RULE NO. 424(b)(5)
REGISTRATION NO. 333-68747
PROSPECTUS
- ----------
MERRILL LYNCH & CO., INC.
MAJOR 11 INTERNATIONAL MARKET INDEX TARGET-TERM SECURITIES(R)
DUE MAY 26, 2006
"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: PAYMENT AT MATURITY:
o 100% principal protection at maturity. o On the maturity date, for each unit of the
MITTS Securities you own, we will pay you an
o No payments before maturity date. amount equal to the sum of the principal amount
of each unit and an additional amount based on
o Senior unsecured debt securities of Merrill Lynch & the percentage increase, if any, in the value of
Co., Inc. the Major 11 International Index, as reduced by
an annual adjustment factor of 1.5%.
o Linked to the value of the Major 11 International
Index. o At maturity, you will receive no less than
the principal amount of your MITTS Securities.
o The MITTS Securities are listed on the American
Stock Exchange under the trading symbol "EUM".
INVESTING IN THE MITTS SECURITIES INVOLVES
RISK. SEE "RISK FACTORS" BEGINNING ON PAGE S-3 OF
THIS PROSPECTUS.
---------------
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.
---------------
MERRILL LYNCH & CO.
---------------
The date of this prospectus is June 24, 1999.
"MITTS" and "Market Index Target-Term Securities" are registered service marks
of Merrill Lynch & Co., Inc.
TABLE OF CONTENTS
Page
----
SUMMARY INFORMATION--Q&A..................................................3
RISK FACTORS..............................................................6
MERRILL LYNCH & CO., INC.................................................10
RATIO OF EARNINGS TO FIXED CHARGES.......................................11
DESCRIPTION OF THE MITTS SECURITIES......................................12
THE MAJOR 11 INTERNATIONAL INDEX.........................................20
OTHER TERMS..............................................................29
PROJECTED PAYMENT SCHEDULE...............................................29
WHERE YOU CAN FIND MORE INFORMATION......................................30
INCORPORATION OF INFORMATION WE FILE WITH THE SEC........................30
PLAN OF DISTRIBUTION.....................................................31
EXPERTS..................................................................31
SUMMARY INFORMATION--Q&A
This summary includes questions and answers that highlight selected
information from this prospectus to help you understand the Major 11
International Market Index Target-Term Securities due May 26, 2006. You should
carefully read the this prospectus to fully understand the terms of the MITTS
Securities, the Major 11 International Index and the tax and other
considerations that should be important to you in making a decision about
whether to invest in the MITTS Securities. You should carefully review the
"Risk Factors" section, which highlights risks associated with an investment in
the MITTS Securities, to determine whether an investment in the MITTS
Securities is appropriate for you.
References in this prospectus to "ML&Co.", "we", "us" and "our" are to
Merrill Lynch & Co., Inc.
References in this prospectus to "MLPF&S" are to Merrill Lynch,
Pierce, Fenner & Smith Incorporated.
WHAT ARE THE MITTS SECURITIES?
The MITTS Securities are a series of senior debt securities issued by
ML&Co. and are not secured by collateral. The MITTS Securities rank equally
with all of our other unsecured and unsubordinated debt. The MITTS Securities
will mature on May 26, 2006. We cannot redeem the MITTS Securities at any
earlier date. We will not make any payments on the MITTS Securities until
maturity.
Each unit of MITTS Securities represents $10 principal amount of MITTS
Securities. You may transfer the MITTS Securities only in whole units. You will
not have the right to receive physical certificates evidencing your ownership
except under limited circumstances. Instead, we issued the MITTS Securities in
the form of a global certificate, which is held by The Depository Trust
Company, also known as DTC, or its nominee. Direct and indirect participants in
DTC will record your ownership of the MITTS Securities. You should refer to the
section "Description of the MITTS Securities--Depositary" in this prospectus.
WHAT WILL I RECEIVE AT THE STATED MATURITY DATE OF THE MITTS
SECURITIES?
We have designed the MITTS Securities for investors who want to
protect their investment by receiving at least the principal amount of their
investment at maturity and who also want to participate in possible increases
in the value of the Major 11 International Index, a compilation of eleven
equity indices reflecting select stocks listed on certain exchanges in Europe,
Asia and Australia. At the stated maturity date, you will receive a payment on
the MITTS Securities equal to the sum of two amounts: the "PRINCIPAL AMOUNT"
and the "SUPPLEMENTAL REDEMPTION AMOUNT".
PRINCIPAL AMOUNT
The principal amount per unit is $10.
SUPPLEMENTAL REDEMPTION AMOUNT
The Supplemental Redemption Amount per unit will equal: (Adjusted Ending Value - Starting Value)
$10 x(--------------------------------------)
( Starting Value )
but will not be less than zero.
"STARTING VALUE" equals 126.56, the closing value of the Major 11
International Index on May 20, 1999, the date the MITTS Securities were priced
for initial sale to the public.
"ADJUSTED ENDING VALUE" means the average of the values of the Major
11 International Index at the close of the market on five business days before
the maturity of the MITTS Securities as reduced on each day by the application
of the Adjustment Factor. We may calculate the Adjusted Ending Value by
reference to fewer than five or even a single day's closing value if, during
the period shortly before the stated maturity date of the MITTS Securities,
there is a disruption in the trading of a sufficient number of the component
stocks included in any of the sub-indices comprising the Major 11 International
Index or certain futures or options relating to those sub-indices.
The "ADJUSTMENT FACTOR" equals 1.5% per year and will be applied over
the entire term of the MITTS Securities to reduce the closing values of the
Major 11 International Index used to calculate the Supplemental Redemption
Amount during the calculation period. As a result of the cumulative effect of
this reduction, the values used to calculate the Supplemental Redemption Amount
during the calculation period will be approximately 9.99% less than the actual
closing value of the Major 11 International Index on each day during the
calculation period. For a detailed discussion of how the Adjustment Factor will
affect the value of the Major 11 International Index used to calculate
your Supplemental Redemption Amount, see "Description of the MITTS
Securities--Payment at Maturity" in this prospectus.
For more specific information about the Supplemental Redemption Amount, please
see the section "Description of the MITTS Securities" in this prospectus.
We will pay you a Supplemental Redemption Amount only if the Adjusted
Ending Value is greater than the Starting Value. If the Adjusted Ending Value
is less than, or equal to, the Starting Value, the Supplemental Redemption
Amount will be zero. We will pay you the principal amount of your MITTS
Securities regardless of whether any Supplemental Redemption Amount is payable.
EXAMPLES
Here are two examples of Supplemental Redemption Amount calculations
assuming an Adjustment Factor of 1.5% per year and an investment term of seven
years:
EXAMPLE 1--The Major 11 International Index, as adjusted, is below the Starting
Value at maturity:
Starting Value: 126.56
Hypothetical closing value of the Major 11 International
Index at maturity: 132.89
Hypothetical Adjusted Ending Value: 119.61
(Supplemental Redemption
Amount cannot be less
than zero)
(119.61 - 126.56)
Supplemental Redemption Amount (per unit) = $10 x (---------------)
( 126.56 )
TOTAL PAYMENT AT MATURITY (PER UNIT) = $10 + $0 = $10
EXAMPLE 2--The Major 11 International Index, as adjusted, is above the Starting
Value at maturity:
Starting Value: 126.56
Hypothetical closing value of the Major 11 International
Index at maturity: 202.50
Hypothetical Adjusted Ending Value: 182.26
(182.26 - 126.56)
Supplemental Redemption Amount (per unit) = $10 x (---------------)
( 126.56 )
TOTAL PAYMENT AT MATURITY (PER UNIT) = $10 + $4.40 = $14.40
WHO PUBLISHES THE MAJOR 11 INTERNATIONAL
INDEX AND WHAT DOES THE MAJOR 11 INTERNATIONAL
INDEX MEASURE?
The AMEX publishes the Major 11 International Index, which measures
the performance of various European, Australian and Asian stock indices. Each
sub-index that comprises the Major 11 International Index measures the
performance of certain common stocks in Australia or in a designated European
or Asian country. The publishers of the sub-indices use various methods to
select and maintain stocks in a sub-index. The sub-indices comprising the Major
11 International Index represent common stocks of issuers traded principally on
stock exchanges located in England, Japan, Germany, Switzerland, France, the
Netherlands, Italy, Australia, Sweden, Spain and Hong Kong.
Please note that an investment in the MITTS Securities does not
entitle you to any ownership interest in the stocks of the companies included
in sub- indices comprising the Major 11 International Index.
ARE THE MITTS SECURITIES LISTED ON A STOCK EXCHANGE?
The MITTS Securities are listed on the AMEX under the trading symbol
"EUM". You should be aware that the listing of the MITTS Securities on the AMEX
will not necessarily ensure that a liquid trading market will be available for
the MITTS Securities. You should review "Risk Factors--There may be an
uncertain trading market for the MITTS Securities" in this prospectus.
WHAT IS THE ROLE OF MLPF&S?
Our subsidiary, MLPF&S, was the underwriter for the offering and sale
of the MITTS Securities. MLPF&S intends to buy and sell the MITTS Securities to
create and maintain a secondary market for holders of the MITTS Securities.
However, MLPF&S will not be obligated to engage in any of these market
activities or continue them once it has started.
MLPF&S is also our agent for purposes of calculating, among other
things, the Adjusted Ending Value and the Supplemental Redemption Amount. Under
certain circumstances, these duties could result in a conflict of interest
between MLPF&S' status as our subsidiary and its responsibilities as
calculation agent.
WHO IS ML&CO.?
Merrill Lynch & Co., Inc. is a holding company with various subsidiary
and affiliated companies that provide investment, financing, insurance and
related services on a global basis. For information about ML&Co. see the
section "Merrill Lynch & Co., Inc." in this prospectus. You should also read
the other documents we have filed with the SEC, which you can find by referring
to the section "Where You Can Find More Information" in this prospectus.
ARE THERE ANY RISKS ASSOCIATED WITH MY INVESTMENT?
Yes, an investment in the MITTS Securities is subject to risk. Please
refer to the section "Risk Factors" in this prospectus.
RISK FACTORS
Your investment in the 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 if the Adjusted Ending Value does not exceed
the Starting Value at the stated maturity date, the Supplemental Redemption
Amount will be ZERO. This will be true even if the value of the Major 11
International Index, as reduced by the Adjustment Factor over the term of the
MITTS Securities, was higher than the Starting Value at some time during the
life of the MITTS Securities but later falls below the Starting Value. If the
Supplemental Redemption Amount is zero, we will pay you only the principal
amount of your MITTS Securities.
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 factors
that affect the time value of money.
YOUR RETURN WILL NOT REFLECT THE RETURN OF OWNING THE STOCKS
INCLUDED IN THE MAJOR 11 INTERNATIONAL INDEX
The AMEX calculates the value of the Major 11 International Index by
reference to the values of eleven major international market indices that
reflect the prices of the common stocks included in those indices without
taking into consideration the value of dividends paid on those stocks, except
in the case of the Deutscher Aktienindex whose value reflects dividends paid on
its underlying common stocks. The return on your MITTS Securities will not
reflect the return you would realize if you actually owned all of the stocks
underlying each of the sub-indices comprising the Major 11 International Index
and received the dividends paid on those stocks because of the cumulative
effect of the reduction caused by the Adjustment Factor and because, except as
noted above, the value of the Major 11 International Index is calculated by
reference to the prices of the stocks included in the sub-indices without
taking into consideration the value of any dividends paid on those stocks.
YOUR RETURN MAY BE AFFECTED BY FACTORS AFFECTING INTERNATIONAL
SECURITIES MARKETS
The sub-indices that comprise the Major 11 International Index measure
the value of the equity securities of companies listed on various European,
Australian and Asian exchanges. The return of your MITTS Securities will be
affected by factors affecting the value of securities in these markets. The
European, Australian and Asian securities markets may be more volatile than
U.S. or other securities markets and may be affected by market developments in
different ways than U.S. or other securities markets. Direct or indirect
government intervention to stabilize a particular non-U.S. securities market
and cross-shareholdings in European, Australian and Asian companies on these
markets may affect prices and the volume of trading on those markets. Also,
there is generally less publicly available information about non-U.S. companies
than about U.S. companies that are subject to the reporting requirements of the
SEC. Additionally, non-U.S. companies are subject to accounting, auditing and
financial reporting standards and requirements that differ from those
applicable to U.S.
reporting companies.
The prices and performance of securities of companies in Europe,
Australia and Asia may be affected by political, economic, financial and social
factors in those regions. In addition, recent or future changes in a country's
government, economic and fiscal policies, the possible imposition of, or
changes in, currency exchange laws or other laws or restrictions applicable to
non-U.S. companies or investments in non-U.S. equity securities, and possible
fluctuations in the rate of exchange between currencies are factors that could
negatively affect the international securities markets. Moreover, the relevant
European, Australian and Asian economies may differ favorably or unfavorably
from the U.S. economy in economic factors such as growth of gross national
product, rate of inflation, capital reinvestment, resources and
self-sufficiency. Because some of the sub-indices comprising the Major 11
International Index have a greater weighting than others in calculating the
value of the Major 11 International Index, fluctuations in the securities
markets that those sub-indices measure will have a greater relative effect on
the value of the Major 11 International Index than will fluctuations in
securities markets measured by sub-indices with a lesser weighting.
YOUR RETURN MAY BE AFFECTED BY CURRENCY EXCHANGE RATES
Although the stocks included in the sub-indices are traded in
currencies other than U.S. dollars and the MITTS Securities are denominated in
U.S. dollars, we will not adjust the amount payable at maturity for currency
exchange rates in effect at the maturity of the MITTS Securities. Any amount in
addition to the principal amount of each unit payable to you at maturity is
based solely upon the percentage increase in the Major 11 International Index
as adjusted by the Adjustment Factor. Changes in exchange rates, however, may
reflect changes in the relevant European, Australian and Asian economies which
in turn may affect the value of the sub-indices, the Major 11 International
Index and the MITTS Securities.
THERE MAY BE AN UNCERTAIN TRADING MARKET FOR THE MITTS SECURITIES
Although the MITTS Securities are listed on the AMEX under the trading
symbol "EUM", you cannot assume that a trading market will continue to exist
for the MITTS Securities. If a trading market does continue to exist, there can
be no assurance 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 increase, if any, in
the value of the Major 11 International Index.
If the trading market for the MITTS Securities is limited, there may
be a limited number of buyers for your MITTS Securities if you do not wish to
hold your investment until maturity. This may affect the price you receive.
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
exacerbate the decrease in the trading value of the MITTS Securities caused by
another factor. For example, an increase in 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 Major 11
International 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 MAJOR 11 INTERNATIONAL 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 amount by which the Major
11 International Index, as reduced by the Adjustment Factor over the term of
the MITTS Securities, exceeds the Starting Value. If you choose to sell your
MITTS Securities when the value of the Major 11 International Index, as reduced
by the Adjustment Factor over the term of the MITTS Securities, exceeds the
Starting Value, you may receive substantially less than the amount that would
be payable at maturity based on that value because of the expectation that the
Major 11 International Index will continue to fluctuate until the Adjusted
Ending Value is determined. If you choose to sell your MITTS Securities when
the value of the Major 11 International Index is below, or not sufficiently
above, the Starting Value, you may receive less than the $10 principal amount
per unit of your MITTS Securities. In general, rising dividend rates, or
dividends per share, in the countries in which the stocks included in the
sub-indices comprising the Major 11 International Index trade, may increase the
value of the Major 11 International Index while falling dividend rates in these
countries may decrease the value of the Major 11 International Index.
CHANGES IN THE LEVELS OF 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 MITTS Securities at maturity, we expect that
changes in U.S. 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. Additionally, changes in non-U.S. interest rates will affect the
trading value of the MITTS Securities. In general, if interest rates increase
in the countries in which the stocks included in the sub-indices trade, we
expect the trading value of the MITTS Securities will increase and, conversely,
if interest rates in these countries decrease, we expect the trading value of
the MITTS Securities will decrease. The level of interest rates in these
countries may also affect the applicable economies and, in turn, the value of
the Major 11 International Index. Rising interest rates may lower the value of
the Major 11 International Index and, thus, the MITTS Securities. Falling
interest rates may increase the value of the Major 11 International Index and,
thus, may increase the value of the MITTS Securities.
CHANGES IN VOLATILITY OF THE MAJOR 11 INTERNATIONAL 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 Major 11 International Index increases, we expect that
the trading value of the MITTS Securities will increase and, conversely, if the
volatility of the Major 11 International 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. We
anticipate that before their maturity, the MITTS Securities may trade at a
value above that which would be expected based on the level of interest rates
and the value of the Major 11 International Index. This difference will reflect
a "time premium" due to expectations concerning the value of the Major 11
International Index during the period before the stated maturity of the MITTS
Securities. However, as the time remaining to the stated maturity of the MITTS
Securities decreases, we expect that this time premium will decrease, lowering
the trading value of the MITTS Securities.
CHANGES IN THE DIVIDEND YIELDS OF THE STOCKS INCLUDED IN THE
SUB-INDICES ARE EXPECTED TO AFFECT THE TRADING VALUE OF THE MITTS SECURITIES.
Generally, if dividend yields on the stocks included in the sub-indices
comprising the Major 11 International Index increase, we expect that the value
of the MITTS Securities will decrease and, conversely, if dividend yields on
these stocks 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 Major 11 International Index at
maturity, an improvement in our credit ratings will not reduce the 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. However, we expect that the effect on the trading value of the
MITTS Securities of a given increase in the value of the Major 11 International
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 1983 Indenture under which the MITTS
Securities were issued. New York has certain 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 Securities 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 sub-indices or futures or options in the sub-indices for our 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, the value of the sub-indices and, in turn, the value of the Major 11
International Index in a manner that would be adverse to your investment in the
MITTS Securities.
POTENTIAL CONFLICTS OF INTERESTS
Our subsidiary, MLPF&S, is our agent for the purposes of calculating
the Adjusted Ending Value and the Supplemental Redemption Amount payable to you
at maturity. Under certain circumstances, MLPF&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 Major 11
International 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 Major 11 International Index. See "Description of the
MITTS Securities--Adjustments to the Major 11 International Index; Market
Disruption Events" and "--Discontinuance of the Major 11 International 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 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.
THERE ARE UNCERTAIN TAX CONSEQUENCES ASSOCIATED WITH AN INVESTMENT IN THE
MITTS SECURITIES
You should also consider the tax consequences of investing in the
MITTS Securities, aspects of which are uncertain. See "United States Federal
Income Taxation".
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
- ----------
(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
ML&Co. issued the MITTS Securities 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 May 26, 2006.
While at maturity a beneficial owner of a MITTS Security will receive
the sum of the principal amount of each MITTS Security plus the Supplemental
Redemption Amount, if any, there will be no other payment of interest, periodic
or otherwise. See "--Payment at Maturity".
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 "Description of the MITTS Securities--Events of Default and Acceleration"
and "Other Terms--Events of Default" in this prospectus.
ML&Co. issued the MITTS Securities in denominations of whole units.
The MITTS Securities do not have the benefit of any sinking fund.
PAYMENT AT MATURITY
At maturity, a beneficial owner of a MITTS Security will be entitled
to receive the principal amount of that MITTS Security plus a 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 ($10 per unit) = (Adjusted Ending Value - Starting Value)
$10 x(--------------------------------------)
( Starting Value )
PROVIDED, HOWEVER, that in no event will the Supplemental Redemption Amount be
less than zero.
The "STARTING VALUE" equals 126.56, the closing value of the Major 11
International Index on May 20, 1999, the date the MITTS Securities were priced
for initial sale to the public.
The "ADJUSTED ENDING VALUE" will be determined by the calculation
agent and will equal the average or arithmetic mean of the closing values of
the Major 11 International Index, as reduced by the application of the
Adjustment Factor on each Calculation Day, determined on each of the first five
Calculation Days during the Calculation Period. If there are fewer than five
Calculation Days, then the Adjusted Ending Value will equal the average or
arithmetic mean of the closing values of the Major 11 International Index on
those Calculation Days, as reduced by the application of the Adjustment Factor
on each Calculation Day, and if there is only one Calculation Day, then the
Adjusted Ending Value will equal the closing value of the Major 11
International Index on that Calculation Day, as reduced by the application of
the Adjustment Factor on that Calculation Day. If no Calculation Days occur
during the Calculation Period, then the Adjusted Ending Value will equal the
closing value of the Major 11 International Index determined on the last
scheduled Index Business Day in the Calculation Period, as reduced by the
application of the Adjustment Factor on that day, regardless of the occurrence
of a Market Disruption Event on that day.
The "ADJUSTMENT FACTOR" equals 1.5% per year and will be applied over
the entire term of the MITTS Securities. On each calendar day during the term
of the MITTS Securities, we will apply this percentage on a pro-rated basis
based on a 365-day year to reduce the value used to calculate the Supplemental
Redemption Amount on each Calculation Day during the Calculation Period. As a
result of the cumulative effect of this reduction, the values used to calculate
the Supplemental Redemption Amount during the Calculation Period will be
approximately 9.99% less than the actual closing value of the Major 11
International Index on each Calculation Day during the Calculation Period.
The "CALCULATION PERIOD" means the period from and including the
seventh scheduled Index Business Day before the maturity date to and including
the second scheduled Index Business Day before the maturity date.
A "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 any day on which the New York Stock
Exchange and the AMEX are open for trading and the Major 11 International Index
or any successor index 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.
HYPOTHETICAL RETURNS
The following table illustrates, for a range of hypothetical closing
values of the Major 11 International Index during the Calculation Period:
o the percentage change from the Starting Value to the hypothetical
closing value,
o the Adjusted Ending Value used to calculate the Supplemental
Redemption Amount,
o the total amount payable at maturity for each unit of MITTS
Securities,
o the total rate of return to beneficial owners of the MITTS
Securities,
o the pretax annualized rate of return to beneficial owners of MITTS
Securities, and
o the pretax annualized rate of return of an investment in the
stocks included in each sub-index comprising the Major 11
International Index, which includes an assumed aggregate dividend
yield of 1.51% per annum, as more fully described below.
For the purposes of calculating this table, we have applied an
Adjustment Factor of 1.5% per annum.
PERCENTAGE PRETAX
CHANGE ANNUALIZED
HYPOTHETICAL FROM THE TOTAL AMOUNT PRETAX RATE OF
CLOSING STARTING PAYABLE AT TOTAL ANNUALIZED RETURN OF
VALUE VALUE TO THE MATURITY PER RATE OF RATE OF STOCKS
DURING THE HYPOTHETICAL UNIT OF THE RETURN ON RETURN ON UNDERLYING
CALCULATION CLOSING ADJUSTED MITTS THE MITTS THE MITTS EACH
PERIOD VALUE ENDING VALUE(1) SECURITIES SECURITIES SECURITIES(2) SUB-INDEX(2)(3)
- --------------- ------------ --------------- ------------ ---------- ------------- ---------------
25.31 -80.00% 22.78 $10.00 0.00% 0.00% -20.05%
50.62 -60.00% 45.56 $10.00 0.00% 0.00% -11.15%
75.94 -40.00% 68.35 $10.00 0.00% 0.00% -5.68%
101.25 -20.00% 91.13 $10.00 0.00% 0.00% -1.67%
126.56(4) 0.00% 113.91 $10.00 0.00% 0.00% 1.51%
151.87 20.00% 136.69 $10.80 8.01% 1.10% 4.16%
177.18 40.00% 159.48 $12.60 26.01% 3.32% 6.43%
202.50 60.00% 182.26 $14.40 44.01% 5.26% 8.42%
227.81 80.00% 205.04 $16.20 62.01% 6.99% 10.20%
253.12 100.00% 227.82 $18.00 80.01% 8.55% 11.81%
278.43 120.00% 250.61 $19.80 98.01% 9.97% 13.27%
303.74 140.00% 273.39 $21.60 116.02% 11.28% 14.62%
329.06 160.00% 296.17 $23.40 134.02% 12.49% 15.87%
354.37 180.00% 318.95 $25.20 152.02% 13.61% 17.04%
379.68 200.00% 341.74 $27.00 170.02% 14.66% 18.14%
- -------------------
(1) The Adjusted Ending Values specified in this column are approximately
9.99% less than the hypothetical closing values of the Major 11
International Index as a result of the cumulative effect of the
application of an Adjustment Factor of 1.5% per annum over the term of
the MITTS Securities.
(2) The annualized rates of return specified in the preceding table are
calculated on a semiannual bond equivalent basis.
(3) This rate of return assumes:
(a) an investment of a fixed amount in the stocks included in the
sub- indices with the allocation of this amount reflecting the
current relative weights of these stocks in the sub-indices;
(b) a percentage change in the aggregate price of the stocks that
equals the percentage change in the Major 11 International Index
from the Starting Value to the relevant hypothetical closing
value;
(c) a constant dividend yield of 1.51% per annum, paid quarterly from
the date of initial delivery of the MITTS Securities, applied to
the value of the Major 11 International Index at the end of each
quarter assuming this value increases or decreases linearly from
the Starting Value to the applicable hypothetical closing value;
(d) no transaction fees or expenses in connection with purchasing and
holding stocks included in each sub-index;
(e) an investment term from May 26, 1999 to May 26, 2006, and
(f) a final value of the Major 11 International Index equal to the
hypothetical closing value.
(4) This is the Starting Value of the Major 11 International Index.
The above figures are for purposes of illustration only. The actual
Supplemental Redemption Amount received by investors and the resulting total
and pretax annualized rate of return will depend entirely on the actual
Adjusted Ending Value determined by the calculation agent as provided in this
prospectus.
ADJUSTMENTS TO THE MAJOR 11 INTERNATIONAL INDEX; MARKET DISRUPTION EVENTS
If at any time the AMEX changes its method of calculating the Major 11
International Index, or the value of the Major 11 International Index changes,
in any material respect, or if the Major 11 International Index is in any other
way modified so that the Major 11 International Index does not, in the opinion
of the calculation agent, fairly represent the value of the Major 11
International Index had any 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 of the Major 11
International Index 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 Major 11
International Index as if no changes or modifications had been made, and
calculate the closing value with reference to the Major 11 International Index,
as so adjusted. Accordingly, if the method of calculating the Major 11
International Index is modified so that the value of the Major 11 International
Index is a fraction or a multiple of what it would have been if it had not been
modified, E.G., due to a split, then the calculation agent shall adjust the
Major 11 International Index in order to arrive at a value of the Major 11
International Index as if it had not been modified, E.G., as if a split had not
occurred.
"MARKET DISRUPTION EVENT" means, with respect to any sub-index, the
occurrence or existence of any suspension of, or limitation imposed on,
trading, by reason of movements in price exceeding limits permitted by the
relevant exchange or otherwise, during the one-half hour period that ends at
the regular official weekday time at which trading on the Index Exchange
related to that sub-index occurs, on:
(A) the Index Exchange in securities that comprise 20% or
more of the value of that sub-index or
(B) any exchanges on which futures or options on that
sub-index are traded in those options or futures if, in the
determination of the calculation agent, that suspension or limitation
is material.
For the purpose of the above definition:
(1) a limitation on the hours and number of days of
trading will not constitute a Market Disruption Event if it results
from an announced change in the regular hours of the relevant exchange
and
(2) a limitation on trading imposed during the course
of a day by reason of movements in price otherwise exceeding levels
permitted by the relevant exchange will constitute a Market Disruption
Event.
"INDEX EXCHANGE" means, with respect to any sub-index, the principal
exchange on which the shares comprising that sub-index are traded.
DISCONTINUANCE OF THE MAJOR 11 INTERNATIONAL INDEX
If the AMEX discontinues publication of the Major 11 International
Index and the AMEX or another entity publishes a successor or substitute index
that the calculation agent determines, in its sole discretion, to be comparable
to the Major 11 International Index (a "successor index"), then, upon the
calculation agent's notification of any determination to the trustee and
ML&Co., the calculation agent will substitute the successor index as calculated
by the AMEX or any other entity for the Major 11 International Index and
calculate the closing 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.
In the event that the AMEX discontinues publication of the Major 11
International Index and:
o the calculation agent does not select a successor index, or
o the successor index is no longer published on any of the
Calculation Days,
the calculation agent will compute a substitute value for the Major 11
International Index in accordance with the procedures last used to calculate
the Major 11 International Index before any discontinuance. If a successor
index is selected or the calculation agent calculates a value as a substitute
for the Major 11 International Index as described below, the successor index or
value will be used as a substitute for the Major 11 International Index for all
purposes, including for purposes of determining whether a Market Disruption
Event exists.
If the AMEX discontinues publication of the Major 11 International
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 will 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.
A "BUSINESS DAY" is any day on which the NYSE and the AMEX are open
for trading.
Notwithstanding these alternative arrangements, discontinuance of the
publication of the Major 11 International 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 of the MITTS Securities, will be equal to the
principal amount and the Supplemental Redemption Amount, if any, calculated as
though the date of early repayment was the stated maturity date of the MITTS
Securities, PROVIDED, HOWEVER, that the Adjustment Factor will be applied to
the values used to calculate the Supplemental Redemption Amount as if the MITTS
Securities had not been accelerated and had remained outstanding to the stated
maturity date. 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 of the MITTS Security plus an
additional amount of contingent interest calculated as though the date of the
commencement of the proceeding was the maturity date of the MITTS Securities.
In case of default in payment at the maturity date of the MITTS
Securities, whether at their stated maturity or upon acceleration, from and
after the maturity date the MITTS Securities will bear interest, payable upon
demand of their beneficial owners, at the rate of 6.45% per annum to the extent
that payment of any interest is 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 that amount has been made or duly provided for.
DEPOSITARY
DESCRIPTION OF THE GLOBAL SECURITIES
Upon issuance, all MITTS Securities will be represented by one or more
fully registered global securities. Each global security will be deposited
with, or on behalf of, DTC (DTC, together with any successor, being a
"depositary"), as depositary, registered in the name of Cede & Co., DTC's
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 the 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 a 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 of the MITTS Securities 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 that action, and those participants would authorize beneficial owners
owning through those participants to give or take that 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 will act as securities depositary for the MITTS Securities. The
MITTS Securities will be issued as fully registered securities registered in
the name of Cede & Co. (DTC's nominee). One or more fully registered global
securities will be issued for the MITTS Securities in the aggregate principal
amount of such issue, and will be 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 pursuant to the provisions of Section 17A of the Securities
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 certain 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 the 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 or indirect participants through which the beneficial
owner entered into the transaction. Transfers of ownership interests in the
MITTS Securities are to be made by entries 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 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 such 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
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.
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.
Principal, premium, if any, and/or interest, if any, payments made in
cash 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 that 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 those payments to direct participants
shall be the responsibility of DTC, and disbursement of any payments to the
beneficial owners will be the responsibility of direct participants 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.
DTC may discontinue providing its services as securities depositary
with respect to the MITTS Securities at any time by giving reasonable notice to
ML&Co. or the trustee. Under these circumstances, in the event that a successor
securities depositary is not obtained, MITTS Security certificates are required
to be printed and delivered.
ML&Co. may decide to discontinue use of the system of book-entry
transfers through DTC or a successor securities depositary. In that event,
MITTS Security certificates 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
Settlement for the MITTS Securities will be made by the underwriter in
immediately available funds. 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 MAJOR 11 INTERNATIONAL INDEX
The AMEX calculates and disseminates the value of the Major 11
International Index on each Index Business Day. The AMEX generally calculates
and disseminates the value of the Major 11 International Index based on the
most recently reported values of the sub-indices, at approximately 15-second
intervals during the AMEX's business hours and the end of each Index Business
Day via the Consolidated Tape Association's Network B. The Major 11
International Index value is reported by the AMEX and Bloomberg under the
symbol "EUX" and by Reuters under the symbol ".EUX".
DETERMINATION OF INDEX MULTIPLIER FOR EACH SUB-INDEX
The AMEX determined the initial weighting of each sub-index at the
close of business on November 20, 1997 based on the relative total market
capitalization of each sub-index as of that date. The market capitalization of
a stock equals the product of the total number of shares outstanding and the
price per share of that stock. The total market capitalization of the stocks
comprising each sub-index was determined using the most recently available
information at that time concerning the number of shares outstanding for each
stock contained in a sub-index and the most recently available price for each
share of that stock. Then-current exchange rates were used to translate this
market capitalization information into U.S. dollars. The market capitalizations
expressed in U.S. dollars of each sub-index were totaled. The weighting of each
sub-index was then determined and equaled the percentage of the market
capitalization for that sub-index relative to the total market capitalization.
The index multiplier for each sub-index was then calculated and equaled:
o the weighting for the sub-index multiplied by 100, divided by
o the most recently available value of the sub-index.
The index multipliers were calculated in this way so that the index would equal
100.00 on November 20, 1997. The AMEX may adjust the index multiplier of any
sub-index in the event of a significant change in how that sub-index is
calculated, however, there will not be any periodic rebalancing of the Major 11
International Index to reflect changes in the relative market capitalizations
of the sub-indices.
COMPUTATION OF THE MAJOR 11 INTERNATIONAL INDEX
The AMEX calculates the Major 11 International Index by totaling the
products of the most recently available value of each sub-index and the index
multiplier applicable to each sub-index. Because the sub-indices are based on
stocks traded on exchanges in Europe, Asia and Australia, once the applicable
exchanges close and the values of the sub-indices become fixed until these
exchanges reopen, the value of the Major 11 International Index will be fixed.
The following is a list of the sub-indices and certain information
concerning each sub-index. All disclosure contained in this prospectus
supplement regarding the sub-indices is derived from publicly available
information.
FINANCIAL TIMES 100 INDEX--"FTSE 100"
DESCRIPTION OF FTSE 100: The FTSE 100 is intended to provide an
indication of the pattern of common stock price movement of the 100
common stocks with the largest market capitalization on the London
Stock Exchange.
PUBLISHER: FTSE International Limited
REQUIRED DISCLOSURE: The FTSE is a registered trademark of the
London Stock Exchange Limited and the Financial Times Limited.
NIKKEI STOCK AVERAGE, "NIKKEI 225"
DESCRIPTION OF NIKKEI 225: The Nikkei 225 is intended to provide an
indication of the pattern of common stock price movement of the 225
most actively traded common stocks on the Tokyo Stock Exchange. The
Nikkei 225 is a modified price-weighted index which means that an
underlying stock's weight in the Nikkei 225 is based on its price per
share rather than the total market capitalization of the issuer.
PUBLISHER: Nihon Keizai Shimbun, Inc. ("NKS")
REQUIRED DISCLOSURE: NKS is under no obligation to continue the
calculation and dissemination of the Nikkei 225. The MITTS Securities
are not sponsored, endorsed, sold or promoted by NKS. No inference
should be drawn from the information contained in this prospectus
supplement that NKS makes any representation or warranty, implied or
express, to ML&Co., the holders of the MITTS Securities or any member
of the public regarding the advisability of investing in securities
generally or in the MITTS Securities in particular or the ability of
the Nikkei 225 to track general stock market performance. NKS has no
obligation to take the needs of ML&Co. or the holders of the MITTS
Securities into consideration in determining, composing or calculating
the Nikkei 225. NKS is not responsible for, and has not participated
in the determination of the timing of, prices for, or quantities of,
the MITTS Securities to be issued or in the determination or
calculation of the equation by which the MITTS Securities are to be
settled in cash. NKS has no obligation or liability in connection with
the administration, marketing or trading of the MITTS Securities.
NKS has consented to the use of and reference to the Nikkei 225 in
connection with the MITTS Securities.
DEUTSCHER AKTIENINDEX--"DAX(R)"
DESCRIPTION OF DAX: The DAX is a total rate of return index measuring
the performance of 30 common stocks on the Frankfurt Stock Exchange
selected on the basis of their market capitalization and trading
volume. A total rate of return index reflects both the price
performance of the relevant common stocks as well as the dividends
paid on these common stocks.
PUBLISHER: Deutsche Borse AG
"DAX" is a registered trademark of Deutsche Borse AG.
SWISS MARKET INDEX--"SMI(R)"
DESCRIPTION OF SMI: The SMI is intended to provide an indication of
the pattern of common stock price movement of common stocks with the
largest market capitalization and greatest liquidity on the Geneva,
Zurich and Basle Stock Exchanges.
PUBLISHER: Swiss Exchange SWX
REQUIRED DISCLOSURE: These MITTS Securities are not in any way
sponsored, endorsed, sold or promoted by the Swiss Exchange SWX and
the Swiss Exchange SWX makes no warranty or representation whatsoever,
express or implied, either as to the results to be obtained from the
use of the SMI index (the "Index") and/or the figure at which the said
Index stands at any particular time on any particular day or
otherwise. The Index is compiled and calculated solely by the Swiss
Exchange SWX. However, the Swiss Exchange SWX shall not be liable
(whether in negligence or otherwise) to any person for any error in
the Index and the Swiss Exchange SWX shall not be under any obligation
to advise any person of any error therein.
SMI(R) is a registered trademark of the Swiss Exchange SWX.
COMPAGNIE DES AGENTS DE CHANGE 40 INDEX--"CAC 40"
DESCRIPTION OF CAC 40: The CAC 40 is intended to provide an indication
of the pattern of common stock price movement of the 40 common stocks
with the largest market capitalization on the Paris Bourse.
PUBLISHER: SBF-Paris Bourse
REQUIRED DISCLOSURE: "CAC 40" is a registered trademark of the Societe
des Bourses Francaises-Paris Bourse, which designates the index that
the SBF-Paris Bourse calculates and publishes. Authorization to use
the index and the "CAC 40" trademark in connection with the MITTS
Securities has been granted by license.
The SBF-Paris Bourse, owner of the trademark and of the index, does
not sponsor, endorse or participate in the marketing of the MITTS
Securities. The SBF-Paris Bourse makes no warranty or representation
to any person, express or implied, as to the figure at which the said
index stands at any particular time, nor as to the results or
performance of the MITTS Securities. Neither shall the SBF-Paris
Bourse be under any obligation to advise any person of any error in
the published level of the index.
AMSTERDAM EXCHANGES-INDEX(R)--"AEX-INDEx(R)"
DESCRIPTION OF AEX: The AEX is intended to provide an indication of
the pattern of common stock price movement of the 25 common stocks
with the largest market capitalization on the Amsterdam Stock
Exchange.
PUBLISHER: AEX-Optiebeurs nv
REQUIRED DISCLOSURE: "The AEX-index is a REGISTERED trademark of ASX
Operations Pty Limited ("ASXO"), a wholly owned subsidiary of the
Australian Stock Exchange Limited. ASXO has granted a licence for the
use of the index on the basis that ASXO does not expressly or
impliedly approve, endorse, make any judgement or express any opinion
in respect of the MITTS Securities or any Index Products issued by the
Licensee."
MILANO ITALIA BORSA 30 INDEX--"MIB 30"
DESCRIPTION OF MIB 30: The MIB 30 is intended to provide an indication
of the pattern of common stock price movement of common stocks with
the largest market capitalization and greatest liquidity on the
Italian Stock Exchange.
PUBLISHER: Borsa Italiana S.p.A.
AUSTRALIA ALL ORDINARIES INDEX--"XAO"
DESCRIPTION OF XAO: The XAO is a capitalization-weighted index of 274
common stocks listed on the Australian Stock Exchange.
PUBLISHER: ASX Operations Pty Limited
REQUIRED DISCLOSURE: The XAO is a registered trade mark of ASX
Operations Pty Limited or ASXO, a wholly-owned subsidiary of the
Australian Stock Exchange Limited or ASX. ASXO has granted a license
for the use of the XAO on the basis that ASXO does not expressly or by
implication approve, endorse, make any judgment or express any opinion
in respect of the ML&Co. or the MITTS Securities. ASX and its related
corporations, shall have no liability for any claim whatsoever where
the claim arises wholly or substantially out of accident or negligence
of ASX, its related corporations and their servants and agents as the
case may be or acts of third parties; and without in any way limiting
the generality of the foregoing, arising out of unavailability of the
All Ordinaries Index or non-supply of the All Ordinaries Index.
OM STOCKHOLM EXCHANGE INDEX--"OMX INDEX"
DESCRIPTION OF OMX INDEX: The OMX index is intended to provide an
indication of the pattern of common stock price movement of the 30
common stocks with the largest volume of trading on the Stockholm
Stock Exchange.
PUBLISHER: OM Gruppen AB
REQUIRED DISCLOSURE: The MITTS Securities are not in any way
sponsored, endorsed, sold or promoted by OM Gruppen AB or OM and OM
makes no warranty or representation whatsoever, express or implied,
either as to the results to be obtained from the use of the OMX index
and/or the figure at which the said OMX index stands at any particular
time on any particular day or otherwise. The OMX index is compiled and
calculated solely by an indexer on behalf of OM. However, OM shall not
be liable whether in negligence or otherwise to any person for any
error in the OMX index and OM shall not be under any obligation to
advise any person of any error in the OMX index.
All rights to the trademark OMX, OMX INDEX are vested in OM Gruppen AB
and are used under a license agreement with OM.
IBEX 35 INDEX--"IBEX 35"
DESCRIPTION OF IBEX 35: The IBEX 35 is intended to provide an
indication of the pattern of common stock price movement of the 35
common stocks with the greatest liquidity continuously traded and
quoted on the Joint Stock Exchange System made up of the Barcelona,
Bilbao, Madrid and Valencia stock exchanges.
PUBLISHER: Sociedad de Bolsas, S.A.
REQUIRED DISCLOSURE: Sociedad de Bolsas, S.A. does not warrant in any
case nor for any reason whatsoever:
(a) the continuity of the composition of the IBEX 35 exactly as it is
today;
(b) the continuity of the method for calculating the IBEX 35 exactly
as it is calculated today;
(c) the continuity of the calculation, formula and publication of the
IBEX 35;
(d) the precision, integrity or freedom from errors or mistakes in
the composition and calculation of the IBEX 35; and
(e) the adequacy of the IBEX 35 for the purposes expected in the
issue of the MITTS Securities nor for dealing in the same.
AMEX HONG KONG 30 INDEX--"HK30"
DESCRIPTION OF HK30: The HK30 is intended to provide an indication of
the pattern of common stock price movement of 30 common stocks listed
on the Hong Kong Stock Exchange and selected on the basis of market
weight, trading liquidity and representation of business industry.
PUBLISHER: The American Stock Exchange
REQUIRED DISCLOSURE: The "AMEX Hong Kong 30 Index" is a service mark
of the AMEX. The AMEX in no way sponsors, endorses or is otherwise
involved in the issuance of the MITTS Securities, other than the fact
that the MITTS Securities will be listed and traded on the AMEX and
the AMEX will calculate and disseminate the Major 11 International
Index, and the AMEX disclaims any liability to any party for any
inaccuracy in the data on which the HK30 is based, for any mistakes,
errors or omissions in the calculation, and/or dissemination of the
HK30, or for the manner in which it is applied in connection with the
issuance of the MITTS Securities.
AMEX has consented to the use and reference to the term "AMEX Hong
Kong 30 Index".
The publisher of each sub-index will add or delete stocks due to
events such as the bankruptcy or merger of the issuer of a stock. The publisher
of a sub-index may reevaluate the composition of the stocks underlying the sub-
index at specified intervals to assure that they still meet the selection
criteria or any ongoing eligibility criteria.
The publisher of a sub-index is under no obligation to continue the
calculation and dissemination of that sub-index and that publisher may change
the method by which that sub-index is calculated. The publishers of the
sub-indices are under no obligation to take the needs of ML&Co. or the holders
of the MITTS into consideration in determining, composing or calculating the
sub-indices.
OTHER TERMS
The MITTS Securities were issued 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.
Series of senior debt securities may from time to time be issued 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 claims of ML&Co. itself as a creditor of
the subsidiary may be recognized. 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 such 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 of 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 debt securities affected. However, without the consent of
each holder of any outstanding debt security affected, no amendment or
modification to any 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 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 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 debt securities of any series of debt securities 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 any Indenture which
cannot be modified under the terms of that Indenture without the
consent of each holder of each series of 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 final Treasury Department
Regulations (the "Final Regulations") concerning the United States Federal
income tax treatment of contingent payment debt instruments to the MITTS
Securities, we have determined that the projected payment schedule for the
MITTS Securities will consist of payment on the maturity date of the principal
amount thereof and a projected Supplemental Redemption Amount equal to $5.5992
per unit. This represents an estimated yield on the MITTS Securities equal to
6.45% 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 (I.E.,
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 the term of the MITTS Securities based upon the
projected payment schedule for the MITTS Securities (including both the
Projected Supplemental Redemption Amount and an estimated yield equal to 6.45%
per annum (compounded semiannually)) as determined by ML&Co. for purposes of
illustrating the application of the Final Regulations to the MITTS Securities:
TOTAL INTEREST DEEMED
TO HAVE ACCRUED ON
INTEREST DEEMED TO ACCRUE MITTS SECURITIES AS
DURING ACCRUAL PERIOD (PER OF END OF ACCRUAL
ACCRUAL PERIOD UNIT) PERIOD (PER UNIT)
-------------- -------------------------- -----------------
May 26, 1999 through November 26, 1999......................... $0.3252 $0.3252
November 27, 1999 through May 26, 2000......................... $0.3330 $0.6582
May 27, 2000 through November 26, 2000......................... $0.3437 $1.0019
November 27, 2000 through May 26, 2001......................... $0.3548 $1.3567
May 27, 2001 through November 26, 2001......................... $0.3663 $1.7230
November 27, 2001 through May 26, 2002......................... $0.3780 $2.1010
May 27, 2002 through November 26, 2002......................... $0.3903 $2.4913
November 27, 2002 through May 26, 2003......................... $0.4028 $2.8941
May 27, 2003 through November 26, 2003......................... $0.4159 $3.3100
November 27, 2003 through May 26, 2004......................... $0.4292 $3.7392
May 27, 2004 through November 26, 2004......................... $0.4431 $4.1823
November 27, 2004 through May 26, 2005......................... $0.4574 $4.6397
May 27, 2005 through November 26, 2005......................... $0.4721 $5.1118
November 27, 2005 through May 26, 2006......................... $0.4874 $5.5992
- ---------------
Projected Supplemental Redemption Amount = $5.5992 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.