<PAGE>
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): September 20, 1999
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Merrill Lynch & Co., Inc.
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(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1-7182 13-2740599
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
</TABLE>
World Financial Center, North Tower, New York, New York 10281-1332
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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.)
<PAGE>
Item 5. Other Events
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Exhibits are filed herewith in connection with the Registration Statements
on Form S-3 (File Nos. 333-59997 and 333-68747) filed by Merrill Lynch & Co.,
Inc. (the "Company") with the Securities and Exchange Commission covering Senior
Debt Securities issuable under an indenture dated as of April 1, 1983, as
amended through the date hereof, between the Company and The Chase Manhattan
Bank (as so amended, the "Indenture"). The Company will issue $47,000,000
aggregate principal amount of Nikkei 225 Market Index Target-Term Securities(R)
due September 20, 2002 and $44,000,000 aggregate principal amount of Energy
Select Sector SPDR(R) Fund Market Index Target-Term Securities(R) due September
20, 2006 under the Indenture. The exhibits consist of the forms of Securities
and opinions of counsel relating thereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
------------------------------------------------------------------
EXHIBITS
(4)(a) Instruments defining the rights of security holders,
including indentures.
Form of Merrill Lynch & Co., Inc.'s Nikkei 225 Market
Index Target-Term Securities due September 20, 2002.
(4)(b) Instruments defining the rights of security holders,
including indentures.
Form of Merrill Lynch & Co., Inc.'s Energy Select
Sector SPDR Fund Market Index Target-Term Securities
due September 20, 2006.
(5) & (23)(a) Opinion re: legality; consent of counsel.
Opinion of Brown & Wood LLP relating to the Nikkei 225
Market Index Target-Term Securities due September 20,
2002 (including consent for inclusion of such opinion
in this report and in Merrill Lynch & Co., Inc.'s
Registration Statements relating to such Securities).
(5) & (23)(b) Opinion re: legality; consent of counsel.
Opinion of Brown & Wood LLP relating to the Energy
Select Sector SPDR Fund Market Index Target-Term
Securities due September 20, 2006 (including consent
for inclusion of such opinion in this report and in
Merrill Lynch & Co., Inc.'s Registration Statements
relating to such Securities).
2
<PAGE>
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.
-------------------------
(Registrant)
By: /s/ John C. Stomber
---------------------------------
John C. Stomber
Senior Vice President
and
Treasurer
Date: September 20, 1999
3
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
MERRILL LYNCH & CO., INC.
EXHIBITS TO CURRENT REPORT ON
FORM 8-K DATED SEPTEMBER 20, 1999
Commission File Number 1-7182
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Exhibit Index
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<CAPTION>
Exhibit No. Description Page
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<S> <C> <C>
(4)(a) Instruments defining the rights of security holders,
including indentures.
Form of Merrill Lynch & Co., Inc.'s Nikkei 225 Market Index
Target-Term Securities due September 20, 2002.
(4)(b) Instruments defining the rights of security holders,
including indentures.
Form of Merrill Lynch & Co., Inc.'s Energy Select Sector
SPDR Fund Market Index Target-Term Securities due September
20, 2006.
(5) & (23)(a) Opinion re: legality; consent of counsel.
Opinion of Brown & Wood LLP relating to the Nikkei 225
Market Index Target-Term Securities due September 20, 2002
(including consent for inclusion of such opinion in this
report and in Merrill Lynch & Co., Inc.'s Registration
Statements relating to such Securities).
(5) & (23)(b) Opinion re: legality; consent of counsel.
Opinion of Brown & Wood LLP relating to the Energy Select
Sector SPDR Fund Market Index Target-Term Securities due
September 20, 2006 (including consent for inclusion of such
opinion in this report and in Merrill Lynch & Co., Inc.'s
Registration Statements relating to such Securities).
</TABLE>
<PAGE>
Exhibit (4)(a)
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- 4,700,000 Units
CUSIP 590188 355 (Each Unit representing $10 principal
amount of MITTS Securities)
MERRILL LYNCH & CO., INC.
Nikkei 225 Market Index Target-Term Securities(R)
due September 20, 2002
("MITTS(R) Securities")
Merrill Lynch & Co., Inc., a Delaware corporation (hereinafter referred to
as the "Company", which term includes any successor corporation under the
Indenture herein referred to), for value received, hereby promises to pay to
CEDE & CO., or its registered assigns, the principal sum of FORTY SEVEN MILLION
DOLLARS ($47,000,000) (the "Principal Amount") plus the Supplemental Redemption
Amount, as defined below, if any, on September 20, 2002 (the "Stated Maturity").
Payment or delivery of the Principal Amount and the Supplemental Redemption
Amount, if any, and any interest on any overdue amount thereof with respect to
this Security shall be made at the office or agency of the Company 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.
This MITTS Security is one of the series of Nikkei 225 Market Index Target-
Term Securities due September 20, 2002.
<PAGE>
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 17,777.22. The Adjusted Ending Value
will be determined by Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Calculation Agent") and will equal the average or arithmetic mean of the
closing values of the Nikkei 225 Index (the "Index"), as reduced by the
application of the Adjustment Factor on each Calculation Day (as defined below),
determined on each of the first five Calculation Days during the Calculation
Period (as defined below). If there are fewer than five Calculation Days in the
Calculation Period, the Adjusted Ending Value will equal the average or
arithmetic mean of the closing values of the 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 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 shall
equal the closing value of the Index determined on the last scheduled Index
Business Day (as defined below) 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 (as defined below) on that day.
The "Adjustment Factor" equals 1.95% 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 values used to calculate the Supplemental Redemption
Amount on each Calculation Day during the Calculation Period.
The "Calculation Period" means the period from and including the seventh
scheduled Index Business Day prior to the Stated Maturity to and including the
second scheduled Index Business Day prior to the Stated Maturity.
"Calculation Day" means any Index Business Day during the Calculation
Period on which a Market Disruption Event has not occurred.
An "Index Business Day" is any day on which the New York Stock Exchange
(the "NYSE") and the American Stock Exchange (the "AMEX") are open for trading
and the Index or any Successor Index (as defined below) 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 the Company and Holders and beneficial owners of the MITTS
Securities.
2
<PAGE>
Adjustments to the Index; Market Disruption Events
If at any time Nihon Keizai Shimbun, Inc. ("NKS") changes its method of
calculating the Index, or the value of the Index changes, in any material
respect, or if the Index is in any other way modified so that the Index does
not, in the opinion of the Calculation Agent, fairly represent the value of the
Index had those 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 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 Index as if those changes or modifications had not been made,
and calculate the closing value with reference to the Index, as adjusted.
Accordingly, if the method of calculating the Index is modified so that the
value of the 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 Index in order to arrive at a value of the Index as if it had not
been modified, e.g., as if the split had not occurred.
"Market Disruption Event" means either of the following events as
determined by the Calculation Agent:
(A) the suspension or material limitation on trading on the Tokyo Stock
Exchange ("TSE") 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 Index or a Successor Index; or
(B) the suspension or material limitation, in each case, on the Singapore
International Monetary Exchange, Ltd., the Osaka Securities Exchange or any
other major futures or securities market from trading in futures or options
contracts related to the Nikkei 225 Index or a Successor Index during the
one-half hour period preceding the close of trading on the applicable
exchange.
For the purpose of the above definition:
(1) 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;
(2) a decision to permanently discontinue trading in the relevant futures or
options contract will not constitute a Market Disruption Event;
(3) a suspension in trading in a futures or options contract on the Nikkei 225
Index by a major securities market by reason of (a) a price change
violating limits set by that securities market, (b) an imbalance of orders
relating to those contracts or (c) a disparity in bid and ask quotes
relating to those contracts will constitute a suspension or material
limitation of trading in futures or options contracts related to the Nikkei
225 Index; and
(4) an absence of trading on the TSE will not include any time when the
TSE is closed for trading under ordinary circumstances.
3
<PAGE>
Discontinuance of the Index
If NKS discontinues publication of the Index and NKS or another entity
publishes a successor or substitute index that the Calculation Agent determines,
in its sole discretion, to be comparable to the Index (any such index being
referred herein as a "Successor Index"), then, upon the Calculation Agent's
notification of such determination to the Trustee (as defined below) and the
Company, the Calculation Agent will substitute the Successor Index as calculated
by NKS or such other entity for the Index and calculate the closing value as
described above under "--Supplemental Redemption Amount". Upon any selection by
the Calculation Agent of a Successor Index, the Company shall promptly cause
notice to be given to Holders of the MITTS Securities by publication in a United
States newspaper of general circulation.
In the event that NKS discontinues publication of the Index and the
Calculation Agent does not select a Successor Index, or the Successor Index is
no longer published on any of the Calculation Days, the Calculation Agent will
compute a substitute value for the Index in accordance with the procedures last
used to calculate the Index before any discontinuance. If a Successor Index is
selected or the Calculation Agent calculates a value as a substitute for the
Index, the Successor Index or value will be used as a substitute for the Index
for all purposes, including for purposes of determining whether a Market
Disruption Event exists.
If the NKS discontinues publication of the Index before the Calculation
Period and the Calculation Agent determines that no Successor Index is available
at that time, then on each Business Day (as defined below) until the earlier to
occur of the determination of the Adjusted Ending Value and a determination by
the Calculation Agent that a Successor Index is available, the Calculation Agent
will determine the value that would be used in computing the Supplemental
Redemption Amount as described in the preceding paragraph as if that day were a
Calculation Day. The Calculation Agent will cause notice of each value to be
published not less often than once each month in The Wall Street Journal or
another newspaper of general circulation, and arrange for information with
respect to these values to be made available by telephone.
A "Business Day" is any day on which the NYSE and the AMEX are open for
trading.
General
This MITTS Security is one of a duly authorized issue of securities of the
Company, issued and to be issued under an Indenture, dated as of April 1, 1983,
as amended (herein referred to as the "Indenture"), between the Company 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 the Company, 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.
The Company 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.
4
<PAGE>
The MITTS Securities are not subject to redemption by the Company 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 Holder of a MITTS Security
upon any acceleration permitted by the MITTS Securities, with respect to each
$10 principal amount thereof, will be equal to the $10 principal amount and the
Supplemental Redemption Amount, if any, calculated assuming (i) the date of
early repayment is the Stated Maturity of the MITTS Securities and (ii) 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.
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 Holders
thereof, at the rate of 6.65% 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 the
Company and the rights of the Holders of the MITTS Securities of each series to
be affected under the Indenture at any time by the Company 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 the Company 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 the
Company, which is absolute and unconditional, to pay the Principal Amount plus
the Supplemental Redemption Amount, if any, 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 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 Security Register of the Company, upon surrender of this MITTS
Security for registration of transfer at the office or agency of the Company 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 the Company duly
executed by, the Holder hereof or by his attorney duly authorized in writing,
and thereupon one
5
<PAGE>
or more new MITTS Securities, of 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. This MITTS Security
shall remain in the form of a global security held by a Depository.
Notwithstanding the foregoing, if (x) any Depository is at any time unwilling or
unable to continue as Depository and a successor depository is not appointed by
the Company within 60 days, (y) the Company 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, the
Company 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 the Company 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, the Company, the Trustee and any agent of the Company 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 the Company, 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.
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.
6
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: September 20, 1999
CERTIFICATE OF AUTHENTICATION Merrill Lynch & Co., Inc.
This is one of the Securities of the series
designated therein referred to in the
within-mentioned Indenture.
The Chase Manhattan Bank, as Trustee [Copy of Seal] By:
Treasurer
By: Attest:
Authorized Officer Secretary
7
<PAGE>
Exhibit (4)(b)
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- 4,400,000 Units
CUSIP 590188 348 (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 September 20, 2006
("MITTS(R) Securities")
Merrill Lynch & Co., Inc., a Delaware corporation (hereinafter referred to
as the "Company", 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 FORTY FOUR MILLION
DOLLARS ($44,000,000) (the "Principal Amount") plus the Supplemental Redemption
Amount, as defined below, on September 20, 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 the Company maintained for
that purpose in the Borough of Manhattan, The City of New York, in the
consideration specified below, or 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.
This MITTS Security is one of the series of Energy Select Sector SPDR Fund
Market Index Target-Term Securities due September 20, 2006.
<PAGE>
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") (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 the Company 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 (as defined below),
a Holder 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.
If the Company chooses to deliver shares of the Energy SPDR Funds to the
holders hereof at the Stated Maturity, the Company or one of its affiliates will
deliver such shares that are then newly issued by the Energy SPDR Fund.
The Company 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, the
Company 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 29.27. 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 will equal 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.
2
<PAGE>
The "Adjustment Factor" equals 1.25% 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 values used to calculate the Supplemental Redemption
Amount.
"Net Asset Value" means the net asset value per share of the Energy SPDR
Fund as determined by the Energy SPDR Fund.
The "Calculation Period" means the period from and including the seventh
scheduled Trading Day prior to the maturity to and including the second
scheduled Trading Day prior to maturity.
A "Calculation Day" means any Trading Day on which a Market Disruption
Event has not occurred.
A "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 the
Company at maturity. In the event the Company 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 Energy SPDR Fund; 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 Adjusted Ending Value and 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, 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;
(b) the suspension or material limitation on trading, 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 (whether by reason of movements in
price otherwise exceeding levels permitted by the
3
<PAGE>
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 New York Stock Exchange ("NYSE") or (2) suspends the creation or
redemption of shares of the Energy SPDR Fund.
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 Securities and Exchange Commission of similar scope as
determined by the Calculation Agent, will be considered "material".
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 (as defined below) and the Company, 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 preceding paragraph with
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reference to such successor index. Upon any selection by the Calculation Agent
of a successor index, the Company 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, the Company shall cause notice thereof to be given to holders of the
MITTS Securities.
If Standard & Poor's ("S&P") discontinues publication of the S&P's 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 the
Company, 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 the
Company 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 the Company, 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.
The Company 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 the Company 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
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
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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 of 7.08% 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 the
Company and the rights of the Holders of the MITTS Securities of each series to
be affected under the Indenture at any time by the Company 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 the Company 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 the
Company, 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 Security Register of the Company, upon surrender of this MITTS
Security for registration of transfer at the office or agency of the Company 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 the Company duly
executed by, the Holder hereof or by his attorney duly authorized in writing,
and thereupon one or more new MITTS Securities, of 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 the Company within 60 days, (y) the Company executes and delivers
to the Trustee a
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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, the
Company 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 the Company 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, the Company, the Trustee and any agent of the Company 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 the Company, 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.
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.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: September 20, 1999
Merrill Lynch & Co., Inc.
CERTIFICATE OF AUTHENTICATION
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
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<PAGE>
EXHIBIT (5) & (23)(a)
September 20, 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 September 14, 1999 (the "Terms Agreement") between
the Company and MLPF&S (the "Underwriter"), of $47,000,000 aggregate principal
amount of the Company's Nikkei 225 Market Index Target-Term Securities(R) due
September 20, 2002 (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 (the "Indenture"), and the Company's Registration
Statements on Form S-3 (File Nos. 333-59997 and 333-68747) relating to the
Securities (the "Registration Statements").
<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).
We consent to the filing of this opinion as an exhibit to the Registration
Statements and as an exhibit to the Current Report of the Company on Form 8-K
dated September 20, 1999.
Very truly yours,
/s/ Brown & Wood LLP
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<PAGE>
EXHIBIT (5) & (23)(b)
September 20, 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 September 14, 1999 (the "Terms Agreement") between
the Company and MLPF&S (the "Underwriter"), of $44,000,000 aggregate principal
amount of the Company's Energy Select Sector SPDR(R) Fund Market Index Target-
Term Securities(R) due September 20, 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 (the "Indenture"), and
the Company's Registration Statements on Form S-3 (File Nos. 333-59997 and 333-
68747) relating to the Securities (the "Registration Statements").
<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).
We consent to the filing of this opinion as an exhibit to the Registration
Statements and as an exhibit to the Current Report of the Company on Form 8-K
dated September 20, 1999.
Very truly yours,
/s/ Brown & Wood LLP
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