UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 28, 2008
Merrill Lynch & Co., Inc.
(Exact Name of Registrant as Specified in its Charter)
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| Delaware
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1-7182
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13-2740599 |
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(State or Other
Jurisdiction of
Incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.) |
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| 4 World Financial Center, New York, New York
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10080 |
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| (Address of Principal Executive Offices)
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(Zip Code) |
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| Registrant’s telephone number, including area code:
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(212) 449-1000 |
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(Former Name or Former Address, if Changed Since Last Report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement
On January 28, 2008, the Management Development and Compensation Committee of the Board of
Directors (“MDCC”) of Merrill Lynch & Co., Inc. (“Merrill Lynch” or the “Company”) determined that
the Company will not pay bonuses to executive officers for performance in 2007. The Board of
Directors ratified this determination in accordance with its normal practice.
The MDCC also determined that the Company should make retention stock option grants to certain
executive officers remaining with the Company in order to promote the continuity of the management
team as they continue to navigate through challenging market conditions in 2008. The performance
features of the grants are designed to integrate existing and new members of management into a
cohesive executive team strongly aligned with the future financial interests of shareholders. The
Committee determined that stock options were the most appropriate vehicle for providing a forward
looking incentive and that the grants should have significant performance features, similar to the
stock option grants made to John A. Thain, Chairman and CEO, and Nelson Chai, Executive Vice
President and Chief Financial Officer, when they joined Merrill Lynch.
To ensure significant retention value, the grants will not be exercisable and will not be subject
to retirement treatment prior to January 28, 2010. One third of the stock options granted will
become exercisable on or after January 28, 2010. The remaining two-thirds of stock options granted
will become exercisable on or after that date only if specified stock price targets are achieved at
any time after the grant date as follows: (A) one third of the total grant will become exercisable
if the average closing price of Merrill Lynch common stock over any 15-day trading period reaches
$80.00 per share and (B) the last third of the total grant will become exercisable if the average
closing price of Merrill Lynch common stock over any 15-day trading period reaches $100.00 per
share. The exercise price of all of the stock options is $55.593, the fair market value of Merrill
Lynch’s common stock on January 28, 2008, the date of grant.
The grants will be subject to retirement treatment after January 28, 2010, subject to applicable
age and length of service requirements and continued compliance with non-competition and other
covenants. In addition, if the executive is terminated by the Company without cause, he or she
will be entitled to retain the grants, subject to the same covenants. However, the timing and terms
of exercise will remain the same, including the stock price hurdles applicable to the performance
tranches.
The number of retention stock options awarded to each executive are as follows:
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Options |
Gregory J. Fleming, President and COO |
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1,187,200 |
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Robert J. McCann, Vice Chairman, President Global Wealth Management |
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971,346 |
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Rosemary T. Berkery, Vice Chairman and General Counsel |
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593,600 |
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The previously announced sign-on arrangements for Mr. Thain and Mr. Chai were not affected by the
MDCC’s actions.