owned directly or indirectly by ML&Co.
In addition, ML&Co. may not permit MLPF&S to:
o merge or consolidate, unless the surviving company is a
Controlled Subsidiary, or
o convey or transfer its properties and assets substantially as an
entirety, except to one or more Controlled Subsidiaries.
MERGER AND CONSOLIDATION
ML&Co. may consolidate or merge with or into any other corporation and
ML&Co. may sell, lease or convey all or substantially all of its assets to any
corporation, provided that:
o the resulting corporation, if other than ML&Co., is a corporation
organized and existing under the laws of the United States of
America or any U.S. state and assumes all of ML&Co.'s obligations
to:
o pay any amounts due and payable or deliverable with respect
to all the senior debt securities; and
o perform and observe all of ML&Co.'s obligations under the
1983 Indenture, and
o ML&Co. or the successor corporation, as the case may be, is not,
immediately after any consolidation or merger, in default under
the 1983 Indenture.
MODIFICATION AND WAIVER
ML&Co. and the trustee may modify and amend the 1983 Indenture with
the consent of holders of at least 66 2/3% in principal amount of each
outstanding series of senior debt securities affected. However, without the
consent of each holder of any outstanding senior debt security affected, no
amendment or modification to the 1983 Indenture may:
o change the stated maturity date of the principal of, or any
installment of interest or Additional Amounts payable on, any
senior debt security or any premium payable on redemption, or
change the redemption price;
o reduce the principal amount of, or the interest or Additional
Amounts payable on, any senior debt security or reduce the amount
of principal which could be declared due and payable before the
stated maturity date;
o change the place or currency of any payment of principal or any
premium, interest or Additional Amounts payable on any senior
debt security;
o impair the right to institute suit for the enforcement of any
payment on or with respect to any senior debt security;
o reduce the percentage in principal amount of the outstanding
senior debt securities of any series, the consent of whose
holders is required to modify or amend the 1983 Indenture; or
o modify the foregoing requirements or reduce the percentage of
outstanding senior debt securities necessary to waive any past
default to less than a majority.
No modification or amendment of ML&Co.'s Subordinated Indenture or any
Subsequent Indenture for subordinated debt securities may adversely affect the
rights of any holder of ML&Co.'s senior indebtedness without the consent of
each holder affected. The holders of at least a majority in principal amount of
outstanding senior debt securities of any series may, with respect to that
series, waive past defaults under the 1983 Indenture and waive compliance by
ML&Co. with provisions in the 1983 Indenture, except as described under
"--Events of Default".
EVENTS OF DEFAULT
Each of the following will be Events of Default with respect to senior
debt securities of any series:
o default in the payment of any interest or Additional Amounts
payable when due and continuing for 30 days;
o default in the payment of any principal or premium when due;
o default in the deposit of any sinking fund payment, when due;
o default in the performance of any other obligation of ML&Co.
contained in the 1983 Indenture for the benefit of that series or
in the senior debt securities of that series, continuing for 60
days after written notice as provided in the 1983 Indenture;
o specified events in bankruptcy, insolvency or reorganization of
ML&Co.; and
o any other Event of Default provided with respect to senior debt
securities of that series which are not inconsistent with the
1983 Indenture.
If an Event of Default occurs and is continuing for any series of senior debt
securities, other than as a result of the bankruptcy, insolvency or
reorganization of ML&Co., the trustee or the holders of at least 25% in
principal amount of the outstanding senior debt securities of that series may
declare all amounts, or any lesser amount provided for in the senior debt
securities, due and payable or deliverable immediately. At any time after a
declaration of acceleration has been made with respect to senior debt
securities of any series but before the trustee has obtained a judgment or
decree for payment of money, the holders of a majority in principal amount of
the outstanding senior debt securities of that series may rescind any
declaration of acceleration and its consequences, if all payments due, other
than those due as a result of acceleration, have been made and all Events of
Default have been remedied or waived.
The holders of a majority in principal amount or aggregate issue price
of the outstanding senior debt securities of that series may waive any Event of
Default with respect to that series, except a default:
o in the payment of any amounts due and payable or deliverable
under the debt securities of that series; or
o in respect of an obligation or provision of the 1983 Indenture
which cannot be modified under the terms of that Indenture
without the consent of each holder of each outstanding security
of each series of senior debt securities affected.
The holders of a majority in principal amount of the outstanding
senior debt securities of a series may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or exercising
any trust or power conferred on the trustee with respect to those senior debt
securities, provided that any direction shall not be in conflict with any rule
of law or the 1983 Indenture. Before proceeding to exercise any right or power
under the 1983 Indenture at the direction of the holders, the trustee shall be
entitled to receive from the holders reasonable security or indemnification
against the costs, expenses and liabilities which might be incurred by it in
complying with any direction.
The MITTS Securities and other series of senior debt securities issued
under the 1983 Indenture do not have the benefit of any cross-default
provisions with other indebtedness of ML&Co.
ML&Co. is required to furnish to the trustee annually a statement as
to the fulfillment by ML&Co. of all of its obligations under the 1983
Indenture.
PROJECTED PAYMENT SCHEDULE
Solely for purposes of applying the Treasury Department Final
Regulations (the "Final Regulations") concerning the United States Federal
income tax treatment of contingent payment debt instruments to the MITTS
Securities, ML&Co. has determined that the projected payment schedule for the
MITTS Securities will consist of payment on the maturity date of the principal
amount and a projected Supplemental Redemption Amount equal to $5.5304 per
unit. This represents an estimated yield on the MITTS Securities equal to 6.39%
per annum, compounded semiannually.
The projected payment schedule, including both the projected
Supplemental Redemption Amount and the estimated yield on the MITTS Securities,
has been determined solely for United States Federal income tax purposes, for
purposes of applying the Final Regulations to the MITTS Securities, and is
neither a prediction nor a guarantee of what the actual Supplemental Redemption
Amount will be, or that the actual Supplemental Redemption Amount will even
exceed zero.
The following table sets forth the amount of interest that will be
deemed to have accrued with respect to each unit of the MITTS Securities during
each accrual period over a term of seven years and one day for the MITTS
Securities based upon the projected payment schedule for the MITTS Securities,
including both the projected Supplemental Redemption Amount and the estimated
yield equal to 6.39% per annum, compounded semiannually, as determined by
ML&Co. for purposes of application of the Final Regulations to the MITTS
Securities:
TOTAL INTEREST
DEEMED TO
HAVE ACCRUED
ON THE MITTS
INTEREST DEEMED TO SECURITIES
ACCRUE DURING AS OF END OF
ACCRUAL PERIOD ACCRUAL PERIOD
ACCRUAL PERIOD (PER UNIT) (PER UNIT)
September 29, 1997 through March 30, 1998..................... $0.3186 $0.3186
March 31, 1998 through September 30, 1998..................... $0.3315 $0.6501
October 1, 1998 through March 30, 1999........................ $0.3384 $0.9885
March 31, 1999 through September 30, 1999..................... $0.3511 $1.3396
October 1, 1999 through March 30, 2000........................ $0.3623 $1.7019
March 31, 2000 through September 30, 2000..................... $0.3739 $2.0758
October 1, 2000 through March 30, 2001........................ $0.3858 $2.4616
March 31, 2001 through September 30, 2001..................... $0.3981 $2.8597
October 1, 2001 through March 30, 2002........................ $0.4109 $3.2706
March 31, 2002 through September 30, 2002..................... $0.4240 $3.6946
October 1, 2002 through March 30, 2003........................ $0.4375 $4.1321
March 31, 2003 through September 30, 2003..................... $0.4516 $4.5837
October 1, 2003 through March 30, 2004........................ $0.4659 $5.0496
March 31, 2004 through September 30, 2004..................... $0.4808 $5.5304
- -----------
Projected Supplemental Redemption Amount = $5.5304 per unit.
All prospective investors in the MITTS Securities should consult their
own tax advisors concerning the application of the Final Regulations to their
investment in the MITTS Securities. Investors in the MITTS Securities may also
obtain the projected payment schedule, as determined by ML&Co. for purposes of
the application of the Final Regulations to the MITTS Securities, by submitting
a written request for such information to Merrill Lynch & Co., Inc., Attn:
Darryl W. Colletti, Corporate Secretary's Office, 100 Church Street, 12th
Floor, New York, New York 10080-6512.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC.
Our SEC filings are also available over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file by visiting
the SEC's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information about the public reference rooms. You may also inspect our SEC
reports and other information at the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
We have filed a registration statement on Form S-3 with the SEC
covering the MITTS Securities and other securities. For further information on
ML&Co. and the MITTS Securities, you should refer to our registration statement
and its exhibits. This prospectus summarizes material provisions of contracts
and other documents that we refer you to. Because the prospectus may not
contain all the information that you may find important, you should review the
full text of these documents. We have included copies of these documents as
exhibits to our registration statement of which this prospectus is a part.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to incorporate by reference the information we file
with them, which means:
o incorporated documents are considered part of the prospectus;
o we can disclose important information to you by referring you to
those documents; and
o information that we file with the SEC will automatically update
and supersede this incorporated information.
We incorporate by reference the documents listed below which were
filed with the SEC under the Exchange Act:
o annual report on Form 10-K for the year ended December 25, 1998;
o quarterly report on Form 10-Q for the period ended March 26,
1999; and
o current reports on Form 8-K dated December 28, 1998, January 19,
1999, February 17, 1999, February 18, 1999, February 22, 1999,
February 23, 1999, March 26, 1999, April 13, 1999, April 19,
1999, May 26, 1999, May 28, 1999 and June 1, 1999.
We also incorporate by reference each of the following documents that we will
file with the SEC after the date of this prospectus until this offering is
completed:
o reports filed under Sections 13(a) and (c) of the Exchange Act;
o definitive proxy or information statements filed under Section 14
of the Exchange Act in connection with any subsequent
stockholders' meeting; and
o any reports filed under Section 15(d) of the Exchange Act.
You should rely only on information contained or incorporated by
reference in this prospectus. We have not, and MLPF&S has not, authorized any
other person to provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely on it. We are
not, and MLPF&S is not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus is
accurate as of the date of this prospectus only. Our business, financial
condition and results of operations may have changed since that date.
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us at the following address: Mr. Lawrence
M. Egan, Jr., Corporate Secretary's Office, Merrill Lynch & Co., Inc., 100
Church Street, New York, New York 10080-6512, Telephone: (212) 602-8435.
PLAN OF DISTRIBUTION
This prospectus has been prepared in connection with secondary sales
of the MITTS Securities and is to be used by MLPF&S when making offers and
sales related to market-making transactions in the MITTS Securities.
MLPF&S may act as principal or agent in these market-making
transactions.
The MITTS Securities may be offered on the AMEX or off the exchange in
negotiated transactions or otherwise.
The distribution of the MITTS Securities will conform to the
requirements set forth in the applicable sections of Rule 2720 of the Conduct
Rules of the NASD.
EXPERTS
The consolidated financial statements and the related financial
statement schedule incorporated in this prospectus by reference from the Annual
Report on Form 10-K of Merrill Lynch & Co., Inc. and subsidiaries have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports (which express an unqualified opinion and which report on the
consolidated financial statements includes an explanatory paragraph for the
change in accounting method for certain internal-use software development
costs), which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
With respect to unaudited interim financial information for the
periods included in the Quarterly Reports on Form 10-Q which are incorporated
herein by reference, Deloitte & Touche LLP have applied limited procedures in
accordance with professional standards for a review of such information.
However, as stated in their reports included in such Quarterly Reports on Form
10-Q and incorporated by reference herein, they did not audit and they do not
express an opinion on such interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted in
light of the limited nature of the review procedures applied. Deloitte & Touche
LLP is not subject to the liability provisions of Section 11 of the Securities
Act for any such report on unaudited interim financial information because any
such report is not a "report" or a "part" of the Registration Statement
prepared or certified by an accountant within the meaning of Sections 7 and 11
of the Securities Act.