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EXHIBIT 99.1
PROSPECTUS SUPPLEMENT No. 1
(To Prospectus dated September 26, 2000)
[LOGO]
1,000,000,000 Depositary Receipts
Software HOLDRS Trust
This prospectus supplement amends and supplements information contained in
the prospectus dated September 26, 2000 relating to the sale of up to
1,000,000,000 depositary receipts by Software 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
Software HOLDRS Trust.
The depositary trust agreement has been amended to provide the following:
. if a company included in the Software HOLDRS Trust distributes
securities, the distributed securities will not be distributed from
the Software 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 Software HOLDRS
Trust at the time of the distribution, and
. if the securities of a company included in the Software 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
Software 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
Software 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 Software
HOLDRS Trust are represented in the Technology sector. The Standard & Poor's
sector classifications of the securities included in the Software 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 Software 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
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distribution by an underlying issuer or in exchange of securities included in
the Software HOLDRS Trust will be distributed from the Software HOLDRS Trust to
you.
The date of this prospectus supplement is November 28, 2000.
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