SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
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For the fiscal year ended:
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Commission file number: |
December 31, 2010 |
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001-32415 |
MERRILL LYNCH DEPOSITOR, INC.
(ON BEHALF OF PPLUS TRUST SERIES LMG-4)
(Exact name of registrant as specified in its
charter)
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DELAWARE
(State or other
jurisdiction of
incorporation)
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13-3891329
(I. R. S. Employer
Identification No.) |
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ONE BRYANT PARK
3RD FLOOR - STRUCTURED CREDIT TRADING
NEW YORK, NEW YORK
(Address of principal
executive offices)
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10036
(Zip Code) |
Registrants telephone number, including area code: (212) 449-1000
Securities registered pursuant to Section 12(b) of the Act:
PPLUS Trust Certificates Series LMG-4 listed on The New York Stock Exchange.
Securities registered pursuant to Section 12(g) of the Act:
Not Applicable.
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
Yes o No þ
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes o No þ
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).
Yes o No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in
Rule 12b-2 of the Exchange Act.
Large
accelerated filer o Accelerated filer o Non-accelerated filer þ Smaller reporting filer o
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes o No þ
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrants most recently completed second fiscal
quarter.
Not Applicable.
Indicate the number of shares outstanding for each of the registrants classes
of common stock, as of the latest practicable date.
Not Applicable.
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
DOCUMENTS INCORPORATED BY REFERENCE
None.
PART I
ITEM 1. BUSINESS
For information with respect to the underlying
securities held by PPLUS Trust Series LMG-4, please
refer to Liberty Media LLCs (Commission file number
001-16615) periodic reports, including annual reports
on Form 10-K, quarterly reports on Form 10-Q and
current reports on Form 8-K, and other information on
file with the Securities and Exchange Commission (the
SEC). You can read and copy these reports and other
information at the public reference facilities
maintained by the SEC at Room 1580, 100 F Street,
N.E., Washington, D.C. 20549. You may obtain copies
of this material for a fee by writing to the SECs
Public Reference Section of the SEC at 100 F Street,
N.E., Washington, D.C. 20549. You may obtain
information about the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330.
You can also access some of this information
electronically by means of the SECs website on the
Internet at http://www.sec.gov, which contains
reports, proxy and information statements and other
information that the underlying securities issuer has
filed electronically with the SEC.
Although we have no reason to believe the information
concerning the underlying securities or the
underlying securities issuer contained in the
underlying securities issuers Exchange Act reports
is not reliable, neither the depositor nor the
trustee participated in the preparation of such
documents or made any due diligence inquiry with
respect to the information provided therein. No
investigation with respect to the underlying
securities issuer (including, without limitation, no
investigation as to its financial condition or
creditworthiness) or of the underlying securities has
been made. You should obtain and evaluate the same
information concerning the underlying securities
issuer as you would obtain and evaluate if your
investment were directly in the underlying securities
or in other securities issued by the underlying
securities issuer. There can be no assurance that
events affecting the underlying securities or the
underlying securities issuer have not occurred or
have not yet been publicly disclosed which would
affect the accuracy or completeness of the publicly
available documents described above.
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ITEM 1A. RISK FACTORS
Your investment in the trust certificates will
involve certain risks. You should carefully consider
the following discussion of risks, and the other
information included or incorporated by reference in
the applicable prospectus supplement and the
accompanying prospectus. You should also carefully
consider any risk factors and other information that
the underlying securities issuer may file in its
Exchange Act reports as referenced in Item 1 above.
IF ANY CALL WARRANTS ARE EXERCISED PRIOR TO THE
STATED MATURITY DATE, YOU MAY NOT BE ABLE TO REINVEST
YOUR CALL PROCEEDS AT A YIELD COMPARABLE TO THE YIELD
YOU WOULD HAVE RECEIVED ON YOUR TRUST CERTIFICATES
The yield you will realize on your trust certificates
depends upon several factors, including:
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the purchase price of the trust certificates, |
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when you acquire your trust certificates, and |
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whether the call warrant holders exercise their
optional rights to purchase outstanding trust
certificates. |
Although the call warrant holders are not obligated
to exercise the call warrants, the yield you will
realize on your trust certificates depends on whether
the call warrant holders exercise their call warrants
to purchase the trust certificates.
Prevailing interest rates at the time of a call
exercise may be lower than the yield on your trust
certificates. Therefore, you may be unable to realize
a comparable yield upon reinvesting the funds you
receive from the exercise of any call warrants. In
addition, if the prevailing market value of the trust
certificates exceeds the call exercise price paid to
you upon the exercise of a call, you will not be able
to realize such excess.
YOU MAY NOT BE PAID IF THE ASSETS OF THE TRUST ARE
INSUFFICIENT
Currently, the trust has no significant assets other
than the underlying securities. If the underlying
securities are insufficient to make payments or
distributions on the trust certificates, no other
assets will be available for payment of the
deficiency. The underlying securities issuer is
organized as a holding company that owns subsidiary
companies. According to the underlying securities
prospectus, the underlying securities issuer derives
its operating income and cash flow primarily from its
subsidiaries and investments, which poses two
principal risks:
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The underlying securities issuers right to
participate as an equity holder in any
distribution of assets of any of its subsidiaries
upon the subsidiarys liquidation or otherwise,
and thus the ability of its security holders,
including the trust, to benefit from the
distribution, will be subject to prior claims of
the subsidiarys creditors, except to the extent
that any claims the underlying securities issuer
may have as a creditor of the subsidiary are
recognized, and |
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The underlying securities issuers ability to
service its indebtedness and other obligations is
dependent primarily upon the earnings and cash
flow of its subsidiaries and the distribution or
other payment to it of such earnings and cash
flow. |
YOU MAY NOT RECOVER THE WHOLE OF THE PRESENT VALUE OR
STATED AMOUNT (IF APPLICABLE) OF YOUR TRUST
CERTIFICATES IF THE TRUST DISPOSES OF THE UNDERLYING
SECURITIES ON A DEFAULT BY THE UNDERLYING SECURITIES
ISSUER OR IN THE EVENT THE UNDERLYING SECURITIES
ISSUER CEASES FILING EXCHANGE ACT REPORTS
If the underlying securities issuer defaults on its
obligations under the underlying securities or the
underlying securities issuer ceases to file Exchange
Act reports or ceases to satisfy the requirements of
Rule 3-10 of Regulation S-X under the Securities Act,
then the trust will either distribute the underlying
securities to the trust certificateholders or dispose
of them and distribute the proceeds to the trust
certificateholders. Your recovery in either of those
events may be limited by two factors:
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if a default occurs, the market value of the
underlying securities may be adversely affected
and the proceeds of their disposition may be lower
than the aggregate present value or stated amount
(if applicable) of the trust certificates; and |
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in either event, any distribution of funds or
underlying securities by the trust to the trust
certificateholders will be done in accordance with
the allocation ratio as described in the
applicable prospectus supplement relating to the
trust certificates. The funds or aggregate
principal amount of underlying securities you
receive on that distribution may be less than the
present value or stated amount (if applicable) of
your trust certificates. |
THE TRUSTEE WILL NOT MANAGE THE UNDERLYING SECURITIES
Except as described below, the trust will not dispose
of any underlying securities, even if an event occurs
that adversely affects the value of the underlying
securities or that adversely affects the underlying
securities issuer. As provided in the applicable
trust agreement, the trust will dispose of the
underlying securities only if
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there is a payment default on any underlying
securities, |
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there is another type of default that accelerates
the maturity of the underlying securities, or |
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the underlying securities issuer ceases to file
Exchange Act reports or ceases to satisfy the
requirements of Rule 3-10 of Regulation S-X under
the Securities Act. |
Under the first circumstance listed above, the
trustee must sell the underlying securities on behalf
of the trust, even if adverse market conditions
exist. The trustee has no discretion to do otherwise.
If adverse market conditions do exist at the time of
the trustees sale of the underlying securities, you
may incur greater losses than if the trust continued
to hold the underlying securities.
THE TRUST CERTIFICATES ARE SUBJECT TO THE
CREDITWORTHINESS OF THE UNDERLYING SECURITIES
ISSUER
The trust certificates represent interests in
obligations of the underlying securities issuer. In
particular, the trust certificates will be subject to
all the risks associated with directly investing in
the underlying securities issuers unsecured
unsubordinated debt obligations. Neither the
underlying indenture nor the underlying securities
place a limitation on the amount of indebtedness that
may be incurred by the underlying securities issuer.
THE PAYMENTS OWED TO THE TRUST CERTIFICATEHOLDERS ARE
UNSECURED OBLIGATIONS
In a liquidation, holders of the underlying
securities, including the trust, will be paid only
after holders of secured obligations of the
underlying securities issuer. According to the
underlying securities prospectus, the underlying
securities are general unsecured obligations of the
underlying securities issuer, which rank on a parity
with all other unsecured senior indebtedness of the
underlying securities issuer. However, if the
underlying securities issuer subjects any of its
property to a lien then the underlying securities,
and any other obligations which are then outstanding
and subject to a similar covenant, will be secured
ratably with the indebtedness or obligation secured
by that lien and for the same length of time, subject
to certain exceptions.
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THE RATINGS OF THE TRUST CERTIFICATES MAY CHANGE
At the time of issuance, Moodys and S&P assigned
ratings to the trust certificates equivalent to the
ratings of the underlying securities, as of the date
of the applicable prospectus supplement.
Any rating issued with respect to the trust
certificates is not a recommendation to purchase,
sell or hold a security. Ratings do not comment on
the market price of the trust certificates or their
suitability for a particular investor. We cannot
assure you that these ratings will remain for any
given period of time or that a ratings agency would
not revise or withdraw entirely the ratings if, in
its judgment, circumstances (including, without
limitation, the rating of the underlying securities)
merit. A revision or withdrawal of a rating may
adversely affect the market price of the trust
certificates.
If the underlying securities issuers credit rating
is downgraded, your trust certificates may become
less liquid and subject to increased price
volatility. If the underlying securities were
downgraded, the trust certificates would be similarly
downgraded. The market value of the underlying
securities would be expected to decrease in the event
of a downgrade. As a result, a downgrade could result
in the market price of the trust certificates
becoming increasingly volatile as the value of the
underlying security changes. Also, if the trust
certificates are downgraded to below investment grade
status, and enter what is commonly called junk
status, the trust certificates could become less
liquid.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 2. PROPERTIES
None.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. (REMOVED AND RESERVED)
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PART II
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
The Trust Certificates issued by PPLUS Trust Series
LMG-4 are represented by one or more physical
certificates registered in the name of Cede & Co.,
the nominee of the Depository Trust Company. The
Trust Certificates are listed on the New York Stock
Exchange.
ITEM 6. SELECTED FINANCIAL DATA
Not Applicable.
ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Not Applicable.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
Not Applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not Applicable.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
The Registrant has procedures so as to provide
reasonable assurance that its future Exchange Act
filings will be filed within the applicable time
periods.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Not Applicable.
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ITEM 11. EXECUTIVE COMPENSATION
Not Applicable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
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(a) |
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Securities Authorized For Issuance Under Equity
Compensation Plans: None. |
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(b) |
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Security Ownership Of Certain Beneficial Owners:
None. |
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Security Ownership Of Management: Not Applicable. |
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Changes In Control: None. |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
None.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Not Applicable.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements: Not Applicable.
(a)(2) Financial Statement Schedules: Not Applicable.
(a)(3) List of Exhibits
The following exhibits are filed as part of, and
incorporated by reference into, this Annual Report on
Form 10-K:
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31.1. |
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Certification of the Vice President of Registrant dated March 28,
2011, pursuant to Rules 13a-14 and 15d-14 under the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002, with respect to the Registrants Annual Report on
Form 10-K for the year ended December 31, 2010. |
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99.1. |
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Trustees Annual Compliance Certificate dated March 4, 2011. |
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99.2. |
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Report of PricewaterhouseCoopers LLP, Independent Registered Public
Accounting Firm, dated March 21, 2011, Registrants Assertion on
Compliance with PPLUS Minimum Servicing Standards dated March 21, 2011
and PPLUS Minimum Servicing Standards. |
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99.3. |
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Report of KPMG LLP, Independent Registered Public Accounting Firm,
dated March 2, 2011, The Bank of New York Mellons Assertion on
Compliance with PPLUS Minimum Servicing Standards dated March 2, 2011
and PPLUS Minimum Servicing Standards. |
(b) Exhibits
The Registrant hereby files as part of this
Annual Report on Form 10-K the exhibits
listed in Item 15(a)(3) set forth above.
(c) Financial Statement Schedules
Not Applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, hereunto duly authorized.
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MERRILL LYNCH DEPOSITOR, INC.
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Date: March 28, 2011 |
By: |
/s/
John Marciano |
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Name: |
John Marciano |
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Title: |
Vice President |
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