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EXHIBIT 99.1
PROSPECTUS SUPPLEMENT No. 2
(To Prospectus Supplement No. 1 dated June 30, 2000 and
to Prospectus dated January 31, 2000)
[LOGO]
1,000,000,000 Depositary Receipts
Pharmaceutical HOLDRS Trust
This prospectus supplement amends and supplements information contained in
the prospectus dated January 31, 2000 relating to the sale of up to
1,000,000,000 depositary receipts by Pharmaceutical HOLDRS Trust.
The depositary trust agreement entered into between Merrill Lynch, Pierce,
Fenner & Smith Incorporated, as the initial depositor, and The Bank of New York,
as trustee, has been amended as of November 22, 2000. The agreement has been
amended to revise the rules related to distributions of securities from the
Pharmaceutical HOLDRS Trust.
The depositary trust agreement has been amended to provide the following:
. if a company included in the Pharmaceutical HOLDRS Trust
distributes securities, the distributed securities will not be
distributed from the Pharmaceutical HOLDRS Trust, unless either 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 Standard & Poor's sector
classification that is different from the Standard & Poor's sector
classifications represented in the Pharmaceutical HOLDRS Trust at
the time of the distribution, and
. if the securities of a company included in the Pharmaceutical
HOLDRS Trust are no longer outstanding, as a result of a merger,
consolidation, corporate combination or other event, any securities
received in exchange for those securities will not be distributed
from the Pharmaceutical HOLDRS Trust, unless either the securities
received in exchange are not listed for trading on a U.S. national
securities exchange or through Nasdaq NMS or the securities
received in exchange have a Standard & Poor's sector classification
that is different from the Standard & Poor's sector classifications
represented in the Pharmaceutical HOLDRS Trust at the time of the
exchange.
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. As of
the date of this prospectus supplement, the securities included in the
Pharmaceutical HOLDRS Trust are represented in the Consumer Staples and
Healthcare sectors. The Standard & Poor's sector classifications of the
securities included in the Pharmaceutical HOLDRS Trust 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.
It is anticipated, as a result of Standard & Poor's broadly defined sector
classifications, that most distributions or exchanges of securities will not
result in the distribution of securities from the
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Pharmaceutical HOLDRS Trust. 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 in exchange of securities included in
the Pharmaceutical HOLDRS Trust will be distributed from the Pharmaceutical
HOLDRS Trust to you.
The date of this prospectus supplement is November 28, 2000
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