Document:

EX-4.2

 

EXHIBIT 4.2

FORM OF CERTIFICATE OF DESIGNATION

6.25% NONCUMULATIVE PERPETUAL PREFERRED STOCK, SERIES 7

     RESOLVED, that pursuant to the authority vested in the Board of Directors of
Merrill Lynch & Co., Inc., a Delaware corporation (the “Corporation”), by
Article IV of the Restated Certificate of Incorporation, as amended, of the
Corporation and in the Finance Committee of the Board of Directors by delegated
authority, a series of preferred stock of the Corporation be, and it hereby is,
created out of the authorized but unissued shares of the capital stock of the
Corporation, such series to be designated 6.25% Noncumulative Perpetual Preferred
Stock, Series 7, to consist of 50,000 shares (the “Series 7 Preferred
Stock”), par value $1.00 per share, the preferences, relative and other
rights, and qualifications, limitations or restrictions of which shall be (in
addition to those set forth in the Corporation’s Restated Articles of
Incorporation, as amended) as follows:

     Section 1. Liquidation Value. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of the Series 7 Preferred Stock at the
time outstanding will be entitled to receive out of the assets of the Corporation available for
distribution to stockholders, before any distribution of assets is made to holders of Common Stock
or any other class of stock ranking junior to the Series 7 Preferred Stock in the distribution of
assets upon any liquidation, dissolution or winding up of the affairs of the Corporation,
liquidating distributions in the amount of $1,000 per share, plus any dividends declared thereon
and not yet paid prior to the date of liquidation.

     After payment of the full amount of the liquidating distributions to which they are entitled
pursuant to the preceding paragraph, the holders of Series 7 Preferred Stock will have no right or
claim to any of the remaining assets of the Corporation. In the event that, upon any such
voluntary or involuntary liquidation, dissolution or winding up, the available assets of the
Corporation are insufficient to pay the full amount of the liquidating distributions on all
outstanding Series 7 Preferred Stock and the corresponding amounts payable on all shares of other
classes or series of capital stock of the Corporation ranking on a parity with the Series 7
Preferred Stock in the distribution of assets upon any liquidation, dissolution or winding up of
the affairs of the Corporation, then the holders of the Series 7 Preferred Stock and such other
classes or series of capital stock shall share ratably in any such distribution of assets in
proportion to the full liquidating distributions to which they otherwise respectively would be
entitled.

     For the purposes of this Section 1, the consolidation or merger of the Corporation with or
into any other entity, or the sale, lease or conveyance of all or substantially all of the property
or business of the Corporation, shall not be deemed to constitute the liquidation, dissolution or
winding up of the Corporation.

 

 

     Section 2. Dividends.

     (a) Payment of Dividends. Holders of Series 7 Preferred Stock shall be entitled to receive,
if, when and as authorized and declared by the Board of Directors, out of assets of the Corporation
legally available therefor, cash dividends at an annual rate of 6.25% of the $1,000 liquidation
preference per share (equivalent to $62.50 per share per annum), and no more. Such noncumulative
cash dividends shall be payable, if authorized and declared, quarterly on March 30, June 30,
September 30 and December 30 of each year, or, if any such day is not a Business Day (as defined
herein), on the preceding Business Day (each such date, “Dividend Payment Date”). Each
authorized and declared dividend shall be payable to holders of record of the Series 7 Preferred
Stock as they appear on the stock books of the Corporation at the close of business on such record
date, not more than 30 calendar days nor less than 10 calendar days preceding the Dividend Payment
Date therefor, as may be determined by the Board of Directors (each such date, a “Record
Date”); provided, however, that if the date fixed for redemption of any of the
Series 7 Preferred Stock occurs after a dividend is authorized and declared but before it is paid,
such dividend shall be paid as part of the redemption price to the person to whom the redemption
price is paid. Quarterly dividend periods (each, a “Dividend Period”) shall commence on
and include the first day, and shall end on and include the last day, of the quarterly period in
which the corresponding Dividend Payment Date occurs.

     The amount of dividends payable for the first Dividend Period and for any other Dividend
Period which, as to any share of Series 7 Preferred Stock (determined by reference to the issuance
date and the redemption or retirement date thereof), is greater or less than a full Dividend Period
shall be computed on the basis of the number of days elapsed in the period using a 360-day year
composed of twelve 30-day months.

     Holders of the Series 7 Preferred Stock shall not be entitled to any interest, or any sum of
money in lieu of interest, in respect of any dividend payment or payments on the Series 7 Preferred
Stock authorized and declared by the Board of Directors that may be unpaid.

     (b) Dividends Noncumulative. The right of holders of Series 7 Preferred Stock to receive
dividends is noncumulative. Accordingly, if the Board of Directors does not authorize or declare a
dividend payable in respect of any Dividend Period, holders of Series 7 Preferred Stock shall have
no right to receive a dividend in respect of such Dividend Period and the Corporation shall have no
obligation to pay a dividend in respect of such Dividend Period, whether or not dividends are
authorized and declared payable in respect of any prior or subsequent Dividend Period.

     (c) Priority as to Dividends; Limitations on Dividends on Junior Equity. If full dividends on
the Series 7 Preferred Stock for a completed Dividend Period shall not have been declared and paid,
or declared and a sum sufficient for the payment thereof shall not have been set apart for such
payments, no dividends or distributions shall be authorized, declared or paid or set aside for
payment (other than as provided in the second paragraph of this Section 2(c)) during the next
subsequent Dividend Period with respect to the Common Stock or any other stock

-2-

 

of the Corporation ranking junior to the Series 7 Preferred Stock as to dividends or amounts
upon liquidation, dissolution or winding up of the affairs of the Corporation (together with the
Common Stock, “Junior Equity”) or any stock on parity with the Series 7 Preferred Stock as
to dividends or amounts upon liquidation, dissolution or winding up of the affairs of the
Corporation (“Parity Stock”), nor shall any Junior Equity or Parity Stock be redeemed,
purchased or otherwise acquired for any consideration (or any monies to be paid to or made
available for a sinking fund for the redemption of any such stock) by the Corporation (except by
conversion into or exchange for other Junior Equity), until such time as dividends on all
outstanding Series 7 Preferred Stock for at least four consecutive Dividend Periods have been paid
in full.

     When dividends are not paid in full (or a sum sufficient for such full payment is not so set
apart) for any Dividend Period on the Series 7 Preferred Stock, all dividends declared on the
Series 7 Preferred Stock and any other series ranking on a parity as to dividends with the Series 7
Preferred Stock shall be distributed pro rata so that the amount of dividends declared per share on
the Series 7 Preferred Stock and each such other series of capital stock shall in all cases bear to
each other the same ratio that full dividends, for such Dividend Period, per share of Series 7
Preferred Stock (which shall not include any accumulation in respect of unpaid dividends for prior
Dividend Periods) and full dividends, including required or permitted accumulations, if any, on the
stock of each other series ranking on a parity as to dividends with the Series 7 Preferred Stock
bear to each other.

     (d) So long as any shares of Series 7 Preferred Stock are outstanding, the Corporation shall
not authorize or issue any class or series of stock with a preference as to payment of
distributions or amounts upon liquidation, dissolution or winding up that is senior in right to the
preferences of the Series 7 Preferred Stock as to payment of distributions or amounts upon
liquidation, dissolution or winding up.

     (e) Any reference to “dividends” or “distributions” in this Section 2 shall not be deemed to
include any distribution made in connection with any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation.

     Section 3. Optional Redemption. The Series 7 Preferred Stock will not be redeemable prior to
March 18, 2010. On or after March 18, 2010, the Series 7 Preferred Stock will be redeemable at the
option of the Corporation, in whole or in part, at any time or from time to time, at a cash
redemption price equal to the sum of the liquidation preference thereof plus the amount of the
declared and unpaid dividends thereon from the beginning of the Dividend Period in which the
redemption occurs to the date of redemption.

     In the event that fewer than all the outstanding shares of Series 7 Preferred Stock are to be
redeemed, the number of shares of Series 7 Preferred Stock to be redeemed shall be determined by
the Board of Directors, and the shares to be redeemed shall be determined by lot or pro rata as may
be determined by the Board of Directors or by any other method as may be determined by the Board of
Directors in its sole discretion to be equitable, provided that such method satisfies

-3-

 

any applicable requirements of any securities exchange (if any) on which the shares of Series
7 Preferred Stock are then listed.

     Unless full dividends on the Series 7 Preferred Stock in respect of the most recently
completed Dividend Period have been or contemporaneously are declared and paid or full dividends
have been declared and a sum sufficient for the payment thereof has been set apart for payment in
respect of the most recently completed Dividend Period, no Series 7 Preferred Stock shall be
redeemed unless all outstanding shares of Series 7 Preferred Stock are redeemed and the Corporation
shall not purchase or otherwise acquire any Series 7 Preferred Stock; provided, however, that the
Corporation may purchase or acquire Series 7 Preferred Stock pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding Series 7 Preferred Stock.

     The Corporation will give notice of redemption of the Series 7 Preferred Stock by publication
in a newspaper of general circulation in the City of New York, such publication to be made once a
week for two successive weeks commencing not less than 30 nor more than 60 days’ prior to the
redemption date. A failure to give such notice or any defect in the notice or in the Corporation’s
mailing will not affect the validity of the proceedings for the given redemption of any Series 7
Preferred Stock except as to the holder to whom notice was defective or not given. Each notice
shall state: (i) the redemption date; (ii) the redemption price and (iii) the number of shares of
Series 7 Preferred Stock to be redeemed.

     A notice by the Corporation pursuant to this Section 3 shall be sufficiently given if in
writing and mailed, first class postage prepaid, to each record holder of Series 7 Preferred Stock
at the holder’s address as it appears in the records of the Corporation’s transfer agent. In any
case where notice is given by mail, neither the failure to mail such notice nor any defect in the
notice to any particular holder shall affect the sufficiency of such notice, to any other holder.
Any notice mailed to a holder in the manner described above shall be deemed given on the date
mailed, whether or not the holder actually receives the notice. A notice of redemption shall be
given not less than 30 days and not more than 60 days prior to the date of redemption specified in
the notice, and shall specify (i) the redemption date, (ii) the number of Series 7 Preferred Stock
to be redeemed, (iii) the redemption price and (iv) the manner in which holders of Series 7
Preferred Stock called for redemption may obtain payment of the redemption price in respect of
those shares.

     Any shares of Series 7 Preferred Stock that are duly called for redemption pursuant to this
Section 3 shall no longer be deemed to be outstanding for any purpose from and after that time that
the Corporation shall have irrevocably deposited with the paying agent identified in the notice of
redemption funds in an amount equal to the aggregate redemption price. From and after that time,
the holders of the Series 7 Preferred Stock so called for redemption shall have no further rights
as stockholders of the Corporation and in lieu thereof shall have only the right to receive the
redemption price, without interest.

     Series 7 Preferred Stock redeemed pursuant to this Section 3 or purchased or otherwise
acquired for value by the Corporation shall, after such acquisition, have the status of authorized
and unissued shares of Preferred Stock and may be

-4-

 

reissued by the Corporation at any time as shares of any series of Preferred Stock other than
as Series 7 Preferred Stock.

     Section 4. Voting Rights.

     (a) General. Except as expressly provided in this Section 4 and as required by law, holders
of Series 7 Preferred Stock shall have no voting rights. When the holders of Series 7 Preferred
Stock are entitled to vote as a separate series, each Series 7 Preferred Stock will be entitled to
40 votes and may designate up to 40 proxies, with each such proxy having the right to vote a whole
number of votes, totaling 40 votes per share of Series 7 Preferred Stock. When the holders of
Series 7 Preferred Stock are entitled to vote together as a class with any other capital stock of
the Corporation, each share of Series 7 Preferred Stock will be entitled to one vote.

     (b) Right to Elect Directors. If, at the time of any annual meeting of the Corporation’s
stockholders for the election of directors, the Corporation has failed to pay or declare and set
aside for payment all scheduled dividends during any six Dividend Periods (whether or not
consecutive) on the Series 7 Preferred Stock, the number of directors then constituting the Board
of Directors of the Corporation will be increased by two (if not already increased by two due to
failure to pay or declare and set aside dividends on any series of Preferred Stock), and the
holders of the Series 7 Preferred Stock, voting separately as a class with all other series of
Preferred Stock then entitled by the terms of such Preferred Stock to vote for additional
directors, will be entitled to elect such two additional directors to serve on the Corporation’s
Board of Directors at each such annual meeting. Each director elected by the holders of shares of
the Preferred Stock (a “Preferred Director”) shall continue to serve as such director until
the payment of all dividends on the Preferred Stock for at least four consecutive Dividend Periods,
including the Series 7 Preferred Stock. Any Preferred Director may be removed by, and shall not be
removed except by, the vote of the holders of record of the outstanding Series 7 Preferred Stock
entitled to vote, voting separately as a class with all other holders of all other series of
Preferred Stock entitled to vote on the matter, at a meeting of the Corporation’s stockholders, or
of the holders of the Series 7 Preferred Stock and all other series of Preferred Stock so entitled
to vote thereon, called for that purpose. As long as dividends on the Series 7 Preferred Stock
shall not have been paid for the preceding quarterly Dividend Period, (i) any vacancy in the office
of any Preferred Director may be filled (except as provided in the following clause (ii)) by any
instrument in writing signed by the remaining Preferred Director and filed with the Corporation,
and (ii) in the case of the removal of any Preferred Director, the vacancy may be filled by the
vote of the holders of the outstanding Series 7 Preferred Stock entitled to vote, voting together
as a single class with the holders of all other series of Preferred Stock entitled to vote on the
matter, at the same meeting at which such removal shall be voted. Each director appointed as
aforesaid by the remaining Preferred Director shall be deemed, for all purposes hereof, to be
Preferred Director. Any Preferred Director will be deemed to be an Independent Director for
purposes of the actions requiring the approval of a majority of the Independent Directors.

     (c) Certain Voting Rights. The affirmative vote or consent of the holders of at least 67% of
the outstanding voting power of each series of Preferred Stock of

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the Corporation, including the Series 7 Preferred Stock, will be required (i) to create any
class or series of stock which shall, as to dividends or distribution of assets, rank prior to any
outstanding series of Preferred Stock of the Corporation other than a series which shall not have
any right to object to such creation or (ii) alter or change the provisions of the Corporation’s
Restated Certificate of Incorporation (including the terms of the Series 7 Preferred Stock),
including by consolidation or merger, so as to adversely affect the voting powers, preferences or
special rights of the holders of a series of Preferred Stock of the Corporation; provided,
however, that if such amendment shall not adversely affect all series of Preferred Stock of
the Corporation, such amendment need only be approved by at least 67% of the voting power of each
series of Preferred Stock adversely affected thereby. Notwithstanding the foregoing, an alteration
or change to the provisions of the Corporation’s Restated Certificate of Incorporation shall not be
deemed to affect the voting powers, preferences or special rights of the holders of the Series 7
Preferred Stock, provided that: (x) the Series 7 Preferred Stock remain outstanding with the terms
thereof unchanged; or (y) the Series 7 Preferred Stock are converted in a merger or consolidation
transaction into shares of the surviving or successor corporation or the direct or indirect parent
of the surviving or successor corporation having terms identical to the terms of the Series 7
Preferred Stock set forth herein. Additionally, an increase in the amount of the authorized
Preferred Stock or the creation or issuance of any other series of Preferred Stock or an increase
in the amount of authorized shares of any such series, in each case ranking on a parity with or
junior to the Series 7 Preferred Stock with respect to payment of dividends or distribution of
assets upon liquidation, dissolution or winding up, shall not be deemed to adversely affect the
voting powers, preferences or special rights of the holders of the Series 7 Preferred Stock.

     Section 5. Independent Directors.

     (a) Number; Definition. As long as any Series 7 Preferred Stock are outstanding, at least two
directors on the Board of Directors shall be Independent Directors. As used herein,
“Independent Director” means any director of the Corporation who is either (i) not a
current officer or employee of the Corporation or (ii) a Preferred Director.

     (b) Determination by Independent Directors. In determining whether any proposed action
requiring their consent is in the best interests of the Corporation, the Independent Directors
shall consider the interests of holders of both the Common Stock and the Preferred Stock,
including, without limitation, the holders of the Series 7 Preferred Stock. In considering the
interests of the holders of the Preferred Stock, including, without limitation, holders of the
Series 7 Preferred Stock, the Independent Directors shall owe the same duties that the Independent
Directors owe with respect to holders of shares of Common Stock.

     Section 6. No Conversion Rights. The holders of Series 7 Preferred Stock shall not have any
rights to convert such shares into shares of any other class or series of stock or into any other
securities of, or any interest in, the Corporation.

     Section 7. No Sinking Fund. No sinking fund shall be established for the retirement or
redemption of Series 7 Preferred Stock.

-6-

 

     Section 8. Preemptive or Subscription Rights. No holder of Series 7 Preferred Stock of the Corporation
shall, as such holder, have any preemptive right to purchase or subscribe for any additional shares
of stock of the Corporation or any other security of the Corporation that it may issue or sell.

     Section 9. No Other Rights. The Series 7 Preferred Stock shall not have any designations,
preferences or relative, participating, optional or other special rights except as set forth in the
Corporation’s Restated Certificate of Incorporation or as otherwise required by law.

     Section 10. Compliance with Applicable Law. Declaration by the Board of Directors and payment
by the Corporation of dividends to holders of the Series 7 Preferred Stock and repurchase,
redemption or other acquisition by the Corporation (or another entity as provided in subsection (a)
of Section 3 hereof) of Series 7 Preferred Stock shall be subject in all respects to any and all
restrictions and limitations placed on dividends, redemptions or other distributions by the
Corporation (or any such other entity) under (i) laws, regulations and regulatory conditions or
limitations applicable to or regarding the Corporation (or any such other entity) from time to time
and (ii) agreements with federal or state regulatory or banking authorities with respect to the
Corporation (or any such other entity) from time to time in effect.

-7-EX-4.5

 

EXHIBIT 4.5

	 	 	 	 	 
	NUMBER R-

	 	 	 	SHARES

6.70% NON-CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES 6,

OF

MERRILL LYNCH & CO., INC.

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

CUSIP
59022 Y 865

SEE REVERSE FOR CERTAIN DEFINITIONS

     This
certifies that MELLON INVESTOR SERVICES, as depositary, is the registered owner of
SHARES (           ) fully paid and non-assessable shares of Non-Cumulative Perpetual Preferred
Stock, Series 6, par value $1.00 per share, of Merrill Lynch & Co., Inc., a Delaware corporation
(the “Corporation”), transferable upon the books of the Corporation by the holder hereof in person
or by duly authorized attorney upon surrender of this Certificate properly endorsed.

     This Certificate shall not be valid unless countersigned and registered by the Transfer Agent
and Registrar.

Dated:

	 	 	 	 	 
	 	 	MERRILL LYNCH & CO., INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	E. Stanley O’Neal
	 

	 	 	 	Chairman of the Board and
	 

	 	 	 	Chief Executive Officer
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Judith A. Witterschein
	 

	 	 	 	Secretary

	 	 	 	 	 
	Countersigned and Registered:	 	 
	 
	 	 	 	 
	MELLON INVESTOR SERVICES, 

Transfer Agent and Registrar	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 

Authorized Officer
	 	 

 

 

[REVERSE OF CERTIFICATE]

MERRILL LYNCH & CO., INC.

     MERRILL LYNCH & CO., INC. WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS A
STATEMENT OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF WHICH MERRILL LYNCH & CO., INC. IS
AUTHORIZED TO ISSUE AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR
RIGHTS. ANY SUCH REQUEST IS TO BE ADDRESSED TO THE SECRETARY OF MERRILL LYNCH & CO., INC. OR TO THE
TRANSFER AGENT.

 

EXPLANATION OF ABBREVIATIONS

The following abbreviations when used in the form of ownership on the face of this certificate
shall be construed as though they were written out in full according to applicable laws or
regulations. Abbreviations in addition to those appearing below may be used.

	 	 	 	 	 	 	 
	Phrase Abbreviation	 	Equivalent	 	Phrase Abbreviation	 	Equivalent
	JT TEN

	 	As joint tenants,
with right of
survivorship and not as
tenants in common
	 	TEN BY ENT
	 	As tenants by
the entireties
	TEN IN COM

	 	As tenants in common
	 	UNIF GIFT MIN ACT
	 	Uniform Gifts
to Minors Act

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Word	 	 	 	Word	 	 
	Word Abbreviation	 	Equivalent	 	Abbreviation	 	Equivalent	 	Abbreviation	 	Equivalent
	ADM

	 	Administrator(s)
	 	EST
	 	Estate, of
Estate
 of
	 	PAR
	 	Paragraph
	 

	 	Administratrix
	 	EX
	 	Executor(s),

Executrix
	 	PL
	 	Public Law
	AGMT

	 	Agreement
	 	FBO
	 	For the
benefit
 of
	 	TR
	 	(As)
trustee(s), 
for, of
	ART

	 	Article
	 	FDN
	 	Foundation
	 	U
	 	Under
	CH

	 	Chapter
	 	
GDN
	 	
Guardian(s)
	 	
UA
	 	Under 
agreement
	CUST

	 	Custodian for
	 	
GDNSHP
	 	
Guardianship
	 	 

UW
	 	Under will of,

Of will of,
	DEC

	 	Declaration
	 	MIN
	 	Minor(s)
	 	 	 	Under last

will & testament

 

 

     For value received,                      hereby sell(s), assign(s) and
transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE                                                                     
                                                                                 
                                                        PLEASE PRINT OR
TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE                                                                                                          
                                                                              

Shares of the capital stock represented by the
within Certificate, and do(es) hereby irrevocably constitute and appoint                      Attorney to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.

Dated                     

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	NOTICE: The signature to the
assignment must correspond
with the name as written upon
the face of this Certificate
in every particular, without
alteration or enlargement or
any change whatsoever.

	SIGNATURE GUARANTEED
	 	 	 	 
	 
	 	 	 	 
	 

NOTICE: The signature(s)
should be guaranteed by an
eligible guarantor institution
(banks, stockbrokers, savings
and loan associations, and
credit unions with membership
in an approved signature
guarantee medallion program),
pursuant to Rule 17Ad-15 under
the Securities Exchange Act of
1934.

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