RULE NO. 424(b)(5)
REGISTRATION NO. 333-68747
PROSPECTUS
- ----------
Merrill Lynch & Co., Inc.
Select Sector SPDR Fund Growth Portfolio
Market Index Target-Term Securities(R)
due May 25, 2006
"MITTS(R) Securities"
$10 principal amount per unit
__________________
This prospectus is to be used by Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, our wholly-owned subsidiary when making
offers and sales related to market-making transactions in the MITTS
Securities.
The MITTS Securities:
o 100% principal protection at maturity.
o No payments before the maturity date.
o Senior unsecured debt securities of Merrill Lynch & Co., Inc.
o Linked to the value of the Select Sector SPDR Fund Growth Portfolio Index,
an index tracking the value of various Select Sector SPDR Funds. Each
Select Sector SPDR Fund is an index fund whose stated investment objective
is to provide investment results that, before expenses, correspond
generally to the price and yield performance of publicly-traded equity
securities involved in a specific market sector comprising the relevant
sector index.
o The MITTS Securities have been approved for listing on the American Stock
Exchange under the trading symbol "GWM".
Payment at maturity:
o On the maturity date, for each unit of the MITTS Securities you own, we
will pay you an amount equal to the sum of the principal amount of each
unit and an additional amount based on the percentage increase, if any, in
the value of the Select Sector SPDR Fund Growth Portfolio Index, reduced
by an annual adjustment factor of 2.35%.
o At maturity, you will receive no less than the principal amount of your
MITTS Securities.
Investing in the MITTS Securities involves risk.
See "Risk Factors" beginning on page S-9 of this prospectus.
_____________________
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
_______________
Merrill Lynch & Co.
_______________
The date of this prospectus is June 24, 1999.
"MITTS" and "Market Index Target-Term Securities" are registered service marks
of Merrill Lynch & Co., Inc. "SPDRs", "Select Sector SPDR", "Select Sector
SPDRs", and "Select Sector Standard & Poor's Depositary Receipts" are
trademarks of the McGraw-Hill Companies, Inc.
<PAGE>
TABLE OF CONTENTS
Page
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SUMMARY INFORMATION -- Q&A.................................................. 3
RISK FACTORS................................................................ 7
MERRILL LYNCH & CO., INC.................................................... 12
RATIO OF EARNINGS TO FIXED CHARGES.......................................... 12
DESCRIPTION OF THE MITTS SECURITIES......................................... 13
THE SELECT SECTOR SPDR FUND GROWTH PORTFOLIO INDEX.......................... 20
OTHER TERMS................................................................. 23
PROJECTED PAYMENT SCHEDULE.................................................. 27
WHERE YOU CAN FIND MORE INFORMATION......................................... 28
INCORPORATION OF INFORMATION WE FILE WITH THE SEC........................... 28
PLAN OF DISTRIBUTION........................................................ 29
EXPERTS..................................................................... 29
SUMMARY INFORMATION -- Q&A
This summary includes questions and answers that highlight selected
information from this prospectus to help you understand the Select Sector SPDR
Fund Growth Portfolio Market Index Target-Term Securities due May 25, 2006.
You should carefully read the prospectus and the accompanying fund prospectus
to fully understand the terms of the MITTS Securities, the Select Sector SPDR
Fund Growth Portfolio Index (the "SPDR Fund Growth Portfolio Index") and the
tax and other considerations that should be important to you in making a
decision about whether to invest in the MITTS Securities. You should carefully
review the "Risk Factors" section, which highlights the material risks
associated with an investment in the MITTS Securities, to determine whether an
investment in the MITTS Securities is appropriate for you.
References in this prospectus to "ML&Co.", "we", "us" and "our" are
to Merrill Lynch & Co., Inc.
References in this prospectus to "MLPF&S" are to Merrill Lynch,
Pierce, Fenner & Smith Incorporated.
We have attached the prospectus for the Select Sector SPDR Funds. You
should carefully read the fund prospectus to fully understand the operation
and management of the Select Sector SPDR Funds, including the fees and
expenses associated with shares of the Select Sector SPDR Funds which affect
the value per share of the Select Sector SPDR Funds and which will therefore
indirectly affect the value of the SPDR Fund Growth Portfolio Index.
Our affiliate, MLPF&S, is both a soliciting dealer in the shares of
the Select Sector SPDR Funds and the index compilation agent for each of the
indices related to the Select Sector SPDR Funds. However, we are not
affiliated with any of the Select Sector SPDR Funds. The Select Sector SPDR
Funds did not receive any of the proceeds from the initial sale of the MITTS
Securities and does not have any obligations with respect to the MITTS
Securities.
We have attached the fund prospectus and are delivering it to you
together with this prospectus of ML&Co. for the convenience of reference only.
The fund prospectus does not constitute a part of this prospectus, nor is it
incorporated by reference in this prospectus.
What are the MITTS Securities?
The MITTS Securities are a series of senior debt securities issued by
ML&Co. and are not secured by collateral. The MITTS Securities rank equally
with all of our other unsecured and unsubordinated debt. The MITTS Securities
will mature on May 25, 2006. We cannot redeem the MITTS Securities at any
earlier date. We will not make any payments on the MITTS Securities until
maturity.
Each unit of MITTS Securities represents $10 principal amount of
MITTS Securities. You may transfer the MITTS Securities only in whole units.
You will not have the right to receive physical certificates evidencing your
ownership except under limited circumstances. Instead, we issued the MITTS
Securities in the form of a global certificate, which is held by The
Depository Trust Company, also known as DTC, or its nominee. Direct and
indirect participants in DTC will record your ownership of the MITTS
Securities. You should refer to the section "Description of the MITTS
Securities--Depositary" in this prospectus.
What will I receive at the stated maturity date of the MITTS Securities?
We have designed the MITTS Securities for investors who want to
protect their investment by receiving at least the principal amount of their
investment at maturity and who also want to participate in possible increases
in the value of the SPDR Fund Growth Portfolio Index. At the stated maturity
date, you will receive a payment on the MITTS Securities equal to the sum of
two amounts: the "principal amount" and the "Supplemental Redemption Amount".
Principal amount
The principal amount per unit is $10.
Supplemental Redemption Amount
The Supplemental Redemption Amount per unit will equal:
( Adjusted Ending Value - Starting Value )
$10 x ( -------------------------------------- )
( Starting Value )
but will not be less than zero.
The "Starting Value" equals 100, the value to which the SPDR Fund
Growth Portfolio Index was set on May 25, 1999, the date the MITTS Securities
were priced for initial sale to the public (the "Pricing Date").
"Adjusted Ending Value" means the average of the closing values of
the SPDR Fund Growth Portfolio Index at the close of the market on five
business days before the maturity of the MITTS Securities as reduced on each
day by the application of the Adjustment Factor. We may calculate the Adjusted
Ending Value by reference to fewer than five or even a single day's closing
value if, during the period shortly before the stated maturity date of the
MITTS Securities, there is a disruption in the trading of a sufficient number
of the component stocks included in any of the funds underlying the SPDR Fund
Growth Portfolio Index or certain futures or options relating to those funds
or the S&P 500 Index.
The "Adjustment Factor" equals 2.35% and will be applied over the
entire term of the MITTS Securities to reduce the closing values of the SPDR
Fund Growth Portfolio Index used to calculate the Supplemental Redemption
Amount during the Calculation Period. As a result of the cumulative effect of
this reduction, the values used to calculate the Supplemental Redemption
Amount during the Calculation Period will be approximately 15.18% less than
the actual value of the SPDR Fund Growth Portfolio Index on each day during
the Calculation Period. For a detailed discussion of how the Adjustment Factor
will affect the value of the SPDR Fund Growth Portfolio Index used to
calculate your Supplemental Redemption Amount, see "Description of the MITTS
Securities--Payment at maturity" in this prospectus.
For more specific information about the Supplemental Redemption
Amount, please see the section "Description of the MITTS Securities--Payment
at maturity" in this prospectus.
We will pay you a Supplemental Redemption Amount only if the Adjusted
Ending Value is greater than the Starting Value. If the Adjusted Ending Value
is less than, or equal to, the Starting Value, the Supplemental Redemption
Amount will be zero. We will pay you the principal amount of your MITTS
Securities regardless of whether any Supplemental Redemption Amount is
payable.
Examples
Here are two examples of Supplemental Redemption Amount
calculations assuming an Adjustment Factor of 2.35% per year and a term equal to
that of the MITTS Securities:
Example 1--The SPDR Fund Growth Portfolio Index, as adjusted, is below
the Starting Value at maturity:
Starting Value: 100.00
Hypothetical closing value of the SPDR Fund Growth Portfolio Index at
maturity: 105.00
Hypothetical Adjusted Ending Value: 89.06
<TABLE>
<CAPTION>
<S> <C> <C>
(Supplemental
( 89.06-100 ) Redemption
Supplemental Redemption Amount (per unit) = $10 X ( --------- ) = $0.00 Amount cannot be
( 100 ) less than zero)
</TABLE>
Total payment at maturity (per unit) = $10 + $0 = $10
Example 2 -- The SPDR Fund Growth Portfolio Index, as adjusted, is
above the Starting Value at maturity:
Starting Value: 100.00
Hypothetical closing value of the SPDR Fund Growth Portfolio Index at
maturity: 180.00
Hypothetical Adjusted Ending Value: 152.68
( 52.68-100 )
Supplemental Redemption Amount (per unit) = $10 x ( ---------- ) = $5.27
( 100 )
Total payment at maturity (per unit) = $10 + $5.27 = $15.27
What is the SPDR Fund Growth Portfolio Index?
The AMEX publishes the SPDR Fund Growth Portfolio Index under the
symbol "GWI". The index measures the performance of eight underlying funds
(each a "Select Sector SPDR Fund") that each tracks the performance of stocks
in a particular sector or group of industries selected from a universe of
companies defined in the S&P 500 Index.
Each Select Sector SPDR Fund is an index fund whose stated investment
objective is to provide investment results that, before expenses, correspond
generally to the price and yield performance of publicly-traded equity
securities comprising the relevant sector index (each a "Select Sector
Index"). Each Select Sector Index consists of the equity securities of
publicly-traded companies that are components of the S&P 500 Index and are
involved in a specific market sector. The Select Sector SPDR Funds are eight
of the nine investment funds comprising the Select Sector SPDR Trust, a
management investment company registered under the Investment Company Act of
1940, as amended. The combined companies constituting the nine Select Sector
Indexes represent all of the companies whose stocks are components of the S&P
500 Index. The funds included in the SPDR Fund Growth Portfolio Index include
all sectors of stock included in the S&P 500 Index except one, the utilities
sector.
Our affiliate, MLPF&S, is both a soliciting dealer in the shares of
the Select Sector SPDR Funds and the index compilation agent for the Select
Sector Indexes underlying the Select Sector SPDR Funds. The Select Sector SPDR
Funds did not receive any of the proceeds from the initial sale of, and does
not have any obligations under, the MITTS Securities.
You should carefully read the fund prospectus accompanying this
prospectus to fully understand the operation and management of the Select
Sector SPDR Funds, including the fees and expenses charged by the Select
Sector SPDR Funds. In addition, because the Select Sector SPDR Trust is
subject to the registration requirements of the Securities Act of 1933, as
amended, and the Investment Company Act, the Select Sector SPDR Trust is
required to file periodically certain information specified by the SEC. For
more information about the Select Sector SPDR Funds you can inspect
information provided to or filed with the SEC by the Select Sector SPDR Trust
at the SEC's public reference facilities or accessed over the Internet through
a web site maintained by the SEC at http://www.sec.gov. You may also obtain
copies of these documents at no cost by calling the Select Sector SPDR Trust
at (800) 843-2639 or by writing the Select Sector SPDR Trust c/o ALPS Mutual
Funds Services, Inc., 370 17th Street, Suite 3100, Denver, CO 80202. Neither
the fund prospectus nor these other documents are incorporated by reference in
this prospectus, and we make no representation or warranty as to the accuracy
or completeness of this information.
Please note that an investment in the MITTS Securities does not
entitle you to any ownership interest in the Select Sector SPDR Funds
comprising the SPDR Fund Growth Portfolio Index.
Are the MITTS Securities listed on a stock exchange?
The MITTS Securities are listed on the AMEX under the trading symbol
"GWM". You should be aware that the listing of the MITTS Securities on the
AMEX does not necessarily ensure that a liquid trading market will be
available for the MITTS Securities. You should review "Risk Factors--There may
be an uncertain trading market for the MITTS Securities" in this prospectus.
What is the role of MLPF&S?
Our subsidiary, MLPF&S, was the underwriter for the initial offering
and sale of the MITTS Securities. MLPF&S intends to buy and sell the MITTS
Securities to create and maintain a secondary market for holders of the MITTS
Securities. However, MLPF&S is not be obligated to engage in any of these
market activities or continue them once it has started.
MLPF&S is also be our agent for purposes of calculating, among other
things, the Adjusted Ending Value and the Supplemental Redemption Amount.
Under certain circumstances, these duties could result in a conflict of
interest between MLPF&S' status as our subsidiary and its responsibilities as
calculation agent.
MLPF&S also is a soliciting dealer in the shares of the Select Sector
SPDR Funds and is the index compilation agent for the indices related to the
Select Sector SPDR Funds. Under certain circumstances, these duties could
result in a conflict of interest between MLPF&S's status as our subsidiary and
its responsibilities to the Select Sector SPDR Funds and the Select Sector
Indexes. Please see the section entitled "Risk Factors-Potential conflicts of
interests" in this prospectus.
Who is ML&Co.?
Merrill Lynch & Co., Inc. is a holding company with various
subsidiary and affiliated companies that provide investment, financing,
insurance and related services on a global basis. For information about ML&Co.
see the section "Merrill Lynch & Co., Inc." in the accompanying prospectus.
You should also read the other documents we have filed with the SEC, which you
can find by referring to the section "Where You Can Find More Information" in
this prospectus.
Are there any risks associated with my investment?
Yes, an investment in the MITTS Securities is subject to risk. Please
refer to the section "Risk Factors" in this prospectus.
RISK FACTORS
Your investment in the MITTS Securities will involve risks. You
should carefully consider the following discussion of risks before investing
in the MITTS Securities. In addition, you should reach an investment decision
with regard to the MITTS Securities only after consulting with your legal and
tax advisers and considering the suitability of the MITTS Securities in light
of your particular circumstances.
You may not earn a return on your investment
You should be aware that if the Adjusted Ending Value does not exceed
the Starting Value at the stated maturity date, the Supplemental Redemption
Amount will be zero. This will be true even if the value of the SPDR Fund
Growth Portfolio Index, as reduced by the Adjustment Factor over the term of
the MITTS Securities, was higher than the Starting Value at some time during
the life of the MITTS Securities but later falls below the Starting Value. If
the Supplemental Redemption Amount is zero, we will repay you only the
principal amount of your MITTS Securities.
Your yield may be lower than the yield on a standard debt security of comparable
maturity
The amount we pay you at maturity may be less than the return you
could earn on other investments. Your yield may be less than the yield you
would earn if you bought a standard senior non-callable debt security of
ML&Co. with the same maturity date. Your investment may not reflect the full
opportunity cost to you when you take into account factors that affect the
time value of money.
Your return will not reflect the return of owning the Select Sector SPDR Funds
comprising the SPDR Fund Growth Portfolio Index
The AMEX calculates the value of the SPDR Fund Growth Portfolio Index
by reference to the values of eight Select Sector SPDR Funds that reflect the
prices of those funds without taking into consideration the value of dividends
paid on those funds. The return on your MITTS Securities will not reflect the
return you would realize if you actually owned all of the Select Sector SPDR
Funds comprising the SPDR Fund Growth Portfolio Index and received the
dividends paid on those funds because of the cumulative effect of the
reduction caused by the Adjustment Factor and because the value of the SPDR
Fund Growth Portfolio Index is calculated by reference to the values of the
Select Sector SPDR Funds included in the SPDR Fund Growth Portfolio Index
without taking into consideration the value of any dividends paid on those
funds.
Changes in the value per share of a Select Sector SPDR Fund will not exactly
mirror changes in the related Select Sector Index
As indicated in the fund prospectus, a Select Sector SPDR Fund's
investment objective is to provide investment results that, before expenses,
correspond generally to the price and yield performance of the publicly-traded
equity securities included in the related Select Sector Index. However,
changes in the value of a Select Sector Index and in the value per share of
the related Select Sector SPDR Fund are not expected to be identical because:
o a Select Sector SPDR Fund's investment portfolio may not hold all
of the stocks in the related Select Sector Index or may not hold
each stock in the same weighting as the related Select Sector
Index,
o a Select Sector SPDR Fund may hold assets other than equity
securities, and
o the value per share of a Select Sector SPDR Fund reflects the
reduction of fund assets resulting from the accrual of fees and
expenses and the payment of distributions, if any.
As stated in the fund prospectus, the investment adviser to the
Select Sector SPDR Funds believes that "over time, 'the tracking error' of a
Select Sector SPDR Fund relative to the performance of the related Select
Sector Index, adjusted for the effect of that Select Sector SPDR Fund's
expenses, will be less than 5%". There is no assurance that the tracking error
will not be greater than 5% at any time, including the time that you may wish
to sell your MITTS Securities before the maturity date or at the time the
calculation agent determines the Supplemental Redemption Amount, if any.
The SPDR Fund Growth Portfolio Index is expected to be indirectly
affected by fees charged by the underlying Select Sector SPDR Funds to their
shareholders which will reduce the value of the Select Sector SPDR Fund
shares.
There may be an uncertain trading market for the MITTS Securities
Although the MITTS Securities are listed on the AMEX under the
trading symbol "GWM", you cannot assume that a trading market will continue to
exist for the MITTS Securities. If a trading market does continue to exist,
there can be no assurance that there will be liquidity in the trading market.
The continued existence of a trading market for the MITTS Securities will
depend on our financial performance, and other factors such as the increase,
if any, in the value of the SPDR Fund Growth Portfolio Index.
If the trading market for the MITTS Securities is limited, there may
be a limited number of buyers for your MITTS Securities if you do not wish to
hold your investment until maturity. This may affect the price you receive.
Many factors affect the trading value of the MITTS Securities; these factors
interrelate in complex ways and the effect of any one factor may offset or
magnify the effect of another factor
The trading value of the MITTS Securities will be affected by factors
that interrelate in complex ways. It is important for you to understand that
the effect of one factor may offset the increase in the trading value of the
MITTS Securities caused by another factor and that the effect of one factor
may exacerbate the decrease in the trading value of the MITTS Securities
caused by another factor. For example, an increase in interest rates may
offset some or all of any increase in the trading value of the MITTS
Securities attributable to another factor, such as an increase in the value of
the SPDR Fund Growth Portfolio Index. The following paragraphs describe the
expected impact on the market value of the MITTS Securities given a change in
a specific factor, assuming all other conditions remain constant.
The value of the SPDR Fund Growth Portfolio Index is expected to
affect the trading value of the MITTS Securities. We expect that the market
value of the MITTS Securities will depend substantially on the amount by which
the SPDR Fund Growth Portfolio Index, as reduced by the Adjustment Factor over
the term of the MITTS Securities, exceeds the Starting Value. If you choose to
sell your MITTS Securities when the value of the SPDR Fund Growth Portfolio
Index, as reduced by the Adjustment Factor over the term of the MITTS
Securities, exceeds the Starting Value, you may receive substantially less
than the amount that would be payable at maturity based on this value because
of the expectation that the SPDR Fund Growth Portfolio Index will continue to
fluctuate until the Adjusted Ending Value is determined. If you choose to sell
your MITTS Securities when the value of the SPDR Fund Growth Portfolio Index
is below, or not sufficiently above, the Starting Value, you may receive less
than the $10 principal amount per unit of your MITTS Securities. In general,
rising dividend rates, or dividends per share, may increase the value of the
SPDR Fund Growth Portfolio Index while falling dividend rates may decrease the
value of the SPDR Fund Growth Portfolio Index.
Changes in the levels of U.S. interest rates are expected to affect
the trading value of the MITTS Securities. Because we will pay, at a minimum,
the principal amount per unit of MITTS Securities at maturity, we expect that
changes in U.S. interest rates will affect the trading value of the MITTS
Securities. In general, if U.S. interest rates increase, we expect that the
trading value of the MITTS Securities will decrease and, conversely, if U.S.
interest rates decrease, we expect the trading value of the MITTS Securities
will increase. Rising interest rates may lower the value of the SPDR Fund
Growth Portfolio Index and, thus, the MITTS Securities. Falling interest rates
may increase the value of the SPDR Fund Growth Portfolio Index and, thus, may
increase the value of the MITTS Securities.
Changes in the volatility of the SPDR Fund Growth Portfolio Index are
expected to affect the trading value of the MITTS Securities. Volatility is
the term used to describe the size and frequency of price and/or market
fluctuations. Generally, if the volatility of the SPDR Fund Growth Portfolio
Index increases, we expect that the trading value of the MITTS Securities will
increase and, conversely, if the volatility of the SPDR Fund Growth Portfolio
Index decreases, we expect that the trading value of the MITTS Securities will
decrease.
As the time remaining to maturity of the MITTS Securities decreases,
the "time premium" associated with the MITTS Securities will decrease. We
anticipate that before their maturity, the MITTS Securities may trade at a
value above that which would be expected based on the level of interest rates
and the value of the SPDR Fund Growth Portfolio Index. This difference will
reflect a "time premium" due to expectations concerning the value of the SPDR
Fund Growth Portfolio Index during the period before the stated maturity of
the MITTS Securities. However, as the time remaining to the stated maturity of
the MITTS Securities decreases, we expect that this time premium will
decrease, lowering the trading value of the MITTS Securities.
Changes in dividend yields of the stocks included in the underlying
Select Sector SPDR Funds are expected to affect the trading value of the MITTS
Securities. Generally, if dividend yields on the stocks included in the Select
Sector SPDR Funds comprising the SPDR Fund Growth Portfolio Index increase, we
expect that the value of the MITTS Securities will decrease and, conversely,
if dividend yields on these stocks decrease, we expect that the value of the
MITTS Securities will increase.
Changes in our credit ratings may affect the trading value of the
MITTS Securities. Our credit ratings are an assessment of our ability to pay
our obligations. Consequently, real or anticipated changes in our credit
ratings may affect the trading value of the MITTS Securities. However, because
your return on your MITTS Securities is dependent upon factors in addition to
our ability to pay our obligations under the MITTS Securities, such as the
percentage increase in the value of the SPDR Fund Growth Portfolio Index at
maturity, an improvement in our credit ratings will not reduce the investment
risks related to the MITTS Securities.
In general, assuming all relevant factors are held constant, we
expect that the effect on the trading value of the MITTS Securities of a given
change in most of the factors listed above will be less if it occurs later in
the term of the MITTS Securities than if it occurs earlier in the term of the
MITTS Securities. However, we expect that the effect on the trading value of
the MITTS Securities of a given increase in the value of the SPDR Fund Growth
Portfolio Index will be greater if it occurs later in the term of the MITTS
Securities than if it occurs earlier in the term of the MITTS Securities.
No affiliation between ML&Co. and the Select Sector SPDR Funds
Our affiliate MLPF&S is both a soliciting dealer in the shares of the
Select Sector SPDR Funds and the index compilation agent for the related
Select Sector Indexes. However, we are not affiliated with the Select Sector
SPDR Funds or the related Select Sector Indexes. The Select Sector SPDR Funds
have no obligations with respect to the MITTS Securities or amounts to be paid
to you, including any obligation to take the needs of ML&Co. or of beneficial
owners of the MITTS Securities into consideration for any reason. The Select
Sector SPDR Funds will not receive any of the proceeds from this offering and
are not responsible for, and have not participated in, the determination or
calculation of the amount you will receive on your MITTS Securities at
maturity. In addition, the Select Sector SPDR Funds are not involved with the
administration or trading of the MITTS Securities and have no obligations with
respect to any amounts due under the MITTS Securities.
Amounts payable on the MITTS Securities may be limited by state law
New York State laws govern the 1983 Indenture under which the MITTS
Securities were issued. New York has certain usury laws that limit the amount
of interest that can be charged and paid on loans, which includes debt
securities like the MITTS Securities. Under present New York law, the maximum
rate of interest is 25% per annum on a simple interest basis. This limit may
not apply to debt securities in which $2,500,000 or more has been invested.
While we believe that New York law would be given effect by a state
or Federal court sitting outside of New York, many other states also have laws
that regulate the amount of interest that may be charged to and paid by a
borrower. We will promise, for the benefit of the MITTS Securities holders, to
the extent permitted by law, not to voluntarily claim the benefits of any laws
concerning usurious rates of interest.
Purchases and sales by us and our affiliates may affect your return
We and our affiliates may from time to time buy or sell shares of the
Select Sector SPDR Funds comprising the SPDR Fund Growth Portfolio Index or
the stocks underlying those funds for our own accounts for business reasons or
in connection with hedging our obligations under the MITTS Securities. These
transactions could affect the price of the underlying stocks, the value of the
Select Sector SPDR Funds and, in turn, the value of the SPDR Fund Growth
Portfolio Index in a manner that would be adverse to your investment in the
MITTS Securities.
Potential conflicts of interests
Our subsidiary, MLPF&S, is our agent for the purposes of calculating
the Adjusted Ending Value and the Supplemental Redemption Amount payable to
you at maturity. Under certain circumstances, MLPF&S' role as our subsidiary
and its responsibilities as calculation agent for the MITTS Securities could
give rise to conflicts of interests. These conflicts could occur, for
instance, in connection with its determination as to whether the value of the
SPDR Fund Growth Portfolio Index can be calculated on a particular trading
day, or in connection with judgments that it would be required to make in the
event of a discontinuance of the SPDR Fund Growth Portfolio Index. See
"Description of the MITTS Securities--Adjustments to the SPDR Fund Growth
Portfolio Index; Market Disruption Events" and "Discontinuance of the SPDR
Fund Growth Portfolio Index" in this prospectus.
MLPF&S is a soliciting dealer in the shares of the Select Sector SPDR
Funds. Under certain circumstances, MLPF&S' role as calculation agent for the
MITTS Securities and its role as a soliciting dealer in these shares could
give rise to conflicts of interests between the calculation agent and holders
of the MITTS Securities. These conflicts could occur in connection with its
determination as to the Adjusted Ending Value and the amount we owe you at
maturity.
Additionally, MLPF&S serves as Index Compilation Agent for each
Select Sector Index. In its capacity as Index Compilation Agent, MLPF&S
determines, in consultation with S&P, which securities of the S&P 500 are to
be included in each Select Sector Index. Under certain circumstances, MLPF&S'
role as calculation agent for the MITTS Securities and its role as Index
Compilation Agent could give rise to conflicts of interests between the
calculation agent and holders of the MITTS Securities.
MLPF&S is required to carry out its duties as calculation agent in
good faith and using its reasonable judgment. However, you should be aware
that because we control MLPF&S, potential conflicts of interest could arise.
We have entered into an arrangement with one of our subsidiaries to
hedge the market risks associated with our obligation to pay amounts due at
maturity on the MITTS Securities. This subsidiary expects to make a profit in
connection with this arrangement. We did not seek competitive bids for this
arrangement from unaffiliated parties.
MERRILL LYNCH & CO., INC.
We are a holding company that, through our U.S. and non-U.S.
subsidiaries and affiliates such as Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Merrill Lynch Government Securities Inc., Merrill Lynch Capital
Services, Inc., Merrill Lynch International, Merrill Lynch Capital Markets
Bank Ltd., Merrill Lynch Asset Management L.P. and Merrill Lynch Mercury Asset
Management, provides investment, financing, advisory, insurance, and related
products on a global basis, including:
o securities brokerage, trading and underwriting;
o investment banking, strategic services, including mergers and
acquisitions and other corporate finance advisory activities;
o asset management and other investment advisory and recordkeeping
services;
o trading and brokerage of swaps, options, forwards, futures and
other derivatives;
o securities clearance services;
o equity, debt and economic research;
o banking, trust and lending services, including mortgage lending
and related services; and
o insurance sales and underwriting services.
We provide these products and services to a wide array of clients,
including individual investors, small businesses, corporations, governments,
governmental agencies and financial institutions.
Our principal executive office is located at World Financial Center,
North Tower, 250 Vesey Street, New York, New York 10281; our telephone number
is (212) 449-1000.
If you want to find more information about us, please see the
sections entitled "Where You Can Find More Information" and "Incorporation of
Information We File with the SEC" in this prospectus.
In this prospectus, "ML&Co.", "we", "us" and "our" refer specifically
to Merrill Lynch & Co., Inc., the holding company. ML&Co. is the issuer of the
MITTS Securities described in this prospectus.
RATIO OF EARNINGS TO FIXED CHARGES
In 1998, we acquired the outstanding shares of Midland Walwyn Inc.,
in a transaction accounted for as a pooling-of-interests. The following
information for the fiscal years 1994 through 1997 has been restated as if the
two entities had always been combined.
The following table sets forth our historical ratios of earnings to
fixed charges for the periods indicated:
<TABLE>
<CAPTION>
For the Three
Year Ended Last Friday in December Months Ended
1994 1995 1996 1997 1998 March 26, 1999
---- ---- ---- ---- ---- --------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(a)......... 1.2 1.2 1.2 1.2 1.1 1.3
- ----------
(a) The effect of combining Midland Walwyn did not change the ratios reported for the fiscal years 1994
through 1997.
</TABLE>
For the purpose of calculating the ratio of earnings to fixed
charges, "earnings" consist of earnings from continuing operations before
income taxes and fixed charges, excluding capitalized interest and preferred
security dividend requirements of subsidiaries. "Fixed charges" consist of
interest costs, the interest factor in rentals, amortization of debt issuance
costs, preferred security dividend requirements of subsidiaries, and
capitalized interest.
DESCRIPTION OF THE MITTS SECURITIES
ML&Co. issued the MITTS Securities as a series of senior debt
securities under the senior indenture, referred to as the 1983 Indenture,
which is more fully described in this prospectus. The MITTS Securities will
mature on May 25, 2006.
While at maturity a beneficial owner of a MITTS Security will receive
the sum of the principal amount of each MITTS Security plus the Supplemental
Redemption Amount, if any, there will be no other payment of interest,
periodic or otherwise. See "--Payment at maturity".
The MITTS Securities are not subject to redemption by ML&Co. or at
the option of any beneficial owner before maturity. Upon the occurrence of an
Event of Default with respect to the MITTS Securities, beneficial owners of
the MITTS Securities may accelerate the maturity of the MITTS Securities, as
described under "Description of the MITTS Securities--Events of Default and
Acceleration" and "Other Terms--Events of Default" in this prospectus.
ML&Co. issued the MITTS Securities in denominations of whole units of
$10.00 per unit.
The MITTS Securities do not have the benefit of any sinking fund.
Payment at maturity
At maturity, a beneficial owner of a MITTS Security will be entitled
to receive the principal amount of that MITTS Security plus a Supplemental
Redemption Amount, if any, all as provided below. If the Supplemental
Redemption Amount is not greater than zero, a beneficial owner of a MITTS
Security will be entitled to receive only the principal amount of its MITTS
Securities.
The "Supplemental Redemption Amount" for a MITTS Security will be
determined by the calculation agent and will equal:
<TABLE>
<CAPTION>
<S> <C>
( Adjusted Ending Value - Starting Value )
principal amount of each MITTS Security ($10 per unit) X ( -------------------------------------- )
( Starting Value )
</TABLE>
provided, however, that in no event will the Supplemental Redemption
Amount be less than zero.
The "Starting Value" equals 100.
The "Adjusted Ending Value" will be determined by the calculation
agent and will equal the average or arithmetic mean of the closing values of
the SPDR Fund Growth Portfolio Index, as reduced by the application of the
Adjustment Factor on each Calculation Day, determined on each of the first
five Calculation Days during the Calculation Period. If there are fewer than
five Calculation Days, then the Adjusted Ending Value will equal the average
or arithmetic mean of the closing values of the SPDR Fund Growth Portfolio
Index on those Calculation Days, as reduced by the application of the
Adjustment Factor on each Calculation Day. If there is only one Calculation
Day, then the Adjusted Ending Value will equal the closing value of the SPDR
Fund Growth Portfolio Index on that Calculation Day, as reduced by the
application of the Adjustment Factor on that Calculation Day. If no
Calculation Days occur during the Calculation Period, then the Adjusted Ending
Value will equal the closing value of the SPDR Fund Growth Portfolio Index
determined on the last scheduled Index Business Day in the Calculation Period,
as reduced by the application of the Adjustment Factor on that day, regardless
of the occurrence of a Market Disruption Event on that day.
The "Adjustment Factor" equals 2.35% per year and will be applied
over the entire term of the MITTS Securities. On each calendar day during the
term of the MITTS Securities, we will apply this percentage on a pro-rated
basis based on a 365-day year to reduce the value used to calculate the
Supplemental Redemption Amount on each Calculation Day during the Calculation
Period. As a result of the cumulative effect of this reduction, the values
used to calculate the Supplemental Redemption Amount during the Calculation
Period will be approximately 15.18% less than the actual closing value of the
SPDR Fund Growth Portfolio Index on each Calculation Day during the
Calculation Period.
The "Calculation Period" means the period from and including the
seventh scheduled Index Business Day before the maturity date to and including
the second scheduled Index Business Day before the maturity date.
A "Calculation Day" means any Index Business Day during the
Calculation Period on which a Market Disruption Event has not occurred.
An "Index Business Day" is any day on which the NYSE and the AMEX are
open for trading and the SPDR Fund Growth Portfolio Index or any successor
index is calculated and published.
All determinations made by the calculation agent shall be at the sole
discretion of the calculation agent and, absent a determination by the
calculation agent of a manifest error, shall be conclusive for all purposes
and binding on ML&Co. and beneficial owners of the MITTS Securities.
Hypothetical returns
The following table illustrates, for a range of hypothetical closing
values of the SPDR Fund Growth Portfolio Index during the Calculation Period:
o the percentage change from the Starting Value to the hypothetical
closing value of the SPDR Fund Growth Portfolio Index,
o the Adjusted Ending Value used to calculate the Supplemental
Redemption Amount,
o the total amount payable at maturity for each unit of MITTS
Securities,
o the total rate of return to beneficial owners of the MITTS
Securities,
o the pretax annualized rate of return to beneficial owners of MITTS
Securities, and
o the pretax annualized rate of return of an investment in the
shares of the Select Sector SPDR Funds included in the SPDR Fund
Growth Portfolio Index, which includes an assumed aggregate
dividend yield of 1.09% per annum, as more fully described below.
For the purposes of calculating this table, we have applied an
Adjustment Factor of 2.35% per annum.
<TABLE>
<CAPTION>
Pretax
Percentage annualized
change from Total amount Pretax rate of return
Hypothetical the Starting payable at Total rate annualized of the shares
closing value Value to the maturity per of return rate of of the Select
during the hypothetical Adjusted unit of the on the return on Sector SPDR
Calculation closing Ending MITTS MITTS the MITTS Funds in the
Period value Value(1) Securities Securities Securities(2) index(2)(3)
- ------------- ------------ -------- -------------- ----------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
20.00 -80.00% 16.96 $10.00 0.00% 0.00% -20.52%
40.00 -60.00^ 33.93 $10.00 0.00% 0.00% -11.58%
60.00 -40.00% 50.89 $10.00 0.00% 0.00% -6.09%
80.00 -20.00% 67.86 $10.00 0.00% 0.00% -2.09%
100.00(4) 0.00% 84.82 $10.00 0.00% 0.00% 1.09%
120.00 20.00% 101.78 $10.18 1.78% 0.25% 3.73%
140.00 40.00% 118.75 $11.87 18.75% 2.47% 5.99%
160.00 60.00% 135.71 $13.57 35.71% 4.41% 7.98%
180.00 80.00% 152.68 $15.27 52.68% 6.13% 9.74%
200.00 100.00% 169.64 $16.96 69.64% 7.69% 11.34%
220.00 120.00% 186.60 $18.66 86.60% 9.11% 12.80%
240.00 140.00% 203.57 $20.36 103.57% 10.41% 14.14%
260.00 160.00% 220.53 $22.05 120.53% 11.61% 15.38%
280.00 180.00% 237.50 $23.75 137.50% 12.74% 16.54%
300.00 200.00% 254.46 $25.45 154.46% 13.79% 17.63%
(1) The Adjusted Ending Values specified in this column are approximately 15.18% less than the hypothetical
closing values of the SPDR Fund Growth Portfolio Index as a result of the cumulative effect of the
application of an Adjustment Factor of 2.35% per annum over the term of the MITTS Securities.
(2) The annualized rates of return specified in the preceding table are calculated on a semiannual bond
equivalent basis.
(3) This rate of return assumes:
(a) an investment of a fixed amount in the shares of the Select Sector SPDR Funds comprising the SPDR
Fund Growth Portfolio Index with the allocation of this amount reflecting the relative weights of
each of the Select Sector SPDR Funds in the SPDR Fund Growth Portfolio Index;
(b) a percentage change in the aggregate price of the shares that equals the percentage change in the
SPDR Fund Growth Portfolio Index from the Starting Value to the relevant hypothetical closing
value;
(c) a constant dividend yield of 1.09% per annum, paid quarterly from the date of initial delivery of
the MITTS Securities, applied to the value of the shares of the Select Sector SPDR Funds comprising
the SPDR Fund Growth Portfolio Index at the end of each quarter assuming this value increases or
decreases linearly from the Starting Value to the applicable hypothetical closing value;
(d) no transaction fees or expenses in connection with purchasing and holding shares of the Select Sector
SPDR Funds;
(e) an investment term from May 28, 1999 to May 25, 2006; and
(f) a final value of the SPDR Fund Growth Portfolio Index equal to the hypothetical closing value.
(4) The Starting Value of the SPDR Fund Growth Portfolio Index equals 100.
</TABLE>
The above figures are for purposes of illustration only. The actual
Supplemental Redemption Amount received by investors and the resulting total
and pretax annualized rate of return will depend entirely on the actual
Adjusted Ending Value determined by the calculation agent as provided in this
prospectus.
Adjustments to the SPDR Fund Growth Portfolio Index; Market Disruption Events
If at any time the AMEX changes its method of calculating the SPDR
Fund Growth Portfolio Index, or the value of the SPDR Fund Growth Portfolio
Index changes, in any material respect, or if the SPDR Fund Growth Portfolio
Index is in any other way modified so that the SPDR Fund Growth Portfolio
Index does not, in the opinion of the calculation agent, fairly represent the
value of the SPDR Fund Growth Portfolio Index had any changes or modifications
not been made, then, from and after that time, the calculation agent shall, at
the close of business in New York, New York, on each date that the closing
value of the SPDR Fund Growth Portfolio Index is to be calculated, make any
adjustments as, in the good faith judgment of the calculation agent, may be
necessary in order to arrive at a calculation of a value of a stock index
comparable to the SPDR Fund Growth Portfolio Index as if no changes or
modifications had been made, and calculate the closing value with reference to
the SPDR Fund Growth Portfolio Index, as so adjusted. Accordingly, if the
method of calculating the SPDR Fund Growth Portfolio Index is modified so that
the value of the SPDR Fund Growth Portfolio Index is a fraction or a multiple
of what it would have been if it had not been modified, e.g., due to a split,
then the calculation agent shall adjust the SPDR Fund Growth Portfolio Index
in order to arrive at a value of the SPDR Fund Growth Portfolio Index as if it
had not been modified, e.g., as if a split had not occurred.
"Market Disruption Event" means any of the following events, with
respect to the Select Sector SPDR Funds, as determined by the calculation
agent:
(a) the suspension or material limitation on trading for more than two
hours of trading, or during the one-half hour period preceding the
close of trading on the applicable exchange, in 20% or more of the
stocks which then comprise the Select Sector SPDR Funds underlying
the SPDR Fund Growth Portfolio Index; or
(b) the suspension or material limitation on trading, in each case,
for more than two hours of trading whether by reason of movements
in price otherwise exceeding levels permitted by the relevant
exchange or otherwise in option contracts or futures contracts
related to the S&P 500 Index or the shares of a Select Sector SPDR
Fund underlying the SPDR Fund Growth Portfolio Index which are
traded on any major U.S. exchange.
A limitation on the hours in a trading day and/or number of days of
trading will not constitute a Market Disruption Event if it results from an
announced change in the regular business hours of the relevant exchange.
For the purposes of clause (a) above, any limitations on trading
during significant market fluctuations under NYSE Rule 80A or any applicable
rule or regulation enacted or promulgated by the NYSE or any other self
regulatory organization or the SEC of similar scope as determined by the
calculation agent, will be considered "material".
Discontinuance of the SPDR Fund Growth Portfolio Index
If the AMEX discontinues publication of the SPDR Fund Growth
Portfolio Index and the AMEX or another entity publishes a successor or
substitute index that the calculation agent determines, in its sole
discretion, to be comparable to the SPDR Fund Growth Portfolio Index (a
"successor index"), then, upon the calculation agent's notification of any
determination to the trustee and ML&Co., the calculation agent will substitute
the successor index as calculated by the AMEX or any other entity for the SPDR
Fund Growth Portfolio Index and calculate the closing value as described above
under " Payment at maturity". Upon any selection by the calculation agent of a
successor index, ML&Co. shall cause notice to be given to holders of the MITTS
Securities.
In the event that the AMEX discontinues publication of the SPDR Fund
Growth Portfolio Index and:
o the calculation agent does not select a successor index, or
o the successor index is no longer published on any of the
Calculation Days,
the calculation agent will compute a substitute value for the SPDR Fund Growth
Portfolio Index in accordance with the procedures last used to calculate the
SPDR Fund Growth Portfolio Index before any discontinuance. If a successor
index is selected or the calculation agent calculates a value as a substitute
for the SPDR Fund Growth Portfolio Index as described below, the successor
index or value will be used as a substitute for the SPDR Fund Growth Portfolio
Index for all purposes, including for purposes of determining whether a Market
Disruption Event exists.
If the AMEX discontinues publication of the SPDR Fund Growth
Portfolio Index before the period during which the Supplemental Redemption
Amount is to be determined and the calculation agent determines that no
successor index is available at that time, then on each Exchange Business Day
until the earlier to occur of:
o the determination of the Adjusted Ending Value and
o a determination by the calculation agent that a successor index is
available,
the calculation agent will determine the value that would be used in computing
the Supplemental Redemption Amount as described in the preceding paragraph as
if that day were a Calculation Day. The calculation agent will cause notice of
each value to be published not less often than once each month in The Wall
Street Journal or another newspaper of general circulation, and arrange for
information with respect to these values to be made available by telephone.
An "Exchange Business Day" is any day on which the NYSE and the AMEX
are open for trading.
Notwithstanding these alternative arrangements, discontinuance of the
publication of the SPDR Fund Growth Portfolio Index may adversely affect
trading in the MITTS Securities.
Events of Default and Acceleration
In case an Event of Default with respect to any MITTS Securities has
occurred and is continuing, the amount payable to a beneficial owner of a
MITTS Security upon any acceleration permitted by the MITTS Securities, with
respect to each $10 principal amount, will be equal to the principal amount
and the Supplemental Redemption Amount, if any, calculated as though the date
of early repayment was the stated maturity date of the MITTS Securities,
provided, however, that the Adjustment Factor will be applied to the values
used to calculate the Supplemental Redemption Amount as if the MITTS
Securities had not been accelerated and had remained outstanding to the stated
maturity date. See "-Payment at maturity" in this prospectus. If a bankruptcy
proceeding is commenced in respect of ML&Co., the claim of the beneficial
owner of a MITTS Security may be limited, under Section 502(b)(2) of Title 11
of the United States Code, to the principal amount of the MITTS Security plus
an additional amount of contingent interest calculated as though the date of
the commencement of the proceeding was the maturity date of the MITTS
Securities.
In case of default in payment at the maturity date of the MITTS
Securities, whether at their stated maturity or upon acceleration, from and
after the maturity date the MITTS Securities will bear interest, payable upon
demand of their beneficial owners, at the rate of 6.38% per annum to the
extent that payment of any interest is legally enforceable on the unpaid
amount due and payable on that date in accordance with the terms of the MITTS
Securities to the date payment of that amount has been made or duly provided
for.
Depositary
Description of Global Securities
Upon issuance, all MITTS Securities will be represented by one or
more fully registered global securities. Each global security will be
deposited with, or on behalf of, DTC (DTC, together with any successor, being
a "depositary"), as depositary, registered in the name of Cede & Co., DTC's
nominee. Unless and until it is exchanged in whole or in part for MITTS
Securities in definitive form, no global security may be transferred except as
a whole by the depositary to a nominee of the depositary or by a nominee of
the depositary to the depositary or another nominee of the depositary or by
the depositary or any nominee to a successor of the depositary or a nominee of
that successor.
So long as DTC, or its nominee, is a registered owner of a global
security, DTC or its nominee, as the case may be, will be considered the sole
owner or holder of the MITTS Securities represented by the global security for
all purposes under the 1983 Indenture. Except as provided below, the
beneficial owners of the MITTS Securities represented by a global security
will not be entitled to have the MITTS Securities represented by a global
security registered in their names, will not receive or be entitled to receive
physical delivery of the MITTS Securities in definitive form and will not be
considered the owners or holders of the MITTS Securities including for
purposes of receiving any reports delivered by ML&Co. or the trustee under the
1983 Indenture. Accordingly, each person owning a beneficial interest in a
global security must rely on the procedures of DTC and, if that person is not
a participant of DTC, on the procedures of the participant through which that
person owns its interest, to exercise any rights of a holder under the 1983
Indenture. ML&Co. understands that under existing industry practices, in the
event that ML&Co. requests any action of holders or that an owner of a
beneficial interest in a global security desires to give or take any action
which a holder is entitled to give or take under the 1983 Indenture, DTC would
authorize the participants holding the relevant beneficial interests to give
or take that action, and those participants would authorize beneficial owners
owning through those participants to give or take that action or would
otherwise act upon the instructions of beneficial owners. Conveyance of
notices and other communications by DTC to participants, by participants to
indirect participants and by participants and indirect participants to
beneficial owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time.
DTC Procedures
The following is based on information furnished by DTC:
DTC will act as securities depositary for the MITTS Securities. The
MITTS Securities will be issued as fully registered securities registered in
the name of Cede & Co. (DTC's nominee). One or more fully registered global
securities will be issued for the MITTS Securities in the aggregate principal
amount of such issue, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. DTC holds securities that its participants
deposit with DTC. DTC also facilitates the settlement among participants of
securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in participants'
accounts, thereby eliminating the need for physical movement of securities
certificates. Direct participants of DTC include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its direct participants and by the
NYSE, the AMEX, and the National Association of Securities Dealers, Inc.
Access to DTC's system is also available to others such as securities brokers
and dealers, banks and trust companies that clear through or maintain a
custodial relationship with a direct participant, either directly or
indirectly. The rules applicable to DTC and its participants are on file with
the SEC.
Purchases of MITTS Securities under DTC's system must be made by or
through direct participants, which will receive a credit for the MITTS
Securities on DTC's records. The ownership interest of each beneficial owner
is in turn to be recorded on the records of direct and indirect participants.
Beneficial owners will not receive written confirmation from DTC of their
purchase, but beneficial owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the direct or indirect participants through which the
beneficial owner entered into the transaction. Transfers of ownership
interests in the MITTS Securities are to be made by entries on the books of
participants acting on behalf of beneficial owners. To facilitate subsequent
transfers, all MITTS Securities deposited with DTC are registered in the name
of DTC's nominee, Cede & Co. The deposit of MITTS Securities with DTC and
their registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual beneficial owners of the MITTS
Securities; DTC's records reflect only the identity of the direct participants
to whose accounts such MITTS Securities are credited, which may or may not be
the beneficial owners. The participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the
MITTS Securities. Under its usual procedures, DTC mails an omnibus proxy to
ML&Co. as soon as possible after the applicable record date. The omnibus proxy
assigns Cede & Co.'s consenting or voting rights to those direct participants
identified in a listing attached to the omnibus proxy to whose accounts the
MITTS Securities are credited on the record date.
Principal, premium, if any, and/or interest, if any, payments made in
cash on the MITTS Securities will be made in immediately available funds to
DTC. DTC's practice is to credit direct participants' accounts on the
applicable payment date in accordance with their respective holdings shown on
the depositary's records unless DTC has reason to believe that it will not
receive payment on that date. Payments by participants to beneficial owners
will be governed by standing instructions and customary practices, as is the
case with securities held for the accounts of customers in bearer form or
registered in "street name", and will be the responsibility of that
participant and not of DTC, the trustee or ML&Co., subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal, premium, if any, and/or interest, if any, to DTC is the
responsibility of ML&Co. or the trustee, disbursement of those payments to
direct participants shall be the responsibility of DTC, and disbursement of
any payments to the beneficial owners will be the responsibility of direct
participants and indirect participants.
Exchange for Certificated Securities
If:
o the depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by ML&Co.
within 60 days,
o ML&Co. executes and delivers to the trustee a company order to the
effect that the global securities shall be exchangeable, or
o an Event of Default under the 1983 Indenture has occurred and is
continuing with respect to the MITTS Securities,
the global securities will be exchangeable for MITTS Securities in definitive
form of like tenor and of an equal aggregate principal amount, in
denominations of $10 and integral multiples of $10. The definitive MITTS
Securities will be registered in the name or names as the depositary shall
instruct the trustee. It is expected that instructions may be based upon
directions received by the depositary from participants with respect to
ownership of beneficial interests in the global securities.
DTC may discontinue providing its services as securities depositary
with respect to the MITTS Securities at any time by giving reasonable notice
to ML&Co. or the trustee. Under these circumstances, in the event that a
successor securities depositary is not obtained, MITTS Security certificates
are required to be printed and delivered.
ML&Co. may decide to discontinue use of the system of book-entry
transfers through DTC or a successor securities depositary. In that event,
MITTS Security certificates will be printed and delivered.
The information in this section concerning DTC and DTC's system has
been obtained from sources that ML&Co. believes to be reliable, but ML&Co.
takes no responsibility for its accuracy.
Same-day settlement and payment
Settlement for the MITTS Securities will be made by the underwriter
in immediately available funds. ML&Co. will make all payments of principal and
the Supplemental Redemption Amount, if any, in immediately available funds so
long as the MITTS Securities are maintained in book-entry form.
THE SELECT SECTOR SPDR FUND GROWTH PORTFOLIO INDEX
The SPDR Fund Growth Portfolio Index is an index tracking the value
of eight underlying Select Sector SPDR Funds. Each Select Sector SPDR Fund is
an index fund whose stated investment objective is to provide investment
results that, before expenses, correspond generally to the price and yield
performance of the publicly-traded equity securities comprising the relevant
sector index. Each sector index consists of the equity securities of
publicly-traded companies that are components of the S&P 500 Index and that
represent a specific market sector. An investment in the MITTS Securities does
not entitle you to any ownership interest in any of the Select Sector SPDR
Funds comprising the SPDR Fund Growth Portfolio Index.
The initial multipliers were calculated so that the value of the SPDR
Fund Growth Portfolio Index equalled 100 on the Pricing Date. The initial
multiplier for each Select Sector SPDR Fund was determined by the calculation
agent on the Pricing Date and equalled:
o the initial weighting for the Select Sector SPDR Fund multiplied
by 100, divided by
o the last sale price reported on the AMEX of that Select Sector
SPDR Fund on the Pricing Date.
The respective multipliers will remain constant for the term of the MITTS
Securities unless adjusted for certain events such as splits, reverse splits
or capital gains distributions of any Select Sector SPDR Fund. The AMEX will
have the sole discretion as to whether to make any adjustments and the amount
of any adjustments.
The AMEX calculates and disseminates the value of the SPDR Fund
Growth Portfolio Index that equals the sum of the products, for each Select
Sector SPDR Fund, of the applicable multiplier and the most recently reported
price at which the Select Sector SPDR Fund has traded on its primary exchange.
The AMEX disseminates the SPDR Fund Growth Portfolio Index at approximately
15-second intervals during the AMEX's business hours and at the end of each
Index Business Day via the Consolidated Tape Association's Network B. The SPDR
Fund Growth Portfolio Index is reported by the AMEX and Bloomberg under the
symbol "GWI" and by Reuters under the symbol ".GWI".
Select Sector SPDR Funds
ML&Co. has attached the fund prospectus describing the Select Sector
SPDR Funds and is delivering it to purchasers of the MITTS Securities together
with this prospectus of ML&Co. for the convenience of reference only. The fund
prospectus does not constitute a part of this prospectus of ML&Co., nor is it
incorporated by reference in this prospectus of ML&Co. The summary description
below is qualified in its entirety by the information describing the Select
Sector SPDR Funds and the Select Sector Indexes included in the attached fund
prospectus.
The investment objective of each Select Sector SPDR Fund is to
provide investment results that, before expenses, correspond generally to the
price and yield performance of publicly traded equity securities of companies
in a particular sector or group of industries as represented by a specified
Select Sector Index published by the AMEX. The companies included in each
Select Sector SPDR Index are selected on the basis of general industry
classification from a universe of companies defined by the S&P 500. For
further information on the Select Sector SPDR Funds and the Select Sector
Indexes you should carefully read the fund prospectus accompanying this
prospectus.
Although ML&Co.'s subsidiary, MLPF&S, provides certain services to
the Select Sector SPDR Funds and the provider of the Select Sector Indexes,
ML&Co. is not affiliated with the Select Sector SPDR Funds or the Select
Sector Indexes, and the Select Sector SPDR Funds will not receive any of the
proceeds from the sale of, or have any obligations under, the MITTS
Securities. A prospective purchaser of the MITTS Securities should
independently decide whether an investment in the MITTS Securities is
appropriate.
The Select Sector SPDR Trust is subject to the registration
requirements of the Securities Act and the Investment Company Act, and is
required to file periodically certain information specified by the SEC. For
more information about the Select Sector SPDR Funds, the information provided
to or filed with the SEC by the Trust can be inspected at the SEC's public
reference facilities or accessed over the Internet through a web site
maintained by the SEC at http://www.sec.gov. Copies of these documents may
also be obtained at no cost by calling the Trust at (800) 843-2639 or by
writing the Trust c/o ALPS Mutual Funds Services, Inc., 370 17th Street, Suite
3100, Denver, CO 80202. Neither the fund prospectus nor such other documents
are incorporated by reference in this prospectus, and ML&Co. makes no
representation or warranty as to the accuracy or completeness of any such
documents.
ML&Co. is not affiliated with any of the Select Sector SPDR Funds,
and the Select Sector SPDR Funds do not have obligations with respect to the
MITTS Securities. This prospectus relates only to the MITTS Securities offered
by this prospectus and does not relate to the shares of the Select Sector SPDR
Funds or any other securities relating to the Select Sector SPDR Funds. The
information contained in this prospectus regarding the Select Sector SPDR
Funds has been derived from the publicly available documents described in the
preceding paragraph. ML&Co. makes no representation that these publicly
available documents or any other publicly available information regarding the
Select Sector SPDR Funds are accurate or complete. Furthermore, there can be
no assurance that all events occurring prior to the date of this prospectus,
including events that would affect the accuracy or completeness of the
publicly available documents described in the preceding paragraph, that would
affect the trading price of the shares of the Select Sector SPDR Funds, and
therefore the trading price of the MITTS Securities, have been publicly
disclosed. Subsequent disclosure of any of these events or the disclosure of
or failure to disclose material future events concerning the Select Sector
SPDR Funds could affect the Supplemental Redemption Amount, if any, to be
received at maturity and therefore the trading value of the MITTS Securities.
MLPF&S, a subsidiary of ML&Co., is a soliciting dealer in the shares
of the Select Sector SPDR Funds. Additionally, MLPF&S serves as index
compilation agent for the Select Sector Indexes. In its capacity as index
compilation agent, MLPF&S determines, in consultation with S&P, the
composition of the securities measured by the Select Sector Indexes.
License Agreement
S&P, the AMEX and MLPF&S have entered into a non-exclusive license
agreement providing for the license to MLPF&S, in exchange for a fee, of the
right to use Select Sector Indexes owned and published by S&P in connection
with certain securities, including the MITTS Securities, and ML&Co. is an
authorized sublicensee of MLPF&S.
The license agreement among S&P, the AMEX and MLPF&S provides that
the following language must be stated in this prospectus:
"Standard & Poor's(R)", "Standard & Poor's 500(R)", "S&P 500(R)",
"S&P(R)", "500", "Standard & Poor's Depositary Receipts", "SPDRs", "Select
Sector SPDR" and "Select Sector Standard & Poor's Depositary Receipts" are
registered trademarks of Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., and have been licensed for use by MLPF&S. ML&Co. is an
authorized sublicensee of MLPF&S. The stocks comprising the Select Sector
Indexes were selected by MLPF&S, as index compilation agent, in consultation
with S&P from the universe of companies represented by the S&P 500 Index. The
composition and weightings of the stocks included in the Select Sector Indexes
can be expected to differ from the composition and weighting of stocks
included in any similar S&P 500 sector indexes published and disseminated by
S&P.
The MITTS Securities, the SPDR Fund Growth Portfolio Index, the
Select Sector SPDR Funds and the Select Sector Indexes are not sponsored,
endorsed, sold or promoted by S&P. S&P makes no representation or warranty,
express or implied, to the holders of the MITTS Securities or any member of
the public regarding the advisability of investing in securities generally or
in the MITTS Securities particularly or in the ability of the SPDR Fund Growth
Portfolio Index to track the performance and yield of the Select Sector
Indexes or in the ability of the Select Sector Indexes to track the
performance of the corresponding sectors represented in the stock market. The
stocks included in the Select Sector Indexes were selected by MLPF&S as the
index compilation agent in consultation with S&P. The composition and
weightings of the stocks included in each Select Sector Index can be expected
to differ from the composition and weighting of stocks included in any
corresponding S&P 500 sector index that is published and disseminated by S&P.
S&P's only relationship to the index compilation agent is the licensing of
certain trademarks and trade names of S&P and of the S&P 500 Index which is
determined, composed and calculated by S&P without regard to the index
compilation agent or the MITTS Securities. S&P has no obligation to take the
needs of the index compilation agent, ML&Co. or the holders of the MITTS
Securities into consideration in determining, composing or calculating the S&P
500 Index. S&P is not responsible for and has not participated in any
determination of the timing of the sale of the MITTS Securities, prices at
which the MITTS Securities are initially to be sold, or quantities of the
MITTS Securities to be issued or in the calculation of the Supplemental
Redemption Amount. S&P has no obligation or liability in connection with the
administration, marketing or trading of the MITTS Securities.
S&P does not guarantee the accuracy and/or the completeness of the
S&P 500 Index, the Select Sector Indexes or any data included therein. S&P
makes no warranty, express or implied, as to results to be obtained by ML&Co.,
MLPF&S, the holders of the MITTS Securities, or any other person or entity
from the use of the S&P 500 Index, the Select Sector Indexes or any data
included therein in connection with the rights licensed under the license
agreement described herein or for any other use. S&P makes no express or
implied warranties, and expressly disclaims all warranties of merchantability
or fitness for a particular purpose with respect to the S&P 500 Index, the
Select Sector Indexes or any data included therein. Without limiting the
generality of the foregoing, in no event shall S&P have any liability for any
special, punitive, indirect or consequential damages, including lost profits,
even if notified of the possibility of such damages.
All disclosures contained in this prospectus regarding the S&P 500
Index or the Select Sector Indexes, including its respective make-up, method
of calculation and changes in its components, are derived from publicly
available information prepared by S&P and the Select Sector SPDR Trust,
respectively. ML&Co. and MLPF&S do not assume any responsibility for the
accuracy or completeness of this information.
OTHER TERMS
The MITTS Securities were issued as a series of senior debt
securities under the 1983 Indenture, dated as of April 1, 1983, as amended and
restated, between ML&Co. and The Chase Manhattan Bank, as trustee. A copy of
the 1983 Indenture is filed as an exhibit to the registration statement
relating to the MITTS Securities of which this prospectus is a part. The
following summaries of the material provisions of the 1983 Indenture are not
complete and are subject to, and qualified in their entirety by reference to,
all provisions of the 1983 Indenture, including the definitions of terms in
the 1983 Indenture.
Series of senior debt securities may from time to time be issued
under the 1983 Indenture, without limitation as to aggregate principal amount,
in one or more series and upon terms as ML&Co. may establish under the
provisions of the 1983 Indenture.
The 1983 Indenture and the MITTS Securities are governed by and
construed in accordance with the laws of the State of New York.
ML&Co. may issue senior debt securities with terms different from
those of senior debt securities previously issued, and issue additional senior
debt securities of a previously issued series of senior debt securities.
The senior debt securities are unsecured and rank equally with all
other unsecured and unsubordinated indebtedness of ML&Co. However, because
ML&Co. is a holding company, the rights of ML&Co. and its creditors, including
the holders of senior debt securities, to participate in any distribution of
the assets of any subsidiary upon its liquidation or reorganization or
otherwise are necessarily subject to the prior claims of creditors of the
subsidiary, except to the extent that claims of ML&Co. itself as a creditor of
the subsidiary may be recognized. In addition, dividends, loans and advances
from certain subsidiaries, including MLPF&S, to ML&Co. are restricted by net
capital requirements under the Exchange Act, and under rules of exchanges and
other regulatory bodies.
Limitations Upon Liens
ML&Co. may not, and may not permit any majority-owned subsidiary to,
create, assume, incur or permit to exist any indebtedness for borrowed money
secured by a pledge, lien or other encumbrance, other than those liens
specifically permitted by the 1983 Indenture, on the Voting Stock owned
directly or indirectly by ML&Co. of any majority-owned subsidiary, other than
a majority-owned subsidiary which, at the time of the incurrence of the
secured indebtedness, has a net worth of less than $3,000,000, unless the
outstanding senior debt securities are secured equally and ratably with the
secured indebtedness.
"Voting Stock" is defined in the 1983 Indenture as the stock of the
class or classes having general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation provided that, for the purposes of the 1983 Indenture, stock that
carries only the right to vote conditionally on the occurrence of an event is
not considered voting stock whether or not the event has happened.
Limitation on Disposition of Voting Stock of, and Merger and Sale of Assets by,
MLPF&S
ML&Co. may not sell, transfer or otherwise dispose of any Voting
Stock of MLPF&S or permit MLPF&S to issue, sell or otherwise dispose of any of
its Voting Stock, unless, after giving effect to any such transaction, MLPF&S
remains a Controlled Subsidiary.
"Controlled Subsidiary" is defined in the 1983 Indenture to mean a
corporation more than 80% of the outstanding shares of Voting Stock of which
are owned directly or indirectly by ML&Co.
In addition, ML&Co. may not permit MLPF&S to:
o merge or consolidate, unless the surviving company is a
Controlled Subsidiary, or
o convey or transfer its properties and assets substantially as an
entirety, except to one or more Controlled Subsidiaries.
Merger and Consolidation
ML&Co. may consolidate or merge with or into any other corporation
and ML&Co. may sell, lease or convey all or substantially all of its assets to
any corporation, provided that:
o the resulting corporation, if other than ML&Co., is a corporation
organized and existing under the laws of the United States of
America or any U.S. state and assumes all of ML&Co.'s obligations
to:
o pay any amounts due and payable or deliverable with respect to all
the Senior Debt Securities; and
o perform and observe of all of ML&Co.'s obligations under the 1983
Indenture, and
o ML&Co. or the successor corporation, as the case may be, is not,
immediately after any consolidation or merger, in default under
the 1983 Indenture.
Modification and Waiver
ML&Co. and the trustee may modify and amend the 1983 Indenture with
the consent of holders of at least 66 2/3% in principal amount of each
outstanding series of debt securities affected. However, without the consent
of each holder of any outstanding debt security affected, no amendment or
modification to any Indenture may:
o change the stated maturity date of the principal of, or any
installment of interest or Additional Amounts payable on, any
senior debt security or any premium payable on redemption, or
change the redemption price;
o reduce the principal amount of, or the interest or Additional
Amounts payable on, any senior debt security or reduce the amount
of principal which could be declared due and payable before the
stated maturity date;
o change the place or currency of any payment of principal or any
premium, interest or Additional Amounts payable on any senior debt
security;
o impair the right to institute suit for the enforcement of any
payment on or with respect to any senior debt security;
o reduce the percentage in principal amount of the outstanding
senior debt securities of any series, the consent of whose
holders is required to modify or amend the 1983 Indenture; or
o modify the foregoing requirements or reduce the percentage of
outstanding senior debt securities necessary to waive any past
default to less than a majority.
No modification or amendment of ML&Co.'s Subordinated Indenture or
any Subsequent Indenture for subordinated debt securities may adversely affect
the rights of any holder of ML&Co.'s senior indebtedness without the consent
of each holder affected. The Holders of at least a majority in principal
amount of outstanding senior debt securities of any series may, with respect
to that series, waive past defaults under the Indenture and waive compliance
by ML&Co. with provisions in the 1983 Indenture, except as described under
"--Events of Default".
Events of Default
Each of the following will be Events of Default with respect to
senior debt securities of any series:
o default in the payment of any interest or Additional Amounts
payable when due and continuing for 30 days;
o default in the payment of any principal or premium when due;
o default in the deposit of any sinking fund payment, when due;
o default in the performance of any other obligation of ML&Co.
contained in the Indenture for the benefit of that series or in
the senior debt securities of that series, continuing for 60 days
after written notice as provided in the 1983 Indenture;
o specified events in bankruptcy, insolvency or reorganization of
ML&Co.; and
o any other Event of Default provided with respect to senior debt
securities of that series which are not inconsistent with the 1983
Indenture.
If an Event of Default occurs and is continuing for any series of senior debt
securities, other than as a result of the bankruptcy, insolvency or
reorganization of ML&Co., the trustee or the holders of at least 25% in
principal amount of the outstanding senior debt securities of that series may
declare all amounts, or any lesser amount provided for in the senior debt
securities, due and payable or deliverable immediately. At any time after a
declaration of acceleration has been made with respect to senior debt
securities of any series but before the trustee has obtained a judgment or
decree for payment of money, the holders of a majority in principal amount of
the outstanding senior debt securities of that series may rescind any
declaration of acceleration and its consequences, if all payments due, other
than those due as a result of acceleration, have been made and all Events of
Default have been remedied or waived.
The holders of a majority in principal amount or aggregate issue
price of the outstanding debt securities of any series of debt securities may
waive any Event of Default with respect to that series, except a default:
o in the payment of any amounts due and payable or deliverable under
the debt securities of that series; or
o in respect of an obligation or provision of any Indenture which
cannot be modified under the terms of that Indenture without the
consent of each holder of each series of debt securities affected.
The holders of a majority in principal amount of the outstanding
senior debt securities of a series may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or
exercising any trust or power conferred on the trustee with respect to those
senior debt securities, provided that any direction shall not be in conflict
with any rule of law or the 1983 Indenture. Before proceeding to exercise any
right or power under the 1983 Indenture at the direction of the holders, the
trustee shall be entitled to receive from the Holders reasonable security or
indemnification against the costs, expenses and liabilities which might be
incurred by it in complying with any direction.
The MITTS Securities and other series of senior debt securities
issued under the 1983 Indenture do not have the benefit of any cross-default
provisions with other indebtedness of ML&Co.
ML&Co. is required to furnish to the trustee annually a statement as
to the fulfillment by ML&Co. of all of its obligations under the 1983
Indenture.
<PAGE>
PROJECTED PAYMENT SCHEDULE
Solely for purposes of applying the final Treasury Department
Regulations (the "Final Regulations") concerning the United States Federal
income tax treatment of contingent payment debt instruments to the MITTS
Securities, we have determined that the projected payment schedule for the
MITTS Securities will consist of payment on the maturity date of the principal
amount thereof and a projected Supplemental Redemption Amount equal to $5.5253
per unit. This represents an estimated yield on the MITTS Securities equal to
6.38% per annum (compounded semiannually).
The projected payment schedule, including both projected Supplemental
Redemption Amount and the estimated yield on the MITTS Securities, has been
determined solely for United States Federal income tax purposes i.e., for
purposes of applying the Final Regulations to the MITTS Securities, and is
neither a prediction nor a guarantee of what the actual Supplemental
Redemption Amount will be, or that the actual Supplemental Redemption Amount
will even exceed zero.
The following table sets forth the amount of interest that will be
deemed to have accrued with respect to each unit of the MITTS Securities
during each accrual period over a term of five years and ten days for the
MITTS Securities based upon the projected payment schedule for the MITTS
Securities, including both the projected Supplemental Redemption Amount and
the estimated yield equal to 6.38% per annum, compounded semiannually, as
determined by ML&Co. for purposes of illustrating the application of the Final
Regulations to the MITTS Securities:
<TABLE>
<CAPTION>
Total interest deemed
Interest deemed to to have accrued on
accrue during accrual MITTS Securities as of
period end of accrual period
Accrual Period (per unit) (per unit)
-------------- ---------- ----------
<S> <C> <C>
May 28, 1999 through November 28, 1999.......................... $0.3217 $0.3217
November 29, 1999 through May 28, 2000.......................... $0.3292 $0.6509
May 29, 2000 through November 28, 2000.......................... $0.3398 $0.9907
November 29, 2000 through May 28, 2001.......................... $0.3506 $1.3413
May 29, 2001 through November 28, 2001.......................... $0.3618 $1.7031
November 29, 2001 through May 28, 2002.......................... $0.3733 $2.0764
May 29, 2002 through November 28, 2002.......................... $0.3852 $2.4616
November 29, 2002 through May 28, 2003.......................... $0.3976 $2.8592
May 29, 2003 through November 28, 2003.......................... $0.4102 $3.2694
November 29, 2003 through May 28, 2004.......................... $0.4233 $3.6927
May 29, 2004 through November 28, 2004.......................... $0.4368 $4.1295
November 29, 2004 through May 28, 2005.......................... $0.4507 $4.5802
May 29, 2005 through November 28, 2005.......................... $0.4651 $5.0453
November 29, 2005 through May 25, 2006.......................... $0.4800 $5.5253
</TABLE>
- ----------
Projected Supplemental Redemption Amount = $5.5253 per unit.
All prospective investors in the MITTS Securities should consult
their own tax advisors concerning the application of the Final Regulations to
their investment in the MITTS Securities. Investors in the MITTS Securities
may also obtain the projected payment schedule, as determined by ML&Co. for
purposes of the application of the Final Regulations to the MITTS Securities,
by submitting a written request for such information to Merrill Lynch & Co.,
Inc., Attn: Darryl W. Colletti, Corporate Secretary's Office, 100 Church
Street, 12th Floor, New York, New York 10080-6512.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC.
Our SEC filings are also available over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file by
visiting the SEC's public reference rooms in Washington, D.C., New York, New
York, and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information about the public reference rooms. You may also inspect our SEC
reports and other information at the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
We have filed a registration statement on Form S-3 with the SEC
covering the MITTS Securities and other securities. For further information on
ML&Co. and the MITTS Securities, you should refer to our registration
statement and its exhibits. This prospectus summarizes material provisions of
contracts and other documents that we refer you to. Because the prospectus may
not contain all the information that you may find important, you should review
the full text of these documents. We have included copies of these documents
as exhibits to our registration statement of which this prospectus is a part.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to incorporate by reference the information we file
with them, which means:
o incorporated documents are considered part of the prospectus;
o we can disclose important information to you by referring you to
those documents; and
o information that we file with the SEC will automatically update
and supersede this incorporated information.
We incorporate by reference the documents listed below which were
filed with the SEC under the Exchange Act:
o annual report on Form 10-K for the year ended December 25, 1998;
o quarterly report on Form 10-Q for the period ended March 26, 1999;
and
o current reports on Form 8-K dated December 28, 1998, January 19,
1999, February 17, 1999, February 18, 1999, February 22, 1999,
February 23, 1999, March 26, 1999, April 13, 1999, April 19, 1999,
May 26, 1999, May 28, 1999 and June 1, 1999.
We also incorporate by reference each of the following documents that
we will file with the SEC after the date of this prospectus until this
offering is completed:
o reports filed under Sections 13(a) and (c) of the Exchange Act;
o definitive proxy or information statements filed under Section 14
of the Exchange Act in connection with any subsequent
stockholders' meeting; and
o any reports filed under Section 15(d) of the Exchange Act.
You should rely only on information contained or incorporated by
reference in this prospectus. We have not, and MLPF&S has not, authorized any
other person to provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely on it. We are
not, and MLPF&S is not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus
is accurate as of the date of this prospectus only. Our business, financial
condition and results of operations may have changed since that date.
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us at the following address: Mr. Lawrence
M. Egan, Jr., Corporate Secretary's Office, Merrill Lynch & Co., Inc., 100
Church Street, New York, New York 10080-6512, Telephone: (212) 602-8435.
PLAN OF DISTRIBUTION
This prospectus has been prepared in connection with secondary sales
of the MITTS Securities and is to be used by MLPF&S when making offers and
sales related to market-making transactions in the MITTS Securities.
MLPF&S may act as principal or agent in these market-making
transactions.
The MITTS Securities may be offered on the AMEX or off the exchange
in negotiated transactions or otherwise.
The distribution of the MITTS Securities will conform to the
requirements set forth in the applicable sections of Rule 2720 of the Conduct
Rules of the NASD.
EXPERTS
The consolidated financial statements and the related financial
statement schedule incorporated in this prospectus by reference from the
Annual Report on Form 10-K of Merrill Lynch & Co., Inc. and subsidiaries have
been audited by Deloitte & Touche LLP, independent auditors, as stated in
their reports (which express an unqualified opinion and which report on the
consolidated financial statements includes an explanatory paragraph for the
change in accounting method for certain internal-use software development
costs), which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
With respect to unaudited interim financial information for the
periods included in the Quarterly Reports on Form 10-Q which are incorporated
herein by reference, Deloitte & Touche LLP have applied limited procedures in
accordance with professional standards for a review of such information.
However, as stated in their reports included in such Quarterly Reports on Form
10-Q and incorporated by reference herein, they did not audit and they do not
express an opinion on such interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted
in light of the limited nature of the review procedures applied. Deloitte &
Touche LLP is not subject to the liability provisions of Section 11 of the
Securities Act for any such report on unaudited interim financial information
because any such report is not a "report" or a "part" of the Registration
Statement prepared or certified by an accountant within the meaning of
Sections 7 and 11 of the Securities Act.
