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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 18, 1999
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Merrill Lynch & Co., Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 1-7182 13-2740599
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
World Financial Center, North Tower, New York, New York 10281-1220
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 449-1000
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
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Exhibits are filed herewith in connection with the Registration Statement
on Form S-3 (File No. 333-59997) filed by Merrill Lynch & Co., Inc. ("ML&Co.")
with the Securities and Exchange Commission covering Senior Debt Securities
issuable under an indenture dated as of April 1, 1983, as amended and restated,
between ML&Co. and The Chase Manhattan Bank (the "Indenture"). ML&Co. will issue
$51,000,000 aggregate principal amount of Energy Select Sector SPDR(R) Fund
Market Index Target-Term Securities(R) due February 21, 2006 under the
Indenture. The exhibits consist of the form of Securities and an opinion of
counsel relating thereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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EXHIBITS
(4) Instruments defining the rights of security holders,
including indentures.
Form of Merrill Lynch & Co., Inc.'s Energy Select
Sector SPDR(R) Fund Market Index Target-Term
Securities(R) due February 21, 2006.
(5) & (23) Opinion re: legality; consent of counsel.
Opinion of Brown & Wood LLP relating to the Energy
Select Sector SPDR(R) Fund Market Index Target-Term
Securities(R) due February 21, 2006 (including consent
for inclusion of such opinion in this report and in
Merrill Lynch & Co., Inc.'s Registration Statement
relating to such Securities).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
MERRILL LYNCH & CO., INC.
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(Registrant)
By: /s/ Theresa Lang
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Theresa Lang
Treasurer
Date: February 18, 1999
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
MERRILL LYNCH & CO., INC.
EXHIBITS TO CURRENT REPORT ON
FORM 8-K DATED FEBRUARY 18, 1999
Commission File Number 1-7182
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Exhibit Index
Exhibit No. Description Page
- ----------- ----------- ----
(4) Instruments defining the rights of security
holders, including indentures.
Form of Merrill Lynch & Co., Inc.'s Energy
Select Sector SPDR(R) Fund Market Index
Target-Term Securities(R) due February 21,
2006.
(5) & (23) Opinion re: legality; consent of counsel.
Opinion of Brown & Wood LLP relating to the
Energy Select Sector SPDR(R) Fund Market
Index Target-Term Securities(R) due February
21, 2006 (including consent for inclusion of
such opinion in this report and in Merrill
Lynch & Co., Inc.'s Registration Statement
relating to such Securities).
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Exhibit (4)
THIS MITTS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR MITTS
SECURITIES IN CERTIFICATED FORM, THIS MITTS SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO A NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS MITTS SECURITY
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO MERRILL LYNCH & CO., INC.
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY MITTS
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. R- 5,100,000 Units
CUSIP 590188 546
(Each Unit representing $10 principal
amount of MITTS Securities)
MERRILL LYNCH & CO., INC.
Energy Select Sector SPDR(R) Fund
Market Index Target-Term Securities(R)
due February 21, 2006
("MITTS Securities")
Merrill Lynch & Co., Inc., a Delaware corporation (hereinafter referred
to as "ML&Co.", which term includes any successor corporation under the
Indenture herein referred to), for value received, hereby promises to pay to
CEDE & CO., or registered assigns, the principal sum of FIFTY-ONE MILLION
DOLLARS ($51,000,000) (the "Principal Amount") plus the Supplemental Redemption
Amount, as defined below, on February 21, 2006 (the "Stated Maturity").
Payment or delivery of the Principal Amount and the Supplemental
Redemption Amount and any interest on any overdue amount thereof with respect to
this Security shall be made at the office or agency of ML&Co. maintained for
that purpose in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts or in the consideration specified
below.
This MITTS Security is one of the series of Energy Select Sector
SPDR(R) Fund Market Index Target-Term Securities(R) due February 21, 2006.
At maturity, a beneficial owner of a MITTS Security will be entitled to
receive the number of shares of the Energy Select Sector SPDR Fund (the "Energy
SPDR Fund")
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(or cash with an equal value) equal in value (determined based on the Ending
Value (as defined below)) to the Principal Amount of such MITTS Security plus
the Supplemental Redemption Amount, if any, all as provided below. The amount to
be paid by ML&Co. to any holder of the MITTS Securities on the maturity date
will be aggregated based on the total number of units then held by such holder
and rounded to the nearest cent. If the Adjusted Ending Value (as defined below)
does not exceed the Starting Value, a beneficial owner of a MITTS Security will
be entitled to receive only the number of shares of the Energy SPDR Fund (or
cash with an equal value) equal in value (determined based on the Ending Value)
to the Principal Amount of such MITTS Security.
ML&Co. may, at its option, in lieu of delivering shares of the Energy
SPDR Fund, pay cash in an amount equal to the sum of the Principal Amount of the
MITTS Securities and the Supplemental Redemption Amount, if any. In addition, if
at any time Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") ceases
to be a soliciting dealer in the shares of the Energy SPDR Fund, ML&Co. will pay
the amount due to the holders of the MITTS Securities in cash instead of shares.
Supplemental Redemption Amount
The "Supplemental Redemption Amount" with respect to this MITTS
Security equals:
(Adjusted Ending Value - Starting Value)
Principal Amount x ( -------------------------------------)
( Starting Value )
provided, however, that in no event will the Supplemental Redemption
Amount be less than zero. The Starting Value equals 22.4936. The Adjusted Ending
Value will be determined by the calculation agent and will equal the Ending
Value, as reduced by the Adjustment Factor (as defined below). The "Ending
Value" will equal the average (arithmetic mean) of the Net Asset Values (as
defined below) per share of the Energy SPDR Fund on each of the first five
Calculation Days (as defined below) during the Calculation Period (as defined
below). If there are fewer than five Calculation Days in the Calculation Period,
the Ending Value will equal the average (arithmetic mean) of the Net Asset
Values of the Energy SPDR Fund on each of such Calculation Days, and if there is
only one Calculation Day, then the Ending Value will be equal to the Net Asset
Value per share of the Energy SPDR Fund on such Calculation Day. If no
Calculation Days occur during the Calculation Period because of Market
Disruption Events (as defined below), then the Ending Value shall mean the Net
Asset Value per share of the Energy SPDR Fund on the last Trading Day (as
defined below) prior to the Calculation Period for which a Net Asset Value per
share of the Energy SPDR Fund was determined.
The "Adjustment Factor" equals 0.85% per annum and will be prorated
based on a 365-day year and applied each calendar day during the term of the
MITTS Securities to reduce the Ending Value used to calculate the Supplemental
Redemption Amount.
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"Net Asset Value" means the net asset value per share of the Energy
SPDR Fund as determined by the Energy SPDR Fund. The Energy SPDR Fund calculates
its net asset value per share by dividing the value of its net assets (i.e., the
value of its total assets less total liabilities) by its total number of shares
outstanding.
The "Calculation Period" means the period from and including the
seventh scheduled Calculation Day prior to the maturity to and including the
second scheduled Calculation Day prior to maturity.
"Calculation Day" means any Trading Day on which a Market Disruption
Event has not occurred.
"Trading Day" is a day on which the shares of the Energy SPDR Fund (A)
are not suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business and (B) have
traded at least once on a national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the shares of the Energy SPDR Fund.
Fractional Shares
No fractional shares of the Energy SPDR Fund will be distributed by
ML&Co. at maturity. In the event ML&Co. elects to pay holders of the MITTS
Securities in shares of the Energy SPDR Fund, all amounts due to any holder of
the MITTS Securities in respect of the total number of units held by such holder
will be aggregated, and in lieu of delivering any fractional share to such
holder, such holder will receive the cash value of such fractional share based
on the Ending Value.
Adjustments to the Net Asset Value; Market Disruption Events
If at any time the shares of the Energy SPDR Fund are subject to a
split or reverse split, the calculation agent shall adjust the Net Asset Value
per share of the Energy SPDR Fund used to calculate the Ending Value in order to
arrive at a Net Asset Value per share of the Energy SPDR Fund as if such split
or reverse split, as the case may be, had not occurred.
"Market Disruption Event" means any of the following events, as
determined by the calculation agent:
(a) the suspension or material limitation on trading (limitations
pursuant to New York Stock Exchange ("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)
on trading during significant market fluctuations shall be considered "material"
for purposes of this definition), in each case, 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
Energy Select Sector Index;
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(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 related to the shares of the Energy SPDR Fund which are traded
on any major U.S. exchange; or
(c) the Energy SPDR Fund (1) is unable or otherwise fails to issue a
Net Asset Value for any shares of the Energy SPDR Fund after the close of
business on the NYSE or (2) suspends the creation or redemption of shares of the
Energy SPDR Fund.
For the purposes of paragraphs (a) and (b) of this definition, 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.
Termination of the Energy SPDR Fund
If the Energy SPDR Fund is liquidated or otherwise terminated, for
purposes of calculating the Supplemental Redemption Amount payable at the
maturity of the MITTS Securities, the "Net Asset Value" will be calculated by
the calculation agent as follows: The Net Asset Value per share of the Energy
SPDR Fund on the Trading Day occurring immediately before any liquidating
distribution will equal the Net Asset Value for such day (the "Pre-liquidation
Date"). The calculation agent will then calculate the Net Asset Value after the
close of trading on each Trading Day (each such date, a "Determination Date")
after the Pre-liquidation Date by increasing or decreasing, as the case may be,
the Net Asset Value as of the immediately preceding Trading Day by the
percentage by which the closing value of the Energy Select Sector Index
increases or decreases from such immediately preceding Trading Day to such
Determination Date and further decreasing such Net Asset Value by fees, expenses
and non-liquidating distribution (together, "Fund Expenses") that the
calculation agent, in its sole judgment but with reference to the Fund Expenses
actually incurred by the Energy SPDR Fund before its liquidation or termination,
deems would reasonably have been accrued and included in the calculation of the
Net Asset Value per share of the Energy SPDR Fund had it not been liquidated or
terminated, from such immediately preceding Trading Day to such Determination
Date. The calculation agent will cause notice of each such 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
such values to be made available by telephone.
If the Energy SPDR Fund is liquidated or otherwise terminated and the
Energy Select Sector Index is no longer calculated or published (an "Index
Termination Event"), the calculation agent will select a successor index that it
determines, in its sole discretion, to be comparable to the Energy Select Sector
Index, and, upon the calculation agent's notification of such determination to
the Trustee and ML&Co., the calculation agent will substitute the successor
index for the Energy Select Sector Index and calculate the Net Asset Value in
accordance with the procedures referred to in the immediately
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preceding paragraph with reference to such successor index. Upon any selection
by the calculation agent of a successor index, ML&Co. shall cause notice thereof
to be given to holders of the MITTS Securities.
In the event that an Index Termination Event occurs and a successor
index to the Energy Select Sector Index is not selected by the calculation agent
or is no longer published on any of the Calculation Days, the calculation agent
shall compute a substitute index for the Energy Select Sector Index for any such
Calculation Day in accordance with the procedures last used to calculate the
Energy Select Sector Index prior to any such discontinuance. The calculation
agent will calculate the Net Asset Value in accordance with the procedures
referred to in the first paragraph of this section with reference to such
substitute index. Upon any selection by the calculation agent of such substitute
index, ML&Co. shall cause notice thereof to be given to holders of the MITTS
Securities.
If S&P discontinues publication of the S&P 500 Index subsequent to an
Index Termination Event and (i) a successor index to the Energy Select Sector
Index is not selected by the calculation agent or is no longer published on any
of the Calculation Days and (ii) the calculation agent is unable to calculate a
substitute index for the Energy Select Sector Index, the calculation agent will
compute a substitute index for the S&P 500 Index for any such Calculation Day in
accordance with the procedures last used to calculate the S&P 500 Index prior to
any such discontinuance. If the calculation agent calculates such substitute
index for the S&P 500 Index, the calculation agent will use such substitute
index to calculate the substitute index for the Energy Select Sector Index.
General
This MITTS Security is one of a duly authorized issue of securities of
ML&Co., issued and to be issued under an Indenture, dated as of April 1, 1983,
as amended and restated (herein referred to as the "Indenture"), between ML&Co.
and The Chase Manhattan Bank , as Trustee (herein referred to as the "Trustee",
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of ML&Co., the Trustee and the
Holders of the MITTS Securities, and the terms upon which the MITTS Securities
are, and are to be, authenticated and delivered.
ML&Co. hereby covenants for the benefit of the Holders of the MITTS
Securities, to the extent permitted by applicable law, not to claim voluntarily
the benefits of any laws concerning usurious rates of interest against a Holder
of the MITTS Securities.
The MITTS Securities are not subject to redemption by ML&Co. or at the
option of the Holder prior to the Stated Maturity.
In case an Event of Default with respect to any MITTS Securities shall
have occurred and be continuing, the amount payable to a beneficial owner of a
MITTS
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Security upon any acceleration permitted by the MITTS Securities, with
respect to each $10 principal amount thereof, will be equal to the Principal
Amount and the Supplemental Redemption Amount, if any, calculated assuming (i)
the date of early repayment is the maturity date of the MITTS Securities and
(ii) the Adjustment Factor is prorated based on a 365-day year and applied each
calendar day to reduce the Net Asset Value per share of the Energy SPDR Fund
used to calculate the Supplemental Redemption Amount.
In case of default in payment of the MITTS Securities (whether at the
Stated Maturity or upon acceleration), from and after the maturity date the
MITTS Securities shall bear interest, payable upon demand of the beneficial
owners thereof, at the rate 5.83% per annum (to the extent that payment of such
interest shall be legally enforceable) on the unpaid amount due and payable on
such date in accordance with the terms of the MITTS Securities to the date
payment of such amount has been made or duly provided for.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of ML&Co.
and the rights of the Holders of the MITTS Securities of each series to be
affected under the Indenture at any time by ML&Co. and the Trustee with the
consent of the Holders of not less than 66 2/3% in aggregate principal amount of
the MITTS Securities at the time Outstanding, as defined in the Indenture, of
each series affected thereby. The Indenture also contains provisions permitting
the Holders of specified percentages in aggregate principal amount of the MITTS
Securities of each series at the time Outstanding, on behalf of the Holders of
all MITTS Securities of each series, to waive compliance by ML&Co. with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this MITTS
Security shall be conclusive and binding upon such Holder and upon all future
Holders of this MITTS Security and of any MITTS Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this MITTS Security.
No reference herein to the Indenture and no provision of this MITTS
Security or of the Indenture shall alter or impair the obligation of ML&Co.,
which is absolute and unconditional, to pay the Principal Amount plus the
Supplemental Redemption Amount with respect to this MITTS Security and any
interest on any overdue amount thereof at the time, place, and rate, and in the
coin or currency or other consideration, herein prescribed.
As provided in the Indenture and subject to certain limitations set
forth therein and on the first page hereof, the transfer of this MITTS Security
may be registered on the MITTS Security Register of ML&Co., upon surrender of
this MITTS Security for registration of transfer at the office or agency of
ML&Co. in the Borough of Manhattan, The City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to ML&Co.
duly executed by, the Holder hereof or by his attorney duly authorized in
writing, and thereupon one or more new MITTS Securities, of
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<PAGE>
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The MITTS Securities are issuable only in registered form without
coupons in denominations of $10 and integral multiples thereof. As provided in
the Indenture and subject to certain limitations set forth therein and on the
first page hereof, the MITTS Securities are exchangeable for a like aggregate
principal amount of MITTS Securities in authorized denominations, as requested
by the Holder surrendering the same. If (x) any Depository is at any time
unwilling or unable to continue as Depository and a successor depository is not
appointed by ML&Co. within 60 days, (y) ML&Co. executes and delivers to the
Trustee a Company Order to the effect that this MITTS Security shall be
exchangeable or (z) an Event of Default has occurred and is continuing with
respect to the MITTS Securities, this MITTS Security shall 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 thereof. Such
definitive MITTS Securities shall be registered in such name or names as the
Depository shall instruct the Trustee. If definitive MITTS Securities are so
delivered, ML&Co. may make such changes to the form of this MITTS Security as
are necessary or appropriate to allow for the issuance of such definitive MITTS
Securities.
No service charge shall be made for any such registration of transfer
or exchange, but ML&Co. may require payment of a sum sufficient to cover any tax
or governmental charge payable in connection therewith.
Prior to due presentment of this MITTS Security for registration of
transfer, ML&Co., the Trustee and any agent of ML&Co. or the Trustee may treat
the Person in whose name this MITTS Security is registered as the owner hereof
for all purposes, whether or not this MITTS Security be overdue, and neither
ML&Co., the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this MITTS Security which are defined in the
Indenture but not in this MITTS Security shall have the meanings assigned to
them in the Indenture.
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Unless the certificate of authentication hereon has been executed by
The Chase Manhattan Bank, the Trustee under the Indenture, or its successor
thereunder, by the manual signature of one of its authorized officers, this
MITTS Security shall not be entitled to any benefits under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, ML&Co. has caused this instrument to be duly
executed under its corporate seal.
Dated: February 18, 1999
<TABLE>
<S> <C> <C>
CERTIFICATE OF AUTHENTICATION Merrill Lynch & Co., Inc.
This is one of the Securities of the series [Copy of Seal]
designated therein referred to in the
within-mentioned Indenture.
The Chase Manhattan Bank, as Trustee By:
Treasurer
By: Attest:
Authorized Officer Secretary
</TABLE>
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EXHIBIT (5) & (23)
February 18, 1999
Merrill Lynch & Co., Inc.
World Financial Center
North Tower
New York, New York 10281
Gentlemen:
As your counsel, we have examined a copy of the Restated Certificate of
Incorporation, as amended, of Merrill Lynch & Co., Inc. (hereinafter called the
"Company"), certified by the Secretary of State of the State of Delaware. We are
familiar with the corporate proceedings had in connection with the proposed
issuance and sale by the Company to the Underwriter named in the Terms Agreement
referred to below, pursuant to an Underwriting Agreement dated August 5, 1998
(the "Underwriting Agreement"), between the Company and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), as supplemented
by the Terms Agreement dated February 12, 1999 (the "Terms Agreement") between
the Company and MLPF&S (the "Underwriter"), of $51,000,000 aggregate principal
amount of the Company's Energy Select Sector SPDR(R) Fund Market Index
Target-Term Securities(R) due February 21, 2006 (the "Securities"). We have also
examined a copy of the Indenture between the Company and The Chase Manhattan
Bank as Trustee, dated as of April 1, 1983, as amended and restated (the
"Indenture"), and the Company's Registration Statement on Form S-3 (File No.
333-59997) relating to the Securities (the "Registration Statement").
<PAGE>
Based upon the foregoing and upon such further investigation as we
deemed relevant in the premises, we are of the opinion that:
1. The Company has been duly incorporated under the laws of the State
of Delaware.
2. The Securities have been duly and validly authorized by the Company
and when the Securities have been duly executed and authenticated in accordance
with the terms of the Indenture and delivered against payment therefor as set
forth in the Underwriting Agreement, as supplemented by the Terms Agreement, the
Securities will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by bankruptcy, moratorium,
insolvency, reorganization or similar laws relating to or affecting creditors'
rights generally and except as enforcement thereof is subject to general
principles at equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
2
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We consent to the filing of this opinion as an exhibit to the
Registration Statement and as an exhibit to the Current Report of the Company on
Form 8-K dated February 18, 1999.
Very truly yours,
/s/ Brown & Wood LLP
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