RULE NO. 424(b)(5)
REGISTRATION NO. 333-68747
P R O S P E C T U S
Merrill Lynch & Co., Inc.
Merrill Lynch EuroFund Market Index Target-Term Securities(R)
due February 28, 2006 "MITTS(R) Securities"
$10 principal amount per unit
This prospectus is to be used by Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, our wholly-owned subsidiary, when making
offers and sales related to market-making transactions in the MITTS
Securities.
The MITTS Securities:
o 100% principal protection at maturity
o No payments before the maturity date
o Senior unsecured debt securities of Merrill Lynch & Co., Inc.
o Linked to the value of the Merrill Lynch EuroFund, a registered mutual
fund
o The MITTS Securities are listed on the American Stock Exchange under the
symbol "EFM"
Payment at Maturity:
o On the maturity date, for each unit of the MITTS Securities you own, we
will pay you an amount equal to the sum of the principal amount of each
unit and an additional amount based on the percentage increase, if any,
in the total return value of the Class B shares of the Merrill Lynch
EuroFund, reduced by an adjustment factor of 2.6% of the EuroFund's value
each year, as described in this prospectus
o ML&Co. will pay you by delivering to you a number of Class D shares of
the Merrill Lynch EuroFund with an equal value, based upon the market
price for Class D Shares shortly before the stated maturity of the MITTS
Securities
o You will receive no less than the principal amount of your MITTS
Securities
Investing in the MITTS Securities involves risks.
See "Risk Factors" beginning on page 3.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these MITTS Securities or
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
The sale price of the MITTS Securities will be the prevailing market
price at the time of sale.
--------------------
Merrill Lynch & Co.
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The date of this prospectus is June 24, 1999.
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"MITTS" and "Market Index Target-Term Securities" are registered service marks
owned by Merrill Lynch & Co., Inc.
TABLE OF CONTENTS
Page
RISK FACTORS..............................................................3
MERRILL LYNCH & CO., INC..................................................6
RATIO OF EARNINGS TO FIXED CHARGES........................................7
DESCRIPTION OF THE MITTS SECURITIES.......................................8
THE EUROFUND INDEX.......................................................15
OTHER TERMS..............................................................16
PROJECTED PAYMENT SCHEDULE...............................................20
WHERE YOU CAN FIND MORE INFORMATION......................................21
INCORPORATION OF INFORMATION WE FILE WITH THE SEC........................21
PLAN OF DISTRIBUTION.....................................................22
EXPERTS..................................................................22
RISK FACTORS
Your investment in the MITTS Securities will involve risks. You
should carefully consider the following discussion of risks before investing
in the MITTS Securities. In addition, you should reach an investment decision
with regard to the MITTS Securities only after consulting with your legal and
tax advisers and considering the suitability of the MITTS Securities in the
light of your particular circumstances.
You may not earn a return on your investment
You should be aware that at maturity you will receive no more than a
number of Class D shares of the EuroFund in an amount equal in value,
determined based on the market price of the Class D shares shortly before the
maturity date, to the principal amount, if these shares are available, if the
average value of the index over five trading days shortly before the maturity
date is less than 15.53. This will be true even if, at some time during the
life of the MITTS Securities, the value of the EuroFund index, as adjusted,
was higher than 15.53, the value of the EuroFund Index on the date the MITTS
Securities were priced for initial sale to the public, but later falls below
15.53.
Your yield on the MITTS Securities will not equal the yield on Class B Shares
or the securities held by the EuroFund
The yield you earn on the MITTS Securities, if any, will not be the
same as the yield that you would earn if you directly owned Class B Shares of
the EuroFund. In calculating the value of the EuroFund index, the AMEX will
reduce the value of the EuroFund index by 2.6% each year. This annual
reduction will be applied on a pro rata basis each calendar day. Because of
these cumulative daily reductions, the value of the EuroFund index over time
will increasingly diverge from the actual value of the Class B Shares and
their distributions had you directly owned the Class B Shares. These
reductions would not apply if you directly owned the Class B Shares of the
EuroFund.
In addition, the yield you earn on the MITTS Securities, if any, will
not be the same yield that you would earn if you directly owned the securities
held by the EuroFund. Because the EuroFund's return, as measured by the index,
is determined after deductions for annual fees and expenses and transaction
fees, the EuroFund's return, and consequently the return on the MITTS
Securities, will be less than the return you would realize if you directly
owned the securities held by the EuroFund.
Your yield may be lower than the yield on a standard debt security of
comparable maturity
The amount we pay you at maturity may be less than the return you
could earn on other similar investments. Your yield may be less than the yield
you would earn if you bought a standard senior non-callable debt security of
Merrill Lynch & Co., Inc. with the same maturity date. Your investment may not
reflect the full opportunity cost to you when you consider inflation or other
factors that affect the time value of money.
There may be an uncertain trading market for the MITTS Securities in the future
Although the MITTS Securities are listed on the NYSE under the symbol
"EFM," you cannot assume that a trading market will continue to exist for the
MITTS Securities. If a trading market in the MITTS Securities continues to
exist, you cannot assume that there will be liquidity in the trading market.
The continued existence of a trading market for the MITTS Securities will
depend on our financial performance and other factors including the
appreciation, if any, of the value of the index.
If a limited trading market for the MITTS Securities exists, and you
do not wish to hold your investment until maturity, fewer buyers may want to
purchase your MITTS Securities. This may affect the price you receive if you
sell before maturity.
Many factors affect the trading value of the MITTS
Securities; these factors interrelate in complex ways and the effect of any
one factor may offset or magnify the effect of another factor
The trading value of the MITTS Securities will be affected by factors
that interrelate in complex ways. It is important for you to understand that
the effect of one factor may offset the increase in the trading value of the
MITTS Securities caused by another factor and that the effect of one factor
may magnify the decrease in the trading value of the MITTS Securities caused
by another factor. For example, an increase in U.S. interest rates may offset
some or all of any increase in the trading value of the MITTS Securities
attributable to another factor, such as an increase in the value of the index.
The following paragraphs describe the expected impact on the trading value of
the MITTS Securities given a change in a specific factor, assuming all other
conditions remain constant.
The value of the EuroFund index is expected to affect the trading
value of the MITTS Securities. We expect that the market value of the MITTS
Securities will depend substantially on the amount by which the value of the
EuroFund index exceeds or does not exceed 15.53. If you choose to sell your
MITTS Securities when the value of the EuroFund index exceeds 15.53 on any
given date, you may receive substantially less than the value that would be
payable at maturity based on that value of the EuroFund index because of the
expectation that the value of the EuroFund index will continue to fluctuate
until shortly before the maturity date when the average value of the index is
determined. If you choose to sell your MITTS Securities when the value of the
EuroFund index is below, or not sufficiently above, 15.53, you may receive
less than the principal amount per unit of MITTS Securities and lose a
substantial portion of your investment. Political, economic and other
developments that affect the securities owned by the EuroFund may also affect
the value of the EuroFund Index and the value of the MITTS Securities.
Changes in the levels of interest rates are expected to affect the
trading value of the MITTS Securities. Because we will pay at a minimum, the
principal amount per unit of the MITTS Securities at maturity, we expect that
changes in interest rates will affect the trading value of the MITTS
Securities. In general, if interest rates increase, we expect that the trading
value of the MITTS Securities will decrease, and, conversely, if interest
rates decrease, we expect the trading value of the MITTS Securities will
increase.
Changes in the volatility of the index are expected to affect the
trading value of the MITTS Securities. Volatility is the term used to describe
the size and frequency of market fluctuations. Generally, if the volatility of
the EuroFund index increases, we expect that the trading value of the MITTS
Securities will increase. If the volatility of the EuroFund index decreases,
we expect that the trading value of the MITTS Securities will decrease.
As the time remaining to maturity of the MITTS Securities decreases,
the "time premium" associated with the MITTS Securities will decrease. The
MITTS Securities may trade at a value above that which would be expected based
on the level of interest rates and the EuroFund index. This difference would
reflect a "time premium" due to expectations concerning the value of the
EuroFund index during the period before February 28, 2006, the stated maturity
of the MITTS Securities. However, as the time remaining to maturity of the
MITTS Securities decreases, we expect that this time premium will decrease,
lowering the trading value of the MITTS Securities.
Changes in our credit ratings may affect the trading value of the
MITTS Securities. Our credit ratings are an assessment of our ability to pay
our obligations. Consequently, real or anticipated changes in our credit
ratings may affect the trading value of the MITTS Securities. However, because
your return on your MITTS Securities is dependent upon factors in addition to
our ability to pay our obligations under the MITTS Securities, such as the
percentage increase in the value of the index at maturity, an improvement in
our credit ratings will not reduce investment risks related to the MITTS
Securities.
In general, assuming all relevant factors are held constant, we
expect that the effect on the trading value of the MITTS Securities of a given
change in most of the factors listed above will be less if it occurs later in
the term of the MITTS Securities than if it occurs earlier in the term of the
MITTS Securities, except that we expect that the effect on the trading value
of the MITTS Securities of a given increase or decrease in the EuroFund index
will be greater if it occurs later in the term of the MITTS Securities than if
it occurs earlier in the term of the MITTS Securities.
No shareholder's rights
You will not be entitled to any rights with respect to any shares of
the EuroFund, including, without limitation, voting rights and rights to
receive any dividends or distributions on the shares, until we deliver Class D
Shares at the maturity of the MITTS Securities. For example, if the EuroFund
sets a record date for a matter to be voted on by holders of Class D Shares
prior to our delivery of Class D Shares to you, you will not be entitled to
vote on that matter. You should be aware that if Class D Shares of the
EuroFund are not available for sale to new investors immediately prior to the
stated maturity date, we will pay you the amounts due to you for your MITTS
Securities in cash instead of delivering Class D Shares on the stated maturity
date.
Amounts payable on the MITTS Securities may be limited by state law
New York State laws govern the indenture under which the MITTS
Securities are issued. New York has usury laws that limit the amount of
interest that can be charged and paid on loans, which includes debt securities
like the MITTS Securities. Under present New York law, the maximum rate of
interest is 25% per annum on a simple interest basis. This limit may not apply
to debt securities in which $2,500,000 or more has been invested.
While we believe that New York law would be given effect by a state
or Federal court sitting outside of New York, many other states also have laws
that regulate the amount of interest that may be charged to and paid by a
borrower. We will promise, for the benefit of holders of the MITTS Securities,
to the extent permitted by law, not to voluntarily claim the benefits of any
laws concerning usurious rates of interest.
Purchases and sales by us and our affiliates may affect your return
We and our affiliates may from time to time buy or sell shares of the
EuroFund or shares of the companies in which the EuroFund invests, for our own
accounts, for business reasons or in connection with hedging our obligations
under the MITTS Securities. These transactions could affect the EuroFund index
in a manner that would be adverse to your investment in the MITTS Securities.
Potential conflicts of interest
Our subsidiary, Merrill Lynch, Pierce, Fenner & Smith Incorporated or
MLPF&S, is our agent for the purposes of calculating the value of the index
and the amount payable to you at maturity. In some circumstances, MLPF&S's
role as our subsidiary and its responsibilities as calculation agent for the
MITTS Securities could give rise to conflicts of interests. These conflicts
could occur, for instance, in connection with its determination as to whether
the value of the index can be calculated on a particular trading day, or in
connection with judgments that it would be required to make in the event of a
discontinuance of the index. See "Description of the MITTS
Securities--Adjustments to the Index; Market Disruption Events" and
"--Discontinuance of the Index" in this prospectus. MLPF&S is required to
carry out its duties as calculation agent in good faith and using its
reasonable judgment. However, you should be aware that because we control
MLPF&S, potential conflicts of interest could arise.
We have entered into an arrangement with one of our subsidiaries to
hedge the market risks associated with our obligation to pay amounts due at
maturity on the MITTS Securities. This subsidiary expects to make a profit in
connection with this arrangement. We did not seek competitive bids for this
arrangement from unaffiliated parties.
MERRILL LYNCH & CO., INC.
We are a holding company that, through our U.S. and non-U.S.
subsidiaries and affiliates such as Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Merrill Lynch Government Securities Inc., Merrill Lynch Capital
Services, Inc., Merrill Lynch International, Merrill Lynch Capital Markets
Bank Ltd., Merrill Lynch Asset Management L.P. and Merrill Lynch Mercury Asset
Management, provides investment, financing, advisory, insurance, and related
products on a global basis, including:
o securities brokerage, trading and underwriting;
o investment banking, strategic services, including mergers and
acquisitions and other corporate finance advisory activities;
o asset management and other investment advisory and recordkeeping
services;
o trading and brokerage of swaps, options, forwards, futures and
other derivatives;
o securities clearance services;
o equity, debt and economic research;
o banking, trust and lending services, including mortgage lending
and related services; and
o insurance sales and underwriting services.
We provide these products and services to a wide array of clients, including
individual investors, small businesses, corporations, governments,
governmental agencies and financial institutions.
Our principal executive office is located at World Financial Center,
North Tower, 250 Vesey Street, New York, New York 10281; our telephone number
is (212) 449-1000.
If you want to find more information about us, please see the
sections entitled "Where You Can Find More Information" and "Incorporation of
Information We File with the SEC" in this prospectus.
In this prospectus, "ML&Co.", "we", "us" and "our" refer specifically
to Merrill Lynch & Co., Inc., the holding company. ML&Co. is the issuer of the
MITTS Securities described in this prospectus.
RATIO OF EARNINGS TO FIXED CHARGES
In 1998, we acquired the outstanding shares of Midland Walwyn Inc.,
in a transaction accounted for as a pooling-of-interests. The following
information for the fiscal years 1994 through 1997 has been restated as if the
two entities had always been combined.
The following table sets forth our historical ratios of earnings to
fixed charges for the periods indicated:
For the Three Months
Year Ended Last Friday in December Ended
1994 1995 1996 1997 1998 March 26, 1999
---- ---- ---- ---- ---- --------------------
Ratio of earnings to fixed charges(a)......... 1.2 1.2 1.2 1.2 1.1 1.3
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(a) The effect of combining Midland Walwyn did not change the ratios reported
for the fiscal years 1994 through 1997.
For the purpose of calculating the ratio of earnings to fixed charges,
"earnings" consist of earnings from continuing operations before income taxes
and fixed charges, excluding capitalized interest and preferred security
dividend requirements of subsidiaries. "Fixed charges" consist of interest
costs, the interest factor in rentals, amortization of debt issuance costs,
preferred security dividend requirements of subsidiaries, and capitalized
interest.
DESCRIPTION OF THE MITTS SECURITIES
On September 3, 1998, ML&Co. issued an aggregate principal amount of
$77,000,000 or 7,700,000 of the MITTS Securities.
The MITTS Securities were issued as a series of senior debt
securities under the 1983 Indenture, which is more fully described in this
prospectus.
The MITTS Securities will mature on February 28, 2006.
While at maturity a beneficial owner of a MITTS Security will
receive, if available, the number of Class D Shares of the EuroFund equal in
value, determined based on the Maturity NAV, to the sum of the principal
amount of each MITTS Security plus the Supplemental Redemption Amount, if any,
there will be no other payment of interest, periodic or otherwise. See
"--Delivery at Maturity".
The MITTS Securities are not subject to redemption by ML&Co. or at
the option of any beneficial owner before maturity. Upon the occurrence of an
Event of Default with respect to the MITTS Securities, beneficial owners of
the MITTS Securities may accelerate the maturity of the MITTS Securities, as
described under "- Events of Default and Acceleration" and "Other Terms -
Events of Default" in this prospectus.
The MITTS Securities were issued in denominations of whole units.
Delivery at Maturity
At maturity, a beneficial owner of a MITTS Security will be entitled
to receive the number of Class D Shares of the EuroFund equal in value,
determined based on the Maturity NAV, to the principal amount of each MITTS
Security plus the Supplemental Redemption Amount, if any, all as provided
below. The number of Class D Shares delivered by ML&Co. will be rounded to the
nearest one-thousandth of a share. If the Ending Index Value does not exceed
the Starting Index Value, a beneficial owner of a MITTS Security will be
entitled to receive only the number of Class D Shares of the EuroFund equal in
value to the principal amount of each MITTS Security, determined based on the
Maturity NAV.
"Maturity NAV" shall mean the net asset value for the Class D Shares
of the EuroFund as calculated by the EuroFund on the first Calculation Day
during the Calculation Period; provided, however, if no Calculation Days occur
during the Calculation Period because of Market Disruption Events, then
Maturity NAV shall mean the net asset value for the Class D Shares of the
EuroFund as calculated by the EuroFund on the last scheduled Index Business
Day in the Calculation Period regardless of the occurrence of a Market
Disruption Event on that day.
Notwithstanding the foregoing, if the EuroFund is not issuing Class D
Shares to new investors in the EuroFund on the date Maturity NAV is to be
determined, ML&Co. may, in lieu of delivering Class D Shares of the EuroFund,
pay cash in an amount equal to the sum of the principal amount of the MITTS
Securities and the Supplemental Redemption Amount, if any.
The "Supplemental Redemption Amount" for a MITTS Security will be
determined by the calculation agent and will equal:
Principal amount of each MITTS Security X ( Ending Index Value - Starting Index Value )
($10 per unit) ( ----------------------------------------- )
( Starting Index Value )
provided, however, that in no event will the Supplemental Redemption Amount be
less than zero.
The "Starting Index Value" equals 15.53, which was the value of the
EuroFund Index on the date the MITTS Securities were initially priced for sale
to the public (the "Pricing Date"). The value of the EuroFund Index on the
Pricing Date was set to match the net asset value of Class B Shares of the
EuroFund on the Pricing Date.
The "Ending Index Value" will be determined by the calculation agent
and will the equal the closing value of the EuroFund Index determined on the
first Calculation Day during the Calculation Period. If no Calculation Days
occur during the Calculation Period because of Market Disruption Events, then
the Ending Index Value will equal the closing value of the EuroFund Index
determined on the last scheduled Index Business Day in the Calculation Period
regardless of the occurrence of a Market Disruption Event on that day.
The "Calculation Period" means the period from and including the
seventh scheduled Index Business Day prior to the maturity date to and
including the second scheduled Index Business Day prior to the maturity date.
"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 a day on which the NYSE and the AMEX are
open for trading and the AMEX calculates and publishes the EuroFund Index.
"Market Disruption Event" means the EuroFund
o is unable or otherwise fails to issue a net asset value for any
series of shares of the EuroFund after the close of business on
the NYSE but before 11:00 p.m., New York City time on the same
day or
o suspends redemption of shares of the EuroFund.
All determinations made by the calculation agent shall be at the sole
discretion of the calculation agent and, absent a determination by the
calculation agent of a manifest error, shall be conclusive for all purposes
and binding on ML&Co. and beneficial owners of the MITTS Securities.
Hypothetical Returns
The following table illustrates, for a range of hypothetical Ending
Values:
o the Ending Index Value used to calculate the Supplemental Redemption
Amount;
o the percentage change from the Starting Index Value to the Ending
Index Value;
o the total value of Class D Shares deliverable at maturity for each
$10 principal amount of MITTS Securities;
o the total rate of return to beneficial owners of the MITTS
Securities;
o the pretax annualized rate of return on the MITTS Securities; and
o the pretax annualized rate of return of class B Shares.
Total Value of
Class D Shares
Percentage Change Deliverable at Pretax Pretax
of Ending Index Maturity per $10 Total Rate of Annualized Rate Annualized Rate
Hypothetical Value Principal Amount Return on the of Return on the of Return of
Ending Index Over the Starting of MITTS MITTS MITTS Class B
Value Index Value Securities Securities Securities (1) Shares (1)(2)
----------- ----------------- ---------------- ------------- ---------------- ----------------
3.11 -80.00% $10.00 0.00% 0.00% -18.02%
6.21 -60.00% $10.00 0.00% 0.00% -9.40%
9.32 -40.00% $10.00 0.00% 0.00% -4.17%
12.42 -20.00% $10.00 0.00% 0.00% -0.38%
15.53(3) 0.00% $10.00 0.00% 0.00% 2.62%
18.64 20.00% $12.00 20.00% 2.45% 5.10%
21.74 40.00% $14.00 40.00% 4.54% 7.22%
24.85 60.00% $16.00 60.00% 6.37% 9.07%
27.95 80.00% $18.00 80.00% 8.00% 10.72%
31.06 100.00% $20.00 100.00% 9.47% 12.21%
34.17 120.00% $22.00 120.00% 10.80% 13.56%
37.27 140.00% $24.00 140.00% 12.03% 14.81%
40.38 160.00% $26.00 160.00% 13.17% 15.96%
43.48 180.00% $28.00 180.00% 14.22% 17.03%
46.59 200.00% $30.00 200.00% 15.21% 18.03%
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(1) The annualized rates of return specified in the preceding table are
calculated on a semiannual bond equivalent basis.
(2) This rate of return assumes:
(a) an initial investment of a fixed amount in the Series B Shares of
the EuroFund;
(b) a reinvestment of all cash dividends and distributions in the
Series B Shares of the EuroFund;
(c) no transaction fees or expenses;
(d) an investment term from September 3, 1998 to February 28, 2006; and
(e) a final EuroFund Index value equal to the Ending Index Value.
(3) This is the Starting Index Value.
The above figures are for purposes of illustration only. The actual
investment term, Supplemental Redemption Amount received by investors, and the
resulting total and pretax annualized rate of return will depend entirely on
the Starting Index Value and the actual Ending Index Value determined by the
calculation agent as provided in this prospectus.
Adjustments to the EuroFund Index
If at any time the AMEX changes the method of calculating the
EuroFund Index, or the index's value changes, in any material respect, or if
the EuroFund Index is in any other way modified so that the EuroFund Index
does not, in the opinion of the calculation agent, fairly represent the value
of the EuroFund Index had the 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 with
respect to the Ending Index Value 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 an index comparable to the
EuroFund Index as if any changes or modifications had not been made, and
calculate the closing value with reference to the EuroFund Index, as adjusted.
Accordingly, if the method of calculating the EuroFund Index is modified so
that the value of the EuroFund Index is a fraction or a multiple of what it
would have been if it had not been modified, for example, due to a split in
the EuroFund Index, then the calculation agent shall adjust the EuroFund Index
in order to arrive at a value of the EuroFund Index as if it had not been
modified, for example, as if the split had not occurred.
Discontinuance of the EuroFund Index
If the AMEX discontinues publication of the EuroFund Index and the
AMEX or another entity publishes a successor or substitute index that the
calculation agent determines, in its sole discretion, to be comparable to the
EuroFund Index (a "Successor Index") then, upon the calculation agent's
notification of its determination to the Trustee and ML&Co., the calculation
agent will substitute the Successor Index as calculated by the AMEX or any
other entity for the EuroFund Index and calculate the Ending Index Value as
described above under "Delivery at Maturity". Upon any selection by the
calculation agent of a Successor Index, ML&Co. shall cause notice to be given
to holders of the MITTS Securities.
If the AMEX discontinues publication of the EuroFund Index and a
Successor Index is not selected by the calculation agent or is no longer
published on any of the Calculation Days, the value to be substituted for the
EuroFund Index for any Calculation Day used to calculate the Supplemental
Redemption Amount at maturity will be a value computed by the calculation
agent for each Calculation Day in accordance with the procedures last used to
calculate the EuroFund Index before any discontinuance. If a Successor Index
is selected or the calculation agent calculates a value as a substitute for
the EuroFund Index as described below, the Successor Index or value shall be
substituted for the EuroFund Index for all purposes, including for purposes of
determining whether a Market Disruption Event exists.
If the AMEX discontinues publication of the Index before the period
during which the Supplemental Redemption Amount is to be determined and the
calculation agent determines that no Successor Index is available at that
time, then on each Business Day until the earlier to occur of:
o the determination of the Adjusted Ending Value and
o a determination by the calculation agent that a Successor Index is
available,
the calculation agent shall 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.
Notwithstanding these alternative arrangements, discontinuance of the
publication of the Index may adversely affect trading in the MITTS Securities.
Events of Default and Acceleration
In case an Event of Default with respect to any MITTS Securities has
occurred and is continuing, the amount payable to a beneficial owner of a
MITTS Security upon any acceleration permitted by the MITTS Securities, with
respect to each $10 principal amount of a MITTS Security, will be equal to the
principal amount and the Supplemental Redemption Amount, if any, calculated as
though the date of early repayment were the stated maturity date of the MITTS
Securities. See "Delivery at Maturity" in this prospectus. If a bankruptcy
proceeding is commenced in respect of ML&Co., the claim of the beneficial
owner of a MITTS Security may be limited, under Section 502(b)(2) of Title 11
of the United States Code, to the principal amount of the MITTS Security plus
an additional amount of contingent interest calculated as though the date of
the commencement of the proceeding were the maturity date of the MITTS
Securities.
In case of default in payment at the maturity date of the MITTS
Securities, whether at their stated maturity or upon acceleration, from and
after the maturity date the MITTS Securities shall bear interest, payable upon
demand of the beneficial owners, at the rate of 5.97% per annum, to the extent
that payment of any interest shall be legally enforceable, on the unpaid
amount due and payable on that date in accordance with the terms of the MITTS
Securities to the date payment of any amount has been made or duly provided
for.
Global Securities
Description of the Global Securities.
Beneficial owners of the MITTS Securities may not receive physical
delivery of the MITTS Securities nor may they be entitled to have the MITTS
Securities registered in their names. The MITTS Securities currently are
represented by one or more fully registered global securities. Each global
security was deposited with, or on behalf of, The Depository Trust Company or
DTC (DTC, together with any successor thereto, being a "depositary"), as
depositary, registered in the name of Cede & Co., DTC's partnership nominee.
Unless and until it is exchanged in whole or in part for MITTS Securities in
definitive form, no global security may be transferred except as a whole by
the depositary to a nominee of the depositary or by a nominee of the
depositary to the depositary or another nominee of the depositary or by the
depositary or any nominee to a successor of the depositary or a nominee of
that successor.
So long as DTC, or its nominee, is a registered owner of a global
security, DTC or its nominee, as the case may be, will be considered the sole
owner or holder of the MITTS Securities represented by a global security for
all purposes under the 1983 Indenture. Except as provided below, the
beneficial owners of the MITTS Securities represented by a global security
will not be entitled to have the MITTS Securities represented by the global
security registered in their names, will not receive or be entitled to receive
physical delivery of the MITTS Securities in definitive form and will not be
considered the owners or holders under the 1983 Indenture, including for
purposes of receiving any reports delivered by ML&Co. or the trustee under the
1983 Indenture. Accordingly, each person owning a beneficial interest in a
global security must rely on the procedures of DTC and, if that person is not
a participant of DTC on the procedures of the participant through which that
person owns its interest, to exercise any rights of a holder under the 1983
Indenture. ML&Co. understands that under existing industry practices, in the
event that ML&Co. requests any action of holders or that an owner of a
beneficial interest in a global security desires to give or take any action
which a holder is entitled to give or take under the 1983 Indenture, DTC would
authorize the participants holding the relevant beneficial interests to give
or take any action, and the participants would authorize beneficial owners
owning through those participants to give or take action or would otherwise
act upon the instructions of beneficial owners. Conveyance of notices and
other communications by DTC to participants, by participants to indirect
participants and by participants and indirect participants to beneficial
owners will be governed by arrangements among them, subject to any statutory
or regulatory requirements as may be in effect from time to time.
DTC Procedures
The following is based on information furnished by DTC:
DTC is the securities depositary for the MITTS Securities. The MITTS
Securities were issued as fully registered securities registered in the name
of Cede & Co., DTC's partnership nominee. One or more fully registered global
securities were issued for the MITTS Securities in the aggregate principal
amount of the MITTS Securities, and were deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered under to the provisions of Section 17A of the Securities
and Exchange Act of 1934, as amended. DTC holds securities that its
participants deposit with DTC. DTC also facilitates the settlement among
participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct participants of DTC include securities brokers
and dealers, banks, trust companies, clearing corporations and other
organizations. DTC is owned by a number of its direct participants and by the
NYSE, the AMEX and the National Association of Securities Dealers, Inc. Access
to the DTC's system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a direct participant, either directly or indirectly. The
rules applicable to DTC and its participants are on file with the SEC.
Purchases of MITTS Securities under DTC's system must be made by or
through direct participants, which will receive a credit for the MITTS
Securities on DTC's records. The ownership interest of each beneficial owner
is in turn to be recorded on the records of direct and indirect participants.
Beneficial owners will not receive written confirmation from DTC of their
purchase, but beneficial owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the direct participants or indirect participants through which
the beneficial owner entered into the transaction. Transfers of ownership
interests in the MITTS Securities are to be accomplished by entries made on
the books of participants acting on behalf of beneficial owners.
To facilitate subsequent transfers, all MITTS Securities deposited
with DTC are registered in the name of DTC's partnership nominee, Cede & Co.
The deposit of MITTS Securities with DTC and their registration in the name of
Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual beneficial owners of the MITTS Securities; DTC's records reflect
only the identity of the direct participants to whose accounts the MITTS
Securities are credited, which may or may not be the beneficial owners. The
participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the
MITTS Securities. Under its usual procedures, DTC mails an omnibus proxy to
ML&Co. as soon as possible after the applicable record date. The omnibus proxy
assigns Cede & Co.'s consenting or voting rights to those direct participants
identified in a listing attached to the omnibus proxy to whose accounts the
MITTS Securities are credited on the record date identified in a listing
attached to the omnibus proxy.
Principal, premium, if any, and/or interest, if any, payments on the
MITTS Securities will be made in immediately available funds to DTC. DTC's
practice is to credit direct participants' accounts on the applicable payment
date in accordance with their respective holdings shown on the depositary's
records unless DTC has reason to believe that it will not receive payment on
that date. Payments by participants to beneficial owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name", and will be the responsibility of the participant and not of DTC, the
trustee or ML&Co., subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of principal, premium, if any, and/or
interest, if any, to DTC is the responsibility of ML&Co. or the trustee,
disbursement of payments to direct participants is the responsibility of DTC,
and disbursement of payments to the beneficial owners is the responsibility of
direct and indirect participants.
Exchange for Certificated Securities
If:
o the depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by ML&Co.
within 60 days,
o ML&Co. executes and delivers to the trustee a company order to
the effect that the global securities shall be exchangeable, or
o an Event of Default under the 1983 Indenture has occurred and is
continuing with respect to the MITTS Securities,
the global securities will be exchangeable for MITTS Securities in definitive
form of like tenor and of an equal aggregate principal amount, in
denominations of $10 and integral multiples of $10. The definitive MITTS
Securities will be registered in the name or names as the depositary shall
instruct the trustee. It is expected that instructions may be based upon
directions received by the depositary from participants with respect to
ownership of beneficial interests in the global securities.
In addition, ML&Co. may decide to discontinue use of the system of
book-entry transfers through the depositary. In that event, MITTS Securities
in definitive form will be printed and delivered.
The information in this section concerning DTC and DTC's system has
been obtained from sources that ML&Co. believes to be reliable, but ML&Co.takes
no responsibility for its accuracy.
Same-Day Settlement and Payment
ML&Co. will make all payments of principal and the Supplemental
Redemption Amount, if any, in immediately available funds so long as the MITTS
Securities are maintained in book-entry form.
THE EUROFUND INDEX
Calculation of the EuroFund Index
The AMEX has set the starting value of the EuroFund Index to equal
the net asset value of one Class B Share of the EuroFund on the Pricing Date.
Thereafter, the AMEX will calculate the value of the EuroFund Index on any day
by multiplying the current Index Share Multiplier by the most recent net asset
value per Class B Share announced by the EuroFund. For purposes of this
calculation, any declared but unpaid Cash Distribution ,as defined below, will
be added back and included in the "net asset value" of the EuroFund from and
including the ex-dividend date related to any Cash Distribution to but
excluding the date that any Cash Distribution is paid to holders of the Class
B Shares.
The value of the EuroFund Index is reported on the AMEX and Bloomberg
under the symbol "EFI" and on the Reuters under the symbol ".EFI".
Calculation of the Index Share Multiplier
The Index Share Multiplier shall initially be set to one,
representing one Class B Share of the EuroFund. If the EuroFund distributes
any cash dividends or distributions of any character to holders of the Class B
Shares (a "Cash Distribution"), then the Index Share Multiplier shall be
increased by a percentage of Class B Shares equal to the Cash Distribution
divided by the net asset value for Class B Shares calculated by the EuroFund
on the date that any Cash Distribution is paid to holders of Class B Shares.
If a Market Disruption Event has occurred on the day any Cash Distribution is
paid, the adjustment to the Index Share Multiplier shall be postponed until
the next succeeding Index Business Day on which a Market Disruption Event has
not occurred. The Index Share Multiplier shall also be adjusted by the AMEX to
reflect certain stock splits, reverse stock splits or share dividends that may
occur with respect to the Class B Shares.
Each calendar day, the AMEX shall reduce the value of the EuroFund
Index by a percentage equal to 2.6% divided by 365 and reset the Index Share
Multiplier so that the product of the net asset value and the revised Index
Share Multiplier equals the value of the EuroFund Index so reduced. If a
Market Disruption Event occurs on any day on which the EuroFund Index value is
to be determined, then the foregoing adjustment to the Index Share Multiplier
shall occur on the next succeeding Index Business Day on which a Market
Disruption Event has not occurred.
The EuroFund
The EuroFund has stated that its investment objectives are to seek
capital appreciation primarily through investment in equities of corporations
domiciled in European countries. Current income from dividends and interest
will not be an important consideration in selecting portfolio securities. The
EuroFund has stated that it anticipates that under normal market conditions at
least 80% of its net assets will consist of European corporate securities,
primarily common stocks and securities convertible into common stock.
The EuroFund is a diversified, open-end management investment company
under the Investment Company Act.
The EuroFund has publicly disclosed its intention to distribute all
of its net investment income, if any. The EuroFund has indicated that
dividends from the net investment income are paid at least annually and all
net realized capital gains, if any, are distributed to the shareholders of the
EuroFund annually.
The EuroFund is subject to the registration requirements of the
Securities Act and the Investment Company Act. Accordingly, the EuroFund files
prospectuses, statements of additional information, reports, proxy and other
information statements and other information with the SEC. ML&Co. makes no
representation or warranty as to the accuracy or completeness of that
information.
The foregoing summary of the policies of the EuroFund reflect certain
investment restrictions which are subject to change by shareholders of the
EuroFund at any time.
The EuroFund is managed by Merrill Lynch Asset Management, L.P., an
affiliate of ML&Co. The EuroFund itself is governed by an independent board of
directors.
The EuroFund has no obligations with respect to the MITTS Securities.
This prospectus relates only to the MITTS Securities offered hereby and does
not relate to the Class B or Class D shares of the EuroFund. The information
contained in this prospectus regarding the EuroFund has been derived from the
publicly available documents described above. ML&Co. has not participated in
the preparation of these documents or made any due diligence inquiries with
respect to the EuroFund in connection with the offering of the MITTS
Securities. ML&Co. makes no representation that these publicly available
documents or any other publicly available information regarding the EuroFund
are accurate or complete. Furthermore, there can be no assurance that all
events occurring prior to the date of this prospectus, including events that
would affect the accuracy or completeness of the publicly available documents
described in the preceding paragraph, that would affect the EuroFund index,
and therefore the trading price of the MITTS securities, have been publicly
disclosed. Subsequent disclosure of any events or the disclosure of or failure
to disclose material future events concerning the EuroFund could affect the
supplemental redemption amount to be received at the stated maturity date and
therefore the trading value of the MITTS Securities.
OTHER TERMS
ML&Co. issued the MITTS Securities as a series of senior debt
securities under the 1983 Indenture, dated as of April 1, 1983, as amended and
restated, between ML&Co. and The Chase Manhattan Bank, as trustee. A copy of
the 1983 Indenture is filed as an exhibit to the registration statement
relating to the MITTS Securities of which this prospectus is a part. The
following summaries of the material provisions of the 1983 Indenture are not
complete and are subject to, and qualified in their entirety by reference to,
all provisions of the 1983 Indenture, including the definitions of terms in
the 1983 Indenture.
ML&Co. may issue series of senior debt securities from time to time
under the 1983 Indenture, without limitation as to aggregate principal amount,
in one or more series and upon terms as ML&Co. may establish under the
provisions of the 1983 Indenture.
The 1983 Indenture and the MITTS Securities are governed by and
construed in accordance with the laws of the State of New York.
ML&Co. may issue senior debt securities with terms different from
those of senior debt securities previously issued, and issue additional senior
debt securities of a previously issued series of senior debt securities.
The senior debt securities are unsecured and rank equally with all
other unsecured and unsubordinated indebtedness of ML&Co. However, because
ML&Co. is a holding company, the rights of ML&Co. and its creditors, including
the holders of senior debt securities, to participate in any distribution of
the assets of any subsidiary upon its liquidation or reorganization or
otherwise are necessarily subject to the prior claims of creditors of the
subsidiary, except to the extent that a bankruptcy court may recognize claims
of ML&Co. itself as a creditor of the subsidiary. In addition, dividends,
loans and advances from certain subsidiaries, including MLPF&S, to ML&Co. are
restricted by net capital requirements under the Exchange Act, and under rules
of exchanges and other regulatory bodies.
Limitations Upon Liens
ML&Co. may not, and may not permit any majority-owned subsidiary to,
create, assume, incur or permit to exist any indebtedness for borrowed money
secured by a pledge, lien or other encumbrance, other than those liens
specifically permitted by the 1983 Indenture, on the Voting Stock owned
directly or indirectly by ML&Co. of any majority-owned subsidiary, other than
a majority-owned subsidiary which, at the time of the incurrence of the
secured indebtedness, has a net worth of less than $3,000,000, unless the
outstanding senior debt securities are secured equally and ratably with the
secured indebtedness.
"Voting Stock" is defined in the 1983 Indenture as the stock of the
class or classes having general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation provided that, for the purposes of the 1983 Indenture, stock that
carries only the right to vote conditionally on the occurrence of an event is
not considered voting stock whether or not the event has happened.
Limitation on Disposition of Voting Stock of, and Merger and Sale of Assets
by, MLPF&S
ML&Co. may not sell, transfer or otherwise dispose of any Voting
Stock of MLPF&S or permit MLPF&S to issue, sell or otherwise dispose of any of
its Voting Stock, unless, after giving effect to any transaction, MLPF&S
remains a Controlled Subsidiary.
"Controlled Subsidiary" is defined in the 1983 Indenture to mean a
corporation more than 80% of the outstanding shares of Voting Stock of which
are owned directly or indirectly by ML&Co.
In addition, ML&Co. may not permit MLPF&S to:
o merge or consolidate, unless the surviving company is a
Controlled Subsidiary, or
o convey or transfer its properties and assets substantially
as an entirety, except to one or more Controlled Subsidiaries.
Merger and Consolidation
ML&Co. may consolidate or merge with or into any other corporation and
ML&Co. may sell, lease or convey all or substantially all of its assets to any
corporation, provided that:
o the resulting corporation, if other than ML&Co., is a corporation
organized and existing under the laws of the United States of
America or any U.S. state and assumes all of ML&Co.'s obligations
to:
o pay any amounts due and payable or deliverable with respect to
all the senior debt securities; and
o perform and observe all of ML&Co.'s obligations under the 1983
Indenture, and
o ML&Co. or the successor corporation, as the case may be, is not,
immediately after any consolidation or merger, in default under
the 1983 Indenture.
Modification and Waiver
ML&Co. and the trustee may modify and amend the 1983 Indenture with
the consent of holders of at least 66 2/3% in principal amount of each
outstanding series of senior debt securities affected. However, without the
consent of each holder of any outstanding senior debt security affected, no
amendment or modification to the 1983 Indenture may:
o change the stated maturity date of the principal of, or any
installment of interest or Additional Amounts payable on, any
senior debt security or any premium payable on redemption, or
change the redemption price;
o reduce the principal amount of, or the interest or Additional
Amounts payable on, any senior debt security or reduce the
amount of principal which could be declared due and payable
before the stated maturity date;
o change the place or currency of any payment of principal or any
premium, interest or Additional Amounts payable on any senior
debt security;
o impair the right to institute suit for the enforcement of any
payment on or with respect to any senior debt security;
o reduce the percentage in principal amount of the outstanding
senior debt securities of any series, the consent of whose
holders is required to modify or amend the 1983 Indenture; or
o modify the foregoing requirements or reduce the percentage of
outstanding senior debt securities necessary to waive any past
default to less than a majority.
No modification or amendment of ML&Co.'s Subordinated Indenture or
any Subsequent Indenture for subordinated debt securities may adversely affect
the rights of any holder of ML&Co.'s senior indebtedness without the consent
of each holder affected. The holders of at least a majority in principal
amount of outstanding senior debt securities of any series may, with respect
to that series, waive past defaults under the 1983 Indenture and waive
compliance by ML&Co. with provisions in the 1983 Indenture, except as
described under "--Events of Default".
Events of Default
Each of the following will be Events of Default with respect to
senior debt securities of any series:
o default in the payment of any interest or Additional Amounts
payable when due and continuing for 30 days;
o default in the payment of any principal or premium when due;
o default in the deposit of any sinking fund payment, when due;
o default in the performance of any other obligation of ML&Co.
contained in the 1983 Indenture for the benefit of that series
or in the senior debt securities of that series, continuing for
60 days after written notice as provided in the 1983 Indenture;
o specified events in bankruptcy, insolvency or reorganization of
ML&Co.; and
o any other Event of Default provided with respect to senior debt
securities of that series which are not inconsistent with the
1983 Indenture.
If an Event of Default occurs and is continuing for any series of senior debt
securities, other than as a result of the bankruptcy, insolvency or
reorganization of ML&Co., the trustee or the holders of at least 25% in
principal amount of the outstanding senior debt securities of that series may
declare all amounts, or any lesser amount provided for in the senior debt
securities, due and payable or deliverable immediately. At any time after a
declaration of acceleration has been made with respect to senior debt
securities of any series but before the trustee has obtained a judgment or
decree for payment of money, the holders of a majority in principal amount of
the outstanding senior debt securities of that series may rescind any
declaration of acceleration and its consequences, if all payments due, other
than those due as a result of acceleration, have been made and all Events of
Default have been remedied or waived.
The holders of a majority in principal amount or aggregate issue
price of the outstanding senior debt securities of that series may waive any
Event of Default with respect to that series, except a default:
o in the payment of any amounts due and payable or deliverable
under the debt securities of that series; or
o in respect of an obligation or provision of the 1983
Indenture which cannot be modified under the terms of that
Indenture without the consent of each holder of each
outstanding security of each series of senior debt securities
affected.
The holders of a majority in principal amount of the outstanding
senior debt securities of a series may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or
exercising any trust or power conferred on the trustee with respect to those
senior debt securities, provided that any direction shall not be in conflict
with any rule of law or the 1983 Indenture. Before proceeding to exercise any
right or power under the 1983 Indenture at the direction of the holders, the
trustee shall be entitled to receive from the holders reasonable security or
indemnification against the costs, expenses and liabilities which might be
incurred by it in complying with any direction.
The MITTS Securities and other series of senior debt securities
issued under the 1983 Indenture do not have the benefit of any cross-default
provisions with other indebtedness of ML&Co.
ML&Co. is required to furnish to the trustee annually a statement as
to the fulfillment by ML&Co.of all of its obligations under the 1983 Indenture.
PROJECTED PAYMENT SCHEDULE
Solely for purposes of applying the final Treasury Department
Regulations (the "Final Regulations") concerning the United States Federal
income tax treatment of contingent payment debt instruments to the MITTS
Securities, ML&Co. has determined that the projected payment schedule for the
MITTS Securities will consist of payment on the maturity date of the principal
amount and a projected Supplemental Redemption Amount equal to $5.5344 per
unit, the "Projected Supplemental Redemption Amount". This represents an
estimated yield on the MITTS Securities equal to 5.97% per annum (compounded
semiannually).
The following table sets forth the amount of interest that will be
deemed to have accrued with respect to each unit of the MITTS Securities
during each accrual period over a term of seven years and six months for the
MITTS Securities based upon the projected payment schedule for the MITTS
Securities, including both the Projected Supplemental Redemption Amount and
the estimated yield equal to 5.97% per annum, compounded semiannually, as
determined by ML&Co. for purposes of applying the Final Regulations to the
MITTS Securities:
Total Interest Deemed
Interest Deemed to to Have Accrued on
Accrue During MITTS Securities as of
Accrual Period End of Accrual Perio
Accrual Period (per unit) (per unit)
-------------- ------------------ ----------------------
September 3, 1998 through February 28, 1999................... $0.2910 $0.2910
March 1, 1999 through August 28, 1999......................... $0.3072 $0.5982
August 29, 1999 through February 28, 2000..................... $0.3164 $0.9146
February 29, 2000 through August 28, 2000..................... $0.3258 $1.2404
August 29, 2000 through February 28, 2001..................... $0.3355 $1.5759
March 1, 2001 through August 28, 2001......................... $0.3455 $1.9214
August 29, 2001 through February 28, 2002..................... $0.3559 $2.2773
March 1, 2002 through August 28, 2002......................... $0.3665 $2.6438
August 29, 2002 through February 28, 2003..................... $0.3774 $3.0212
March 1, 2003 through August 28, 2003......................... $0.3887 $3.4099
August 29, 2003 through February 28, 2004..................... $0.4003 $3.8102
February 29, 2004 through August 28, 2004..................... $0.4122 $4.2224
August 29, 2004 through February 28, 2005..................... $0.4245 $4.6469
March 1, 2005 through August 28, 2005......................... $0.4372 $5.0841
August 29, 2005 through February 28, 2006..................... $0.4503 $5.5344
- ---------
Projected Supplemental Redemption Amount = $5.5344 per unit.
Prospective investors in the MITTS Securities should consult their
own tax advisors concerning the application of the Final Regulations to their
investment in the MITTS Securities. Investors in the MITTS Securities may also
obtain the projected payment schedule, as determined by ML&Co. for purposes of
the application of the Final Regulations to the MITTS Securities, by
submitting a written request for this information to Merrill Lynch & Co.,
Inc., Attn: Darryl W. Colletti, Corporate Secretary's Office, 100 Church
Street, 12th Floor, New York, New York 10080-6512.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC.
Our SEC filings are also available over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file by
visiting the SEC's public reference rooms in Washington, D.C., New York, New
York, and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information about the public reference rooms. You may also inspect our SEC
reports and other information at the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
We have filed a registration statement on Form S-3 with the SEC
covering the MITTS Securities and other securities. For further information on
ML&Co. and the MITTS Securities, you should refer to our registration
statement and its exhibits. This prospectus summarizes material provisions of
contracts and other documents that we refer you to. Because the prospectus may
not contain all the information that you may find important, you should review
the full text of these documents. We have included copies of these documents
as exhibits to our registration statement of which this prospectus is a part.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to incorporate by reference the information we file
with them, which means:
o incorporated documents are considered part of the prospectus;
o we can disclose important information to you by referring you to those
documents; and
o information that we file with the SEC will automatically update and
supersede this incorporated information.
We incorporate by reference the documents listed below which were
filed with the SEC under the Exchange Act:
o annual report on Form 10-K for the year ended December 25, 1998;
o quarterly report on Form 10-Q for the period ended March 26, 1999; and
o current reports on Form 8-K dated December 28, 1998, January 19,
1999, February 17, 1999, February 18, 1999, February 22, 1999,
February 23, 1999, March 26, 1999, April 13, 1999, April 19,
1999, May 26, 1999, May 28, 1999 and June 1, 1999.
We also incorporate by reference each of the following documents that we will
file with the SEC after the date of this prospectus until this offering is
completed:
o reports filed under Sections 13(a) and (c) of the Exchange Act;
o definitive proxy or information statements filed under Section
14 of the Exchange Act in connection with any subsequent
stockholders' meeting; and
o any reports filed under Section 15(d) of the Exchange Act.
You should rely only on information contained or incorporated by
reference in this prospectus. We have not, and MLPF&S has not, authorized any
other person to provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely on it. We are
not, and MLPF&S is not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus
is accurate as of the date of this prospectus only. Our business, financial
condition and results of operations may have changed since that date.
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us at the following address: Mr. Lawrence
M. Egan, Jr., Corporate Secretary's Office, Merrill Lynch & Co., Inc., 100
Church Street, New York, New York 10080-6512, Telephone: (212) 602-8435.
PLAN OF DISTRIBUTION
This prospectus has been prepared in connection with secondary sales
of the MITTS Securities and is to be used by MLPF&S when making offers and
sales related to market-making transactions in the MITTS Securities.
MLPF&S may act as principal or agent in these market-making
transactions.
The MITTS Securities may be offered on the AMEX or off the exchange
in negotiated transactions or otherwise.
The distribution of the MITTS Securities will conform to the
requirements set forth in the applicable sections of Rule 2720 of the Conduct
Rules of the NASD.
EXPERTS
The consolidated financial statements and the related financial
statement schedule incorporated in this prospectus by reference from the
Annual Report on Form 10-K of Merrill Lynch & Co., Inc. and subsidiaries have
been audited by Deloitte & Touche LLP, independent auditors, as stated in
their reports (which express an unqualified opinion and which report on the
consolidated financial statements includes an explanatory paragraph for the
change in accounting method for certain internal-use software development
costs), which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
With respect to unaudited interim financial information for the
periods included in the Quarterly Reports on Form 10-Q which are incorporated
herein by reference, Deloitte & Touche LLP have applied limited procedures in
accordance with professional standards for a review of such information.
However, as stated in their reports included in such Quarterly Reports on Form
10-Q and incorporated by reference herein, they did not audit and they do not
express an opinion on such interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted
in light of the limited nature of the review procedures applied. Deloitte &
Touche LLP is not subject to the liability provisions of Section 11 of the
Securities Act for any such report on unaudited interim financial information
because any such report is not a "report" or a "part" of the Registration
Statement prepared or certified by an accountant within the meaning of
Sections 7 and 11 of the Securities Act.