-----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, AXB+3IBi52K6+kbq4t+KDZUYuaQ+9LUzYl7/JrObz7f6kr/bTxpAv1LrNUqSMr/8 iQn8gFlUG/um4zZ3e/4Vtg== 0000947871-06-000348.txt : 20060217 0000947871-06-000348.hdr.sgml : 20060217 20060216205309 ACCESSION NUMBER: 0000947871-06-000348 CONFORMED SUBMISSION TYPE: POS AM PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20060217 DATE AS OF CHANGE: 20060216 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] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AM SEC ACT: 1933 Act SEC FILE NUMBER: 333-43142 FILM NUMBER: 06627057 BUSINESS ADDRESS: STREET 1: 4 WORLD FINANCIAL CENTER STREET 2: NORTH TOWER CITY: NEW YORK STATE: NY ZIP: 10080 BUSINESS PHONE: 2126702273 MAIL ADDRESS: STREET 1: 4 WORLD FINANCIAL CENTER STREET 2: NORTH TOWER CITY: NEW YORK STATE: NY ZIP: 10080 POS AM 1 posam_021306-wireless.txt POST-EFFECTIVE AMENDMENT NO. 6 TO FORM S-1 As filed with the Securities and Exchange Commission on February 17, 2006 Registration No. 333-43142 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________ POST-EFFECTIVE AMENDMENT NO. 6 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) _________________ Wireless HOLDRS(SM) Trust [Issuer with respect to the receipts] Delaware 6211 13-5674085 (State or other jurisdiction (Primary Standard (I.R.S. Employer of incorporation or Industrial Classification Identification Number) organization) Code Number) _________________ 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: Judith Witterschein, Esq. Andrew B. Janszky, Esq. Corporate Secretary Shearman & Sterling LLP 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 sip 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. |_| ================================================================================ PROSPECTUS - ---------- [GRAPHIC OMITTED] 1,000,000,000 Depositary Receipts Wireless HOLDRS(SM) Trust The Wireless HOLDRS(SM) trust issues Depositary Receipts called Wireless HOLDRS(SM) representing your undivided beneficial ownership in the common stock or American depositary shares of a group of specified companies that are involved in various segments of the wireless telecommunications industry. The Bank of New York is the trustee. You only may acquire, hold or transfer Wireless HOLDRS in a round-lot amount of 100 Wireless HOLDRS or round-lot multiples. Wireless HOLDRS are separate from the underlying deposited common stocks or American depositary shares that are represented by the Wireless HOLDRS. For a list of the names and the number of shares of the companies that are represented by a Wireless HOLDR, see "Highlights of Wireless HOLDRS-The Wireless HOLDRS" starting on page 9. The Wireless HOLDRS(SM) Trust will issue Wireless HOLDRS on a continuous basis. Investing in Wireless HOLDRS involves significant risks. See "Risk Factors" starting on page 4. Wireless HOLDRS are neither interests in nor obligations of Merrill Lynch, Pierce, Fenner & Smith Incorporated. Wireless 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 Wireless HOLDRS are listed on the American Stock Exchange under the symbol "WMH". On February 15, 2006, the last reported sale price of Wireless HOLDRS on the American Stock Exchange was $60.99. ______________ 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 February 16, 2006. "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 WIRELESS HOLDRS..................................................9 THE TRUST.....................................................................16 DESCRIPTION OF WIRELESS HOLDRS................................................16 DESCRIPTION OF THE UNDERLYING SECURITIES......................................17 DESCRIPTION OF THE DEPOSITARY TRUST AGREEMENT.................................19 UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.................................23 ERISA CONSIDERATIONS..........................................................28 PLAN OF DISTRIBUTION..........................................................28 LEGAL MATTERS.................................................................28 WHERE YOU CAN FIND MORE INFORMATION...........................................28 This prospectus contains information you should consider when making your investment decision. With respect to information about Wireless 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 Wireless HOLDRS in any jurisdiction where the offer or sale is not permitted. The Wireless 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 Wireless HOLDRS or of the underlying securities through an investment in the Wireless HOLDRS. 2 SUMMARY The Wireless HOLding Company Depositary ReceiptS or HOLDRS trust was formed under the depositary trust agreement, dated as of October 25, 2000 among The Bank of New York, as trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, other depositors and the owners of the Wireless HOLDRS, and was amended on November 22, 2000. The trust is not a registered investment company under the Investment Company Act of 1940. The trust currently holds shares of common stock or American depositary shares issued by a group of specified companies that were, at the time of the initial offering, generally considered to be involved in various segments of the wireless telecommunications industry. The number of shares of each company's common stock or American depositary shares currently held by the trust with respect to each round-lot of Wireless HOLDRS is specified under "Highlights of Wireless HOLDRS-The Wireless HOLDRS." This group of common stocks or American depositary shares, and the securities of any company that may be added to the Wireless HOLDRS, are collectively referred to in this prospectus as the securities or the underlying securities. There are currently 18 companies included in Wireless HOLDRS, which may change as a result of reconstitution events, distributions of securities by underlying issuers or other events. The Wireless HOLDRS are separate from the underlying common stocks that are represented by the Wireless HOLDRS. On February 14, 2006 there were 984,000 Wireless HOLDRS outstanding. 3 RISK FACTORS An investment in Wireless HOLDRS involves risks similar to investing directly in each of the underlying securities outside of the Wireless HOLDRS, including the risks associated with a concentrated investment in wireless telecommunications companies. General Risk Factors o Loss of investment. Because the value of Wireless HOLDRS directly relates to the value of the underlying securities, you may lose a substantial portion of your investment in the Wireless HOLDRS if the underlying securities decline in value. o Discount trading price. Wireless 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 Wireless HOLDRS or other corporate events, such as mergers, a Wireless 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 Wireless 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 wireless telecommunications industry. At the time of the initial offering, the companies included in the Wireless HOLDRS were generally considered to be involved in various aspects of the wireless telecommunications industry. However, the market price of the underlying securities and the Wireless HOLDRS may not necessarily follow the price movements of the entire wireless telecommunications industry generally. If the underlying securities decline in value, your investment in the Wireless HOLDRS will decline in value even if the securities prices of companies in the wireless telecommunications industry generally increase in value. In addition, since the time of the initial offering the companies included in the Wireless HOLDRS may not be involved in the wireless telecommunications industry. In this case, the Wireless HOLDRS may not consist of securities issued only by companies involved in the wireless telecommunications industry. o Not necessarily comprised of solely wireless telecommunications companies. As a result of distributions of securities by companies included in the Wireless HOLDRS or other corporate events, such as mergers, securities of companies that are not currently included in the Wireless HOLDRS and that are not involved in the wireless telecommunications industry may be included in the Wireless HOLDRS. The securities of a new company will only be distributed from the Wireless HOLDRS if the securities have a different Standard & Poor's Corporation sector classification than any of the underlying issuers included in the Wireless 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 Wireless HOLDRS provides no assurance that each new company included in the Wireless HOLDRS will be involved in the wireless telecommunications industry. Currently, the underlying securities included in the Wireless HOLDRS are represented in the Telecommunication Services and Information Technology 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 Wireless HOLDRS, and yet not be involved in the wireless telecommunications industry. In addition, the GICS sector classifications of securities included in the Wireless 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. Therefore, additional GICS sectors may be represented in the Wireless HOLDRS, 4 which may also result in the inclusion in the Wireless HOLDRS of the securities of a new company that is not involved in the wireless telecommunications industry. o No investigation of underlying securities. The underlying securities initially included in the Wireless HOLDRS were selected by Merrill Lynch, Pierce, Fenner & Smith Incorporated based on the market capitalization of issuers and the market liquidity of securities in the wireless telecommunications industry, without regard for the value, price performance, volatility or investment merit of the underlying securities. Consequently, the Wireless HOLDRS trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and their 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 affiliates. o Loss of diversification. As a result of industry developments, reorganizations or market fluctuations affecting issuers of the underlying securities, Wireless HOLDRS may not necessarily be a diversified investment in the wireless telecommunications industry. In addition, reconstitution events, distributions of securities by an underlying issuer or other events, which may result in the distribution of securities from, or the inclusion of additional securities in, the Wireless HOLDRS, may also reduce diversification. Wireless 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 Wireless HOLDRS and receive delivery of each of the underlying securities. The cancellation of your Wireless 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 Wireless HOLDRS will involve payment of a cancellation fee to the trustee. o Trading halts. Trading in Wireless HOLDRS on the American Stock Exchange may be halted if trading in one or more of the underlying securities is halted. Trading in Wireless HOLDRS may be halted even if trading continues in some or all of the underlying securities. If trading is halted in the Wireless HOLDRS, you will not be able to trade Wireless HOLDRS and you will only be able to trade the underlying securities if you cancel your Wireless 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 Wireless HOLDRS. If the Wireless HOLDRS are delisted by the American Stock Exchange, a termination event will result unless the Wireless 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 Wireless HOLDRS are delisted. There are currently 18 companies whose securities are included in the Wireless HOLDRS. o Possible conflicts of interest. Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, selected the underlying securities that were originally included in Wireless HOLDRS and may face possible conflicts of interest as Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates may provide investment banking or other services for issuers of the underlying securities in connection with its business. 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 Wireless HOLDRS. In addition, you will not be entitled to any interest on any distribution by reason of any delay in distribution by the depositary. 5 Risk Factors Specific to Companies Involved in the Wireless Telecommunications Industry The stock prices of companies involved in the wireless telecommunications industry have been and are likely to continue to be extremely volatile, which will directly affect the price volatility of the Wireless HOLDRS, and you could lose a substantial part of your investment. The trading prices of the securities of wireless telecommunications companies have been extremely volatile. These stock prices could be subject to wide fluctuations in response to a variety of factors, including the following: o general market fluctuations; o actual or anticipated fluctuations in the companies' quarterly or annual operating results; o announcements of technological innovations or new services by competitors of the same companies included in the Wireless HOLDRS; o announcements by wireless telecommunications companies or their competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; o failure to integrate or realize projected benefits from acquisitions; o changes in government regulations; and o difficulty in obtaining additional financing. Other broad market and industry factors may decrease the stock price of wireless telecommunications companies' stocks, regardless of their operating results. Market fluctuations, as well as general political and economic conditions, such as recession or interest rate or currency rate fluctuations, also decrease the market price of wireless telecommunications companies' stocks. In addition, the trading prices of wireless telecommunications stocks in general have experienced extreme price and volume fluctuations. These fluctuations may be unrelated or disproportionate to the operating performance of these companies. The valuations of many wireless telecommunications stocks are high when measured by conventional valuation standards such as price to earnings and price to sales ratios. Some of the companies do not, or in the future might not, have earnings. As a result, these trading prices may decline substantially and valuations may not be sustained. Any negative change in the public's perception of the prospects of wireless telecommunications companies, generally, could depress the stock prices of a wireless telecommunications company regardless of wireless telecommunications companies' results. Other broad market and industry factors may decrease the stock price of wireless telecommunications 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 wireless telecommunications stocks. For example, there can be no assurance that terrorist attacks or other acts of war, if they occur, will not have a negative effect on the market price of wireless telecommunications stocks. As a result of fluctuations in the trading prices of the companies included in the Wireless HOLDRS, the trading price of Wireless HOLDRS has fluctuated significantly. The initial offering price of a Wireless HOLDR, on October 31, 2000 was $103.10, and during 2005, the price of a Wireless HOLDR reached a high of $61.80 and a low of $51.72. o Companies whose securities are included in the Wireless 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 Wireless HOLDRS. Companies whose securities are included in the Wireless 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 Wireless HOLDRS may have to forego strategic 6 acquisitions or investments, reduce or defer their development activities, or delay their introduction of new products and services. Any of these actions may reduce the market price of stocks in the wireless telecommunications industry. o The wireless telecommunications industry is extremely competitive, and a wireless telecommunications company's failure to establish its wireless network and its customer base would adversely affect its operating results. The competition among wireless telecommunications companies to build and develop wireless telecommunications networks, form alliances with telecommunications and Internet service providers and establish and maintain a customer base is significant. Customer loyalty can be easily influenced by a competitor's new offerings, especially those offerings which provide cost savings or expanded network geographic coverage areas. Many wireless telecommunications companies face significant competition from other companies in the telecommunications and technology industries, including traditional telecommunications companies, some of which have greater market share and financial resources. These companies may be better positioned to finance research and development activities, provide a wider range of products and services over a greater geographic area, and may have greater resources with which to purchase additional licenses and radio frequency, acquire other companies in the industry and reduce prices to gain market share. o Changes in the regulatory environments in which wireless telecommunications companies operate could affect their ability to offer products and services. The licensing, construction, ownership and operation of wireless communications systems, the grant, maintenance and renewal of applicable licenses and radio frequency allocations and the rates charged to customers are all subject to significant regulation. Delays in receiving required regulatory approvals and licenses or the enactment of new and adverse regulatory requirements may adversely affect the ability of wireless telecommunications companies to continue to offer existing and new products and services. In addition, legislative, judicial and regulatory agency actions could negatively affect the ability of many wireless telecommunications companies to maintain required licenses or renew licenses upon their expiration. o If wireless telecommunications companies do not anticipate and respond to the rapid technological changes in the industry, they could lose customer or market share. The wireless telecommunications industry is experiencing significant technological change, as evidenced by the introduction of new products and services and increased availability of transmission capacity, changes in consumer requirements and preferences and the utilization of Internet-based technologies for voice and data transmission. Wireless telecommunications companies must be able to successfully predict which of the many possible networks, products and services will be important to finance, establish and maintain. The cost of establishing networks and implementing new technologies is significant, and there can be no assurance that a telecommunications company will select appropriate technology and equipment or that it will obtain appropriate new technology on a timely basis or on satisfactory terms. The failure to obtain effective technology and equipment may adversely affect a wireless telecommunications company's ability to offer competitive products and services and the viability of its operations. o Inability to manage rapid growth could adversely affect financial reporting, customer service and revenues. Many wireless telecommunications companies are expanding their networks and operations. This expansion has placed and will continue to place significant demands on their operating, financial control and billing systems, customer support, sales and marketing and administrative resources and network infrastructure. This growth will require many telecommunications companies to enhance management, financial and information systems and to effectively develop and train their employee base. o Some of the companies involved in the wireless telecommunications industry are also engaged in other lines of business unrelated to the wireless business, and they may experience problems with these lines of business which could adversely affect their operating results. Some of the companies which comprise the Wireless HOLDRS are engaged in multiple lines of business, including operating as local and long-distance telephone providers, Internet service providers and manufacturing new technologies. These additional lines of business may present additional risks not mentioned in this prospectus. The operating results of these wireless telecommunications companies may fluctuate as a result of these additional risks and events in the other lines of business. In addition, changes in technology and telecommunications regulation may expose wireless telecommunications companies to business risks 7 with which they have less experience than they have with the business risks associated with their traditional businesses. Despite a company's possible success in the wireless telecommunications industry, there can be no assurance that the other lines of business in which these companies are engaged will not have an adverse effect on a company's business or financial condition. o The international operations of some domestic and foreign wireless telecommunications companies expose them to risks associated with instability and changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations and other risks inherent to international business. Some domestic and foreign companies included in the Wireless HOLDRS have international operations or investments which are essential parts of their business. The risks of international business that the companies are exposed to include the following: o general economic, social and political conditions; o the difficulty of enforcing intellectual property rights, agreements and collecting receivables through foreign legal systems; o differing tax rates, tariffs, exchange controls or other similar restrictions; o currency fluctuations; and o changes in, and compliance with, domestic and foreign laws and regulations, particularly those which affect telecommunications carriers and service providers, which impose a range of restrictions on operations, trade practices, foreign trade and international investment decisions. o Many wireless telecommunications companies are dependent on their ability to continue to attract and retain highly skilled technical and managerial personnel to develop and generate their business. The success any wireless telecommunications company is highly dependent on the experience, abilities and continued services of key executive officers and key technical personnel. If these companies lose the services of any of these officers or key technical personnel, their future success could be undermined. Competition for personnel is intense. There is no certainty that any of these wireless telecommunications companies will be able to continue to attract and retain qualified personnel. o It may be impossible to initiate legal proceedings or enforce judgments against some of the companies included in the Wireless HOLDRS. Some of the companies included in the Wireless HOLDRS are incorporated under the laws of a jurisdiction other than the United States and a substantial portion of their assets are located outside the United States. As a result, it may be impossible to effect service of process within the United States on some of the companies included in the Wireless HOLDRS or enforce judgments made against them in courts in the United States based on civil liability provisions of the securities laws of the United States. In addition, judgments obtained in the United States, especially those awarding punitive damages, may not be enforceable in foreign countries. o Potential voting impediments may exist with respect to the ownership of some of the underlying securities included in the Wireless HOLDRS. Holders of American depositary shares, including those included in the Wireless HOLDRS, may only exercise voting rights with respect to the securities represented by American depositary shares in accordance with the provisions of deposit agreements entered into in connection with the issuance of the American depositary shares. These deposit agreements may not permit holders of American depositary shares to exercise voting rights that attach to the securities underlying the American depositary shares without the issuer first instructing the depositary to send voting information to the holder of the American depositary share. Also, holders of American depositary shares may not exercise voting rights unless they take a variety of steps, which include registration in the share registry of the company that has issued the securities underlying the American depositary shares. The cumulative effect of these steps may make it impractical for holders of American depositary shares to exercise the voting rights attached to the underlying securities. 8 HIGHLIGHTS OF WIRELESS HOLDRS This discussion highlights information regarding Wireless HOLding Company Depositary ReceiptS. We present certain information more fully in the rest of this prospectus. You should read the entire prospectus carefully before you purchase Wireless HOLDRS. Issuer........................... Wireless HOLDRS Trust. The trust........................ The Wireless HOLDRS Trust was formed under the depositary trust agreement, dated as of October 25, 2000, among The Bank of New York, as trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, other depositors and the owners of the Wireless HOLDRS, and was amended on November 22, 2000. 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 Wireless HOLDRS representing the underlying securities issued by the trust. The trustee holds the underlying securities on behalf of the holders of Wireless HOLDRS. Purpose of Wireless HOLDRS....... Wireless HOLDRS are designed to achieve the following: Diversification. Wireless HOLDRS are designed to allow you to diversify your investment in the wireless telecommunications industry through a single, exchange-listed instrument representing your undivided beneficial ownership of the underlying securities. Flexibility. The beneficial owners of Wireless HOLDRS have undivided beneficial ownership interests in each of the underlying securities represented by the Wireless HOLDRS, and can cancel their Wireless HOLDRS to receive each of the underlying securities represented by the Wireless HOLDRS. Transaction costs. The expenses associated with buying and selling Wireless 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, traded on U.S. stock markets that, when initially selected, were involved in the wireless telecommunications 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 18 companies included in Wireless 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 Wireless HOLDRS.............. The trust has issued, and may continue to issue, Wireless HOLDRS that represent an undivided beneficial ownership interest in the shares of U.S. traded securities that are held by the trust on your behalf. The Wireless HOLDRS themselves are separate from the underlying securities that are represented by the Wireless HOLDRS. The following chart provides: o the names of the 18 issuers of underlying securities currently represented by Wireless HOLDRS, o the stock ticker symbols, o the share amounts currently represented by a round-lot of 100 Wireless HOLDRS, and o the principal U.S. market on which the underlying securities are traded.
Primary Name of Company (1) Ticker Share Amounts Trading Market - -------------------------------------------------------- ------------ ---------------------- ---------------- Aether Holdings Inc. AETH 1 NASDAQ ALLTEL Corp. AT 1.07 NYSE Crown Castle International Corp. CCI 4 NYSE Deutsche Telekom AG * DT 18.48409 NYSE Freescale Semicondutor CL B FSL.B 4.527015 NYSE LM Ericsson Telephone Company * ERICY 7.4 NASDAQ Motorola, Inc. MOT 41 NYSE Nextel Partners, Inc. CL A NXTP 4 NASDAQ Nokia Corp. * NOK 23 NYSE Qualcomm Incorporated QCOM 26 NASDAQ Research In Motion Limited RIMM 4 NASDAQ RF Micro Devices, Inc. RFMD 4 NASDAQ SK Telecom Co., Ltd. * SKM 17 NYSE Sprint Nextel Corporation S 30.780034488 NYSE Telesp Celular Participacoes S.A. * TCP 3 NYSE United States Cellular Corporation USM 1 AMEX Verizon Communications VZ 17 NYSE Vodafone Group p.l.c. * VOD 21 NYSE
(1) Effective December 2, 2005, SR Telecom Inc (NASDAQ: "SRXA"), a component of the Wireless HOLDRS Trust, has been delisted from trading on NASDAQ. The Bank of New York distributed shares of SR Telecom at the rate of 0.00104727 SR Telecom Inc shares per Wireless HOLDRS. _______________________________ * The securities of these non-U.S. companies trade in the United States as American depositary receipts. Please see "Risk Factors" and "United States Federal Income Tax Consequences--Special considerations with respect to underlying securities of foreign issuers" for additional information relating to an investment in a non-U.S. company. The companies whose securities were included in the Wireless HOLDRS at the time the Wireless 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 wireless telecommunications industry, as measured by market capitalization and trading volume on September 15, 2000. The market capitalization of a company is determined by multiplying the market price of its securities by the number of its outstanding securities. The trust only will issue and cancel and you only may obtain, hold, trade or surrender, Wireless HOLDRS in a round-lot of 100 Wireless HOLDRS and round-lot multiples. The trust will only issue Wireless HOLDRS upon the deposit of the whole shares represented by a round-lot of 100 Wireless HOLDRS. In the event that a fractional share comes to be represented by a round-lot of Wireless HOLDRS, the trust may require a minimum of more 10 than one round-lot of 100 Wireless HOLDRS for an issuance so that the trust will always receive whole share amounts for issuance of Wireless HOLDRS. The number of outstanding Wireless 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 Wireless HOLDRS on a continuous basis when an investor deposits the required securities with the trustee. Purchases........................ You may acquire Wireless HOLDRS in two ways o through an in-kind deposit of the required number of securities of the underlying issuers with the trustee, or o through a cash purchase in the secondary trading market. Issuance and cancellation fees... If you wish to create Wireless HOLDRS by delivering to the trust the requisite securities represented by a round-lot of 100 Wireless 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 Wireless HOLDRS. If you wish to cancel your Wireless 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 Wireless HOLDRS. Commissions...................... If you choose to deposit underlying securities in order to receive Wireless 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 Wireless 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 Wireless 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 Wireless 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 Wireless 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 Wireless 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 such fractional share. Except with respect to the right to vote for dissolution of the trust, the Wireless HOLDRS themselves will not have voting rights. Rights relating to the underlying securities............ Wireless HOLDRS represents your beneficial ownership of the underlying securities. Owners of Wireless HOLDRS have the same rights and privileges as if they owned the underlying securities beneficially outside of Wireless HOLDRS. These include the right to instruct the trustee to vote the underlying securities, to receive any dividends and other distributions on the underlying securities that are declared and paid to the trustee by an issuer of 11 an underlying security, the right to pledge Wireless HOLDRS and the right to surrender Wireless HOLDRS to receive the underlying securities. Wireless 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 Wireless HOLDRS. However, due to the nature of Wireless HOLDRS, you will not be able to participate in any dividend reinvestment program of an issuer of underlying securities unless you cancel your Wireless HOLDRS (and pay the applicable fees) and receive all of the underlying securities. A holder of Wireless HOLDRS is not a registered owner of the underlying securities. In order to become a registered owner, a holder of Wireless HOLDRS would need to surrender their Wireless 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 Wireless HOLDRS in the same manner as if you beneficially owned your underlying securities outside of Wireless 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 Wireless HOLDRS at the time of the distribution. In addition, if the issuer of underlying securities offers rights to acquire additional underlying securities or other securities, the rights may be distributed to you, may be disposed of for your benefit, 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 Wireless 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 Wireless HOLDRS (and pay the applicable fees and expenses) and receive all of your underlying securities in exchange for your Wireless 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." 12 Ownership rights in fractional shares in the underlying securities............ As a result of distributions of securities by companies included in the Wireless HOLDRS or other corporate events, such as mergers, a Wireless 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 Wireless 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 round-lots of 100 Wireless HOLDRS are outstanding and each round-lot of 100 Wireless HOLDRS represents 1.75 shares of an underlying security, there will be 175,001.75 votes of the underlying security represented by Wireless HOLDRS. If holders of 50,000 round-lots of 100 Wireless HOLDRS vote their underlying securities "yes" and holders of 50,001 round-lots of 100 Wireless HOLDRS vote their underlying securities "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 Wireless 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 Wireless 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 Wireless HOLDRS. C. If the underlying securities of an issuer cease to be outstanding as a result of a merger, consolidation or other corporate combination or other event, 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 Wireless HOLDRS only if the distributed securities have a different Standard & Poor's GICS sector classification than any of the underlying securities represented in the Wireless 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 Nasdaq NMS within five business days from the 13 date the securities are delisted. To the extent a distribution of underlying securities from the Wireless 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 Wireless HOLDRS, as 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 Wireless 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 Wireless 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 Wireless HOLDRS will be included in Wireless HOLDRS or distributed 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, 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 is given only one GICS sector classification. The securities included in the Wireless HOLDRS are currently represented in the Telecommunication Services and Information Technology GICS sectors. The Standard & Poor's GICS sector classifications of the securities included in the Wireless 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 Wireless 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 Wireless 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. Beneficial owners of at least 75% of outstanding Wireless HOLDRS vote to dissolve and liquidate the trust. If a termination event occurs, the trustee will distribute the underlying securities 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 Wireless HOLDRS surrendered, along with any taxes or other governmental charges, if any. 14 United States federal income tax consequences................. The United States federal income tax laws will treat a U.S. holder of Wireless HOLDRS as directly owning the underlying securities. The Wireless HOLDRS themselves will not result in any United States federal income tax consequences separate from the tax consequences associated with ownership of the underlying securities. Listing.......................... The Wireless HOLDRS are listed on the American Stock Exchange under the symbol "WMH." On February 15, 2006 the last reported sale price of Wireless HOLDRS on the American Stock Exchange was $60.99. Trading.......................... Investors are only able to acquire, hold, transfer and surrender a round-lot of 100 Wireless HOLDRS. Bid and ask prices, however, are quoted per single Wireless HOLDR. Clearance and settlement......... Wireless HOLDRS have been issued only in book-entry form. Wireless HOLDRS are evidenced by one or more global certificates that the trustee has deposited with The Depository Trust Company, referred to as the DTC. Transfers within DTC will be in accordance with DTC's usual rules and operating procedures. For further information, see "Description of Wireless HOLDRS." 15 THE TRUST General. This discussion highlights information about the Wireless HOLDRS Trust. You should read this information, information about the depositary trust agreement as well as the depositary trust agreement and the amendment to the depositary trust agreement before you purchase Wireless HOLDRS. The material terms of the depositary trust agreement are described in this prospectus under the heading "Description of the Depositary Trust Agreement." The Wireless HOLDRS Trust. The trust was formed pursuant to the depositary trust agreement, dated as of October 25, 2000. The Depositary Trust Agreement was amended November 22, 2000. The Bank of New York is the trustee. The Wireless HOLDRS Trust is not a registered investment company under the Investment Company Act of 1940. The Wireless HOLDRS Trust is intended to hold deposited shares for the benefit of owners of Wireless HOLDRS. The trustee will perform only administrative and ministerial acts. The property of the trust consists of the underlying securities and all monies or other property, if any, received by the trustee. The trust will terminate on December 31, 2040, or earlier if a termination event occurs. DESCRIPTION OF WIRELESS HOLDRS The trust has issued Wireless HOLDRS under the Depositary Trust Agreement described in this prospectus under the heading "Description of the Depositary Trust Agreement." The trust may issue additional Wireless HOLDRS on a continuous basis when an investor deposits the requisite underlying securities with the trustee. You may only acquire, hold, trade and surrender Wireless HOLDRS in a round-lot of 100 Wireless HOLDRS and round-lot multiples. The trust will only issue Wireless HOLDRS upon the deposit of the whole shares of underlying securities that are represented by a round-lot of 100 Wireless 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 Wireless HOLDRS, the trust may require a minimum of more than one round-lot of 100 Wireless HOLDRS for an issuance so that the trust will always receive whole share amounts for issuance of Wireless HOLDRS. Wireless 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 Wireless HOLDRS-The Wireless HOLDRS." Beneficial owners of Wireless HOLDRS will have the same rights and privileges as they would have if they beneficially owned the underlying securities in "street name" outside of the trust. These include the right of investors to instruct the trustee to vote the securities, and 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, as well as the right to cancel Wireless HOLDRS to receive the underlying securities. See "Description of the Depositary Trust Agreement." Wireless 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. The trust will not publish or otherwise calculate the aggregate value of the underlying securities represented by a receipt. Wireless 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 Wireless HOLDRS wishes to realize the dollar value of the underlying securities, that owner will have to cancel the Wireless HOLDRS. Such cancellation will require payment of fees and expenses as described in "Description of the Depositary Trust Agreement- Withdrawal of underlying securities." Wireless HOLDRS are evidenced by one or more global certificates that the trustee has deposited with DTC and registered in the name of Cede & Co., as nominee for DTC. Wireless HOLDRS are available only in book-entry form. Owners of Wireless HOLDRS may hold their Wireless 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 are the common stock or American depositary shares of a group of 20 specified companies that, at the time of selection, were involved in various aspects of the wireless telecommunications industry and whose securities are registered under section 12 of the Securities Exchange Act of 1934. The issuers of the underlying securities were, as of the time of selection, among the largest capitalized and most liquid companies involved in the wireless telecommunications industry as measured by market capitalization and trading volume. The Wireless HOLDRS may no longer consist exclusively of securities issued by companies involved in the wireless telecommunications industry. Merrill Lynch, Pierce, Fenner & Smith Incorporated will determine, in its sole discretion, whether the issuer of a particular underlying security remains in the wireless telecommunications industry and will undertake to make adequate disclosure when necessary. Underlying securities. For a list of the underlying securities represented by Wireless HOLDRS, please refer to "Highlights of Wireless HOLDRS-The Wireless 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 and 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 Wireless 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 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 18 underlying securities currently represented by a single Wireless HOLDR measured at the close of the business day on April 27, 2000, and thereafter as of the end of each month to February 14, 2006. 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.
Closing Closing Closing Closing 2000 Price 2001 Price 2002 Price 2003 Price ---- ----- ---- ----- ---- ----- ---- ----- April 27........ 117.45 January 31..... 75.00 January 31..... 45.71 January 31... 32.84 April 28........ 119.69 February 28.... 56.10 February 28.... 41.51 February 28.. 31.14 May 31.......... 106.57 March 30....... 52.57 March 28....... 43.45 March 31..... 30.97 June 30......... 100.87 April 30....... 60.43 April 30....... 38.49 April 30..... 32.51 July 31......... 91.58 May 31......... 56.34 May 31......... 38.51 May 30....... 35.54 August 31....... 89.68 June 29........ 53.77 June 28........ 33.61 June 30...... 36.18 September 29.... 81.70 July 31........ 55.25 July 31........ 30.14 July 31...... 35.60 October 31...... 80.71 August 31...... 50.09 August 30...... 31.21 August 29.... 37.10 November 30..... 73.11 September 28... 47.49 September 30... 27.48 September 30. 37.38 December 29..... 72.59 October 31..... 48.39 October 31..... 33.28 October 31... 40.99 November 30.... 52.55 November 29.... 38.47 November 28.. 40.86 December 31.... 50.53 December 31.... 34.66 December 31.. 43.97 Closing Closing Closing 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- January 30...... 48.91 January 31..... 54.62 January 31..... 60.30 February 27..... 51.79 February 28.... 54.61 February 14.... 60.88 March 31........ 50.09 March 31....... 53.78 April 30........ 47.93 April 29....... 52.86 May 28.......... 49.29 May 31......... 55.96 June 30......... 50.24 June 30........ 55.11 July 30......... 47.52 July 29........ 59.49 August 31....... 49.50 August 31...... 59.81 September 30.... 52.74 September 30... 60.09 October 29...... 54.54 October 31..... 57.52 November 30..... 58.94 November 30.... 59.73 December 31..... 59.43 December 30.... 58.07
[GRAPHIC OMITTED] 18 DESCRIPTION OF THE DEPOSITARY TRUST AGREEMENT General. The depositary trust agreement, dated as of October 25, 2000, among Merrill Lynch, Pierce, Fenner & Smith Incorporated, The Bank of New York, as trustee, other depositors and the owners of the Wireless HOLDRS, provides that Wireless HOLDRS will represent an owner's undivided beneficial ownership interest in the securities of the underlying companies. The depositary trust agreement was amended on November 22, 2000 to modify the reconstitution events, described below. The trustee. The Bank of New York serves as trustee for the Wireless 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 Wireless HOLDRS. You may create and cancel Wireless HOLDRS only in round-lots of 100 Wireless HOLDRS. You may create Wireless HOLDRS by delivering to the trustee the requisite underlying securities. The trust will only issue Wireless HOLDRS upon the deposit of the whole shares represented by a round-lot of 100 Wireless HOLDRS. In the event that a fractional share comes to be represented by a round-lot of Wireless HOLDRS, the trust may require a minimum of more than one round-lot of 100 Wireless HOLDRS for an issuance so that the trust will always receive whole share amounts for issuance of Wireless HOLDRS. Similarly, you must surrender Wireless HOLDRS in integral multiples of 100 Wireless 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 Wireless 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. You will receive proxy soliciting materials provided by issuers of the deposited shares 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 Wireless HOLDRS, other than Merrill Lynch, Pierce, Fenner & Smith Incorporated owning Wireless 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 Wireless 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 Wireless 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 distributed 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 of 1933. Otherwise, if practicable, the rights will be disposed of and the net proceeds distributed 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 Wireless 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 Wireless 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 Wireless HOLDR, the 19 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. 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 Wireless 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 Wireless 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 Wireless HOLDRS only if the distributed securities have a different Standard and Poor's GICS sector classification than any of the underlying securities represented in the Wireless 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 Wireless 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 Wireless 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 Wireless 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 Wireless HOLDRS will be distributed from the Wireless 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 and Poor's GICS sectors and each class of publicly traded securities of a company is given only one GICS sector. The securities included in the Wireless HOLDRS are currently represented in the Telecommunication Services and Information Technology GICS sectors. The Standard & Poor's GICS sector classifications of the securities included in the Wireless 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. 20 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 Wireless 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 Wireless 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 Wireless HOLDRS. Further issuances of Wireless HOLDRS. The depositary trust agreement provides for further issuances of Wireless HOLDRS on a continuous basis without your consent. 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 the initial depositor of its intent to resign. Upon termination, the beneficial owners of Wireless HOLDRS will surrender their Wireless 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 Wireless 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 Wireless HOLDRS are delisted. Finally, the trust will terminate if 75% of the owners of outstanding Wireless 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 Wireless 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 Wireless 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 Wireless HOLDRS will not become effective until 30 days after notice of the amendment is given to the owners of Wireless HOLDRS. Issuance and cancellation fees. If you wish to create Wireless 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 Wireless HOLDRS. If you wish to cancel your Wireless 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 Wireless 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 Wireless 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 Incorporated or another broker, in addition to the issuance fee 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 Wireless 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 Wireless HOLDR, the Trustee will waive that portion of the fee which exceeds the total 21 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. Governing law. The depositary trust agreement and the Wireless 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 Wireless 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 is liable for its own negligence or misconduct except for good faith errors in judgment so long as the trustee is not negligent in ascertaining the relevant facts. 22 UNITED STATES FEDERAL INCOME TAX CONSEQUENCES General The following discussion represents the opinion of Shearman & Sterling LLP, our special U.S. federal income tax counsel, as to the principal U.S. federal income tax consequences relating to the Wireless HOLDRS for: o an individual who is a citizen or resident of the United States; o a corporation (or an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any state thereon or the District of Columbia; 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 either (i) it is subject to the primary supervision of a U.S. court and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person (a "U.S. receipt holder"); and o any individual, corporation, estate or trust that is not a U.S. receipt holder (a "non-U.S. receipt holder"). If a partnership (or an entity treated as a partnership for U.S. federal income tax purposes) holds Wireless HOLDRS, the tax treatment of the partnership and each partner will generally depend on the status of the partner and the activities of the partnership. Partnerships acquiring Wireless HOLDRS, and partners in such partnerships, should consult their tax advisors. This discussion is based upon laws, regulations, rulings and decisions currently in effect, all of which are subject to change or differing interpretations, 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, such as (without limitation) tax-exempt entities, banks, dealers in securities, U.S. receipt holders whose functional currency is not the U.S. dollar, investors who acquire or hold any Wireless HOLDRS as part of a conversion, straddle or other hedging transaction, certain former citizens and residents of the United States and persons subject to the alternative minimum tax.. In addition, this discussion generally is limited to investors who will hold the Wireless HOLDRS as "capital assets" (generally, property held for investment) within the meaning of section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"). Moreover, this discussion does not address Europe 2001 held by a partnership or other flow through entity. We recommend that you consult with your own tax advisor with regard to the application of the U.S. federal income tax laws to your particular situation as well as any tax consequences arising under the laws of any state, local or non-U.S. jurisdiction. 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 Wireless HOLDRS A receipt holder purchasing and owning Wireless HOLDRS will be treated, for U.S. federal income tax purposes, as directly owning a proportionate share of the underlying securities represented by Wireless 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. 23 Qualified dividend income received in respect of Wireless HOLDRS by U.S. receipt holders who are individuals, trusts and estates will be eligible for U.S. federal income taxation at preferential rates. Qualified dividend income includes dividends received from domestic corporations and "qualified foreign corporations," as such term is defined below under "Special considerations with respect to underlying securities of foreign issuers." In order for such dividends to qualify for the preferential rates, specific minimum holding period requirements must be met, and for this purpose, a U.S. receipt holder's holding period with respect to an underlying security may be tolled for any period in which such holder has diminished its risk of loss in respect of such security by (for example) entering into a hedging transaction. Special rules apply to a U.S. receipt holder who leverages its investment in Wireless HOLDRS. U.S. receipt holders that are corporations may be eligible for a dividend-received deduction in respect of dividends received from domestic corporations. A receipt holder will determine its initial tax basis in each of the underlying securities by allocating the purchase price for the Wireless 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 Wireless 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 Wireless HOLDRS. Similarly, with respect to sales of Wireless HOLDRS for cash in the secondary market, the amount realized with respect to a sale of Wireless HOLDRS will be equal to the aggregate amount realized with respect to each of the underlying securities. The distribution of any securities by the trust upon the surrender of Wireless 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. Gain or loss with respect to fractional shares shall be computed by allocating a portion of the aggregate tax basis of the distributed securities to such fractional shares. The receipt holder's aggregate tax basis with respect to the distributed securities will be the same as when held through the trust, less any tax basis allocated to 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 Wireless 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 If any of the underlying securities are 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. As discussed above, dividends received by certain U.S. receipt holders from an issuer of underlying securities that is a "qualified foreign corporation" will be eligible for U.S. federal income taxation at preferential rates. A qualified foreign corporation includes: 24 o a foreign corporation that is eligible for the benefits of a comprehensive U.S. income tax treaty, which the Secretary of the Treasury determines to be satisfactory and that includes an exchange of information program, o a foreign corporation if the stock to which the dividend is paid is readily tradable on an established market in the United States, and o a corporation that is incorporated in a possession of the United States but will not include: o a passive foreign investment company (as defined below), o a foreign personal holding company (as specially defined in the Code), or o a foreign investment company (as specially defined in the Code). The foreign personal holding company rules and the foreign investment company rules have generally been repealed for taxable years of foreign corporations beginning after December 31, 2004. 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 taxable years beginning after December 31, 2006, the number of specific classes of income for which a separate limitation on foreign taxes eligible for the U.S. foreign tax credit is calculated will be reduced to two types of income, "passive income" and "general income." In addition, dividends distributed by a foreign issuer that constitutes "financial services income" with respect to a U.S. Holder will be treated as constituting "general 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 foreign withholding tax. Some foreign issuers may make arrangements through which holders of their American depositary shares or global shares can apply for a refund of withheld taxes. With respect to these issuers, holders of Wireless HOLDRS may be able to use these arrangements to apply for a refund of withheld taxes. In some cases, however, the holders of Wireless HOLDRS may have to independently apply to a foreign tax authority 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"). The Initial Depositor is not aware that any of the foreign issuers of the underlying securities is currently a PFIC, 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. The Initial Depositor will notify the trustee, who in turn will notify the receipt holders, if it becomes aware that any of the 25 foreign issuers is a PFIC. 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 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 Internet HOLDRS or of the underlying securities or upon the receipt of "excess distributions." To avoid the interest charge provisions described in the preceding sentence, a U.S. receipt holder can make one of certain elections (to the extent available under specific rules) including an election 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. A non-U.S. receipt holder who wishes to claim a reduction in withholding under the benefit of an applicable tax treaty must comply with certification requirements. 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 any underlying securities of a foreign issuer, 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 U.S. and any 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 corporate 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 timely 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 Wireless 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, 26 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 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. It is expected that the underlying securities are currently "regularly traded on an established securities market" although no assurances can be made that the securities will continue to be so traded. 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. Backup withholding and information reporting 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 or 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 the applicable rate 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 on a timely basis. 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. 27 ERISA CONSIDERATIONS Any plan fiduciary which proposes to have a plan acquire Wireless HOLDRS should consult with its counsel with respect to the potential applicability of the prohibited transaction provisions 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 Wireless 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 Wireless HOLDRS to Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Merrill Lynch, Pierce, Fenner & Smith Incorporated has deposited the underlying securities to receive Wireless HOLDRS. The trust delivered the initial distribution of Wireless HOLDRS against deposit of the underlying securities in New York, New York on approximately January 17, 2001. Investors who purchase Wireless 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. Members of the selling group have from time to time provided investment banking and other financial services to some of the issuers of the underlying securities and expect in the future to provide these services, for which they have received and will receive customary fees and commissions. They also may have served as counterparties in other transactions with some 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 Wireless 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 Wireless 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 these liabilities. LEGAL MATTERS Legal matters, including the validity of the Wireless HOLDRS, were passed upon for Merrill Lynch, Pierce, Fenner & Smith Incorporated, the initial depositor and the underwriter in connection with the initial offering of Wireless HOLDRS, by Shearman & Sterling LLP, New York, New York. Shearman & Sterling LLP, 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 Wireless 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 Wireless 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 28 Washington, D.C.. 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 Securities Exchange Act of 1934. Since the securities of the issuers of the underlying securities are registered under the Securities Exchange Act of 1934, 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. However, some of the issuers of the underlying securities may be considered foreign issuers. The requirements for filing periodic financial and other information for foreign issuers differ from that of domestic issuers. In particular, foreign issuers are not required to file quarterly reports with the SEC and are not required to file periodic financial and other information on EDGAR. Therefore, this information may not be accessible through the SEC's Web site. Information regarding the issuers of the underlying securities may also be obtained from other sources including, but not limited to, press releases, newspaper articles and other publicly disseminated information. The trust and the selling group and their affiliates are not affiliated with the issuers of the underlying securities, and the issuers of the underlying securities have no obligations with respect to Wireless HOLDRS. This prospectus relates only to Wireless 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 Wireless 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 Wireless HOLDRS have been publicly disclosed. 29 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 2001, 2002, 2003, 2004 and 2005, through February 14, 2006. The historical prices of the underlying securities should not be taken as an indication of future performance. AETHER SYSTEMS, INC. (AETH) Aether Systems, Inc. provides services, software and support that enable businesses to extend their desktop applications to wireless and mobile handheld devices. Aether provides consulting and engineering solutions, hosting facilities for businesses, product fulfillment and customer support. Aether also offers applications and software that are specifically tailored for customers, as well as integration, hosted and deployment services.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 50.31 January 7.23 January 3.41 January 5.26 January 3.28 January 3.22 February 25.72 February 4.20 February 3.30 February 4.33 February 3.42 February March 13.00 March 4.37 March 3.15 March 4.31 March 3.34 March April 15.07 April 3.33 April 3.61 April 3.90 April 3.34 April May 11.57 May 3.60 May 4.81 May 3.41 May 3.13 May June 8.85 June 2.95 June 4.80 June 3.44 June 3.29 June July 10.58 July 2.98 July 5.82 July 3.20 July 3.44 July August 8.85 August 2.84 August 5.41 August 2.93 August 3.61 August September 6.27 September 2.68 September 4.57 September 3.32 September 3.41 September October 6.97 October 2.28 October 4.84 October 3.66 October 3.28 October November 7.48 November 3.48 November 4.97 November 3.72 November 3.48 November December 9.20 December 3.76 December 4.75 December 3.34 December 3.32 December
The closing price on February 14, 2006 was $3.17. ALLTELL Corp. (AT) ALLTEL Corporation, through its subsidiaries, provides wireless and wireline local, long-distance, network access and Internet services in the United States. Alltell provides various voice features along with its wireless calling plans, including call waiting, call forwarding, caller identification, three-way calling, no-answer transfer, directory assistance call completion and voicemail. Alltell also publishes telephone directories for affiliates and other independent telephone companies. In addition, the company provides billing, customer care and other data processing and outsourcing services to telecommunications companies. The company sells its wireless products and services through its retail stores, retail kiosks, dealers and direct sales representatives.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 59.18 January 55.48 January 46.87 January 48.68 January 55.04 January 60.03 February 53.70 February 55.65 February 43.42 February 51.80 February 57.20 February March 52.46 March 55.55 March 44.76 March 49.89 March 54.85 March April 54.31 April 49.50 April 46.86 April 50.34 April 56.96 April May 57.99 May 51.49 May 47.88 May 50.63 May 58.17 May June 61.26 June 47.00 June 48.22 June 50.62 June 62.28 June July 61.65 July 40.52 July 46.79 July 52.00 July 66.50 July August 58.00 August 42.06 August 45.80 August 54.65 August 61.99 August September 57.95 September 40.13 September 46.34 September 54.91 September 65.11 September October 57.14 October 49.71 October 47.27 October 54.93 October 61.86 October November 65,08 November 55.08 November 45.41 November 56.69 November 66.83 November December 61.73 December 51.00 December 46.58 December 58.76 December 63.10 December
The closing price on February 14, 2006 was $61.90. A-1 CROWN CASTLE INTERNATIONAL CORP. (CCI) Crown Castle International Corp., through its subsidiaries, owns, operates, leases and manages towers and transmission networks for wireless communications and broadcast transmission companies in the United States, Puerto Rico and Australia. Crown Castle leases antenna space on its towers to tenants that operate analog, digital and broadcast transmission networks and wireless networks. Crown Castle also provides related services to its customers, including network design, radio frequency engineering, site acquisition, development and project management of antenna installations and network management and maintenance.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 27.94 January 7.27 January 3.95 January 12.40 January 16.40 January 31.63 February 25.13 February 6.21 February 3.88 February 12.05 February 16.34 February March 14.81 March 6.61 March 5.50 March 12.63 March 16.06 March April 24.49 April 7.30 April 6.37 April 13.95 April 16.13 April May 16.60 May 4.50 May 8.33 May 14.73 May 17.78 May June 16.40 June 3.93 June 7.77 June 14.75 June 20.32 June July 9.75 July 2.30 July 9.90 July 14.12 July 21.76 July August 10.19 August 2.30 August 10.75 August 14.31 August 24.76 August September 9.00 September 2.17 September 9.41 September 14.88 September 24.63 September October 11.70 October 3.50 October 12.66 October 15.31 October 24.52 October November 10.89 November 3.96 November 12.41 November 16.88 November 27.40 November December 10.68 December 3.75 December 11.03 December 16.64 December 26.91 December
The closing price on February 14, 2006 was $29.41. DEUTSCHE TELEKOM AG (DT) Deutsche Telekom AG provides telecommunications and information technology services worldwide. The company operates through three segments: Broadband/Fixed Network, Mobile Communications and Business Customers. Broadband/Fixed Network segment includes the activities of T-Com and T-Online divisions. The T-Com division provides fixed-line network communication services and products, including network access products, narrowband access products and calling services in Europe. The T-Online division offers Internet services in Europe. The Mobile Communications segment comprises the activities of T-Mobile division, which provides digital mobile telephony services based on the global system for mobile communications technology and non-voice services. The Business Customers segment includes the activities of T-Systems division that provides information and communications technology services.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 33.34 January 14.81 January 12.52 January 19.90 January 21.63 January 15.85 February 24.57 February 14.09 February 11.47 February 19.67 February 20.87 February March 23.19 March 14.98 March 11.02 March 18.04 March 19.96 March April 25.71 April 13.23 April 13.40 April 17.08 April 18.79 April May 21.00 May 10.80 May 15.02 May 16.84 May 18.65 May June 22.45 June 9.31 June 15.20 June 17.71 June 18.42 June July 21.71 July 11.32 July 15.05 July 16.67 July 19.78 July August 15.55 August 11.00 August 14.34 August 17.53 August 19.08 August September 15.50 September 8.27 September 14.44 September 18.66 September 18.24 September October 15.50 October 11.38 October 15.61 October 19.27 October 17.70 October November 16.91 November 12.21 November 16.48 November 21.22 November 16.59 November December 16.90 December 12.70 December 18.13 December 22.68 December 16.83 December
The closing price on February 14, 2006 was $16.36. A-2 FREESCALE SEMICONDUCTOR, INC. (FSL.B) Freescale Semiconductor, Inc. engages in the design and manufacture of embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets worldwide. The company operates through three primary segments: Transportation and Standard Products Group (TSPG), Networking and Computing Systems Group (NCSG) and Wireless and Mobile Solutions Group (WMSG). The TSPG segment provides embedded systems components, including processors. The NCSG segment offers embedded processors and related connectivity products for the wired and wireless networking and computing markets. The WMSG segment provides semiconductors for wireless mobile devices, such as cellular phones, smart phones, personal data assistants, two-way messaging devices, global positioning systems, mobile gaming devices and wireless consumer electronics. The company sells its products to original equipment manufacturers, original design manufacturers and contract manufacturers through its own sales force, agents and distributors.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January * January * January * January * January 17.10 January 25.16 February * February * February * February * February 18.90 February March * March * March * March * March 16.95 March April * April * April * April * April 18.72 April May * May * May * May * May 20.20 May June * June * June * June * June 21.01 June July * July * July * July 14.05 July 25.52 July August * August * August * August 13.90 August 23.88 August September * September * September * September 14.30 September 23.41 September October * October * October * October 15.54 October 23.69 October November * November * November * November 17.66 November 25.75 November December * December * December * December 17.82 December 25.19 December
The closing price on February 14, 2006 was $27.58. LM ERICSSON TELEPHONE COMPANY (ERICY) LM Ericsson Telephone Company engages in the development and supply of telecommunications equipment and related services to mobile and fixed network operators worldwide. The company offers mobile systems that include radio base stations, base station controllers and radio network controllers, mobile switching centers, service application nodes and other nodes for billing and operations support. The company also offers a range of professional services to support network operators, as well as provides consulting services to network operators for business planning and development, design and optimization of networks and the introduction of new services. LM Ericsson, through a joint venture, with Sony Ericsson Mobile Communications, provides various mobile handsets. In addition, the company provides technology to manufacturers of mobile handsets and other wireless devices; Bluetooth solutions to various consumer device manufacturers; and mobile communications systems and services that enable businesses, government entities and educational institutions to have access to applications and services across various locations. Furthermore, the company offers airborne, terrestrial and marine radar systems, as well as various solutions that integrate copper and optical cables and power networks.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 118.80 January 43.40 January 8.13 January 23.01 January 29.33 January 36.48 February 82.80 February 42.20 February 6.49 February 29.01 February 29.31 February March 55.90 March 41.80 March 6.36 March 27.76 March 28.20 March April 64.30 April 24.90 April 9.06 April 26.67 April 29.45 April May 64.00 May 22.20 May 10.40 May 27.99 May 31.43 May June 54.20 June 14.40 June 10.63 June 29.90 June 31.95 June July 53.60 July 9.60 July 14.26 July 26.71 July 34.36 July August 49.80 August 7.30 August 15.48 August 27.04 August 34.91 August September 34.90 September 3.60 September 14.70 September 31.24 September 36.84 September October 42.70 October 7.89 October 17.08 October 28.91 October 32.80 October November 54.60 November 9.83 November 16.25 November 33.25 November 32.58 November December 52.20 December 6.74 December 17.70 December 31.49 December 34.40 December
The closing price on February 14, 2006 was $34.82. A-3 MOTOROLA, INC. (MOT) Motorola, Inc. provides mobility products and solutions across broadband, embedded systems and wireless networks worldwide. The company operates in four segments: Mobile Devices, Networks, Government and Enterprise Mobility Solutions and Connected Home Solutions. Mobile Devices designs, manufactures, sells and services wireless subscriber and server equipment for cellular systems, portable energy storage products and systems, servers and software solutions and related software and accessory products. The Networks segment designs, manufactures, sells, installs and services wireless infrastructure communication systems. The Government and Enterprise Mobility Solutions segment provides analog and digital two-way radio, voice and data communications products and systems to public-safety, government, utility, transportation and other markets, as well as offers integrated information management, mobile and biometric applications and services. The Connected Home Solutions segment offers digital systems and set-top terminals for cable TV and broadcast networks; cable modems and cable modem termination systems, and IP-based telephony products; hybrid fiber coaxial network transmission systems used by cable TV operators; digital satellite TV systems; and direct-to-home satellite networks and private networks.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 22.81 January 13.31 January 7.98 January 16.58 January 15.74 January 22.71 February 15.17 February 13.00 February 8.42 February 18.45 February 15.66 February March 14.26 March 14.20 March 8.26 March 17.60 March 14.97 March April 15.55 April 15.40 April 7.91 April 18.25 April 15.34 April May 14.70 May 15.99 May 8.52 May 19.77 May 17.37 May June 16.56 June 14.59 June 9.43 June 18.25 June 18.26 June July 18.69 July 11.60 July 9.04 July 15.93 July 21.18 July August 17.40 August 12.00 August 10.73 August 16.15 August 21.88 August September 15.60 September 10.18 September 11.95 September 18.04 September 22.03 September October 16.37 October 9.17 October 13.53 October 17.26 October 22.16 October November 16.54 November 11.24 November 14.04 November 19.26 November 24.09 November December 15.02 December 8.65 December 14.00 December 17.20 December 22.59 December
The closing price on February 14, 2006 was $22.22. NEXTEL PARTNERS, INC. CL A (NXTP) Nextel Partners, Inc. owns exclusive rights to offer integrated, digital wireless communications services offered by Nextel Communications, Inc. under the Nextel brand name in mid-sized and rural markets throughout the United States. The company offers four distinct wireless services in a single wireless handset. These services include international and nationwide Direct Connect; digital cellular voice; short messaging; and cellular Internet access, which provides users with wireless access to the Internet and an organization's internal databases, as well as other applications, including email.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 20.75 January 6.32 January 5.25 January 12.93 January 19.89 January 27.98 February 19.44 February 5.36 February 5.62 February 12.82 February 19.91 February March 13.73 March 6.02 March 5.04 March 12.66 March 21.92 March April 17.19 April 5.09 April 5.81 April 13.35 April 23.52 April May 15.05 May 5.09 May 5.45 May 16.31 May 23.75 May June 15.52 June 2.72 June 7.34 June 15.92 June 25.17 June July 14.86 July 3.91 July 8.88 July 16.07 July 24.90 July August 10.25 August 5.46 August 8.23 August 14.42 August 26.24 August September 6.73 September 5.38 September 7.85 September 16.58 September 25.10 September October 5.35 October 7.11 October 11.98 October 16.84 October 25.15 October November 9.62 November 6.60 November 11.79 November 18.09 November 26.50 November December 12.00 December 6.07 December 13.45 December 19.54 December 27.94 December
The closing price on February 14, 2006 was $28.06. A-4 NOKIA CORPORATION (NOK) Nokia Corporation manufactures mobile devices principally based on global system for mobile communications, code division multiple access (CDMA) and wideband CDMA (WCDMA) technologies. Nokia operates in three divisions: Multimedia, Enterprise Solutions and Networks. The Multimedia division focuses on bringing connected mobile multimedia to consumers in the form of advanced mobile devices, including 3G WCDMA mobile devices and solutions. The Enterprise Solutions division enables businesses and institutions extend their use of mobility from mobile devices for voice and basic data to secure mobile access, content and applications. The Networks division provides network infrastructure, communications and networks service platforms and professional services to operators and service providers. Nokia also provides equipment, solutions and services for its operator and enterprise customers. The company sells its mobile devices primarily to operators, distributors, independent retailers and enterprise customers worldwide.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 34.35 January 23.45 January 14.39 January 20.66 January 15.28 January 18.38 February 22.00 February 20.77 February 13.23 February 21.77 February 16.14 February March 24.00 March 20.74 March 14.01 March 20.28 March 15.43 March April 34.19 April 16.26 April 16.57 April 14.01 April 15.98 April May 29.24 May 13.88 May 18.04 May 13.74 May 16.86 May June 21.19 June 14.48 June 16.43 June 14.54 June 16.64 June July 21.81 July 12.40 July 15.30 July 11.62 July 15.95 July August 15.24 August 13.29 August 16.29 August 11.87 August 15.77 August September 15.65 September 13.25 September 15.60 September 13.72 September 16.91 September October 20.51 October 16.62 October 16.99 October 15.42 October 16.82 October November 23.01 November 19.21 November 17.98 November 16.17 November 17.08 November December 24.53 December 15.50 December 17.00 December 15.67 December 18.30 December
The closing price on February 14, 2006 was $18.52. QUALCOMM, INC. (QCOM) Qualcomm Incorporated develops and markets digital wireless communications products, technologies and services for use in wireless networks. Qualcomm developed Code Division Multiple Access (CDMA) technology, which is a communications industry standard for digital wireless networks. Qualcomm also develops and supplies CDMA-based integrated circuits and system software for wireless voice and data communications. Additionally, Qualcomm develops and supplies global positioning system products to wireless device and infrastructure manufacturers. The company markets and sells its products and CDMA technology through its own direct sales force and through third parties.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 84.06 January 44.05 January 37.66 January 58.61 January 37.24 January 47.96 February 54.81 February 33.25 February 34.58 February 63.09 February 36.05 February March 56.62 March 37.64 March 37.50 March 66.29 March 36.63 March April 57.36 April 30.16 April 31.88 April 62.46 April 34.89 April May 60.74 May 31.64 May 33.55 May 67.07 May 37.27 May June 58.48 June 27.49 June 36.03 June 36.05 June 33.01 June July 63.23 July 27.48 July 37.48 July 34.19 July 39.48 July August 58.85 August 27.71 August 41.33 August 38.05 August 39.71 August September 47.54 September 27.62 September 41.67 September 39.04 September 44.75 September October 49.12 October 34.52 October 47.49 October 41.60 October 39.76 October November 58.72 November 41.22 November 44.55 November 41.62 November 45.47 November December 50.50 December 36.39 December 53.93 December 42.40 December 43.08 December
The closing price on February 14, 2006 was $47.60. A-5 RESEARCH IN MOTION LIMITED (RIMM) Research In Motion Limited engages in the design, manufacture and marketing of wireless solutions for the mobile communication market worldwide. RIMM provides platforms and solutions for access to email, phone, short message service, organizer, Internet and intranet-based corporate data applications. RIMM also licenses its technology to handset and software vendors to enable these companies to offer wireless data services using the BlackBerry Enterprise Server and BlackBerry Internet Service. In addition, RIMM enables various third party developers and manufacturers to improve their products and services with wireless connectivity. The company offers its products to carrier partners, resellers and end users.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 65.81 January 25.61 January 12.76 January 43.51 January 71.29 January 67.53 February 38.69 February 22.89 February 12.70 February 49.45 February 66.11 February March 21.97 March 27.77 March 13.06 March 46.67 March 76.42 March April 33.92 April 17.70 April 15.61 April 43.55 April 64,41 April May 32.62 May 15.12 May 19.02 May 59.97 May 82.82 May June 32.25 June 11.38 June 21.62 June 68.45 June 73.79 June July 23.53 July 11.74 July 12.04 July 61.67 July 70.66 July August 16.86 August 10.60 August 14.24 August 60.22 August 78.30 August September 16.08 September 9.42 September 19.10 September 76.34 September 68.30 September October 16.26 October 12.50 October 22.06 October 88.20 October 61.49 October November 21.79 November 15.28 November 22.85 November 88.97 November 61.13 November December 23.72 December 13.12 December 33.42 December 82.42 December 66.01 December
The closing price on February 14, 2006 was $68.68. RF MICRO DEVICES, INC. (RFMD) RF Micro Devices, Inc. designs, manufactures and markets radio frequency integrated circuits, which are included primarily in cellular and personal communications service phones, base stations, wireless local area networks and cable television modems. RF Micro Devices' products include amplifiers, transmitters and receivers, and its integrated circuits perform transmit and receive functions that are critical to the performance of wireless and PCS phones. The company markets and sells its products through its own direct sales force and through third parties.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 21.63 January 18.31 January 5.62 January 9.49 January 5.47 January 7.28 February 11.12 February 15.64 February 6.54 February 9.23 February 5.50 February March 11.69 March 17.90 March 6.00 March 8.46 March 5.22 March April 29.38 April 17.40 April 4.72 April 7.36 April 3.92 April May 26.08 May 16.41 May 5.64 May 7.97 May 4.65 May June 26.97 June 7.62 June 5.90 June 7.50 June 5.41 June July 27.36 July 6.66 July 7.37 July 5.92 July 6.09 July August 25.46 August 6.69 August 8.83 August 5.12 August 6.55 August September 16.60 September 6.00 September 9.24 September 6.34 September 5.65 September October 20.44 October 8.48 October 11.69 October 6.51 October 5.24 October November 24.25 November 12.19 November 11.71 November 6.96 November 5.68 November December 19.23 December 7.33 December 10.06 December 6.84 December 5.41 December
The closing price on February 14, 2006 was $7.10. A-6 SK TELECOM CO., LTD. (SKM) SK Telecom Co., Ltd. provides wireless telecommunications services in Korea. SK Telecom offers cellular services using a network of code division multiple access technology. SK Telecom also develops and commercializes wireless Internet services. Through its subsidiary, SK Teletech Co., Ltd., the company designs, markets and sells digital handsets under the brand name `Sky'. Through another subsidiary, SK Telink Co., Ltd., the company offers international telecommunications services, including direct-dial, as well as prepaid and postpaid card calling services, bundled services for corporate customers, voice services using Internet protocol, Web-to-phone services and data services.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 25.73 January 21.92 January 17.01 January 22.18 January 19.96 January 23.23 February 19.49 February 21.95 February 15.39 February 25.01 February 21.30 February March 15.18 March 24.60 March 13.62 March 21.30 March 19.72 March April 21.05 April 21.39 April 15.20 April 20.20 April 19.46 April May 19.17 May 24.78 May 17.95 May 20.87 May 20.92 May June 16.90 June 24.79 June 18.86 June 20.99 June 20.40 June July 18.33 July 21.42 July 19.41 July 17.66 July 21.47 July August 19.18 August 21.76 August 19.06 August 18.90 August 21.26 August September 18.44 September 21.23 September 17.84 September 19.45 September 21.84 September October 21.08 October 20.07 October 19.60 October 19.73 October 20.21 October November 22.80 November 22.50 November 17.85 November 22.51 November 21.13 November December 21.62 December 21.35 December 18.65 December 22.25 December 20.29 December
The closing price on February 14, 2006 was $23.76. SPRINT NEXTEL CORPORATION (S) Sprint Nextel Corporation offers a range of wireless and wireline communications services to consumer, business and government customers in the United States. Sprint Nextel develops, engineers and deploys various technologies, including two wireless networks offering mobile data services; national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. The company has strategic alliances with Cisco Systems, Hewlett-Packard, IBM and Nortel Networks.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 30.50 January 16.38 January 3.76 January 17.41 January 23.83 January 22.89 February 25.18 February 9.25 February 3.96 February 17.73 February 23.68 February March 19.00 March 10.29 March 4.36 March 18.43 March 22.75 March April 25.63 April 11.21 April 3.50 April 17.89 April 22.26 April May 22.00 May 10.44 May 4.46 May 17.76 May 23.69 May June 24.15 June 4.47 June 5.75 June 17.60 June 25.09 June July 25.92 July 4.10 July 14.12 July 18.68 July 26.90 July August 24.98 August 3.96 August 14.77 August 19.68 August 25.93 August September 26.29 September 1.96 September 15.10 September 20.13 September 23.78 September October 22.30 October 3.48 October 16.00 October 20.95 October 23.31 October November 24.95 November 5.76 November 14.99 November 22.81 November 25.04 November December 24.41 December 4.38 December 16.42 December 24.85 December 23.36 December
The closing price on February 14, 2006 was $23.99. A-7 TELESP CELLULAR PARTICIPACOES S.A. (TCP) Telesp Celular Participacoes S.A., through its susbsidiaries, provides cellular telecommunications services using both digital and analog technologies in Brazil. Telesp provides voice service and ancillary services, including voicemail and voicemail notification, call forwarding, three-way calling, caller identification, short messaging, limitation on the number of used minutes and cellular chat room and data services. The company also offers roaming services, through agreements with local cellular service providers throughout Brazil and other countries. In addition, the company offers multimedia message services and mobile execution environment that enable the handset to download applications and execute them at the mobile and a user interface with icons to identify the services, such as voice mail, downloads and text messaging.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 26.95 January 7.60 January 2.79 January 7.53 January 6.20 January 4.82 February 24.00 February 7.98 February 2.41 February 7.57 February 6.93 February March 14.81 March 6.33 March 3.24 March 9.13 March 5.98 March April 16.80 April 6.41 April 3.85 April 7.13 April 5.28 April May 17.46 May 5.44 May 4.08 May 7.05 May 5.07 May June 15.15 June 3.96 June 3.90 June 7.88 June 4.27 June July 14.60 July 2.62 July 3.52 July 6.60 July 4.39 July August 12.93 August 3.37 August 4.05 August 6.43 August 4.15 August September 5.28 September 1.81 September 4.66 September 6.18 September 3.91 September October 5.05 October 2.66 October 5.70 October 5.99 October 3.65 October November 7.40 November 2.74 November 6.08 November 6.49 November 3.55 November December 9.26 December 3.05 December 6.58 December 6.80 December 3.78 December
The closing price on February 14, 2006 was $5.17. UNITED STATES CELLULAR CORPORATION (USM) United States Cellular Corporation owns and manages wireless telecommunications systems throughout the United States. The company offers a full range of wireless telephones to its customers, including both analog and digital headsets. United States Cellular provides wireless service to major, mid- and small-sized cities in twenty-five U.S. states, and offers local, regional and national service plans. The company sells and services its products through facilities located across the United States.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 66.65 January 40.15 January 23.85 January 38.85 January 44.90 January 50.90 February 59.28 February 38.80 February 24.35 February 41.35 February 50.00 February March 63.50 March 41.00 March 23.61 March 38.65 March 45.63 March April 66.00 April 39.50 April 24.05 April 34.27 April 46.20 April May 61.10 May 37.18 May 26.25 May 35.61 May 47.04 May June 57.65 June 25.45 June 25.45 June 38.55 June 49.94 June July 56.30 July 26.10 July 28.75 July 39.25 July 52.15 July August 51.75 August 31.45 August 27.96 August 40.25 August 54.88 August September 49.50 September 29.58 September 29.10 September 43.15 September 53.42 September October 44.65 October 27.60 October 33.86 October 41.65 October 51.00 October November 44.40 November 29.50 November 34.60 November 44.25 November 50.80 November December 45.25 December 25.02 December 35.50 December 44.76 December 49.40 December
The closing price on February 14, 2006 was $51.80. A-8 VERIZON COMMUNICATIONS INC. (VZ) Verizon Communications, Inc. provides communications services primarily in the United States. Verizon operates through three segments: Domestic Telecom, Domestic Wireless and Information Services. The Domestic Telecom segment provides local telephone services in 29 states and the District of Columbia. The Domestic Wireless segment offers various products and services, which include wireless voice and data services, as well as sells related equipment in the United States. The Information Services segment engages in print and online directory publishing, provision of content for electronic communications products and services and Website creation services. The company also provides voice switching/processing services, end-user networking services, personal computer-based conferencing, internetworking, data transmission, network integration services and network monitoring services. The company was incorporated in 1983 under the name Bell Atlantic Corporation. The company changed its name to Verizon Communications, Inc. in 2000 following a merger with GTE Corporation.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 54.95 January 46.35 January 38.28 January 36.86 January 35.59 January 31.66 February 49.50 February 46.80 February 34.58 February 38.33 February 35.97 February March 49.30 March 46.10 March 35.35 March 36.54 March 35.50 March April 55.07 April 40.11 April 37.38 April 37.74 April 35.80 April May 54.85 May 43.00 May 37.85 May 34.58 May 35.38 May June 53.50 June 40.15 June 39.45 June 36.19 June 34.55 June July 54.15 July 33.00 July 35.00 July 38.54 July 34.23 July August 50.00 August 31.00 August 35.32 August 39.25 August 32.71 August September 54.11 September 27.44 September 32.44 September 39.38 September 32.69 September October 49.81 October 37.76 October 33.60 October 39.10 October 31.51 October November 47.00 November 41.88 November 32.84 November 41.23 November 31.98 November December 47.46 December 38.75 December 35.08 December 40.51 December 30.12 December
The closing price on February 14, 2006 was $33.52. VODAFONE GROUP PLC. (VOD) Vodafone Group Public Limited Company operates as a mobile telecommunications company principally in the United States, Europe and Asia. Vodafone's products and services include voice services; short messaging service; Vodafone live!, an integrated communications and multimedia proposition, through which customers access various online services, such as games, ringtones, news, sports and information; mobile connect cards that provide working mobility to customers accessing email and company applications; and roaming services. The company distributes its products and services directly, as well as through third-party service providers, independent dealers and agencies.
Closing Closing Closing Closing Closing Closing 2001 Price 2002 Price 2003 Price 2004 Price 2005 Price 2006 Price ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January 34.97 January 21.70 January 18.85 January 25.60 January 25.98 January 21.11 February 27.31 February 19.00 February 18.10 February 24.97 February 26.29 February March 27.15 March 18.43 March 18.22 March 23.90 March 26.56 March April 30.28 April 16.20 April 19.76 April 24.54 April 26.14 April May 25.89 May 14.93 May 21.91 May 23.76 May 25.18 May June 29.35 June 13.65 June 19.65 June 22.10 June 24.32 June July 21.55 July 15.17 July 18.98 July 21.73 July 25.83 July August 20.15 August 15.99 August 18.30 August 22.90 August 27.25 August September 21.96 September 12.83 September 20.25 September 24.11 September 25.97 September October 23.12 October 15.92 October 21.15 October 25.79 October 26.26 October November 25.34 November 18.75 November 23.35 November 27.27 November 21.55 November December 25.68 December 18.12 December 25.04 December 27.38 December 21.47 December
The closing price on February 14, 2006 was $21.21. A-9 ================================================================================ [GRAPHIC OMITTED] 1,000,000,000 Depositary Receipts Wireless HOLDRSSM Trust P R O S P E C T U S February 16, 2006 ================================================================================ 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 attorney's 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. II-1 (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. o 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. o 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. o 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 of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective. o 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. o 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 14 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 Securities 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. 6 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, on February 16, 2006. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: * ------------------------------------- Name: Joseph F. Regan Title: First Vice President, Chief Financial Officer and Controller Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 6 to the Registration Statement has been signed by the following persons in the capacities indicated below on February 16, 2006. Signature Title --------- ----- * Chief Executive Officer, - ------------------------- Chairman of the Board Robert J. McCann * Director - ------------------------- Do Woo Kim * Director - ------------------------- Carlos M. Morales * Director - ------------------------- Candace E. Browning * Director - ------------------------- Gregory J. Fleming * Controller - ------------------------- Joseph F. Regan *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 included as exhibits thereto, form of Depositary Trust Agreement and form of HOLDRS, filed on September 27, 2000 as an exhibit to the Amendment No. 1 to the registration statement filed on Form S-1 for Wireless HOLDRS. *4.2 Amendment No. 2 to the Standard Terms for Depositary Trust Agreements, dated as of November 22, 2000, filed on September 27, 2000 as an exhibit to the Amendment No. 1 to the registration statement filed on Form S-1 for Wireless HOLDRS. *5.1 Opinion of Shearman & Sterling LLP regarding the validity of the Wireless HOLDRS Receipts, filed on September 27, 2000 as an exhibit to the Amendment No. 1 to the registration statement filed on Form S-1 for Wireless HOLDRS. *8.1 Opinion of Shearman & Sterling LLP, as special U.S. tax counsel, regarding the material federal income tax consequences, filed on September 27, 2000 as an exhibit to the Amendment No. 1 to the registration statement filed on Form S-1 for Wireless HOLDRS. *8.2 Opinion of Shearman & Sterling LLP, as special U.S. tax counsel regarding the material federal income tax consequences, filed on July 14, 2003 as an exhibit to Amendment No. 4 to the registration statement filed on Form S-1 for Wireless HOLDRS. *24.1 Power of Attorney (included in Part II of Registration Statement), filed on August 4, 2000 as an exhibit to the registration statement filed on Form S-1 for Wireless HOLDRS. *24.2 Power of Attorney of James P. Gorman, Arshad R. Zakaria and Carlos M. Morales. *24.3 Power of Attorney of Candace E. Browning, Gregory J. Fleming, Do Woo Kim and Joseph F. Regan. 24.4 Power of Attorney of Robert J. McCann and Joseph F. Regan. __________________ * Previously filed II-4 EX-24.4 3 ex24-4_021306.txt POWER OF ATTORNEY EXHIBIT 24.4 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. Bodhurta and each of them, with full power to act without the other, her and his, respectively, true and lawful attorneys-in-fact and agents with full and several power of substitution, for her and him and in her and 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 HOLDRS(SM) Trust, B2B Internet HOLDRS(SM) Trust, Broadband HOLDRS(SM) Trust, Europe 2001 HOLDRS(SM) Trust, Internet HOLDRS(SM) Trust, Internet Architecture HOLDRS(SM) Trust, Internet Infrastructure HOLDRS(SM) Trust, Market 2000+ HOLDRS(SM) Trust, Oil Service HOLDRS(SM) Trust, Pharmaceutical HOLDRS(SM) Trust, Regional Bank HOLDRS(SM) Trust, Semiconductor HOLDRS(SM) Trust, Software HOLDRS(SM) Trust, Telecom HOLDRS(SM) Trust, Wireless HOLDRS(SM) Trust, Utilities HOLDRS(SM) Trust and Retail HOLDRS(SM) 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 she or 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/ Robert J. McCann Chairman of the Board & - ----------------------------- Chief Executive Officer Name: Robert J. Mccann /s/ Joseph F. Regan First Vice President, Chief - ---------------------------- Financial Officer & Controller Name: Joseph F. Regan -----END PRIVACY-ENHANCED MESSAGE-----