-----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, Iw8DS1GEFUgu3LM58qGrkl2Lz5wo993z4F8gUp3Ag8d6x7yQS6F5jnE9+J89LoSm kBf+RBzpiSw9xShxERQHoA== 0000950130-01-501226.txt : 20010504 0000950130-01-501226.hdr.sgml : 20010504 ACCESSION NUMBER: 0000950130-01-501226 CONFORMED SUBMISSION TYPE: 424B4 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20010503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERRILL LYNCH PIERCE FENNER & SMITH INC CENTRAL INDEX KEY: 0000728612 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B4 SEC ACT: SEC FILE NUMBER: 333-54662 FILM NUMBER: 1621574 BUSINESS ADDRESS: STREET 1: NORTH TOWER WORLD FINANCIAL CENTER STREET 2: NORTH TOWER WORLD FINANCIAL CENTER 5TH F CITY: NEW YORK STATE: NY ZIP: 10281-1323 BUSINESS PHONE: 2124496202 MAIL ADDRESS: STREET 1: WORLD FINANCIAL CENTER STREET 2: NORTH TOWER 23RD FL CITY: NEW YORK STATE: NY ZIP: 10281-1323 424B4 1 d424b4.txt FINAL PROSPECTUS RULE NO. 424(b)(4) REGISTRATION NO. 333-54662 PROSPECTUS HOLDRS/sm/ Retail 1,000,000,000 Depositary Receipts Retail HOLDRS SM Trust The Retail HOLDRS SM Trust will issue Depositary Receipts called Retail HOLDRS SM representing your undivided beneficial ownership in the common stock of a group of specified companies that, among other things, sell retail merchandise to consumers through traditional retail stores, the Internet, mail order catalogs and other outlets. The Bank of New York will be the trustee. You only may acquire, hold or transfer Retail HOLDRS in a round-lot amount of 100 Retail HOLDRS or round-lot multiples. Retail HOLDRS are separate from the underlying common stocks that are represented by the Retail HOLDRS. For a list of the names and the number of shares of the companies that make up a Retail HOLDR, see "Highlights of Retail HOLDRS--The Retail HOLDRS" starting on page 9. Merrill Lynch, Pierce, Fenner & Smith Incorporated has sold 1,000,000 Retail HOLDRS in the initial distribution. The trust will issue the additional Retail HOLDRS on a continuous basis. Investing in Retail HOLDRS involves significant risks. See "Risk Factors" starting on page 4. The initial public offering price for a round-lot of 100 Retail HOLDRS will equal the sum of the closing market price on the primary U.S. trading market on May 1, 2001, the pricing date, for each deposited share multiplied by the share amount specified in this prospectus, plus an underwriting fee. Retail HOLDRS are neither interests in nor obligations of either the initial depositor, Merrill Lynch, Pierce, Fenner & Smith Incorporated, or The Bank of New York, as trustee. Before this issuance, there has been no public market for Retail HOLDRS. The Retail HOLDRS have been approved for listing on the American Stock Exchange under the symbol "RTH", subject to official notice of issuance. --------------- 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.
Initial Price Underwriting to Public* Fee ------------- ------------ Per Retail HOLDR............................... $100.15 2%
-------- *Includes underwriting fee. For purchases of 10,000 to 49,999 Retail HOLDRS, the underwriting fee will be 1%, and for purchases of 50,000 or more Retail HOLDRS, the underwriting fee will be 0.25%. --------------- Merrill Lynch & Co. Robert W. Baird & Co. First Union Securities, Inc. Morgan Keegan & Company, Inc. Raymond James & Associates, Inc. Sutro & Co. Incorporated Tucker Anthony Capital Markets
The date of this prospectus is May 1, 2001. "HOLDRS" and "HOLding Company Depositary ReceiptS" are service marks of Merrill Lynch & Co., Inc. TABLE OF CONTENTS
Page ---- Summary.................................................................... 3 Risk Factors............................................................... 4 Highlights of Retail HOLDRS................................................ 9 The Trust.................................................................. 16 Description of Retail HOLDRS............................................... 16 Description of the Underlying Securities................................... 17 Description of the Depositary Trust Agreement.............................. 19 Federal Income Tax Consequences............................................ 23 ERISA Considerations....................................................... 26 Plan of Distribution....................................................... 26 Legal Matters.............................................................. 27 Where You Can Find More Information........................................ 27
--------------- This prospectus contains information you should consider when making your investment decision. With respect to information about Retail HOLDRS, you should rely only on the information contained in this prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell Retail HOLDRS in any jurisdiction where the offer or sale is not permitted. The Retail HOLDRS are not registered for public sale outside of the United States. Non-U.S. receipt holders should refer to "Federal Income Tax Consequences--Non-U.S. receipt holders" and we recommend that non-U.S. receipt holders consult their tax advisors regarding U.S. withholding and other taxes which may apply to ownership of the Retail HOLDRS or of the underlying securities through an investment in the Retail HOLDRS. 2 SUMMARY The Retail HOLDRS Trust will be formed under the depositary trust agreement, dated as of March 12, 2001, among The Bank of New York, as trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, other depositors and the owners of the Retail HOLDRS. The trust is not a registered investment company under the Investment Company Act of 1940. The trust will hold shares of common stock issued by 20 specified companies that, among other things, sell retail merchandise to consumers through traditional retail stores, the Internet, mail order catalogs and other outlets. The number of shares of each company's common stock held by the trust with respect to each round-lot of Retail HOLDRS is specified under "Highlights of Retail HOLDRS--The Retail HOLDRS." This group of common stocks is collectively referred to in this prospectus as the securities or the underlying securities. The trust will issue Retail HOLDRS that represent your undivided beneficial ownership interest in the securities held by the trust on your behalf. The Retail HOLDRS are separate from the underlying securities that are represented by the Retail HOLDRS. 3 RISK FACTORS An investment in Retail HOLDRS involves risks similar to investing in each of the underlying securities outside of the Retail HOLDRS, including the risks associated with concentrated investments in the retailing industry. General Risk Factors . Loss of investment. Because the value of Retail HOLDRS directly relates to the value of the underlying securities, you may lose a substantial portion of your investment in the Retail HOLDRS if the underlying securities decline in value. . Discount trading price. Retail HOLDRS may trade at a discount to the aggregate value of the underlying securities. . Not necessarily representative of the retailing industry. While the underlying securities are securities of companies generally considered to be involved in various aspects of the retailing industry, the underlying securities and the Retail HOLDRS may not necessarily follow the price movements of the entire retailing industry generally. If the underlying securities decline in value, your investment in the Retail HOLDRS will decline in value even if the market price of the securities of companies in the retailing industry generally increase in value. Furthermore, after the initial deposit, one or more of the issuers of the underlying securities may no longer be involved in the retailing industry. In this case, the Retail HOLDRS may no longer consist of securities issued only by companies involved in the retailing industry. . Not necessarily comprised only of retail companies. As a result of distributions of securities by companies included in the Retail HOLDRS or other corporate events, such as mergers, securities of companies that are not currently included in the Retail HOLDRS and that are not involved in the retailing industry may be included in the Retail HOLDRS. The securities of a new company will only be distributed from the Retail HOLDRS if the securities have a different Standard & Poor's Corporation sector classification than any of the underlying issuers included in Retail HOLDRS at the time of the distribution or the corporate event or if the securities are not listed for trading on a U.S. national securities exchange or through Nasdaq NMS. As there are only 11 broadly defined sector classifications, the use of Standard & Poor's sector classifications to determine whether a new company will be included in the Retail HOLDRS provides no assurance that each new company included in the Retail HOLDRS will be involved in the retailing industry. Currently, the underlying securities included in the Retail HOLDRS are represented in the Consumer Staples and Consumer Cyclicals sectors. As each Standard & Poor's sector classification is defined so broadly, the securities of a new company could have the same sector classification as a company currently included in the Retail HOLDRS yet not be involved in the retailing industry. In addition, the sector classifications of securities included in the Retail HOLDRS may change over time if the companies that issued these securities change their focus of operations or if Standard & Poor's alters the criteria it uses to determine sector classifications, or both. Therefore, additional sector classifications may be represented in the Retail HOLDRS which may also result in the inclusion in the Retail HOLDRS of the securities of a new company that is not involved in the retailing industry. . No investigation of underlying securities. The underlying securities included in the Retail 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 retailing industry, without regard for the value, price performance, volatility or investment merit of the underlying securities. Consequently, the Retail HOLDRS Trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and each of their respective affiliates, have not 4 performed any investigation or review of the selected companies, including the public filings by the companies. Investors and market participants should not conclude that the inclusion of a company is any form of investment recommendation by the trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, or their respective affiliates. . Concentration of investment. As a result of market fluctuations and/or reconstitution events, an investment in Retail HOLDRS may represent a more concentrated investment in one or more of the underlying securities or one or more industries. A concentrated investment will reduce the diversification of the Retail HOLDRS and increase your exposure to the risks of concentrated investments. . Conflicting investment choices. In order to sell one or more of the underlying securities individually or to participate in a tender offer relating to one or more of the underlying securities, you will be required to cancel your Retail HOLDRS and receive delivery of each of the underlying securities. The cancellation of your Retail HOLDRS will allow you to sell individual underlying securities or to deliver individual underlying securities in a tender offer. The cancellation of Retail HOLDRS will involve payment of a cancellation fee to the trustee. . Trading halts. Trading in Retail HOLDRS on the American Stock Exchange may be halted if trading in one or more of the underlying securities is halted. Trading in Retail HOLDRS may be halted even if trading continues in some or all of the underlying securities. If trading is halted in the Retail HOLDRS, you will not be able to trade Retail HOLDRS and you will only be able to trade the underlying securities if you cancel your Retail HOLDRS and receive each of the underlying securities. . Delisting from the American Stock Exchange. If the number of companies whose securities are held in the trust falls below nine, the American Stock Exchange may consider delisting the Retail HOLDRS. If the Retail HOLDRS are delisted by the American Stock Exchange, a termination event will result unless the Retail HOLDRS are listed for trading on another U.S. national securities exchange or through Nasdaq NMS within five business days from the date the Retail HOLDRS are delisted. . Possible conflicts of interest. Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, has selected the underlying securities and may face possible conflicts of interest in connection with its activities. For example, Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates, collectively referred to as Merrill Lynch, may engage in investment banking and other activities, may provide services to issuers of the underlying securities in connection with its business, or may make purchases or sales, including establishing long or short positions, in the underlying securities for its own account. In addition, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, will purchase, in the secondary market, the underlying securities that will be deposited into the trust. Merrill Lynch may make these purchases before the deposit into the trust, or it may borrow securities for the deposit and subsequently purchase the securities to repay to the lenders the securities previously borrowed. In either event, the purchases of the underlying securities will be made at various prices. As the initial offering price for the Retail HOLDRS will be based on the closing market price of each of the underlying securities on the pricing date, Merrill Lynch may recognize a gain on its purchases of the underlying securities. Specifically, if the closing market price for the underlying securities on the pricing date is higher than the price at which Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, purchases the underlying securities then it will recognize a gain in connection with such purchases. Merrill Lynch may recognize this gain on any of the underlying securities that comprise the Retail HOLDRS or on all of the underlying securities in the aggregate. The potential profit of Merrill Lynch also is affected by any hedging activities that it may engage in while it purchases the underlying securities in the secondary market for deposit into the 5 trust. All of these activities may result in conflicts of interest with respect to the financial interest of Merrill Lynch, on the one hand, and, on the other hand, the initial selection of the underlying securities included in the Retail HOLDRS, the selection of the retailing industry, Merrill Lynch's activity in the secondary market in the underlying securities, and the creation and cancellation of Retail HOLDRS by Merrill Lynch. . Temporary price increases in the underlying securities. Purchasing activity in the secondary trading market associated with acquiring the underlying securities for deposit into the trust may temporarily increase the market price of the deposited shares, which will result in a higher initial offering price for the Retail HOLDRS. Large volumes of purchasing activity, which may occur in connection with the issuance of Retail HOLDRS, particularly in connection with the initial issuance of Retail HOLDRS, could temporarily increase the market price of the underlying securities, resulting in a higher price on that date. This purchasing activity could create a temporary imbalance between the supply and demand of the underlying securities, thereby limiting the liquidity of the underlying securities due to a temporary increased demand for underlying securities. Temporary increases in the market price of the underlying securities may also occur as a result of the purchasing activity of other market participants. Other market participants may attempt to benefit from increases in the market price of the underlying securities that may occur as a result of the increased purchasing activity in the underlying securities resulting from the issuance of the Retail HOLDRS. Consequently, prices for the underlying securities may decline immediately after the pricing date. If the trading prices for the underlying securities decline, the trading price of Retail HOLDRS will also decline. Risk Factors Specific to Companies Involved in the Retailing Industry . Retail companies operate in a highly competitive industry and face intense price competition. The retailing industry is highly competitive with numerous industry participants. The companies included in the Retail HOLDRS compete with general merchandise, apparel and household merchandise retailers, Internet retailers, discount retailers, television direct marketers and mail-order catalog retailers. Some of the principal factors which retail companies must address to remain competitive include: . merchandise selection and quality; . brand recognition; . price; . convenience; . customer service; and . timely product delivery. Retail companies may also face increased pricing pressure as more retail outlets, especially electronic-commerce retailers and discount retailers, are established that are able to offer similar merchandise at reduced prices. If any of the companies included in the Retail HOLDRS fail to successfully compete and maintain customer satisfaction and market share, its stock price may decline and will negatively affect the market price of the Retail HOLDRS. . The companies in the Retail HOLDRS may be subject to seasonal and quarterly variations in the retailing industry. The apparel and general merchandise segments of the retailing industry have historically been subject to significant seasonal and quarterly variations. Many retailers derive a significant portion of their annual revenue during the months of November 6 and December. In anticipation of increased sales activity during this period many retail companies incur significant additional expenses. If the demand during November and December is miscalculated, a retail company could have significant excess inventory, which would have an adverse affect on its financial performance. In addition, a significant shortfall in sales during November and December would have an adverse impact on the results of operations of a retail company. Any seasonal or quarterly fluctuations that a retail company reports may not match the expectations of market analysts and investors. This, along with any changes in the expectations of consumer demand, could cause the market price of the Retail HOLDRS to fluctuate significantly. . Retail companies' revenues may be adversely affected by general economic factors. General economic factors in the markets in which retail companies operate, many of which are beyond their control, may nevertheless materially adversely affect company forecasts and actual performance. These factors include: . interest rates; . recession; . inflation and deflation; . consumer credit availability and debt levels; . tax rates and policy; . unemployment trends; and . other matters that influence consumer confidence and spending. These factors may negatively affect consumer spending and confidence and result in reduced revenues for retail companies. As many of the companies included in the Retail HOLDRS are apparel and general merchandise retailers that rely on consumers' purchases of discretionary items for a significant portion of their sales, during periods where disposable income is lower or during periods of economic uncertainty, consumer purchases of these items may decline. As a result, retail companies may be more adversely affected by a cyclical downturn in the economy than other companies. In addition, increased volatility in financial markets may cause these factors to change with a greater degree of frequency and magnitude. . Many of the companies included in the Retail HOLDRS are dependent on third party suppliers and distribution systems. Many of the companies included in the Retail HOLDRS purchase merchandise both directly from brand owners and indirectly from retailers and third party suppliers. These companies may also be dependent upon suppliers for the products used for their own brand name merchandise. Reliance on third party suppliers subjects retail companies to risks of delivery delays, price increases and receipt of non-conforming or poor quality merchandise. The purchase of merchandise from parties other than the brand owners also increases the risk that a retail company could mistakenly purchase and sell non-authentic or damaged goods, which may expose them to liability. In addition, many of the companies in the Retail HOLDRS use third party distributors and transportation providers over which they have no control to deliver and transport their merchandise. If retail companies encounter problems with their suppliers or distributors, their reputation could be harmed and their operations and financial conditions could be adversely affected. . Unexpected changes in consumer trends can affect the business of retail companies. Consumer trends can change rapidly, and the retail business is sensitive to these changes. The consumer companies included in the Retail HOLDRS may not accurately anticipate shifts in consumer trends and adjust their merchandise mix to appeal to changing consumer tastes in a timely manner. If a company misjudges the market for its products or is unsuccessful in 7 responding to changes in consumer trends or in market demand, the retail company could experience insufficient or excess inventory levels or higher markdowns, any of which would have a material adverse effect on its business, financial condition and results of operations and could adversely affect the price of the Retail HOLDRS. . Retail companies may be unable to protect their intellectual property rights and may be liable for infringing the intellectual property rights of others. Third parties may infringe or misappropriate the trademarks or other proprietary rights of the retail companies included in the Retail HOLDRS, which could have a material adverse effect on their business, results of operations or financial condition. Retail companies could also incur substantial costs in asserting and defending their intellectual property or proprietary rights. In addition, third parties may assert infringement claims against companies included in the Retail HOLDRS for infringement or misappropriation of their proprietary rights. These claims and any resulting litigation, if it occurs, could subject companies included in the Retail HOLDRS to significant liability for damages and may also result in limitations on the ability to use the intellectual property subject to the claim. 8 HIGHLIGHTS OF RETAIL HOLDRS This discussion highlights information regarding Retail HOLDRS. We present certain information more fully in the rest of this prospectus. You should read the entire prospectus carefully before you purchase Retail HOLDRS. Retail HOLDRS Trust. Issuer....................... The trust.................... The Retail HOLDRS Trust will be formed under the depositary trust agreement, dated as of March 12, 2001 among The Bank of New York, as trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, other depositors and the owners of the Retail HOLDRS. The trust is not a registered investment company under the Investment Company Act of 1940. Initial depositor............ Merrill Lynch, Pierce, Fenner & Smith Incorporated. Trustee...................... The Bank of New York, a New York state- chartered banking organization, will be the trustee and receive compensation as set forth in the depositary trust agreement. Purpose of Retail HOLDRS..... Retail HOLDRS are designed to achieve the following: Diversification. Retail HOLDRS are designed to allow you to diversify your investments in the retailing industry through a single, exchange- listed instrument representing your undivided beneficial ownership of the underlying securities. Flexibility. The beneficial owners of Retail HOLDRS have undivided beneficial ownership interests in each of the underlying securities represented by the Retail HOLDRS, and can cancel their Retail HOLDRS to receive each of the underlying securities represented by the Retail HOLDRS. Transaction costs. The expenses associated with buying and selling Retail HOLDRS in the secondary market are expected to be less than separately buying and selling each of the underlying securities in a traditional brokerage account with transaction-based charges. Trust assets................. The trust will hold securities issued by specified companies in the retailing industry. 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. The Retail HOLDRS............ The trust will issue Retail HOLDRS that represent your undivided beneficial ownership interest in the shares of U.S.-traded securities held by the trust on your behalf. The Retail HOLDRS themselves are separate from the underlying securities that are represented by the Retail HOLDRS. The specific share amounts for each round-lot of 100 Retail HOLDRS are set forth in the table below and were determined so that the initial weightings of each underlying security included in the Retail HOLDRS approximates the relative market capitalizations of the specified companies (based on the market capitalizations of the underlying securities on the trading date immediately preceding the pricing date), subject to a maximum initial weight of 20%. 9 The share amounts will not change, except for changes due to corporate events, such as stock splits or reverse stock splits on the underlying securities, or reconstitution events. However, the weightings are expected to change substantially over time because of price fluctuations. The following table provides: . the names of the 20 issuers of the underlying securities represented by the Retail HOLDRS, . stock ticker symbols, . share amounts represented by a round-lot of 100 Retail HOLDRS as of April 30, 2001, . initial weightings as of April 30, 2001, and . the principal U.S. market on which the underlying securities are traded.
Primary U.S. Share Initial Trading Name of Company Ticker Amounts Weightings Market ---------------- ------ ------- ---------- ------------ The Home Depot, Inc. HD 40 19.74% NYSE Wal-Mart Stores, Inc. WMT 36 19.52% NYSE Walgreen Co. WAG 19 8.52% NYSE Target Corporation TGT 16 6.45% NYSE Safeway Inc. SWY 9 5.12% NYSE The Gap, Inc. GPS 16 4.65% NYSE Lowe's Companies, Inc. LOW 7 4.62% NYSE CVS Corporation CVS 7 4.32% NYSE Kohl's Corporation KSS 6 3.84% NYSE The Kroger Co. KR 15 3.55% NYSE Costco Wholesales Corporation COST 8 2.93% Nasdaq NMS Albertson's, Inc. ABS 8 2.80% NYSE The May Department Stores Company MAY 6 2.34% NYSE Sears, Roebuck and Co. S 6 2.32% NYSE Best Buy Co., Inc. BBY 4 2.31% NYSE Federated Department Stores FD 4 1.80% NYSE The TJX Companies, Inc. TJX 5 1.64% NYSE The Limited, Inc. LTD 8 1.42% NYSE Amazon.com, Inc. AMZN 7 1.16% Nasdaq NMS RadioShack Corporation RSH 3 0.96% NYSE
These companies are generally considered to be 20 of the largest and most liquid companies with U.S.-traded securities involved in the retailing industry, as measured by market capitalization and trading volume on January 24, 2001. The market capitalization of a company is determined by multiplying the market price of its common stock by the number of its outstanding shares of common stock. The trust only will issue and cancel, and you only may obtain, hold, trade or surrender Retail HOLDRS in a round-lot of 100 Retail HOLDRS and round-lot multiples. The trust will only issue Retail HOLDRS upon the deposit of the whole shares represented by a round-lot of 100 Retail HOLDRS. In the event that a fractional share comes to be represented by a round-lot of Retail HOLDRS, the trust may require a minimum of more than one round-lot of 100 Retail HOLDRS for an issuance so that the trust will always receive whole share amounts for issuance of Retail HOLDRS. 10 The number of outstanding Retail HOLDRS will increase and decrease as a result of in-kind deposits and withdrawals of the underlying securities. The trust will stand ready to issue additional Retail HOLDRS on a continuous basis when an investor deposits the required securities with the trustee. Public offering price........ The initial public offering price for 100 Retail HOLDRS will equal the sum of the closing market price on the primary U.S. trading market on May 1, 2001, the pricing date, for each underlying security multiplied by the share amount to be determined on the pricing date, plus an underwriting fee. Purchases.................... After the initial offering, you may acquire Retail HOLDRS in two ways: . through an in-kind deposit of the required number of securities of the underlying issuers with the trustee, or . through a cash purchase in the secondary trading market. Underwriting fees............ If you purchase Retail HOLDRS in the initial public offering, you will pay an underwriting fee equal to: . For purchases of fewer than 10,000 Retail HOLDRS, 2%. . For purchases of 10,000 to 49,999 Retail HOLDRS, 1%. . For purchases of 50,000 or more Retail HOLDRS, 0.25%. You will not be charged any issuance fee or other sales commission in connection with purchases of Retail HOLDRS made in the initial public offering. Issuance and cancellation After the initial offering, if you wish to fees........................ create Retail HOLDRS by delivering to the trust the requisite securities represented by a round-lot of 100 Retail HOLDRS, The Bank of New York, as trustee, will charge you an issuance fee of up to $10.00 for each round-lot of 100 Retail HOLDRS. If you wish to cancel your Retail HOLDRS and withdraw your underlying securities, The Bank of New York as trustee will charge you a cancellation fee of up to $10.00 for each round-lot of 100 Retail HOLDRS. Commissions.................. If you choose to deposit underlying securities in order to receive Retail HOLDRS after the conclusion of the initial public offering, you will not be charged the underwriting fee. However, in addition to the issuance fee charged by the trustee described above, you will be responsible for paying any sales commission associated with your purchase of the underlying securities that is charged by your broker. 11 Custody fees................ The Bank of New York, as trustee and as custodian, will charge you a quarterly custody fee of $2.00 for each round-lot of 100 Retail HOLDRS, to be deducted from any cash dividend or other cash distributions on underlying securities received by the trust. With respect to the aggregate custody fee payable in any calendar year for each Retail HOLDR, the trustee will waive that portion of the fee which exceeds the total cash dividends and other cash distributions received, or to be received, and payable with respect to such calendar year. Rights relating to RetailHOLDRS............... You have the right to withdraw the underlying securities upon request by delivering a round- lot or integral multiple of a round-lot of Retail HOLDRS to the trustee, during the trustee's business hours, and paying the cancellation fees, taxes, and other charges. You should receive the underlying securities no later than the business day after the trustee receives a proper notice of cancellation. The trustee will not deliver fractional shares of underlying securities. To the extent that any cancellation of Retail HOLDRS would otherwise require the delivery of a fractional share, the trustee will sell such share in the market and the trust, in turn, will deliver cash in lieu of such share. Except with respect to the right to vote for dissolution of the trust, the Retail HOLDRS themselves will not have voting rights. Rights relating to the underlying securities...... You have the right to: . Receive all shareholder disclosure materials, including annual and quarterly reports, distributed by the issuers of the underlying securities. . Receive all proxy materials distributed by the issuers of the underlying securities and to instruct the trustee to vote the underlying securities or attend shareholder meetings yourself. . Receive dividends and other distributions on the underlying securities, if any are declared and paid to the trustee by an issuer of the underlying securities, net of any applicable taxes or fees. However, any distribution of securities by an issuer of underlying securities will be deposited into the trust and will become part of the Retail HOLDRS unless the distributed securities are not listed for trading on a U.S. national securities exchange or through Nasdaq NMS or the distributed securities have a different Standard & Poor's sector classification than any of the underlying securities represented in the Retail 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 made available to you, may be disposed of or may lapse. If you wish to participate in a tender offer for underlying securities, or any form of stock repurchase program by an issuer of an 12 underlying security, you must obtain the underlying securities by surrendering your Retail HOLDRS and receiving all of your underlying securities. For specific information about obtaining your underlying securities, you should read the discussion under the caption "Description of the Depositary Trust Agreement." Reconstitution events........ The depositary trust agreement provides for the automatic distribution of underlying securities from the Retail HOLDRS to you in the following four circumstances: A. If an issuer of underlying securities no longer has a class of securities registered under section 12 of the Securities Exchange Act of 1934, then its securities will no longer be an underlying security and the trustee will distribute the shares of that company to the owners of the Retail HOLDRS. B. If the SEC finds that an issuer of underlying securities should be registered as an investment company under the Investment Company Act of 1940, and the trustee has actual knowledge of the SEC finding, then the trustee will distribute the shares of that company to the owners of the Retail HOLDRS. C. If the underlying securities of an issuer cease to be outstanding as a result of a merger, consolidation or other corporate combination, the trustee will distribute the consideration paid by and received from the acquiring company or the securities received in exchange for the securities of the underlying issuer whose securities cease to be outstanding to the beneficial owners of Retail HOLDRS only if the distributed securities have a different Standard & Poor's sector classification than any of the underlying securities represented in the Retail HOLDRS at the time of the distribution or exchange or if the securities received are not listed for trading on a U.S. national securities exchange or through Nasdaq NMS. 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 Nasdaq NMS and are not listed for trading on another U.S. national securities exchange or through Nasdaq NMS within five business days from the date the securities are delisted. To the extent a distribution of underlying securities from the Retail HOLDRS is required as a result of a reconstitution event, the trustee will deliver the underlying security to you as promptly as practicable after the date that the trustee has knowledge of the occurrence of a reconstitution event. In addition, securities of a new company will be added to the Retail HOLDRS, as a result of a distribution of securities by an underlying issuer, where a corporate event occurs, or where the securities of an underlying issuer are exchanged for the securities of another company, unless the securities received have a 13 Standard & Poor's sector classification that is different from the sector classification of any other security then included in the Retail HOLDRS or are not listed for trading on a U.S. national securities exchange or through Nasdaq NMS. It is anticipated, as a result of the broadly defined Standard & Poor's sector classifications, that most distributions or exchanges of securities will result in the inclusion of new securities in Retail HOLDRS. The trustee will review the publicly available information that identifies the Standard & Poor's sector classifications of securities to determine whether securities received as a result of a distribution by an underlying issuer or as consideration for securities included in the Retail HOLDRS will be distributed from the Retail HOLDRS to you. Standard & Poor's sector classification.............. Standard & Poor's Corporation is an independent source of market information that, among other things, classifies the securities of public companies into various sector classifications based on its own criteria. There are 11 Standard & Poor's sector classifications and each class of publicly traded securities of a company are given only one sector classification. The securities included in the Retail HOLDRS are currently represented in the Consumer Cyclicals and Consumer Staples sectors. The Standard & Poor's sector classifications of the securities included in the Retail HOLDRS may change over time if the companies that issued these securities change their focus of operations or if Standard & Poor's alters the criteria it uses to determine sector classifications, or both. Termination events........... A. The Retail HOLDRS are delisted from the American Stock Exchange and are not listed for trading on another U.S. national securities exchange or through Nasdaq NMS within five business days from the date the Retail HOLDRS are delisted. B. The trustee resigns and no successor trustee is appointed within 60 days from the date the trustee provides notice to Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, of its intent to resign. C. 75% of beneficial owners of outstanding Retail HOLDRS vote to dissolve and liquidate the trust. If a termination event occurs, the trustee will distribute the underlying securities to you as promptly as practicable after the termination event. Federal income tax The federal income tax laws will treat a U.S. consequences................. holder of Retail HOLDRS as directly owning the underlying securities. The Retail HOLDRS themselves will not result in any federal tax consequences separate from the tax consequences associated with ownership of the underlying securities. 14 Listing...................... Application has been made to list the Retail HOLDRS on the American Stock Exchange under the symbol "RTH". Trading will take place only in round-lots of 100 Retail HOLDRS and round-lot multiples. A minimum of 150,000 Retail HOLDRS will be required to be outstanding when trading begins. Trading...................... Investors only will be able to acquire, hold, transfer and surrender a round-lot of 100 Retail HOLDRS. Bid and ask prices, however, will be quoted per single Retail HOLDR. Clearance and settlement..... The trust will issue Retail HOLDRS in book- entry form. Retail HOLDRS will be evidenced by one or more global certificates that the trustee will deposit with The Depository Trust Company, referred to as DTC. Transfers within DTC will be in accordance with DTC's usual rules and operating procedures. For further information see "Description of Retail HOLDRS." 15 THE TRUST General. This discussion highlights information about the Retail HOLDRS Trust. You should read this information, information about the depositary trust agreement as well as the depositary trust agreement before you purchase Retail HOLDRS. The material terms of the depositary trust agreement are described in this prospectus under the heading "Description of the Depositary Trust Agreement." The Retail HOLDRS Trust. The trust will be formed pursuant to the depositary trust agreement, dated as of March 12, 2001. The Bank of New York will be the trustee. The Retail HOLDRS Trust is not a registered investment company under the Investment Company Act of 1940. The Retail HOLDRS Trust is intended to hold deposited shares for the benefit of owners of Retail HOLDRS. The trustee will perform only administrative and ministerial acts. The property of the trust will consist of the underlying securities and all monies or other property, if any, received by the trustee. The trust will terminate on December 31, 2041, or earlier if a termination event occurs. DESCRIPTION OF RETAIL HOLDRS The trust will issue Retail HOLDRS under the depositary trust agreement described in this prospectus under the heading "Description of the Depositary Trust Agreement." After the initial offering, the trust may issue additional Retail HOLDRS on a continuous basis when an investor deposits the requisite underlying securities with the trustee. You may only acquire, hold, trade and surrender Retail HOLDRS in a round- lot of 100 Retail HOLDRS and round-lot multiples. The trust will only issue Retail HOLDRS upon the deposit of the whole shares of underlying securities that are represented by a round-lot of 100 Retail HOLDRS. In the event of a stock split, reverse stock split, or other distribution by the issuer of an underlying security that results in a fractional share becoming represented by a round-lot of Retail HOLDRS, the trust may require a minimum of more than one round-lot of 100 Retail HOLDRS for an issuance so that the trust will always receive whole share amounts for issuance of Retail HOLDRS. Retail HOLDRS will represent your individual and undivided beneficial ownership interest in the specified underlying securities. The 20 companies selected as part of this receipt program are listed above in the section entitled "Highlights of Retail HOLDRS--The Retail HOLDRS." Beneficial owners of Retail HOLDRS will have the same rights and privileges as they would have if they beneficially owned the underlying securities outside of the trust. These include the right of investors to instruct the trustee to vote the securities, to receive dividends and other distributions on the underlying securities, if any are declared and paid to the trustee by an issuer of an underlying security, and the right to cancel Retail HOLDRS to receive the underlying securities. See "Description of the Depositary Trust Agreement." Retail HOLDRS are not intended to change your beneficial ownership in the underlying securities under federal securities laws, including sections 13(d) and 16(a) of the Securities Exchange Act of 1934, referred to herein as the Exchange Act. The trust will not publish or otherwise calculate the aggregate value of the underlying securities represented by a receipt. Retail HOLDRS may trade in the secondary market at prices that are lower than the aggregate value of the corresponding underlying securities. If, in such case, an owner of Retail HOLDRS wishes to realize the dollar value of the underlying securities, that owner will have to cancel the Retail HOLDRS. Such cancellation will require payment of fees and expenses as described in "Description of the Depositary Trust Agreement--Withdrawal of underlying securities." Retail HOLDRS will be evidenced by one or more global certificates that the trustee will deposit with DTC and register in the name of Cede & Co., as nominee for DTC. Retail HOLDRS will be available only in book-entry form. Owners of Retail HOLDRS may hold their Retail HOLDRS through DTC, if they are participants in DTC, or indirectly through entities that are participants in DTC. 16 DESCRIPTION OF THE UNDERLYING SECURITIES Selection criteria. The underlying securities of the Retail HOLDRS are the common stocks of a group of 20 specified companies that, among other things, sell merchandise to retail consumers through traditional retail stores, the Internet, mail order catalogs and other outlets and whose securities are registered under section 12 of the Exchange Act. The issuers of the underlying securities are considered to be 20 of the largest, most liquid companies involved in the retailing industry as measured by market capitalization and trading volume on January 24, 2001. The companies included in the Retail HOLDRS also meet the following minimum selection criteria as of January 24, 2001: . Market capitalization equal to or greater than $500 million; . Average daily trading volume of at least 100,000 shares over the 60 trading days before January 24, 2001; . Average daily dollar volume (that is, the average daily trading volume multiplied by the average closing price over the 60 day period prior to January 24, 2001) of at least $5 million over the 60 trading days before January 24, 2001; and . A trading history of at least 90 calendar days. The market capitalization of a company is determined by multiplying the market price of its common stock by the number of its outstanding shares of common stock. In determining whether a company was to be considered for inclusion in the Retail HOLDRS, Merrill Lynch, Pierce, Fenner & Smith Incorporated examined available public information about the company, including analysts' reports and other independent market sources. The ultimate determination of the inclusion of the 20 specified companies, however, rested solely within the discretion of Merrill Lynch, Pierce, Fenner & Smith Incorporated. After the initial deposit, one or more of the issuers of the underlying securities may no longer be involved in various segments of the retailing industry. In addition, as a result of a reconstitution event or a distribution of securities, the securities of a non-retail company may be included in the Retail HOLDRS. Merrill Lynch, Pierce, Fenner & Smith Incorporated will determine, in its sole discretion, whether the issuer of a particular underlying security remains in the retailing industry and will undertake to make adequate disclosure when necessary. Underlying securities. For a list of the underlying securities represented by Retail HOLDRS, please refer to "Highlights of Retail HOLDRS--The Retail HOLDRS." If the underlying securities change because of a reconstitution event, a distribution of securities by an underlying issuer or other event, a revised list of underlying securities will be set forth in a prospectus supplement and will be available from the American Stock Exchange and through a widely used electronic information dissemination system such as Bloomberg or Reuters. No investigation. In selecting the underlying securities, 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, other than to the extent required to determine whether the companies satisfied the program's stated selection criteria. Accordingly, before you acquire Retail HOLDRS, you should consider publicly available financial and other information about the issuers of the underlying securities. See "Risk Factors" and "Where You Can Find More Information." Investors and market participants should not conclude that the inclusion of a company in the list is any form of investment recommendation of that company by the trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, the selling group or any of their respective affiliates. General background and historical information. For a brief description of the business of each of the issuers of the underlying securities and monthly pricing information showing the historical performance of each underlying issuer's securities, see "Annex A." 17 The following table and graph set forth the composite performance of all of the underlying securities represented by a single Retail HOLDR based upon the indicative share amounts set forth in the table on page 10 of this preliminary prospectus, measured at the close of each month from May 1997, the first month when all of the underlying securities were publicly traded, to April 30, 2001. 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. The actual share amounts will be determined on the pricing date and may differ from the indicative share amounts.
1997 Value 1998 Value 1999 Value 2000 Value 2001 Value ---- ----- ---- ----- ---- ----- ---- ----- ---- ----- January January January January May 30... 36.98 30....... 50.51 29....... 93.51 31....... 95.49 31....... 99.66 June February February February February 30....... 39.76 27....... 55.79 26....... 93.51 29....... 92.78 28....... 93.72 July March March March March 31....... 44.27 31....... 59.92 31....... 96.90 31....... 105.84 30....... 91.16 August April April April April 29....... 42.25 30....... 60.34 30....... 94.84 28....... 98.96 30....... 95.43 September 30....... 44.30 May 29... 63.15 May 28... 89.52 May 31... 94.24 October 31....... 44.88 June 30.. 68.50 June 30.. 98.46 June 30.. 92.06 November 28....... 48.38 July 31.. 68.48 July 30.. 93.81 July 31.. 91.43 December August August August 31....... 48.97 31....... 61.44 31....... 88.34 31....... 85.31 September September September 30....... 62.62 30....... 89.58 29....... 89.27 October October October 30....... 70.36 29....... 95.60 31....... 88.44 November November November 30....... 77.92 30....... 100.37 30....... 87.51 December December December 31....... 89.06 31....... 109.94 29....... 92.31
[LINE GRAPH] 18 DESCRIPTION OF THE DEPOSITARY TRUST AGREEMENT General. The depositary trust agreement, dated as of March 12, 2001, among Merrill Lynch, Pierce, Fenner & Smith Incorporated, The Bank of New York, as trustee, other depositors and the owners of the Retail HOLDRS, provides that Retail HOLDRS will represent an owner's undivided beneficial ownership interest in the securities of the underlying companies. The trustee. The Bank of New York will serve as trustee. The Bank of New York, which was founded in 1784, was New York's first bank and is the oldest bank in the country still operating under its original name. The Bank is a state-chartered New York banking corporation and a member of the Federal Reserve System. The Bank conducts a national and international wholesale banking business and a retail banking business in the New York City, New Jersey and Connecticut areas, and provides a comprehensive range of corporate and personal trust, securities processing and investment services. Issuance, transfer and surrender of Retail HOLDRS. You may create and cancel Retail HOLDRS only in round-lots of 100 Retail HOLDRS. You may create Retail HOLDRS by delivering to the trustee the requisite underlying securities. The trust will only issue Retail HOLDRS upon the deposit of the whole shares represented by a round-lot of 100 Retail HOLDRS. In the event that a fractional share comes to be represented by a round-lot of Retail HOLDRS, the trust may require a minimum of more than one round-lot of 100 Retail HOLDRS for an issuance so that the trust will always receive whole share amounts for issuance of Retail HOLDRS. Similarly, you must surrender Retail HOLDRS in integral multiples of 100 Retail HOLDRS to withdraw deposited shares from the trust. The trustee will not deliver fractional shares of underlying securities, and to the extent that any cancellation of Retail HOLDRS would otherwise require the delivery of fractional shares, the trust will deliver cash in lieu of such shares. You may request withdrawal of your deposited shares during the trustee's normal business hours. The trustee expects that in most cases it will deliver your deposited shares within one business day of your withdrawal request. Voting rights. The trustee will deliver proxy solicitation materials provided by issuers of the underlying securities to you so as to permit you to give the trustee instructions as to how to vote on matters to be considered at any annual or special meetings held by issuers of the underlying securities. Under the depositary trust agreement, any beneficial owner of Retail HOLDRS, other than Merrill Lynch, Pierce, Fenner & Smith Incorporated owning Retail HOLDRS for its own proprietary account as principal, will have the right to vote to dissolve and liquidate the trust. Distributions. You will be entitled to receive, net of trustee fees, distributions of cash, including dividends, securities or property, if any, made with respect to the underlying securities. The trustee will use its reasonable efforts to ensure that it distributes these distributions as promptly as practicable after the date on which it receives the distribution. Therefore, you may receive your distributions substantially later than you would have had you held the underlying securities directly. Any distributions of securities by an issuer of underlying securities will be deposited into the trust and will become part of the Retail HOLDRS unless such securities are not listed for trading on a U.S. national securities exchange or through Nasdaq NMS or such distributed securities have a different Standard & Poor's sector classification than any of the underlying securities represented in the Retail HOLDRS at the time of the distribution of such securities. In addition, if the issuer of underlying securities offers rights to acquire additional underlying securities or other securities, the rights will be made available to you through the trustee, if practicable, and if the rights and the securities that those rights relate to are exempt from registration or are registered under the Securities Act. Otherwise, if practicable, the rights will be disposed of and the proceeds provided to you by the trustee. In all other cases, the rights will lapse. You will be obligated to pay any tax or other charge that may become due with respect to Retail HOLDRS. The trustee may deduct the amount of any tax or other governmental charge from a distribution before making payment to you. In addition, the trustee will deduct its quarterly custody fee of $2.00 for each round-lot of 100 Retail HOLDRS from quarterly dividends, if any, paid to the trustee by the issuers of the 19 underlying securities. With respect to the aggregate custody fee payable in any calendar year for each Retail HOLDR, the trustee will waive that portion of the fee which exceeds the total cash dividends and other cash distributions received, or to be received, and payable with respect to such calendar year. Record dates. With respect to dividend payments and voting instructions, the trustee expects to fix the trust's record dates as close as possible to the record date fixed by the issuer of the underlying securities. Shareholder communications. The trustee promptly will forward to you all shareholder communications that it receives from issuers of the underlying securities. Withdrawal of underlying securities. You may surrender your Retail HOLDRS and receive underlying securities during the trustee's normal business hours and upon the payment of applicable fees, taxes or governmental charges, if any. You should receive your underlying securities no later than the business day after the trustee receives your request. If you surrender Retail HOLDRS in order to receive underlying securities, you will pay to the trustee a cancellation fee of up to $10.00 per round-lot of 100 Retail HOLDRS. Further issuances of Retail HOLDRS. The depositary trust agreement provides for further issuances of Retail HOLDRS on a continuous basis without your consent. Reconstitution events. The depositary trust agreement provides for the automatic distribution of underlying securities to you in the following four circumstances: A. If an issuer of underlying securities no longer has a class of securities registered under section 12 of the Securities Exchange Act of 1934, then its securities will no longer be an underlying security and the trustee will distribute the shares of that company to the owners of the Retail HOLDRS. B. If the SEC finds that an issuer of underlying securities should be registered as an investment company under the Investment Company Act of 1940, and the trustee has actual knowledge of the SEC finding, then the trustee will distribute the shares of that company to the owners of the Retail HOLDRS. C. If the underlying securities of an issuer cease to be outstanding as a result of a merger, consolidation, corporate combination or other event, the trustee will distribute the consideration paid by and received from the acquiring company to the beneficial owners of Retail HOLDRS only if the distributed securities have a different Standard & Poor's sector classification than any of the underlying securities represented in the Retail HOLDRS at the time of the distribution or exchange or if the securities received are not listed for trading on a U.S. national securities exchange or through Nasdaq NMS. 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 Nasdaq NMS and are not listed for trading on another U.S. national securities exchange or through Nasdaq NMS within five business days from the date the securities are delisted. To the extent a distribution of underlying securities is required as a result of a reconstitution event, the trustee will deliver the underlying security to you as promptly as practicable after the date that the trustee has knowledge of the occurrence of a reconstitution event. As provided in the depositary trust agreement, securities of a new company will be added to the Retail HOLDRS, as a result of a distribution of securities by an underlying issuer or where an event occurs, such as a merger, where the securities of an underlying issuer are exchanged for the securities of another company, unless the securities received have a different Standard & Poor's sector classification than any of the underlying securities represented in the Retail HOLDRS at the time of distribution or exchange or are not listed for trading on a U.S. national securities exchange or through Nasdaq NMS. 20 It is anticipated, as a result of the broadly defined sector classifications, that most distributions or exchanges of securities will result in the inclusion of new securities in the Retail HOLDRS. The trustee will review the publicly available information that identifies the Standard & Poor's sector classifications of securities to determine whether securities received as a result of a distribution by an underlying issuer or as consideration for securities included in the Retail HOLDRS will be distributed from the Retail HOLDRS to you. Standard & Poor's sector classifications. Standard & Poor's Corporation is an independent source of market information that, among other things, classifies the securities of public companies into various sector classifications based on its own criteria. There are 11 Standard & Poor's sector classifications and each class of publicly traded securities of a company are given only one sector classification. The securities included in the Retail HOLDRS are currently represented in the Consumer Cyclicals and Consumer Staples sectors. The Standard & Poor's sector classifications of the securities included in the Retail HOLDRS may change over time if the companies that issued these securities change their focus of operations or if Standard & Poor's alters the criteria it uses to determine sector classifications, or both. Termination of the trust. The trust will terminate if the trustee resigns and no successor trustee is appointed by Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, within 60 days from the date the trustee provides notice to Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, of its intent to resign. Upon termination, the beneficial owners of Retail HOLDRS will surrender their Retail HOLDRS as provided in the depositary trust agreement, including payment of any fees of the trustee or applicable taxes or governmental charges due in connection with delivery to the owners of the underlying securities. The trust also will terminate if Retail HOLDRS are delisted from the American Stock Exchange and are not listed for trading on another U.S. national securities exchange or through Nasdaq NMS within five business days from the date the Retail HOLDRS are delisted. Finally, the trust will terminate if 75% of the owners of outstanding Retail HOLDRS other than Merrill Lynch, Pierce, Fenner & Smith Incorporated vote to dissolve and liquidate the trust. If a termination event occurs, the trustee will distribute the underlying securities to you as promptly as practicable after the termination event occurs. Amendment of the depositary trust agreement. The trustee and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, may amend any provisions of the depositary trust agreement without the consent of any other depositor or any of the owners of the Retail HOLDRS. Promptly after the execution of any amendment to the agreement, the trustee must furnish or cause to be furnished written notification of the substance of the amendment to each owner of Retail HOLDRS. Any amendment that imposes or increases any fees or charges, subject to exceptions, or that otherwise prejudices any substantial existing right of the owners of Retail HOLDRS will not become effective until 30 days after notice of the amendment is given to the owners of Retail HOLDRS. Issuance and cancellation fees. After the initial public offering, the trust expects to issue more Retail HOLDRS. If you wish to create Retail HOLDRS by delivering to the trust the requisite underlying securities, the trustee will charge you an issuance fee of up to $10.00 for each round-lot of 100 Retail HOLDRS. If you wish to cancel your Retail HOLDRS and withdraw your underlying securities, the trustee will charge you a cancellation fee of up to $10.00 for each round-lot of 100 Retail HOLDRS issued. The trustee may negotiate either of these fees depending on the volume, frequency and size of the issuance or cancellation transactions. Commissions. If you choose to create or cancel Retail HOLDRS after the conclusion of the initial public offering, you will not be charged the underwriting fee. However, in addition to the issuance and cancellation fees described above, 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 any of the members of the selling group or another broker, in addition to the issuance or cancellation fee, as the case may be, described above. 21 Custody fees. The Bank of New York, as trustee and as custodian, will charge you a quarterly custody fee of $2.00 for each round-lot of 100 Retail HOLDRS to be deducted from any dividend payments or other cash distributions on underlying securities received by the trustee. With respect to the aggregate custody fee payable in any calendar year for each Retail HOLDR, the Trustee will waive that portion of the fee which exceeds the total cash dividends and other cash distributions received, or to be received, and payable with respect to such calendar year. The trustee cannot recapture unpaid custody fees from prior years. Address of the trustee. The Bank of New York, ADR Department, 101 Barclay Street, New York, New York 10286. Governing law. The depositary trust agreement and Retail HOLDRS will be 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 will assume no responsibility or liability for, and makes no representations as to, the validity or sufficiency, or as to the accuracy of the recitals, if any, set forth in the Retail HOLDRS. The trustee undertakes to perform only those duties as are specifically set forth in the depositary trust agreement. Subject to the preceding sentence, the trustee will be liable for its own negligence or misconduct except for good faith errors in judgment so long as the trustee was not negligent in ascertaining the relevant facts. 22 FEDERAL INCOME TAX CONSEQUENCES General The following is a summary of the U.S. federal income tax consequences relating to the Retail HOLDRS for: . a citizen or resident of the United States; . a corporation or partnership created or organized in the United States or under the laws of the United States; . an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; . a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust (each of the above, a "U.S. receipt holder"); and . any person other than a U.S. receipt holder (a "non-U.S. receipt holder"). This summary is based upon laws, regulations, rulings and decisions currently in effect, all of which are subject to change, possibly on a retroactive basis. The discussion does not deal with all U.S. federal income tax consequences applicable to all categories of investors, some of which may be subject to special rules. In addition, this summary generally is limited to investors who will hold the Retail HOLDRS as "capital assets" (generally, property held for investment) within the meaning of section 1221 of the Internal Revenue Code of 1986, as amended. Moreover, this summary does not address Retail HOLDRS held by a foreign partnership or other foreign flow through entities. We recommend that you consult with your own tax advisor. Taxation of the trust The trust will provide for flow through tax consequences as it will be treated as a grantor trust or custodial arrangement for U.S. federal income tax purposes. Taxation of Retail HOLDRS A receipt holder purchasing and owning Retail HOLDRS will be treated, for U.S. federal income tax purposes, as directly owning a proportionate share of the underlying securities represented by Retail HOLDRS. Consequently, if there is a taxable cash distribution on an underlying security, a holder will recognize income with respect to the distribution at the time the distribution is received by the trustee, not at the time that the holder receives the cash distribution from the trustee. A receipt holder will determine its initial tax basis in each of the underlying securities by allocating the purchase price for the Retail HOLDRS among the underlying securities based on their relative fair market values at the time of purchase. Similarly, when a holder sells a receipt, it will determine the amount realized with respect to each security by allocating the sales price among the underlying securities based on their relative fair market values at the time of sale. A holder's gain or loss with respect to each security will be computed by subtracting its adjusted basis in the security from the amount realized on the security. With respect to purchases of Retail HOLDRS for cash in the secondary market, a receipt holder's aggregate tax basis in each of the underlying securities will be equal to the purchase price of the Retail HOLDRS. Similarly, with respect to sales of Retail HOLDRS for cash in the secondary market, the amount realized with respect to a sale of Retail HOLDRS will be equal to the aggregate amount realized with respect to each of the underlying securities. The distribution of any securities by the trust upon the surrender of Retail HOLDRS, the occurrence of a reconstitution event, or a termination event will not be a taxable event, except to the extent that cash is distributed in lieu of fractional shares. The receipt holder's holding period with respect to the distributed securities will include the period that the holder held the securities through the trust. 23 Brokerage fees and custodian fees The brokerage fee incurred in purchasing a receipt will be treated as part of the cost of the underlying securities. Accordingly, a holder includes this fee in its tax basis in the underlying securities. A holder will allocate the brokerage fee among the underlying securities using either a fair market value allocation or pro rata based on the number of shares of each underlying security. Similarly, the brokerage fee incurred in selling Retail HOLDRS will reduce the amount realized with respect to the underlying securities. A holder will be required to include in its income the full amount of dividends paid on the underlying securities, even though the depositary trust agreement provides that the custodian fees will be deducted directly from any dividends paid. These custodian fees will be treated as an expense incurred in connection with a holder's investment in the underlying securities and may be deductible. If a holder is an individual, estate or trust, however, the deduction of its share of custodian fees will be a miscellaneous itemized deduction that may be disallowed in whole or in part. Special considerations with respect to underlying securities of foreign issuers With respect to underlying securities of foreign issuers, the gross amount of any taxable cash distribution will not be eligible for the dividends received deduction generally allowed to corporate U.S. receipt holders. If a foreign issuer pays a dividend in a currency other than in U.S. dollars, the amount of the dividend for U.S. federal income tax purposes will be the U.S. dollar value (determined at the spot rate on the date of the payment) regardless of whether the payment is later converted into U.S. dollars. In this case, the U.S. receipt holder may recognize ordinary income or loss as a result of currency fluctuations between the date on which the dividend is paid and the date the dividend amount is converted into U.S. dollars. Subject to conditions and limitations, any foreign tax withheld on dividends may be deducted from taxable income or credited against a U.S. receipt holder's U.S. federal income tax liability. The limitation on foreign taxes eligible for the U.S. foreign tax credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by a foreign issuer generally will constitute "passive income" or, in the case of some U.S. holders, "financial services income." For purposes of the U.S. foreign tax credit limitation, dividends received by a U.S. receipt holder with respect to an underlying security of a foreign issuer generally will be treated as foreign source income while any gain or loss recognized from the sale of such security generally will be treated as from sources within the United States. The rules relating to the determination of the foreign tax credit are complex and we recommend that U.S. receipt holders consult their own tax advisors to determine whether and to what extent a credit would be available. Dividends and distributions made by a foreign issuer may be subject to a withholding tax. Some foreign issuers have made arrangements through which holders of their American depositary shares can apply for a refund of withheld taxes. It is expected that holders of Retail HOLDRS will be able to use these arrangements to apply for a refund of withheld taxes. Additionally, special U.S. federal income tax rules apply to U.S. persons owning shares of a "passive foreign investment company" (a "PFIC"). We do not believe that any of the foreign issuers of the underlying securities is currently a PFIC and do not anticipate that any issuer will become a PFIC in the future, although no assurances can be made that the applicable tax law or other relevant circumstances will not change in a manner which affects the PFIC determination. A foreign corporation generally will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying relevant look-through rules, either: . at least 75% of its gross income is "passive income;" or . 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. 24 Passive income for this purpose generally includes dividends, interest, royalties, rents, and gains from commodities and securities transactions. If a corporation were classified as a PFIC, a U.S. receipt holder could be subject to increased tax liability, possibly including an interest charge, upon the sale or other disposition of the Retail HOLDRS or of the underlying securities or upon the receipt of "excess distributions," unless the U.S. receipt holder elected to be taxed currently on its pro rata portion of the corporation's income, whether or not the income was distributed in the form of dividends or otherwise. Non-U.S. receipt holders A non-U.S. receipt holder generally will be subject to U.S. withholding tax at a rate of 30% or a lower rate as may be specified by an applicable tax treaty with respect to dividends received on underlying securities of U.S. issuers. However, if that income is effectively connected with a U.S. trade or business conducted by the holder or, where a tax treaty applies, is attributable to a permanent establishment maintained in the United States by the holder, then those dividends will be exempt from withholding tax, provided the holder complies with applicable certification and disclosure requirements. A non-U.S. receipt holder generally will not be subject to U.S. federal income or withholding tax with respect to dividends received on underlying securities of foreign issuers, unless that income is effectively connected with a U.S. trade or business conducted by the holder or, where a tax treaty applies, is attributable to a permanent establishment maintained in the United States by the holder. With respect to dividends of both U.S. and foreign issuers, a non-U.S. receipt holder's dividends that are effectively connected with a U.S. trade or business or dividends attributable to a permanent establishment, net of relevant deductions and credits, will be subject to U.S. federal income taxation at the same graduated rates applicable to U.S. persons. In addition to this graduated tax, effectively connected dividends or dividends attributable to a permanent establishment received by a corporate non-U.S. receipt holder may also be subject to a branch profits tax at a rate of 30% or a lower rate as may be specified by an applicable tax treaty. Under some circumstances, a non- U.S. receipt holder whose dividends are so effectively connected or attributable shall be entitled to a dividends received deduction equal to 70% or 80% of the amount of the dividend. A non-U.S. receipt holder that is eligible for a reduced rate of withholding tax pursuant to a tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the Internal Revenue Service. A non-U.S. receipt holder generally will not be subject to U.S. federal income or withholding tax with respect to gain recognized upon the sale or other disposition of Retail HOLDRS or of the underlying securities unless: . 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, . 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 . 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. 25 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. The preceding discussion does not address all aspects of U.S. federal income taxation that may be relevant in light of a non-U.S. receipt holder's or an issuer's particular facts and circumstances. We recommend that investors consult their own tax advisors. ERISA CONSIDERATIONS Any plan fiduciary which proposes to have a plan acquire Retail HOLDRS should consult with its counsel with respect to the potential applicability of ERISA and the Internal Revenue Code to this investment and whether any exemption would be applicable and determine on its own whether all conditions have been satisfied. Moreover, each plan fiduciary should determine whether, under the general fiduciary standards of investment prudence and diversification, an acquisition of Retail HOLDRS is appropriate for the plan, taking into account the overall investment policy of the plan and the composition of the plan's investment portfolio. PLAN OF DISTRIBUTION In accordance with the depositary trust agreement, the trust will issue to Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Merrill Lynch, Pierce, Fenner & Smith Incorporated will deposit the underlying securities to receive Retail HOLDRS. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Robert W. Baird & Co. Incorporated, First Union Securities, Inc., Morgan Keegan & Company, Inc., Raymond James & Associates, Inc., Sutro & Co. Incorporated and Tucker Anthony Incorporated, the selling group, propose to offer the Retail HOLDRS to the public at the offering price set forth on the cover page of this prospectus, which includes an underwriting fee of 2%. Investors who purchase Retail HOLDRS through a fee-based brokerage account should consider that the underwriting fee is in addition to the fees charged in that account. We recommend that investors review the terms of their brokerage accounts for details on applicable charges. Merrill Lynch, Pierce, Fenner & Smith Incorporated will provide Retail HOLDRS to the other members of the selling group at the public offering price, as set forth on the cover page of this prospectus, less a concession that is not in excess of 1.5%. The selling group may allow to certain dealers, and the dealers may reallow, a discount on sales of Retail HOLDRS not in excess of 1.5% of the public offering price as set forth on the cover page of this prospectus. We expect the trust to deliver the initial distribution of Retail HOLDRS against deposit of the underlying securities in New York, New York on May 4, 2001. After the initial offering, the public offering price, concession and discount may be changed. The trust will continue to issue Retail HOLDRS in connection with deposits of underlying securities. This offering is being made in compliance with Conduct Rule 2810 of the National Association of Securities Dealers, Inc. Accordingly, sales will not be made to a discretionary account without the prior written approval of a purchaser of Retail HOLDRS. Members of the selling group and their affiliates 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 may use this prospectus, as updated from time to time, in connection with offers and sales related to market-making transactions in the Retail 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. 26 Merrill Lynch, Pierce, Fenner & Smith Incorporated has agreed to indemnify the trustee against some civil liabilities related to acts performed or not performed by the trustee in accordance with the depositary trust agreement or periodic reports filed or not filed with the SEC with respect to the Retail HOLDRS. Should a court determine not to enforce the indemnification provision, Merrill Lynch, Pierce, Fenner & Smith Incorporated also has agreed to contribute to payments the trustee may be required to make with respect to these liabilities. LEGAL MATTERS Legal matters, including the validity of the Retail HOLDRS, will be passed upon for Merrill Lynch, Pierce, Fenner & Smith Incorporated, the initial depositor and the underwriters, by Shearman & Sterling, New York, New York. Shearman & Sterling, as special U.S. tax counsel to the trust, also will render an opinion regarding the material federal income tax consequences relating to the Retail HOLDRS. WHERE YOU CAN FIND MORE INFORMATION Merrill Lynch, Pierce, Fenner & Smith Incorporated has filed a registration statement on Form S-1 with the SEC covering the Retail HOLDRS. While this prospectus is a part of the registration statement, it does not contain all the exhibits filed as part of the registration statement. You should consider reviewing the full text of those exhibits. The registration statement is available over the Internet at the SEC's Web site at http://www.sec.gov. You also may read and copy the registration statement at the SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for more information on the public reference rooms and their copy charges. Merrill Lynch, Pierce, Fenner & Smith Incorporated will not file any reports pursuant to the Exchange Act. The trust will file modified reports pursuant to the Exchange Act. Since the securities of the issuers of the underlying securities are registered under the Exchange Act, the issuers of the underlying securities are required to file periodically financial and other information specified by the SEC. For more information about the issuers of the underlying securities, information provided to or filed with the SEC by the issuers of the underlying securities with respect to their registered securities can be inspected at the SEC's public reference facilities or accessed through the SEC's Web site referenced above. 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 respective affiliates are not affiliated with the issuers of the underlying securities, and the issuers of the underlying securities have no obligations with respect to Retail HOLDRS. This prospectus relates only to Retail HOLDRS and does not relate to the other securities of the issuers of the underlying securities. The information in this prospectus regarding the issuers of the underlying securities has been derived from the publicly available documents described in the preceding paragraph. We have not participated in the preparation of these documents or made any due diligence inquiries with respect to the issuers of the underlying securities in connection with Retail HOLDRS. We make no representation that these publicly available documents or any other publicly available information regarding the issuers of the underlying securities are accurate or complete. Furthermore, we cannot assure you that all events occurring prior to the date of this prospectus, including events that would affect the accuracy or completeness of the publicly available documents described in the preceding paragraph, that would affect the trading price of the securities of the issuers of the underlying securities, and therefore the offering and trading prices of the Retail HOLDRS have been publicly disclosed. 27 ANNEX A This annex forms an integral part of the prospectus. The following tables provide a brief description of the business of each of the issuers of the underlying securities and set forth the split-adjusted closing market prices, as reported on the applicable primary U.S. trading market, of each of the underlying securities in each month during 1996, 1997, 1998, 1999, 2000 and 2001, through April 2001. A table outlining the primary U.S. market on which the securities of the issuers are listed can be found on page 10. The foreign stock market or markets on which the equity securities of the foreign issuers included in the Retail HOLDRS, if any, are listed is described below. An asterisk (*) denotes that no shares of the issuer were trading on a U.S. market during that month. The historical prices of the underlying securities should not be taken as an indication of future performance. ALBERTSON'S, INC. (ABS) Albertson's, Inc., is a retail food and drug chain. Albertson's operates under the names of Albertson's, Acme Markets, Jewel Food Stores, Seessel's, Super Saver, Max, Osco Drug and Sav-on. These stores consist of combination food-drug stores, stand-alone drug stores, conventional supermarkets, warehouse stores and an electronic-commerce retail site. Albertson's distribution centers provide product exclusively to its retail stores.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 33.88 January 35.00 January 47.75 January 61.00 January 30.50 January 28.35 February 37.00 February 35.25 February 46.81 February 57.00 February 24.50 February 29.05 March 37.13 March 34.00 March 52.75 March 54.44 March 30.88 March 31.82 April 38.50 April 33.00 April 50.06 April 51.50 April 32.63 April 33.40 May 39.88 May 33.50 May 46.31 May 53.50 May 36.63 June 41.38 June 36.50 June 51.81 June 51.56 June 33.25 July 41.00 July 37.06 July 48.00 July 49.75 July 30.19 August 42.38 August 34.25 August 50.56 August 47.94 August 21.50 September 42.13 September 34.88 September 54.13 September 39.56 September 21.00 October 34.38 October 36.88 October 55.75 October 36.00 October 23.69 November 34.88 November 44.38 November 57.06 November 32.00 November 25.56 December 35.63 December 47.25 December 63.69 December 32.25 December 26.50
The closing price on May 1, 2001 was 33.18. AMAZON.COM, INC. (AMZN) Amazon.com, Inc. is an online retailer that offers a variety of products, such as books, music, videos, toys, electronics, software, video games and home improvement products for sale through the Internet. Amazon.com also offers Web- based services where buyers and sellers can enter into transactions with respect to a wide range of products. Amazon.com has invested in and developed commercial relationships with a number of electronic-commerce companies.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January * January * January 4.92 January 58.47 January 64.56 January 17.31 February * February * February 6.42 February 64.06 February 68.88 February 10.19 March * March * March 7.13 March 86.09 March 67.00 March 10.23 April * April * April 7.65 April 86.03 April 55.19 April 15.78 May * May 1.50 May 7.34 May 59.38 May 48.31 June * June 1.54 June 16.63 June 62.56 June 36.31 July * July 2.40 July 18.48 July 50.03 July 30.13 August * August 2.34 August 13.96 August 62.19 August 41.50 September * September 4.34 September 18.60 September 79.94 September 38.44 October * October 5.08 October 21.07 October 70.63 October 36.63 November * November 4.13 November 32.00 November 85.06 November 24.69 December * December 5.02 December 53.54 December 76.13 December 15.56
The closing price on May 1, 2001 was 16.89. A-1 BEST BUY CO., INC. (BBY) Best Buy Co., Inc. is a retailer of brand name consumer electronics, home office equipment, video games, computer software, music and appliances. In addition, Best Buy sells cameras and other photographic equipment and ready-to- assemble furniture designed for use with computer and audio/video equipment. Best Buy also offers various products through the Internet directly to consumers.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 3.81 January 2.50 January 12.69 January 45.38 January 47.75 January 49.80 February 4.19 February 2.31 February 14.89 February 46.38 February 54.63 February 40.96 March 4.34 March 2.56 March 16.67 March 52.00 March 86.00 March 35.96 April 4.81 April 3.38 April 17.56 April 47.63 April 80.75 April 55.05 May 5.69 May 3.41 May 16.25 May 45.50 May 64.00 June 5.75 June 3.70 June 18.06 June 67.50 June 63.25 July 4.66 July 3.25 July 23.38 July 74.63 July 72.75 August 5.53 August 4.27 August 19.44 August 70.38 August 61.75 September 5.69 September 6.17 September 20.81 September 62.00 September 63.63 October 4.09 October 6.98 October 24.00 October 55.75 October 50.19 November 3.19 November 7.28 November 28.81 November 62.50 November 25.75 December 2.66 December 9.22 December 30.69 December 50.25 December 29.56
The closing price on May 1, 2001 was 55.10. COSTCO WHOLESALE CORPORATION (COST) Costco Wholesale Corporation operates self-service members-only warehouse stores which offer volume purchasing of nationally branded and selected private label consumer and business merchandise at discount prices. Costco's product offerings include food, appliances, electronics, furniture and clothing. Costco buys nearly all of its merchandise directly from manufacturers. Costco's warehouse stores are located throughout the United States and Canada, and in the United Kingdom, Korea, Taiwan and Japan. Costco also offers various products through the Internet directly to consumers.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 7.81 January 13.31 January 21.69 January 41.44 January 48.94 January 46.25 February 8.63 February 12.81 February 24.44 February 40.16 February 49.63 February 41.75 March 9.38 March 13.81 March 26.69 March 45.78 March 52.56 March 39.25 April 9.50 April 14.44 April 27.94 April 40.47 April 54.06 April 34.93 May 10.00 May 16.88 May 28.94 May 36.25 May 31.94 June 10.81 June 16.44 June 31.53 June 40.03 June 33.00 July 10.25 July 18.94 July 28.38 July 37.38 July 32.56 August 9.94 August 18.03 August 23.53 August 37.38 August 34.44 September 10.25 September 18.81 September 23.69 September 36.00 September 34.94 October 9.94 October 19.25 October 28.38 October 40.16 October 36.63 November 11.63 November 22.16 November 31.38 November 45.84 November 32.63 December 12.56 December 22.31 December 36.09 December 45.63 December 39.94
The closing price on May 1, 2001 was 35.92. A-2 CVS CORPORATION (CVS) CVS Corporation operates retail drugstores and Internet and mail order businesses that principally sell pharmaceutical products. CVS also offers prescription benefit management and specialty pharmaceutical services. CVS' retail drugstores sell prescription and over-the-counter drugs, general merchandise, beauty and cosmetic products and convenience foods. Through its prescription benefit management services, CVS provides prescription plan design and administration, claims processing, and facilitation of communications between health plans, patients, physicians and pharmacists for managed care organizations. CVS' specialty pharmacy mail order and retail operations sell prescription drugs to individuals with conditions requiring complex and expensive drug therapies. CVS' various operations carry their own private label products as well as third party brand name products.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 14.25 January 21.63 January 32.78 January 54.75 January 34.94 January 59.20 February 15.94 February 23.13 February 37.03 February 53.00 February 35.00 February 61.00 March 18.06 March 23.06 March 37.75 March 47.50 March 37.56 March 58.49 April 19.38 April 24.81 April 36.88 April 47.63 April 43.50 April 58.95 May 20.31 May 23.81 May 35.09 May 46.00 May 43.50 June 20.25 June 25.63 June 38.94 June 50.75 June 40.00 July 19.56 July 28.38 July 41.00 July 49.75 July 39.44 August 21.13 August 28.19 August 36.38 August 41.69 August 37.13 September 22.06 September 28.44 September 43.81 September 40.81 September 46.31 October 18.63 October 30.66 October 45.69 October 43.44 October 52.94 November 20.56 November 33.25 November 49.38 November 39.69 November 56.88 December 20.69 December 32.03 December 55.00 December 39.88 December 59.94 The closing price on May 1, 2001 was 59.69. FEDERATED DEPARTMENT STORES (FD) Federated Department Stores operates full-line department stores in the United States. Federated's department stores include Bloomingdale's, The Bon Marche, Burdines, Goldsmith's, Lazarus, Macy's and Rich's. These department stores sell a range of merchandise, including men's, women's and children's clothing and accessories, cosmetics, home furnishings and other consumer goods. Federated also operates catalog businesses and electronic-commerce businesses which provide goods and services online. Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 27.00 January 32.88 January 42.31 January 41.81 January 41.63 January 44.56 February 30.25 February 34.75 February 46.88 February 38.13 February 36.69 February 48.35 March 32.25 March 33.13 March 51.81 March 40.13 March 42.25 March 41.55 April 33.50 April 34.00 April 49.50 April 46.69 April 34.00 April 42.98 May 34.63 May 37.00 May 51.81 May 54.50 May 38.50 June 34.13 June 34.75 June 53.81 June 52.94 June 33.75 July 30.25 July 43.63 July 52.94 July 51.31 July 24.06 August 34.63 August 42.00 August 44.00 August 46.00 August 27.63 September 33.50 September 43.13 September 36.38 September 43.69 September 26.13 October 33.00 October 44.06 October 38.44 October 42.69 October 32.56 November 34.13 November 45.56 November 41.69 November 47.06 November 30.50 December 34.13 December 43.06 December 43.56 December 50.56 December 35.00
The closing price on May 1, 2001 was 42.65. A-3 THE GAP, INC. (GPS) The Gap, Inc. is an international retailer that operates stores selling specialty apparel in the United States, Canada, the United Kingdom, France, Germany and Japan. The Gap sells casual and business-casual apparel, intimate apparel, personal care and other accessories for men, women and children in its Gap, GapKids, babyGap, Banana Republic and Old Navy stores. The Gap designs virtually all of the clothing and products sold in its stores under the Gap, Banana Republic and Old Navy brand names, which are then manufactured by independent sources. Products offered in The Gap's retail line are also available through its Web sites and catalogs.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 6.98 January 8.52 January 17.36 January 42.79 January 44.69 January 32.60 February 7.91 February 9.78 February 19.86 February 43.13 February 48.31 February 27.24 March 8.20 March 9.93 March 20.00 March 44.88 March 49.81 March 23.72 April 8.93 April 9.44 April 22.86 April 44.38 April 36.75 April 27.71 May 9.96 May 10.19 May 24.00 May 41.71 May 35.06 June 9.52 June 11.52 June 27.31 June 50.38 June 31.25 July 8.81 July 13.17 July 26.50 July 46.75 July 35.81 August 10.37 August 13.17 August 22.69 August 39.13 August 22.44 September 8.56 September 14.81 September 23.44 September 32.00 September 20.13 October 8.56 October 15.76 October 26.72 October 37.13 October 25.81 November 9.52 November 15.91 November 32.78 November 40.56 November 24.94 December 8.93 December 15.75 December 37.42 December 46.00 December 25.50 The closing price on May 1, 2001 was 28.62. THE HOME DEPOT, INC. (HD) The Home Depot, Inc. is a home improvement retailer that operates in the United States, Canada and Latin America. Home Depot stores sell building materials, home improvement products, and lawn and garden products. In addition, Home Depot operates mail order businesses that offer maintenance and repair products, wallpaper and custom window treatments. Home Depot also offers various products through the Internet directly to consumers. Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 10.22 January 11.00 January 20.17 January 40.33 January 56.63 January 48.20 February 9.61 February 12.14 February 21.29 February 39.79 February 57.81 February 42.50 March 10.61 March 11.89 March 22.54 March 41.50 March 64.50 March 43.10 April 10.53 April 12.89 April 23.23 April 39.83 April 56.50 April 47.10 May 11.36 May 14.03 May 26.19 May 37.71 May 48.81 June 12.00 June 15.33 June 27.69 June 42.96 June 49.94 July 11.19 July 16.60 July 27.92 July 42.54 July 51.75 August 11.81 August 15.73 August 25.42 August 41.00 August 48.06 September 12.64 September 17.38 September 26.33 September 45.75 September 53.06 October 12.19 October 18.58 October 29.04 October 50.50 October 43.00 November 11.58 November 18.69 November 33.17 November 52.79 November 39.19 December 11.14 December 19.63 December 40.79 December 68.75 December 45.69
The closing price on May 1, 2001 was 49.24. A-4 KOHL'S CORPORATION (KSS) Kohl's Corporation operates specialty department stores primarily in the midwest, mid-Atlantic and northeastern regions of the United States. Kohl's stores sell clothing, shoes and accessories for men, women and children, and soft home products, such as towels, sheets, pillows and housewares. The consumer retail items and home products carried by Kohl's mainly consist of national brand merchandise targeted to middle-income customers.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 7.05 January 9.72 January 17.34 January 33.88 January 35.06 January 71.00 February 7.73 February 11.50 February 20.05 February 34.50 February 37.91 February 65.91 March 7.92 March 10.59 March 20.44 March 35.44 March 51.25 March 61.69 April 8.59 April 12.22 April 20.66 April 33.22 April 48.13 April 61.06 May 8.28 May 13.47 May 23.78 May 34.09 May 51.75 June 9.16 June 13.19 June 25.94 June 38.44 June 55.63 July 7.84 July 15.75 July 24.50 July 38.03 July 56.75 August 9.50 August 17.23 August 22.72 August 35.63 August 56.00 September 9.00 September 17.75 September 19.50 September 33.06 September 57.69 October 9.00 October 16.78 October 23.91 October 37.44 October 54.19 November 10.00 November 18.09 November 24.59 November 36.09 November 53.56 December 9.81 December 17.03 December 30.72 December 36.09 December 61.00
The closing price on May 1, 2001 was 63.90. THE KROGER CO. (KR) The Kroger Co. operates retail supermarket food and drug stores and convenience stores, and also manufactures and processes food for sale in its own stores. Kroger's supermarkets and department stores carry a range of items including food, pharmacy, health and personal hygiene items. Kroger's convenience stores generally offer staple food items, convenience foods, general merchandise and gasoline. Kroger stores and operations are primarily located in the southern, mid-western and western regions of the United States.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 8.69 January 11.94 January 19.56 January 31.75 January 17.38 January 24.55 February 9.28 February 13.25 February 21.13 February 32.34 February 14.94 February 24.24 March 10.13 March 12.75 March 23.09 March 29.94 March 17.56 March 25.79 April 10.28 April 13.75 April 20.94 April 27.16 April 18.56 April 22.59 May 9.81 May 12.94 May 21.47 May 29.28 May 19.88 June 9.88 June 14.50 June 21.44 June 27.94 June 22.06 July 9.44 July 14.78 July 23.66 July 26.44 July 20.69 August 10.59 August 15.06 August 22.50 August 23.13 August 22.69 September 11.19 September 15.09 September 25.00 September 22.06 September 22.56 October 11.16 October 16.31 October 27.75 October 20.81 October 22.56 November 11.53 November 17.22 November 26.53 November 21.31 November 26.50 December 11.63 December 18.38 December 30.25 December 18.88 December 27.06
The closing price on May 1, 2001 was 23.74. A-5 THE LIMITED, INC. (LTD) The Limited, Inc. is principally engaged in the purchase, distribution and sale of women's and men's clothing, women's intimate apparel and personal care products. The Limited's retail operations include Express, Lerner New York, Lane Bryant, Limited Stores, Structure and Henri Bendel. Intimate Brands, Inc., a corporation in which The Limited holds a majority interest, derives its revenues from sales of women's intimate and other apparel and personal care products and accessories. Intimate Brands operates the Victoria's Secret, Bath & Body Works and White Barn Candle Co. stores. The Limited also operates mail order catalogs and electronic-commerce businesses.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 8.38 January 8.56 January 13.25 January 17.06 January 15.34 January 20.66 February 8.75 February 9.38 February 14.50 February 17.75 February 17.00 February 17.65 March 9.50 March 9.19 March 14.34 March 19.81 March 21.06 March 15.72 April 10.38 April 9.06 April 16.78 April 21.88 April 22.59 April 16.92 May 10.38 May 10.06 May 16.63 May 24.44 May 24.13 June 10.75 June 10.13 June 16.56 June 22.69 June 21.63 July 9.50 July 11.16 July 13.41 July 22.84 July 20.44 August 9.25 August 11.38 August 10.50 August 18.94 August 20.00 September 9.56 September 12.22 September 10.97 September 19.13 September 22.06 October 9.19 October 11.78 October 12.81 October 20.50 October 25.25 November 9.00 November 12.03 November 14.47 November 21.22 November 19.44 December 9.19 December 12.75 December 14.56 December 21.66 December 17.06
The closing price on May 1, 2001 was 17.00. LOWE'S COMPANIES, INC. (LOW) Lowe's Companies, Inc. operates retail stores that sell home improvement products targeted for both "do-it-yourself" and commercial construction and renovation businesses. Lowe's stores carry products, supplies and materials for home improvement, decor, maintenance, repair and remodeling, lawn and garden care and maintenance of commercial buildings. Lowe's also offers services such as installation, delivery, loading, assembly and free "how-to" clinics to aid customers in design and planning of home improvement tasks. Lowe's also offers various products through the Internet directly to consumers.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 15.56 January 16.56 January 25.28 January 58.31 January 44.63 January 53.45 February 15.50 February 18.25 February 29.22 February 59.31 February 47.81 February 55.88 March 17.88 March 18.69 March 35.09 March 60.50 March 58.38 March 58.45 April 16.19 April 19.00 April 34.97 April 52.75 April 49.50 April 63.00 May 17.13 May 19.69 May 39.59 May 51.69 May 46.56 June 18.06 June 18.56 June 40.56 June 56.69 June 41.06 July 16.31 July 18.81 July 38.50 July 52.75 July 42.19 August 18.06 August 17.28 August 35.06 August 45.25 August 44.81 September 20.44 September 19.44 September 31.81 September 48.75 September 44.88 October 20.06 October 20.81 October 33.75 October 55.38 October 45.69 November 20.31 November 22.97 November 42.25 November 49.81 November 40.06 December 17.81 December 23.84 December 51.19 December 59.75 December 44.50
The closing price on May 1, 2001 was 64.72. A-6 THE MAY DEPARTMENT STORES COMPANY (MAY) The May Department Stores Company operates regional department store companies, including Lord & Taylor, Hecht's, Robinson's-May, Filene's, Kaufmann's, Famous-Barr L.S., Jones Store, Meier & Frank and ZCMI. In August 2000, May completed the acquisition of David's Bridal, one of the largest retailers of bridal gowns and other bridal party merchandise in the United States.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 29.67 January 29.67 January 35.04 January 40.25 January 31.13 January 38.95 February 31.08 February 31.08 February 40.50 February 39.50 February 26.19 February 39.59 March 32.17 March 30.33 March 42.33 March 39.13 March 28.50 March 35.48 April 34.00 April 30.83 April 41.13 April 39.81 April 27.50 April 37.25 May 31.58 May 31.42 May 42.96 May 43.31 May 30.06 June 29.17 June 31.50 June 43.67 June 40.88 June 24.00 July 29.83 July 37.21 July 42.79 July 38.69 July 23.75 August 30.33 August 35.88 August 37.50 August 39.06 August 22.94 September 32.42 September 36.33 September 34.33 September 36.44 September 20.50 October 31.58 October 35.92 October 40.67 October 34.69 October 26.25 November 32.50 November 35.83 November 40.21 November 33.63 November 28.06 December 31.17 December 35.13 December 40.25 December 32.25 December 32.75 The closing price on May 1, 2001 was 37.30. RADIOSHACK CORPORATION (RSH) RadioShack Corporation, formerly Tandy Corporation, primarily engages in the retail sale of consumer electronics through the RadioShack store chain and also offers its products and services on its Web site. RadioShack operates company-owned stores and franchise stores. The RadioShack stores carry an assortment of its private brand and third party brand name products, including electronic parts and accessories, wireless and conventional telephones, audio and video equipment, digital satellite systems, and specialized products such as scanners and weather radios. RadioShack also offers electronics-related services. Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 9.56 January 11.31 January 19.38 January 27.00 January 48.88 January 55.04 February 10.94 February 12.59 February 22.25 February 27.81 February 38.00 February 42.80 March 11.56 March 12.53 March 23.50 March 31.91 March 50.75 March 36.69 April 12.97 April 13.13 April 24.88 April 36.38 April 57.00 April 30.63 May 13.50 May 13.50 May 22.13 May 41.25 May 42.63 June 11.84 June 14.00 June 26.53 June 48.88 June 47.38 July 10.56 July 14.86 July 28.41 July 51.31 July 56.38 August 11.03 August 16.59 August 27.28 August 47.25 August 59.00 September 10.09 September 16.81 September 26.75 September 51.69 September 64.63 October 9.41 October 17.19 October 24.78 October 63.00 October 59.63 November 10.56 November 21.56 November 22.53 November 76.63 November 46.88 December 11.00 December 19.28 December 20.59 December 49.19 December 42.81
The closing price on May 1, 2001 was 30.15. A-7 SAFEWAY INC. (SWY) Safeway Inc. operates a chain of grocery stores primarily in the midwest and western regions of the United States and Canada. Safeway's stores offer food and general merchandise, including baked goods, meat, delicatessen, floral and pharmaceutical products. In addition to offering nationally advertised products from third party suppliers, Safeway operates a network of distribution, manufacturing and food processing facilities that support its retail operations and produce products that are sold under its own private labels.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 12.75 January 23.88 January 33.22 January 56.13 January 38.25 January 50.67 February 14.94 February 24.13 February 34.88 February 57.75 February 38.56 February 54.31 March 14.25 March 23.25 March 37.00 March 51.31 March 45.25 March 55.15 April 16.88 April 22.31 April 38.13 April 53.94 April 44.13 April 54.30 May 16.88 May 22.50 May 36.44 May 46.50 May 46.13 June 16.50 June 23.06 June 40.69 June 49.50 June 45.00 July 18.00 July 26.78 July 44.75 July 53.88 July 45.06 August 18.13 August 25.50 August 39.00 August 46.69 August 49.31 September 21.31 September 27.19 September 46.13 September 38.06 September 46.69 October 21.44 October 29.19 October 47.94 October 35.31 October 54.69 November 20.31 November 30.38 November 52.81 November 36.88 November 58.94 December 21.38 December 31.63 December 60.94 December 35.75 December 62.50 The closing price on May 1, 2001 was 54.51. SEARS, ROEBUCK AND CO. (S) Sears, Roebuck and Co. operates retail stores and provides product repair services throughout the United States and Canada. Sears' stores carry clothing, accessories, cosmetics, jewelry, home fashions, sporting goods, home improvement and lawn products, appliances and electronics. Sears also operates specialty stores that individually focus on offering automotive products and hardware and construction materials. The merchandise offered in Sears stores consists of third party brands, as well as its own proprietary brands. Sears also offers various products through the Internet directly to consumers. Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 41.50 January 48.00 January 46.00 January 40.13 January 30.94 January 38.75 February 45.38 February 54.25 February 53.00 February 40.63 February 27.56 February 41.05 March 48.75 March 50.13 March 57.44 March 45.19 March 30.63 March 35.27 April 50.00 April 48.00 April 59.31 April 46.00 April 36.75 April 36.85 May 50.88 May 49.13 May 61.81 May 47.81 May 36.94 June 48.63 June 53.75 June 61.06 June 44.56 June 32.63 July 41.00 July 63.13 July 50.75 July 40.50 July 29.88 August 44.00 August 56.75 August 45.38 August 37.50 August 31.19 September 44.75 September 56.94 September 44.19 September 31.38 September 32.42 October 48.38 October 41.88 October 44.94 October 28.19 October 29.73 November 49.75 November 45.81 November 47.44 November 34.19 November 32.44 December 46.00 December 45.25 December 42.50 December 30.38 December 34.75
The closing price on May 1, 2001 was 37.02. A-8 TARGET CORPORATION (TGT) Target Corporation operates general merchandise retail stores and is a direct marketer of consumer products. Target stores offer a range of consumer products including clothing, health and beauty aids, school and office supplies, electronics, pharmacy services and home accessories, as well as books, music and movies. Target also sells various products by catalog and the Internet directly to consumers. Target's products are purchased from a variety of domestic and international suppliers.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 6.19 January 9.41 January 17.98 January 31.88 January 32.94 January 37.98 February 6.20 February 10.50 February 19.33 February 31.28 February 29.50 February 39.00 March 7.07 March 10.44 March 22.00 March 33.31 March 37.38 March 36.08 April 7.96 April 11.25 April 21.83 April 33.66 April 33.28 April 38.45 May 8.50 May 12.03 May 23.19 May 31.50 May 31.34 June 8.59 June 13.30 June 24.25 June 32.50 June 29.00 July 7.56 July 16.16 July 23.91 July 32.34 July 29.00 August 8.63 August 14.25 August 18.38 August 28.91 August 23.25 September 8.25 September 15.06 September 17.88 September 30.03 September 25.63 October 8.66 October 15.75 October 21.19 October 32.31 October 27.63 November 9.72 November 16.61 November 22.50 November 35.28 November 30.06 December 9.81 December 16.88 December 27.13 December 36.72 December 32.25 The closing price on May 1, 2001 was 39.09. THE TJX COMPANIES, INC. (TJX) The TJX Companies, Inc. is a discount retailer of clothing and home fashions in the United States, Canada and Europe. TJX operates under various trade names, including T.J. Maxx, Marshalls and A.J. Wright, in the United States, and Winners, a discount family clothing and home fashions chain in Canada. TJX also operates HomeGoods, a chain of discount home fashions stores in the United States, and T.K. Maxx, a chain of discount family clothing and home fashion stores in the United Kingdom, the Republic of Ireland and The Netherlands. Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 4.72 January 9.94 January 16.94 January 29.56 January 16.31 January 31.00 February 5.56 February 10.44 February 19.44 February 28.56 February 15.94 February 30.58 March 6.28 March 10.69 March 22.78 March 34.00 March 22.19 March 32.00 April 7.38 April 11.81 April 22.13 April 33.31 April 19.19 April 31.33 May 8.81 May 12.00 May 23.38 May 30.00 May 21.63 June 8.44 June 13.19 June 24.13 June 33.31 June 18.75 July 7.53 July 14.94 July 23.50 July 33.06 July 16.75 August 8.00 August 13.75 August 22.31 August 28.88 August 18.81 September 8.97 September 15.28 September 17.81 September 28.06 September 22.50 October 10.00 October 14.81 October 18.94 October 27.13 October 27.25 November 11.28 November 17.25 November 25.63 November 26.19 November 25.63 December 11.84 December 17.19 December 29.00 December 20.44 December 27.75
The closing price on May 1, 2001 was 32.48. A-9 WALGREEN CO. (WAG) Walgreen Co. is a drugstore retailer that has stores throughout the United States and Puerto Rico and operates a Web site-based prescription retail business. Walgreen's drugstores are engaged in the retail sale of prescription and non-prescription drugs, and carry additional product lines such as general merchandise, cosmetics, toiletries, household items, food and beverages. Customer prescription purchases can be made at Walgreen's drugstores as well as through the mail, telephone and the Walgreen's Web site. Walgreen drugstores sell independent brand name products purchased from domestic and foreign suppliers as well as products marketed under Walgreen's own various trade names.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 8.72 January 10.28 January 16.56 January 31.25 January 27.94 January 40.94 February 8.25 February 10.69 February 18.34 February 32.00 February 25.81 February 44.32 March 8.16 March 10.47 March 17.63 March 28.25 March 25.75 March 40.80 April 8.00 April 11.50 April 17.25 April 26.88 April 28.13 April 42.78 May 7.97 May 11.69 May 17.59 May 23.25 May 28.38 June 8.38 June 13.41 June 20.66 June 29.38 June 32.19 July 7.94 July 14.13 July 21.59 July 28.31 July 31.19 August 8.22 August 13.47 August 19.19 August 23.19 August 32.88 September 9.25 September 12.81 September 22.03 September 25.38 September 37.94 October 9.44 October 14.06 October 24.34 October 25.19 October 45.63 November 10.44 November 16.09 November 26.94 November 29.13 November 44.56 December 10.06 December 15.69 December 29.28 December 29.25 December 41.81
The closing price on May 1, 2001 was 44.30. WAL-MART STORES, INC. (WMT) Wal-Mart Stores, Inc. operates mass merchandising stores, which serve customers primarily through the operation of Wal-Mart discount stores, Wal-Mart Supercenters and Sam's Clubs stores. The Wal-Mart discount stores and Wal-Mart Supercenters offer a wide variety of merchandise, including clothing, household and sporting goods and groceries. Wal-Mart stores sell name-brand merchandise and merchandise sold under Wal-Mart's own brands. Sam's Clubs are warehouse stores, accessible by membership only, that offer bulk-quantity brand name merchandise and grocery items. Wal-Mart also offers various products through the Internet directly to consumers.
Closing Closing Closing Closing Closing Closing 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price 2001 Price - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- -------- ------- January 10.19 January 11.88 January 19.91 January 43.00 January 54.75 January 56.80 February 10.63 February 13.19 February 23.16 February 43.06 February 48.88 February 50.09 March 11.50 March 13.94 March 25.41 March 46.09 March 56.50 March 50.50 April 11.94 April 14.06 April 25.28 April 46.00 April 55.38 April 51.74 May 12.94 May 14.94 May 27.56 May 42.63 May 58.00 June 12.69 June 16.91 June 30.38 June 48.25 June 57.63 July 12.00 July 18.75 July 31.56 July 42.25 July 54.94 August 13.19 August 17.75 August 29.50 August 44.31 August 47.44 September 13.19 September 18.31 September 27.31 September 47.56 September 48.13 October 13.25 October 17.50 October 34.53 October 56.69 October 45.38 November 12.75 November 20.03 November 37.66 November 57.50 November 52.19 December 11.38 December 19.72 December 40.72 December 69.13 December 53.13
The closing price on May 1, 2001 was 53.50. A-10 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- HOLDRS/SM/ Retail 1,000,000,000 Depositary Receipts Retail HOLDRS SM Trust --------------------- P R O S P E C T U S --------------------- Merrill Lynch & Co. Robert W. Baird & Co. First Union Securities, Inc. Morgan Keegan & Company, Inc. Raymond James & Associates, Inc. Sutro & Co. Incorporated Tucker Anthony Capital Markets May 1, 2001 Until May 26, 2001 (25 days after the date of this prospectus), all dealers effecting transactions in the offered Retail HOLDRS, whether or not participating in this distribution, may be required to deliver a prospectus. This requirement is in addition to the obligations of dealers to deliver a prospectus when acting as underwriters and with respect to unsold allotments or subscriptions. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----