RULE NO. 424(b)(5)
REGISTRATION NO. 333-68747
PROSPECTUS
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MERRILL LYNCH & CO., INC.
AMEX OIL INDEX SM
STOCK MARKET ANNUAL RESET TERMSM NOTES DUE DECEMBER 29, 2000
"SMART NOTES SM"
This prospectus is to be used by Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & hSmith Incorporated, our wholly-owned subsidiary, when making
offers and sales related to market-making transactions in the SMART Notes.
The SMART Notes:
o 100% principal protection at maturity o Interest
payment on each June 30 and December 30
o We will pay interest on the SMART Notes at a rate
equal to the product of 85% and the percentage
increase, if any, in the AMEX Oil Index
o For each $1,000 principal amount of the SMART Notes
that you own, you will receive not less than $20 per
year
o The SMART Notes are listed on the American Stock
Exchange under the symbol "MOI.F"
INVESTING IN THE SMART NOTES 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 securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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MERRILL LYNCH & CO.
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The date of this prospectus is June 24, 1999.
SM"SMART Notes" and "Stock Market Annual Reset Term" are service marks of
Merrill Lynch & Co., Inc. SM"Oil Index" is a registered service mark of the
American Stock Exchange, Inc.
TABLE OF CONTENTS
PAGE
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RISK FACTORS............................................................3
MERRILL LYNCH & CO., INC................................................6
RATIO OF EARNINGS TO FIXED CHARGES......................................7
DESCRIPTION OF THE SMART NOTES..........................................8
THE AMEX OIL INDEX.....................................................13
OTHER TERMS............................................................15
WHERE YOU CAN FIND MORE INFORMATION....................................19
INCORPORATION OF INFORMATION WE FILE WITH THE SEC......................19
PLAN OF DISTRIBUTION...................................................20
EXPERTS................................................................20
RISK FACTORS
Your investment in the SMART Notes will involve risks. You should
carefully consider the following discussion of risks before investing in the
SMART Notes. In addition, you should reach an investment decision with regard to
the SMART Notes only after consulting with your legal and tax advisers and
considering the suitability of the SMART Notes in the light of your particular
circumstances.
YOU MAY NOT EARN A RETURN ON YOUR INVESTMENT
If the arithmetic mean of the quarterly closing values of the AMEX Oil
Index applicable to each December payment date, determined in the manner set
forth in this prospectus, does not exceed the closing value of the AMEX Oil
Index on the last business day of the immediately preceding calendar year by
more than approximately 2.35%, at maturity you receive no more than $20 for each
$1,000 principal amount of your SMART Notes on that December payment date. This
will be true even if at some point during the time the calculation agent
determines the interest payable on the SMART Notes for each December payment
date, the arithmetic mean of the quarterly closing values of the AMEX Oil Index
for that year exceeded the closing value of the AMEX Oil Index on the last
business day of the immediately preceding calendar year by more than 2.35%.
You will receive no less than $20 for each $1,000 principal amount of
your SMART Notes and we will repay you 100% of the principal amount of your
SMART Notes at maturity. Therefore, the amount that we pay you at maturity may
be less than the return you could earn on other investments. Your yield may be
less than the yield you would earn if you bought a 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 take into
account factors that affect the time value of money.
The amount payable on the SMART Notes based on the AMEX Oil Index will
not produce the same return as if you purchased the stocks underlying the AMEX
Oil Index and held them for a similar period because of the following:
o the AMEX Oil Index does not reflect the payment of dividends on
the stocks underlying it,
o the annual amount payable is limited to 85% multiplied by the
percentage increase in the AMEX Oil Index during any relevant
period, but will not be less than $20 per $1,000 principal amount
of the SMART Notes,
o the arithmetic mean of the quarterly closing values of the AMEX
Oil Index for each calendar year may not reflect the full
percentage increase in the AMEX Oil Index during any relevant
period because it is an average of the AMEX Oil Index at various
points in time, and
o the amounts payable on the SMART Notes do not reflect changes in
the AMEX Oil Index for the period between the determination of the
arithmetic mean of the quarterly closing values of the AMEX Oil
Index applicable to each December payment date and the
determination of the closing value of the AMEX Oil Index on the
last business day of the preceding calendar year for the next
December payment date.
THERE MAY BE AN UNCERTAIN TRADING MARKET FOR THE SMART NOTES IN THE FUTURE
Although the SMART Notes are listed on the AMEX under the symbol
"MOI.F," you cannot assume that a trading market will continue to exist for the
SMART Notes. If a trading market does continue to exist, there can be no
assurance that there will be liquidity in the trading market. The continued
existence of a trading market for the SMART Notes will depend on our financial
performance, and other factors, such as the increase, if any, in the value of
the index. We expect that the secondary market for the SMART Notes, including
prices in that market, will likely be affected by our creditworthiness and by a
number of other factors. It is possible to view the SMART Notes as the economic
equivalent of a debt obligation plus a series of cash settlement options;
however, the SMART Notes may trade in the secondary market at a discount from
the aggregate value of these economic components, if these economic components
were valued and capable of being traded separately.
If the trading market for the SMART Notes is limited and you do not
wish to hold your investment until maturity, there may be a limited number of
buyers for your SMART Notes. This may affect the price you receive if you sell
before maturity.
MANY FACTORS AFFECT THE TRADING VALUE OF THE SMART NOTES; 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 SMART Notes 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 SMART
Notes caused by another factor and that the effect of one factor may magnify the
decrease in the trading value of the SMART Notes 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 SMART Notes attributable to another factor,
such as an increase in the value of the index.
RELATIVE LEVEL OF THE AMEX OIL INDEX. We expect that the trading value
of the SMART Notes will depend significantly on the extent of the excess of the
expected average of the quarterly closing values of the AMEX Oil Index for a
calendar year over the closing value of the AMEX Oil Index on the last business
day of the preceding calendar year. If, however, you sell your SMART Notes at a
time when this excess exists, the price you receive may nevertheless be at a
discount from the amount expected to be payable if this excess were to prevail
until the next December payment date. Furthermore, the price at which you will
be able to sell SMART Notes before a December payment date may be at a discount,
which could be substantial, from the principal amount of your SMART Notes, if,
at that time, the AMEX Oil Index is below, equal to or not sufficiently above
the closing value of the AMEX Oil Index on the last business day of the
immediately preceding calendar year before that December payment date. The level
of the AMEX Oil Index will depend on the prices of the stocks underlying the
AMEX Oil Index which, in turn, will be affected by factors affecting the oil
industry, see "The AMEX Oil Index--Oil Industry Sector".
CHANGES IN THE VOLATILITY OF THE INDEX ARE EXPECTED TO AFFECT THE
TRADING VALUE OF THE SMART NOTES. If the volatility of the AMEX Oil Index
increases, we expect the trading value of the SMART Notes to increase. If the
volatility of the AMEX Oil Index decreases, we expect the trading value of the
SMART Notes to decrease.
CHANGES IN THE LEVELS OF U.S. INTEREST RATES ARE EXPECTED TO AFFECT THE
TRADING VALUE OF THE SMART Notes. In general, if U.S. interest rates increase,
we expect the value of the SMART Notes to decrease. If U.S. interest rates
decrease, we expect the value of the SMART Notes to increase. Interest rates may
also affect the U.S. economy, and, in turn, the level of the AMEX Oil Index.
Rising interest rates may lower the level of the AMEX Oil Index and, thus, the
value of the SMART Notes. Falling interest rates may increase the level of the
AMEX Oil Index and, thus, may increase the value of the SMART Notes.
TIME REMAINING TO DECEMBER PAYMENT DATES. We anticipate that before
each December payment date, the SMART Notes may trade at a value above which may
be inferred from the level of U.S. interest rates and the AMEX Oil Index. This
difference will reflect a "time premium" due to expectations concerning the
level of the AMEX Oil Index during the period before each December payment date.
As the time remaining to each December payment date decreases, however, this
time premium may decrease, thus decreasing the trading value of the SMART Notes.
AS THE TIME REMAINING TO MATURITY OF THE SMART NOTES DECREASES, THE
"TIME PREMIUM" ASSOCIATED WITH THE SMART NOTES WILL DECREASE. As the number of
remaining December payment dates decreases, the cumulative value of all the
annual rights to receive an amount that reflects participation in the payments
in excess of the minimum annual interest payment of $20 per $1,000 principal
amount will decrease, thus decreasing the value of the SMART Notes.
CHANGES IN DIVIDEND YIELDS OF THE STOCKS INCLUDED IN THE INDEX ARE
EXPECTED TO AFFECT THE TRADING VALUE OF THE SMART NOTES. A number of complex
relationships between the relative values of the SMART Notes and dividend rates
are likely to exist. If dividend rates on the stocks comprising the AMEX Oil
Index increase, the value of the annual right to receive an amount that reflects
participation in the average appreciation of the AMEX Oil Index above the annual
starting value is expected to decrease, and consequently, we expect the value of
the SMART Notes to decrease. Conversely, if dividend rates on the stocks
comprising the AMEX Oil Index decrease, the value of the annual right to receive
such an amount is expected to increase and, therefore, the value of the SMART
Notes is expected to increase. In general, however, because the majority of
issuers of stocks underlying the AMEX Oil Index are organized in the United
States, rising U.S. corporate dividend rates may increase the AMEX Oil Index
and, in turn, increase the value of the SMART Notes. Conversely, falling U.S.
dividend rates may decrease the AMEX Oil Index and, in turn, decrease the value
of the SMART Notes.
CHANGES IN OUR CREDIT RATINGS MAY AFFECT THE TRADING VALUE OF THE SMART
NOTES. 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 SMART Notes. However, because your return on
your SMART Notes is dependent upon factors in addition to our ability to pay our
obligations under the SMART Notes, 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 SMART Notes.
In general, assuming all relevant factors are held constant, we expect
that the effect on the trading value of the SMART Notes of a given change in
most of the factors listed above will be less if it occurs later in the term of
the SMART Notes than if it occurs earlier in the term of the SMART Notes.
However, we expect that the effect on the trading value of the SMART Notes of a
given increase in the value of the index will be greater if it occurs later in
the term of the SMART Notes than if it occurs earlier in the term of the SMART
Notes.
AMOUNTS PAYABLE ON THE MITTS SECURITIES MAY BE LIMITED BY STATE LAW
The indenture under which the SMART Notes are issued is governed by New
York State law. 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 SMART
Notes. Under present New York law, the maximum rate of interest is 25% per annum
on a simple interest basis. This limit may not apply to debt securities in which
$2,500,000 or more has been invested.
While we believe that New York law would be given effect by a state or
Federal court sitting outside of New York, many other states also have laws that
regulate the amount of interest that may be charged to and paid by a borrower.
We will promise, for the benefit of the holders of the SMART Notes, to the
extent permitted by law, not to voluntarily claim the benefits of any laws
concerning usurious rates of interest.
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
SMART Notes 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
YEAR ENDED LAST FRIDAY IN DECEMBER MONTHS ENDED
1994 1995 1996 1997 1998 MARCH 26, 1999
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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 SMART NOTES
The SMART Notes were issued as a series of Senior Debt Securities under
the 1983 Indenture which is more fully described this prospectus.
The SMART Notes will mature, and the principal of the SMART Notes will
be repayable at par, on December 29, 2000.
The SMART Notes are not subject to redemption before maturity by ML&Co.
or at the option of any beneficial owner. Upon the occurrence of an Event of
Default with respect to the SMART Notes, however, beneficial owners of the SMART
Notes or the Trustee may accelerate the maturity of the SMART Notes, as
described under "Description of SMART Notes--Events of Default and Acceleration"
and "Other Terms--Events of Default" in this prospectus.
The SMART Notes are transferable in denominations of $1,000 and
integral multiples of $1,000.
INTEREST PAYMENTS
For each full calendar year, ML&Co. will pay interest in an amount
equal to the following for each $1,000 principal amount of SMART Notes:
$1,000 x Average Percent Change x Participation Rate
provided, however, that the per annum amount payable as a result of the
foregoing on the SMART Notes will not be less than the Minimum Annual Payment of
$20 per $1,000 principal amount of SMART Notes on a per annum basis or 2% per
annum.
The "PARTICIPATION RATE" equals 85%.
The "AVERAGE PERCENT CHANGE" applicable to the determination of the
amount payable in any calendar year will equal:
Ending Average Value - Starting Annual Value
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Starting Annual Value
The "STARTING ANNUAL VALUE" applicable to the determination of the
amount payable in a calendar year will equal the closing value of the AMEX Oil
Index on the last AMEX Business Day in the immediately preceding calendar year
as determined by State Street Bank and Trust Company or the calculation agent.
The "ENDING AVERAGE VALUE" applicable to the determination of the
amount payable in a calendar year will equal the arithmetic average or
arithmetic mean of the Quarterly Values of the AMEX Oil Index for each calendar
quarter during such year as determined by the calculation agent.
The "QUARTERLY VALUE" for any of the first three calendar quarters in a
calendar year will be the closing value of the AMEX Oil Index on the last
scheduled AMEX Business Day in any such calendar quarter; provided, however,
that if a Market Disruption Event has occurred on the last scheduled AMEX
Business Day in that calendar quarter, the Quarterly Value for that calendar
quarter will be the closing value of the AMEX Oil Index on the next succeeding
scheduled AMEX Business Day regardless of whether a Market Disruption Event
occurs on that day.
The "QUARTERLY VALUE" for the fourth calendar quarter in a calendar
year will be the closing value of the AMEX Oil Index on the seventh scheduled
AMEX Business Day preceding the end of that calendar quarter; provided, however,
that if a Market Disruption Event has occurred on the seventh scheduled AMEX
Business Day, the Quarterly Value for that calendar quarter will be the closing
value of the AMEX Oil Index on the sixth scheduled AMEX Business Day preceding
the end of that calendar quarter regardless of whether a Market Disruption Event
occurs on that day. The calculation agent will determine scheduled AMEX Business
Days.
If the Ending Average Value applicable to the applicable December
payment date does not exceed the Annual Starting Value by more than
approximately 2.35%, beneficial owners of the SMART Notes will receive only the
Minimum Annual Payment on that December payment date, even if the value of the
AMEX Oil Index at some point between the determination of the applicable
Starting Annual Value and the determination of the applicable Ending Average
Value exceeded that Starting Annual Value by more than approximately 2.35%.
"CALCULATION DAY" is any day on which a Starting Annual Value or a
closing value of the AMEX Oil Index for a calendar quarter is required to be
calculated.
An "AMEX BUSINESS DAY" is a day on which the AMEX is open for trading.
All determinations made by the calculation agent shall be at the sole discretion
of the calculation agent and, in the absence of manifest error, shall be
conclusive for all purposes and binding on ML&Co. and beneficial owners of the
SMART Notes.
All percentages resulting from any calculation on the SMART Notes will
be rounded to the nearest one hundred-thousandth of a percentage point, with
five one millionths of a percentage point rounded upwards, e.g., 9.876545% or
.09876545 would be rounded to 9.87655% or .0987655, and all dollar amounts used
in or resulting from any calculation will be rounded to the nearest cent with
one-half cent being rounded upwards.
ADJUSTMENTS TO THE INDEX; MARKET DISRUPTION EVENT
If at any time the method of calculating the AMEX Oil Index, or its
value, is changed in a material respect, or if the AMEX Oil Index is in any
other way modified so that the index does not, in the opinion of the calculation
agent, fairly represent the value of the AMEX Oil Index had no changes or
modifications been made, then, from and after that time, the calculation agent
shall, at the close of business in New York, New York, on each Calculation Day,
make any adjustments as, in the good faith judgment of the calculation agent,
may be necessary in order to arrive at a calculation of a value of a stock index
comparable to the AMEX Oil Index as if no changes or modifications had been
made, and calculate the closing value with reference to the AMEX Oil Index, as
adjusted. Accordingly, if the method of calculating the AMEX Oil Index is
modified so that the value of the index is a fraction or a multiple of what it
would have been if it had not been modified, e.g., due to a split in the index,
then the calculation agent shall adjust the index in order to arrive at a value
of the AMEX Oil Index as if it had not been modified, e.g., as if a split had
not occurred.
"MARKET DISRUPTION EVENT" means either of the following events, as
determined by the calculation agent:
(a) the suspension or material limitation on trading
during the last half hour of trading in any of the
component stocks, or depository receipts representing
those stocks, included in the AMEX Oil Index on any
national securities exchange in the United States, or
(b) the suspension or material limitation, in each case
during the last half hour of trading whether by
reason of movements in price exceeding levels
permitted by the relevant exchange or otherwise, in
o futures contracts related to the AMEX Oil
Index which are traded on any exchange or
board of trade in the United States or
o option contracts related to the AMEX Oil Index
which are traded on the AMEX.
For the purposes of clause (a) above, any limitations on trading during
significant market fluctuations under New York Stock Exchange Rule 80A, or any
applicable rule or regulation enacted or promulgated by the NYSE, the AMEX or
any other self regulatory organization or the SEC of similar scope as determined
by the calculation agent, will be considered "material".
For the purposes of this definition, a limitation on the hours in a
trading day and/or number of days of trading will not constitute a Market
Disruption Event if it results from an announced change in the regular business
hours of the relevant exchange.
INTEREST PAYMENT DATES
ML&Co. will make semiannual interest payments on the SMART Notes on
June 30 of each year ("June Payment Dates") and December 31 of each year and at
maturity ("December Payment Dates"), except as described in this prospectus, to
the persons in whose names the SMART Notes are registered on the immediately
preceding June 29 or December 30, and, at maturity, to the person to whom the
principal is payable. For each Note, ML&Co. will pay half of the Minimum Annual
Payment for each calendar year on the June Payment Date, and will pay the
balance of the annual amount payable on each Note for that year on the December
Payment Date.
Notwithstanding the foregoing, if it is known at least three Business
Days before December 31 that December 31 will not be a Business Day, the amount
payable by ML&Co. with respect to a December Payment Date for the SMART Notes
will be made on the Business Day immediately preceding that December 31 to the
persons in whose names the SMART Notes are registered on the second Business Day
immediately preceding that December 31.
DISCONTINUANCE OF THE AMEX OIL INDEX
If the AMEX discontinues publication of the AMEX Oil 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 AMEX Oil Index
(a "Successor Index"), then, upon the calculation agent's notification of any
determination to the Trustee and ML&Co., the calculation agent will substitute
the Successor Index as calculated by the AMEX or any other entity for the AMEX
Oil Index and calculate the annual amount payable as described above under
"Interest Payments". Upon any selection by the calculation agent of a Successor
Index, ML&Co. shall cause notice to be given to holders of the SMART Notes.
If the AMEX discontinues publication of the AMEX Oil 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
AMEX Oil Index for any Calculation Day used to calculate the annual amount
payable will be a value computed by the calculation agent for each Calculation
Day in accordance with the procedures last used to calculate the AMEX Oil Index
before any discontinuance. If a Successor Index is selected or the calculation
agent calculates a value as a substitute for the AMEX Oil Index the Successor
Index or value shall be substituted for the AMEX Oil Index for all purposes,
including for purposes of determining whether a Market Disruption Event exists.
If the AMEX discontinues publication of the AMEX Oil Index before the
period during which the amount payable with respect to any year is to be
determined and the calculation agent determines that no Successor Index is
available at that time, then on each AMEX Business Day until the earlier to
occur of
(a) the determination of the amount payable with respect to that year
or
(b) 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 amount payable with respect to that
year as described in the preceding paragraph as if that day were a
Calculation Day.
The calculation agent will cause notice of each such value to be published not
less often than once each month in The Wall Street Journal or another newspaper
of general circulation, and arrange for information with respect to these values
to be made available by telephone. Notwithstanding these alternative
arrangements, discontinuance of the publication of the AMEX Oil Index may
adversely affect trading in the SMART Notes.
EVENTS OF DEFAULT AND ACCELERATION
In case an Event of Default with respect to any SMART Notes shall have
occurred and be continuing, the amount payable to a beneficial owner of a Note
upon any acceleration permitted by the SMART Notes, will equal:
(a) the principal amount of each SMART Note, plus
(b) an additional amount, if any, of interest calculated as though the
date of early repayment were a December Payment Date and prorated
through the date of early repayment on the basis of a year
consisting of 360 days of twelve 30-day months.
If Quarterly Values have been calculated before the early redemption date for
the calendar year in which any early redemption date occurs, these Quarterly
Values shall be averaged with the value of the AMEX Oil Index determined with
respect to that date of early redemption. If no Quarterly Values have been
calculated before the early redemption date for the calendar year in which the
early redemption date occurs, the Ending Average Value for that calendar year
will be the value of the AMEX Oil Index determined with respect to the date of
early redemption. The Minimum Supplemental Redemption Amount with respect to any
early redemption date will be an amount equal to the interest which would have
accrued on the SMART Notes from and including January 1 in the calendar year in
which the early redemption date occurs, to but excluding the date of early
redemption at an annualized rate of 2%, calculated on a semiannual bond
equivalent basis.
If a bankruptcy proceeding is commenced in respect of ML&Co., the claim
of the beneficial owner of a Note may be limited, under Section 502(b)(2) of
Title 11 of the United States Code, to the principal amount of the Note plus an
additional amount, if any, of contingent interest calculated as though the date
of the commencement of the proceeding were the maturity date of the SMART Notes.
In case of default in payment at the maturity date of the SMART Notes
whether at their stated maturity or upon acceleration, from and after the
maturity date the SMART Notes shall bear interest, payable upon demand of the
holders, at the rate of 7% per annum to the extent that payment of interest
shall be legally enforceable, on the unpaid amount due and payable on that date
in accordance with the terms of the SMART Notes to the date payment of that
amount has been made or duly provided for.
GLOBAL SECURITIES
DESCRIPTION OF THE GLOBAL SECURITIES.
Beneficial owners of the SMART Notes may not receive physical delivery
of the securities nor may they be entitled to have the securities registered in
their names. The SMART Notes are represented by one or more fully registered
global securities. Each global security has been 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 SMART Notes 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 such depositary or another nominee of the
depositary or by the depositary or any nominee to a successor of such 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 SMART Notes represented by a global security for all
purposes under the 1983 Indenture. Except as provided below, the beneficial
owners of the securities represented by a global security are not entitled to
have the SMART Notes represented by the global security registered in their
names, will not receive or be entitled to receive physical delivery of the SMART
Notes in definitive form and are not 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 action, and those 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 are 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 securities. The securities
have been issued as fully registered securities registered in the name of Cede &
Co. (DTC's partnership nominee). One or more fully registered global securities
have been issued for the SMART Notes in the aggregate principal amount of that
issue, and has been deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants deposit with DTC. DTC also facilitates
the settlement among participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct participants of DTC include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. DTC is owned by a number of its direct
participants and by the NYSE, the AMEX and the National Association of
Securities Dealers, Inc. Access to 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 securities under DTC's system must be made by or through
direct participants, which will receive a credit for the 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 such beneficial owner
entered into the transaction. Transfers of ownership interests in the securities
are to be accomplished by entries made on the books of participants acting on
behalf of beneficial owners.
To facilitate subsequent transfers, all securities deposited with DTC
are registered in the name of DTC's partnership nominee, Cede & Co. The deposit
of 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 securities; DTC's records reflect only the identity of the direct
participants to whose accounts such securities are credited, which may or may
not be the beneficial owners. The participants are 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 are 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
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 securities are
credited on the record date.
Principal, premium, if any, and/or interest, if any, payments on the
SMART Notes 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 such 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 such 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 such
payments to direct participants is the responsibility of DTC, and disbursement
of such payments to the beneficial owners is the responsibility of direct and
indirect participants.
EXCHANGE FOR CERTIFICATED SECURITIES
If
(a) 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,
(b) ML&Co. executes and delivers to the trustee a company order
to the effect that the global securities shall be
exchangeable, and
(c) an Event of Default under the 1983 Indenture has occurred and
is continuing with respect to the securities,
the global securities will be exchangeable for securities in definitive form of
like tenor and of an equal aggregate principal amount, in denominations of
$1,000 and integral multiples of $1,000. The definitive securities will be
registered in such name or names as the depositary shall instruct the trustee.
It is expected that such 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, SMART Notes 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.
THE AMEX OIL INDEX
The AMEX Oil Index is a price-weighted stock index, i.e., an Underlying
Stock's weight in the index is based on its price per share rather than the
total market capitalization of the issuer, calculated, published and
disseminated by the AMEX that measures the composite price performance of
selected common stocks of widely-held corporations involved in various segments
of the oil industry. The AMEX Oil Index was originally published by the AMEX as
the Oil and Gas Index. In September 1984, the AMEX changed the Oil and Gas Index
from a market-weighted index to a price-weighted index and deleted all companies
engaged exclusively in gas exploration and production activities. The Oil and
Gas Index was then renamed the Oil Index. At March 24, 1994, the calculation of
the value of the AMEX Oil Index was based on the relative value of the aggregate
market price of the common stocks of sixteen companies engaged in various
segments of the oil industry.
The AMEX may from time to time, with approval of the SEC, add companies
to, or delete companies from, the AMEX Oil Index to fulfill the above-stated
intention of providing an indication of price movements of common stock of
corporations engaged in various segments of the oil industry. The level of the
AMEX Oil Index is calculated once per day using last sale prices only, i.e., not
special "bid quotes" or special "ask quotes" which are used in connection with
other stock indices.
The level of the AMEX Oil Index is disseminated via the Consolidated
Tape Authority Network-B also known as the "AMEX Tape". The AMEX Tape Symbol for
the AMEX Oil Index is "XOI".
COMPUTATION OF THE AMEX OIL INDEX
At March 24, 1994, the AMEX computed the AMEX Oil Index as of a
particular time as follows:
(a) the market price of one share of each component stock is
determined as of such time;
(b) the market prices of all component stocks as of such time (as
determined under clause (a) above) are aggregated;
(c) the aggregate amount (as determined under clause (b)
above) is divided by 3.47874.
While the AMEX employed the above methodology to calculate the AMEX Oil
Index at March 24, 1994, no assurance can be given that the AMEX will not modify
or change such methodology in a manner that may affect the amounts payable on
any December Payment Date to beneficial owners of the SMART Notes.
In order to maintain continuity in the level of the AMEX Oil Index in
the event of certain changes due to non-market factors affecting the Underlying
Stocks, such as the addition or deletion of stocks, substitution of stocks,
stock dividends, stock splits or distributions of assets to stockholders, the
divisor used in calculating the AMEX Oil Index is adjusted in a manner designed
to prevent any instantaneous change or discontinuity in the level of the AMEX
Oil Index. Thereafter, the divisor remains at the new value until a further
adjustment is necessary as the result of another change. As a result of each
such change affecting any component stock, the divisor is adjusted in such a way
that the level of the AMEX Oil Index immediately after any change will equal the
level of the AMEX Oil Index immediately prior to the change.
Component stocks may be deleted or added by the AMEX with approval of
the SEC. However, to maintain continuity in the AMEX Oil Index, the policy of
the AMEX is generally not to alter the composition of the component stocks
except when a component stock is deleted due to
(a) bankruptcy of the issuer,
(b) merger of the issuer with, or acquisition of the issuer by, another
company,
(c) delisting of such stock, or
(d) failure of such stock to meet, upon periodic review by the AMEX,
market value and trading volume criteria established by the AMEX
(as such may change from time to time).
Upon deletion of a stock from the component stocks, the AMEX may select a
suitable replacement for such deleted component stock. The policy of the AMEX is
to announce any such change in advance via distribution of an information
circular.
The use of and reference to the AMEX Oil Index in connection with the
SMART Notes has been consented to by the AMEX, the publisher of the AMEX Oil
Index and, in connection with that consent, the AMEX has requested that the
following information appear in this prospectus. The AMEX is under no obligation
to continue the calculation and dissemination of the AMEX Oil Index. The SMART
Notes are not sponsored, endorsed, sold or promoted by the AMEX. No inference
should be drawn from the information contained in this prospectus that the AMEX
makes any representation or warranty, implied or express, to ML&Co., beneficial
owners of the SMART Notes or any member of the public regarding the advisability
of investing in securities generally or in the SMART Notes in particular or the
ability of the AMEX Oil Index to track general stock market performance. The
AMEX has no obligation to take the needs of ML&Co. or beneficial owners of the
SMART Notes into consideration in determining, composing or calculating the AMEX
Oil Index. The AMEX is not responsible for, and has not participated, in the
determination or calculation of the equation by which the SMART Notes with
respect to the annual payments will be determined. The AMEX has no obligation or
liability in connection with the administration, marketing or trading of the
SMART Notes. The AMEX disclaims all responsibility for any errors or omissions
in the calculation and dissemination of the AMEX Oil Index or the manner in
which the index is applied in determining the annual payments with respect to
the SMART Notes.
None of ML&Co., the calculation agent, MLPF&S nor the trustee accepts
any responsibility for the calculation, maintenance or publication of the AMEX
Oil Index or any Successor Index.
You should review the historical prices of the securities underlying
the Amex Oil Index. The historical prices of the securities should not be taken
as an indication of future performance, and no assurance can be given that the
prices of the securities will increase sufficiently to cause the beneficial
owners of the SMART Notes to receive an amount in excess of the Minimum Annual
Payment on any December Payment Date and at the maturity of the SMART Notes.
OIL INDUSTRY SECTOR
The oil industry is subject to varying degrees of regulatory, political
and economic risk which may affect the price of the stocks of the companies in
the industry. These risks depend on a number of factors including the countries
in which a particular company conducts its activities, evolving levels of
governmental regulation, and litigation with respect to environmental and other
matters. All segments of the oil industry are competitive, including
manufacturing, distribution and marketing of petroleum products and
petrochemicals. In addition, the oil industry competes with other industries in
supplying the energy needs of various types of consumers. Refining margins or
the difference between the price of products and the price of crude oil, and
marketing margins or the difference between the wholesale and retail price of
petroleum products, also affect companies engaged in the oil industry.
The profitability of companies engaged in the oil industry is directly
affected by the worldwide price of oil and related petroleum products which, in
turn, depends upon the worldwide demand for oil and related petroleum products.
Environmental regulation is a significant factor affecting
profitability of companies engaged in the oil industry. In the U.S., companies
engaged in the oil industry are subject to substantial environmental regulation
by federal, state, and local authorities. Federal regulations include the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended or also known as CERCLA or Superfund, the Superfund Amendments and
Reauthorizations Act of 1986, and the Resource Conservation Recovery Act of
1976.
In the United States and elsewhere, various laws and regulations are
either now in force, in standby status or under consideration, with respect to
such matters as price controls, crude oil and refined product allocations,
refined product specifications, environmental, health and safety regulations,
retroactive and prospective tax increases, cancellation of contract rights,
expropriation of property, divestiture of certain operations, foreign exchange
rate restrictions as to the convertibility of currencies, tariffs and other
international trade restrictions. Other regulations such as the U.S. Federal
Clean Air Act Amendments of 1990 may have a substantial impact on companies
engaged in the oil industry despite the fact that they do not impose direct
regulations. Finally, regional regulations like those proposed by California's
South Coast Air Quality Management District may have substantial effects on the
oil industry as well.
OTHER TERMS
The SMART Notes were issued as a series of senior debt securities under
the 1983 Indenture, dated as of April 1, 1983, as amended and restated, between
ML&Co. and The Chase Manhattan Bank, as trustee. A copy of the 1983 Indenture is
filed as an exhibit to the registration statement relating to the SMART Notes of
which this prospectus is a part. The following summaries of the material
provisions of the 1983 Indenture are not complete and are subject to, and
qualified in their entirety by reference to, all provisions of the 1983
Indenture, including the definitions of terms in the 1983 Indenture.
Series of senior debt securities may from time to time be issued under
the 1983 Indenture, without limitation as to aggregate principal amount, in one
or more series and upon terms as ML&Co. may establish under the provisions of
the 1983 Indenture.
The 1983 Indenture and the SMART Notes 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 is
necessarily subject to the prior claims of creditors of the subsidiary, except
to the extent that claims of ML&Co. itself as a creditor of the subsidiary may
be recognized. In addition, dividends, loans and advances from certain
subsidiaries, including MLPF&S, to ML&Co. are restricted by net capital
requirements under the Exchange Act, and under rules of exchanges and other
regulatory bodies.
LIMITATIONS UPON LIENS
ML&Co. may not, and may not permit any majority-owned subsidiary to,
create, assume, incur or permit to exist any indebtedness for borrowed money
secured by a pledge, lien or other encumbrance, other than those liens
specifically permitted by the 1983 Indenture, on the Voting Stock owned directly
or indirectly by ML&Co. of any majority-owned subsidiary, other than a
majority-owned subsidiary which, at the time of the incurrence of the secured
indebtedness, has a net worth of less than $3,000,000, unless the outstanding
senior debt securities are secured equally and ratably with the secured
indebtedness.
"Voting Stock" is defined in the 1983 Indenture as the stock of the
class or classes having general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation provided that, for the purposes of the 1983 Indenture, stock that
carries only the right to vote conditionally on the occurrence of an event is
not considered voting stock whether or not the event has happened.
LIMITATION ON DISPOSITION OF VOTING STOCK OF, AND MERGER AND SALE OF ASSETS BY,
MLPF&S
ML&Co. may not sell, transfer or otherwise dispose of any Voting Stock
of MLPF&S or permit MLPF&S to issue, sell or otherwise dispose of any of its
Voting Stock, unless, after giving effect to any such transaction, MLPF&S
remains a Controlled Subsidiary.
"Controlled Subsidiary" is defined in the 1983 Indenture to mean a
corporation more than 80% of the outstanding shares of Voting Stock of which are
owned directly or indirectly by ML&Co.
In addition, ML&Co. may not permit MLPF&S to:
o merge or consolidate, unless the surviving company is a Controlled
Subsidiary, or
o convey or transfer its properties and assets substantially as an
entirety, except to one or more Controlled Subsidiaries.
MERGER AND CONSOLIDATION
ML&Co. may consolidate or merge with or into any other corporation and
ML&Co. may sell, lease or convey all or substantially all of its assets to any
corporation, provided that:
o the resulting corporation, if other than ML&Co., is a corporation
organized and existing under the laws of the United States of
America or any U.S. state and assumes all of ML&Co.'s obligations
to:
o pay any amounts due and payable or deliverable with respect to all the
Senior Debt Securities; and
o perform and observe of all of ML&Co.'s obligations under the 1983
Indenture, and
o ML&Co. or the successor corporation, as the case may be, is not,
immediately after any consolidation or merger, in default under the
1983 Indenture.
MODIFICATION AND WAIVER
ML&Co. and the trustee may modify and amend the 1983 Indenture with the
consent of holders of at least 66 2/3% in principal amount of each outstanding
series of debt securities affected. However, without the consent of each holder
of any outstanding debt security affected, no amendment or modification to any
Indenture may:
o change the stated maturity date of the principal of, or any
installment of interest or Additional Amounts payable on, any
senior debt security or any premium payable on redemption, or
change the redemption price;
o reduce the principal amount of, or the interest or Additional
Amounts payable on, any senior debt security or reduce the amount
of principal which could be declared due and payable before the
stated maturity date;
o change the place or currency of any payment of principal or any
premium, interest or Additional Amounts payable on any senior debt
security;
o impair the right to institute suit for the enforcement of any
payment on or with respect to any senior debt security;
o reduce the percentage in principal amount of the outstanding
senior debt securities of any series, the consent of whose holders
is required to modify or amend the 1983 Indenture; or
o modify the foregoing requirements or reduce the percentage of
outstanding senior debt securities necessary to waive any past
default to less than a majority.
No modification or amendment of ML&Co.'s Subordinated Indenture or any
Subsequent Indenture for subordinated debt securities may adversely affect the
rights of any holder of ML&Co.'s senior indebtedness without the consent of each
holder affected. The holders of at least a majority in principal amount of
outstanding senior debt securities of any series may, with respect to that
series, waive past defaults under the Indenture and waive compliance by ML&Co.
with provisions in the 1983 Indenture, except as described under "--Events of
Default".
EVENTS OF DEFAULT
Each of the following will be Events of Default with respect to senior
debt securities of any series:
o default in the payment of any interest or Additional Amounts
payable when due and continuing for 30 days;
o default in the payment of any principal or premium when due;
o default in the deposit of any sinking fund payment, when due;
o default in the performance of any other obligation of ML&Co.
contained in the Indenture for the benefit of that series or in
the senior debt securities of that series, continuing for 60 days
after written notice as provided in the 1983 Indenture;
o specified events in bankruptcy, insolvency or reorganization of
ML&Co.; and
o any other Event of Default provided with respect to senior debt
securities of that series which are not inconsistent with the 1983
Indenture.
If an Event of Default occurs and is continuing for any series of
senior debt securities, other than as a result of the bankruptcy, insolvency or
reorganization of ML&Co., the trustee or the holders of at least 25% in
principal amount of the outstanding senior debt securities of that series may
declare all amounts, or any lesser amount provided for in the senior debt
securities, due and payable or deliverable immediately. At any time after a
declaration of acceleration has been made with respect to senior debt securities
of any series but before the trustee has obtained a judgment or decree for
payment of money, the holders of a majority in principal amount of the
outstanding senior debt securities of that series may rescind any declaration of
acceleration and its consequences, if all payments due, other than those due as
a result of acceleration, have been made and all Events of Default have been
remedied or waived.
The holders of a majority in principal amount or aggregate issue price
of the outstanding debt securities of any series of senior debt securities may
waive an Event of Default for that series, except a default:
o in the payment of any amounts due and payable or deliverable under the
debt securities of that series; or
o in respect of an obligation or provision of any Indenture which cannot
be modified under the terms of that Indenture without the consent of
each holder of each series of debt securities affected.
The holders of a majority in principal amount of the outstanding senior
debt securities of a series may direct the time, method and place of conducting
any proceeding for any remedy available to the trustee or exercising any trust
or power conferred on the trustee with respect to those senior debt securities,
provided that any direction shall not be in conflict with any rule of law or the
1983 Indenture. Before proceeding to exercise any right or power under the 1983
Indenture at the direction of the holders, the trustee shall be entitled to
receive from the Holders reasonable security or indemnification against the
costs, expenses and liabilities which might be incurred by it in complying with
any direction.
The SMART Notes 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.
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 SMART Notes and other securities. For further information on ML&Co.
and the SMART Notes, 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 SMART Notes and is to be used by MLPF&S when making offers and sales related
to market-making transactions in the SMART Notes.
MLPF&S may act as principal or agent in these market-making
transactions.
The SMART Notes may be offered on the AMEX or off the exchange in
negotiated transactions or otherwise.
The distribution of the SMART Notes 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.