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:
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December 31, 2008
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001-31484
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MERRILL LYNCH DEPOSITOR, INC.
(ON BEHALF OF PREFERREDPLUS TRUST SERIES UPC-1)
(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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WORLD FINANCIAL CENTER,
NEW YORK, NEW YORK
(Address of principal
executive offices)
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10080
(Zip Code)
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Registrant’s telephone number, including area code: (212) 449-1000
Securities registered pursuant to Section 12(b) of the Act:
PreferredPLUS Trust Certificates Series UPC-1, 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 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 registrant’s 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. (Check one):
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 registrant’s most recently completed second fiscal
quarter.
Not Applicable.
Indicate the number of shares outstanding for each of the registrant’s 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 PreferredPLUS Trust Series UPC-1,
please refer to Unum Group Corporation’s (Commission
file number 001-11294) 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
SEC’s 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 SEC’s 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 issuer’s 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 THE UNDERLYING SECURITIES ARE REDEEMED PRIOR TO
THEIR MATURITY DATE OR IF ANY CALL WARRANTS ARE
EXERCISED, YOU MAY NOT BE ABLE TO REINVEST YOUR
REDEMPTION OR 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,
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whether the underlying securities issuer exercises
its option to redeem the underlying securities,
and
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whether the call warrant holders exercise their
optional rights to purchase outstanding trust
certificates.
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The underlying securities issuer has the right to
redeem the underlying securities at its option. Because
the underlying securities issuer has the right to
redeem the underlying securities early, we cannot
assure you that the trust will be able to hold the
underlying securities until their maturity date.
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 an early redemption or 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 an early redemption or exercise of any call
warrants. In addition, if the prevailing market value
of the trust certificates exceeds the redemption price
or call exercise price paid to you upon a redemption of
the underlying securities or the exercise of a call,
you will not be able to realize such excess. As well,
though holders of trust certificates are entitled to
receive a distribution of a proportionate amount of the
principal amount of the underlying securities on
December 15, 2028, if that amount exceeds the call
exercise price, then the call warrant holders are
likely to exercise their optional purchase rights. If
they do exercise those rights, you will receive the
call exercise price, not a proportional amount of the
principal amount on the underlying securities.
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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.
YOU MAY NOT RECOVER THE WHOLE OF THE STATED AMOUNT OR
PRESENT VALUE (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, 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 stated amount or present value (if
applicable) of the trust certificates; and
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The funds or aggregate principal amount of
underlying securities you receive on that
distribution may be less than the stated amount or
present value (if applicable) of your trust
certificates.
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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.
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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 trustee’s
sale of the underlying securities, you may incur
greater losses than if the trust continued to hold the
underlying securities.
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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 issuer’s unsecured subordinated
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 senior
unsecured unsubordinated obligations of the underlying
securities issuer and rank pari passu, or equally and
ratably, with all other senior unsecured and
unsubordinated indebtedness of the underlying
securities issuer from time to time outstanding.
THE RATINGS OF THE TRUST CERTIFICATES MAY CHANGE
At the time of issuance, Moody’s and/or 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 initial 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.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 2. PROPERTIES
None.
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ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
The Trust Certificates issued by PreferredPLUS Trust
Series UPC-1 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. MANAGEMENT’S 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.
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ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Not Applicable.
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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(c)
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Security Ownership Of Management: Not Applicable.
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(d)
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Changes In Control: None.
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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 Vice President of Registrant
dated March 27, 2009, 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 Registrant’s
Annual Report on Form 10-K for the year
ended December 31, 2008.
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99.1.
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Trustee’s Annual Compliance Certificate
dated March 6, 2009.
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99.2.
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Report of Deloitte & Touche LLP,
Independent Registered Public Accounting
Firm, dated March 23, 2009, Registrant’s
Assertion on Compliance with PPLUS Minimum
Servicing Standards dated March 23, 2009
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 6, 2009, The Bank of New York Mellon’s
Assertion on Compliance with PPLUS Minimum
Servicing Standards dated March 6,
2009 and PPLUS Minimum Servicing
Standards.
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(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 27, 2009
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By:
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/s/ Steven O’Neill
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Name:
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Steven O’Neill
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Title:
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Vice President
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