Pricing Supplement No. 6
Pricing Supplement No. 6
Dated April 3, 2003
(to Prospectus dated November 28, 2001
and Prospectus Supplement
dated December 5, 2001)
Merck & Co., Inc.
Medium-Term Notes, Series E
Floating Rate Notes
Underwriters and Principal
Amounts: |
Salomon Smith Barney Inc.
Morgan Stanley & Co. Incorporated
TOTAL |
$10,000,000
$15,000,000
$25,000,000
|
| Trade Date: |
April 3, 2003
|
|
Settlement Date
(Original Issue Date):
|
April 10, 2003
|
|
| Stated Maturity: |
February 18, 2043
|
|
| Interest Rate Basis: |
3-month LIBOR
|
|
| Spread: |
Minus 45 basis points
|
|
| Initial Interest Rate: |
3-month LIBOR, determined as if the
original issue date were an interest reset date, minus the spread
|
|
| Interest Reset Dates: |
Quarterly, on the 18th day of
each February, May, August and November, commencing May 18, 2003
|
|
| Interest Payment Dates: |
February 18, May
18, August 18 and November 18 of each year, commencing May 18, 2003
|
|
| Issue Price: |
100.00% of the principal amount
|
|
| Underwriter’s Discount: |
1.00% of the principal amount
|
|
| Net Proceeds to Merck: |
99.00% of the principal amount
|
|
| Calculation Agent: |
U.S. Bank Trust National Association
|
|
| CUSIP: |
58933NAX7
|
|
Optional
Repayment Dates: |
The notes will be repayable at the option of the holder on at least 30
days notice on the following optional repayment dates and at the
following repayment prices: |
| |
Optional Repayment Date |
Repayment Price |
| |
February 18, 2014 and on each third
anniversary thereafter to maturity |
100.00% |
| Optional Redemption: |
The notes may be redeemed at any time, at the option of Merck, in whole
or in part, in amounts of $1,000 or any multiple of $1,000, at the
following redemption prices, if redeemed during the following 12-month
periods: |
| |
Redemption Period |
Redemption Price
|
| |
February 18, 2033 through February 17, 2034 |
105.00% |
| |
February 18, 2034 through February 17, 2035 |
104.50% |
| |
February 18, 2035 through February 17, 2036 |
104.00% |
| |
February 18, 2036 through February 17, 2037 |
103.50% |
| |
February 18, 2037 through February 17, 2038 |
103.00% |
| |
February 18, 2038 through February 17, 2039 |
102.50% |
| |
February 18, 2039 through February 17, 2040 |
102.00% |
| |
February 18, 2040 through February 17, 2041 |
101.50% |
| |
February 18, 2041 through February 17, 2042 |
101.00% |
| |
February 18, 2042 through February 17, 2043 |
100.50% |
Notes Used as Qualified
Replacement Property:
Prospective investors
seeking to treat the notes as “qualified replacement property” for
purposes of Section 1042 of the Internal Revenue Code of 1986, as amended (the
“Code”), should be aware that Section 1042 requires the issuer to meet
certain requirements in order for the notes to constitute qualified replacement
property. In general, qualified replacement property is a security issued by a
domestic “operating corporation” that did not, for the taxable year
preceding the taxable year in which such security was purchased, have
“passive investment income” in excess of 25 percent of the gross
receipts of such corporation for such preceding taxable year (the “Passive
Income Test”). A corporation will be considered an “operating
corporation” if at the time the securities are purchased or before the end
of the replacement period, as defined in Section 1042 of the Code, more than 50
percent of its assets are used in the active conduct of a trade or business. For
these purposes, where the issuing corporation is in control of one or more
corporations or such issuing corporation is controlled by one or more other
corporations, all such corporations are treated as one corporation (the
“Affiliated Group”) for the purposes of computing the amount of
passive investment income for purposes of Section 1042. Merck believes that it
is an “operating corporation” and that less than 25 percent of its
Affiliated Group’s gross receipts is passive investment income for the
taxable year ending December 31, 2002. In making this determination, Merck has
made certain assumptions and used procedures which it believes are reasonable.
However, the calculation and characterization of certain types of income (as
active or passive investment income) in certain of the Affiliated Group’s
finance and insurance companies is not entirely clear as there are no Treasury
regulations or rulings promulgated by the Internal Revenue Service (the
“IRS”) that explain the calculation and characterization of such
income in circumstances similar to those of Merck’s Affiliated Group. Even
if such categories of income were treated as passive investment income, Merck
believes that the Affiliated Group’s passive investment income did not
exceed more than 25 percent of the Affiliated Group’s gross receipts for
the taxable year ending December 31, 2002. No assurance can be given as to
whether Merck will continue to meet the Passive Income Test. It is, in addition,
possible that the IRS may disagree with the manner in which Merck has calculated
disagree with the manner
in which Merck has calculated the Affiliated Group’s gross receipts
(including the characterization thereof) and passive investment income and the
conclusions reached herein. Investors that treat the notes as “qualified
replacement property” are subject to special rules regarding their basis
and holding period in the notes. Investors should consult their own tax advisors
about the operation of the rules relating to qualified replacement property in
their particular circumstances.
| |
SALOMON SMITH BARNEY
MORGAN STANLEY |