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Registration No. 333-92163
Rule No. 424(b)(3)
PROSPECTUS SUPPLEMENT No. 2
(To Prospectus Supplement No. 1
dated July 6, 2000 and to Prospectus
dated January 31, 2000)
[LOGO OF HOLDERS/SM/ TELECOM]
1,000,000,000 Depositary Receipts
Telecom HOLDRS/SM/ 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 Telecom 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 Telecom HOLDRS Trust.
The depositary trust agreement has been amended to provide the following:
. if a company included in the Telecom HOLDRS Trust distributes
securities, the distributed securities will not be distributed from the
Telecom 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 Telecom HOLDRS Trust at the time of
the distribution, and
. if the securities of a company included in the Telecom 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 Telecom 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 Telecom 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 Telecom HOLDRS Trust are
represented in the Communication Services sector. The Standard & Poor's sector
classifications of the securities included in the Telecom 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 Telecom 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 Telecom HOLDRS Trust will be distributed
from the Telecom HOLDRS Trust to you.
The date of this prospectus supplement is November 28, 2000.
