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Exhibit 99(B)
THIS CALLABLE 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
CALLABLE MITTS SECURITIES IN CERTIFICATED FORM, THIS CALLABLE 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
CALLABLE 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 CALLABLE 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- ,000,000 Units
CUSIP 590188 256 (Each Unit representing $10 principal
amount of Callable MITTS Securities)
MERRILL LYNCH & CO., INC.
Callable Market Index Target-Term Securities(R)
due August 3, 2007
based upon Biotech HOLDRS(SM)
("Callable MITTS(R) Securities")
Merrill Lynch & Co., Inc., a Delaware corporation (hereinafter
referred to as the "Company", which term includes any successor corporation
under the Indenture herein referred to), for value received, hereby promises to
pay to CEDE & CO., or its registered assigns, the principal sum of
MILLION DOLLARS ($ ,000,000) (the "Principal Amount") plus the Supplemental
Redemption Amount, as defined below, if any, on August 3, 2007 (the "Stated
Maturity"), provided that, the Callable MITTS Securities have not been called
prior to the Stated Maturity.
Payment or delivery of the Principal Amount and the Supplemental
Redemption Amount, if any, the Call Price (as defined below) 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 Callable MITTS Security is one of the series of Callable Market
Index Target-Term Securities due August 3, 2007 based upon Biotech
HOLDRS.
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Supplemental Redemption Amount
The "Supplemental Redemption Amount" with respect to this Callable
MITTS Security equals:
(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 . The Ending Value will be
determined by Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Calculation Agent") and will equal the value of the Reference Property (as
defined below) determined as follows: (A) for any portion of the Reference
Property consisting of cash, that cash, plus interest on the amount accruing
from and including the date of the payment of that cash to holders of the
Reference Property for which that cash was paid to but excluding the Stated
Maturity at a fixed interest rate determined on the date of the payment equal to
the interest rate that would be paid on a fixed rate senior non-callable debt
security of the Company with a term approximately equal to the remaining term
for the Callable MITTS Securities as determined by the Calculation Agent; (B)
for any portion of the Reference Property consisting of property other than cash
or Reference Securities (as defined below), the market value of that property,
as determined by the Calculation Agent on the date that the property was
delivered to holders of the relevant Reference Property for which the property
was distributed plus interest on the amount accruing from and including the date
of delivery to but excluding the Stated Maturity at a fixed interest rate
determined as described in (A) above; and (C) for any portion of the Reference
Property consisting of Reference Securities, the average (arithmetic mean) of
the Closing Prices (as defined below) of each such Reference Security determined
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 with respect to any Reference Security, then the
Ending Value shall be calculated using the average (arithmetic mean) of the
Closing Prices of that Reference Security on those Calculation Days, and if
there is only one Calculation Day, then the Ending Value shall be calculated
using the Closing Price of that Reference Security on such Calculation Day. If
no Calculation Days occur during the Calculation Period with respect to that
Reference Security, then the Ending Value shall be calculated using the Closing
Price of that Reference Security determined on the last scheduled Trading Day
(as defined below) in the Calculation Period, regardless of the occurrence of a
Market Disruption Event (as defined below) on that day.
"Reference Property" initially shall mean one depositary receipt
issued by the Biotech HOLDRS Trust ("Biotech HOLDRS"), and shall be subject to
adjustment from time to time to reflect the distribution of cash, securities
and/or other property in accordance with the adjustment provisions described
below under "Dilution and Reorganization Adjustments".
"Reference Securities" shall mean any securities included in the
Reference Property.
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The "Calculation Period" means the period from and including the
seventh scheduled Trading Day prior to the Stated Maturity to and including the
second scheduled Trading Day prior to the Stated Maturity.
"Calculation Day" means, with respect to any Reference Security, any
Trading Day (as defined below) during the Calculation Period on which a Market
Disruption Event has not occurred.
"Market Disruption Event" means, for any Reference Security, the
occurrence or existence on any Trading Day (as defined below) during the one-
half hour period that ends when the Closing Price is determined, of any
suspension of, or limitation imposed on, trading in that Reference Security on
the New York Stock Exchange (the "NYSE"), or other market or exchange, if
applicable.
"Trading Day" means a day on which the American Stock Exchange (the
"AMEX"), the NYSE and the NASDAQ National Market System ("NASDAQ NMS") are open
for trading.
"Closing Price" of a Reference Security means, for a Calculation Day
the following:
(a) If the Reference Security is listed on a national securities exchange
in the United States, is a NASDAQ NMS security or is included in the
OTC Bulletin Board Service ("OTC Bulletin Board") operated by the
National Association of Securities Dealers, Inc. (the "NASD"), Closing
Price means (i) the last reported sale price, regular way, on that day
on the principal United States securities exchange registered under
the Securities Exchange Act of 1934, as amended, on which that
Reference Security is listed or admitted to trading, or (ii) if not
listed or admitted to trading on any such securities exchange or if
the last reported sale price is not obtainable, the last reported sale
price on the over-the-counter market as reported on the NASDAQ NMS or
OTC Bulletin Board on that day, or (iii) if the last reported sale
price is not available pursuant to (i) and (ii) above, the mean of the
last reported bid and offer price on the over-the-counter market as
reported on the NASDAQ NMS or OTC Bulletin Board on that day as
determined by the Calculation Agent.
The term "NASDAQ NMS security" shall include a security included in
any successor to that system and the term "OTC Bulletin Board" shall
include any successor service to that service.
(b) If the Reference Security is not listed on a national securities
exchange in the United States or is not a NASDAQ NMS security or
included in the OTC Bulletin Board operated by the NASD, Closing Price
means the last reported sale price on that day on the securities
exchange on which the Reference Security is listed or admitted to
trading with the greatest volume of trading for the calendar month
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preceding that day as determined by the Calculation Agent, provided
that if the last reported sale price is for a transaction which
occurred more than four hours prior to the close of that exchange,
then the Closing Price shall mean the average, mean, of the last
available bid and offer price on that exchange. If the Reference
Security is not listed or admitted to trading on any such securities
exchange or if the last reported sale price or bid and offer are not
obtainable, the Closing Price shall mean the last reported sale price
for a transaction which occurred more than four hours prior to when
trading in such over-the-counter market typically ends, then the
Closing Price shall mean the average, mean, of the last available bid
and offer prices in such market of the three dealers which have the
highest volume of transactions in the Reference Security in the
immediately preceding calendar month as determined by the Calculation
Agent based on information that is reasonably available to it.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law to close and that is a day on which the NYSE
and the AMEX are open for trading.
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 beneficial owners of the Callable MITTS Securities.
Early Call of the Callable MITTS Securities at the Option of the Company
During the month of August 2006 (the "Call Period"), the Company, in
its sole discretion, may elect to call the Callable MITTS Securities, in whole
but not in part, before the Stated Maturity by giving notice to the Trustee on
any Business Day within the month of August 2006, at $ per unit (the "Call
Price") and specifying the date on which the Call Price shall be paid (the
"Payment Date").
The Payment Date shall be no later than the twentieth Business Day
after the call election. The Trustee will provide notice of the call election to
the registered holders of the Callable MITTS Securities, specifying the Payment
Date, no less than 15 calendar days prior to the Payment Date.
Dilution and Reorganization Adjustments
The Reference Property is subject to adjustment if an issuer of any
Reference Security shall: (i)pay a stock dividend or make a distribution on that
Reference Security in Reference Securities; (ii)subdivide or split the
outstanding units of that Reference Security into a greater number of units;
(iii)combine the outstanding units of that Reference Security into a smaller
number of units; (iv)issue by reclassification of units of that Reference
Security any units of another security of that issuer; (v)issue rights or
warrants to all holders of that Reference Security entitling them to subscribe
for or purchase shares, in the aggregate, for more than 5% of
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the number of those Reference Securities outstanding prior to the issuance of
the rights or warrants at a price per share less than the then current market
price of that Reference Security (other than rights to purchase that Reference
Security pursuant to a plan for the reinvestment of dividends or interest); or
(vi) pay a dividend or make a distribution to all holders of that Reference
Security of evidences of its indebtedness or other assets including in the case
where the Reference Security is Biotech HOLDRS, any of the securities underlying
Biotech HOLDRS that may be distributed by the Biotech HOLDRS Trust, but
excluding any stock dividends or distributions referred to in clause (i) above
or any cash dividends other than any Extraordinary Cash Dividend or issuance to
all holders of that Reference Security of rights or warrants to subscribe for or
purchase any of its securities (other than those referred to in clause (v)
above) (any of the foregoing assets are referred to as the "Distributed Assets"
and any of the foregoing events are referred to as the "Dilution Events"). For
purposes of provision (vi), if the holder of a Reference Security can elect to
receive securities in lieu of cash or property other than securities, then for
purposes of provision (vi) the holders of the Reference Security shall be deemed
to receive only the securities.
In the case of the Dilution Events referred to in clauses (i), (ii),
(iii) and (iv) above, the Reference Property shall be adjusted to include the
number of units of the Reference Security and/or security of that issuer which a
holder of Reference Property as constituted immediately prior to the Dilution
Event would have owned or been entitled to receive as a result of that Dilution
Event. Each adjustment shall become effective immediately after the effective
date for the dividend, distribution subdivision, split, combination or
reclassification, as the case may be. Each adjustment shall be made
successively.
In the case of the Dilution Event referred to in clause (v) above, the
Reference Property shall be adjusted by multiplying the number of Reference
Securities constituting Reference Property immediately prior to the date of
issuance of the rights or warrants referred to in clause (v) above by a
fraction, (1) the numerator of which shall be the number of Reference Securities
outstanding on the date immediately prior to such issuance, plus the number of
additional Reference Securities offered for subscription or purchase pursuant to
the rights or warrants, and (2) the denominator of which shall be the number of
Reference Securities outstanding on the date immediately prior to such issuance,
plus the number of additional Reference Securities which the aggregate offering
price of the total number of Reference Securities so offered for subscription or
purchase pursuant to the rights or warrants would purchase at the current market
price, determined as the average Closing Price per Reference Security for the 20
Trading Days immediately prior to the date of such rights or warrants are
issued, subject to certain adjustments, which shall be determined by multiplying
such total number of Reference Securities by the exercise price of the rights or
warrants and dividing the product so obtained by the current market price. To
the extent that the rights or warrants are not exercised before they expire, or
if the rights or warrants are not issued, the Reference Property shall be
readjusted to the Reference Property which would then be in effect had such
adjustments for the issuance of the rights or warrants been made upon the basis
of delivery of only the number of Reference Securities actually delivered under
the rights or warrants.
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In the case of the Dilution Event referred to in clause (vi) above,
the Reference Property shall be adjusted to include, from and after the
dividend, distribution or issuance, for the portion of the Distributed Assets
consisting of cash, the amount of such Distributed Assets consisting of cash
received on Reference Property as constituted on the date of the dividend,
distribution or issuance, plus for the portion of the Distributed Assets which
are other than cash, the number or amount of each type of Distributed Assets
other than cash received on Reference Property as constituted on the date of the
dividend, distribution or issuance.
An "Extraordinary Cash Dividend" means, with respect to any
consecutive 12-month period, the amount, if any, by which the aggregate amount
of all cash dividends or any other distribution made by the issuer of a
Reference Security or made pursuant to an arrangement effecting a distribution
of distributable profits or reserves, whether in cash or in specie, on any
Reference Security occurring in such 12-month period (or, if the Reference
Security was not outstanding at the commencement of such 12-month period or was
not then a part of the Reference Property, occurring in such shorter period
during which such Reference Security was outstanding and was part of the
Reference Property) exceeds on a per share basis 10% of the average of the
Closing Prices per share of such Reference Security over such 12-month period
(or shorter period during which such Reference Security was outstanding and was
part of the Reference Property); provided that, for purposes of the foregoing
definition, the amount of cash dividends paid on a per share basis will be
appropriately adjusted to reflect the occurrence during such period of any stock
dividend or distribution of shares of capital stock of the issuer of such
Reference Security or any subdivision, split, combination or reclassification of
shares of such Reference Security.
If the Reference Security is Biotech HOLDRS, the determination as to
whether any cash dividend on such Biotech HOLDRS is an Extraordinary Cash
Dividend shall be made by examining which of the stocks underlying Biotech
HOLDRS is responsible for all or a portion of such cash dividend or distribution
on Biotech HOLDRS, and treating each such stock underlying Biotech HOLDRS as if
it were a Reference Security only for this purpose and then determining whether
such cash dividend would be an Extraordinary Cash Dividend as defined above with
respect to such deemed Reference Security.
A "Reorganization Event" shall mean, (i) any consolidation or merger
of an issuer of a Reference Security, or any surviving entity or subsequent
surviving entity of that issuer (a "Successor Company"), with or into another
entity, other than a merger or consolidation in which such issuer is the
continuing corporation and in which the Reference Security outstanding
immediately prior to the merger or consolidation is not exchanged for cash,
securities or other property of such issuer or another corporation, (ii) any
sale, transfer, lease or conveyance to another corporation of the property of an
issuer of a Reference Security or any Successor Company as an entirety or
substantially as an entirety, (iii) any statutory exchange of securities of an
issuer of a Reference Security or any Successor Company with another
corporation, other than in connection with a merger or acquisition, or (iv) any
liquidation, dissolution, winding up or bankruptcy of an issuer of a Reference
Security or any Successor Company.
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If a Reorganization Event occurs, the Reference Property shall
include: (i) for any cash received in that Reorganization Event, the cash
received by a holder of the Reference Property as constituted on the date of the
Reorganization Event, (ii) for any property other than cash or securities
received in that Reorganization Event, the property received by a holder of the
Reference Property as constituted on the date of the Reorganization Event as
determined by the Calculation Agent, and (iii) for any securities received in
that Reorganization Event, the securities received by a holder of the Reference
Property as constituted on the date of the Reorganization Event (subject to
adjustment on a basis consistent with the adjustment provisions described
above).
All adjustments will be calculated to the nearest 1/10,000th of a
share of the Reference Security, or if there is not a nearest 1/10,000th of a
share, to the next lower 1/10,000th of a share. No adjustment shall be required
unless that adjustment would require an increase or decrease of at least one
percent in the Closing Price; provided, however, that any adjustments which by
reason of the foregoing are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
The foregoing adjustments shall be made by MLPF&S, as Calculation
Agent, and all adjustments, absent a manifest error, shall be final.
The Company will, within ten Business Days following the occurrence of
an event that requires an adjustment, or if the Company is not aware of such
occurrence, as soon as practicable after becoming so aware, provide written
notice to the trustee, which shall provide notice to the holders of the Callable
MITTS Securities of the occurrence of the event and, if applicable, a statement
in reasonable detail setting forth the adjusted Closing Price to be used in
determining the Ending Value.
General
This Callable 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 Callable MITTS Securities, and the terms upon which the
Callable MITTS Securities are, and are to be, authenticated and delivered.
The Company hereby covenants for the benefit of the Holders of the
Callable 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 Callable MITTS Securities.
The Callable MITTS Securities are not subject to redemption by the
Company or at the option of the Holder prior to the Stated Maturity, except as
provided herein.
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In case an Event of Default with respect to any Callable MITTS
Securities shall have occurred and be continuing, the amount payable to a Holder
of a Callable MITTS Security upon any acceleration permitted by the Callable
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 the date of early repayment is the Stated Maturity of
the Callable MITTS Securities. If the acceleration occurs before the end of the
Call Period, the maximum amount payable with respect to the Callable MITTS
Securities will be the Call Price.
In case of default in payment of the Callable MITTS Securities
(whether at the Stated Maturity or upon acceleration), from and after the
maturity date the Callable MITTS Securities shall bear interest, payable upon
demand of the Holders thereof, at the rate of % 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 Callable 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 Callable 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 Callable 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 Callable MITTS Securities of each series at the time
Outstanding, on behalf of the Holders of all Callable 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 Callable MITTS Security shall
be conclusive and binding upon such Holder and upon all future Holders of this
Callable MITTS Security and of any Callable 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 Callable MITTS
Security.
No reference herein to the Indenture and no provision of this Callable
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 Callable 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 Callable MITTS
Security may be registered on the Security Register of the Company, upon
surrender of this Callable 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
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authorized in writing, and thereupon one or more new Callable MITTS Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Callable MITTS Securities are issuable only in registered form
without coupons in denominations of $10 and integral multiples thereof. This
Callable 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 Callable MITTS Security
shall be exchangeable or (z) an Event of Default has occurred and is continuing
with respect to the Callable MITTS Securities, this Callable MITTS Security
shall be exchangeable for Callable 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 Callable MITTS Securities shall be
registered in such name or names as the Depository shall instruct the Trustee.
If definitive Callable MITTS Securities are so delivered, the Company may make
such changes to the form of this Callable MITTS Security as are necessary or
appropriate to allow for the issuance of such definitive Callable 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 Callable 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 Callable MITTS Security
is registered as the owner hereof for all purposes, whether or not this Callable
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 Callable MITTS Security which are defined in
the Indenture but not in this Callable 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
Callable MITTS Security shall not be entitled to any benefits under the
Indenture or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: August 4, 2000
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
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