MERRILL LYNCH & CO INC, DEF 14A, 1994-03-14

MERRILL LYNCH & CO INC
DEF 14A, 1994-03-14
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES

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<PAGE>

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

Merrill Lynch & Co., Inc.
(Name of Registrant as Specified In Its Charter)

Merrill Lynch & Co., Inc.
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (check the appropriate box):

[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).

[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*

(4) Proposed maximum aggregate value of transaction:
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*Set forth the amount on which the filing is calculated and state how it was
determined.

[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount previously paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

<PAGE>

Proxy Statement

Notice of the Annual
Meeting of Stockholders
to be held April 19, 1994

Merrill Lynch & Co., Inc.
Conference and Training Center
Plainsboro, New Jersey

[LOGO OF MERRILL LYNCH APPEARS HERE]
<PAGE>

[LOGO OF MERRILL LYNCH APPEARS HERE]
- --------------------------------------------------------------------------------

March 14, 1994

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders to be
held at 10:30 A.M., local time, on Tuesday, April 19, 1994, at the Merrill
Lynch & Co., Inc. Conference and Training Center, Plainsboro, New Jersey.

Information regarding the business of the meeting is set forth in the following
formal Notice of Annual Meeting and Proxy Statement. There will be an
opportunity for stockholders to ask questions about our business and to comment
on any aspect of company affairs properly brought before the meeting.

We cannot stress strongly enough that the vote of every stockholder, regardless
of the number of shares owned, is important. Therefore, after you read the
Notice of Annual Meeting and Proxy Statement, and even if you plan to attend
the meeting, please complete and return promptly the enclosed form of proxy to
ensure that your shares will be represented. A return envelope is enclosed for
your convenience. Since mail delays may occur, it is important that the proxy
be returned well in advance of the meeting. If you decide to attend the meeting
and wish to vote your shares personally, you may revoke your proxy at any time
before it is exercised at the meeting. Merrill Lynch will admit to the meeting
stockholders of record, persons holding proof of beneficial ownership or who
have been granted proxies, and any other persons that Merrill Lynch, in its
sole discretion, may elect to admit.

We look forward to receiving your vote and seeing you at the meeting. Any
stockholder requiring directions to the meeting, or who has a disability that
may require special assistance, is asked to contact our Corporate Secretary,
Gregory T. Russo, at 100 Church Street, 12th Floor, New York, NY 10080-6512.

Sincerely,

/s/ Daniel P. Tully
DANIEL P. TULLY
Chairman of the Board and
Chief Executive Officer
<PAGE>

[LOGO OF MERRILL LYNCH APPEARS HERE]
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 19, 1994

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of MERRILL LYNCH
& CO., INC. ("ML & Co."), a Delaware corporation, will be held on Tuesday,
April 19, 1994, at 10:30 A.M., local time, at the Merrill Lynch & Co., Inc.
Conference and Training Center, 800 Scudders Mill Road, Plainsboro, New Jersey,
for the following purposes:

(1) To elect 5 directors to the Board of Directors to hold office for a
term of 3 years;

(2) To consider approving performance goals governing, and eligibility
requirements for, certain annual bonuses and grants of restricted
shares and units;

(3) To consider a stockholder proposal; and

(4) To transact such other business as properly may come before the Annual
Meeting and any adjournment thereof.

Only holders of Common Stock of record on the books of ML & Co. at the close of
business on February 23, 1994, are entitled to notice of, and to vote at, the
Annual Meeting and any adjournment thereof. A list of such stockholders will be
available from April 8, 1994, until prior to the meeting, as required by law,
at the office of Merrill Lynch Asset Management located at 800 Scudders Mill
Road, Plainsboro, New Jersey. This list will also be available at the Annual
Meeting. The stock transfer books will not be closed.

Public notice of the date of the Annual Meeting was previously included in ML &
Co.'s Quarterly Report on Form 10-Q for the period ended September 24, 1993,
which was filed with the Securities and Exchange Commission on November 5,
1993, and in ML & Co.'s Third Quarter Report to stockholders mailed on November
16, 1993.

By Order of the Board of Directors

GREGORY T. RUSSO
Secretary

New York, N.Y.
March 14, 1994

STOCKHOLDERS ARE URGED TO VOTE, SIGN, AND DATE THE ENCLOSED FORM OF PROXY AND
TO RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.

The Proxy Statement for the Annual Meeting follows this page. For stockholders
who have not previously been sent a copy, enclosed is the Annual Report of ML &
Co. for 1993, which is not proxy soliciting material.
<PAGE>

[LOGO OF MERRILL LYNCH APPEARS HERE]
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PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS
APRIL 19, 1994

March 14, 1994
World Financial Center
North Tower
New York, NY 10281

This Proxy Statement is furnished in connection with the solicitation on behalf
of the Board of Directors of Merrill Lynch & Co., Inc., a Delaware corporation
("ML & Co."), of proxies from holders of ML & Co. Common Stock, par value $1.33
1/3 per share (the "Common Stock"), eligible to vote at the forthcoming Annual
Meeting of Stockholders, and at any adjournment thereof, on the matters set
forth in the foregoing Notice of Annual Meeting of Stockholders. The Annual
Meeting will be held on Tuesday, April 19, 1994, at 10:30 A.M., local time, at
the Merrill Lynch & Co., Inc. Conference and Training Center, 800 Scudders Mill
Road, Plainsboro, New Jersey.

The close of business on February 23, 1994 has been fixed by the Board of
Directors as the record date for determining the stockholders entitled to
notice of, and to vote at, the Annual Meeting and at any adjournment thereof.
On that date, there were 212,582,125* shares of Common Stock outstanding
(excluding treasury shares), the holders thereof being entitled to one vote per
share. To the knowledge of ML & Co., except as provided below, no person is the
beneficial owner of more than 5% of the outstanding shares of Common Stock.

<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS(1)
------------------- ----------------- -----------
<S> <C> <C>
State Street Bank and Trust Company, Trustee
("State Street")
225 Franklin Street
Boston, Massachusetts 02110
Merrill Lynch & Co., Inc.
Employee Stock Ownership Plan (the "ESOP")... 11,913,420(2) 5.6%
Other ML & Co. employee benefit plans......... 4,005,190(3) 1.9%
Other......................................... 2,066,982(4) 1.0%
The Equitable Companies Incorporated
(the "Equitable Companies")
787 Seventh Avenue
New York, New York 10019....................... 18,319,242(5) 8.6%
</TABLE>
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* All amounts of shares of Common Stock presented in this Proxy Statement
reflect the two-for-one Common Stock split, effected in the form of a 100%
stock dividend, paid on November 24, 1993.
<PAGE>

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(1) Percentages are calculated based on the Common Stock outstanding as of
February 23, 1994.

(2) The amount shown is the number of shares of Common Stock that, as of
February 23, 1994, were held by the ESOP but had not been allocated to
participants; as of that date, an additional 12,826,979 shares of Common Stock
allocated to participants were held by the ESOP (representing an additional
6.0% of the outstanding shares of Common Stock) . Thus, the ESOP held a total
of 24,740,399 shares of Common Stock, representing 11.6% of the outstanding
shares of Common Stock. Participants have the right to direct the voting of
allocated shares by State Street as a co-trustee of the ESOP. Subject to the
provisions of the ESOP trust agreement, State Street is obligated to vote
unallocated shares, and allocated shares for which it has not received
directions, in the same proportion as directed shares are voted. The trust
agreement also contains provisions regarding the allocation of shares to
participants, the vesting of shares of Common Stock in participants, and the
disposition of shares.

(3) Information concerning the amount and nature of beneficial ownership is as
of February 23, 1994. Participants have the right to direct the voting of
shares of Common Stock by State Street as a co-trustee of these plans. Subject
to the provisions of the trust agreements relating to these employee benefit
plans, State Street is obligated to vote shares for which it has not received
directions in the same proportion as directed shares are voted. The trust
agreements also contain provisions regarding the disposition of shares.

(4) Information concerning the amount and nature of beneficial ownership is as
of December 31, 1993 and was supplied by State Street. As trustee for various
collective investment funds for employee benefit plans and index accounts not
affiliated with ML & Co. and for various personal trust accounts not affiliated
with ML & Co., State Street has sole power to vote, or to direct the vote of,
1,649,082 of such shares, and sole power to dispose of, or to direct the
disposition of, 2,048,782 of such shares.

(5) Information concerning the amount and nature of beneficial ownership is as
of December 31, 1993 and was supplied by the Equitable Companies, AXA, a French
insurance holding company that owns 49% of the Equitable Companies ("AXA"), and
a group of five French mutual insurance companies that own, as a group, 50% of
AXA (the "Mutuelles AXA"). Such information indicates that shares are held by
subsidiaries of the Equitable Companies as follows: (i) 17,507,200 are held on
behalf of client discretionary investment accounts by Alliance Capital
Management, L.P. ("Alliance") (which has sole dispositive power over all such
shares, sole voting power over 9,872,560 of such shares, and shared voting
power over 228,700 of such shares); (ii) 811,800 shares are held by The
Equitable Life Assurance Society of the United States (which has sole voting
and dispositive power over all such shares); (iii) 200 are held on behalf of
client discretionary investment advisory accounts by Wood, Struthers & Winthrop
Management Corp. (which has shared voting and sole dispositive power over all
such shares); and (iv) 42 are held for investment purposes by Donaldson Lufkin
& Jenrette Securities Corporation (which has sole voting and dispositive power
over all such shares). Each of AXA, the Mutuelles AXA, as a group, and the
Equitable Companies, by virtue of their relationship to the Equitable
Companies' subsidiaries, may be deemed to have sole voting power over
10,684,402 of the above-mentioned shares and shared voting power over 228,900
of such shares.

2
<PAGE>

A plurality of the votes of the shares of Common Stock represented in person or
by proxy at the Annual Meeting is required for the election of directors. The
affirmative vote of the majority of the shares of Common Stock represented at
the Annual Meeting in person or by proxy and entitled to vote is required to
approve the proposed performance goals governing, and eligibility requirements
for, certain annual bonuses and grants of restricted shares and units (the
"Performance Goals Proposal"), the stockholder proposal and all other matters.
All shares of Common Stock represented by valid proxies received pursuant to
this solicitation and not revoked will be voted in accordance with the choices
specified. Where no specification is made with respect to any item submitted to
a vote, such shares will be voted for the election as directors of ML & Co. of
the 5 persons named under the caption "Election of Directors," for the
Performance Goals Proposal, and against the stockholder proposal. Since the
proxy confers discretionary authority to vote upon other matters that properly
may come before the meeting, shares represented by signed proxies returned to
ML & Co. will be voted in accordance with the judgment of the person or persons
voting the proxies on any other matters that properly may be brought before the
meeting. With regard to the election of directors, votes may be cast in favor
or withheld; votes that are withheld will have no effect on the outcome of the
vote. With regard to other proposals, votes may be cast in favor or against, or
a stockholder may abstain. Abstentions will be counted as shares that are
represented at the meeting and entitled to vote. Abstentions on the stockholder
proposal and on the Performance Goals Proposal will have the effect of a
negative vote because such proposals require the affirmative vote of a majority
of shares present in person or by proxy and entitled to vote. Under the rules
of the New York Stock Exchange, Inc. ("NYSE"), brokers who hold shares in
street name for customers have the authority to vote on certain items in the
event that they have not received instructions from beneficial owners. Brokers
(other than ML & Co.'s subsidiary, Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("MLPF&S")) that do not receive instructions are entitled to vote
on the election of directors. Under such rules, if MLPF&S does not receive
instructions on this item, it is entitled to vote shares only in the same
proportion as the shares represented by votes from all record holders. With
respect to the Performance Goals Proposal and the stockholder proposal, neither
MLPF&S nor any other broker may vote shares held for customers without specific
instructions from such customers. Under applicable Delaware law, a broker non-
vote will be disregarded and will have no effect on the outcome of the election
of directors, the Performance Goals Proposal or the stockholder proposal.

The execution of a proxy will not affect a stockholder's right to attend the
Annual Meeting and to vote in person. A stockholder who executes a proxy may
revoke it at any time before it is exercised at the meeting by giving notice to
the Secretary of ML & Co. or by filing another proxy.

The expenses involved in the preparation of proxy materials and the
solicitation on behalf of the Board of Directors of proxies for the Annual
Meeting will be borne by ML & Co. In addition to the solicitation of proxies by
mail, solicitation may be made by certain directors, officers, and other
employees of ML & Co. or of its subsidiaries in person or by telephone,
telegraph, or other means of communication, for which no additional
compensation will be paid, and by Georgeson & Co., Inc. for a fee of $22,000
plus expenses. ML & Co. will reimburse brokers, including MLPF&S, and other
nominees for costs incurred by them in mailing soliciting materials to the
beneficial owners of its stock in accordance with the rules of the NYSE.

3
<PAGE>

The accounting firm of Deloitte & Touche has been selected by the Board of
Directors, upon the recommendation of the Audit and Finance Committee of the
Board, as the independent public accountants of ML & Co. and its subsidiaries
during the 1994 fiscal year. Representatives of Deloitte & Touche are expected
to be present at the Annual Meeting with the opportunity to make a statement,
if they desire to do so, and to answer stockholders' questions.

ELECTION OF DIRECTORS

The Board of Directors of ML & Co. is divided into 3 classes. Each class serves
for a 3-year term and one class of directors is elected each year. During the
1993 fiscal year, the Board of Directors met 9 times.

The Board of Directors proposes the election, as directors, of the 5 persons
named below, to hold office for a term of 3 years, ending in 1997. The
remaining 8 directors named below will continue to serve in accordance with
their previous elections. It is intended that shares of Common Stock
represented by proxies received in response to this Proxy Statement will be
voted for the election of the nominees listed below unless otherwise directed
by stockholders in their proxies. While it is not anticipated that any of the
nominees will be unable to take office, if that is the case, such shares will
be voted in favor of the other person or persons proposed by the Board of
Directors.

The following information is provided concerning directors of ML & Co.,
nominees for election as directors, and executive officers. The information as
to ownership of Common Stock and certain affiliations is based upon information
received from the nominees, directors, and executive officers.

FOR A 3-YEAR TERM EXPIRING IN 1997
<S> <C> <C>
William O. Bourke, 66................ 1987 4,120(4)
Corporate Director (3); Chairman of
the Board of Reynolds Metals Compa-
ny, a producer of aluminum prod-
ucts, from April, 1988 to May,
1992; Chief Executive Officer of
that company from April, 1986 to
May, 1992; President of that com-
pany from January, 1983 to April,
1988.
Stephen L. Hammerman, 55............. 1985 694,442(5)(6)
Vice Chairman of the Board since
April, 1992; Executive Vice Presi-
dent from June, 1985 to April,
1992; General Counsel since Octo-
ber, 1984; General Counsel of
MLPF&S since March, 1981.
Aulana L. Peters, 52 (3)............. Not Previously 200
Partner in the law firm of Gibson, A Director
Dunn & Crutcher since 1988 and from
1980 to 1984; Commissioner of the
U.S. Securities and Exchange Com-
mission from 1984 to 1988.
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
NAME, AGE, AND PRINCIPAL OCCUPATION DIRECTOR OF COMMON STOCK AS OF
FOR THE LAST 5 YEARS(1) SINCE FEBRUARY 23, 1994(2)
- ----------------------------------------------------------------------------------
<S> <C> <C>
John J. Phelan, Jr., 62.......................... 1991 3,920
Corporate Director (3); Senior Adviser to the
Boston Consulting Group since October, 1992;
Member of the Council on Foreign Relations
since 1988; President of the International Fed-
eration of Stock Exchanges from January, 1991
to January, 1993; Chairman and Chief Executive
Officer of the New York Stock Exchange, Inc.
from May, 1984 to December, 1990.
Charles A. Sanders, M.D., 62 (3)................. 1987 3,920
Chairman of the Board of Glaxo Inc., a pharma-
ceutical company, since January, 1992; Chief
Executive Officer of that company from July,
1989 through February, 1994; Vice Chairman of
Squibb Corporation, a pharmaceutical and health
care products company, from March, 1988 to July,
1989; Executive Vice President of that company
from September, 1981 to March, 1988.
<CAPTION>
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE

TERM EXPIRING IN 1995
<S> <C> <C>
Robert A. Hanson, 69............................. 1984 1,552
Corporate Director (3); Chairman of the Board of
Deere & Company, a manufacturer, distributor,
and financier of farm and industrial equipment,
from October, 1982 to June, 1990; Chief Execu-
tive Officer of that company from August, 1982
to August, 1989.
Earle H. Harbison, Jr., 65 (3)................... 1987 5,320(4)
Chairman of the Board of Harbison Walker, Inc.,
a manufacturer of molded plastic products;
Chairman of the Executive Committee of Monsanto
Company, a provider of chemical and agricul-
tural products, pharmaceuticals, sweeteners,
industrial process controls, and man-made fi-
bers, from January, 1993 to August, 1993; Pres-
ident and Chief Operating Officer of that com-
pany from May, 1986 through December, 1992.
Daniel P. Tully, 62.............................. 1985 1,745,678(5)(6)
Chairman of the Board since June, 1993; Chief
Executive Officer since May, 1992; President
and Chief Operating Officer since July, 1985;
Chairman of the Board, President, and Chief Ex-
ecutive Officer of MLPF&S since July, 1985.
Robert P. Luciano, 60 (3)........................ 1989 3,920
Chairman of the Board of Schering-Plough Corpo-
ration, a health and personal care products
company, since January, 1984 and its Chief Ex-
ecutive Officer since February, 1982.
</TABLE>

5
<PAGE>

TERM EXPIRING IN 1996
<S> <C> <C>
Jill K. Conway, 59 (3)...................... 1978 3,354
Visiting Scholar, Massachusetts Institute
of Technology since 1985; President of
Smith College from July, 1975 to June,
1985.
William J. Crowe, Jr., 69 (3)............... 1989 1,736
Counselor, The Center for Strategic and In-
ternational Studies, an economic and po-
litical consulting organization, since
February 1990; Chairman of the Foreign In-
telligence Advisory Board for the Presi-
dent of the United States since January,
1993; Professor of Geopolitics at the Uni-
versity of Oklahoma since January, 1990;
Admiral, United States Navy (Retired);
Chairman of the Joint Chiefs of Staff, the
principal military advisors to the Presi-
dent of the United States of America, from
October, 1985 to September, 1989.
George B. Harvey, 62 (3).................... 1993 3,386
Chairman of the Board, President, and Chief
Executive Officer of Pitney Bowes Inc., a
provider of mailing, office and logistics
systems and management and financial serv-
ices, since 1983.
William L. Weiss, 64 (3).................... 1993 2,786
Chairman of the Board of Ameritech Corpora-
tion, a provider of communications and in-
formation services, since 1983 and its
Chief Executive Officer from 1983 through
December, 1993.
<CAPTION>

EXECUTIVE OFFICERS NAMED IN THE SUMMARY
COMPENSATION TABLE
(IN ADDITION TO THOSE WHO ARE DIRECTORS)
- --------------------------------------------
<S> <C>
Herbert M. Allison, Jr.................... 616,221(5)
David H. Komansky......................... 532,299(5)(6)
John L. Steffens.......................... 895,677(5)
All directors and executive officers of ML &
Co. as a group, including those named
above...................................... 6,191,446(4)(5)(6)
</TABLE>
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(1) Unless otherwise indicated, the offices listed are of ML & Co.
(2) All directors, nominees, and executive officers have sole investment power
and sole voting power over shares listed, except as indicated in notes 4,
5, and 6 below. The percentage of shares beneficially owned by any one
director, nominee or executive officer did not exceed 1% of the outstanding
Common Stock. All current directors, nominees, and executive officers of ML
& Co. as a group owned 2.9% of the outstanding Common Stock.

6
<PAGE>

(3) The following directors and nominees also hold directorships in, or similar
affiliations with, the following companies:
William O. Bourke--Reynolds Metals Company; Premark International, Inc.; and
Sonat Inc.
Jill K. Conway--The Allen Group, Inc.; Arthur D. Little, Inc.; Colgate-
Palmolive Company; and NIKE, Inc.
William J. Crowe, Jr.--General Dynamics Corporation; Norfolk Southern
Corporation; Pfizer Inc.; and Texaco Inc.
Robert A. Hanson--The Dun & Bradstreet Corporation; Procter & Gamble
Company; and R.R. Donnelley & Sons Company.
Earle H. Harbison, Jr.--Harbison Walker, Inc.; Angelica Corporation; Mutual
of America; and National Life Insurance Company.
George B. Harvey--Pitney Bowes Inc.; Connecticut Mutual Life Insurance Co.;
and McGraw-Hill, Inc.
Robert P. Luciano--Schering-Plough Corporation; Allied-Signal, Inc.; Borden,
Inc.; and C.R. Bard, Inc.
Aulana L. Peters--Northrop Corporation; Mobil Corporation; Minnesota Mining
and Manufacturing Company (3M); and the New York Stock Exchange, Inc.
John J. Phelan, Jr.--Avon Products, Inc.; Eastman Kodak Company;
Metropolitan Life Insurance Company; and Sonat Inc.
Charles A. Sanders, M.D.--Glaxo Holdings p.l.c.; Morton International, Inc.;
and Reynolds Metals Company.
William L. Weiss--Ameritech Corporation; Abbott Laboratories; The Quaker
Oats Company; and Tenneco Inc.
(4) The number of shares shown for Messrs. Bourke and Harbison include shares
held by their wives, as to which they may be deemed to have shared
investment power and shared voting power. Each of them has expressly
disclaimed beneficial ownership of the shares held by his wife (200 shares
in the case of Mr. Bourke and 2,000 shares in the case of Mr. Harbison).
(5) Beneficial ownership shown for the following individuals and group also
includes the indicated number of shares of Common Stock that may be
purchased upon the exercise (presently or within 60 days) of Stock Options
granted under the ML & Co. Long-Term Incentive Compensation Plan: Daniel P.
Tully (1,218,225); Stephen L. Hammerman (473,060); Herbert M. Allison, Jr.
(434,705); David H. Komansky (316,345); John L. Steffens (596,345); and all
current directors and executive officers of ML & Co. as a group
(3,977,575).
(6) Beneficial ownership shown for Mr. Hammerman, and for the group consisting
of all directors and executive officers of ML & Co., includes 35,000 shares
of Common Stock held in trusts as to which Mr. Hammerman has shared voting
and investment power. Beneficial ownership shown for Mr. Tully, and for the
group consisting of all directors and executive officers of ML & Co.,
includes 9,000 shares of Common Stock held in a trust as to which Mr. Tully
has shared voting and investment power. Beneficial ownership shown for Mr.
Komansky, and for the group consisting of all directors and executive
officers of ML & Co., includes 1,447 shares of Common Stock held by a
charitable foundation of which Mr. Komansky and two other executive
officers not named in the Summary Compensation Table act as trustees and as
to which they have shared voting and investment power. Beneficial ownership
shown for the group consisting of all directors and executive officers of
ML & Co. includes 10,148 shares of Common Stock held in a charitable
foundation as to which an executive officer not named in the Summary
Compensation Table has shared voting and investment power and 616 shares of
Common Stock held in trusts as to which an executive officer not named in
the Summary Compensation Table has sole voting and investment power.

7
<PAGE>

COMMITTEES OF THE BOARD OF DIRECTORS

In addition to an Executive Committee, ML & Co. has standing Audit and Finance,
Management Development and Compensation, and Nominating Committees of the Board
of Directors.

The Audit and Finance Committee consists of Mr. Hanson, who chairs the
committee, and Messrs. Crowe, Harvey, Luciano, and Sanders. The committee held
6 meetings during the 1993 fiscal year. The Audit and Finance Committee has
performed the following functions, among others: monitoring ML & Co.'s system
of internal accounting controls and overseeing and evaluating the internal
audit function; recommending the appointment and monitoring the performance,
independence, and fees of ML & Co.'s independent public accountants and
monitoring professional services they provide; reviewing the scope of the
annual audit with the independent public accountants and reviewing their
reports to management; reviewing ML & Co.'s annual consolidated financial
statements; and overseeing corporate funding policy, securities offerings,
budgets and financial objectives, financial commitments and related policies,
and risk management policies and procedures.

The Management Development and Compensation Committee, which consists of Mrs.
Conway, who chairs the committee, and Messrs. Bourke, Harbison, Phelan, and
Weiss, held 10 meetings during the 1993 fiscal year. This committee has
performed the following functions, among others: exercising primary
responsibility on behalf of the Board of Directors for reviewing and
recommending employee compensation programs, policies, and practices, including
salary, cash incentive, long-term incentive compensation, stock purchase, and
other retirement and health and welfare programs; making grants under ML &
Co.'s Equity Capital Accumulation Plan and Long-Term Incentive Compensation
Plan; discharging the responsibilities described below under the caption
"Compensation Committee Report"; and periodically reviewing management
development programs and executive succession plans.

The Nominating Committee, which consists of Mr. Harbison, who chairs the
committee, Mrs. Conway and Mr. Hanson (all of whom are voting members) and Mr.
Tully (who is a non-voting member) held 1 meeting and had a number of
discussions during the 1993 fiscal year. This committee has performed the
following functions: seeking potential candidates to serve on the Board of
Directors with a view toward a desirable balance of expertise among Board
members and recommending to the Board of Directors membership of committees of
the Board and nominees to fill vacancies on the Board. The Nominating Committee
will consider nominees recommended by stockholders. Those wishing to submit
recommendations for the 1995 Annual Meeting of Stockholders should write to
Gregory T. Russo, Secretary, Merrill Lynch & Co., Inc., 12th Floor, 100 Church
Street, New York, New York 10080-6512.

8
<PAGE>

APPROVAL OF PERFORMANCE GOALS GOVERNING, AND ELIGIBILITY REQUIREMENTS FOR,
CERTAIN ANNUAL BONUSES AND GRANTS OF RESTRICTED SHARES AND UNITS

The Board of Directors recommends approval by the stockholders of the
performance goals and eligibility requirements contained in the ML & Co.
Executive Officer Compensation Plan (the "Cash Plan") and in resolutions
adopted by ML & Co.'s Management Development and Compensation Committee
("MDCC"). These performance goals will govern, in the case of the Cash Plan,
the award of annual bonuses and, in the case of the resolutions, the grant of
Restricted Shares and Restricted Units under ML & Co.'s Long-Term Incentive
Compensation Plan, which was approved by stockholders in 1989 ("LTIC").
Approval of the performance goals is being recommended to preserve, for the
fiscal years 1994 and thereafter, ML & Co.'s federal tax deduction for
compensation paid to its Chairman of the Board (the "Chairman") and/or Chief
Executive Officer ("CEO") and the four next highest paid executive officers (as
such term is defined in Rule 3b-7 of the rules and regulations promulgated
under the Securities Exchange Act of 1934) (collectively, the "covered
officers"), by complying with new provisions of Section 162(m) of the Internal
Revenue Code ("IRC"), enacted as part of the Omnibus Budget Reconciliation Act
of 1993. These provisions and the proposed regulations issued under IRC Section
162(m) by the U.S. Department of the Treasury could limit ML & Co.'s federal
tax deduction for compensation paid to the covered officers to $1 million each,
unless compensation in excess of this amount is based on the achievement of
performance goals and eligibility requirements that have been approved by a
committee of outside directors and approved by stockholders.

The MDCC, a committee of outside directors, has formulated the performance
measures on which annual bonus amounts to be paid to covered officers under the
Cash Plan and the dollar value of grants of Restricted Shares and Restricted
Units to be made under LTIC to executive officers with the title Executive Vice
President, Vice Chairman, Chief Operating Officer, CEO or Chairman will be
based, and recommends approval of these performance measures by ML & Co.'s
stockholders. The performance measures link changes in the dollar amount of
annual bonus compensation and the dollar value (measured as of the time of the
grant) of Restricted Share and Restricted Unit grants directly to changes in
the financial performance of ML & Co. The specific financial performance
measures used in the formula are ML & Co.'s Net Income Applicable to Common
Stockholders (as defined below, "Net Income") and ML & Co.'s Return on Average
Common Stockholders' Equity (as defined below, "ROE"). These performance
measures have generally been used by the MDCC over the past several years to
determine the funds available for annual bonuses for executive officers,
including the CEO.

Under the Cash Plan and the resolutions adopted by the MDCC to govern its
discretion in granting Restricted Share and Restricted Unit awards under LTIC,
the performance goal formula will be used to determine the maximum cash bonus
amount (the "Cash Bonus Amount") and the maximum dollar value of Restricted
Shares and Restricted Units (the "Restricted Share and/or Restricted Unit
Amount") that may be granted to the Chairman and/or the CEO. The Cash Bonus
Amount for the Chairman and/or the CEO will be calculated by increasing or
decreasing his Cash Bonus Amount from the prior year (which for the 1993
performance year was $6.2 million) by the Average Percentage Change in
Performance for ML & Co. over such prior year. The Average Percentage Change in
Performance is the sum of the percentage change in Net Income and the
percentage change in ROE from one fiscal year to the next, divided by two. The
Restricted Share and/or Restricted Unit Amount for the Chairman and/or CEO will
also be calculated by increasing or decreasing his Restricted Share and/or
Restricted

9
<PAGE>

Unit Amount for the prior year (which for the 1993 performance year was $1.45
million) by the Average Percentage Change in Performance.

The Cash Bonus Amounts and Restricted Share and/or Restricted Unit Amounts with
respect to a given performance year for additional officers (i.e., those other
than the Chairman and/or the CEO) covered by the Cash Plan or by the
resolutions will be established as follows:

Chief Operating 80% of the Chairman and/or CEO's Cash
Officer Bonus Amount or Restricted Share and/or
Restricted Unit Amount.

Executive Vice 70% of the Chairman and/or CEO's Cash
President(s) and Vice Bonus Amount or Restricted Share and/or
Chairman Restricted Unit Amount

The performance goal formula has the effect of increasing compensation only
when ML & Co.'s performance (as measured by Net Income and ROE) increases over
a prior year and of decreasing compensation if ML & Co.'s performance declines
from a prior year. Under the Cash Plan and the performance goals contained in
the resolutions, no Cash Bonus Amounts or Restricted Share and/or Restricted
Unit Amounts will be paid unless ML & Co. achieves a positive Net Income and a
positive ROE for the relevant performance year. In the event that no Cash Bonus
Amounts and Restricted Share and/or Restricted Unit Amounts are paid in a given
year, the Cash Plan and the resolutions provide that, to calculate the next
year's Cash Bonus Amounts and Restricted Share and/or Restricted Units Amounts,
the MDCC will use all base amounts (including Net Income and ROE) from the most
recent fiscal year in which Net Income and ROE were positive. The MDCC retains
the discretion to reduce the amount of cash compensation or the dollar value of
Restricted Share and Restricted Unit grants yielded by the formula for any
officer.

Net Income and ROE were chosen as the performance measures by the MDCC because
in combination they provide an incentive for executives to work towards both
growth in profits and a high return on stockholders' equity. These measures
also are currently used by the MDCC to determine cash incentive compensation
levels throughout the corporation.

Prior to awarding any cash bonuses or any Restricted Share and/or Restricted
Unit grants for the performance year 1994 and all future years covered by the
Cash Plan and the resolutions, the MDCC or any sub-committee of the MDCC (or
any successor thereto) will evaluate the performance of ML & Co. to certify
that the performance goals have been met and will then determine compensation
in accordance with the formula, subject to its discretion to reduce the
compensation yielded by the formula.

As described under the caption "Executive Compensation--Compensation Committee
Report," the MDCC decided to determine bonuses and Restricted Stock and/or
Restricted Unit awards for the 1993 performance year consistent with the
performance goals described herein. Bonus amounts paid for 1993 which are
listed under the caption "Executive Compensation--Summary Compensation Table"
were determined consistent with the performance goals and the MDCC's discretion
described herein.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR the adoption of this proposal.

10
<PAGE>

CERTAIN DEFINITIONS:

The performance goals contained in the Cash Plan and in the resolutions
governing Restricted Share and Restricted Unit grants under LTIC use the
following definitions:

"AVERAGE COMMON STOCKHOLDERS' EQUITY" means, with respect to any performance
year, the sum of the month-end common stockholders' equity (excluding preferred
stock) for the month of December in the fiscal year prior to such performance
year and each of the 12 months in such performance year, as reported by ML &
Co., divided by 13.

"NET INCOME" means, with respect to any performance year, Net Earnings for ML &
Co. Applicable to Common Stockholders, as it appears in ML & Co.'s Statement of
Consolidated Earnings contained in ML & Co.'s Consolidated Financial Statements
for such performance year adjusted to eliminate (i) the cumulative effect of
changes in accounting principles (which include changes in generally accepted
accounting principles) adopted by ML & Co. for the relevant performance year;
(ii) expenses classified as "Provisions for Restructuring" (net of "Related
Applicable Income Tax Benefits") within ML & Co.'s Statement of Consolidated
Earnings; (iii) gains and/or losses classified as "Discontinued Operations"
within ML & Co.'s Statement of Consolidated Earnings; and (iv) gains or losses
classified as "Extraordinary Items" within ML & Co.'s Statement of Consolidated
Earnings (which may, in accordance with generally accepted accounting
principles, include (A) profits or losses on disposal of assets or segments of
the previously separate companies of a business combination within two years of
the date of such combination; (B) gains on restructuring payables; (C) gains or
losses on the extinguishment of debt; (D) gains or losses from the
expropriation of property; (E) gains or losses that are the direct result of a
major casualty; and (F) losses resulting from a newly enacted law or
regulation).

"ROE" means, with respect to any performance year, the Net Income for such
period, divided by the Average Common Stockholders' Equity for such period.

11
<PAGE>

STOCKHOLDER PROPOSAL

Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Ave., N.W.,
Suite 215, Washington, D.C. 20037, holding 200 shares of Common Stock, has
given notice of her intention to propose the following resolution at the Annual
Meeting:

"RESOLVED: That the stockholders of Merrill Lynch, assembled in Annual
Meeting in person and by proxy, hereby request the Board of Directors to
take the necessary steps to provide for cumulative voting in the election
of directors, which means each stockholder shall be entitled to as many
votes as shall equal the number of shares he or she owns multiplied by the
number of directors to be elected, and he or she may cast all of such votes
for a single candidate, or any two or more of them as he or she may see
fit."

The following statement has been submitted by Mrs. Davis in support of the
resolution:

"REASONS: Many states have mandatory cumulative voting, so do National
Banks."

"In addition, many corporations have adopted cumulative voting."

"Last year the owners of 24,064,876* shares, representing approximately
29.3% of shares voting, voted FOR this proposal."

"If you AGREE, please mark your proxy FOR this resolution."

The Board of Directors recommends a vote AGAINST the adoption of this proposal.

This same proposal has been previously submitted eight times by its proponent
to Annual Meetings of Stockholders. It has been consistently opposed by the
Board of Directors and defeated by stockholders every time by a substantial
majority of the votes cast.

The reasons the Board of Directors opposes this resolution are essentially the
same as those stated in the proxy statements for the eight prior Annual
Meetings at which the proposal was submitted. Under the General Corporation Law
of Delaware (the "Corporation Law"), the state in which ML & Co. is
incorporated, cumulative voting is permissible only if provided for in a
corporation's certificate of incorporation. The general rule under the
Corporation Law, which is followed by many large corporations, is that each
director must be elected by a plurality of the votes of the shares present in
person or represented by proxy.

The Board of Directors would recommend a change in the method of stockholder
voting only if another method would better serve the interests of the
stockholders as a whole. To the contrary, cumulative voting would give
stockholders who seek to support a special interest group the potential to
elect one or more directors representing the interests of that group. Any
directors so elected may view themselves as representatives of the group that
elected them and feel obligated to represent that group's interests, regardless
of whether the furtherance of those interests would benefit all stockholders

- --------
* This number does not reflect the two-for-one Common Stock split, effected in
the form of a 100% stock dividend, paid on November 24, 1993. The indicated
percentage of shares is accurate.

12
<PAGE>

generally. This would tend to promote adherence to narrow interests rather than
those of stockholders at large, whereas the election of directors by plurality
vote is designed to produce a board of directors that views its accountability
as being to stockholders generally. Cumulative voting would also create a risk
of promoting factionalism among members of the Board of Directors and may,
therefore, undermine their ability to work together effectively. Accordingly,
the Board of Directors regards the proposed change as not only serving no
useful purpose but as being contrary to the best interests of all ML & Co.
stockholders.

For the reasons stated above, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST
the adoption of this proposal.

13
<PAGE>

EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE REPORT

EXECUTIVE COMPENSATION POLICIES

ML & Co. is engaged in a highly competitive industry. As a consequence, ML &
Co. views its ability to attract, retain and motivate qualified executives as
the cornerstone of its future success. To accomplish these objectives, ML & Co.
believes that executive compensation programs must be highly variable and
structured to ensure that the financial interests of executives and ML & Co.'s
stockholders are aligned.

For these reasons, both the annual cash incentive award (bonus) and the equity-
based awards made to executives vary directly with changes in ML & Co.'s
financial results and the individual performance of the executive. Maximum
awards are determined for executives based on a formula, and vary up and down
with changes in ML & Co.'s net income and return on equity. These maximum
awards may then be reduced by the MDCC based on other considerations including
productivity, expense and risk control, product innovation, quality of client
service, management development, and strategic planning. Additionally, the MDCC
considers the extent to which individuals take a leadership role in promoting
ML & Co.'s principles of Client Focus, Respect for the Individual, Teamwork,
Responsible Citizenship and Integrity.

OVERVIEW AND PROCESS

The MDCC is responsible for administering compensation for all executive
officers. The MDCC consists of five directors who have never been employees of
ML & Co. and who are not eligible to participate in any of the compensation
programs or plans that the MDCC administers. It is the responsibility of the
MDCC, on behalf of the Board of Directors, to oversee executive compensation
programs, policies, and practices, which include base salary, annual bonus
compensation, and long-term equity-based incentive compensation, as well as
retirement, health and welfare programs, and other similar programs of ML & Co.

Each year the MDCC conducts a full review of ML & Co.'s executive compensation
programs to ensure that such programs are aligned with ML & Co.'s long-term
strategic and financial goals, annual financial plans and other short-term
objectives. In addition, the MDCC reviews the impact of changes in laws and
regulations on the compensation of ML & Co.'s executive officers. The MDCC has
access to advice and counsel from independent third parties concerning matters
such as historical data on CEO compensation levels within the securities
industry which it uses to assess its overall methodology for determining
compensation. The MDCC also reviews elements of executive management
compensation with the Board of Directors, which has specific responsibility to
approve the compensation of executive management.

BASE SALARIES

Executive officer salaries are typically reviewed every three to four years
based on factors determined by the MDCC at the time of review. Executive
officer salaries were not reviewed by the MDCC in 1993. For 1993, the base
salaries of executive officers named in the Summary Compensation Table ranged

14
<PAGE>

from 7% to 9% of their total annual cash compensation levels (base salary plus
annual bonus). This relationship of salaries to total annual cash compensation
is intended to increase the motivational value of the annual bonus.

INCENTIVE COMPENSATION

LIMITS TO TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Section 162(m) of the
Internal Revenue Code limits the tax deductibility of compensation in excess of
$1 million paid to the individual executive officers named in the Summary
Compensation Table except under certain circumstances. To satisfy Section
162(m), the MDCC has adopted, and ML & Co.'s Board of Directors is recommending
that stockholders approve, performance goals and eligibility requirements
contained in the Cash Plan that must be met for the payment of annual bonuses
to the executive officers named each year in the Summary Compensation Table,
and contained in resolutions adopted by the MDCC to govern the annual grant
value of Restricted Shares and Restricted Units to executive officers under
LTIC. While the performance goals contained in the Cash Plan and the
performance goals governing grants of Restricted Shares and Units (together
referred to as the "performance goals"), if approved by stockholders, will be
initially applicable to compensation amounts that will be paid or granted in
1995 for the 1994 performance year, the MDCC decided to determine compensation
amounts for all executive officers consistent with this approach for the 1993
performance year (the performance goals are discussed in more detail under the
section titled "Approval of Performance Goals Governing, and Eligibility
Requirements for, Certain Annual Bonuses and Grants of Restricted Shares and
Units" on page 9 of this Proxy Statement).

The performance goals provide an objective, quantifiable, performance-based
formula for determining maximum annual bonuses for each of the named executive
officers and Restricted Share and Restricted Unit grants for executive officers
with the title "Executive Vice President" or above. This formula links changes
in annual bonuses and long-term incentive compensation directly to changes in
ML & Co.'s Net Income and ML & Co.'s ROE. The MDCC retains the discretion to
reduce the formula-determined amounts based on its evaluation of other factors.
These factors, which are listed under the section titled "Executive
Compensation Policies," are considered collectively by the MDCC and are not
weighted in any particular order of importance. Because this process determines
compensation levels based on ML & Co.'s and the individual's performance,
compensation is not targeted to specific competitive levels.

ML & Co.'s Net Income and ROE were selected as the performance measures and are
equally weighted in the formula because in combination they provide an
incentive for executives to work towards both growth in profits and a high
return on stockholders' equity. These same performance measures have generally
been used by the MDCC over the past several years to determine the funds
available for executive officer annual bonuses and to determine bonus awards
throughout ML & Co.

ANNUAL BONUS. ML & Co.'s annual bonus provides a direct incentive for executive
officers to improve the financial performance of ML & Co. The MDCC determined
1993 performance year annual bonuses for each executive officer consistent with
the performance goal formula contained in the Cash Plan. Accordingly, the CEO's
maximum annual bonus amount for 1993 was determined by adjusting his 1992 bonus
by the average percentage change in ML & Co.'s net income and return on equity
from 1992 to

15
<PAGE>

1993. The 1992 bonus level was used in this calculation for the CEO because the
MDCC determined, with reference solely to the 1992 fiscal year, that the CEO's
1992 bonus amount was appropriate based on ML & Co.'s 1992 financial results.
Maximum annual 1993 bonus amounts for executive officers (other than the CEO)
were established at 70% of the CEO's maximum 1993 bonus amount. This percentage
reflects the relative responsibility and accountability of these individuals in
relation to that of the CEO. The MDCC retained the discretion to reduce these
maximum annual bonus amounts based on the factors listed under the section
titled "Executive Compensation Policies." The executive officers named in the
Summary Compensation Table received from 79% to 98% of their formula-determined
maximum bonuses for the 1993 performance year.

LONG-TERM INCENTIVE COMPENSATION. Equity-based incentive awards are a
fundamental component of the total compensation awarded each year to members of
executive management. These awards, which include Restricted Shares, Restricted
Units, and Stock Options, align executive and stockholder financial interests
and promote long-term strategic thinking.

Restricted Shares and Restricted Units provide immediate proprietary interest
and reinforce a long-term orientation in decision making since they are
restricted from being sold, transferred, or assigned until the end of the
vesting period of four years; however, they may vest earlier if ML & Co.
achieves certain cumulative return on equity goals (see footnote 2 to the
Summary Compensation Table on page 19 of this Proxy Statement). Restricted
Shares are shares of Common Stock that convey to their holder all the rights of
a stockholder except for the restrictions described in the preceding sentence.
Restricted Units are similar to Restricted Shares but are payable in cash at
the end of the vesting period and do not convey voting rights to their holders
as Restricted Shares do (throughout the rest of this report, Restricted Shares
and Restricted Units are referred to as "Restricted Shares/Units"). Stock
Options directly align the financial interests of executives with those of
stockholders by rewarding executives only if, and to the extent that, the price
of Common Stock appreciates in the future. Stock Options have a term of ten
years and become exercisable in 25% increments each year over a four-year
period. Historical grant amounts are not a consideration in deciding the
appropriate equity-based award for a given performance year.

The January 1994 grants of Restricted Shares/Units for the 1993 performance
year to executive officers with the title of Executive Vice President or above
were based on a formula that is identical to the performance goal formula used
to determine the annual bonuses for the 1993 performance year. That is, the
maximum dollar value of the CEO's Restricted Share/Unit grant for the 1993
performance year was determined by adjusting the dollar value of his grant for
the 1992 performance year by the average percentage increase in net income and
return on equity from 1992 to 1993. The maximum dollar value of grants of
Restricted Shares/Units for executive officers (other than the CEO) were
established at 70% of the CEO's maximum amount. As with the Cash Plan, the MDCC
has the discretion to reduce the maximum Restricted Share/Unit awards yielded
by the formula based on the factors listed under the section titled "Executive
Compensation Policies." The MDCC determined that the Restricted Share/Unit
grants made in January 1994 may vest at the end of the 1995 or 1996 fiscal
years upon the achievement by ML & Co. of a cumulative return on equity of 60%.

The MDCC increased the dollar value of the Stock Option grants to each of the
executive officers for the 1993 performance year by the same percentages as it
increased the actual dollar value of the Restricted Share/Unit grants to these
executive officers. The number of Stock Option shares awarded

16
<PAGE>

was calculated by dividing the dollar value of the award by the average fair
market value of one share of ML & Co. Common Stock over the twenty business
days preceding January 17, 1994 (the date the MDCC met to review executive
option grants) and multiplying the result by four. The multiple of four options
to one share/unit was selected because the Black-Scholes value of a ML & Co.
employee Stock Option, taking into account the illiquidity of employee stock
options, has over time averaged approximately 25% of the value of a share of
Common Stock.

Executive officers are also eligible to participate in broad-based plans
offered generally to ML & Co. employees.

APPROVAL PROCESS

Consistent with the executive compensation policies discussed above, the MDCC
assesses the performance of the CEO and of all other executive officers, and
recommends the annual bonuses of ML & Co.'s CEO, Vice Chairman, and Executive
Vice Presidents to the Board of Directors for approval. Awards of Restricted
Shares/Units and Stock Options to executives are determined by the MDCC in
order to preserve the benefits of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 for the employee stock plans pursuant to which such
securities are awarded.

COMPENSATION OF THE CHIEF EXECUTIVE OFFICER FOR 1993 PERFORMANCE

ANNUAL BONUS. The 1993 performance year annual bonus for the CEO was determined
consistent with the provisions of the performance goals contained in the Cash
Plan referred to above.

ML & Co.'s net income applicable to common stockholders (before the cumulative
effect of a change in accounting principle) in 1993 was $1,388,978,000, which
represents a 46.8% increase over $946,066,000 in 1992. ML & Co.'s return on
equity in 1993 was 27.8%, which represents a 20.3% increase over 1992's return
on equity of 23.1%. The average change in these performance measures, rounded
to the nearest whole percentage point, is 34% ((46.8% + 20.3%) / 2). The CEO's
1992 annual bonus of $4,700,000 was therefore increased by the 34% average
change in the performance measures to produce a 1993 formula cash incentive
compensation award of $6,298,000. In recognition of Mr. Tully's role in
connection with ML & Co.'s record financial results for 1993 and his leadership
in promoting ML & Co.'s principles of Client Focus, Respect for the Individual,
Teamwork, Responsible Citizenship and Integrity, the MDCC deemed it appropriate
to award Mr. Tully $6,200,000, essentially the full amount yielded by the
formula. Mr. Tully's bonus level for 1992 was used in this calculation because
the MDCC determined, with reference solely to the 1992 fiscal year, that such
amount was appropriate based on ML & Co.'s 1992 financial results.

Consistent with its policy of reviewing base salaries every three to four
years, the MDCC did not review Mr. Tully's base salary in 1993. Mr. Tully's
base salary has not been increased since January 1, 1992, when it was set at
its current level of $500,000.

LONG-TERM INCENTIVE COMPENSATION. The value of Mr. Tully's Restricted
Share/Unit grant for 1993 performance was determined consistent with the
provisions of the performance goals adopted by the MDCC, as described above.

Applying the 34% average increase in net income and return on equity to the
grant value of Mr. Tully's 1992 Restricted Share/Unit grant ($1,100,000)
resulted in a maximum Restricted Share/Unit grant for the 1993 performance year
of $1,474,000. Again, in recognition of ML & Co.'s record financial results

17
<PAGE>

and the other factors discussed above, the MDCC deemed it appropriate to award
Mr. Tully Restricted Shares/Units with a grant value of $1,450,000. The number
of Restricted Shares/Units awarded was calculated by dividing the dollar value
of the award ($1,450,000) by the average fair market value of a share of Common
Stock over the twenty business days preceding January 17, 1994, the date the
MDCC met to review executive stock awards ($43.31). Applying the same 34%
factor to the CEO's 1992 stock option grant value of $1,100,000 produced,
similarly, a 1993 performance year grant value of $1,450,000 after rounding by
the MDCC. The number of Stock Options awarded was calculated by dividing the
dollar value of the Stock Option award ($1,450,000) by the same price of Common
Stock used to determine the Restricted Share/Unit grants, and multiplying the
result by four. The multiple of four options to one share/unit was selected
because the Black-Scholes value of a ML & Co. employee Stock Option, taking
into account the illiquidity of employee stock options, has over time averaged
approximately 25% of the value of a share of Common Stock.

The ultimate future value to be realized by the CEO for this long-term award of
Restricted Shares/Units and Stock Options is dependent on the future price of
the Common Stock and on dividends.

SUMMARY

The CEO's compensation for performance in 1993, valued when it was approved in
January 1994 using the methodology explained above, consisted of:

<TABLE>
<CAPTION>
RESTRICTED
SALARY ANNUAL BONUS SHARES/UNITS* STOCK OPTIONS* TOTAL**
------ ------------ -------------- -------------- ----------
<S> <C> <C> <C> <C>
$500,000 $6,200,000 $1,450,000 $1,450,000 $9,600,000
</TABLE>
- --------
* The value of these awards is based on the average fair market value of a
share of Common Stock over the twenty business days preceding January 17,
1994, the date the MDCC met to review these awards ($43.31). These amounts
differ from the amounts shown in the Summary Compensation Table under the
column headed "Restricted Stock Awards" and from the amounts shown in the
table entitled "Option Grants in Last Fiscal Year" under the column headed
"Grant Date Present Value" because those amounts are based on the closing
price, and on the average of the high and low prices, respectively, of
Common Stock on the actual grant date.
** Does not include: grants made in January 1993 for 1992 performance, or
dividend equivalents paid in 1993 for Restricted Shares/Units granted in
prior years, or the value realized or unrealized with respect to prior
years' grants of Restricted Shares/Units or Stock Options, or amounts in the
Summary Compensation Table under the column entitled "All Other
Compensation."

MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE

JILL K. CONWAY, CHAIR
WILLIAM O. BOURKE
EARLE H. HARBISON, JR.
JOHN J. PHELAN, JR.
WILLIAM L. WEISS

* * *

COMPENSATION TABLES AND OTHER INFORMATION

The following tables set forth information with respect to the Chief Executive
Officer and the four most highly compensated executive officers of ML & Co. as
to whom the total annual salary and bonus for the fiscal year ended December
31, 1993 exceeded $100,000.

18
<PAGE>

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------ --------------------------------
AWARDS(1) PAYOUTS
--------------------- ----------
RESTRICTED LONG-TERM
STOCK SECURITIES INCENTIVE ALL OTHER
AWARDS UNDERLYING PLAN COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (2)(3)(4) OPTIONS PAYOUTS SATION
- --------------------------- ---- -------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>

Daniel P. Tully.......... 1993 $500,000 $6,200,000 $1,468,935 133,920 0 $161,342(6)
Chairman of the Board and 1992 500,000 4,700,000 1,234,989 144,500 0 90,473
CEO 1991 450,000 3,375,000 853,025 119,200 $3,069,331(5) --

Herbert M. Allison, Jr... 1993 300,000 4,145,000 759,783 69,270 0 31,871(6)
Executive Vice President 1992 300,000 3,000,000 673,631 78,820 0 27,161
1991 275,000 2,225,000 500,938 70,000 405,000(5) --

David H. Komansky....... 1993 300,000 4,145,000 759,783 69,270 0 36,390(6)
Executive Vice President 1992 300,000 3,150,000 729,766 85,380 0 25,493
1991 225,000 2,275,000 500,938 70,000 192,375(5) --

John L. Steffens........ 1993 400,000 4,045,000 759,783 69,270 0 160,779(6)
Executive Vice President 1992 400,000 3,100,000 729,766 85,380 0 90,471
1991 400,000 2,750,000 500,938 70,000 1,943,644(5) --

Stephen L. Hammerman.... 1993 350,000 3,500,000 506,493 46,180 0 23,315(6)
Vice Chairman of the 1992 350,000 2,400,000 617,495 72,240 0 22,668
Board and General 1991 350,000 1,900,000 500,938 70,000 1,606,144(5) --
Counsel
</TABLE>
- -----

19
<PAGE>

(1) Awards were made in January or February of the succeeding fiscal year for
performance in the year indicated.

(2) Amounts shown are for awards granted in February 1994 for performance in
1993, in February 1993 for performance in 1992, and in February 1992 for
performance in 1991. The February 1994 awards were of Restricted Units; all
other awards were split equally between Restricted Shares and Restricted
Units. All awards have been valued for this table using closing prices of
Common Stock on the Consolidated Transaction Reporting System on the dates
of grant of such awards; the closing price on February 1, 1994, the date of
the grant for performance in 1993, was $43.875. Such shares and units
generally have four year vesting periods, but can vest earlier upon the
achievement of specific cumulative after-tax return on equity ("Cumulative
ROE") goals. Specifically, units granted in February 1994 may vest at the
end of the 1995 or 1996 fiscal year upon the achievement of a Cumulative
ROE of 60%; shares and units granted in February 1993 may vest at the end
of the 1994 or the 1995 fiscal year upon the achievement of a Cumulative
ROE of 45%. Shares and units granted in 1992 vested at the end of the 1993
fiscal year based on the achievement of a Cumulative ROE of 40%.

(3) Dividends are paid on unvested Restricted Shares and dividend equivalents
are paid on unvested Restricted Units. Such dividends and dividend
equivalents are equal in amount to the dividends paid on shares of Common
Stock.

(4) The number and value of Restricted Shares and Restricted Units held by
executive officers named in the table as of December 31, 1993 are as
follows: Mr. Tully (18,062 shares and 18,062 units--$1,517,208); Mr.
Allison (9,852 shares and 9,852 units--$827,568); Mr. Komansky (10,674
shares and 10,672 units--$896,532); Mr. Steffens (10,674 shares and 10,672
units--$896,532); and Mr. Hammerman (9,032 shares and 9,030 units--
$758,604). These amounts do not include Restricted Units awarded in 1994
for performance in 1993.

(5) Amounts shown consist of: (i) the value of Performance Shares paid out in
1992 based on the attainment of performance goals for the fiscal years 1988
through 1991, and (ii) cash payments, under ML & Co.'s now-expired ROE
Incentive Compensation Plan, made in 1992 based on the return on equity
achieved by ML & Co. in 1991.

(6) Amounts shown for 1993 consist of the following: (i) contributions made in
1993 by ML & Co. to accounts of employees under the 401(k) Savings &
Investment Plan--Mr. Allison ($1,500), Mr. Komansky ($1,500), Mr. Steffens
($1,500), and Mr. Hammerman ($1,500); (ii) allocations made in 1993 by ML &
Co. to accounts of employees under the defined contribution retirement
program (including allocations and cash payments made because of
limitations imposed by the Internal Revenue Code)--Mr. Tully ($25,942), Mr.
Allison ($21,815), Mr. Komansky ($21,815), Mr. Steffens ($23,879), and Mr.
Hammerman ($21,815); and (iii) distributions received in 1993 on
investments in ML & Co.-sponsored employee partnerships--Mr. Tully
($135,400), Mr. Allison ($8,556), Mr. Komansky ($13,075), and Mr. Steffens
($135,400).

20
<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
FISCAL OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME YEAR(1) GRANTED FISCAL YEAR ($ PER SHARE) DATE(2) VALUE(3)
---- ------- ---------- ------------ ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Daniel P. Tully............ 1993 133,920 3.0% $40.625 1/26/2004 $1,578,917
Herbert M. Allison, Jr. ... 1993 69,270 1.5% $40.625 1/26/2004 816,693
David H. Komansky.......... 1993 69,270 1.5% $40.625 1/26/2004 816,693
John L. Steffens........... 1993 69,270 1.5% $40.625 1/26/2004 816,693
Stephen L. Hammerman....... 1993 46,180 1.0% $40.625 1/26/2004 544,462
</TABLE>
- --------
(1) Reflects awards made in January 1994 for performance in 1993. Does not
include awards made in January 1993 for performance in 1992; these awards
were reflected in ML & Co.'s 1993 Proxy Statement.
(2) All options are exercisable as follows: 25% after one year, 50% after two
years, 75% after three years, and 100% after four years.
(3) Valued using a modified Black-Scholes option pricing model. The exercise
price of each option ($40.625) is equal to the average of the high and low
prices on the Consolidated Transaction Reporting System of a share of
Common Stock on January 26, 1994, the date of grant. The assumptions used
for the variables in the model were: 27% volatility (which is the
volatility of the Common Stock for the 36 months preceding grant); a 6.03%
risk-free rate of return (which is the yield as of January 26, 1994 (the
date of grant) on a U.S. Strip Treasury zero-coupon bond expiring in
February 2004); a 2% dividend yield (which was the dividend yield on the
date of grant); and a 10-year option term (which is the term of the option
when granted). A discount of 25% was applied to the option value yielded by
the model to reflect the non-transferability of employee options. The
actual gain executives will realize on the options will depend on the
future price of the Common Stock and cannot be accurately forecast by
application of an option pricing model.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END AT FISCAL YEAR-END(1)
------------------------- -------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Daniel P. Tully............ 0 $ 0 899,800 613,900 $26,360,969 $14,091,625
Herbert M. Allison, Jr. ... 0 0 312,500 256,320 9,029,453 5,173,698
David H. Komansky.......... 0 0 217,500 237,880 6,191,641 4,463,346
John L. Steffens........... 0 0 457,500 277,880 13,132,891 5,685,846
Stephen L. Hammerman....... 0 0 352,500 249,740 10,120,703 5,119,824
</TABLE>
- --------
(1) This valuation represents the difference between $42.00, the closing price
of the Common Stock on December 31, 1993 on the Consolidated Transaction
Reporting System, and the exercise prices of these options.

21
<PAGE>

PENSION PLAN ANNUITY

In 1988, the defined benefit Pension Plan of ML & Co. was terminated, and a
group annuity contract to pay the Pension Plan benefits to the vested
participants was purchased from Metropolitan Life Insurance Company with a
portion of the terminated Pension Plan trust assets. This annuity is payable at
normal retirement (generally age 65) or at an early retirement age in a reduced
amount. ML & Co. participates in the actuarial experience and investment
performance of these annuity assets under an agreement with Metropolitan Life
Insurance Company.

Upon retirement, the executive officers named in the Summary Compensation Table
will be eligible to receive an annuity. Those retiring at age 65 with at least
10 years of Pension Plan participation will receive up to the statutory maximum
annual annuity payments applicable to the year in which the annuity payments
are made, which, during 1994, are $118,800 (if born before 1938), $110,880 (if
born between 1938 and 1954), and $102,960 (if born after 1954). These amounts
will be adjusted annually by the Internal Revenue Service for increases in the
cost of living. The compounded annual growth rate of these cost of living
increases has been 4.05% since 1988, the year indexing began. In future years,
after adjustments for cost of living increases, these annuities, if payable as
straight life annuities, will not exceed the following amounts for the
following executive officers: Daniel P. Tully ($316,168) subject to the
statutory maximum ($118,800 in 1994); John L. Steffens ($227,963) subject to
the statutory maximum ($110,880 in 1994); David H. Komansky ($103,655); Stephen
L. Hammerman ($100,466); and Herbert M. Allison, Jr. ($81,543); these annuity
amounts reflect an offset for estimated social security benefits in accordance
with the provisions of the terminated Pension Plan.

ANNUITY AGREEMENT

ML & Co. entered into an annuity agreement with Mr. Tully, effective July 24,
1991, as amended April 30, 1992, to provide for supplemental defined benefit
annuity payments to him and his surviving spouse. Estimated amounts, when
combined with retirement benefits from other sources described in the paragraph
below, payable to Mr. Tully as a straight life annuity upon retirement at age
60 or thereafter, based on his "Highest Consecutive 5-Year Average Earnings"
and "Years of Total Employment," can be calculated using the following table:

<TABLE>
<CAPTION>
YEARS OF TOTAL EMPLOYMENT
--------------------------------
HIGHEST CONSECUTIVE 5-YEAR AVERAGE EARNINGS 35 40 45
------------------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
$2,700,000.................................... $1,181,250 $1,350,000 $1,500,000
2,800,000.................................... 1,225,000 1,400,000 1,500,000
2,900,000.................................... 1,268,750 1,450,000 1,500,000
3,000,000.................................... 1,312,500 1,500,000 1,500,000
3,100,000.................................... 1,356,250 1,500,000 1,500,000
3,200,000.................................... 1,400,000 1,500,000 1,500,000
3,300,000.................................... 1,443,750 1,500,000 1,500,000
3,400,000.................................... 1,487,500 1,500,000 1,500,000
3,500,000.................................... 1,500,000 1,500,000 1,500,000
</TABLE>

22
<PAGE>

The annuity is payable if Mr. Tully retires or dies while an executive officer
of ML & Co. The annual amount of his annuity will be equal to 1.25% of his
highest consecutive 5-year average earnings (i.e., total cash compensation)
multiplied by years of total employment up to age 65, as reduced by the Pension
Plan annuity and the combined annuity value of his account balances
attributable to ML & Co. contributions to the Merrill Lynch & Co., Inc. Savings
& Investment Plan (the "Savings Plan") and the Retirement Accumulation Plan,
and to the allocations under the ESOP (the latter two plans, collectively, the
"Retirement Program") and as further reduced by 50% of the annual social
security retirement benefit amount he would receive upon retirement at age 65.
As of December 31, 1993, Mr. Tully had highest consecutive 5-year average
earnings of $2,775,520 and approximately 38 years of total employment. The
amount of his annuity, however, together with the combined annuity value
described above, cannot exceed $1,500,000 if payable as a straight life
annuity, or $1,270,000 if payable as a 50% or 100% joint and survivor life
annuity. The payment will be made monthly in the form of a life annuity or,
subject to reductions, a joint and survivor life annuity, or 10-year certain
and life annuity. The survivor benefits, if applicable, are payable only to a
spousal beneficiary.

SEVERANCE AGREEMENTS

ML & Co. has agreements with 39 present members of executive and senior
management, including Messrs. Tully, Allison, Komansky, Steffens and Hammerman.
These agreements provide for payments and other benefits if there is a Change
in Control (generally as defined below) of ML & Co. and the employee's
employment is subsequently terminated by ML & Co. or its successor (other than
for cause, disability, retirement, or death) or by the employee for certain
defined reasons such as a change in responsibilities or a reduction in salary
or benefits. The term of each agreement does not exceed 3 years, which term is
automatically extended each year for an additional year until notice to the
contrary is given to the employee. Under each agreement, the employee will
receive a lump sum payment equal to 2.99 times the employee's average annual
compensation for the 5 years immediately preceding the year of the termination
of employment. The employee shall also receive (i) a lump sum payment equal to
the after-tax value of life, disability, accident, and health insurance
benefits for 24 months after termination of employment, (ii) a lump sum payment
equal to the retirement contribution, and an amount sufficient to cover the
income taxes payable thereon, that the employee would have been eligible to
receive from ML & Co. under the terms of the Retirement Program and any
applicable ML & Co. contributions to the Savings Plan, or any successor program
or plan that may be in effect at the time of the Change in Control, determined
as if the employee were fully vested thereunder and had continued (after the
date of termination) to be employed for an additional 24 months at the
employee's highest annual rate of compensation during the 12 months immediately
preceding the date of termination for purposes of determining the basic
contributions and any applicable supplemental contributions; and (iii) any
legal expenses and fees incurred as a result of his termination of employment.
A "Change in Control" of ML & Co. generally includes: (i) the acquisition by
any person of the beneficial ownership of securities representing 30% or more
of the combined voting power of ML & Co.'s then outstanding voting securities;
(ii) a change in the composition of the Board of Directors such that, within a
period of 2 consecutive years, individuals who at the beginning of such 2-year
period constituted the Board of Directors and any new directors elected or
nominated by at least three quarters of the directors who were either directors
at the beginning of the 2-year period or similarly elected, cease for any
reason to constitute at least a majority of the Board of Directors; or (iii)
the entering into of an agreement, the

23
<PAGE>

consummation of which would result in a Change in Control. Any payments
received under these agreements would be in addition to amounts received under
the Long-Term Incentive Compensation Plan and the Equity Capital Accumulation
Plan, which, in the event of a Change in Control, provide for early vesting or
payment.

COMPENSATION OF DIRECTORS

ML & Co. directors who are not full-time employees of ML & Co. or an affiliated
corporation receive monthly cash payments at a rate of $35,000 per year in base
compensation and receive transportation to, or reasonable travel expenses
incurred in connection with attending, meetings. In addition, non-employee
directors receive $15,000 per year for service as members of, or $25,000 per
year for chairing, the Audit and Finance Committee and the Management
Development and Compensation Committee. The director who chairs the Nominating
Committee receives $6,000 per year. Other members of that committee receive no
additional fee. Pursuant to the Merrill Lynch & Co., Inc. Non-Employee
Directors' Equity Plan, each person who was a non-employee director on November
4, 1992 was granted, on that date, restricted stock with a grant value of
$50,000 (or a lesser amount to the extent that such non-employee director was
scheduled to retire before the fifth Annual Meeting of Stockholders subsequent
to such grant). Each person who subsequently became a non-employee director
received a similar grant upon commencement of service, and each new non-
employee director will receive a similar grant upon commencement of service.
Thereafter, at the beginning of the month next following the date of the fifth
Annual Meeting following the date of each such prior grant, an additional
similar grant will be made to each non-employee director. All such restricted
stock vests, and becomes transferable or able to be encumbered, in the same
proportion on the date of each of the five Annual Meetings (or lesser number of
Annual Meetings if the director's scheduled date of retirement is earlier)
following its grant; in all other respects, holders of this restricted stock
have the rights of holders of Common Stock, including the right to receive
dividends. Each non-employee director who has served for 5 years or has reached
age 65, and who thereafter ceases to serve for any reason other than removal
for cause, is eligible to receive a pension benefit. The beneficiary(ies) or
estate of each non-employee director is entitled to receive a death benefit in
the event of such director's death during his or her term. Both such benefits
are based upon the annual base compensation, at the time of the director's
cessation of service or death, as the case may be, plus $10,000, and the
director's age and length of service. Although the amount and method of payment
of each such benefit cannot be determined until the time of entitlement, it
will not, on an annualized basis, exceed an amount equal to the sum of the
annual base compensation for non-employee directors at the time of the
director's cessation of service or death, as the case may be, plus $10,000. ML
& Co. also offers health, life, and business travel insurance benefits to non-
employee directors.

CERTAIN TRANSACTIONS

From time to time since the beginning of the 1993 fiscal year, certain
directors and executive officers of ML & Co. and associates of such persons
were indebted to subsidiaries of ML & Co., as customers, in connection with
margin account loans, mortgage loans, revolving lines of credit and other
extensions of credit by ML & Co.'s subsidiaries. These transactions were in the
ordinary course of business; they were substantially on the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, except that for some credit
products' interest rates

24
<PAGE>

charged were the same as the lowest interest rates charged other persons or
were more favorable for ML & Co. employees and directors than for other
persons; and they did not involve more than the normal risk of collectibility
or present other unfavorable features. In addition, directors, officers, and
employees of ML & Co. are entitled to receive certain discounts or waivers of
fees or commissions for products and services offered by subsidiaries of ML &
Co.

From time to time since the beginning of the 1993 fiscal year, ML & Co. and
certain of its subsidiaries have engaged in transactions in the ordinary course
of business with State Street and the Equitable Companies and their respective
parents and subsidiaries, which are the holders of more than 5% of the
outstanding shares of Common Stock; such transactions were on substantially the
same terms as those prevailing at the time for comparable transactions with
others.

From time to time since the beginning of the 1993 fiscal year, ML & Co.,
through certain of its subsidiaries, in the ordinary course of business has
performed investment banking, financial advisory, and other services for
certain corporations with which its directors are affiliated.

From time to time since the beginning of the 1993 fiscal year, legal services
were performed by the law firm of Gibson, Dunn & Crutcher (a) for mutual funds
advised by affiliates of ML & Co., (b) in connection with investment banking
transactions, (c) for companies (i) that are majority owned by limited
partnerships in which subsidiaries of ML & Co. serve as general partners on
behalf of third party investors and (ii) in which ML & Co. has a co-investment
and (d) for corporate activities of ML & Co. Aulana L. Peters, a nominee for
election as a director, is a partner of this law firm.

A member of the Board of Directors, William O. Bourke, filed a Form 5 with the
SEC, reporting an exempt acquisition under Rule 16a-6 of 200 shares of Common
Stock by his wife (as to which he disclaims beneficial ownership); the form was
filed 18 days late.

Stockholders Charles Miller and Kenneth Steiner commenced in October 1991
separate derivative actions, now consolidated in New York State Supreme Court
(Index No. 29885/91 Sup. Ct.). The plaintiffs assert claims of breach of
fiduciary duties in connection with a series of year-end securities
transactions between subsidiaries of ML & Co. and Guarantee Security Life
Insurance Company ("GSLIC") in 1984-1988 against all present directors of ML &
Co. who were directors at the time of these trades, and other claims against
Transmark U.S.A. Inc., GSLIC's parent company ("Transmark") and one of
Transmark's principals. The damages sought in this action are unspecified.
Motions to dismiss on various grounds were denied, subject to possible further
appellate review. However, the court has stayed the action for all purposes
pending a resolution of related GSLIC litigation now pending in Florida.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION: MEMBER'S
TRANSACTION WITH THE CORPORATION

The members of the MDCC are Jill K. Conway (Chair), William O. Bourke, Earle H.
Harbison, Jr., John J. Phelan, Jr., and William L. Weiss. None of these
individuals is an insider, and no "compensation committee interlocks" existed
during the last fiscal year. A NYSE membership owned by Mr. Phelan

25
<PAGE>

was leased by him to an employee of a NYSE specialist firm that is a subsidiary
of ML & Co. The subsidiary is entitled to use the membership and is responsible
for making lease payments. This lease commenced in May, 1991 at a rate of
$66,000 per year, and was renewed in May, 1992 and 1993 at rates of $89,000 and
$93,100 per year, respectively, the then prevailing lease rates; the range of
rates for new NYSE membership leases, as reported by the NYSE, was $48,000 to
$84,000 during 1991, $70,000 to $100,000 during 1992, and $80,000 to $132,000
during 1993. To provide for a continuation of lease payments at fair market
value, the lease specifies that it is renewable annually at the then prevailing
lease rate.

26
<PAGE>

PERFORMANCE GRAPH

The following performance graph compares the performance of ML & Co.'s Common
Stock for the last 5 fiscal years of ML & Co. to that of the S&P 500 Index, the
S&P Financial Index, and an index based on the common stock of the following 10
companies: American Express Company, Bankers Trust New York Corporation, The
Bear Stearns Companies Inc., A.G. Edwards, Inc., J.P. Morgan & Co.
Incorporated, Morgan Stanley Group Inc., Paine Webber Group Inc., Salomon Inc,
The Charles Schwab Corporation and The Travelers Inc. (the successor to
Primerica Corporation). The graph assumes that the value of the investment in
Common Stock and each index was $100 at December 30, 1988 and that all
dividends were re-invested. Stock price performances shown on the graph are not
necessarily indicative of future price performances.

[GRAPHIC NO. 1 APPEARS HERE]

<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Merrill Lynch & Co., Inc. $100.00 $112.95 $ 94.22 $264.18 $285.93 $404.53
10 Company Group 100.00 127.45 106.61 162.80 179.80 227.56
S&P Financial Index 100.00 132.11 103.51 154.10 191.82 212.54
S&P 500 Index 100.00 131.69 127.01 162.05 180.61 195.60
</TABLE>

<PAGE>

OTHER MATTERS

The Board of Directors knows of no business that will be presented for
consideration at the Annual Meeting other than those items stated in the Notice
of Annual Meeting of Stockholders. Should any other matters properly come
before the Annual Meeting or any adjournment thereof, shares represented by the
enclosed form of proxy, if signed and returned, will be voted in accordance
with the judgment of the person or persons voting the proxies.

ML & CO. WILL FURNISH ANY STOCKHOLDER A COPY OF ITS 1993 FORM 10-K ANNUAL
REPORT (INCLUDING FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES BUT
EXCLUDING OTHER EXHIBITS), WITHOUT CHARGE, UPON REQUEST ADDRESSED TO GREGORY T.
RUSSO, SECRETARY, MERRILL LYNCH & CO., INC., 12TH FLOOR, 100 CHURCH STREET, NEW
YORK, NEW YORK 10080-6512.

STOCKHOLDER PROPOSALS FOR THE 1995 ANNUAL MEETING

In accordance with the rules of the Securities and Exchange Commission,
stockholder proposals intended to be presented at the 1995 Annual Meeting of
Stockholders of ML & Co. must be received by ML & Co., at its principal
executive office, for inclusion in the proxy statement and form of proxy
relating to that meeting not later than November 14, 1994.

By Order of the Board of Directors

GREGORY T. RUSSO
Secretary

28
<PAGE>

[LOGO OF MERRILL LYNCH APPEARS HERE]

Merrill Lynch & Co., Inc.
World Financial Center
North Tower
New York, NY 10281
<PAGE>

GRAPHICS APPENDIX LIST
----------------------

Graphic No. 1 The graph is titled
"Performance Graph"

Presented is a comparison of the
performance of ML & Co.'s Common Stock
for the last five fiscal years to that
of the S&P 500 Index. S&P Financial
Index, and an index based on the common
stock of ten companies, all as described
in narrative and tabular form on page 27
of the Proxy Statement.

<PAGE>

MERRILL LYNCH & CO., INC. PROXY ANNUAL MEETING--APRIL 19, 1994
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Daniel P. Tully, Joseph T. Willett and Rosemary
T. Berkery, and each of them, as proxies, with power of substitution, to vote,
as specified herein, all the shares of Common Stock of Merrill Lynch & Co.,
Inc. held of record by the undersigned at the close of business on February 23,
1994, at the Annual Meeting of
Stockholders to be held on April
19, 1994, and at any adjournment
thereof and, in their discretion,
upon other matters that properly
may come before the meeting.

THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED IN ACCORDANCE
WITH INSTRUCTIONS GIVEN ON THE
REVERSE OF THIS CARD. IF THIS
PROXY IS SIGNED AND RETURNED
WITHOUT SPECIFIC INSTRUCTIONS AS
TO ANY ITEM OR ALL ITEMS, IT WILL
BE VOTED FOR THE ELECTION OF 5
DIRECTORS, FOR PROPOSAL (2), AND
AGAINST PROPOSAL (3). THE
UNDERSIGNED HEREBY REVOKES ANY
PROXY HERETOFORE GIVEN IN RESPECT
OF THE SAME SHARES OF STOCK.

- -------------------------------- --------------
(Signature of Stockholder) (Date)

PLEASE VOTE ON THE REVERSE OF THIS CARD. Sign, date and return this card
promptly using the enclosed envelope. Sign exactly as name appears above. Each
joint tenant should sign. When signing as attorney, trustee, etc., give full
title.

<PAGE>

---------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS (1) AND (2)
---------------------------------------------------------------------------

(1) The election of the 5 nominees named below for a term of 3 years

[_] FOR all nominees listed [_] WITHHOLD
(except as marked to AUTHORITY
the contrary below): to vote for all
nominees listed

William O. Bourke, Stephen L. Hammerman, Aulana L. Peters,
John J. Phelan, Jr. and Charles A. Sanders

(2) Approval of performance goals FOR AGAINST ABSTAIN
governing, and eligibility [_] [_] [_]
requirements for, certain
annual bonuses and grants of
restricted shares and units

---------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST STOCKHOLDER PROPOSAL (3)
---------------------------------------------------------------------------

FOR AGAINST ABSTAIN
(3) Institute cumulative voting [_] [_] [_]

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY NOMINEE, WRITE THAT PERSON'S NAME HERE:
-----------------------------------
(To be signed on the other side)
<PAGE>

EXHIBIT INDEX

Item Exhibit
---- -------

10(1) Merrill Lynch & Co., Inc.
Executive Officer Compensation
Plan

<PAGE>

Exhibit 10(1)

Merrill Lynch & Co., Inc.
Executive Officer Compensation Plan

Article I - GENERAL

Section 1.1 Purpose
-------

The purposes of the Executive Officer Compensation Plan (the "Plan") are:
(a) to motivate and reward Participants on an individual basis for their
contributions to the corporate profitability and growth, financial
strength, and return to stockholders of Merrill Lynch & Co., Inc., a
Delaware corporation; and (b) to ensure that Merrill Lynch & Co., Inc.
receives a tax deduction for the compensation paid to its Chairman and/or
Chief Executive Officer and its four additional most highly compensated
Executive Officers whose compensation is disclosed in its annual proxy
statement.

Section 1.2 Definitions
-----------

For purposes of this Plan, the following terms shall have the meanings
indicated:

(a) "Average Common Stockholders' Equity" means, with respect to any
fiscal year, the sum of the month-end common stockholders' equity
(excluding preferred stock) for the month of December of the fiscal
year prior to the fiscal year for which Average Common Stockholders'
Equity is being computed and each of the 12 months in the fiscal year,
as reported by ML & Co., divided by 13.

(b) "Average Percentage Change in Performance" means, with respect to
any Performance Year, the percentage change (increase or decrease) in
Net Income from the immediately preceding fiscal year (or the fiscal
year indicated in the proviso to Section 2.1 (b)(2)) plus the
percentage change (increase or decrease) in ROE from the immediately
preceding fiscal year (or the fiscal year indicated in the proviso to
Section 2.1 (b)(2)) divided by 2 and rounded to the nearest whole
percentage point.

(d) "Board of Directors" or "Board" means the Board of Directors of ML &
Co.

(e) "Cash Bonus Amount" means the cash bonus computed for each Participant
in accordance with Section 2.1 (b)(4).
<PAGE>

(f) "CEO" means the Chief Executive Officer (or a functional successor) of
ML & Co. as of the end of the relevant Performance Year.

(g) "Chairman" means the Chairman of the Board (or a functional successor)
of ML & Co. as of the end of the relevant Performance Year.

(h) "Chief Operating Officer" means the Chief Operating Officer (or a
functional successor) of ML & Co. as of the end of the relevant
Performance Year.

(i) "Committee" means the Management Development and Compensation
Committee of the Board of Directors of ML & Co., or any subcommittee
of the Management Development and Compensation Committee composed of
"outside directors", as such term is defined in Regulation Section
1.162-27(e)(3) or any functional successor thereto.

(j) "IRC" means the Internal Revenue Code of 1986, as amended.

(k) "Maximum Cash Bonus Amount" means, with respect to an individual
Performance Year, the amount derived by performing the calculations
called for in Sections 2.1(b)(2) and (3).

(l) "ML & Co." means Merrill Lynch & Co., Inc. and any corporation,
partnership, or other organization of which ML & Co. owns or controls,
directly or indirectly, not less than 50% of the total combined voting
power of all classes of stock or other equity interests. For purposes
of this Plan, the term "ML & Co." shall include any successor thereto.

(m) "Net Income" means, with respect to any fiscal year, Net Earnings
Applicable to Common Stockholders for ML & Co. as it appears in ML &
Co.'s Statement of Consolidated Earnings contained in ML & Co.'s
Consolidated Financial Statements for such fiscal year adjusted to
eliminate: (i) the cumulative effect of changes in accounting policy
(which include changes in generally accepted accounting principles)
adopted by ML & Co. for the relevant Performance Year; (ii) expenses
classified as "Provisions for Restructuring" (Net of "Related
Applicable Income Tax Benefits") within ML & Co.'s Statement of
Consolidated Earnings; (iii) gains and/or losses classified as
"Discontinued Operations" within ML & Co.'s Statement of Consolidated
Earnings; and (iv) gains or losses classified as "Extraordinary Items"
within ML & Co.'s Statement of Consolidated Earnings (which may, in
accordance with generally accepted accounting principles, include (A)
profits or losses on disposal of assets or segments of the previously
separate companies of a business combination within two years of the
date of such combination; (B) gains
<PAGE>

on restructuring payables; (C) gains or losses on the extinguishment
of debt; (D) gains or losses from the expropriation of property; (E)
gains or losses that are the direct result of a major casualty; and
(F) losses resulting from a newly enacted law or regulation).

(n) "Retirement" means the cessation of employment by ML & Co. after
reaching age 55 and having completed at least 10 years of service (or
age 65 and having completed at least 5 years of service), including
approved leaves of absence of one year or less.

(o) "ROE" means, with respect to any fiscal year, the Net Income for such
period, divided by the Average Common Stockholders' Equity for such
period.

(p) "Participant" means, any employee of ML & Co. who has met the
eligibility requirements set forth in Section 1.4 hereof.

(q) "Performance Year" means, the fiscal year of ML & Co. that is being
used to measure whether the Performance Goals outlined in Section
2.1(b) have been met.

(r) "Permanent Disability" means any physical or mental condition that, in
the opinion of the Committee, renders an employee incapable of
engaging in any employment or occupation for which the employee is
suited by reason of education or training.

(s) "Prior Year's Maximum Cash Bonus Amount" means, (A) for the
Performance Year 1994, the actual cash bonus paid to the Chairman and
CEO with respect to performance in 1993, as reported in the Summary
Compensation Table of ML & Co.'s Proxy Statement for its 1994 Annual
Meeting and (B) for all subsequent Performance Years, the Maximum Cash
Bonus Amount determined under Section 2.1(b) for the fiscal year
immediately preceding the Performance Year (or the fiscal year
indicated in the proviso to Section 2.1(b)(3)).

Section 1.3 Administration
--------------

(a) The Plan shall be administered by the Committee. Subject to the
provisions of the Plan, the Committee will have sole and complete
authority to: (i) adopt, amend and rescind such rules and regulations
as, in its opinion, may be advisable for the administration of the
Plan; (ii) construe and interpret the Plan and all rules and
regulations; and, (iii) make all determinations deemed advisable or
necessary for the administration of the Plan. This shall include sole
and complete authority to determine and certify the results of the
calculations of Net Income and
<PAGE>

ROE (and that the Performance Goals contained in Section 2.1(b) have
been met), and to determine and certify the calculations of the
Maximum Cash Bonus Amount, the Cash Bonus Amounts for each
Participant, and all other calculations contained in Section 2.1.
All determinations and certifications by the Committee shall be
final and binding.

(b) The Committee shall act in accordance with its charter and with the
procedures established for a committee under ML & Co.'s Certificate of
Incorporation and By-Laws or under any resolution of the Board.

Section 1.4 Eligibility and Participation
-----------------------------

Eligibility to participate in the Plan in any Performance Year shall be
limited to employees of ML & Co. who are determined to be "covered
employees" in accordance with Regulation Section 1.162-27 (c)(2) of the
proposed regulations under Section 162(m) of the IRC and any successor
provision in proposed, temporary or final regulations thereunder.

ARTICLE II - CASH BONUS AWARDS

Section 2.1 Maximum Cash Bonuses - Performance Goals
----------------------------------------

(a) At the end of each Performance Year, the Committee shall determine the
Maximum Cash Bonus Amount and the Cash Bonus Amounts for each
Participant in accordance with Section 2.1(b) and shall certify that
the performance goals contained in such Section 2.1(b) have been met.

(b) Performance Goals

(1) No cash bonus compensation shall be awarded under this Article II
unless ML & Co. shall have positive Net Income and a positive ROE for
the relevant Performance Year.

(2) After ML & Co.'s ROE and Net Income are determined for the
relevant Performance Year, the Committee shall determine the Average
Percentage Change in Performance for the Performance Year; provided
that, in the event that Net Income and ROE in the prior fiscal year
were not positive, the Committee shall determine the Average
Percentage Change in Performance for the relevant Performance Year,
using Net Income and ROE from the most recent prior fiscal year in
which Net Income and ROE were positive.

(3) The Committee shall determine the Maximum Cash Bonus Amount for
the relevant Performance Year by multiplying the Prior Year's Maximum
Cash Bonus Amount by the Average Percentage Change in Performance
<PAGE>

plus 1; provided that, in the event that Net Income and ROE in the
-------------
prior year were not positive, the Committee shall determine the
Maximum Cash Bonus Amount for the relevant Performance Year by
multiplying the Maximum Cash Bonus Amount from the most recent prior
fiscal year in which Net Income and ROE were positive by the Average
Percentage Change in Performance determined in accordance with the
proviso to Section 2.1(b)(2) plus 1.

(4) The Committee shall determine each Participant's Cash Bonus Amount
by multiplying the Maximum Cash Bonus Amount by (a) 100% for the
Chairman and/or CEO, (b) 80%, for the Chief Operating Officer, and (c)
70% for each of the other Participants.

(5) The Committee, in its sole discretion, shall have the option of
determining to pay any Participant an Award less than the Cash Bonus
Amount yielded by this Section 2.1(b).

Section 2.2 Payment of Awards
-----------------

Awards shall be paid (if otherwise payable pursuant to this Plan) as soon
as practicable following the end of each Performance Year, but in no event
later than end of the first fiscal quarter following the end of such
Performance Year.

Section 2.3 Termination of Employment
-------------------------

Termination of a Participant's employment prior to the date an Award is
actually paid pursuant to this Plan for any reason other than death,
Permanent Disability, or Retirement shall result in forfeiture of such
Award, and no payment shall be made to any such Participant.

In the event of Death, Permanent Disability or Retirement of a Participant
after the close of a Performance Year but prior to the date an Award is
paid pursuant to this Plan, the Award shall be paid (if otherwise payable
pursuant to this Plan) to the Participant (or his or her beneficiary, as
appropriate), pursuant to Section 2.2 as if the Participant had continued
to be employed through such date.

ARTICLE III - MISCELLANEOUS

Section 3.1 Nontransferability
------------------

A Participant's rights under this Plan, including the right to any Awards
payable, may not be assigned, pledged, or otherwise transferred except, in
the event of a Participant's death, to his designated beneficiary or, in
the absence of such a designation, by will or the laws of descent and
distribution.
<PAGE>

Section 3.2 Withholding
-----------

ML & Co. shall have the right, before any Award is paid, to deduct or
withhold from any payment under this Plan any Federal, state, local or
other taxes required by law to be withheld or to require the Participant or
his beneficiary or estate, as the case may be, to pay any amount, or the
balance of any amount, required to be withheld.

Section 3.3 No Trust or Fund Created
------------------------

Neither the Plan nor any communication in connection herewith shall create
or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between ML & Co. and a Participant or any other
person. To the extent that any person acquires a right to receive Awards
from ML & Co. pursuant to the Plan, such right shall be no greater than the
right of any unsecured creditor of ML & Co.

Section 3.4 Tax Litigation
--------------

ML & Co. will have the right to contest, at its expense, any tax ruling or
decision, administrative or judicial, on any issue that is related to the
Plan and that ML & Co. believes to be important to Participants in this
Plan and to conduct any such contest or any litigation arising therefrom to
a final determination.

ARTICLE IV - AMENDMENT AND TERMINATION

The Committee may modify, amend or terminate this Plan at any time,
provided that no modification or amendment of the Plan shall be made of
Articles I or II hereof with respect to a Performance Year that has already
been completed, and provided further that no modification or amendment of
this Plan shall be effective that would (1) increase the cost of this Plan
to ML & Co. or (2) alter the allocation of benefits among Participants
unless such modification or amendment has received approval from ML & Co.
stockholders in accordance with Article VI.

ARTICLE V - INTERPRETATION

Section 5.1 Governing Law
-------------

This Plan shall be construed and its provisions enforced and administered
in accordance with the laws of the State of New York applicable to
contracts entered into and performed entirely in such State.
<PAGE>

Section 5.2 Governmental and Other Regulations
----------------------------------

The Plan and any Award hereunder shall be subject to all applicable
Federal and state laws, rules, regulations and to such approvals by any
regulatory or governmental agency that, in the opinion of counsel of ML &
Co., may be required or advisable.

ARTICLE VI - STOCKHOLDER APPROVAL AND EFFECTIVE DATE
---------------------------------------

The Plan shall not be effective unless and until the Performance Goals and
the eligibility and partipation requirements contained herein are approved
by a majority of the votes cast by ML & Co. stockholders at a duly held
stockholder meeting at which a quorum is present either in person or by
proxy.

Subject to stockholder approval as described herein, the Plan shall be
effective as of January 1, 1994, and shall be applicable for all future
fiscal years of the Company unless amended or terminated by the Company
pursuant to Article IV.