Pricing Supplement No. 7
Pricing Supplement No. 8
Dated March 10, 2004
(to
Prospectus dated November 28, 2001
and Prospectus Supplement
dated December 5, 2001)
Merck & Co., Inc.
Medium-Term Notes, Series
E
Floating Rate Notes
Underwriter and Principal
Amount:
|
Morgan Stanley & Co. Incorporated |
$25,000,000
|
Trade Date:
|
March 10, 2004
|
|
Settlement Date
(Original Issue Date):
|
March 15, 2004
|
|
Stated Maturity:
|
February 12, 2044
|
|
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 12th day of each February, May, August and November, commencing May 12, 2004
|
|
| Interest Payment Dates: |
February 12, May 12, August 12 and November 12 of each year, commencing May 12, 2004
|
|
Issue Price:
|
100.00% of the principal amount, plus accrued interest from February 12, 2004
|
|
Underwriter’s Discount:
|
1.00% of the principal amount
|
|
Net Proceeds to Merck:
|
99.00% of the principal amount, plus accrued interest from February 12, 2004
|
|
Calculation Agent:
|
U.S. Bank Trust National Association
|
|
| CUSIP: |
58933NAY5
|
|
| Optional Repayment Dates: |
The notes will be repayable at the option of the holder on at least 30 day notice on the following optional repayment dates and at the following repayment prices: |
| |
Optional Repayment Date
|
Repayment Price |
| |
|
|
| |
February 12, 2015 and 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 12, 2034 through February 11, 2035 |
105.00% |
| |
February 12, 2035 through February 11, 2036 |
104.50% |
| |
February 12, 2036 through February 11, 2037 |
104.00% |
| |
February 12, 2037 through February 11, 2038 |
103.50% |
| |
February 12, 2038 through February 11, 2039 |
103.00% |
| |
February 12, 2039 through February 11, 2040 |
102.50% |
| |
February 12, 2040 through February 11, 2041 |
102.00% |
| |
February 12, 2041 through February 11, 2042 |
101.50% |
| |
February 12, 2042 through February 11, 2043 |
101.00% |
| |
February 12, 2043 through February 11, 2044 |
100.50% |
On
February 9, 2004, we issued $25,000,000 aggregate principal amount of our floating rate
notes due February 12, 2044. The notes offered hereby and our outstanding floating rate
notes due February 12, 2044 will have the same terms, will trade as a single class of
freely tradable notes and will form a single series and class for all purposes under the
indenture. The total aggregate principal amount outstanding of our floating rate notes due
February 12, 2044 will be $50,000,000.
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, 2003. 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, 2003.
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 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.