-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NRCLQrJxPcbYHCUOZzTFGva+7s+USOEO13jOOqnOsUfZgsHUahBkPHtBuHmp2WkQ SlO82jM40Q1XAthQCdjSFQ== 0000947871-02-001176.txt : 20020618 0000947871-02-001176.hdr.sgml : 20020618 20020618142535 ACCESSION NUMBER: 0000947871-02-001176 CONFORMED SUBMISSION TYPE: POS AM PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20020618 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERRILL LYNCH PIERCE FENNER & SMITH INC CENTRAL INDEX KEY: 0000728612 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AM SEC ACT: 1933 Act SEC FILE NUMBER: 333-54662 FILM NUMBER: 02681386 BUSINESS ADDRESS: STREET 1: 4 WORLD FINANCIAL CENTER STREET 2: NORTH TOWER FL 12 CITY: NEW YORK STATE: NY ZIP: 10080 BUSINESS PHONE: 2124496202 MAIL ADDRESS: STREET 1: 4 WORLD FINANCIAL CENTER STREET 2: NORTH TOWER FL 12 CITY: NEW YORK STATE: NY ZIP: 10080 POS AM 1 posam_061402.txt POST EFFECTIVE AMENDMENT NO. 3 TO FORM S-1 As filed with the Securities and Exchange Commission on June 18, 2002 Registration No. 333-54662 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- POST-EFFECTIVE AMENDMENT NO. 3 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------- Merrill Lynch, Pierce, Fenner & Smith Incorporated Initial Depositor (Exact name of registrant as specified in charter) ---------------- Retail HOLDRSsm Trust [Issuer with respect to the receipts] Delaware 6211 13-5674085 (State or other (Primary Standard Industrial (I.R.S. Employer jurisdiction of Classification Code Number) Identification incorporation or Number) organization) ---------------- 250 Vesey Street New York, New York 10281 (212) 449-1000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ---------------- Copies to: Andrea L. Dulberg, Esq. Andrew B. Janszky, Esq. Corporate Secretary Shearman & Sterling Merrill Lynch, Pierce, Fenner & Smith Incorporated 599 Lexington Avenue 250 Vesey Street New York, New York 10022 New York, New York 10281 (212) 848-4000 (212) 449-1000 (Name, address, including zip code, and telephone number, including area code, of agent for service) If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act, please check the following box. [_] PROSPECTUS [GRAPHIC OMITTED] 1,000,000,000 Depositary Receipts Retail HOLDRSsm Trust The Retail HOLDRSsm Trust issues Depositary Receipts called Retail HOLDRSsm representing your undivided beneficial ownership in the common stock of a group of specified companies that, among other things, sell retail merchandise to consumers through traditional retail stores, the Internet, mail order catalogs and other outlets. The Bank of New York is the trustee. You only may acquire, hold or transfer Retail HOLDRS in a round-lot amount of 100 Retail HOLDRS or round-lot multiples. Retail HOLDRS are separate from the underlying common stocks that are represented by the Retail HOLDRS. For a list of the names and the number of shares of the companies that make up a Retail HOLDR, see "Highlights of Retail HOLDRS--The Retail HOLDRS" starting on page 9. The trust will issue the additional Retail HOLDRS on a continuous basis. Investing in Retail HOLDRS involves significant risks. See "Risk Factors" starting on page 4. Retail HOLDRS are neither interests in nor obligations of Merrill Lynch, Pierce, Fenner & Smith Incorporated. Retail HOLDRS are not interests in the Bank of New York, as trustee. Please see "Description of the Depositary Trust Agreement" in this prospectus for a more complete description of the duties and responsibilities of the trustee, including the obligation of the trustee to act without negligence or bad faith. The Retail HOLDRS are listed on the American Stock Exchange under the symbol "RTH". On June 17, 2002, the last reported sale price of the Retail HOLDRS on the American Stock Exchange was $93.00. --------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is June 18, 2002. "HOLDRS" and "HOLding Company Depositary ReceiptS" are service marks of Merrill Lynch & Co., Inc. TABLE OF CONTENTS Page SUMMARY........................................................................3 RISK FACTORS...................................................................4 HIGHLIGHTS OF RETAIL HOLDRS....................................................9 THE TRUST.....................................................................16 DESCRIPTION OF RETAIL HOLDRS..................................................16 DESCRIPTION OF THE UNDERLYING SECURITIES......................................17 DESCRIPTION OF THE DEPOSITARY TRUST AGREEMENT.................................19 UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.................................23 ERISA CONSIDERATIONS..........................................................26 PLAN OF DISTRIBUTION..........................................................26 LEGAL MATTERS.................................................................27 WHERE YOU CAN FIND MORE INFORMATION...........................................27 --------------- This prospectus contains information you should consider when making your investment decision. With respect to information about Retail HOLDRS, you should rely only on the information contained in this prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell Retail HOLDRS in any jurisdiction where the offer or sale is not permitted. The Retail HOLDRS are not registered for public sale outside of the United States. Non-U.S. receipt holders should refer to "United States Federal Income Tax Consequences--Non-U.S. receipt holders" and we recommend that non-U.S. receipt holders consult their tax advisors regarding U.S. withholding and other taxes which may apply to ownership of the Retail HOLDRS or of the underlying securities through an investment in the Retail HOLDRS. 2 SUMMARY The Retail HOLDRS Trust was formed under the depositary trust agreement, dated as of March 12, 2001, among The Bank of New York, as trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, other depositors and the owners of the Retail HOLDRS. The trust is not a registered investment company under the Investment Company Act of 1940. The trust currently holds shares of common stock issued by a group of specified companies that, at the time of the initial offering, among other things, sold retail merchandise to consumers through traditional retail stores, the Internet, mail order catalogs and other outlets. The number of shares of each company's common stock held by the trust with respect to each round-lot of Retail HOLDRS is specified under "Highlights of Retail HOLDRS--The Retail HOLDRS." This group of common stocks and the securities of any company that may be added to the Retail HOLDRS are collectively referred to in this prospectus as the securities or the underlying securities. There are currently 20 companies included in the Retail HOLDRS, which may change as a result of reconstitution events, distributions of securities by the underlying issuers or other events. The Retail HOLDRS are separate from the underlying common stocks that are represented by the Retail HOLDRS. On June 17, 2002, there were 509,000 Retail HOLDRS outstanding. 3 RISK FACTORS An investment in Retail HOLDRS involves risks similar to investing directly in each of the underlying securities outside of the Retail HOLDRS, including the risks associated with concentrated investments in the retailing industry. General Risk Factors o Loss of investment. Because the value of Retail HOLDRS directly relates to the value of the underlying securities, you may lose a substantial portion of your investment in the Retail HOLDRS if the underlying securities decline in value. o Discount trading price. Retail HOLDRS may trade at a discount to the aggregate value of the underlying securities. o Ownership of only fractional shares in the underlying securities. As a result of distributions of securities by companies included in the Retail HOLDRS or other corporate events, such as mergers, a Retail HOLDR may represent an interest in a fractional share of an underlying security. You will only be entitled to voting, distribution and other beneficial ownership rights in the underlying securities in which you own only fractional shares to the extent that the depositary aggregates your fractional shares with the other shares of such underlying securities and passes on beneficial ownership rights, including distribution and voting rights, to you based on your proportional, fractional shares in the underlying securities. In addition, if you surrender your Retail HOLDRS to receive the underlying securities you will receive cash in lieu of your fractional shares. You will not be entitled to any securities if your interest in an underlying security is only a fraction of a share. o Not necessarily representative of the retailing industry. At the time of the initial offering, the companies included in Retail HOLDRS were generally considered to be involved in various aspects of the retailing industry. However, the market price of the underlying securities and the Retail HOLDRS may not necessarily follow the price movements of the entire retailing industry generally. If the underlying securities decline in value, your investment in the Retail HOLDRS will decline in value even if the market price of the securities of companies in the retailing industry generally increase in value. In addition, since the time of the initial offering, the companies included in the Retail HOLDRS may not be involved in the retailing industry. In this case, the Retail HOLDRS may no longer consist of securities issued only by companies involved in the retailing industry. o Not necessarily comprised only of retail companies. As a result of distributions of securities by companies included in the Retail HOLDRS or other corporate events, such as mergers, securities of companies that are not currently included in the Retail HOLDRS and that are not involved in the retailing industry may be included in the Retail HOLDRS. The securities of a new company will only be distributed from the Retail HOLDRS if the securities have a different Standard & Poor's Corporation sector classification than any of the underlying issuers included in Retail HOLDRS at the time of the distribution or the corporate event or if the securities are not listed for trading on a U.S. national securities exchange or through Nasdaq National Market System. As of January 2, 2002, Standard & Poor's Corporation sector classifications are based upon the Standard & Poor's Global Industry Classification Standard ("GICS") sectors. As there are only 10 broadly defined GICS sectors, the use of GICS sectors to determine whether a new company will be included in the Retail HOLDRS provides no assurance that each new company included in the Retail HOLDRS will be involved in the retailing industry. Currently, the underlying securities included in the Retail HOLDRS are represented in the Consumer Discretionary and Consumer Staples GICS sectors. As each Standard & Poor's GICS sector is defined so broadly, the securities of a new company could have the same GICS sector classification as a company currently included in the Retail HOLDRS yet not be involved in the retailing industry. In addition, the GICS sector classifications of securities included in the Retail HOLDRS may change over time if the companies that issued these securities change their focus of 4 operations or if Standard & Poor's alters the criteria it uses to determine GICS sectors, or both. Therefore, additional GICS sectors may be represented in the Retail HOLDRS, which may also result in the inclusion in the Retail HOLDRS of the securities of a new company that is not involved in the retailing industry. o No investigation of underlying securities. The underlying securities initially included in the Retail HOLDRS were selected by Merrill Lynch, Pierce, Fenner & Smith Incorporated based on the market capitalization of the issuers and the market liquidity of securities in the retailing industry, without regard for the value, price performance, volatility or investment merit of the underlying securities. Consequently, the Retail HOLDRS Trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and each of their respective affiliates, have not performed any investigation or review of the selected companies, including the public filings by the companies. Investors and market participants should not conclude that the inclusion of a company is any form of investment recommendation by the trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, or their respective affiliates. o Loss of Diversification. As a result of industry developments, reorganizations, or market fluctuations affecting the issuers of the underlying securities, Retail HOLDRS may not necessarily continue to be a diversified investment in the retailing industry. In addition, reconstitution events, distributions of securities by an underlying issuer or other events, which may result in the distribution or securities from, or the inclusion of additional securities in, Retail HOLDRS may reduce diversification. Retail HOLDRS may represent a concentrated investment in one or more of the underlying securities, which would reduce investment diversification and increase your exposure to the risks of concentrated investments. o Conflicting investment choices. In order to sell one or more of the underlying securities individually, participate in a tender offer relating to one or more of the underlying securities, or participate in any form of stock repurchase program by an issuer of an underlying security, you will be required to cancel your Retail HOLDRS and receive delivery of each of the underlying securities. The cancellation of your Retail HOLDRS will allow you to sell individual underlying securities or to deliver individual underlying securities in a tender offer or any form of stock repurchase program. The cancellation of Retail HOLDRS will involve payment of a cancellation fee to the trustee. o Trading halts. Trading in Retail HOLDRS on the American Stock Exchange may be halted if trading in one or more of the underlying securities is halted. Trading in Retail HOLDRS may be halted even if trading continues in some or all of the underlying securities. If trading is halted in the Retail HOLDRS, you will not be able to trade Retail HOLDRS and you will only be able to trade the underlying securities if you cancel your Retail HOLDRS and receive each of the underlying securities. o Delisting from the American Stock Exchange. If the number of companies whose securities are held in the trust falls below nine, the American Stock Exchange may consider delisting the Retail HOLDRS. If the Retail HOLDRS are delisted by the American Stock Exchange, a termination event will result unless the Retail HOLDRS are listed for trading on another U.S. national securities exchange or through the Nasdaq National Market System within five business days from the date the Retail HOLDRS are delisted. There are currently 20 companies whose securities are included in the Retail HOLDRS. o Possible conflicts of interest. Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, selected the underlying securities that were originally included in the Retail HOLDRS and may face possible conflicts of interest as Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates may engage in investment banking and other activities, and may provide services to issuers of the underlying securities in connection with its business. 5 o Delays in distributions. The depositary trust agreement provides that the trustee will use its reasonable efforts to distribute any cash or other distributions paid in respect of the underlying securities to you as soon as practicable after receipt of such distribution. However, you may receive such cash or other distributions later than you would if you owned the underlying securities outside of the Retail HOLDRS. In addition, you will not be entitled to any interest on any distribution by reason of any delay in distribution by the depositary. Risk Factors Specific to Companies Involved in the Retailing Industry o Retail companies operate in a highly competitive industry and face intense price competition. The retailing industry is highly competitive with numerous industry participants. The companies included in the Retail HOLDRS compete with general merchandise, apparel and household merchandise retailers, Internet retailers, discount retailers, television direct marketers and mail-order catalog retailers. Some of the principal factors which retail companies must address to remain competitive include: o merchandise selection and quality; o brand recognition; o price; o convenience; o customer service; and o timely product delivery. Retail companies may also face increased pricing pressure as more retail outlets, especially electronic-commerce retailers and discount retailers, are established that are able to offer similar merchandise at reduced prices. If any of the companies included in the Retail HOLDRS fail to successfully compete and maintain customer satisfaction and market share, its stock price may decline and will negatively affect the market price of the Retail HOLDRS. o The companies in the Retail HOLDRS may be subject to seasonal and quarterly variations in the retailing industry. The apparel and general merchandise segments of the retailing industry have historically been subject to significant seasonal and quarterly variations. Many retailers derive a significant portion of their annual revenue during the months of November and December. In anticipation of increased sales activity during this period many retail companies incur significant additional expenses. If the demand during November and December is miscalculated, a retail company could have significant excess inventory, which would have an adverse affect on its financial performance. In addition, a significant shortfall in sales during November and December would have an adverse impact on the results of operations of a retail company. Any seasonal or quarterly fluctuations that a retail company reports may not match the expectations of market analysts and investors. This, along with any changes in the expectations of consumer demand, could cause the market price of the Retail HOLDRS to fluctuate significantly. o Retail companies' revenues may be adversely affected by general economic factors. General economic factors in the markets in which retail companies operate, many of which are beyond their control, may nevertheless materially adversely affect company forecasts and actual performance. These factors include: o interest rates; o difficulty in obtaining additional financing; 6 o recession; o inflation and deflation; o consumer credit availability and debt levels; o tax rates and policy; o unemployment trends; and o other matters that influence consumer confidence and spending. These factors may negatively affect consumer spending and confidence and result in reduced revenues for retail companies. As many of the companies included in the Retail HOLDRS are apparel and general merchandise retailers that rely on consumers' purchases of discretionary items for a significant portion of their sales, during periods where disposable income is lower or during periods of economic uncertainty, consumer purchases of these items may decline. As a result, retail companies may be more adversely affected by a cyclical downturn in the economy than other companies. In addition, increased volatility in financial markets may cause these factors to change with a greater degree of frequency and magnitude. o Companies whose securities are included in the Retail HOLDRS may need additional financing, which may be difficult to obtain. Failure to obtain necessary financing or doing so on unattractive terms could adversely affect development and marketing efforts and other operations of companies whose securities are included in the Retail HOLDRS. Companies whose securities are included in Retail HOLDRS may need to raise additional capital in order to fund the continued development and marketing of their products or to fund strategic acquisitions or investments. Their ability to obtain additional financing will depend on a number of factors, including market conditions, operating performance and investor interest. These factors may make the timing, amount, terms and conditions of any financing unattractive. If adequate funds are not available or are not available on acceptable terms, companies whose securities are included in the Retail HOLDRS may have to forego strategic acquisitions or investments, reduce or defer their development activities, delay their introduction of new products and services or reduce or terminate their operations generally. Any of these actions may reduce the market price of stocks in the retailing industry. o Other broad market and industry factors may decrease the stock price of retail stocks, regardless of their operating results. Market fluctuations, as well as general political and economic conditions, such as recession, war or interest rate or currency rate fluctuations, also may decrease the market price of retailing stocks. Current economic conditions have adversely affected employment and other significant elements of the economy that drive productivity and the financial strength of businesses. These economic conditions could have a material adverse affect on retail sales and, as a result, the financial condition and results of operations of companies whose common stocks are included in Retail HOLDRS. The events of September 11, 2001, in New York and Washington, D.C., as well as the United States' war on terrorism, may have an unpredictable effect on economic conditions of companies whose common stocks are included in Retail HOLDRS. Companies whose common stocks are included in Retail HOLDRS results of operations and financial condition could be adversely impacted if those events and other related events cause further disruptions in the economy. o Many of the companies included in the Retail HOLDRS are dependent on third party suppliers and distribution systems. Many of the companies included in the Retail HOLDRS purchase merchandise both directly from brand owners and indirectly from retailers and third party suppliers. These companies may also be dependent upon suppliers for the products used for their own brand name merchandise. Reliance on third party suppliers subjects retail companies to risks of delivery delays, price increases and receipt of non-conforming or poor quality merchandise. The purchase of 7 merchandise from parties other than the brand owners also increases the risk that a retail company could mistakenly purchase and sell non-authentic or damaged goods, which may expose them to liability. In addition, many of the companies in the Retail HOLDRS use third party distributors and transportation providers over which they have no control to deliver and transport their merchandise. If retail companies encounter problems with their suppliers or distributors, their reputation could be harmed and their operations and financial conditions could be adversely affected. o Unexpected changes in consumer trends can affect the business of retail companies. Consumer trends can change rapidly, and the retail business is sensitive to these changes. The consumer companies included in the Retail HOLDRS may not accurately anticipate shifts in consumer trends and adjust their merchandise mix to appeal to changing consumer tastes in a timely manner. If a company misjudges the market for its products or is unsuccessful in responding to changes in consumer trends or in market demand, the retail company could experience insufficient or excess inventory levels or higher markdowns, any of which would have a material adverse effect on its business, financial condition and results of operations and could adversely affect the price of the Retail HOLDRS. o Retail companies may be unable to protect their intellectual property rights and may be liable for infringing the intellectual property rights of others. Third parties may infringe or misappropriate the trademarks or other proprietary rights of the retail companies included in the Retail HOLDRS, which could have a material adverse effect on their business, results of operations or financial condition. Retail companies could also incur substantial costs in asserting and defending their intellectual property or proprietary rights. In addition, third parties may assert infringement claims against companies included in the Retail HOLDRS for infringement or misappropriation of their proprietary rights. These claims and any resulting litigation, if it occurs, could subject companies included in the Retail HOLDRS to significant liability for damages and may also result in limitations on the ability to use the intellectual property subject to the claim. 8 HIGHLIGHTS OF RETAIL HOLDRS This discussion highlights information regarding Retail HOLDRS. We present certain information more fully in the rest of this prospectus. You should read the entire prospectus carefully before you purchase Retail HOLDRS. Issuer................................ Retail HOLDRS Trust. The trust............................. The Retail HOLDRS Trust was formed under the depositary trust agreement, dated as of March 12, 2001 among The Bank of New York, as trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, other depositors and the owners of the Retail HOLDRS. The trust is not a registered investment company under the Investment Company Act of 1940. Initial depositor..................... Merrill Lynch, Pierce, Fenner & Smith Incorporated. Trustee............................... The Bank of New York, a New York state-chartered banking organization, is the trustee and receives compensation as set forth in the depositary trust agreement. The trustee is responsible for receiving deposits of underlying securities and delivering Retail HOLDRS representing the underlying securities issued by the trust. The trustee holds the underlying securities on behalf the holders of Retail HOLDRS. Purpose of Retail HOLDRS.............. Retail HOLDRS are designed to achieve the following: Diversification. Retail HOLDRS are designed to allow you to diversify your investments in the retailing industry through a single, exchange-listed instrument representing your undivided beneficial ownership of the underlying securities. Flexibility. The beneficial owners of Retail HOLDRS have undivided beneficial ownership interests in each of the underlying securities represented by the Retail HOLDRS, and can cancel their Retail HOLDRS to receive each of the underlying securities represented by the Retail HOLDRS. Transaction costs. The expenses associated with buying and selling Retail HOLDRS in the secondary market are expected to be less than separately buying and selling each of the underlying securities in a traditional brokerage account with transaction-based charges. Trust assets.......................... The trust holds securities issued by specified companies that, when initially selected, were in the retailing industry. Except when a reconstitution event, distribution of securities by an underlying issuer or other event occurs, the group of companies will not change. Reconstitution events are described in this prospectus under the heading "Description of the Depositary Trust Agreement--Distributions" and "--Reconstitution events." There are currently 20 companies included in the Retail HOLDRS. The trust's assets may increase or decrease as a result of in-kind deposits and withdrawals of the underlying securities during the life of the trust. 9 The Retail HOLDRS..................... The trust has issued, and may continue to issue, Retail HOLDRS that represent your undivided beneficial ownership interest in the shares of U.S.-traded securities held by the trust on your behalf. The Retail HOLDRS themselves are separate from the underlying securities that are represented by the Retail HOLDRS. The following table provides: - the names of the 20 issuers of the underlying securities currently represented by the Retail HOLDRS, - stock ticker symbols, - share amounts represented by a round-lot of 100 Retail HOLDRS, and - the principal U.S. market on which the underlying securities are traded. Primary Share Trading Name of Company Ticker Amounts Market - ------------------------------ -------- -------- ----------- Albertson's Inc. ABS 8 NYSE Amazon.com, Inc. AMZN 7 Nasdaq Best Buy Co., Inc. BBY 6 NYSE Costco Wholesales Corporation COST 8 Nasdaq CVS Corporation CVS 7 NYSE Federated Department Stores FD 4 NYSE Kohl's Corporation KSS 6 NYSE Lowe's Companies, Inc. LOW 14 NYSE RadioShack Corporation RSH 3 NYSE Safeway Inc. SWY 9 NYSE Sears, Roebuck and Co. S 6 NYSE Target Corporation TGT 16 NYSE The Gap, Inc. GPS 16 NYSE The Home Depot, Inc. HD 40 NYSE The Kroger Co. KR 15 NYSE The Limited, Inc. LTD 8 NYSE The May Department Stores Company MAY 6 NYSE The TJX Companies, Inc. TJX 10 NYSE Walgreen Co. WAG 19 NYSE Wal-Mart Stores, Inc. WMT 36 NYSE - ------------------------- (1) Best Buy Co., Inc. announced a 3-for-2 stock split on its common stock payable to shareholders of record as of April 26, 2002. Best Buy began trading on a split-adjusted basis on May 13, 2002. Effective May 15, 2002 the share amount of Best Buy represented by a round lot of 100 Retail HOLDRS is 6. (2) The TJX Companies, Inc. announced a 2-for-1 stock split on its common stock payable to shareholders of record as of April 25, 2002. TJX began trading on a split-adjusted basis on May 9, 2002. Effective May 14, 2002, the share amount of TJX represented by a round lot of 100 Retail HOLDRS is 10. 10 The companies whose common stocks were included in the Retail HOLDRS at the time Retail HOLDRS were originally issued were generally considered to be among the 20 largest and most liquid companies with U.S.-traded securities involved in the retailing industry, as measured by market capitalization and trading volume on January 24, 2001. The market capitalization of a company is determined by multiplying the market price of its common stock by the number of its outstanding shares of common stock. The trust will only issue and cancel, and you may only obtain, hold, trade or surrender Retail HOLDRS in a round-lot of 100 Retail HOLDRS and round-lot multiples. The trust will only issue Retail HOLDRS upon the deposit of the whole shares represented by a round-lot of 100 Retail HOLDRS. In the event that a fractional share comes to be represented by a round-lot of Retail HOLDRS, the trust may require a minimum of more than one round-lot of 100 Retail HOLDRS for an issuance so that the trust will always receive whole share amounts for issuance of Retail HOLDRS. The number of outstanding Retail HOLDRS will increase and decrease as a result of in-kind deposits and withdrawals of the underlying securities. The trust will stand ready to issue additional Retail HOLDRS on a continuous basis when an investor deposits the required securities with the trustee. Purchases............................. You may acquire Retail HOLDRS in two ways: - through an in-kind deposit of the required number of securities of the underlying issuers with the trustee, or - through a cash purchase in the secondary trading market. Issuance and cancellation fees............................... If you wish to create Retail HOLDRS by delivering to the trust the requisite securities represented by a round-lot of 100 Retail HOLDRS, The Bank of New York, as trustee, will charge you an issuance fee of up to $10.00 for each round-lot of 100 Retail HOLDRS. If you wish to cancel your Retail HOLDRS and withdraw your underlying securities, The Bank of New York, as trustee will charge you a cancellation fee of up to $10.00 for each round-lot of 100 Retail HOLDRS. Commissions........................... If you choose to deposit underlying securities in order to receive Retail HOLDRS, you will be responsible for paying any sales commission associated with your purchase of the underlying securities that is charged by your broker in addition to the issuance fee charged by the trustee, described above. Custody fees.......................... The Bank of New York, as trustee and as custodian, will charge you a quarterly custody fee of $2.00 for each round-lot of 100 Retail HOLDRS, to be deducted from any cash dividend or other cash distributions on underlying securities received by the trust. With respect to the aggregate custody fee payable in any calendar year for each Retail HOLDR, the trustee will waive that portion of the fee which exceeds the total cash dividends and other cash distributions received, or to be received, and payable with respect to such calendar year. Rights relating to Retail HOLDRS....................... You have the right to withdraw the underlying securities upon request by delivering a round-lot or integral multiple of a round-lot of Retail 11 HOLDRS to the trustee, during the trustee's business hours, and paying the cancellation fees, taxes, and other charges. You should receive the underlying securities no later than the business day after the trustee receives a proper notice of cancellation. The trustee will not deliver fractional shares of underlying securities. To the extent that any cancellation of Retail HOLDRS would otherwise require the delivery of a fractional share, the trustee will sell the fractional share in the market and the trust, in turn, will deliver cash in lieu of the fractional share. Except with respect to the right to vote for dissolution of the trust, the Retail HOLDRS themselves will not have voting rights. Rights relating to the underlying securities....................... Retail HOLDRS represents your beneficial ownership of the underlying underlying securities. Owners of Retail HOLDRS have the same rights and privileges as if they owned the underlying securities beneficially outside of Retail HOLDRS. These include the right to instruct the trustee to vote the underlying securities or you may attend shareholder meetings yourself, the right to receive any dividends and other distributions on the underlying securities that are declared and paid to the trustee by an issuer of an underlying security, the right to pledge Retail HOLDRS and the right to surrender Retail HOLDRS to receive the underlying securities. Retail HOLDRS does not change your beneficial ownership in the underlying securities under United States federal securities laws, including sections 13(d) and 16(a) of the Exchange Act. As a result, you have the same obligations to file insider trading reports that you would have if you held the underlying securities outside of Retail HOLDRS. However, due to the nature of Retail HOLDRS, you will not be able to participate in any dividend reinvestment program of an issuer of underlying securities unless you cancel your Retail HOLDRS (and pay the applicable fees) and receive all of the underlying securities. A holder of Retail HOLDRS is not a registered owner of the underlying securities. In order to become a registered owner, a holder of Retail HOLDRS would need to surrender their Retail HOLDRS, pay the applicable fees and expenses, receive all of the underlying securities and follow the procedures established by the issuers of the underlying securities for registering their securities in the name of such holder. You retain the right to receive any reports and communications that the issuers of underlying securities are required to send to beneficial owners of their securities. As such, you will receive such reports and communications from the broker through which you hold your Retail HOLDRS in the same manner as if you beneficially owned your underlying securities outside of Retail HOLDRS in "street name" through a brokerage account. The trustee will not attempt to exercise the right to vote that attaches to, or give a proxy with respect to, the underlying securities other than in accordance with your instructions. The depositary trust agreement entitles you to receive, subject to certain limitations and net of any fees and expenses of the trustee, any distributions of cash (including dividends), securities or property made with respect to the underlying securities. However, any distribution of securities by an issuer of underlying securities will be deposited into the trust and will become part of the underlying securities unless the distributed securities are not listed for trading on a U.S. national securities exchange or through the Nasdaq National Market System or the distributed securities have a Standard & Poor's GICS sector classification that is different from the GICS sectors classifications represented in the Retail HOLDRS at the time of the distribution. In addition, if the issuer of 12 underlying securities offers rights to acquire additional underlying securities or other securities, the rights may be made available to you, may be disposed of or may lapse. There may be a delay between the time any cash or other distribution is received by the trustee with respect to the underlying securities and the time such cash or other distributions are distributed to you. In addition, you are not entitled to any interest on any distribution by reason of any delay in distribution by the trustee. If any tax or other governmental charge becomes due with respect to Retail HOLDRS or any underlying securities, you will be responsible for paying that tax or governmental charge. If you wish to participate in a tender offer for any of the underlying securities, or any form of stock repurchase program by an issuer of an underlying security, you must surrender your Retail HOLDRS (and pay the applicable fees and expenses) and receive all of your underlying securities in exchange for your Retail HOLDRS. For specific information about obtaining your underlying securities, you should read the discussion under the caption "Description of the Depositary Trust Agreement--Withdrawal of underlying securities." Ownership rights in fractional shares in the underlying securities................ As a result of distributions of securities by companies included in the Retail HOLDRS or other corporate events, such as mergers, a Retail HOLDR may represent an interest in a fractional share of an underlying security. You are entitled to receive distributions proportionate to your fractional shares. In addition, you are entitled to receive proxy materials and other shareholder communications and you are entitled to exercise voting rights proportionate to your fractional shares. The trustee will aggregate the votes of all of the share fractions represented by Retail HOLDRS and will vote the largest possible number of whole shares. If, after aggregation, there is a fractional remainder, this fraction will be ignored, because the issuer will only recognize whole share votes. For example, if 100,001 Retail HOLDRS are outstanding and each Retail HOLDR represents 1.75 shares of an underlying security, there will be 175,001.75 votes of the underlying security represented by Retail HOLDRS. If 50,000 holders of such Retail HOLDRS vote their underlying securities "yes" and 50,001 vote "no," there will be 87,500 affirmative votes and 87,501.75 negative votes. The trustee will ignore the .75 negative votes and will deliver to the issuer 87,500 affirmative votes and 87,501 negative votes. Reconstitution events................. The depositary trust agreement provides for the automatic distribution of underlying securities from the Retail HOLDRS to you in the following four circumstances: A. If an issuer of underlying securities no longer has a class of securities registered under section 12 of the Securities Exchange Act of 1934, then its securities will no longer be an underlying security and the trustee will distribute the shares of that company to the owners of the Retail HOLDRS. B. If the SEC finds that an issuer of underlying securities should be registered as an investment company under the Investment Company Act of 1940, and the trustee has actual knowledge of the 13 SEC finding, then the trustee will distribute the shares of that company to the owners of the Retail HOLDRS. C. If the underlying securities of an issuer cease to be outstanding as a result of a merger, consolidation or other corporate combination, the trustee will distribute the consideration paid by and received from the acquiring company or the securities received in exchange for the securities of the underlying issuer whose securities cease to be outstanding to the beneficial owners of Retail HOLDRS only if the distributed securities have a different Standard & Poor's GICS sector classification than any of the underlying securities represented in the Retail HOLDRS at the time of the distribution or exchange or if the securities received are not listed for trading on a U.S. national securities exchange or through the Nasdaq National Market System. In any other case, the additional securities received will be deposited into the trust. D. If an issuer's underlying securities are delisted from trading on a U.S. national securities exchange or through the Nasdaq National Market System and are not listed for trading on another U.S. national securities exchange or through the Nasdaq National Market System within five business days from the date the securities are delisted. To the extent a distribution of underlying securities from the Retail HOLDRS is required as a result of a reconstitution event, the trustee will deliver the underlying security to you as promptly as practicable after the date that the trustee has knowledge of the occurrence of a reconstitution event. In addition, securities of a new company will be added to the Retail HOLDRS, as a result of a distribution of securities by an underlying issuer, where a corporate event occurs, or where the securities of an underlying issuer are exchanged for the securities of another company, unless the securities received have a Standard & Poor's GICS sector classification that is different from the GICS sector classification of any other security then included in the Retail HOLDRS or are not listed for trading on a U.S. national securities exchange or through the Nasdaq National Market System. It is anticipated, as a result of the broadly defined Standard & Poor's GICS sectors, that most distributions or exchanges of securities will result in the inclusion of new securities in Retail HOLDRS. The trustee will review the Standard & Poor's GICS sector classifications of securities to determine whether securities received as a result of a distribution by an underlying issuer or as consideration for securities included in the Retail HOLDRS will be distributed from the Retail HOLDRS to you. Standard & Poor's sector classification..................... Standard & Poor's Corporation is an independent source of market information that, among other things, maintains the Global Industry Classification Standard, referred to herein as "GICS," which classifies the securities of public companies into various sector classifications based upon GICS sectors, which are derived from its own criteria. The GICS classification standards were exclusively effective as of January 2, 2002. There are 10 Standard & Poor's GICS sectors and each class of publicly traded securities of a company are given only one GICS sector classification. The securities included in the Retail HOLDRS are currently 14 represented in the Consumer Discretionary and Consumer Staples GICS sectors. The Standard & Poor's GICS sector classifications of the securities included in the Retail HOLDRS may change over time if the companies that issued these securities change their focus of operations or if Standard & Poor's alters the criteria it uses to determine GICS sectors, or both. Termination events.................... A. The Retail HOLDRS are delisted from the American Stock Exchange and are not listed for trading on another U.S. national securities exchange or through the Nasdaq National Market System within five business days from the date the Retail HOLDRS are delisted. B. The trustee resigns and no successor trustee is appointed within 60 days from the date the trustee provides notice to Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, of its intent to resign. C. 75% of beneficial owners of outstanding Retail HOLDRS vote to dissolve and liquidate the trust. If a termination event occurs, the trustee will distribute the underlying securities to you as promptly as practicable after the termination event. Upon termination of the depositary trust agreement and prior to distributing the underlying securities to you, the trustee will charge you a cancellation fee of up to $10.00 per round-lot of 100 Retail HOLDRS surrendered, along with any taxes or other governmental charges, if any. United States federal income tax consequences.................... The United States federal income tax laws will treat a U.S. holder of Retail HOLDRS as directly owning the underlying securities. The Retail HOLDRS themselves will not result in any United States federal tax consequences separate from the tax consequences associated with ownership of the underlying securities. Listing............................... The Retail HOLDRS are listed on the American Stock Exchange under the symbol "RTH." On June 17, 2002 the last reported sale price of the Retail HOLDRS on the American Stock Exchange was $93.00. Trading............................... Investors are only able to acquire, hold, transfer and surrender a round-lot of 100 Retail HOLDRS. Bid and ask prices, however, are quoted per single Retail HOLDR. Clearance and settlement.............. Retail HOLDRS have been issued in book-entry form. Retail HOLDRS are evidenced by one or more global certificates that the trustee has deposited with The Depository Trust Company, referred to as DTC. Transfers within DTC will be in accordance with DTC's usual rules and operating procedures. For further information see "Description of Retail HOLDRS." 15 THE TRUST General. This discussion highlights information about the Retail HOLDRS Trust. You should read this information, information about the depositary trust agreement as well as the depositary trust agreement before you purchase Retail HOLDRS. The material terms of the depositary trust agreement are described in this prospectus under the heading "Description of the Depositary Trust Agreement." The Retail HOLDRS Trust. The trust was formed pursuant to the depositary trust agreement, dated as of March 12, 2001. The Bank of New York will be the trustee. The Retail HOLDRS Trust is not a registered investment company under the Investment Company Act of 1940. The Retail HOLDRS Trust is intended to hold deposited shares for the benefit of owners of Retail HOLDRS. The trustee will perform only administrative and ministerial acts. The property of the trust will consist of the underlying securities and all monies or other property, if any, received by the trustee. The trust will terminate on December 31, 2041, or earlier if a termination event occurs. DESCRIPTION OF RETAIL HOLDRS The trust has issued Retail HOLDRS under the depositary trust agreement described in this prospectus under the heading "Description of the Depositary Trust Agreement." The trust may issue additional Retail HOLDRS on a continuous basis when an investor deposits the requisite underlying securities with the trustee. You may only acquire, hold, trade and surrender Retail HOLDRS in a round-lot of 100 Retail HOLDRS and round-lot multiples. The trust will only issue Retail HOLDRS upon the deposit of the whole shares of underlying securities that are represented by a round-lot of 100 Retail HOLDRS. In the event of a stock split, reverse stock split, or other distribution by the issuer of an underlying security that results in a fractional share becoming represented by a round-lot of Retail HOLDRS, the trust may require a minimum of more than one round-lot of 100 Retail HOLDRS for an issuance so that the trust will always receive whole share amounts for issuance of Retail HOLDRS. Retail HOLDRS will represent your individual and undivided beneficial ownership interest in the specified underlying securities. The companies selected as part of this receipt program are listed above in the section entitled "Highlights of Retail HOLDRS--The Retail HOLDRS." Beneficial owners of Retail HOLDRS will have the same rights and privileges as they would have if they beneficially owned the underlying securities outside of the trust. These include the right of investors to instruct the trustee to vote the securities, to receive dividends and other distributions on the underlying securities, if any are declared and paid to the trustee by an issuer of an underlying security, and the right to cancel Retail HOLDRS to receive the underlying securities. See "Description of the Depositary Trust Agreement." Retail HOLDRS are not intended to change your beneficial ownership in the underlying securities under federal securities laws, including sections 13(d) and 16(a) of the Securities Exchange Act of 1934, referred to herein as the Exchange Act. The trust will not publish or otherwise calculate the aggregate value of the underlying securities represented by a receipt. Retail HOLDRS may trade in the secondary market at prices that are lower than the aggregate value of the corresponding underlying securities. If, in such case, an owner of Retail HOLDRS wishes to realize the dollar value of the underlying securities, that owner will have to cancel the Retail HOLDRS. Such cancellation will require payment of fees and expenses as described in "Description of the Depositary Trust Agreement--Withdrawal of underlying securities." Retail HOLDRS are evidenced by one or more global certificates that the trustee has deposited with DTC and register in the name of Cede & Co., as nominee for DTC. Retail HOLDRS are available only in book-entry form. Owners of Retail HOLDRS may hold their Retail HOLDRS through DTC, if they are participants in DTC, or indirectly through entities that are participants in DTC. 16 DESCRIPTION OF THE UNDERLYING SECURITIES Selection criteria. The underlying securities of the Retail HOLDRS are the common stocks of a group of specified companies that, at the time of initial selection, among other things, sold merchandise to retail consumers through traditional retail stores, the Internet, mail order catalogs and other outlets and whose securities are registered under Section 12 of the Exchange Act. The issuers of the underlying securities were considered to be among the largest, most liquid companies involved in the retailing industry as measured by market capitalization and trading volume. The Retail HOLDRS may no longer consist of securities issued by companies involved in the retailing industry. Merrill Lynch, Pierce, Fenner & Smith Incorporated will determine, in its sole discretion, whether the issuer of a particular underlying security remains in the retailing business and will undertake to make adequate disclosure when necessary. Underlying securities. For a list of the underlying securities represented by Retail HOLDRS, please refer to "Highlights of Retail HOLDRS--The Retail HOLDRS." If the underlying securities change because of a reconstitution event, a distribution of securities by an underlying issuer or other event, a revised list of underlying securities will be set forth in a prospectus supplement filed with the SEC on a periodic basis. No investigation. The trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and any affiliate of these entities, have not performed any investigation or review of the selected companies, including the public filings by the companies. Accordingly, before you acquire Retail HOLDRS, you should consider publicly available financial and other information about the issuers of the underlying securities. See "Risk Factors" and "Where You Can Find More Information." Investors and market participants should not conclude that the inclusion of a company in the list is any form of investment recommendation of that company by the trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated or any of their respective affiliates. General background and historical information. For a brief description of the business of each of the issuers of the underlying securities and monthly pricing information showing the historical performance of each underlying issuer's securities, see "Annex A." 17 The following table and graph set forth the composite performance of all of the 20 underlying securities currently represented by a single Retail HOLDR, measured at the close of each month from May 1997, the first month when all of the underlying securities were publicly traded, and thereafter as of the end of each month to May 31, 2002. The performance table and graph data are adjusted for any splits that may have occurred over the measurement period. Past movements of the underlying securities are not necessarily indicative of future values.
1997 Value 1998 Value 1999 Value 2000 Value 2001 Value 2002 Value - ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- May 30......... 36.98 January 30.. 50.51 January 29.. 93.51 January 31. 95.49 January 31. 99.66 January 31 98.47 June 30........ 39.76 February 27. 55.79 February 26. 93.51 February 29 92.78 February 29 93.72 February 28 98.68 July 31........ 44.27 March 31.... 59.92 March 31.... 96.90 March 31... 105.84 March 31... 91.16 March 28. 99.54 August 29...... 42.25 April 30.... 60.34 April 30.... 94.84 April 28... 98.96 April 28... 95.43 April 30. 96.48 September 30... 44.30 May 29...... 63.15 May 28...... 89.52 May 31..... 94.24 May 31..... 96.34 May 31... 94.87 October 31..... 44.88 June 30..... 68.50 June 30..... 98.46 June 30.... 92.06 June 29.... 91.87 November 28 48.38 July 31..... 68.48 July 30..... 93.81 July 31.... 91.43 July 31.... 96.34 December 31.... 48.97 August 31... 61.44 August 31... 88.34 August 31.. 85.31 August 31.. 88.41 September 30 62.62 September 30 89.58 September 29 89.27 September 28 79.32 October 30.. 70.36 October 29.. 95.60 October 31. 88.44 October 31. 81.31 November 30. 77.92 November 30. 100.37 November 30 87.51 November 30 92.85 December 31. 89.06 December 31. 109.94 December 29 92.31 December 29 96.59
[GRAPHIC OMITTED] 16 DESCRIPTION OF THE DEPOSITARY TRUST AGREEMENT General. The depositary trust agreement, dated as of March 12, 2001, among Merrill Lynch, Pierce, Fenner & Smith Incorporated, The Bank of New York, as trustee, other depositors and the owners of the Retail HOLDRS, provides that Retail HOLDRS will represent an owner's undivided beneficial ownership interest in the securities of the underlying companies. The trustee. The Bank of New York serves as trustee for the Retail HOLDRS. The Bank of New York, which was founded in 1784, was New York's first bank and is the oldest bank in the country still operating under its original name. The Bank is a state-chartered New York banking corporation and a member of the Federal Reserve System. The Bank conducts a national and international wholesale banking business and a retail banking business in the New York City, New Jersey and Connecticut areas, and provides a comprehensive range of corporate and personal trust, securities processing and investment services. Issuance, transfer and surrender of Retail HOLDRS. You may create and cancel Retail HOLDRS only in round-lots of 100 Retail HOLDRS. You may create Retail HOLDRS by delivering to the trustee the requisite underlying securities. The trust will only issue Retail HOLDRS upon the deposit of the whole shares represented by a round-lot of 100 Retail HOLDRS. In the event that a fractional share comes to be represented by a round-lot of Retail HOLDRS, the trust may require a minimum of more than one round-lot of 100 Retail HOLDRS for an issuance so that the trust will always receive whole share amounts for issuance of Retail HOLDRS. Similarly, you must surrender Retail HOLDRS in integral multiples of 100 Retail HOLDRS to withdraw deposited shares from the trust. The trustee will not deliver fractional shares of underlying securities, and to the extent that any cancellation of Retail HOLDRS would otherwise require the delivery of fractional shares, the trust will deliver cash in lieu of such shares. You may request withdrawal of your deposited shares during the trustee's normal business hours. The trustee expects that in most cases it will deliver your deposited shares within one business day of your withdrawal request. Voting rights. The trustee will deliver to you proxy solicitation materials provided by issuers of the underlying securities to you so as to permit you to give the trustee instructions as to how to vote on matters to be considered at any annual or special meetings held by issuers of the underlying securities. Under the depositary trust agreement, any beneficial owner of Retail HOLDRS, other than Merrill Lynch, Pierce, Fenner & Smith Incorporated owning Retail HOLDRS for its own proprietary account as principal, will have the right to vote to dissolve and liquidate the trust. Distributions. You will be entitled to receive, net of trustee fees, distributions of cash, including dividends, securities or property, if any, made with respect to the underlying securities. The trustee will use its reasonable efforts to ensure that it distributes these distributions as promptly as practicable after the date on which it receives the distribution. Therefore, you may receive your distributions substantially later than you would have had you held the underlying securities directly. Any distributions of securities by an issuer of underlying securities will be deposited into the trust and will become part of the Retail HOLDRS unless such securities are not listed for trading on a U.S. national securities exchange or through the Nasdaq National Market System or such distributed securities have a different Standard & Poor's GICS sector classification than any of the underlying securities represented in the Retail HOLDRS at the time of the distribution of such securities. In addition, if the issuer of underlying securities offers rights to acquire additional underlying securities or other securities, the rights will be made available to you through the trustee, if practicable, and if the rights and the securities that those rights relate to are exempt from registration or are registered under the Securities Act. Otherwise, if practicable, the rights will be disposed of and the proceeds provided to you by the trustee. In all other cases, the rights will lapse. You will be obligated to pay any tax or other charge that may become due with respect to Retail HOLDRS. The trustee may deduct the amount of any tax or other governmental charge from a distribution before making payment to you. In addition, the trustee will deduct its quarterly custody fee of $2.00 for each round-lot of 100 Retail HOLDRS from quarterly dividends, if any, paid to the trustee by the issuers of the underlying securities. With respect to the aggregate custody fee payable in any calendar year for each Retail HOLDR, the trustee will waive that portion of the fee which exceeds the total cash dividends and other cash distributions received, or to be received, and payable with respect to such calendar year. 19 Record dates. With respect to dividend payments and voting instructions, the trustee expects to fix the trust's record dates as close as possible to the record date fixed by the issuer of the underlying securities. Shareholder communications. The trustee promptly will forward to you all shareholder communications that it receives from issuers of the underlying securities. Withdrawal of underlying securities. You may surrender your Retail HOLDRS and receive underlying securities during the trustee's normal business hours and upon the payment of applicable fees, taxes or governmental charges, if any. You should receive your underlying securities no later than the business day after the trustee receives your request. If you surrender Retail HOLDRS in order to receive underlying securities, you will pay to the trustee a cancellation fee of up to $10.00 per round-lot of 100 Retail HOLDRS. Further issuances of Retail HOLDRS. The depositary trust agreement provides for further issuances of Retail HOLDRS on a continuous basis without your consent. Reconstitution events. The depositary trust agreement provides for the automatic distribution of underlying securities to you in the following four circumstances: A. If an issuer of underlying securities no longer has a class of securities registered under section 12 of the Securities Exchange Act of 1934, then its securities will no longer be an underlying security and the trustee will distribute the shares of that company to the owners of the Retail HOLDRS. B. If the SEC finds that an issuer of underlying securities should be registered as an investment company under the Investment Company Act of 1940, and the trustee has actual knowledge of the SEC finding, then the trustee will distribute the shares of that company to the owners of the Retail HOLDRS. C. If the underlying securities of an issuer cease to be outstanding as a result of a merger, consolidation, corporate combination or other event, the trustee will distribute the consideration paid by and received from the acquiring company to the beneficial owners of Retail HOLDRS only if the distributed securities have a different Standard & Poor's GICS sector classification than any of the underlying securities represented in the Retail HOLDRS at the time of the distribution or exchange or if the securities received are not listed for trading on a U.S. national securities exchange or through the Nasdaq National Market System. In any other case, the additional securities received as consideration will be deposited into the trust. D. If an issuer's underlying securities are delisted from trading on a U.S. national securities exchange or through the Nasdaq National Market System and are not listed for trading on another U.S. national securities exchange or through the Nasdaq National Market System within five business days from the date the securities are delisted. To the extent a distribution of underlying securities is required as a result of a reconstitution event, the trustee will deliver the underlying security to you as promptly as practicable after the date that the trustee has knowledge of the occurrence of a reconstitution event. As provided in the depositary trust agreement, securities of a new company will be added to the Retail HOLDRS, as a result of a distribution of securities by an underlying issuer or where an event occurs, such as a merger, where the securities of an underlying issuer are exchanged for the securities of another company, unless the securities received have a different Standard & Poor's GICS sector classification, than any of the underlying securities represented in the Retail HOLDRS at the time of distribution or exchange or are not listed for trading on a U.S. national securities exchange or through the Nasdaq National Market System. It is anticipated, as a result of the broadly defined GICS sectors, that most distributions or exchanges of securities will result in the inclusion of new securities in the Retail HOLDRS. The trustee will review the Standard & Poor's GICS sector classifications of securities to determine whether securities received as a result of a 20 distribution by an underlying issuer or as consideration for securities included in the Retail HOLDRS will be distributed from the Retail HOLDRS to you. Standard & Poor's sector classifications. Standard & Poor's Corporation is an independent source of market information that, among other things, maintains the Global Industry Classification Standard, which classifies the securities of public companies into various sector classifications based upon GICS sectors, which are derived from its own criteria. The GICS classification standards were exclusively effective on January 2, 2002. There are 10 Standard & Poor's GICS sectors and each class of publicly traded securities of a company are given only one GICS sector. The securities included in the Retail HOLDRS are currently represented in the Consumer Discretionary and Consumer Staples GICS sectors. The Standard & Poor's GICS sector classifications of the securities included in the Retail HOLDRS may change over time if the companies that issued these securities change their focus of operations or if Standard & Poor's alters the criteria it uses to determine GICS sectors, or both. Termination of the trust. The trust will terminate if the trustee resigns and no successor trustee is appointed by Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, within 60 days from the date the trustee provides notice to Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, of its intent to resign. Upon termination, the beneficial owners of Retail HOLDRS will surrender their Retail HOLDRS as provided in the depositary trust agreement, including payment of any fees of the trustee or applicable taxes or governmental charges due in connection with delivery to the owners of the underlying securities. The trust also will terminate if Retail HOLDRS are delisted from the American Stock Exchange and are not listed for trading on another U.S. national securities exchange or through the Nasdaq National Market System within five business days from the date the Retail HOLDRS are delisted. Finally, the trust will terminate if 75% of the owners of outstanding Retail HOLDRS other than Merrill Lynch, Pierce, Fenner & Smith Incorporated vote to dissolve and liquidate the trust. If a termination event occurs, the trustee will distribute the underlying securities to you as promptly as practicable after the termination event occurs. Amendment of the depositary trust agreement. The trustee and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, may amend any provisions of the depositary trust agreement without the consent of any other depositor or any of the owners of the Retail HOLDRS. Promptly after the execution of any amendment to the agreement, the trustee must furnish or cause to be furnished written notification of the substance of the amendment to each owner of Retail HOLDRS. Any amendment that imposes or increases any fees or charges, subject to exceptions, or that otherwise prejudices any substantial existing right of the owners of Retail HOLDRS will not become effective until 30 days after notice of the amendment is given to the owners of Retail HOLDRS. Issuance and cancellation fees. If you wish to create Retail HOLDRS by delivering to the trust the requisite underlying securities, the trustee will charge you an issuance fee of up to $10.00 for each round-lot of 100 Retail HOLDRS. If you wish to cancel your Retail HOLDRS and withdraw your underlying securities, the trustee will charge you a cancellation fee of up to $10.00 for each round-lot of 100 Retail HOLDRS issued. The trustee may negotiate either of these fees depending on the volume, frequency and size of the issuance or cancellation transactions. Commissions. If you choose to create or cancel Retail HOLDRS you will be responsible for paying any sales commissions associated with your purchase of the underlying securities that are charged by your broker, whether it be Merrill Lynch Pierce Fenner & Smith Incoporated or another broker, in addition to the issuance or cancellation fee, as the case may be, described above. Custody fees. The Bank of New York, as trustee and as custodian, will charge you a quarterly custody fee of $2.00 for each round-lot of 100 Retail HOLDRS to be deducted from any dividend payments or other cash distributions on underlying securities received by the trustee. With respect to the aggregate custody fee payable in any calendar year for each Retail HOLDR, the Trustee will waive that portion of the fee which exceeds the total cash dividends and other cash distributions received, or to be received, and payable with respect to such calendar year. The trustee cannot recapture unpaid custody fees from prior years. Address of the trustee. The Bank of New York, ADR Department, 101 Barclay Street, New York, New York 10286. 21 Governing law. The depositary trust agreement and the Retail HOLDRS are governed by the laws of the State of New York. The trustee will provide the depositary trust agreement to any owner of the underlying securities free of charge upon written request. Duties and immunities of the trustee. The trustee assumes no responsibility or liability for, and makes no representations as to, the validity or sufficiency, or as to the accuracy of the recitals, if any, set forth in the Retail HOLDRS. The trustee has undertaken to perform only those duties as are specifically set forth in the depositary trust agreement. Subject to the preceding sentence, the trustee will be liable for its own negligence or misconduct except for good faith errors in judgment so long as the trustee was not negligent in ascertaining the relevant facts. 22 UNITED STATES FEDERAL INCOME TAX CONSEQUENCES General The following is a summary of the U.S. federal income tax consequences relating to the Retail HOLDRS for: o a citizen or resident of the United States; o a corporation or partnership created or organized in the United States or under the laws of the United States; o an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; o a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust (each of the above, a "U.S. receipt holder"); and o any person other than a U.S. receipt holder (a "non-U.S. receipt holder"). This summary is based upon laws, regulations, rulings and decisions currently in effect, all of which are subject to change, possibly on a retroactive basis. The discussion does not deal with all U.S. federal income tax consequences applicable to all categories of investors, some of which may be subject to special rules. In addition, this summary generally is limited to investors who will hold the Retail HOLDRS as "capital assets" (generally, property held for investment) within the meaning of section 1221 of the Internal Revenue Code of 1986, as amended. Moreover, this summary does not address Retail HOLDRS held by a foreign partnership or other foreign flow through entities. We recommend that you consult with your own tax advisor. Taxation of the trust The trust will provide for flow through tax consequences as it will be treated as a grantor trust or custodial arrangement for U.S. federal income tax purposes. Taxation of Retail HOLDRS A receipt holder purchasing and owning Retail HOLDRS will be treated, for U.S. federal income tax purposes, as directly owning a proportionate share of the underlying securities represented by Retail HOLDRS. Consequently, if there is a taxable cash distribution on an underlying security, a holder will recognize income with respect to the distribution at the time the distribution is received by the trustee, not at the time that the holder receives the cash distribution from the trustee. A receipt holder will determine its initial tax basis in each of the underlying securities by allocating the purchase price for the Retail HOLDRS among the underlying securities based on their relative fair market values at the time of purchase. Similarly, when a holder sells a receipt, it will determine the amount realized with respect to each security by allocating the sales price among the underlying securities based on their relative fair market values at the time of sale. A holder's gain or loss with respect to each security will be computed by subtracting its adjusted basis in the security from the amount realized on the security. With respect to purchases of Retail HOLDRS for cash in the secondary market, a receipt holder's aggregate tax basis in each of the underlying securities will be equal to the purchase price of the Retail HOLDRS. Similarly, with respect to sales of Retail HOLDRS for cash in the secondary market, the amount realized with respect to a sale of Retail HOLDRS will be equal to the aggregate amount realized with respect to each of the underlying securities. 23 The distribution of any securities by the trust upon the surrender of Retail HOLDRS, the occurrence of a reconstitution event, or a termination event will not be a taxable event, except to the extent that cash is distributed in lieu of fractional shares. The receipt holder's holding period with respect to the distributed securities will include the period that the holder held the securities through the trust. Brokerage fees and custodian fees The brokerage fee incurred in purchasing a receipt will be treated as part of the cost of the underlying securities. Accordingly, a holder includes this fee in its tax basis in the underlying securities. A holder will allocate the brokerage fee among the underlying securities using either a fair market value allocation or pro rata based on the number of shares of each underlying security. Similarly, the brokerage fee incurred in selling Retail HOLDRS will reduce the amount realized with respect to the underlying securities. A holder will be required to include in its income the full amount of dividends paid on the underlying securities, even though the depositary trust agreement provides that the custodian fees will be deducted directly from any dividends paid. These custodian fees will be treated as an expense incurred in connection with a holder's investment in the underlying securities and may be deductible. If a holder is an individual, estate or trust, however, the deduction of its share of custodian fees will be a miscellaneous itemized deduction that may be disallowed in whole or in part. Special considerations with respect to underlying securities of foreign issuers With respect to underlying securities of foreign issuers, the gross amount of any taxable cash distribution will not be eligible for the dividends received deduction generally allowed to corporate U.S. receipt holders. If a foreign issuer pays a dividend in a currency other than in U.S. dollars, the amount of the dividend for U.S. federal income tax purposes will be the U.S. dollar value (determined at the spot rate on the date of the payment) regardless of whether the payment is later converted into U.S. dollars. In this case, the U.S. receipt holder may recognize ordinary income or loss as a result of currency fluctuations between the date on which the dividend is paid and the date the dividend amount is converted into U.S. dollars. Subject to certain conditions and limitations, any foreign tax withheld on dividends may be deducted from taxable income or credited against a U.S. receipt holder's U.S. federal income tax liability. The limitation on foreign taxes eligible for the U.S. foreign tax credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by a foreign issuer generally will constitute "passive income" or, in the case of some U.S. holders, "financial services income." For purposes of the U.S. foreign tax credit limitation, dividends received by a U.S. receipt holder with respect to an underlying security of a foreign issuer generally will be treated as foreign source income while any gain or loss recognized from the sale of such security generally will be treated as from sources within the United States. The rules relating to the determination of the foreign tax credit are complex and we recommend that U.S. receipt holders consult their own tax advisors to determine whether and to what extent a credit would be available. Dividends and distributions made by a foreign issuer may be subject to a withholding tax. Some foreign issuers have made arrangements through which holders of their American depositary shares can apply for a refund of withheld taxes. It is expected that holders of Retail HOLDRS will be able to use these arrangements to apply for a refund of withheld taxes. Additionally, special U.S. federal income tax rules apply to U.S. persons owning shares of a "passive foreign investment company" (a "PFIC"). We do not believe that any of the foreign issuers of the underlying securities is currently a PFIC and do not anticipate that any issuer will become a PFIC in the future, although no assurances can be made that the applicable tax law or other relevant circumstances will not change in a manner which affects the PFIC determination. A foreign corporation generally will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying relevant look-through rules, either: o at least 75% of its gross income is "passive income"; or 24 o on average at least 50% of the gross value of its assets is attributable to assets that produce "passive income" or are held for the production of passive income. Passive income for this purpose generally includes dividends, interest, royalties, rents, and gains from commodities and securities transactions. If a corporation were classified as a PFIC, a U.S. receipt holder could be subject to increased tax liability, possibly including an interest charge, upon the sale or other disposition of the Retail HOLDRS or of the underlying securities or upon the receipt of "excess distributions," unless the U.S. receipt holder elected to be taxed currently on its pro rata portion of the corporation's income, whether or not the income was distributed in the form of dividends or otherwise. Non-U.S. receipt holders A non-U.S. receipt holder generally will be subject to U.S. withholding tax at a rate of 30% or a lower rate as may be specified by an applicable tax treaty with respect to dividends received on underlying securities of U.S. issuers. However, if that income is effectively connected with a U.S. trade or business conducted by the holder or, where a tax treaty applies, is attributable to a permanent establishment maintained in the United States by the holder, then those dividends will be exempt from withholding tax, provided the holder complies with applicable certification and disclosure requirements. A non-U.S. receipt holder generally will not be subject to U.S. federal income or withholding tax with respect to dividends received on underlying securities of foreign issuers, unless that income is effectively connected with a U.S. trade or business conducted by the holder or, where a tax treaty applies, is attributable to a permanent establishment maintained in the United States by the holder. With respect to dividends of both U.S. and foreign issuers, a non-U.S. receipt holder's dividends that are effectively connected with a U.S. trade or business or dividends attributable to a permanent establishment, net of relevant deductions and credits, will be subject to U.S. federal income taxation at the same graduated rates applicable to U.S. persons. In addition to this graduated tax, effectively connected dividends or dividends attributable to a permanent establishment received by a corporate non-U.S. receipt holder may also be subject to a branch profits tax at a rate of 30% or a lower rate as may be specified by an applicable tax treaty. Under some circumstances, a non- U.S. receipt holder whose dividends are so effectively connected or attributable shall be entitled to a dividends received deduction equal to 70% or 80% of the amount of the dividend. A non-U.S. receipt holder that is eligible for a reduced rate of withholding tax pursuant to a tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the Internal Revenue Service. A non-U.S. receipt holder generally will not be subject to U.S. federal income or withholding tax with respect to gain recognized upon the sale or other disposition of Retail HOLDRS or of the underlying securities unless: o that gain is effectively connected with a U.S. trade or business conducted by the holder or, where a tax treaty applies, is attributable to a permanent establishment maintained in the United States by the holder, o in the case of any gain realized by an individual non-U.S. receipt holder, the holder is present in the United States for 183 days or more in the taxable year of the sale or other disposition and certain other conditions are met, or o the underlying securities issuer is or has been a U.S. real property holding corporation for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of the disposition or the period during which the non- U.S. receipt holder held the common stock of such issuer and (a) the common stock is not considered to be "regularly traded on an established securities 25 market" or (b) the non-U.S. receipt holder owned, actually or constructively, at any time during the shorter of the periods described above, more than 5% of the common stock of such issuer. Effectively connected or attributable gains generally will be subject to U.S. federal income taxation at the same graduated rates applicable to U.S. persons, and may, in the case of a corporate non-U.S. receipt holder, also be subject to the branch profits tax. We recommend that non-U.S. receipt holders consult their own tax advisors to determine whether any applicable tax treaties provide for different rules. Information returns will be filed with the Internal Revenue Service in connection with dividend payments made with respect to the underlying securities, or the proceeds of the sale of other disposition of the receipts (or the underlying securities). If you are a non-corporate U.S. receipt holder, you will be subject to U.S. backup withholding tax at a rate of up to 30% on these payments unless you provide your taxpayer identification number to the paying agent and comply with certain certification procedures. If you are a non-U.S. receipt holder, you may have to comply with certification procedures to establish that you are not a U.S. person in order to avoid the information reporting and backup withholding tax requirements. However, payments of dividends to non-U.S. receipt holders will be reported on Internal Revenue Service Form 1042-S even if such payments are not otherwise subject to the information reporting requirements. The amount of any backup withholding from a payment to you will be allowed as a credit against your U.S. federal income tax liability and may entitle you to a refund, provided that the required information is furnished to the Internal Revenue Service. The preceding discussion does not address all aspects of U.S. federal income taxation that may be relevant in light of a non-U.S. receipt holder's or an issuer's particular facts and circumstances. We recommend that investors consult their own tax advisors. ERISA CONSIDERATIONS Any plan fiduciary which proposes to have a plan acquire Retail HOLDRS should consult with its counsel with respect to the potential applicability of ERISA and the Internal Revenue Code to this investment and whether any exemption would be applicable and determine on its own whether all conditions have been satisfied. Moreover, each plan fiduciary should determine whether, under the general fiduciary standards of investment prudence and diversification, an acquisition of Retail HOLDRS is appropriate for the plan, taking into account the overall investment policy of the plan and the composition of the plan's investment portfolio. PLAN OF DISTRIBUTION In accordance with the depositary trust agreement, the trust issued Retail HOLDRS to Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Merrill Lynch, Pierce, Fenner & Smith Incorporated deposited the underlying securities to receive Retail HOLDRS. The trust delivered the initial distribution of Retail HOLDRS against deposit of the underlying securities in New York, New York on approximately April 25, 2001. Investors who purchase Retail HOLDRS through a fee-based brokerage account will pay fees charged by the brokerage account. We recommend that investors review the terms of their brokerage accounts for details on applicable charges. Merrill Lynch, Pierce, Fenner & Smith Incorporated has from time to time provided investment banking and other financial services to certain of the issuers of the underlying securities and expects in the future to provide these services, for which it has received and received customary fees and commissions. Merrill Lynch, Pierce, Fenner & Smith Incorporated also may have served as counterparty in other transactions with certain of the issuers of the underlying securities. Merrill Lynch, Pierce, Fenner & Smith Incorporated has used and may continue to use this prospectus, as updated from time to time, in connection with offers and sales related to market-making transactions in the Retail 26 HOLDRS. Merrill Lynch, Pierce, Fenner & Smith Incorporated may act as principal or agent in these transactions. Market-making sales will be made at prices related to prevailing market prices at the time of sale. Merrill Lynch, Pierce, Fenner & Smith Incorporated has agreed to indemnify the trustee against some civil liabilities related to acts performed or not performed by the trustee in accordance with the depositary trust agreement or periodic reports filed or not filed with the SEC with respect to the Retail HOLDRS. Should a court determine not to enforce the indemnification provision, Merrill Lynch, Pierce, Fenner & Smith Incorporated also has agreed to contribute to payments the trustee may be required to make with respect to such liabilities. LEGAL MATTERS Legal matters, including the validity of the Retail HOLDRS, were passed upon for Merrill Lynch, Pierce, Fenner & Smith Incorporated, the initial depositor and the underwriter, in connection with the initial offering of Retail HOLDRS, by Shearman & Sterling, New York, New York. Shearman & Sterling, as special U.S. tax counsel to the trust, also rendered an opinion regarding the material U.S. federal income tax consequences relating to the Retail HOLDRS. WHERE YOU CAN FIND MORE INFORMATION Merrill Lynch, Pierce, Fenner & Smith Incorporated has filed a registration statement on Form S-1 with the SEC covering the Retail HOLDRS. While this prospectus is a part of the registration statement, it does not contain all the exhibits filed as part of the registration statement. You should consider reviewing the full text of those exhibits. The registration statement is available over the Internet at the SEC's Web site at http://www.sec.gov. You also may read and copy the registration statement at the SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for more information on the public reference rooms and their copy charges. Merrill Lynch, Pierce, Fenner & Smith Incorporated will not file any reports pursuant to the Exchange Act. The trust will file modified reports pursuant to the Exchange Act. Since the securities of the issuers of the underlying securities are registered under the Exchange Act, the issuers of the underlying securities are required to file periodically financial and other information specified by the SEC. For more information about the issuers of the underlying securities, information provided to or filed with the SEC by the issuers of the underlying securities with respect to their registered securities can be inspected at the SEC's public reference facilities or accessed through the SEC's Web site referenced above. In addition, information regarding the issuers of the underlying securities may be obtained from other sources including, but not limited to, press releases, newspaper articles an other publicly disseminated information. The trust and Merrill Lynch, Pierce, Fenner & Smith Incorporated and its respective affiliates are not affiliated with the issuers of the underlying securities, and the issuers of the underlying securities have no obligations with respect to Retail HOLDRS. This prospectus relates only to Retail HOLDRS and does not relate to the other securities of the issuers of the underlying securities. The information in this prospectus regarding the issuers of the underlying securities has been derived from the publicly available documents described in the preceding paragraph. We have not participated in the preparation of these documents or made any due diligence inquiries with respect to the issuers of the underlying securities in connection with Retail HOLDRS. We make no representation that these publicly available documents or any other publicly available information regarding the issuers of the underlying securities are accurate or complete. Furthermore, we cannot assure you that all events occurring prior to the date of this prospectus, including events that would affect the accuracy or completeness of the publicly available documents described in the preceding paragraph, that would affect the trading price of the securities of the issuers of the underlying securities, and therefore the offering and trading prices of the Retail HOLDRS, have been publicly disclosed. 27 ANNEX A This annex forms an integral part of the prospectus. The following tables provide a brief description of the business of each of the issuers of the underlying securities and set forth the split-adjusted closing market prices, as reported on the applicable primary U.S. trading market, of each of the underlying securities in each month during 1998, 1999, 2000 and 2001, through May 2002. A table outlining the primary U.S. market on which the securities of the issuers are listed can be found on page 10. An asterisk (*) denotes that no shares of the issuer were trading on a U.S. market during that month. The historical prices of the underlying securities should not be taken as an indication of future performance. ALBERTSON'S, INC. (ABS) Albertson's, Inc., is a retail food and drug chain. Albertson's operates under the names of Albertson's, Acme Markets, Jewel Food Stores, Seessel's, Super Saver, Max, Osco Drug and Sav-on. These stores consist of combination food-drug stores, stand-alone drug stores, conventional supermarkets, and warehouse stores and an electronic-commerce retail site, Albertsons.com. Albertsons.com operates only in Washington state. Albertson's, Inc. also operates Savon.com, a nationwide online pharmacy service. Albertson's distribution centers provide product exclusively to its retail stores.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 47.75 January 61.00 January 30.50 January 28.35 January 28.75 February 46.81 February 57.00 February 24.50 February 29.05 February 30.26 March 52.75 March 54.44 March 30.88 March 31.82 March 33.14 April 50.06 April 51.50 April 32.63 April 33.40 April 33.54 May 46.31 May 53.50 May 36.63 May 28.70 May 35.17 June 51.81 June 51.56 June 33.25 June 29.99 July 48.00 July 49.75 July 30.19 July 32.73 August 50.56 August 47.94 August 21.50 August 34.99 September 54.13 September 39.56 September 21.00 September 31.88 October 55.75 October 36.00 October 23.69 October 31.91 November 57.06 November 32.00 November 25.56 November 33.56 December 63.69 December 32.25 December 26.50 December 31.49 The closing price on June 17, 2002 was $30.75.
A-1 AMAZON.COM, INC. (AMZN) Amazon.com, Inc. is an online retailer that offers a variety of products, such as books, music, videos, toys, electronics, software, video games and home improvement products for sale through the Internet. Amazon.com also offers Webbased services where buyers and sellers can enter into transactions with respect to a wide range of products. Customers can use Amazon.com payments to pay for goods purchase through its online site. Amazon.com operates websites in the United Kingdom, Denmark, France and Japan.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 4.92 January 58.47 January 64.56 January 17.31 January 14.19 February 6.42 February 64.06 February 68.88 February 10.19 February 14.10 March 7.13 March 86.09 March 67.00 March 10.23 March 14.30 April 7.65 April 86.03 April 55.19 April 15.78 April 16.69 May 7.34 May 59.38 May 48.31 May 16.69 May 18.23 June 16.63 June 62.56 June 36.31 June 14.15 July 18.48 July 50.03 July 30.13 July 12.49 August 13.96 August 62.19 August 41.50 August 8.94 September 18.60 September 79.94 September 38.44 September 5.97 October 21.07 October 70.63 October 36.63 October 6.98 November 32.00 November 85.06 November 24.69 November 11.32 December 53.54 December 76.13 December 15.56 December 10.82
The closing price on June 17, 2002 was $18.41. BEST BUY CO., INC. (BBY) Best Buy Co., Inc. is a retailer of consumer electronics, home office equipment, video games, computer software, music and appliances. In addition, Best Buy sells cameras and other photographic equipment and ready-to-assemble furniture designed for use with computer and audio/video equipment. Best Buy offers its various products directly to consumers through its retail stores and through the Internet.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 8.46 January 30.25 January 31.83 January 33.20 January 49.33 February 9.93 February 30.92 February 36.42 February 27.31 February 44.93 March 11.11 March 34.67 March 57.33 March 23.97 March 52.80 April 11.71 April 31.75 April 53.83 April 36.70 April 49.57 May 10.83 May 30.33 May 42.67 May 35.43 May 46.20 June 12.04 June 45.00 June 42.17 June 42.35 July 15.58 July 49.75 July 48.50 July 44.64 August 12.96 August 46.92 August 41.17 August 39.32 September 13.88 September 41.33 September 42.42 September 30.30 October 16.00 October 37.17 October 33.46 October 36.60 November 19.21 November 41.67 November 17.17 November 47.59 December 20.46 December 33.50 December 19.71 December 49.65
The closing price on June 17, 2002 was $42.26. A-2 COSTCO WHOLESALE CORPORATION (COST) Costco Wholesale Corporation operates self-service membership warehouse stores which offer volume purchasing of nationally branded and selected private label merchandise at discount prices. Costco's product offerings include food, appliances, electronics, furniture and clothing. Costco buys nearly all of its merchandise directly from manufacturers. Costco's warehouse stores are located throughout the United States and Canada, and in the United Kingdom, Korea, Taiwan, Japan and Mexico. The Mexico warehouses are operated through a joint-venture agreement. Costco also offers various products through the Internet directly to consumers.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 21.69 January 41.44 January 48.94 January 46.25 January 46.00 February 24.44 February 40.16 February 49.63 February 41.75 February 41.26 March 26.69 March 45.78 March 52.56 March 39.25 March 39.82 April 27.94 April 40.47 April 54.06 April 34.93 April 40.20 May 28.94 May 36.25 May 31.94 May 38.91 May 39.27 June 31.53 June 40.03 June 33.00 June 41.08 July 28.38 July 37.38 July 32.56 July 43.05 August 23.53 August 37.38 August 34.44 August 37.41 September 23.69 September 36.00 September 34.94 September 35.56 October 28.38 October 40.16 October 36.63 October 37.83 November 31.38 November 45.84 November 32.63 November 40.88 December 36.09 December 45.63 December 39.94 December 44.38
The closing price on June 17, 2002 was $40.69. CVS CORPORATION (CVS) CVS Corporation operates retail drugstores and Internet and mail order businesses that principally sell pharmaceutical products. CVS also offers prescription benefit management and specialty pharmaceutical services. CVS' retail drugstores sell prescription and over-the-counter drugs, general merchandise, beauty and cosmetic products and convenience foods. Through its prescription benefit management services, CVS provides prescription plan design and administration, claims processing, and facilitation of communications between health plans, patients, physicians and pharmacists for managed care organizations. CVS' specialty pharmacy mail order and retail operations sell prescription drugs to individuals with conditions requiring complex and expensive drug therapies. CVS' various operations carry their own private label products as well as third party brand name products.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 32.78 January 54.75 January 34.94 January 59.20 January 27.20 February 37.03 February 53.00 February 35.00 February 61.00 February 27.32 March 37.75 March 47.50 March 37.56 March 58.49 March 34.33 April 36.88 April 47.63 April 43.50 April 58.95 April 33.48 May 35.09 May 46.00 May 43.50 May 54.90 May 32.03 June 38.94 June 50.75 June 40.00 June 38.60 July 41.00 July 49.75 July 39.44 July 36.01 August 36.38 August 41.69 August 37.13 August 36.11 September 43.81 September 40.81 September 46.31 September 33.20 October 45.69 October 43.44 October 52.94 October 23.90 November 49.38 November 39.69 November 56.88 November 26.95 December 55.00 December 39.88 December 59.94 December 29.60
The closing price on June 17, 2002 was $33.63. A-3 FEDERATED DEPARTMENT STORES (FD) Federated Department Stores operates full-line department stores in the United States. Federated's department stores include Bloomingdale's, The Bon Marche, Burdines, Goldsmith's, Lazarus, Macy's, Stern's and Rich's. These department stores sell a range of merchandise, including men's, women's and children's clothing and accessories, cosmetics, home furnishings and other consumer goods. Federated also operates catalog businesses and electronic-commerce businesses which provide goods and services online.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 42.31 January 41.81 January 41.63 January 44.56 January 41.62 February 46.88 February 38.13 February 36.69 February 48.35 February 41.91 March 51.81 March 40.13 March 42.25 March 41.55 March 40.85 April 49.50 April 46.69 April 34.00 April 42.98 April 39.75 May 51.81 May 54.50 May 38.50 May 44.80 May 41.41 June 53.81 June 52.94 June 33.75 June 42.50 July 52.94 July 51.31 July 24.06 July 38.60 August 44.00 August 46.00 August 27.63 August 36.31 September 36.38 September 43.69 September 26.13 September 28.20 October 38.44 October 42.69 October 32.56 October 31.99 November 41.69 November 47.06 November 30.50 November 37.00 December 43.56 December 50.56 December 35.00 December 40.90
The closing price on June 17, 2002 was $42.50. THE GAP, INC. (GPS) The Gap, Inc. is an international retailer that operates stores selling specialty apparel and products in the United States, Canada, the United Kingdom, France, Germany and Japan. The Gap sells casual and business-casual apparel, intimate apparel, personal care and other accessories for men, women and children in its Gap, GapKids, babyGap, Banana Republic and Old Navy stores. The Gap designs virtually all of the clothing and products sold in its stores under the Gap, Banana Republic and Old Navy brand names, which are then manufactured by independent sources. Products offered in The Gap's retail line are also available through its Web sites and catalogs.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 17.36 January 42.79 January 44.69 January 32.60 January 14.40 February 19.86 February 43.13 February 48.31 February 27.24 February 11.97 March 20.00 March 44.88 March 49.81 March 23.72 March 15.04 April 22.86 April 44.38 April 36.75 April 27.71 April 14.11 May 24.00 May 41.71 May 35.06 May 31.00 May 14.57 June 27.31 June 50.38 June 31.25 June 29.00 July 26.50 July 46.75 July 35.81 July 27.31 August 22.69 August 39.13 August 22.44 August 19.65 September 23.44 September 32.00 September 20.13 September 11.95 October 26.72 October 37.13 October 25.81 October 13.07 November 32.78 November 40.56 November 24.94 November 13.23 December 37.42 December 46.00 December 25.50 December 13.94
The closing price on June 17, 2002 was $14.70. A-4 THE HOME DEPOT, INC. (HD) The Home Depot, Inc. is a home improvement retailer that operates in the United States, Canada and Latin America through its Home Depot and EXPO Design Center stores. Home Depot stores sell building materials, home improvement products, and lawn and garden products. EXPO Design Center stores sell products and services for design and renovation products. In addition, Home Depot operates mail order businesses that offer maintenance and repair products, wallpaper and custom window treatments. Home Depot also operates Georgia Lighting, Inc., a specialty lighting designer, distributor and retailer, and Apex Supply Company, a wholesale supplier of plumbing, heating, ventilation and air conditioning products and services. Home Depot also offers various products through the Internet directly to consumers.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 20.17 January 40.33 January 56.63 January 48.20 January 50.09 February 21.29 February 39.79 February 57.81 February 42.50 February 50.00 March 22.54 March 41.50 March 64.50 March 43.10 March 48.61 April 23.23 April 39.83 April 56.50 April 47.10 April 46.37 May 26.19 May 37.71 May 48.81 May 49.29 May 41.69 June 27.69 June 42.96 June 49.94 June 47.24 July 27.92 July 42.54 July 51.75 July 50.37 August 25.42 August 41.00 August 48.06 August 45.95 September 26.33 September 45.75 September 53.06 September 38.37 October 29.04 October 50.50 October 43.00 October 38.23 November 33.17 November 52.79 November 39.19 November 46.65 December 40.79 December 68.75 December 45.69 December 51.01
The closing price on June 17, 2002 was $38.50. KOHL'S CORPORATION (KSS) Kohl's Corporation operates specialty department stores primarily in the midwest, mid-Atlantic, southcentral, southeast, southwest and northeastern regions of the United States. Kohl's stores sell clothing, shoes and accessories for men, women and children, and home products. The consumer retail items and home products carried by Kohl's mainly consist of national brand merchandise targeted to middle-income customers.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 17.34 January 33.88 January 35.06 January 71.00 January 66.29 February 20.05 February 34.50 February 37.91 February 65.91 February 67.67 March 20.44 March 35.44 March 51.25 March 61.69 March 71.15 April 20.66 April 33.22 April 48.13 April 61.06 April 73.70 May 23.78 May 34.09 May 51.75 May 61.55 May 75.00 June 25.94 June 38.44 June 55.63 June 62.73 July 24.50 July 38.03 July 56.75 July 57.28 August 22.72 August 35.63 August 56.00 August 55.50 September 19.50 September 33.06 September 57.69 September 48.00 October 23.91 October 37.44 October 54.19 October 55.61 November 24.59 November 36.09 November 53.56 November 67.85 December 30.72 December 36.09 December 61.00 December 70.44
The closing price on June 17, 2002 was $73.73. A-5 THE KROGER CO. (KR) The Kroger Co. operates retail supermarket food and drug stores, convenience stores, supermarket fuel centers and jewelry stores, and also manufactures and processes food for sale in its own stores. Kroger's supermarkets and department stores carry a range of items including food, pharmacy, health and personal hygiene items. Kroger's convenience stores, some of which are operated through franchise agreements, generally offer staple food items, convenience foods, general merchandise and gasoline. Kroger stores and operations are primarily located in the southern, mid-western and western regions of the United States.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 19.56 January 31.75 January 17.38 January 24.55 January 20.60 February 21.13 February 32.34 February 14.94 February 24.24 February 22.15 March 23.09 March 29.94 March 17.56 March 25.79 March 22.16 April 20.94 April 27.16 April 18.56 April 22.59 April 22.77 May 21.47 May 29.28 May 19.88 May 24.94 May 22.35 June 21.44 June 27.94 June 22.06 June 25.00 July 23.66 July 26.44 July 20.69 July 26.36 August 22.50 August 23.13 August 22.69 August 26.62 September 25.00 September 22.06 September 22.56 September 24.64 October 27.75 October 20.81 October 22.56 October 24.46 November 26.53 November 21.31 November 26.50 November 25.32 December 30.25 December 18.88 December 27.06 December 20.87
The closing price on June 17, 2002 was $19.98. THE LIMITED, INC. (LTD) The Limited, Inc. is principally engaged in the purchase, distribution and sale of women's and men's clothing, women's intimate apparel and personal care products. The Limited's retail operations include Express, Lerner New York, Limited Stores, Structure and Henri Bendel, which predominately sell apparel. The Intimate Brands, Inc. segment derives its revenues from sales of women's intimate and other apparel and personal care products and accessories. Intimate Brands operates the Victoria's Secret and Bath & Body Works, which includes White Barn Candle Co. stores. The Limited also operates mail order catalogs and electronic-commerce businesses. On August 16, 2001, The Limited divested of its Lane Bryant subsidiary.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 13.25 January 17.06 January 15.34 January 20.66 January 18.55 February 14.50 February 17.75 February 17.00 February 17.65 February 18.01 March 14.34 March 19.81 March 21.06 March 15.72 March 17.90 April 16.78 April 21.88 April 22.59 April 16.92 April 19.16 May 16.63 May 24.44 May 24.13 May 16.30 May 20.99 June 16.56 June 22.69 June 21.63 June 16.52 July 13.41 July 22.84 July 20.44 July 16.97 August 10.50 August 18.94 August 20.00 August 14.10 September 10.97 September 19.13 September 22.06 September 9.50 October 12.81 October 20.50 October 25.25 October 11.15 November 14.47 November 21.22 November 19.44 November 13.92 December 14.56 December 21.66 December 17.06 December 14.72
The closing price on June 17, 2002 was $20.81. A-6 LOWE'S COMPANIES, INC. (LOW) Lowe's Companies, Inc. operates retail stores that sell home improvement products targeted for both "do-it-yourself" and commercial construction and renovation businesses. Lowe's stores carry products, supplies and materials for home improvement, decor, maintenance, repair and remodeling, lawn and garden care and maintenance of commercial buildings. Lowe's also offers services such as installation, delivery, loading, assembly and free "how-to" clinics to aid customers in design and planning of home improvement tasks. Lowe's also offers various products through the Internet directly to consumers.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 25.28 January 58.31 January 44.63 January 53.45 January 46.07 February 29.22 February 59.31 February 47.81 February 55.88 February 45.25 March 35.09 March 60.50 March 58.38 March 58.45 March 43.49 April 34.97 April 52.75 April 49.50 April 63.00 April 42.29 May 39.59 May 51.69 May 46.56 May 69.53 May 47.16 June 40.56 June 56.69 June 41.06 June 72.55 July 38.50 July 52.75 July 42.19 July 38.18 August 35.06 August 45.25 August 44.81 August 37.20 September 31.81 September 48.75 September 44.88 September 31.65 October 33.75 October 55.38 October 45.69 October 34.10 November 42.25 November 49.81 November 40.06 November 45.31 December 51.19 December 59.75 December 44.50 December 46.41
The closing price on June 17, 2002 was $47.79. THE MAY DEPARTMENT STORES COMPANY (MAY) The May Department Stores Company operates regional department store companies, including Lord & Taylor, Hecht's, Robinson's-May, Filene's, Kaufmann's, Famous-Barr L.S., Jones Store, Meier & Frank and ZCMI. The May Department Stores Company also operates David's Bridal, After Hours Formalwear, and Priscilla of Boston. David's Bridal is a nationwide retailer of bridal gowns and other bridal party merchandise. After Hours Formalwear rents tuxedos and sells formalwear. Priscilla of Boston specializes in upscale bridal merchandise.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 35.04 January 40.25 January 31.13 January 38.95 January 36.80 February 40.50 February 39.50 February 26.19 February 39.59 February 36.64 March 42.33 March 39.13 March 28.50 March 35.48 March 34.85 April 41.13 April 39.81 April 27.50 April 37.25 April 34.68 May 42.96 May 43.31 May 30.06 May 32.70 May 35.18 June 43.67 June 40.88 June 24.00 June 34.26 July 42.79 July 38.69 July 23.75 July 33.20 August 37.50 August 39.06 August 22.94 August 33.65 September 34.33 September 36.44 September 20.50 September 29.02 October 40.67 October 34.69 October 26.25 October 31.45 November 40.21 November 33.63 November 28.06 November 35.84 December 40.25 December 32.25 December 32.75 December 36.98
The closing price on June 17, 2002 was $35.07. A-7 RADIOSHACK CORPORATION (RSH) RadioShack Corporation primarily engages in the retail sale of consumer electronics through the RadioShack store chain. The RadioShack stores carry an assortment of its private brand and third party brand name products, including electronic parts and accessories, wireless and conventional telephones, personal computers and related products, audio and video equipment, digital satellite systems, and specialized products such as scanners and weather radios. RadioShack also offers access to third-party cellular, satellite, internet and other electronics-related services.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 19.38 January 27.00 January 48.88 January 55.04 January 31.52 February 22.25 February 27.81 February 38.00 February 42.80 February 27.44 March 23.50 March 31.91 March 50.75 March 36.69 March 30.04 April 24.88 April 36.38 April 57.00 April 30.63 April 31.20 May 22.13 May 41.25 May 42.63 May 27.23 May 34.24 June 26.53 June 48.88 June 47.38 June 30.50 July 28.41 July 51.31 July 56.38 July 28.23 August 27.28 August 47.25 August 59.00 August 23.40 September 26.75 September 51.69 September 64.63 September 24.25 October 24.78 October 63.00 October 59.63 October 24.99 November 22.53 November 76.63 November 46.88 November 28.96 December 20.59 December 49.19 December 42.81 December 30.10
The closing price on June 17, 2002 was $30.21. SAFEWAY INC. (SWY) Safeway Inc. is a food and drug retailer that operates primarily in the United States and Canada. Safeway operates a chain of grocery stores primarily in the Midwestern, Southwestern, Mid-Atlantic and Western regions of the United States, and in Western Canada. Safeway's stores offer food and general merchandise, including baked goods, meat, delicatessen, floral and pharmaceutical products. In addition to offering nationally advertised products from third party suppliers, Safeway operates a network of distribution, manufacturing and food processing facilities that support its retail operations and produce products that are sold under its own private labels.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 33.22 January 56.13 January 38.25 January 50.67 January 40.45 February 34.88 February 57.75 February 38.56 February 54.31 February 42.98 March 37.00 March 51.31 March 45.25 March 55.15 March 45.02 April 38.13 April 53.94 April 44.13 April 54.30 April 41.95 May 36.44 May 46.50 May 46.13 May 50.65 May 40.65 June 40.69 June 49.50 June 45.00 June 48.00 July 44.75 July 53.88 July 45.06 July 44.16 August 39.00 August 46.69 August 49.31 August 45.11 September 46.13 September 38.06 September 46.69 September 39.72 October 47.94 October 35.31 October 54.69 October 41.65 November 52.81 November 36.88 November 58.94 November 44.56 December 60.94 December 35.75 December 62.50 December 41.75
The closing price on June 17, 2002 was $30.40. A-8 SEARS, ROEBUCK AND CO. (S) Sears, Roebuck and Co. is a multi-line retailer that operates throughout the United States and Canada. Sears operates retail stores, provides product repair services and other services, and also operates a domestic credit business. Sears' stores carry clothing, accessories, cosmetics, jewelry, home fashions, sporting goods, home improvement and lawn products, appliances and electronics. Sears also operates specialty stores that individually focus on offering automotive products, hardware and construction materials, lawn and garden merchandise, appliances and electronics, and decorating and remodeling needs. The merchandise offered in Sears stores consists of third party brands, as well as its own proprietary brands. Sears also offers various products through the Internet directly to consumers.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 46.00 January 40.13 January 30.94 January 38.75 January 52.84 February 53.00 February 40.63 February 27.56 February 41.05 February 52.58 March 57.44 March 45.19 March 30.63 March 35.27 March 51.27 April 59.31 April 46.00 April 36.75 April 36.85 April 52.75 May 61.81 May 47.81 May 36.94 May 39.88 May 59.05 June 61.06 June 44.56 June 32.63 June 42.31 July 50.75 July 40.50 July 29.88 July 46.98 August 45.38 August 37.50 August 31.19 August 42.75 September 44.19 September 31.38 September 32.42 September 34.64 October 44.94 October 28.19 October 29.73 October 38.77 November 47.44 November 34.19 November 32.44 November 45.51 December 42.50 December 30.38 December 34.75 December 47.64
The closing price on June 17, 2002 was $57.10. TARGET CORPORATION (TGT) Target Corporation operates general merchandise retail stores and is a direct marketer of consumer products. Target operates under various trade names, including Target, Marshall Field's and Mervyn's. Target stores offer a range of consumer products including clothing, health and beauty aids, school and office supplies, electronics, pharmacy services and home accessories, as well as books, music and movies. Target also sells various products by catalog and the Internet directly to consumers. Target's products are purchased from a variety of domestic and international suppliers.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 17.98 January 31.88 January 32.94 January 37.98 January 44.41 February 19.33 February 31.28 February 29.50 February 39.00 February 41.90 March 22.00 March 33.31 March 37.38 March 36.08 March 43.12 April 21.83 April 33.66 April 33.28 April 38.45 April 43.65 May 23.19 May 31.50 May 31.34 May 37.80 May 41.45 June 24.25 June 32.50 June 29.00 June 34.60 July 23.91 July 32.34 July 29.00 July 38.70 August 18.38 August 28.91 August 23.25 August 34.65 September 17.88 September 30.03 September 25.63 September 31.75 October 21.19 October 32.31 October 27.63 October 31.15 November 22.50 November 35.28 November 30.06 November 37.54 December 27.13 December 36.72 December 32.25 December 41.05
The closing price on June 17, 2002 was $39.36. A-10 THE TJX COMPANIES, INC. (TJX) The TJX Companies, Inc. is a discount retailer of clothing and home fashions in the United States, Canada and Europe. TJX operates under various trade names, including T.J. Maxx, Marshalls and A.J. Wright, in the United States, and Winners, a discount family clothing and home fashions chain in Canada. TJX also operates HomeGoods, a chain of discount home fashions stores in the United States, and T.K. Maxx, a chain of discount family clothing and home fashion stores in the United Kingdom, the Republic of Ireland and The Netherlands.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 8.24 January 14.46 January 8.02 January 15.36 January 20.62 February 9.47 February 13.99 February 7.85 February 15.17 February 18.96 March 11.10 March 16.65 March 10.93 March 15.88 March 19.98 April 10.78 April 16.31 April 9.45 April 15.54 April 21.76 May 11.41 May 14.71 May 10.68 May 16.62 May 21.09 June 11.77 June 16.33 June 9.26 June 15.83 July 11.47 July 16.21 July 8.27 July 16.90 August 10.90 August 14.17 August 9.32 August 17.46 September 8.70 September 13.78 September 11.13 September 16.37 October 9.25 October 13.32 October 13.48 October 16.82 November 12.54 November 12.87 November 12.70 November 18.80 December 14.19 December 10.05 December 13.75 December 19.88
The closing price on June 17, 2002 was $20.27. WALGREEN CO. (WAG) Walgreen Co. is a drugstore retailer that has stores throughout the United States and Puerto Rico. Walgreen's drugstores are engaged in the retail sale of prescription and non-prescription drugs, and carry additional product lines such as general merchandise, cosmetics, toiletries, household items, food and beverages. Customer prescription purchases can be made at Walgreen's drugstores as well as through the mail, telephone and the Walgreen's Web site. Walgreen drugstores sell independent brand name products purchased from domestic and foreign suppliers as well as products marketed under Walgreen's own various trade names.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 16.56 January 31.25 January 27.94 January 40.94 January 36.28 February 18.34 February 32.00 February 25.81 February 44.32 February 40.24 March 17.63 March 28.25 March 25.75 March 40.80 March 39.19 April 17.25 April 26.88 April 28.13 April 42.78 April 37.77 May 17.59 May 23.25 May 28.38 May 40.19 May 38.26 June 20.66 June 29.38 June 32.19 June 34.46 July 21.59 July 28.31 July 31.19 July 33.70 August 19.19 August 23.19 August 32.88 August 34.35 September 22.03 September 25.38 September 37.94 September 34.43 October 24.34 October 25.19 October 45.63 October 32.38 November 26.94 November 29.13 November 44.56 November 33.00 December 29.28 December 29.25 December 41.81 December 33.66
The closing price on June 17, 2002 was $38.32. A-10 WAL-MART STORES, INC. (WMT) Wal-Mart Stores, Inc. operates mass merchandising stores, which serve customers primarily through the operation of Wal-Mart discount stores, Wal-Mart Supercenters and Sam's Clubs stores. The Wal-Mart discount stores and Wal-Mart Supercenters offer a wide variety of merchandise, including clothing, household and sporting goods and groceries. Wal-Mart stores sell name-brand merchandise and merchandise sold under Wal-Mart's own brands. Sam's Clubs are warehouse stores, accessible by membership only, that offer bulk-quantity brand name merchandise and grocery items. Wal-Mart has operations in Argentina, Brazil, Canada, Germany, Korea, Mexico, Puerto Rico, The United Kingdom, China and throughout the United States.
Closing Closing Closing Closing Closing 1998 Price 1999 Price 2000 Price 2001 Price 2002 Price ---- ------- ---- ------- ---- ------- ---- ------- ---- ------- January 19.91 January 43.00 January 54.75 January 56.80 January 59.98 February 23.16 February 43.06 February 48.88 February 50.09 February 62.01 March 25.41 March 46.09 March 56.50 March 50.50 March 61.30 April 25.28 April 46.00 April 55.38 April 51.74 April 55.86 May 27.56 May 42.63 May 58.00 May 51.75 May 54.10 June 30.38 June 48.25 June 57.63 June 48.80 July 31.56 July 42.25 July 54.94 July 55.90 August 29.50 August 44.31 August 47.44 August 48.05 September 27.31 September 47.56 September 48.13 September 49.50 October 34.53 October 56.69 October 45.38 October 51.40 November 37.66 November 57.50 November 52.19 November 55.15 December 40.72 December 69.13 December 53.13 December 57.55
The closing price on June 17, 2002 was $58.31. A-11 ================================================================================ [GRAPHIC OMITTED] 1,000,000,000 Depositary Receipts Retail HOLDRS SM Trust ----------------------------------------------------------------------- P R O S P E C T U S ----------------------------------------------------------------------- June 18, 2002 ================================================================================ PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Indemnification of Directors and Officers. Section 145 of the General Corporation Law of the State of Delaware, as amended, provides that under certain circumstances a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director, officer, employee or agent of the corporation or is or was serving at its request in such capacity in another corporation or business association, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. Article XIV, Section 2 of the Restated Certificate of Incorporation of Merrill Lynch, Pierce, Fenner & Smith Incorporated provides in effect that, subject to certain limited exceptions, Merrill Lynch, Pierce, Fenner & Smith Incorporated shall indemnify its directors and officers to the full extent authorized or permitted by law. The directors and officers of Merrill Lynch, Pierce, Fenner & Smith Incorporated are insured under policies of insurance maintained by Merrill Lynch, Pierce, Fenner & Smith Incorporated, subject to the limits of the policies, against certain losses arising from any claim made against them by reason of being or having been such directors or officers. In addition, Merrill Lynch, Pierce, Fenner & Smith Incorporated has entered into contracts with all of its directors providing for indemnification of such persons by Merrill Lynch, Pierce, Fenner & Smith Incorporated to the full extent authorized or permitted by law, subject to certain limited exceptions. Item 16. Exhibits. See Exhibit Index. Item 17. Undertakings. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933. (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of the prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. II-1 (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (5) For purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (6) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to Item 15 of this registration statement, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-2 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant hereby certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has duly caused this Post-Effective Amendment No. 3 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, on June 18, 2002. Merrill Lynch, Pierce, Fenner & Smith Incorporated By: * ----------------------------------------------- Name: John J. Fosina Title: Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 3 to the Registration Statement has been signed by the following persons in the capacities indicated below on June 18, 2002. Signature Title --------- ----- * - ----------------------------------- Chief Executive Officer, E. Stanley O'Neal Chairman of the Board and Director * Director ----------------------------- George A. Schieren * Director ----------------------------- Thomas H. Patrick * Chief Financial Officer ----------------------------- John J. Fosina * Controller ----------------------------- Dominic A. Carone *By: /s/ MITCHELL M. COX Attorney-in-Fact --------------------------- Mitchell M. Cox II-3 INDEX TO EXHIBITS Exhibits *4.1 Standard Terms for Depositary Trust Agreements between Merrill Lynch, Pierce, Fenner & Smith Incorporated and The Bank of New York, as Trustee dated as of September 2, 1999, and exhibits thereto, form of Depositary Trust Agreement, form of HOLDRS and form of Amendment No. 2 to the Standard Terms for Depositary Trust Agreements, filed on February 13, 2001 as part of the registration statement filed on form S-1 for Retail HOLDRS. *5.1 Opinion of Shearman & Sterling regarding the validity of the Retail HOLDRS receipts, filed on February 9, 2001 as part of the registration statement filed on form S-1 for Retail HOLDRS. *8.1 Opinion of Shearman & Sterling, as special U.S. tax counsel regarding the material federal income tax consequences, filed on February 9, 2001 as part of the registration statement filed on form S-1 for Retail HOLDRS. *24.1 Power of Attorney (included in Part II of Registration Statement), filed on January 30, 2001 as part of the registration statement filed on form S-1 for Retail HOLDRS. 24.2 Power of Attorney of John J. Fosina, George A. Schieren, E. Stanley O'Neal, Thomas H. Patrick and Dominic A. Carone - --------------- * Previously filed. EX-24 3 exh24_061402.txt EXHIBIT 24.2 POWER OF ATTORNEY Exhibit 24.2 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below constitutes and appoints Mitchell M. Cox and Stephen G. Bodurtha and each of them, with full power to act without the other, his true and lawful attorneys-in-fact and agents with full and several power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, and supplements to the Registration Statements for each of the Biotech HOLDRSsm Trust, B2B Internet HOLDRSsm Trust, Broadband HOLDRSsm Trust, CP HOLDRSsm Trust, Europe 2001 HOLDRSsm Trust, Internet HOLDRSsm Trust, Internet Architecture HOLDRSsm Trust, Internet Infrastructure HOLDRSsm Trust, Market 2000+ HOLDRSsm Trust, Oil Service HOLDRSsm Trust, Pharmaceutical HOLDRSsm Trust, Regional Bank HOLDRSsm Trust, Semiconductor HOLDRSsm Trust, Software HOLDRSsm Trust, Telecom HOLDRSsm Trust, Wireless HOLDRSsm Trust, Utilities HOLDRSsm Trust and Retail HOLDRSsm Trust, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he might or could do in person, hereby ratifying and conforming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Signature Title /s/ E. STANLEY O'NEAL Chief Executive Officer, Chairman - -------------------------- of the Board and Director E. Stanley O'Neal /S/ GEORGE A. SHIEREN Director - -------------------------- George A. Schieren /s/ THOMAS H. PATRICK Director - -------------------------- Thomas H. Patrick /s/ John A. Fosina Chief Financial Officer - -------------------------- John A. Fosina /s/ Dominic A. Carone Controller - -------------------------- Dominic A. Carone -----END PRIVACY-ENHANCED MESSAGE-----