<PAGE>
As filed with the Securities and Exchange Commission on February 10, 2000
Registration No. 333-96061
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
AMENDMENT No. 1
To
FORM S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Initial Depositor
(Exact name of registrant as specified in charter)
--------------
Internet Architecture HOLDRSSM Trust
yet-to-be formed
[Issuer with respect to the receipts]
<TABLE>
<S> <C> <C>
Delaware 6211 13-5674085
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
--------------
250 Vesey Street
New York, New York 10281
(212) 449-1000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Copies to:
<TABLE>
<S> <C>
Andrea L. Dulberg, Esq. Andrew B. Janszky
Corporate Secretary Shearman & Sterling
Merrill Lynch, Pierce, Fenner & Smith Incorporated 599 Lexington Avenue
250 Vesey Street New York, New York 10022
New York, New York 10281 (212) 848-4000
(212) 449-1000
(Name, address, including zip code, and
telephone number,
including area code, of agent for service)
</TABLE>
Approximate date of commencement of proposed sale to public:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Title of Each Class of Proposed Maximum Proposed Maximum Amount of
Securities to Be Amount to Be Offering Price Aggregate Registration
Registered Registered Per Receipt(1) Offering Price(1) Fee(2)(3)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Internet Architecture 1,000,000,000 $100 $1,099,000,000 $290,136
HOLDRS................ receipts
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- --------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act. 10,000,000 receipts are
estimated to be offered in the initial offering at $100 per receipt and
990,000,000 receipts are estimated to be offered continuously after the
initial offering at $0.10 per receipt.
(2) This Registration Statement also registers, where required, an
indeterminate amount of securities to be sold by Merrill Lynch, Pierce,
Fenner & Smith Incorporated in market-making transactions.
(3) Merrill Lynch, Pierce, Fenner & Smith Incorporated previously paid on
February 3, 2000, $2,640 of this registration fee for 100,000 receipts
based on a proposed maximum offering price of $100 per receipt.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to such
Section 8(a), may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We +
+have filed a registration statement relating to these receipts with the +
+Securities and Exchange Commission. We cannot sell these receipts until the +
+registration statement becomes effective. This prospectus is not an offer to +
+sell these receipts and we are not soliciting offers to buy these receipts in +
+any state where such offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion
Preliminary Prospectus dated February 10, 2000
PROSPECTUS
[LOGO OF HOLDRS INTERNET ARCHITECTURE]
1,000,000,000 Depositary Receipts
Internet Architecture HOLDRSSM Trust
The Internet Architecture HOLDRSSM Trust will issue Depositary Receipts
called Internet Architecture HOLDRSSM representing your undivided beneficial
ownership in the U.S.-traded common stock of a group of specified companies
that, among other things, develop and market hardware and software designed to
enhance the speed and efficiency of connections within and to the Internet,
connections within a company's internal networks and end user access to
networks. The Bank of New York will be the trustee. You only may acquire, hold
or transfer Internet Architecture HOLDRS in a round-lot amount of 100 Internet
Architecture HOLDRS or round-lot multiples. Internet Architecture HOLDRS are
separate from the underlying deposited common stocks that are represented by
the Internet Architecture HOLDRS. For a list of the names and the number of
shares of the companies that make up an Internet Architecture HOLDR, see
"Highlights of Internet Architecture HOLDRS--The Internet Architecture HOLDRS"
starting on page 10 . The trust will issue the additional Internet Architecture
HOLDRS on a continuous basis.
Investing in Internet Architecture HOLDRS involves significant risks. See
"Risk factors" starting on page 4.
The initial public offering price for a round-lot of 100 Internet
Architecture HOLDRS will equal the sum of the closing market price on the
primary trading market on the pricing date for each deposited share multiplied
by the share amount specified in this prospectus, plus an underwriting fee.
Internet Architecture 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 Internet
Architecture HOLDRS. Application has been made to list the Internet
Architecture HOLDRS on the American Stock Exchange under the symbol "IAH".
----------
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.
<TABLE>
<CAPTION>
Initial Price Underwriting
to Public* Fee
------------- ------------
<S> <C> <C>
Per Internet Architecture HOLDR................. 2%
</TABLE>
-----
* Includes underwriting fee.
For purchases of Internet Architecture HOLDRS in excess of Internet
Architecture HOLDRS, the underwriting fee will be %.
----------
Merrill Lynch & Co.
----------
The date of this Prospectus is , 2000
"HOLDRS" and "HOLding Company Depositary ReceiptS" are service marks of Merrill
Lynch & Co., Inc.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary.................................................................... 3
Risk Factors............................................................... 4
Highlights of Internet Architecture HOLDRS................................. 9
The Trust.................................................................. 16
Description of Internet Architecture HOLDRS................................ 16
Description of the Underlying Securities................................... 17
Description of the Depositary Trust Agreement.............................. 19
Federal Income Tax Consequences............................................ 22
ERISA Considerations....................................................... 23
Plan of Distribution....................................................... 23
Legal Matters.............................................................. 24
Where You Can Find More Information........................................ 25
</TABLE>
----------------
This prospectus contains information you should consider when making your
investment decision. With respect to information about Internet Architecture
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 Internet
Architecture HOLDRS in any jurisdiction where the offer or sale is not
permitted.
2
<PAGE>
SUMMARY
The Internet Architecture HOLDRS trust will be formed under the
depositary trust agreement, dated as of February , 2000 among The Bank of
New York, as trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
other depositors and the owners of the Internet Architecture 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 generally considered to be involved in various aspects of the
Internet architecture business. Companies involved in the Internet
architecture business are companies that, among other things, develop and
market hardware and software designed to enhance the speed and efficiency of
connections within and to the Internet, connections within a company's
internal networks and end user access to networks.The number of shares of each
common stock held by the trust with respect to each round-lot of Internet
Architecture HOLDRS is specified under "Highlights of Internet Architecture
HOLDRS--The Internet Architecture HOLDRS." This group of common stocks is
referred to as the underlying securities. Except when a reconstitution event
occurs, the underlying securities will not change.
Under no circumstances will a new company be added to the group of
issuers of underlying securities.
The trust will issue Internet Architecture HOLDRS that represent your
undivided beneficial ownership interest in the shares of common stock held by
the trust on your behalf. The Internet Architecture HOLDRS are separate from
the underlying common stocks that are represented by the Internet Architecture
HOLDRS.
3
<PAGE>
RISK FACTORS
An investment in Internet Architecture HOLDRS involves risks similar to
investing in each of the underlying securities outside of the Internet
Architecture HOLDRS, including the risks associated with concentrated
investments in Internet architecture companies.
General Risk Factors
. Loss of investment. Because the value of Internet Architecture HOLDRS
directly relates to the value of the underlying securities, you may
lose all or a substantial portion of your investment in the Internet
Architecture HOLDRS if the underlying securities decline in value.
. Discount trading price. Internet Architecture HOLDRS may trade at a
discount to the aggregate value of the underlying securities.
. Not necessarily representative of the Internet architecture
business. While the underlying securities are common stocks of
companies generally considered to be involved in various aspects of
the Internet architecture business, the underlying securities and the
Internet Architecture HOLDRS may not necessarily follow the price
movements of the entire Internet architecture business generally. If
the underlying securities decline in value, your investment in the
Internet Architecture HOLDRS will decline in value even if common
stock prices of companies involved in the Internet architecture
business 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 Internet architecture business. In this
case, the Internet Architecture HOLDRS may no longer consist of
securities issued only by companies involved in the Internet
architecture business.
. No investigation of underlying securities. The underlying securities
included in the Internet Architecture HOLDRS were selected by Merrill
Lynch, Pierce, Fenner & Smith Incorporated based on the market
capitalization of issuers and the market liquidity of common stocks
in the Internet architecture business, without regard for the value,
price performance, volatility or investment merit of the underlying
securities. Consequently, the Internet Architecture HOLDRS trust, the
trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and
their affiliates, have not performed any investigation or review of
the selected companies, including the public filings by the
companies. Investors and market participants should not conclude that
the inclusion of a company is any form of investment recommendation
by the trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, or their affiliates.
. Loss of diversification. As a result of business developments,
reorganizations, or market fluctuations affecting issuers of the
underlying securities, Internet Architecture HOLDRS may not
necessarily continue to be a diversified investment in the Internet
architecture business. As a result of market fluctuation and/or
reconstitution events, Internet Architecture HOLDRS may represent a
concentrated investment in one or more of the underlying securities
which would reduce investment diversification and increase your
exposure to the risks of concentrated investments.
. 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 Internet Architecture HOLDRS and receive
delivery of each of the underlying securities. The cancellation of
your Internet Architecture HOLDRS will allow you to sell individual
underlying securities or to deliver individual underlying securities
in a tender offer. The cancellation of Internet Architecture HOLDRS
will involve payment of a cancellation fee to the trustee.
. Trading halts. Trading in Internet Architecture HOLDRS may be halted
if trading in one or more of the underlying securities is halted. If
so, you will not be able to trade Internet
4
<PAGE>
Architecture HOLDRS even though there is trading in some of the
underlying securities; however, you will be able to cancel your
Internet Architecture HOLDRS to receive the underlying securities.
. Delisting from the American Stock Exchange. If the number of
companies whose common stock is held in the trust falls below nine,
the American Stock Exchange may consider delisting the Internet
Architecture HOLDRS. If the Internet Architecture HOLDRS are delisted
by the American Stock Exchange, a termination event will result
unless the Internet Architecture HOLDRS are listed for trading on
another national securities exchange or through NASDAQ within five
business days from the date the Internet Architecture 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 trade in the underlying
securities for its own account. 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 Internet
Architecture HOLDRS, the selection of the Internet architecture
business, Merrill Lynch's activity in the secondary market in the
underlying securities, and the creation and cancellation of Internet
Architecture 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 affect the
market price of the deposited shares. Large volumes of purchasing
activity, which may occur in connection with the issuance of Internet
Architecture HOLDRS, particularly in connection with the initial
issuance of Internet Architecture 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. Consequently,
prices for the underlying securities may decline after these
purchases as the volume of purchases decreases. This in turn is
likely to have an immediate, adverse effect on the trading price of
Internet Architecture HOLDRS.
Risk Factors Specific to Companies Involved in the Internet Architecture
Business
. Internet architecture company stock prices have been and will likely
continue to be extremely volatile, which will directly affect the
price volatility of the Internet Architecture HOLDRS, and you could
lose all or part of your investment. The trading prices of the common
stocks of Internet architecture companies have been and are likely to
be extremely volatile. Internet architecture companies' stock prices
could be subject to wide fluctuations in response to a variety of
factors, including the following:
. actual or anticipated variations in companies' quarterly operating
results;
. announcements of technological innovations or new services by
Internet architecture companies or their competitors;
. changes in financial estimates by securities analysts;
. conditions or trends in Internet online service companies;
. conditions or trends in online securities trading;
. changes in the market valuations of the Internet or online service
companies;
5
<PAGE>
. developments in Internet regulations;
. announcements by Internet architecture companies or their
competitors of significant acquisitions, strategic partnerships,
joint ventures or capital commitments;
. unscheduled system downtime;
. additions or departures of key personnel; and
. sales of Internet architecture companies' common stock or other
securities in the open market.
In addition, the trading prices of Internet architecture stocks in
general have experienced extreme price and volume fluctuations in
recent months. These fluctuations often have been unrelated or
disproportionate to the operating performance of these companies. The
valuations of many Internet architecture stocks are extraordinarily
high when measured by conventional valuation standards such as price
to earnings and price to sales ratios. Some of the companies do not
or in the future might not have earnings. As a result, these trading
prices may decline substantially. These trading prices and valuations
may not be sustained. Any negative change in the public's perception
of the prospects of Internet or e-commerce companies, generally,
could depress the stock prices of an Internet architecture company
regardless of its operating results. Other broad market and industry
factors may decrease the stock price of Internet architecture stocks,
regardless of their operating results. Market fluctuations, as well
as general political and economic conditions, such as recession or
interest rate or currency rate fluctuations, also may decrease the
market price of Internet stocks.
. The success of many Internet architecture companies depends on timely
introduction and market acceptance of new products. The Internet
market is characterized by rapidly changing technology, evolving
industry standards and practices, frequent new product and service
introductions and enhancements and changing customer demands. The
success of many Internet architecture companies will depend on their
ability to adapt to rapidly changing technologies, to adapt their
services to evolving industry standards and to continually improve
the performance, features and reliability of their products. They
must quickly develop, introduce and deliver their products, or incur
the risk that their competitors will introduce the same or similar
products, or products which could make their product obsolete. In
addition, the widespread adoption of new Internet, networking or
telecommunications technologies or other technological changes could
require substantial expenditures to modify or adapt the existing
products offered by Internet architecture companies. New product
research and development may be costly and time-consuming. Many
Internet architecture companies may not successfully introduce new
products, develop and maintain a loyal customer base or achieve
general market acceptance for their products, and failure to do so
could have a material adverse effect on their business, results of
operations and financial condition.
. New laws and regulations with respect to the Internet could impede
its commercial development and adversely affect the business of many
Internet architecture companies. Due to the increasing popularity and
use of the Internet and other online services, it is possible that a
number of laws and regulations may be adopted with respect to the
Internet or other online services covering issues such as user
privacy, pricing, content, copyrights, distribution and
characteristics and quality of products and services. In addition,
many Internet architecture companies develop products which interact
with or incorporate telecommunications infrastructure which may be
subject to regulation by the Federal Communications Commission.
Furthermore, the growth and development of the market for online
interaction and commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on companies
conducting business online. The adoption of any additional laws or
regulations may impede the growth of the Internet or other online
services which could have a material adverse effect on the business,
results of operations and financial condition of Internet
architecture companies.
6
<PAGE>
. The success of Internet architecture companies depends on continued
growth of Internet use for online commerce and communication. Future
revenues and any future profits of Internet architecture companies
depend substantially upon the widespread acceptance and use of the
Internet and other online services as an effective medium of
communication and commerce by consumers. Rapid growth in the use of
and interest in the Internet and other online services is a
relatively recent phenomenon. There is no assurance that acceptance
and use will continue to develop or that a sufficiently broad base of
consumers will adopt, and continue to use, the Internet and other
online services. For Internet architecture companies to be
successful, their customers must continue to accept and use new ways
of conducting business and exchanging information on the Internet.
. Some of the companies involved in the Internet architecture business
are also engaged in other lines of business unrelated to Internet
architecture, and they may experience problems with these lines of
business which could adversely affect their operating
results. Several of the companies which comprise the Internet
Architecture HOLDRS have lines of business that do not relate to
Internet architecture and which may present additional risks not
mentioned in this prospectus. The operating results of Internet
architecture companies may fluctuate as a result of these additional
risks and events in the industries of these other lines of business.
There can be no assurance that, despite a company's possible success
in the Internet architecture business, the other lines of business in
which these companies are engaged will not have an adverse effect on
the company's business or financial conditions.
. The international operations of many Internet architecture companies
expose them to risks associated with instability and changes in
economic and political conditions, foreign currency fluctuations,
changes in foreign regulations and other risks inherent to
international business. Many Internet architecture companies have
international operations and derive substantial revenue from
international sales. The risks of international business that the
companies are exposed to include the following:
. general economic, social and political conditions;
. the difficulty of enforcing intellectual property rights,
agreements and collecting receivables through certain foreign
legal systems;
. differing tax rates, tariffs, exchange controls or other similar
restrictions;
. currency fluctuations; and
. changes in, and compliance with, domestic and foreign laws and
regulations which impose a range of restrictions on operations,
trade practices, foreign trade and international investment
decisions.
. Many Internet architecture companies rely on a single supplier or a
limited number of suppliers for the components used in their
products. Reliance on a single supplier or limited number of
suppliers subjects many Internet architecture companies to risks of
delivery delays, price increases, receipt of non-conforming or poor
quality components and inability to obtain long-term supplies of
components. Any reduction or interruption in these third parties'
supply or manufacturing would adversely affect an Internet
architecture company's ability to deliver its products and meet
customer needs. There can be no assurance that Internet architecture
companies will not encounter problems with suppliers, which may harm
their reputation and adversely affect their operations and financial
condition.
. Failure to integrate acquisitions could disrupt operations and
prevent the realization of intended benefits. Many Internet
architecture companies are active acquirers of other companies as
part of their business plans. There can be no assurance that Internet
architecture companies will be able to integrate these acquired
companies, which may result in failure to realize expected cost
savings, increases in revenue and other projected benefits from such
integration. There can also
7
<PAGE>
no be no assurance that Internet architecture companies will be able
to attract and retain qualified personnel from acquired businesses or
be successful in integrating such personnel. Further, Internet
architecture companies may suffer material adverse short and long-
term effects on operating results and financial condition as a result
of such acquisitions.
. Many Internet architecture companies are dependent on their ability
to continue to attract and retain highly-skilled technical and
managerial personnel to develop and generate their business. The
success of many Internet architecture companies is highly dependent
of the experience, abilities and continued services of key executive
officers and key technical personnel. If these companies lose the
services of any of these officers or key technical personnel, their
future success could be undermined. Competition for personnel is
intense. There is no certainty that any of these Internet
architecture companies will be able to continue to attract and retain
qualified personnel.
8
<PAGE>
HIGHLIGHTS OF INTERNET ARCHITECTURE HOLDRS
This discussion highlights information regarding Internet Architecture
HOLDRS; we present certain information more fully in the rest of this
prospectus. You should read the entire prospectus carefully before you purchase
Internet Architecture HOLDRS.
Issuer....................... Internet Architecture HOLDRS Trust.
The trust....................
The Internet Architecture HOLDRS Trust will
be formed under the depositary trust
agreement, dated as of February , 2000
among The Bank of New York, as trustee,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated, other depositors and the owners
of the Internet Architecture 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 Internet
Architecture HOLDRS....
Internet Architecture HOLDRS are designed to
achieve the following:
Diversification. Internet Architecture HOLDRS
are designed to allow you to diversify your
investment in the Internet architecture
business through a single, exchange-listed
instrument representing your undivided
beneficial ownership of the underlying
securities.
Flexibility. The beneficial owners of
Internet Architecture HOLDRS have undivided
beneficial ownership interests in each of the
underlying securities represented by the
Internet Architecture HOLDRS, and can cancel
their Internet Architecture HOLDRS to receive
each of the underlying securities represented
by the Internet Architecture HOLDRS.
Transaction costs. The expenses associated
with trading Internet Architecture HOLDRS are
expected to be less than trading each of the
underlying securities separately.
Trust assets.................
The trust will hold shares of common stock
issued by specified companies involved in the
Internet architecture business. Except when a
reconstitution event occurs, the group of
companies will not change. Reconstitution
events are described in this prospectus under
the heading "Description of the depositary
trust agreement--Reconstitution events."
Under no circumstances will the common stock
of a new company be added to the common
stocks underlying the Internet Architecture
HOLDRS.
The trust's assets may increase or decrease
as a result of in-kind deposits and
withdrawals of the underlying securities
during the life of the trust.
9
<PAGE>
The Internet Architecture The trust will issue Internet Architecture
HOLDRS.................. HOLDRS that represent your undivided
beneficial ownership interest in the shares
of U.S.-traded common stock held by the trust
on your behalf. The Internet Architecture
HOLDRS themselves are separate from the
underlying securities that are represented by
the Internet Architecture HOLDRS.
The specific share amounts for each round-lot
of 100 Internet Architecture HOLDRS will be
determined on the pricing date so that the
initial issue price will be approximately
$90-$100 per Internet Architecture HOLDR and
the initial weightings of each underlying
security included in the Internet
Architecture HOLDRS approximates the relative
market capitalizations of the specified
companies (based on the closing market prices
of the underlying securities on the trading
day immediately preceding the pricing date),
subject to a maximum weight of 20%. For
purposes of this preliminary prospectus, the
indicative share amounts and the indicative
weightings of each underlying security, based
on market capitalizations as of February 7,
2000, are set forth in the table below;
however, such share amounts and weightings
are expected to change during the period
between February 7, 2000 and the pricing
date.
After the pricing date, 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.
10
<PAGE>
The following chart provides the
. names of the 20 issuers of the underlying
securities represented by the Internet
Architecture HOLDRS,
. stock ticker symbols,
. indicative share amounts represented by a
round-lot of 100 Internet Architecture
HOLDRS (as of February 7, 2000),
. indicative weightings as of February 7,
2000, and
. principal market on which the shares of
common stock of the selected companies are
traded.
<TABLE>
<CAPTION>
Indicative Primary
Share Indicative Trading
Name of Company Ticker Amounts Weightings Market
---------------- ------ ---------- ---------- -------
<S> <C> <C> <C> <C>
CISCO SYSTEMS,
INC............ CSCO 14 19.41% NASDAQ
INTERNATIONAL
BUSINESS
MACHINES
CORPORATION.... IBM 14 17.68% NYSE
HEWLETT-PACKARD
COMPANY........ HWP 8 11.40% NYSE
SUN
MICROSYSTEMS,
INC............ SUNW 12 11.38% NASDAQ
EMC
CORPORATION/MA.. EMC 8 10.15% NYSE
DELL COMPUTER
CORPORATION.... DELL 20 8.35% NASDAQ
COMPAQ COMPUTER
CORPORATION.... CPQ 13 3.93% NYSE
SYCAMORE
NETWORKS,
INC............ SCMR 1 3.20% NASDAQ
JUNIPER
NETWORKS,
INC............ JNPR 1 1.93% NASDAQ
3COM
CORPORATION.... COMS 3 1.88% NASDAQ
FOUNDRY
NETWORKS,
INC. .......... FDRY 1 1.44% NASDAQ
GATEWAY, INC.... GTW 2 1.39% NYSE
NETWORK
APPLIANCE,
INC............ NTAP 1 1.39% NASDAQ
APPLE COMPUTER,
INC............ AAPL 1 1.26% NASDAQ
COBALT NETWORKS,
INC............ COBT 1 1.08% NASDAQ
SEAGATE
TECHNOLOGY,
INC............ SEG 2 0.99% NYSE
EXTREME
NETWORKS,
INC............ EXTR 1 0.98% NASDAQ
CIENA
CORPORATION.... CIEN 1 0.89% NASDAQ
UNISYS
CORPORATION.... UIS 2 0.72% NYSE
ADAPTEC, INC.... ADPT 1 0.56% NASDAQ
</TABLE>
The actual share amounts and weightings will
be determined on the pricing date and will
appear in the final prospectus delivered in
connection with sales of the Internet
Architecture HOLDRS. These companies
generally are considered to be 20 of the
largest and most liquid companies with U.S.-
traded common stock involved in the Internet
architecture business, as measured by market
capitalization and trading volume on February
7, 2000. The market capitalization of a
company is determined by multiplying the
price of its common stock by the number of
outstanding shares of its common stock.
The trust only will issue and cancel, and you
only may obtain, hold, trade or surrender,
Internet Architecture HOLDRS in a round-lot
of 100 Internet Architecture HOLDRS and
round-lot multiples. The trust will only
issue Internet Architecture HOLDRS upon the
deposit of the whole shares represented by a
round-lot of 100 Internet Architecture
HOLDRS. In the event that a fractional share
comes to be represented by a round-lot of
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<PAGE>
Internet Architecture HOLDRS, the trust may
require a minimum of more than one round-lot
of 100 Internet Architecture HOLDRS for an
issuance so that the trust will always
receive whole share amounts for issuance of
Internet Architecture HOLDRS.
The number of outstanding Internet
Architecture 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
Internet Architecture HOLDRS on a continuous
basis when an investor deposits the required
shares of common stock with the trustee.
Public offering price........
The initial public offering price for 100
Internet Architecture HOLDRS will equal the
sum of the closing market price on the
primary trading market on the pricing date
for each underlying security multiplied by
the share amount to be determined on the
pricing date, plus an underwriting fee. It is
expected that the initial public offering
price will be approximately $90-$100 per
Internet Architecture HOLDR.
Purchases....................
After the initial offering, you may acquire
Internet Architecture HOLDRS in two ways:
. through an in-kind deposit of the required
number of shares of common stock of the
underlying issuers with the trustee, or
. through a cash purchase in the secondary
trading market.
Underwriting fees............
If you purchase Internet Architecture HOLDRS
in the initial public offering, you will pay
Merrill Lynch, Pierce, Fenner & Smith
Incorporated, in its role as underwriter, an
underwriting fee equal to:
. For purchases of Internet
Architecture HOLDRS or fewer, 2%.
. For purchases in excess of Internet
Architecture HOLDRS, %.
You will not be charged any issuance fee or
other sales commission in connection with
purchases of Internet Architecture HOLDRS
made in the initial public offering.
Issuance and cancellation
fees......................... After the initial offering, if you wish to
create Internet Architecture HOLDRS by
delivering to the trust the requisite shares
of common stock represented by a round-lot of
100 Internet Architecture 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 Internet Architecture HOLDRS. If
you wish to cancel your Internet Architecture
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 Internet
Architecture HOLDRS.
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<PAGE>
Commissions..................
If you choose to deposit underlying
securities in order to receive Internet
Architecture 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, whether it be Merrill Lynch, Pierce,
Fenner & Smith Incorporated or another
broker.
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 Internet Architecture 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 Internet Architecture 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 Internet
Architecture HOLDRS....
You have the right to withdraw the underlying
securities upon request by delivering a
round-lot or integral multiple of a round-lot
of Internet Architecture 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 Internet Architecture 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 Internet
Architecture 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 will have the right to instruct the
trustee to vote the underlying securities
or may 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.
If you wish to participate in a tender offer
for underlying securities, you must obtain
the underlying securities by
13
<PAGE>
surrendering your Internet Architecture
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........
A. If an issuer of underlying securities no
longer has a class of common stock
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 Internet Architecture 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 Internet Architecture 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 to the
beneficial owners of Internet Architecture
HOLDRS, unless the merger, consolidation
or other corporate combination is between
companies that are already included in the
Internet Architecture HOLDRS and the
consideration paid is additional
underlying securities. In this case, the
additional underlying securities will be
deposited into the trust.
D. If an issuer's underlying securities are
delisted from trading on a national
securities exchange or NASDAQ and are not
listed for trading on another national
securities exchange or through NASDAQ
within five business days from the date
such securities are delisted.
If a reconstitution event occurs, 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.
Termination events...........
A. The Internet Architecture HOLDRS are
delisted from the American Stock Exchange
and are not listed for trading on another
national securities exchange or through
NASDAQ within five business days from the
date the Internet Architecture 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.
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<PAGE>
C. 75% of beneficial owners of outstanding
Internet Architecture 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
consequences................. The federal income tax laws will treat a U.S.
holder of Internet Architecture HOLDRS as
directly owning the underlying securities.
The Internet Architecture HOLDRS themselves
will not result in any federal tax
consequences separate from the tax
consequences associated with ownership of the
underlying securities.
Listing......................
Application has been made to list the
Internet Architecture HOLDRS on the American
Stock Exchange under the symbol "IAH".
Trading will take place only in round-lots of
100 Internet Architecture HOLDRS and round-
lot multiples. A minimum of 150,000 Internet
Architecture 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
Internet Architecture HOLDRS. Bid and ask
prices, however, will be quoted per single
Internet Architecture HOLDRS.
Clearance and settlement.....
The trust will issue Internet Architecture
HOLDRS in book-entry form. Internet
Architecture 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 Internet
Architecture HOLDRS."
15
<PAGE>
THE TRUST
General. This discussion highlights information about the Internet
Architecture HOLDRS trust. You should read this information, information about
the depositary trust agreement as well as the depositary trust agreement before
you purchase Internet Architecture HOLDRS. The material terms of the depositary
trust agreement are described in this prospectus under the heading "Description
of the depositary trust agreement."
The Internet Architecture HOLDRS trust. The trust will be formed pursuant
to the depositary trust agreement, dated as of February , 2000. The Bank of
New York will be the trustee. The Internet Architecture HOLDRS trust is not a
registered investment company under the Investment Company Act of 1940.
The Internet Architecture HOLDRS trust is intended to hold deposited
shares for the benefit of owners of Internet Architecture 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, 2040, or earlier if a termination event occurs.
DESCRIPTION OF INTERNET ARCHITECTURE HOLDRS
The trust will issue Internet Architecture 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 Internet Architecture HOLDRS on a continuous basis when an
investor deposits the requisite underlying securities with the trustee.
You may only acquire, hold, trade and surrender Internet Architecture
HOLDRS in a round-lot of 100 Internet Architecture HOLDRS and round-lot
multiples. The trust will only issue Internet Architecture HOLDRS upon the
deposit of the whole shares of underlying securities that are represented by a
round-lot of 100 Internet Architecture 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 Internet Architecture HOLDRS, the trust may require a minimum of more than
one round-lot of 100 Internet Architecture HOLDRS for an issuance so that the
trust will always receive whole share amounts for issuance of Internet
Architecture HOLDRS.
Internet Architecture HOLDRS will represent your individual and undivided
beneficial ownership interest in the common stock of the specified underlying
securities. The 20 companies selected as part of this receipt program are
listed above in the section entitled "Highlights of Internet Architecture
HOLDRS--The Internet Architecture HOLDRS."
Beneficial owners of Internet Architecture 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 common stock, and to receive
dividends and other distributions on the underlying securities, if any are
declared and paid to the trustee by an issuer of an underlying security, as
well as the right to cancel Internet Architecture HOLDRS to receive the
underlying securities. See "Description of the depositary trust agreement."
Internet Architecture HOLDRS are not intended to change your beneficial
ownership in the underlying securities under federal securities laws, including
Sections 13(d) and 16(a) of the Securities Exchange Act of 1934.
The trust will not publish or otherwise calculate the aggregate value of
the underlying securities represented by a receipt. Internet Architecture
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 Internet Architecture HOLDRS wishes to realize the dollar value of
the underlying securities, that owner will have to cancel the Internet
Architecture HOLDRS. Such cancellation will require payment of fees and
expenses as described in "Description of the depositary trust agreement--
Withdrawal of underlying securities."
16
<PAGE>
Internet Architecture 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. Internet Architecture HOLDRS will be available
only in book-entry form. Owners of Internet Architecture HOLDRS may hold their
Internet Architecture HOLDRS through DTC, if they are participants in DTC, or
indirectly through entities that are participants in DTC.
DESCRIPTION OF THE UNDERLYING SECURITIES
Selection criteria. The underlying securities are the common stocks of a
group of 20 specified companies involved in various aspects of the Internet
architecture business and whose common stock is registered under Section 12 of
the Exchange Act. The issuers of the underlying securities are considered to be
20 of the largest capitalized, most liquid companies involved in the Internet
architecture business as measured by market capitalization and trading volume.
The following criteria were used in selecting the underlying securities on
February 7, 2000:
. Market capitalization equal to or greater than $2.6 billion;
. Average daily trading volume of at least 425,000 shares over the 60
trading days before February 7, 2000;
. Average daily dollar volume (that is, the average daily trading
volume multiplied by the average closing price over the 60 day period
prior to February 7, 2000) of at least $70 million over the
60 trading days before February 7, 2000; and
. A trading history of at least 90 calendar days.
The market capitalization of a company is determined by multiplying the
price of its common stock by the number of shares of its common stock that are
held by stockholders. In determining whether a company was to be considered for
inclusion in the Internet Architecture 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 substantially involved in the Internet architecture
business. In this case, the Internet Architecture HOLDRS may no longer consist
of securities issued by companies involved in the Internet architecture
business. Merrill Lynch, Pierce, Fenner & Smith Incorporated will determine, in
its sole discretion, whether the issuer of a particular underlying security
remains in the Internet architecture business and will undertake to make
adequate disclosure when necessary.
Underlying securities. For a list of the underlying securities
represented by Internet Architecture HOLDRS, please refer to "Highlights of
Internet Architecture HOLDRS--The Internet Architecture HOLDRS." If the
underlying securities change because of a reconstitution 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 stated
selection criteria. Accordingly, before you acquire Internet Architecture
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, and any of their affiliates.
17
<PAGE>
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."
The following table and graph set forth the composite performance of all
of the underlying securities represented by a single Internet Architecture
HOLDR based upon the indicative share amounts set forth in the table on page 11
of this preliminary prospectus, measured at the close of each business day from
November 5, 1999, the first date when all of the underlying securities were
publicly traded, to February 7, 2000. 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.
<TABLE>
<CAPTION>
Internet Internet Internet Internet
Architecture Architecture Architecture Architecture
1999 HOLDRS 1999 HOLDRS 2000 HOLDRS 2000 HOLDRS
- ---- ------------ ---- ------------ ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
November 5.. 64.63 December 1... 74.83 January 3... 88.58 February 1.. 85.04
November 8.. 65.89 December 2... 77.30 January 4... 83.35 February 2.. 85.36
November 9.. 65.40 December 3... 79.80 January 5... 83.65 February 3.. 88.00
November 10.. 67.16 December 6... 80.62 January 6... 80.97 February 4.. 88.54
November 11.. 68.22 December 7... 81.81 January 7... 83.24 February 7.. 90.31
November 12.. 68.73 December 8... 82.72 January 10.. 86.10
November 15.. 67.86 December 9... 81.55 January 11.. 84.04
November 16.. 69.71 December 10.. 80.86 January 12.. 83.38
November 17.. 69.37 December 13.. 81.37 January 13.. 84.13
November 18.. 73.25 December 14.. 79.21 January 14.. 86.07
November 19.. 74.78 December 15.. 78.52 January 18.. 86.46
November 22.. 74.96 December 16.. 80.50 January 19.. 87.60
November 23.. 74.10 December 17.. 80.94 January 20.. 89.29
November 24.. 75.81 December 20.. 81.73 January 21.. 90.13
November 26.. 76.19 December 21.. 84.06 January 24.. 86.81
November 29.. 76.09 December 22.. 83.35 January 25.. 88.67
November 30.. 74.17 December 23.. 84.97 January 26.. 85.15
December 27.. 84.83 January 27.. 83.69
December 28.. 84.83 January 28.. 81.74
December 29.. 85.85 January 31.. 83.80
December 30.. 86.29
December 31.. 85.94
</TABLE>
[Graph]
18
<PAGE>
DESCRIPTION OF THE DEPOSITARY TRUST AGREEMENT
General. The depositary trust agreement, dated as of February , 2000,
among Merrill Lynch, Pierce, Fenner & Smith Incorporated, The Bank of New York,
as trustee, other depositors and the owners of the Internet Architecture
HOLDRS, provides that Internet Architecture HOLDRS will represent an owner's
undivided beneficial ownership interest in the common stock 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 Internet Architecture HOLDRS. You may
create and cancel Internet Architecture HOLDRS only in round-lots of 100
Internet Architecture HOLDRS. You may create Internet Architecture HOLDRS by
delivering to the trustee the requisite underlying securities. The trust will
only issue Internet Architecture HOLDRS upon the deposit of the whole shares
represented by a round-lot of 100 Internet Architecture HOLDRS. In the event
that a fractional share comes to be represented by a round-lot of Internet
Architecture HOLDRS, the trust may require a minimum of more than one round-lot
of 100 Internet Architecture HOLDRS for an issuance so that the trust will
always receive whole share amounts for issuance of Internet Architecture
HOLDRS. Similarly, you must surrender Internet Architecture HOLDRS in integral
multiples of 100 Internet Architecture HOLDRS to withdraw deposited shares from
the trust. The trustee will not deliver fractional shares of underlying
securities, to the extent that any cancellation of Internet Architecture 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 you proxy soliciting materials
provided by issuers of the deposited shares so as to permit you to give the
trustee instructions as to how to vote on matters to be considered at any
annual or special meetings held by issuers of the underlying securities.
Under the depositary trust agreement, any beneficial owner of Internet
Architecture HOLDRS, other than Merrill Lynch, Pierce, Fenner & Smith
Incorporated owning Internet Architecture 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. You will be
obligated to pay any tax or other charge that may become due with respect to
Internet Architecture 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 Internet Architecture HOLDRS from quarterly dividends, if any,
paid to the trustee by the issuers of the underlying securities. With respect
to the aggregate custody fee payable in any calendar year for each Internet
Architecture 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.
19
<PAGE>
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 Internet
Architecture 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 Internet Architecture 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 Internet Architecture HOLDRS.
Further issuances of Internet Architecture HOLDRS. The depositary trust
agreement provides for further issuances of Internet Architecture 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 four circumstances.
A. If an issuer of underlying securities no longer has a class of common
stock 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 Internet Architecture 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 Internet Architecture 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 to the beneficial owners of Internet
Architecture HOLDRS, unless the merger, consolidation or other
corporate combination is between companies that are already included
in the Internet Architecture HOLDRS and the consideration paid is
additional underlying securities. In this case, the additional
underlying securities will be deposited into the trust.
D. If an issuer's underlying securities are delisted from trading on a
national securities exchange or NASDAQ and are not listed for trading
on another national securities exchange or through NASDAQ within 5
business days from the date such securities are delisted.
If a reconstitution event occurs, 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.
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 Internet Architecture HOLDRS will surrender their Internet
Architecture 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 Internet Architecture HOLDRS are delisted from the
American Stock Exchange and are not listed for trading on another national
securities exchange or through NASDAQ within 5 business days from the date the
Internet Architecture HOLDRS are delisted. Finally, the trust will terminate if
75% of the owners of outstanding Internet Architecture 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.
20
<PAGE>
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 Internet Architecture 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 Internet Architecture 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 Internet
Architecture HOLDRS will not become effective until 30 days after notice of the
amendment is given to the owners of Internet Architecture HOLDRS.
Issuance and cancellation fees. After the initial public offering, the
trust expects to issue more Internet Architecture HOLDRS. If you wish to create
Internet Architecture 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 Internet Architecture HOLDRS. If you wish to
cancel your Internet Architecture 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 Internet Architecture 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 Internet Architecture 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 is charged by
your broker, whether it be Merrill Lynch, Pierce, Fenner & Smith Incorporated
or another broker.
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 Internet
Architecture 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 Internet
Architecture 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 Internet Architecture
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 Internet Architecture 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.
21
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
General
The following is a summary of the U.S. federal income tax consequences
relating to the Internet Architecture 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;
. or 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 Internet Architecture HOLDRS as "capital assets"
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended. We suggest 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 United States federal
income tax purposes.
Taxation of Internet Architecture HOLDRS
A receipt holder purchasing and owning Internet Architecture HOLDRS will
be treated, for U.S. federal income tax purposes, as directly owning a
proportionate share of the underlying securities represented by Internet
Architecture 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 Internet
Architecture 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 basis in the
security from the amount realized on the security. With respect to purchases of
Internet Architecture 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 Internet Architecture HOLDRS. Similarly, with
respect to sales of Internet Architecture HOLDRS for cash in the secondary
market, the amount realized with respect to a sale of Internet Architecture
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
Internet Architecture HOLDRS, the occurrence of a reconstitution event, or a
termination event will not be a taxable event. The receipt holders
22
<PAGE>
holding period with respect to the distributed securities will include the
period that the holder held the securities through the trust.
Brokerage fees and custodian fees
The brokerage fee incurred in purchasing a receipt will be treated as
part of the cost of the underlying securities. Accordingly, a holder includes
this fee in its tax basis in the underlying securities. A holder will allocate
the brokerage fee among the underlying securities using either a fair market
value allocation or pro rata based on the number of shares of each underlying
security. Similarly, the brokerage fee incurred in selling Internet
Architecture 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.
Non-U.S. receipt holders
Non-U.S. receipt holders should consult their tax advisors regarding U.S.
withholding and other taxes which may apply to an investment in the underlying
securities.
ERISA CONSIDERATIONS
Any plan fiduciary which proposes to have a plan acquire Internet
Architecture 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 Internet Architecture 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 Internet Architecture HOLDRS. Merrill Lynch & Co., as underwriter,
proposes to offer the Internet Architecture HOLDRS to the public at the
offering price set forth on the cover page of this prospectus. Merrill Lynch
expects the trust to deliver the initial distribution of Internet Architecture
HOLDRS against deposit of the underlying securities in New York, New York on ,
2000. After the initial offering, the public offering price, concession and
discount may be changed. The trust will continue to issue Internet Architecture
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, Merrill Lynch will not make any sales to
a discretionary account without the prior written approval of a purchaser of
Internet Architecture HOLDRS.
Merrill Lynch has from time to time provided investment banking and other
financial services to certain of the issuers of the underlying securities and
expects in the future to provide these services, for which it has received and
will receive customary fees and commissions. It also may have served as
counterparty in other transactions with certain of the issuers of the
underlying securities.
23
<PAGE>
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 Internet Architecture HOLDRS.
Merrill Lynch, Pierce, Fenner & Smith Incorporated may act as principal or
agent in such transactions. Market-making sales will be made at prices related
to prevailing market prices at the time of sale.
Merrill Lynch, Pierce, Fenner & Smith Incorporated has agreed to
indemnify the trustee against certain 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 Internet Architecture 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 such liabilities.
LEGAL MATTERS
Legal matters, including the validity of the Internet Architecture HOLDRS
will be passed upon for Merrill Lynch, Pierce, Fenner & Smith Incorporated, the
initial depositor and the underwriter, 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 Internet Architecture HOLDRS.
24
<PAGE>
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 Internet
Architecture 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 sit eat 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 and the trust may not be
subject to the requirements of the Exchange Act and accordingly may not file
periodic reports.
Because the common stock of the issuers of the underlying securities is
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. In addition, information regarding the issuers of the
underlying securities may be obtained from other sources including, but not
limited to, press releases, newspaper articles and other publicly disseminated
information.
The trust and Merrill Lynch, Pierce, Fenner & Smith Incorporated and its
affiliates are not affiliated with the issuers of the underlying securities,
and the issuers of the underlying securities have no obligations with respect
to Internet Architecture HOLDRS. This prospectus relates only to Internet
Architecture HOLDRS and does not relate to the common stock or 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 Internet Architecture 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 common stock of the
issuers of the underlying securities, and therefore the offering and trading
prices of the Internet Architecture HOLDRS, have been publicly disclosed.
25
<PAGE>
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 trading market, of
each of the underlying securities in each month during 1995, 1996, 1997, 1998,
1999 and 2000 through January 2000. All market prices in excess of one dollar
are rounded to the nearest one sixty-fourth of a dollar. An asterisk (*)
denotes that no shares of the issuer were outstanding during that month. The
historical prices of the underlying securities should not be taken as an
indication of future performance.
3COM CORPORATION (COMS)
3Com Corporation develops and markets networking systems and services to
connect businesses and individuals to information found on businesses' private
local area networks and wide area networks, which connect local area networks
together or with the Internet. 3Com's products include switches to control
network data traffic, remote access systems, network software, modems and
handheld computers. 3Com offers worldwide customer support and service for its
products, including design, installation and maintenance through telephone,
Internet or on-site assistance. 3Com primarily sells its products through
third-party systems integrators, value-added resellers, dealers and
distributors.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 22 29/32 January 45 7/8 January 67 1/8 January 33 1/16 January 47 January 50 3/4
February 26 1/16 February 48 7/8 February 33 7/64 February 35 3/4 February 31 7/16
March 28 5/16 March 39 7/8 March 32 3/4 March 35 15/16 March 23 5/16
April 28 April 46 1/8 April 29 April 34 1/4 April 26 1/8
May 32 May 49 1/4 May 48 1/2 May 25 3/8 May 27 5/16
June 33 1/2 June 45 3/4 June 45 June 30 11/16 June 26 11/16
July 37 1/32 July 39 3/8 July 54 11/16 July 24 3/4 July 24 1/8
August 39 August 46 3/4 August 49 15/16 August 23 11/16 August 24 13/16
September 45 1/2 September 60 1/16 September 51 1/4 September 30 1/16 September 28 3/4
October 47 October 67 5/8 October 41 7/16 October 36 1/16 October 29
November 45 3/4 November 75 1/8 November 36 1/4 November 38 11/16 November 39 13/16
December 46 5/8 December 73 3/8 December 34 15/16 December 44 13/16 December 47
</TABLE>
The closing price on , 2000 was .
A-1
<PAGE>
ADAPTEC, INC. (ADPT)
Adaptec, Inc. develops, manufactures and markets hardware and software
which increase system performance between personal computers, servers and
networks. Adaptec customers include businesses and original equipment
manufactures, and Adaptec works directly with its customers to design new
products to meet the specific needs of systems integrators and end-users.
Adaptec primarily markets and sells its products through its own direct sales
force and distributors.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 13 11/16 January 22 January 43 3/4 January 22 5/16 January 23 1/8 January 52 3/8
February 16 1/2 February 28 1/32 February 38 1/16 February 26 7/16 February 19 15/16
March 16 1/2 March 24 1/8 March 35 3/4 March 19 5/8 March 22 13/16
April 16 April 28 3/4 April 37 April 23 11/16 April 24 1/16
May 15 1/16 May 29 15/16 May 36 3/4 May 15 3/16 May 30 7/8
June 18 1/2 June 23 11/16 June 34 3/4 June 14 5/16 June 35 5/16
July 21 3/8 July 20 3/4 July 42 1/8 July 11 5/8 July 38 7/8
August 21 1/4 August 24 15/16 August 48 August 11 1/2 August 39
September 20 5/8 September 30 September 46 3/4 September 9 1/2 September 39 11/16
October 22 1/4 October 30 7/16 October 48 7/16 October 16 3/16 October 45
November 23 7/16 November 37 1/4 November 49 1/2 November 16 1/4 November 53 7/8
December 20 1/2 December 40 December 37 1/8 December 17 9/16 December 49 7/8
</TABLE>
The closing price on , 2000 was .
APPLE COMPUTER, INC. (APPL)
Apple Computer, Inc. designs, manufactures and markets personal computers
and related operating systems and application software. Apple's primary product
is the Apple Macintosh computer line, which includes desktop and notebook
personal computers and software. Two recent additions to its product line
include the iMAC desktop and iBook laptop computers. Apple sells its computers
primarily to educational institutions, businesses and individuals. Apple
markets its products and services through third-party distributors, authorized
resellers, retail outlets and the Apple online store.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 40 3/8 January 27 5/8 January 16 5/8 January 18 5/16 January 41 3/16 January 103 3/4
February 39 1/2 February 27 1/2 February 16 1/4 February 23 5/8 February 34 13/16
March 35 1/4 March 24 9/16 March 18 1/4 March 27 1/2 March 35 15/16
April 38 1/4 April 24 3/8 April 17 April 27 3/8 April 46
May 41 9/16 May 26 1/8 May 16 5/8 May 26 5/8 May 44 1/16
June 46 7/16 June 21 June 14 1/4 June 28 11/16 June 46 5/16
July 45 July 22 July 17 1/2 July 34 5/8 July 55 11/16
August 43 August 24 1/4 August 21 3/4 August 31 3/16 August 65 1/4
September 37 1/4 September 22 3/16 September 21 11/16 September 38 1/8 September 63 5/16
October 36 5/16 October 23 October 17 1/32 October 37 1/8 October 80 1/8
November 38 1/8 November 24 1/8 November 17 3/4 November 31 15/16 November 97 7/8
December 31 7/8 December 20 7/8 December 13 1/8 December 40 15/16 December 102 13/16
</TABLE>
The closing price on , 2000 was .
A-2
<PAGE>
CIENA CORPORATION (CIEN)
Ciena Corporation develops and markets products for the optical
networking equipment market. Optical networking equipment uses fiber optic
cables to provide network communications. Ciena products aid the transmission
of data and telephone communications over fiber optic lines by providing
infrastructure to manage the amount of network traffic. Ciena provides products
such as optical transport systems, switches to manage network data traffic and
other multi-service data delivery systems to its customers, who include local
and long-distance telephone carriers and Internet service providers. Ciena
markets and sells its products through its direct sales force, and
internationally, it also uses third-party distributors and representatives.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January * January * January * January 55 1/16 January 20 3/16 January 65 5/8
February * February * February 39 1/4 February 41 15/16 February 27 7/8
March * March * March 28 7/16 March 42 5/8 March 22 1/2
April * April * April 31 1/4 April 55 3/4 April 23 1/2
May * May * May 46 3/4 May 52 May 28 3/4
June * June * June 47 1/8 June 69 5/8 June 30 3/16
July * July * July 56 1/8 July 74 1/16 July 33 3/4
August * August * August 47 3/4 August 28 1/8 August 35 1/8
September * September * September 49 17/32 September 14 5/16 September 36 1/2
October * October * October 55 October 17 3/16 October 35 1/4
November * November * November 54 November 17 November 43 15/16
December * December * December 61 1/8 December 14 5/8 December 57 1/2
</TABLE>
The closing price on , 2000 was .
CISCO SYSTEMS, INC. (CSCO)
Cisco Systems, Inc. develops and markets hardware and software products
which link computer networks, both internally and externally, and provide
worldwide networking capability for the Internet. Cisco produces a range of
networking products which connect computing devices to networks and computing
networks with each other. Cisco products provide routing to connect private
networks, switches to control network data traffic, remote access to network
servers from any location, network architecture and Internet services. Cisco
markets its products worldwide through several channels including its own
direct sales force, distributors, value-added resellers, service providers and
system integrators. Cisco will effect a 2-for-1 stock split on its common stock
in the form of a stock dividend to shareholders of record on February 22, 2000.
The stock will begin trading on a split-adjusted basis on March 23, 2000. The
following table does not take into account any adjustments for this stock
split.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 3 45/64 January 9 1/4 January 15 1/2 January 21 1/64 January 55 25/32 January 109 1/2
February 3 3/4 February 10 9/16 February 12 23/64 February 21 61/64 February 48 29/32
March 4 15/64 March 10 5/16 March 10 11/16 March 22 51/64 March 54 25/32
April 4 7/16 April 11 17/32 April 11 1/2 April 24 27/64 April 57 1/32
May 4 55/64 May 12 11/64 May 15 1/16 May 25 13/64 May 54 1/2
June 5 5/8 June 12 37/64 June 14 59/64 June 30 11/16 June 64 1/2
July 6 3/16 July 11 1/2 July 17 11/16 July 31 59/64 July 62 1/8
August 7 19/64 August 11 23/32 August 16 3/4 August 27 19/64 August 67 13/16
September 7 43/64 September 13 5/64 September 16 15/64 September 30 29/32 September 68 9/16
October 8 39/64 October 13 3/4 October 18 15/64 October 31 1/2 October 74
November 9 11/32 November 15 5/64 November 19 11/64 November 37 11/16 November 89 3/16
December 8 19/64 December 14 9/64 December 18 37/64 December 46 13/32 December 107 1/8
</TABLE>
The closing price on , 2000 was .
A-3
<PAGE>
COBALT NETWORKS, INC. (COBT)
Cobalt Networks, Inc. develops and markets server appliances, which are
network infrastructure devices specially designed to deliver a limited number
of specific network-based applications, including a variety of Internet
applications. Cobalt's two principal product lines, the Cobalt Qube and Cobalt
RaQ, differ from general purpose servers because they focus on allowing
customers to accomplish specific goals such as establishing an Internet
presence, receiving e-mail and accessing software applications over the
Internet. These server appliances are less complex and less expensive than
general purpose servers and are marketed as an alternative to small and medium-
sized businesses. Cobalt primarily uses resellers and distributors to market
and sell its products.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January * January * January * January * January * January 78 1/2
February * February * February * February * February *
March * March * March * March * March *
April * April * April * April * April *
May * May * May * May * May *
June * June * June * June * June *
July * July * July * July * July *
August * August * August * August * August *
September * September * September * September * September *
October * October * October * October * October *
November * November * November * November * November 168 13/16
December * December * December * December * December 108 3/8
</TABLE>
The closing price on , 2000 was .
COMPAQ COMPUTER CORPORATION (CPQ)
Compaq Computer Corporation develops and markets hardware, software,
technology solutions and services, including mainframes, servers, Internet
products, networking and communication products and desktop and portable
computers for both business and personal use. Compaq provides professional and
support services to its customers for its products and for other companies
products which are used in conjunction with Compaq products. In addition,
Compaq has a financial services division which provides its customers with
financing and leasing options for its products. Compaq sells its products
primarily through dealers, value-added resellers and systems integrators. It
also sells products through its own direct sales force and on the Internet.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 7 5/32 January 9 27/64 January 17 11/32 January 30 3/16 January 47 5/8 January 27 1/4
February 6 29/32 February 10 1/8 February 15 51/64 February 32 1/16 February 35 3/8
March 6 7/8 March 7 23/32 March 15 21/64 March 25 7/8 March 31 11/16
April 7 19/32 April 9 11/32 April 17 5/64 April 28 1/16 April 22 5/16
May 7 27/32 May 9 23/32 May 21 5/8 May 27 3/8 May 23 11/16
June 9 3/64 June 9 53/64 June 19 29/32 June 28 3/8 June 23 11/16
July 10 1/8 July 10 59/64 July 28 9/16 July 32 13/16 July 24 1/16
August 9 35/64 August 11 21/64 August 32 3/4 August 27 15/16 August 23 5/32
September 9 43/64 September 12 53/64 September 37 3/8 September 31 5/8 September 22 7/8
October 11 1/8 October 13 29/32 October 32 October 31 5/8 October 19 1/8
November 9 7/8 November 15 27/32 November 31 7/32 November 32 1/2 November 24 7/16
December 9 19/32 December 14 7/8 December 28 1/4 December 42 December 27 1/16
</TABLE>
The closing price on , 2000 was .
A-4
<PAGE>
DELL COMPUTER CORPORATION (DELL)
Dell Computer Corporation develops and markets information processing
products and services which it offers directly to its customer base, who
include corporate and institutional customers as well as individual customers.
Dell's products include desktop and notebook computers, network servers,
storage products, hardware and software. Dell offers services such as custom-
designed computer systems, telephone and on-line technical support and on-site
product service. A significant component of Dell's business is its "direct
model" through which Dell employees market and sell Dell products and services
directly to its customers.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 43/64 January 55/64 January 4 9/64 January 12 7/16 January 50 January 38 7/16
February 21/32 February 1 5/64 February 4 29/64 February 17 31/64 February 40 1/16
March 11/16 March 1 3/64 March 4 15/16 March 16 15/16 March 40 7/8
April 55/64 April 1 7/16 April 5 15/64 April 20 3/16 April 41 3/16
May 25/32 May 1 47/64 May 7 1/32 May 20 39/64 May 34 7/16
June 15/16 June 1 19/32 June 7 11/32 June 23 13/64 June 37
July 1 1/64 July 1 47/64 July 10 11/16 July 27 5/32 July 40 7/8
August 1 13/64 August 2 2/32 August 10 17/64 August 25 August 48 13/16
September 1 21/64 September 2 7/16 September 12 7/64 September 32 7/8 September 41 13/16
October 1 29/64 October 2 35/64 October 10 1/64 October 32 3/4 October 40 1/8
November 1 25/64 November 3 11/64 November 10 17/32 November 30 13/32 November 43
December 1 5/64 December 3 21/64 December 10 1/2 December 36 19/32 December 51
</TABLE>
The closing price on , 2000 was .
EMC CORPORATION (EMC)
EMC Corporation develops, manufactures and markets enterprise storage
systems and software, which function to store and retrieve data from its
customers' computer systems and act as a central repository for the
information. EMC supplies hardware, software and services for the enterprise
storage market. EMC's products allow a customer whose network uses a variety of
computing platforms and systems to manage, share and protect its critical
information regardless of which platform is used. EMC markets and sells its
products through its own direct sales force, distributors, resellers and
original equipment manufacturers.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 4 21/32 January 4 25/32 January 9 15/32 January 16 9/32 January 54 7/16 January 107 1/4
February 4 9/32 February 5 1/2 February 9 February 18 7/8 February 51 3/16
March 4 3/16 March 5 7/17 March 8 7/8 March 18 29/32 March 63 7/8
April 4 27/32 April 5 1/8 April 9 3/32 April 23 1/8 April 54 15/32
May 5 3/4 May 5 1/2 May 9 31/32 May 20 23/32 May 50 7/32
June 6 1/16 June 4 5/8 June 9 3/4 June 22 13/32 June 55
July 5 23/32 July 4 7/8 July 12 21/3 July 24 1/2 July 60 7/16
August 5 1/8 August 4 13/16 August 12 25/32 August 22 1/4 August 59 7/8
September 4 17/32 September 5 5/8 September 14 19/32 September 28 11/16 September 71 3/8
October 3 7/8 October 6 9/16 October 14 October 32 3/16 October 73
November 4 15/32 November 8 1/16 November 15 5/32 November 36 1/4 November 83 11/16
December 3 27/32 December 8 9/32 December 13 23/32 December 42 1/2 December 109 1/4
</TABLE>
The closing price on , 2000 was .
A-5
<PAGE>
EXTREME NETWORKS, INC. (EXTR)
Extreme Networks, Inc. develops and markets network switches to enable
corporate private networks and Internet service and content providers to
control network traffic. Extreme Networks' switches allow faster network access
as well as increase a network's adaptability and ability to grow to meet
customer needs. Extreme Networks markets its products to businesses and
Internet service and content providers. Extreme Networks relies on resellers,
original equipment manufacturers, and to a lesser extent, its own sales force,
to market and sell its products.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January * January * January * January * January * January 84 5/8
February * February * February * February * February *
March * March * March * March * March *
April * April * April * April * April 55 7/16
May * May * May * May * May 42 5/8
June * June * June * June * June 58 1/16
July * July * July * July * July 48 3/4
August * August * August * August * August 63 15/16
September * September * September * September * September 63 5/16
October * October * October * October * October 80 5/16
November * November * November * November * November 66 3/8
December * December * December * December * December 83 1/2
</TABLE>
The closing price on , 2000 was .
FOUNDRY NETWORKS, INC. (FDRY)
Foundry Networks develops, manufactures and markets network products for
the various types of networks used by businesses and Internet service
providers. Foundry's products, which include switches and other networking
products, are designed to increase the speed and efficiency of networks by
distinguishing between and prioritizing different types of network traffic.
Foundry markets and sells its products through its own direct sales force,
resellers and an original equipment manufacturer.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January * January * January * January * January * January 134 11/16
February * February * February * February * February *
March * March * March * March * March *
April * April * April * April * April *
May * May * May * May * May *
June * June * June * June * June *
July * July * July * July * July *
August * August * August * August * August *
September * September * September * September * September 63
October * October * October * October * October 94 3/4
November * November * November * November * November 117 9/16
December * December * December * December * December 150 27/32
</TABLE>
The closing price on , 2000 was .
A-6
<PAGE>
GATEWAY, INC. (GTW)
Gateway, Inc. develops, manufactures, markets and supports personal
computers and related products and services. Gateway's products include desktop
and portable personal computers, servers, workstations and digital media
personal computers. Gateway is also an Internet service provider and is
involved in e-commerce businesses. Gateway markets and sells its products using
"direct marketing" to consumers of personal computers through telephone sales,
the Internet and Gateway retail stores.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 5 7/32 January 6 15/32 January 15 9/32 January 18 27/32 January 38 5/8 January 61 3/16
February 4 19/32 February 7 3/8 February 14 11/16 February 22 February 36 11/32
March 4 11/16 March 6 31/32 March 12 13/16 March 23 3/8 March 34 9/32
April 4 47/64 April 8 23/32 April 13 23/32 April 29 13/32 April 33 3/32
May 4 25/64 May 9 15/32 May 16 21/32 May 22 17/32 May 30 13/32
June 5 11/16 June 8 1/2 June 16 1/4 June 25 June 29 17/32
July 7 7/32 July 10 1/32 July 19 1/16 July 27 July 38 1/16
August 6 21/32 August 11 7/32 August 19 9/16 August 23 21/32 August 48 15/32
September 7 21/32 September 11 31/32 September 15 3/4 September 26 5/32 September 44
October 8 11/32 October 11 49/64 October 14 17/32 October 27 29/32 October 66 1/16
November 6 29/32 November 13 13/32 November 14 3/8 November 28 1/16 November 76 3/8
December 6 1/8 December 13 25/64 December 16 3/8 December 25 19/32 December 72 1/16
</TABLE>
The closing price on , 2000 was .
HEWLETT- PACKARD COMPANY (HWP)
Hewlett-Packard Company designs, manufactures and services equipment and
systems to be used for measurement, computation and communications. Hewlett-
Packard products include personal computers, printers, calculators, medical
electronic equipment and computer systems. Its products and services are used
in business, engineering, science, medicine, education and a variety of other
industries. Hewlett-Packard's services include systems integration, network
systems, management outsourcing and consulting, as well as support and
maintenance services for its products. Hewlett-Packard markets its products and
services through its own direct sales operations; however, the majority of its
sales and marketing is handled through third-party channels such as retailers,
dealers and value-added resellers.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 25 1/8 January 42 3/8 January 52 5/8 January 60 1/8 January 78 3/8 January 108 1/4
February 28 3/4 February 50 3/8 February 56 1/8 February 67 February 66 7/16
March 30 3/32 March 47 1/16 March 53 3/8 March 63 3/8 March 67 13/16
April 33 1/16 April 52 15/16 April 52 1/2 April 75 3/8 April 78 7/8
May 33 May 53 1/4 May 51 1/2 May 62 5/16 May 94 5/16
June 37 1/4 June 49 13/16 June 56 June 59 7/8 June 100 1/2
July 38 15/16 July 44 July 70 July 55 1/2 July 104 11/16
August 40 August 43 3/4 August 61 1/2 August 48 9/16 August 105 3/8
September 41 11/16 September 48 3/4 September 69 9/16 September 52 15/16 September 90 3/4
October 46 5/16 October 44 1/8 October 61 5/8 October 60 1/4 October 74 3/16
November 41 1/2 November 53 7/8 November 61 1/8 November 62 9/16 November 94 7/8
December 41 7/8 December 50 1/4 December 62 3/8 December 68 5/16 December 113 3/4
</TABLE>
The closing price on , 2000 was .
A-7
<PAGE>
INTERNATIONAL BUSINESS MACHINES CORPORATION (IBM)
International Business Machines Corporation develops, manufactures and
markets advanced information processing products and services, such as
computers, software, network systems and network management services. IBM's
business is divided into several main segments including technology, systems,
products, services, software and financing. IBM operates in more than 150
countries and markets and sells its products through its worldwide sales and
distribution organization and through third-party distributors and resellers.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 18 1/32 January 27 1/8 January 39 7/32 January 49 3/8 January 91 5/8 January 112 1/4
February 18 13/16 February 30 21/32 February 35 15/16 February 52 7/32 February 84 7/8
March 20 17/32 March 27 13/16 March 34 5/16 March 51 15/16 March 88 5/8
April 23 21/32 April 26 15/16 April 40 1/8 April 57 15/16 April 104 19/32
May 23 1/4 May 26 11/16 May 43 1/4 May 58 3/4 May 116
June 24 June 24 3/4 June 45 1/8 June 57 13/32 June 129 1/4
July 27 7/32 July 26 7/8 July 52 7/8 July 66 1/4 July 125 11/16
August 25 27/32 August 28 19/32 August 50 11/16 August 56 5/16 August 124 9/16
September 23 5/8 September 31 1/8 September 53 September 64 1/4 September 121
October 24 5/16 October 32 1/4 October 49 1/4 October 74 1/4 October 98 1/4
November 24 5/32 November 39 27/32 November 54 3/4 November 82 9/16 November 103 1/16
December 22 27/32 December 37 7/8 December 52 5/16 December 92 3/16 December 107 7/8
</TABLE>
The closing price on , 2000 was .
JUNIPER NETWORKS, INC. (JNPR)
Juniper Networks, Inc. manufactures and markets Internet backbone
routers, which are the devices that connect different companies' private
networks to each other. Its routers are specially made for Internet and
telecommunications service provider networks to provide the necessary
infrastructure to accommodate the increasing size and scope of the Internet.
Juniper's principal product is the M40 Internet backbone router. Juniper sells
its routers primarily though its own direct sales force and an original
equipment manufacturer.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January * January * January * January * January * January 135 5/16
February * February * February * February * February *
March * March * March * March * March *
April * April * April * April * April *
May * May * May * May * May *
June * June * June * June * June 49 43/64
July * July * July * July * July 54 9/64
August * August * August * August * August 68 21/64
September * September * September * September * September 60 11/16
October * October * October * October * October 91 7/8
November * November * November * November * November 92 3/8
December * December * December * December * December 113 21/64
</TABLE>
The closing price on , 2000 was .
A-8
<PAGE>
NETWORK APPLIANCE, INC. (NTAP)
Network Appliance, Inc. develops and supplies "network appliances," which
are network infrastructure devices that perform specific network applications.
Network Appliance's two major products are filers and Internet caching
appliances. Filers improve the storage and accessibility of data. Network
Appliance's filers, Snap Mirror and Snap Restore, provide its business,
database and e-commerce customers with greater data protection and management
capabilities by providing data mirroring, backup, replication and disaster
recovery. Internet caching appliances are designed to improve performance for
customers by minimizing the delay experienced by Internet users in accessing
Web-based information. Network Appliance products accomplish this by storing or
"caching" frequently accessed data nearer the end user. Network Appliance uses
its own direct sales force and value-added resellers to market and sell its
products.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January * January 3 27/32 January 6 13/32 January 7 17/32 January 26 1/2 January 100 3/8
February * February 3 31/32 February 5 February 7 3/8 February 21
March * March 3 31/32 March 4 1/16 March 8 7/8 March 25 5/16
April * April 4 April 3 41/64 April 9 1/64 April 25 5/32
May * May 4 9/32 May 5 5/64 May 8 45/64 May 23 37/64
June * June 3 23/32 June 4 3/4 June 9 47/64 June 27 15/16
July * July 3 July 5 29/64 July 10 7/16 July 27 1/4
August * August 3 1/2 August 5 29/32 August 10 27/64 August 32 27/32
September * September 3 3/4 September 6 25/32 September 12 21/32 September 35 13/16
October * October 4 3/8 October 6 9/32 October 13 11/16 October 37
November 3 25/32 November 4 1/2 November 6 19/64 November 18 25/32 November 58 27/32
December 5 1/64 December 6 23/64 December 8 7/8 December 22 27/64 December 83 1/16
</TABLE>
The closing price on , 2000 was .
SEAGATE TECHNOLOGY, INC. (SEG)
Seagate Technology, Inc. designs, manufactures and markets products which
store, retrieve and manage data for computer and communications systems. Its
core product line is rigid disc drives, which provide access to large volumes
of information more quickly than other types of disc drives. Rigid disc drives
may be used by computer systems as well as in multimedia applications, such as
graphics, video and animation. Seagate also produces tape drives and digital
audio tape drives, both of which provide customers with additional storage
alternatives. Seagate markets and sells its products through direct sales, use
of third-party distributors and consignment relationships with certain
distributors.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 12 11/16 January 29 1/2 January 51 1/2 January 23 3/16 January 40 11/16 January 39 3/4
February 12 February 32 5/8 February 47 1/8 February 24 5/16 February 28 13/16
March 13 15/16 March 27 3/8 March 44 7/8 March 25 1/4 March 29 9/16
April 15 15/16 April 29 April 46 April 26 11/16 April 27 7/8
May 17 15/16 May 29 3/8 May 40 5/8 May 23 1/4 May 30 3/16
June 19 3/4 June 22 1/2 June 35 1/4 June 23 7/8 June 25 5/8
July 22 3/16 July 24 3/16 July 41 3/16 July 22 5/8 July 26 7/8
August 22 3/16 August 24 August 38 3/16 August 17 1/8 August 33 3/16
September 21 1/16 September 27 15/16 September 36 1/4 September 25 1/16 September 30 5/8
October 22 5/16 October 33 3/8 October 27 1/8 October 26 1/4 October 29 7/16
November 26 3/8 November 39 1/2 November 22 11/16 November 29 1/2 November 37
December 23 3/4 December 39 1/2 December 19 1/4 December 30 1/4 December 46 9/16
</TABLE>
The closing price on , 2000 was .
A-9
<PAGE>
SUN MICROSYSTEMS, INC. (SUNW)
Sun Microsystems, Inc. develops and markets network computing products
and provides a variety of services for its customers. Sun Microsystems'
products are based on open industry standards, which are those available to
users for little or no charge, and include adaptable computer systems, high-
speed microprocessors and software for the network computing market, which
includes the Internet and customers' private networks. Some of Sun
Microsystems' technologies include its Java software, which allows development
of application software regardless of the underlying computing platform that a
system uses, and its Solaris Operating Environment, which is a secure operating
environment that can support numerous applications. Sun Microsystems operates
globally, and markets and sells its products through its own direct sales force
and third-party distributors and resellers.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 2 3/64 January 5 3/4 January 7 16/16 January 11 63/64 January 27 15/16 January 78 9/16
February 2 February 6 9/16 February 7 23/32 February 11 29/32 February 24 21/32
March 2 11/64 March 5 15/32 March 7 7/32 March 10 7/16 March 31 17/64
April 2 1/2 April 6 25/32 April 7 13/64 April 10 19/64 April 29 29/32
May 2 13/16 May 7 53/64 May 8 1/16 May 10 1/64 May 29 7/8
June 3 1/32 June 7 23/64 June 9 5/16 June 10 55/64 June 34 7/16
July 3 1/64 July 6 53/64 July 11 27/64 July 11 13/16 July 33 15/16
August 3 5/8 August 6 51/64 August 12 August 9 29/32 August 39 3/4
September 3 15/16 September 7 49/64 September 11 45/64 September 12 29/64 September 46 1/2
October 4 7/8 October 7 5/8 October 8 9/16 October 14 9/16 October 52 29/32
November 5 17/64 November 7 9/32 November 9 November 18 33/64 November 66 1/8
December 5 45/64 December 6 27/64 December 9 31/32 December 21 13/32 December 77 7/16
</TABLE>
The closing price on , 2000 was .
SYCAMORE NETWORKS, INC. (SCMR)
Sycamore Networks, Inc. creates optical networking products which
facilitate the transmission of voice and data on fiberoptic networks.
Sycamore's products use existing fiberoptic infrastructure and allow its
customers enhanced high-speed data services such as access to the Internet,
video conferencing and remote access to corporate databases. Sycamore also
collaborates with its customers to identify new high speed data services.
Sycamore currently markets its products through its own direct sales force. On
January 26, 2000 Sycamore declared a 3-for-1 stock split on its common stock,
to be effected by means of a stock dividend to shareholders of record on
February 4, 2000. The stock will begin trading on a split-adjusted basis on
February 14, 2000.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January * January * January * January * January * January 319
February * February * February * February * February *
March * March * March * March * March *
April * April * April * April * April *
May * May * May * May * May *
June * June * June * June * June *
July * July * July * July * July *
August * August * August * August * August *
September * September * September * September * September *
October * October * October * October * October 215
November * November * November * November * November 222
December * December * December * December * December 308
</TABLE>
The closing price on , 2000 was .
A-10
<PAGE>
UNISYS CORPORATION (UIS)
Unisys Corporation develops and markets high-end network equipment
designed for use in critical industries, such as electronic commerce and in the
financial, communication and travel industries. Unisys's technology segment
offers servers, desktop and notebook computers, monitors, storage products and
payment systems. Unisys's services include systems integration, multi-vendor
maintenance and network consulting, integration and management. The integration
services provided include adapting available information technology and
solutions to support a particular customer's business operations. Unisys
markets and sells its products primarily through its own direct sales force.
<TABLE>
<CAPTION>
Closing Closing Closing Closing Closing Closing
1995 Price 1996 Price 1997 Price 1998 Price 1999 Price 2000 Price
---- ------- ---- ------- ---- ------- ---- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 9 January 7 1/2 January 6 7/8 January 16 1/2 January 33 1/8 January 31 7/8
February 9 February 6 1/8 February 6 5/8 February 17 7/8 February 29 13/16
March 9 3/8 March 6 March 6 1/4 March 19 March 27 11/16
April 10 1/4 April 6 April 6 April 22 5/16 April 31 7/16
May 10 5/8 May 8 1/8 May 6 7/8 May 24 9/16 May 37 15/16
June 10 7/8 June 7 1/8 June 7 5/8 June 28 1/4 June 38 15/16
July 8 7/8 July 5 7/8 July 9 5/8 July 27 7/16 July 40 13/16
August 8 1/8 August 5 7/8 August 11 5/16 August 18 1/16 August 43
September 7 7/8 September 6 1/8 September 15 5/16 September 22 3/4 September 45 1/8
October 5 5/8 October 6 1/4 October 13 5/16 October 26 5/8 October 22 9/16
November 6 1/2 November 7 5/8 November 14 3/8 November 28 1/2 November 28 3/4
December 5 1/2 December 6 3/4 December 13 7/8 December 34 7/16 December 31 15/16
</TABLE>
The closing price on , 2000 was .
A-11
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[logo]
1,000,000,000 Depositary Receipts
Internet Architecture HOLDRSSM Trust
--------------------
P R O S P E C T U S
--------------------
Merrill Lynch & Co.
, 2000
Until , 2000 (25 days after the date of this prospectus), all
dealers effecting transactions in the offered Internet Architecture 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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses expected to be incurred in connection with the issuance and
distribution of the securities being registered, other than underwriting
compensation, are as set forth below. Except for the registration fee payable
to the Securities and Exchange Commission, all such expenses are estimated:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.............. $290,136
Printing and engraving expenses.................................. 150,000
Legal fees and expenses ......................................... 200,000
Rating agency fees............................................... 0
Miscellaneous.................................................... 9,864
--------
Total.......................................................... $650,000
</TABLE>
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware, as
amended, provides that under certain circumstances a corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation or
is or was serving at its request in such capacity in another corporation or
business association, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful.
Article XIV, Section 2 of the Restated Certificate of Incorporation of
Merrill Lynch, Pierce, Fenner & Smith Incorporated provides in effect that,
subject to certain limited exceptions, Merrill Lynch, Pierce, Fenner & Smith
Incorporated shall indemnify its directors and officers to the full extent
authorized or permitted by law.
The directors and officers of Merrill Lynch, Pierce, Fenner & Smith
Incorporated are insured under policies of insurance maintained by Merrill
Lynch, Pierce, Fenner & Smith Incorporated, subject to the limits of the
policies, against certain losses arising from any claim made against them by
reason of being or having been such directors or officers. In addition, Merrill
Lynch, Pierce, Fenner & Smith Incorporated has entered into contracts with all
of its directors providing for indemnification of such persons by Merrill
Lynch, Pierce, Fenner & Smith Incorporated to the full extent authorized or
permitted by law, subject to certain limited exceptions.
Item 16. Exhibits.
See Exhibit Index.
II-1
<PAGE>
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of the prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(4) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(5) For purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to Item 15 of this registration statement,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant hereby certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-1 and has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, on February
10, 2000.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
*
By: _________________________________
Name: Ahmass L. Fakahany
Title:Senior Vice President,
Chief Financial Officer and
Controller
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities indicated on February 10, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C> <C>
* Chief Executive Officer,
____________________________________ Chairman of the Board
John L. Steffens and Director
* Director
____________________________________
E. Stanley O'Neal
* Director
____________________________________
George A. Schieren
* Senior Vice President,
____________________________________ Chief Financial Officer
Ahmass L. Fakahany and Controller
/s/ Stephen G. Bodurtha Attorney-in-fact
By: ________________________________
Stephen G. Bodurtha
</TABLE>
II-3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibits
--------
<C> <S>
4.1 Standard Terms for Depositary Trust Agreements between Merrill Lynch,
Pierce, Fenner & Smith Incorporated and The Bank of Bank of New York,
as Trustee dated as of September 2, 1999, and included as exhibits
thereto, form of Depositary Trust Agreement and form of HOLDRS
Opinion of Shearman & Sterling regarding the validity of the Internet
5.1 Architecture HOLDRS Receipts
8.1 Opinion of Shearman & Sterling, as special U.S. tax counsel regarding
the material federal income tax consequences
*24.1 Power of Attorney (included in Part II of Registration Statement)
</TABLE>
- --------
* Previously filed.
<PAGE>
S&C Draft of 8/31/99
Exhibit 4.1
STANDARD TERMS FOR DEPOSITARY TRUST AGREEMENTS
between
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
and
THE BANK OF NEW YORK,
as Trustee
Dated as of ______________, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 DEFINITIONS AND ASSUMPTIONS
Section 1.1. Definitions................................................................................1
Section 1.2. Rules of Construction......................................................................5
ARTICLE 2 FORM OF RECEIPTS, DEPOSIT OF SECURITIES, DELIVERY,
REGISTRATION OF TRANSFER AND SURRENDER OF RECEIPTS
Section 2.1. Depositary Trust Agreements................................................................6
Section 2.2. Creation and Declaration of Trusts; Deposit of Securities..................................6
Section 2.3. Acceptance by Trustee......................................................................8
Section 2.4. Form and Transferability of Receipts.......................................................8
Section 2.5. Delivery of Receipts.....................................................................10
Section 2.6. Registration; Registration of Transfer; Combination and Split-up of Certificates..........11
Section 2.7. Surrender of Receipts and Withdrawal of Underlying Securities.............................12
Section 2.8. Limitations on Delivery, Registration of Transfer and Surrender of Receipts...............13
Section 2.9. Lost Certificates, Etc....................................................................14
Section 2.10. Cancellation and Destruction of Surrendered Certificates.................................14
Section 2.11. Reconstitution Events....................................................................14
ARTICLE 3 CERTAIN OBLIGATIONS OF OWNERS OF RECEIPTS
Section 3.1. Filing Proofs, Certificates and Other Information.........................................16
Section 3.2. Liability of Owner for Taxes..............................................................16
Section 3.3. Warranties on Deposit of Shares...........................................................17
ARTICLE 4 THE UNDERLYING SECURITIES
Section 4.1. Cash Distributions........................................................................17
Section 4.2. Distributions Other Than Cash or Securities...............................................17
Section 4.3. Distributions in Securities...............................................................18
Section 4.4. Rights Offerings..........................................................................19
Section 4.5. Fixing of Record Date.....................................................................19
Section 4.6. Reports...................................................................................20
Section 4.7. Voting Instructions for Underlying Securities.............................................20
Section 4.8. Changes Affecting Underlying Securities...................................................21
Section 4.9. Withholding...............................................................................22
Section 4.10. Limitation on Distributions..............................................................22
</TABLE>
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<TABLE>
<CAPTION>
ARTICLE 5 THE TRUSTEE AND THE INITIAL DEPOSITOR
<S> <C>
Section 5.1. Maintenance of Office and Transfer Books by the Trustee...................................22
Section 5.2. Prevention or Delay in Performance by the Initial Depositor or the Trustee................23
Section 5.3. Obligations of the Initial Depositor and the Trustee......................................24
Section 5.4. Resignation or Removal of the Trustee; Appointment of Successor Trustee...................26
Section 5.5. Indemnification...........................................................................27
Section 5.6. Charges of Trustee........................................................................29
Section 5.7. Retention of Trust Documents..............................................................30
Section 5.8. Federal Securities Law Filings............................................................30
Section 5.9. Prospectus Delivery.......................................................................30
ARTICLE 6 AMENDMENT AND TERMINATION
Section 6.1. Amendment.................................................................................31
Section 6.2. Early Termination.........................................................................31
ARTICLE 7 MISCELLANEOUS
Section 7.1. Counterparts.............................................................................33
Section 7.2. Third-Party Beneficiaries................................................................33
Section 7.3. Severability.............................................................................34
Section 7.4. Owners and Beneficial Owners as Parties; Binding Effect..................................34
Section 7.5. Notices..................................................................................34
Section 7.6. Governing Law............................................................................35
</TABLE>
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<TABLE>
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Page
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<S> <C>
EXHIBIT A
FORM OF DEPOSITARY TRUST AGREEMENT.....................................................................A-1
EXHIBIT B
FORM OF CERTIFICATE EVIDENCING RECEIPTS................................................................B-1
</TABLE>
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<PAGE>
STANDARD TERMS FOR DEPOSITARY TRUST AGREEMENTS agreed to as of
_______________, 1999 (these "Standard Terms"), between MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED, a Delaware corporation (the "Initial Depositor")
and THE BANK OF NEW YORK, a New York banking corporation, as trustee (the
"Trustee").
W I T N E S S E T H :
WHEREAS, from time to time, the Initial Depositor and the Trustee may
enter into one or more depositary trust agreements providing for the deposit
with the Trustee of specified Securities (as hereinafter defined), the creation
of Depositary Trust Receipts representing the Securities so deposited and the
execution and delivery of certificates evidencing the Depositary Trust Receipts;
and
WHEREAS, the Initial Depositor and the Trustee wish to establish the
general terms and conditions of such depositary trust agreements and the form of
the certificates evidencing Depositary Trust Receipts;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in these Standard Terms, the parties hereby agree as
follows:
ARTICLE 1
DEFINITIONS AND ASSUMPTIONS
Section 1.1. Definitions. Except as otherwise specified in these
-----------
Standard Terms or in the applicable Depositary Trust Agreement or as the context
may otherwise require, the following terms have the respective meanings set
forth below for all purposes of these Standard Terms and the applicable
Depositary Trust Agreement.
<PAGE>
"Beneficial Owner" means any Person owning a beneficial interest in
any Receipt.
"Closing Date" means the day on which the initial deposit of
Securities is to be made, which date may be specified in the applicable
Depositary Trust Agreement.
"Commission" means the Securities and Exchange Commission of the
United States or any successor governmental agency in the United States.
"Corporate Trust Office" means the office of the Trustee at which its
depositary receipt business is administered which, at the date of these Standard
Terms, is 101 Barclay Street, New York, New York 10286.
"Deliver" means (a) when used with respect to Securities, either (i)
one or more book-entry transfers of such Securities to an account at DTC
designated by the Person entitled to such delivery for further credit as
specified by such Person or (ii) in the case of Securities for which DTC book-
entry settlement is not available, the delivery of certificates evidencing such
Securities to the Person entitled to such delivery, duly endorsed for transfer
or accompanied by proper instruments of transfer and (b) when used with respect
to Receipts, either (i) one or more book-entry transfers of Receipts to an
account at DTC designated by the Person entitled to such delivery for further
credit as specified by such Person or (ii) in the event DTC ceases to make its
book-entry settlement system available for the Receipts, execution and delivery
at the Corporate Trust Office of the Trustee of one or more certificates
evidencing such Receipts.
-2-
<PAGE>
"Depositary Trust Agreement" means a depositary trust agreement
entered into by the Initial Depositor and the Trustee pursuant to these Standard
Terms which incorporates by reference these Standard Terms.
"Depositor" means any Person who deposits Securities into the Trust,
either for its own account or on behalf of another Person who is the owner
or beneficial owner of such Securities.
"Depositor Order" means a written order or request signed in the name
of the Initial Depositor or any other Depositor, as applicable.
"DTC" means The Depository Trust Company, its nominees and their
respective successors.
"Initial Depositor" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated, a Delaware corporation, or its successor.
"Issuance Denomination" is defined in Section 2.4, subject to increase
as provided in Sections 4.3 and 4.8.
"Owner" means the Person in whose name a Receipt is registered in the
books of the Trustee maintained for that purpose.
"Person" means any individual, limited liability company, corporation,
partnership, joint venture, association, joint stock company, trust (including
any trust beneficiary), unincorporated organization or government or any agency
or political subdivision thereof.
-3-
<PAGE>
"Receipt" means a depositary trust receipt which is issued under the
Depositary Trust Agreement and which represents the Owner's right to receive
the Underlying Securities which must be deposited into the Trust for issuance of
a Receipt plus any other Underlying Securities received by the Trustee with
respect to such Underlying Securities and held by the Trustee under the
Depositary Trust Agreement at such time. The Trustee shall only accept for
deposit whole Securities and shall not issue Receipts except to the extent
such Receipts represent, in the aggregate, whole Underlying Securities.
"Registrar" means any bank or trust company having an office in the
Borough of Manhattan, The City of New York, which shall be appointed to register
Receipts and transfers of Receipts as herein provided.
"Restricted Securities" means Securities, or Receipts representing
such Securities, which are acquired directly or indirectly from the issuer or
its affiliates (as defined in Rule 144 under the Securities Act of 1933) in a
transaction or chain of transactions not involving any public offering, or which
are held by an officer or director (or person performing similar functions) or
other affiliate of the issuer, or which would require registration under the
Securities Act of 1933 in connection with the public offer and sale thereof in
the United States, or which are subject to other restrictions on sale or deposit
under the federal securities laws of the United States, a shareholder agreement
or the corporate documents of the issuer.
"Round Lot" means 100.
-4-
<PAGE>
"Securities" means any shares of a class of securities which must be
deposited for issuance of Receipts.
"Securities Issuer" means, as of any time, the issuer of a class of
Securities.
"Securities Registrar" means the entity that presently carries out the
duties of registrar for any Securities or any successor as registrar for any
Securities and any other appointed agent of a Securities Issuer for the transfer
and registration of Securities.
"Surrender" means, when used with respect to Receipts, (a) one or more
book-entry transfers of Receipts to the DTC account of the Trustee or (b)
surrender to the Trustee at its Corporate Trust Office of one or more
certificates evidencing such Receipts, in each case in a Round Lot or an
integral multiple thereof.
"Trust" means the trust entity created by the Depositary Trust
Agreement.
"Trustee" means The Bank of New York, a New York banking corporation,
in its capacity as Trustee under the Depositary Trust Agreement, or any
successor as Trustee thereunder.
"Underlying Securities" means, as of any time, Securities of each of
the classes and in the quantities required by the Depositary Trust Agreement to
be deposited in the Trust for the issuance of Receipts and which are at such
time deposited under the applicable Depositary Trust Agreement and any other
securities, property or cash received by the Trustee in respect thereof and at
such time held hereunder.
-5-
<PAGE>
Section 1.2. Rules of Construction. Unless the context otherwise
---------------------
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in effect
in the United States from time to time;
(iii) "or" is not exclusive;
(iv) the words "herein", "hereof", "hereunder" and other words of
similar import refer to these Standard Terms or the Depositary Trust Agreement
as a whole and not to any particular Article, Section or other subdivision;
(v) "including" means including without limitation; and
(vi) words in the singular include the plural and words in the plural
include the singular.
ARTICLE 2
FORM OF RECEIPTS, DEPOSIT OF SECURITIES, DELIVERY,
REGISTRATION OF TRANSFER AND SURRENDER OF RECEIPTS
Section 2.1. Depositary Trust Agreements. Each Depositary Trust
---------------------------
Agreement entered into between the Initial Depositor and the Trustee for the
purposes set
-6-
<PAGE>
forth herein shall be in substantially the form of Exhibit A to these Standard
Terms and shall provide that these Standard Terms shall be incorporated by
reference into, and form a part of, such Depositary Trust Agreement.
Section 2.2. Creation and Declaration of Trusts; Deposit of
----------------------------------------------
Securities. (a) The Initial Depositor, concurrently with the execution and
- ----------
delivery of the Depositary Trust Agreement, does hereby agree to deposit with
the Trustee under the Depositary Trust Agreement all the right, title and
interest of the Initial Depositor in, to and under Securities, of each of
the classes and in the quantities necessary to create Receipts in accordance
with Section 2 of the Depositary Trust Agreement in effect at the time of
deposit. Unless otherwise specified in the Depositary Trust Agreement, such
deposit shall include all cash dividends and distributions in respect of such
Securities. The Initial Depositor shall make such deposit on or prior to the
Closing Date.
(b) From time to time after the date of the Depositary Trust
Agreement, a Depositor may deposit with the Trustee, in the manner specified in
subsection (a), Securities, of each of the classes and in the quantities
necessary to create Receipts in accordance with Section 2 of the Depositary
Trust Agreement in effect at the time of deposit by Delivery of such Securities
to the Trustee.
(c) The Trustee shall only accept for deposit whole Securities and
shall not issue Receipts except to the extent such Receipts represent, in the
aggregate, whole Underlying Securities.
(d) The Trust shall not engage in any business or activities
other than those required or authorized by these Standard Terms or incidental
and necessary to carry out the duties and responsibilities set forth in the
Depositary Trust
-7-
<PAGE>
Agreement. Other than issuance of the Receipts, the Trust shall not issue or
sell any certificates or other obligations or otherwise incur, assume or
guarantee any indebtedness for money borrowed.
(e) Anything herein to the contrary notwithstanding, the Trustee
does not assume any of the duties, responsibilities, obligations or liabilities
of the Initial Depositor or any other Depositor in respect of the Underlying
Securities.
(f) Underlying Securities shall be held by the Trustee at such
place and in such manner as the Trustee shall determine.
Section 2.3. Acceptance by Trustee. The Trustee will hold the
---------------------
Underlying Securities for the benefit of the Owners for the purposes, and
subject to and limited by the terms and conditions, set forth in these Standard
Terms and the applicable Depositary Trust Agreement.
Section 2.4. Form and Transferability of Receipts. (a) The
------------------------------------
certificates evidencing Receipts shall be substantially in the form set forth in
Exhibit B annexed to these Standard Terms, with appropriate insertions,
modifications and omissions, as hereinafter provided or as may be provided in
the Depositary Trust Agreement. The Issuance Denominations of a certificate
shall be any integral multiple of a Round Lot of Receipts, subject to increase
or decrease as provided in Sections 4.3 and 4.8. No Receipt shall be entitled
to any benefits under the Depositary Trust Agreement or be valid or obligatory
for any purpose unless a certificate evidencing such Receipt shall have been
executed by the Trustee by the manual or facsimile signature
-8-
<PAGE>
of a duly authorized signatory of the Trustee and, if a Registrar (other than
the Trustee) for the Receipts shall have been appointed, countersigned by the
manual or facsimile signature of a duly authorized officer of the Registrar. The
Trustee shall maintain books on which the registered ownership of each Receipt
and transfers, if any, of such registered ownership shall be recorded.
Certificates evidencing Receipts bearing the manual or facsimile signature of a
duly authorized signatory of the Trustee and Registrar, if applicable, who was
at the time such certificates were executed a proper signatory of the Trustee or
Registrar, if applicable, shall bind the Trustee, notwithstanding that such
signatory has ceased to hold such office prior to the delivery of such
certificates.
(b) The certificates evidencing Receipts may be endorsed with or have
incorporated in the text thereof such legends or recitals or modifications not
inconsistent with the provisions of the Depositary Trust Agreement as may be
required by the Trustee or required to comply with any applicable law or
regulations thereunder or with the rules and regulations of any securities
exchange upon which Receipts may be listed or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to which
any particular Receipts are subject by reason of the date of issuance of the
Underlying Securities or otherwise.
(c) The Initial Depositor and the Trustee will apply to DTC for
acceptance of the Receipts in its book-entry settlement system. Receipts
deposited with DTC shall be represented by one or more global certificates which
shall be registered in the name of Cede & Co., as nominee for DTC, and shall
bear the following legend:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
THE AGENT AUTHORIZED BY THE ISSUER FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF
-9-
<PAGE>
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
(d) So long as the Receipts are eligible for book-entry settlement
with DTC and such settlement is available, unless otherwise required by law,
notwithstanding anything to the contrary in the Depositary Trust Agreement, all
Receipts shall be evidenced by one or more global certificates registered in the
name of a nominee of DTC and no person acquiring beneficial ownership of such
Receipts shall receive or be entitled to receive physical delivery of Receipts.
Ownership of beneficial interests in Receipts evidenced by such global
certificate or certificates shall be shown on, and the transfer of such
ownership shall be effected only through, records maintained by (i) DTC or (ii)
institutions that have accounts with DTC.
(e) If, at any time when Receipts are evidenced by a global
certificate, DTC ceases to make its book-entry settlement system available for
such Receipts, the Trustee shall issue separate certificates evidencing Receipts
to the DTC book-entry settlement system participants entitled thereto, with such
additions, deletions and modifications to the Depositary Trust Agreement and to
the form of certificate evidencing Receipts as the Initial Depositor and the
Trustee may, from time to time, agree.
(f) Title to a certificate evidencing Receipts (and to the Receipts
evidenced thereby), when properly endorsed or accompanied by proper
instruments of transfer, shall be transferable by delivery with the same effect
as in the case of a negotiable instrument under the laws of New York; provided,
--------
however, that the Trustee, notwithstanding any notice to the contrary, may treat
- -------
the Owner of Receipts as the
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<PAGE>
absolute owner thereof for the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in the Depositary Trust Agreement and for all other purposes.
Section 2.5. Delivery of Receipts. Upon receipt by the Trustee of
---------------------
any deposit pursuant to Section 2.2, together with a Depositor Order and the
other documents required as above specified, if any, the Trustee, subject to the
terms and conditions of the applicable Depositary Trust Agreement, shall Deliver
to or upon the written order of the Depositor the number of Receipts issuable in
respect of such deposit, provided such number is an integral multiple of an
Issuance Denomination, but only upon payment to the Trustee of the fees and
expenses of the Trustee as provided in Section 5.6 and of all taxes and
governmental charges and fees payable in connection with such deposit and the
transfer of the Underlying Securities.
Section 2.6. Registration; Registration of Transfer; Combination and
-------------------------------------------------------
Split-up of Certificates. (a) The Trustee shall keep or cause to be kept a
- -------------------------
register of Owners of Receipts and shall provide for the registration of
Receipts and the registration of transfers and exchanges of Receipts.
(b) The Trustee, subject to the terms and conditions of these Standard
Terms and the applicable Depositary Trust Agreement, shall register transfers of
ownership of Receipts on its transfer books from time to time, upon any
Surrender of a certificate evidencing such Receipts in any integral multiple of
a Round Lot, by the Owner in person or by a duly authorized attorney, properly
endorsed or accompanied by proper instruments of transfer, and duly stamped as
may be required by the laws of the State of New York and of the United States of
America. Thereupon the Trustee shall execute a new certificate or certificates
evidencing such Receipts in any integral multiple
-11-
<PAGE>
of a Round Lot requested, and deliver the same to or upon the order of the
Person entitled thereto.
(c) The Trustee, subject to the terms and conditions of these Standard
Terms and the applicable Depositary Trust Agreement, shall, upon Surrender of a
certificate evidencing Receipts for the purposes of effecting a split-up or
combination of such certificate or certificates, execute and deliver one or more
new certificate or certificates evidencing such Receipts in any integral
multiple of a Round Lot requested.
(d) The Trustee may appoint one or more co-transfer agents for the
purpose of effecting transfers, combinations and split-ups of Receipts at
designated transfer offices on behalf of the Trustee. In carrying out its
functions, a co-transfer agent may require evidence of authority and compliance
with applicable laws and other requirements by Owners or Persons entitled to
Receipts and will be entitled to protection and indemnity to the same extent as
the Trustee.
Section 2.7. Surrender of Receipts and Withdrawal of Underlying
--------------------------------------------------
Securities. (a) Upon Surrender at the Corporate Trust Office of the Trustee
- ----------
of a Round Lot of Receipts or integral multiple thereof for the purpose of
withdrawal of the Underlying Securities represented thereby, and upon payment of
the fee of the Trustee in connection with the Surrender of Receipts as provided
in Section 5.6 and payment of all taxes and charges payable in connection with
such Surrender and withdrawal of the Underlying Securities, and subject to the
terms and conditions of the applicable Depositary Trust Agreement, including,
without limitation, Section 4.10, the Owner of such Receipts shall be entitled
to Delivery of the amount of Underlying Securities at the time represented by
such Receipts. Delivery of such Underlying Securities may be made by (i)
Delivery of Securities to such Owner or as ordered by such Owner and (ii) any
-12-
<PAGE>
available form of delivery of any other securities, property and cash to which
such Owner is then entitled to such Owner or as ordered by such Owner. The
Trustee shall make such delivery as promptly as practicable.
(b) A certificate evidencing Receipts Surrendered for such purposes
may be required by the Trustee to be properly endorsed in blank or accompanied
by proper instruments of transfer in blank, and if the Trustee so requires, the
Owner thereof shall execute and deliver to the Trustee a written order directing
the Trustee to cause the Underlying Securities being withdrawn to be delivered
to or upon the written order of a Person or Persons designated in such order.
Thereupon the Trustee shall Deliver through the facilities of DTC or, if
applicable, at its Corporate Trust office, subject to Sections 2.8, 3.1, 3.2 and
4.10 and to the other terms and conditions of the Depositary Trust Agreement, to
or upon the written order of the Person or Persons designated in the order
delivered to the Trustee as above provided, the amount of Underlying Securities
represented by such Receipts.
Section 2.8. Limitations on Delivery, Registration of Transfer and
-----------------------------------------------------
Surrender of Receipts. (a) As a condition precedent to the Delivery,
- ---------------------
registration of transfer, split-up, combination or Surrender (including, for the
avoidance of doubt, any Surrender in connection with an exchange) of any Receipt
or withdrawal of any Underlying Securities, the Trustee or Registrar may require
payment from the Depositor of Securities or the presentor of the Receipts of a
sum sufficient to reimburse it for any tax or other charge and any stock
transfer or registration fee with respect thereto (including any such tax or
charge and fee with respect to Securities being deposited or withdrawn) and
payment of any applicable fees as herein provided, may require the production of
proof satisfactory to it as to the identity and genuineness of any signature and
may also require compliance with any regulations the Trustee may establish
-13-
<PAGE>
consistent with the provisions of the Depositary Trust Agreement, including,
without limitation, this Section 2.8.
(b) The Delivery of Receipts against deposits of Securities, the
registration of transfer of Receipts or the Surrender of Receipts for the
purpose of withdrawal of Underlying Securities may be suspended, generally or in
particular instances, during any period when the transfer books of the Trustee
are closed or the transfer books of a Securities Issuer are closed or if any
such action is deemed necessary or advisable by the Trustee at any time or from
time to time, subject to the provisions of the following sentence.
Notwithstanding any other provision of any applicable Depositary Trust Agreement
or the Receipts, the Surrender of Receipts and withdrawal of Underlying
Securities may not be suspended except for (i) temporary delays caused by
closing the transfer books of the Trustee or a Securities Issuer, (ii) the
payment of fees, taxes and applicable charges, and (iii) compliance with any
U.S. laws or governmental regulations relating to the Receipts or to the
withdrawal of the Underlying Securities. Without limitation of the foregoing,
the Trustee shall not knowingly accept for deposit under the Depositary Trust
Agreement any Securities required to be registered under the provisions of the
Securities Act of 1933, as amended, for the public offer and sale thereof in the
United States unless a registration statement is in effect as to such Securities
for such offer and sale.
Section 2.9. Lost Certificates, Etc. In case any certificate
----------------------
evidencing Receipts shall be mutilated, destroyed, lost or stolen, the Trustee
shall execute and deliver a new certificate of like tenor in exchange and
substitution for such mutilated certificate upon cancellation thereof, or in
lieu of and in substitution for such destroyed, lost or stolen certificate.
Before the Trustee shall execute and deliver a new certificate in substitution
for a destroyed, lost or stolen certificate, the Owner thereof shall have (a)
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<PAGE>
filed with the Trustee (i) a request for such execution and delivery before the
Trustee has notice that the Receipts have been acquired by a bona fide purchaser
and (ii) a sufficient indemnity bond, and (b) satisfied any other reasonable
requirements imposed by the Trustee.
Section 2.10. Cancellation and Destruction of Surrendered
-------------------------------------------
Certificates. All certificates evidencing Receipts Surrendered to the Trustee
- ------------
shall be canceled by the Trustee. The Trustee is authorized to destroy
certificates so canceled.
Section 2.11. Reconstitution Events. (a) If any class of Securities
---------------------
ceases to be outstanding as a result of a merger, consolidation or other
corporate combination of the Securities Issuer and Section 4.8 does not apply,
the Trustee shall, if it has actual knowledge of such event, to the extent
lawful and feasible and subject to Section 4.10, distribute any securities
which shall be received by the Trustee in exchange for or in conversion of or in
respect of Underlying Securities which are not Securities issued by a Securities
Issuer to the Owners in proportion to their ownership of Receipts. Effective on
the date that such Securities cease to be outstanding, such class of Securities
shall cease to be part of the Securities which must be deposited for
issuance of Receipts.
(b) If any class of Securities is delisted from trading on its
primary exchange or market and is not listed for trading on another national
securities exchange or through NASDAQ within five business days from the date of
such delisting, the Trustee shall, if it has actual knowledge of such event, to
the extent lawful and feasible and subject to Section 4.10, distribute the
Underlying Securities of such class to the Owners in proportion to their
ownership of Receipts. Effective on the date of such distribution,
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<PAGE>
such class of Securities shall cease to be a part of the securities which must
be deposited for issuance of Receipts.
(c) In the event that any Securities Issuer no longer has a class of
common stock registered under section 12 of the Securities Exchange Act of 1934,
as amended, the Trustee shall, if it has actual knowledge of such event, to the
extent lawful and feasible and subject to Section 4.10, distribute the
Underlying Securities of such Securities Issuer to the Owners in proportion to
their ownership of Receipts. Effective on the date of such distribution, such
class of Securities shall cease to be part of the securities which must be
deposited for issuance of Receipts.
(d) If the Commission determines that a Securities Issuer is an
investment company under the Investment Company Act of 1940, and the Trustee has
actual knowledge of such Commission determination, then the Trustee shall, to
the extent lawful and feasible and subject to Section 4.10, distribute the
Underlying Securities of such Securities Issuer to the Owners in proportion to
their ownership of Receipts. Effective on the date of such distribution, such
class of Securities shall cease to be part of the securities which must be
deposited for issuance of Receipts.
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<PAGE>
ARTICLE 3
CERTAIN OBLIGATIONS OF OWNERS OF RECEIPTS
Section 3.1. Filing Proofs, Certificates and Other Information. Any
-------------------------------------------------
Person presenting Securities for deposit or any Owner of Receipts may be
required from time to time to file with the Trustee such proof of citizenship or
residence, exchange control approval, or such information relating to the
registration on the books of any Securities Issuer or Securities Registrar, if
applicable, to execute such certificates and to make such representations and
warranties, as the Trustee may require. The Trustee may withhold the Delivery
or registration of transfer of any Receipts or the delivery of any Underlying
Securities until such proof or other information is filed or such certificates
are executed or such representations and warranties made.
Section 3.2. Liability of Owner for Taxes. If any tax or other
----------------------------
charge shall become payable with respect to any Receipts or any Underlying
Securities represented thereby, such tax or other charge shall be payable by the
Owner of such Receipts to the Trustee. The Trustee shall refuse to effect
any registration of transfer of such Receipts or any withdrawal of
Underlying Securities represented by such Receipt until such payment is made,
and may withhold any dividends or other distributions, or may sell for the
account of the Owner thereof Underlying Securities constituting any multiples of
the securities which must be deposited for issuance of Receipts, and may
apply such dividends or other distributions or the proceeds of any such sale in
payment of such tax or other charge and the Owner of such Receipt shall remain
liable for any deficiency.
Section 3.3. Warranties on Deposit of Shares.
-------------------------------
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<PAGE>
Every Person depositing Securities under the Depositary Trust Agreement shall
be deemed thereby to represent and warrant that such Securities and each
certificate therefor are validly issued and fully paid, that the person making
such deposit is duly authorized to do so and that at the time of delivery, such
Securities are free and clear of any lien, pledge, encumbrance, right, charge or
claim (other than the rights created by the Depositary Trust Agreement). Every
such person shall also be deemed to represent that such Securities are not, and
Receipts representing such Securities would not be, Restricted Securities. Such
representations and warranties shall survive the deposit of Securities, issuance
of Receipts or termination of the Depositary Trust Agreement.
ARTICLE 4
THE UNDERLYING SECURITIES
Section 4.1. Cash Distributions. Whenever the Trustee shall receive
------------------
any cash dividend or other cash distribution on any Underlying Securities, the
Trustee shall distribute the amount thus received (net of the fees of the
Trustee as provided in Section 5.6, if applicable) to the Owners entitled
thereto, in proportion to the number of Receipts held by them respectively;
provided, however, that in the event that the respective Securities Issuer or
- -------- -------
the Trustee shall be required to withhold and does withhold from such cash
dividend or such other cash distribution an amount on account of taxes, the
amount distributed to the Owners shall be reduced accordingly. The Trustee
shall distribute only such amount, however, as can be distributed without
attributing to any Owner a fraction of one cent. Any such fractional amounts
shall be rounded to the nearest whole cent and so distributed to Owners entitled
thereto.
Section 4.2. Distributions Other Than Cash or Securities. Subject to
-------------------------------------------
the provisions of Sections 4.8 and 5.6, whenever the Trustee shall receive any
distribution other than a distribution described in Sections 4.1, 4.3 or 4.4
or any distribution
-18-
<PAGE>
which would otherwise be distributed hereunder except that the Trustee deems
such distribution not to be lawful and feasible, the Trustee shall, subject to
Section 4.10, cause the securities or property received by it to be distributed
to the Owners entitled thereto, in proportion to the number of Receipts held by
them respectively, in any manner that the Trustee may deem equitable and
practicable for accomplishing such distribution;
provided, however, that if in the opinion of the Trustee such distribution
- -------- -------
cannot be made proportionately among the Owners entitled thereto, or if for any
other reason (including, but not limited to, any requirement that a Securities
Issuer or the Trustee withhold an amount on account of taxes or other
governmental charges or that such securities must be registered under the
Securities Act of 1933 in order to be distributed to Owners) the Trustee deems
such distribution not to be feasible, the Trustee shall adopt such method as it
deems equitable and practicable for the purpose of effecting such distribution,
including, but not limited to, the public or private sale of the securities or
property thus received, or any part thereof, and the net proceeds of any such
sale (net of the fees of the Trustee as provided in Section 5.6) shall be
distributed by the Trustee to the Owners entitled thereto as in the case of a
distribution received in cash.
Section 4.3. Distributions in Securities. If any distribution upon
---------------------------
any Underlying Securities consists of a dividend in, or free distribution of,
Securities, the Trustee shall, to the extent lawful and feasible, retain
such Securities under the Depositary Trust Agreement, and, in such case, the
(i) the amount of such Securities so retained in respect of each Receipt shall
be added to the classes and quantities of securities which must be deposited for
issuance of Receipts and (ii) the number of Receipts in an Issuance
Denomination may be increased or decreased by the Trustee to the lowest multiple
of 100 Receipts such that no fractional shares are thereby represented in such
Issuance Denomination.
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Section 4.4. Rights Offerings. (a) If a Securities Issuer offers
----------------
or causes to be offered to the holders of any Underlying Securities any rights
to subscribe for additional Securities or other securities, the Trustee shall
have discretion in accordance with this Section 4.4 as to the procedure to be
followed in making such rights available to any Owners or in disposing of such
rights on behalf of Owners and making the net proceeds available to Owners or,
if by the terms of such rights offering or for any other reason (including the
absence of an effective registration statement covering the distribution of
securities underlying the rights), the Trustee may not make such rights
available to any Owners or dispose of such rights and make the net proceeds
available to Owners, then the Trustee shall allow the rights to lapse.
(b) The Trustee will not offer rights to Owners unless both the rights
and the securities to which such rights relate are either exempt from
registration under the Securities Act of 1933 with respect to a distribution to
all Owners or are registered under the provisions of such Act.
(c) The Trustee shall not be responsible for any failure to determine
that it may be lawful or feasible to make such rights available to Owners in
general or any Owner in particular.
Section 4.5. Fixing of Record Date. Whenever any cash dividend or
---------------------
other cash distribution shall become payable or any distribution other than cash
shall be made, or whenever the Trustee receives notice of any meeting of or
solicitation of proxies from holders of any Underlying Securities, or whenever a
fee shall be charged by the Trustee under Section 5.6, or whenever for any
reason there is a reconstitution or other event under the Depositary Trust
Agreement that causes a change in the composition of the securities which must
be deposited for issuance of Receipts, or whenever the Trustee
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shall find it necessary or convenient in respect of any matter, the Trustee
shall fix a record date (a) for the determination of the Owners who shall be (i)
entitled to receive such dividend or distribution or the net proceeds of the
sale thereof, (ii) entitled to give instructions to the Trustee for the exercise
of voting rights at any such meeting or solicitation or (iii) required to pay
such fee, or (b) on or after which each Receipt will represent such changed
group of Securities. In the case of subsections (a)(i) and (a)(ii) of this
Section 4.5, the Trustee shall use its reasonable efforts to ensure that, to the
extent practicable, the record date set hereunder will be the same as the record
date set by the Securities Issuer. Subject to the terms and conditions of the
Depositary Trust Agreement, the Owners on such record date shall be entitled, as
the case may be, to receive the amount distributable by the Trustee with respect
to such dividend or other distribution or the net proceeds of sale thereof, or
to give voting instructions, or to act in respect of any other such matter, or
shall be obligated to pay such fee.
Section 4.6. Reports. The Trustee shall, to the extent lawful,
-------
forward to Owners any reports and communications, including any proxy statement
or other soliciting material, received from a Securities Issuer which are
received by the Trustee as the holder of the Underlying Securities or its
appointed agent, unless such reports and communications have been forwarded
directly to Owners by such Securities Issuer or its appointed agent.
Section 4.7. Voting Instructions for Underlying Securities. Upon
---------------------------------------------
receipt by the Trustee or its appointed agent of notice of any meeting of, or
solicitation of proxies from, holders of Underlying Securities, the Trustee
shall, to the extent lawful, mail to the Owners a notice, the form of which
notice shall be in the sole discretion of the Trustee, which shall contain (a)
such information as is contained in such notice of meeting or solicitation, and
(b) a statement that the Owners as of the close of business on a specified
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record date will be entitled, subject to applicable law and the provisions of
the corporate documents of the Securities Issuer, to instruct the Trustee as to
the exercise of the voting rights, if any, or giving of proxies, as applicable,
in respect of the amount of Underlying Securities represented by their
respective Receipts and (c) a statement as to the manner in which such
instructions may be given. Upon the written request of an Owner of a Receipt on
such record date, received on or before the date established by the Trustee for
such purpose, the Trustee shall endeavor, insofar as practicable, to vote or
cause to be voted, or to give a proxy, as applicable, in respect of the amount
of Underlying Securities represented by such Receipt in accordance with the
instructions set forth in such request. The Trustee shall not vote or attempt
to exercise the right to vote that attaches to, or give a proxy with respect to,
Underlying Securities other than in accordance with such instructions.
Section 4.8. Changes Affecting Underlying Securities. (a) In
---------------------------------------
circumstances where the provisions of Sections 2.11 and 4.3 do not apply, upon
any change in nominal value, change in par value, split-up, consolidation or any
other reclassification of any Underlying Securities, or upon any
recapitalization, reorganization, merger or consolidation or sale of assets
affecting the issuer of any Underlying Security, if the relevant Securities
Issuer survives such event, the Trustee shall, to the extent lawful and
feasible, retain such Securities under the Depositary Trust Agreement, and, in
such case, the (A) the amount of such Securities so retained in respect of
each Receipt shall be added to the classes and quantities of securities which
must be deposited for issuance of Receipts and (B) the number of Receipts
in an Issuance Denomination may be increased or decreased by the Trustee to the
lowest multiple of 100 Receipts such that no fractional shares are thereby
represented in such Issuance Denomination.
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(b) Securities of any class which are surrendered by the Trustee in
connection with any such conversion or exchange shall, effective on the date of
such surrender, no longer be part of the securities which must be deposited
for issuance of Receipts. In any such case, or in the case of an event to which
Section 2.11 applies, the Trustee may call for the Surrender of outstanding
certificates evidencing Receipts to be exchanged for new certificates
specifically describing any applicable change in the classes and quantities of
securities which must be deposited for issuance of Receipts.
Section 4.9. Withholding. In the event that the Trustee determines
-----------
that any distribution in property (including Securities and rights to subscribe
therefor) is subject to any tax or other charge which the Trustee is obligated
to withhold, notwithstanding anything to the contrary in these Standard Terms or
the applicable Depositary Trust Agreement, the Trustee may by public or private
sale dispose of all or a portion of such property (including Securities and
rights to subscribe therefor) in such amounts and in such manner as the Trustee
deems necessary and practicable to pay any such taxes or charges and the
Trustee shall distribute the net proceeds of any such sale after deduction of
such taxes or charges to the Owners entitled thereto in proportion to the number
of Receipts held by them respectively.
Section 4.10. Limitation on Distributions. Notwithstanding any
---------------------------
provision of the Depositary Trust Agreement which requires or permits the
Trustee to distribute or Deliver any securities to Owners, the Trustee shall not
distribute to any Owner any fraction of a share. Instead, the Trustee shall, to
the extent lawful, sell the aggregate of such fractions and distribute the net
proceeds to the Owners entitled thereto as in the case of a distribution
received in cash.
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ARTICLE 5
THE TRUSTEE AND THE INITIAL DEPOSITOR
Section 5.1. Maintenance of Office and Transfer Books by the Trustee.
-------------------------------------------------------
(a) Until termination of this Depositary Trust Agreement in accordance with its
terms, the Trustee shall maintain in the Borough of Manhattan, The City of New
York, facilities for the execution and Delivery, registration, registration of
transfers and Surrender of Receipts in accordance with the provisions of these
Standard Terms and the applicable Depositary Trust Agreement.
(b) The Trustee shall keep books for the registration of Receipts and
transfers of Receipts which at all reasonable times shall be open for inspection
by the Owners.
(c) The Trustee may close the transfer books at any time or from time
to time.
(d) If any Receipts evidenced thereby are listed on one or more stock
exchanges in the United States, the Trustee shall act as Registrar or appoint a
registrar or one or more co-registrars for registry of such receipts in
accordance with any requirements of such exchange or exchanges.
Section 5.2. Prevention or Delay in Performance by the Initial
-------------------------------------------------
Depositor or the Trustee. Neither the Initial Depositor nor the Trustee nor any
- ------------------------
of their respective directors, employees, agents or affiliates shall incur any
liability to any Owner or Beneficial Owner of any Receipt, if by reason of any
provision of any present or future
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law or regulation of the United States or any other country, or of any
governmental or regulatory authority or stock exchange, or by reason of any
provision, present or future, of the corporate documents of any Securities
Issuer, or by reason of any provisions of any securities issued or distributed
by any Securities Issuer, or any offering or distribution thereof, or by reason
of any act of God or war or other circumstances beyond its control, the Initial
Depositor or the Trustee shall be prevented or forbidden from, or be subject to
any civil or criminal penalty on account of, doing or performing any act or
thing which by the terms of these Standard Terms or the applicable Depositary
Trust Agreement it is provided shall be done or performed; nor shall the Initial
Depositor or the Trustee incur any liability to any Owner or Beneficial Owner of
any Receipt by reason of any non-performance or delay, caused as aforesaid, in
the performance of any act or thing which by the terms of these Standard Terms
or the applicable Depositary Trust Agreement it is provided shall or may be done
or performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in these Standard Terms or the applicable Depositary
Trust Agreement. Where, by the terms of an offering or distribution to which
Sections 2.11, 4.2 or 4.4 applies, or for any other reason, it is not lawful and
feasible to make such distribution or offering available to Owners, and the
Trustee may not dispose of such distribution or offering on behalf of such
Owners and make the net proceeds available to such Owners, then the Trustee
shall not make such distribution or offering available to Owners and shall allow
any rights, if applicable, to lapse.
Section 5.3. Obligations of the Initial Depositor and the Trustee.
----------------------------------------------------
(a) Neither the Initial Depositor nor the Trustee assumes any obligation nor
shall they be subject to any liability under these Standard Terms or the
applicable Depositary Trust Agreement to any Owner or Beneficial Owner of any
Receipt (including, without limitation, liability with respect to the validity
or worth of the Underlying Securities),
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except that each agrees to perform its respective obligations specifically set
forth in these Standard Terms and the applicable Depositary Trust Agreement
without negligence or bad faith.
(b) Neither the Initial Depositor nor the Trustee shall be under any
obligation to prosecute any action, suit or other proceeding in respect of any
Underlying Securities or in respect of the Receipts.
(c) Neither the Initial Depositor nor the Trustee shall be liable for
any action or non-action by it in reliance upon the advice of or information
from legal counsel, accountants, any person presenting Securities for deposit,
any Owner or any other person believed by it in good faith to be competent to
give such advice or information.
(d) The Trustee shall not be liable for any acts or omissions made by
a successor Trustee whether in connection with a previous act or omission of the
Trustee or in connection with any matter arising wholly after the resignation of
the Trustee, provided that in connection with the issue out of which such
potential liability arises the Trustee performed its obligations without
negligence or bad faith while it acted as Trustee.
(e) The Trustee shall not be responsible for any failure to carry out
any instructions to vote any of the Underlying Securities, or for the manner in
which any such vote is cast or the effect of any such vote, provided that any
such action or non-action is without negligence or bad faith.
(f) Except as specifically provided in Section 4.6, the Trustee shall
have no obligation to monitor or to obtain any information concerning the
business or
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affairs of any Securities Issuer or to advise Owners or Beneficial Owners of any
event or condition affecting any Securities Issuer.
(g) The Trustee shall have no obligation to comply with any direction
or instruction from any Owner or Beneficial Owner regarding Receipts except to
the extent specifically provided in these Standard Terms or any applicable
Depositary Trust Agreement.
(h) The Trustee shall be a fiduciary under these Standard Terms and
the applicable Depositary Trust Agreement; provided, however, that the fiduciary
-------- -------
duties and responsibilities and liabilities of the Trustee shall be limited by,
and shall be only those specifically set forth in, these Standard Terms and the
applicable Depositary Trust Agreement.
Section 5.4. Resignation or Removal of the Trustee; Appointment of
-----------------------------------------------------
Successor Trustee. (a) The Trustee may at any time resign as Trustee hereunder
- -----------------
by written notice of its election so to do, delivered to the Initial Depositor,
and such resignation shall take effect upon the appointment of a successor
Trustee and its acceptance of such appointment as hereinafter provided.
(b) If at any time the Trustee is in material breach of its
obligations under the Depositary Trust Agreement and the Trustee fails to cure
such breach within 30 days after receipt by the Trustee of written notice from
the Initial Depositor or Owners of 25% or more of the outstanding Receipts
specifying such default and requiring the Trustee to cure such default, the
Initial Depositor, acting on behalf of the Owners, may remove the Trustee by
written notice delivered to the Trustee in the manner provided
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<PAGE>
in Section 7.5, and such removal shall take effect upon the appointment of the
successor Trustee and its acceptance of such appointment as hereinafter
provided.
(c) In case at any time the Trustee acting hereunder shall resign or
be removed, the Initial Depositor, acting on behalf of the Owners, shall use its
reasonable efforts to appoint a successor Trustee, which shall be a bank or
trust company having an office in the Borough of Manhattan, The City of New
York. Every successor Trustee shall execute and deliver to its predecessor and
to the Initial Depositor, acting on behalf of the Owners, an instrument in
writing accepting its appointment hereunder, and thereupon such successor
Trustee, without any further act or deed, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor; but such predecessor,
nevertheless, upon payment of all sums due it and on the written request of the
Initial Depositor, acting on behalf of the Owners, shall execute and deliver an
instrument transferring to such successor all rights and powers of such
predecessor hereunder, shall duly assign, transfer and deliver all right, title
and interest in the Underlying Securities to such successor, and shall deliver
to such successor a list of the Owners of all outstanding Receipts. The Initial
Depositor or any such successor Trustee shall promptly mail notice of the
appointment of such successor Trustee to the Owners.
(d) Any corporation into or with which the Trustee may be merged,
consolidated or converted shall be the successor of such Trustee without the
execution or filing of any document or any further act.
Section 5.5. Indemnification. (a) The Initial Depositor shall indemnify
---------------
the Trustee, its directors, employees, agents and affiliates against, and hold
each of them harmless from, any loss, liability, cost, expense or judgment
(including, but not limited to, the fees and expenses of counsel) (collectively
"Indemnified Amounts") which is
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incurred by any of them and which arises out of acts performed or omitted
pursuant to the provisions of these Standard Terms or any Depositary Trust
Agreement, as the same may be amended, modified or supplemented from time to
time, or any filings with or submissions to the Commission in connection with or
with respect to such Receipts (which by way of illustration and not by way of
limitation, include any registration statement and any amendments or supplements
thereto filed with the Commission or any periodic reports or updates that may be
filed under the Securities Exchange Act of 1934, as amended, or any failure to
make any filings or submissions to the Commission which are required to be made
in connection with or with respect to such Receipts), except that the Initial
Depositor shall not have any obligations under this Section 5.5(a) to pay
Indemnified Amounts incurred as a result of and attributable to (i) the
negligence or bad faith of, or material breach of the terms of this Agreement
by, the Trustee, (ii) written information regarding the name and address of the
Trustee furnished in writing to the Initial Depositor (and not materially
changed or altered) expressly for use in the registration statement filed with
the Commission relating to the Receipts, or (iii) any misrepresentations or
omissions made by a Depositor (other than Initial Depositor) in connection with
such Depositor's offer and sale of Receipts.
(b) The Trustee shall indemnify the Initial Depositor, its directors,
employees, agents and affiliates against, and hold each of them harmless from,
any Indemnified Amounts (i) caused by the negligence or bad faith of the Trustee
or (ii) arising out of any written information regarding the name and address of
the Trustee furnished in writing to the Initial Depositor (and not materially
changed or altered) expressly for use in the registration statement filed with
the Commission relating to the Receipts.
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[(c) If the indemnification provided for in this Section 5.5 is
unavailable or insufficient to hold harmless the indemnified party under
subsection (a) or (b) above, then the indemnifying party shall contribute to the
Indemnified Amounts referred to in subsection (a) or (b) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Initial Depositor on the one hand and the Trustee on the other hand from the
offering of the Receipts which are the subject of the action or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Initial
Depositor on the one hand and the Trustee on the other hand in connection with
the action, statement or omission which resulted in such Indemnified Amount as
well as any other relevant equitable considerations. The relative benefits
received by the Initial Depositor on the one hand and the Trustee on the other
shall be deemed to be in the same proportions as the total commissions from the
offering of the Receipts which are the subject of the action (before deducting
expenses) received by the Initial Depositor bear to the total fees received by
the Trustee from the offering of such Receipts. The relative fault shall be
determined by reference to, among other things, whether any untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact which from which the action arises relates to information
supplied by the Initial Depositor or the Trustee and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission or the act or omission from which the action
arises. The amount of Indemnified Amounts referred to in the first sentence of
this subsection (c) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (c).]
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<PAGE>
Section 5.6. Charges of Trustee. The following charges shall be
------------------
incurred by any party depositing or withdrawing Securities or by any party
Surrendering Receipts or to whom Receipts are Delivered or any Owner, as
applicable: (1) taxes and charges and other fees payable in respect of the
Underlying Securities assessed by third-party custodians, depositories, transfer
agents, and other service providers in the ordinary course of their
respective businesses (whether in connection with the deposit of Securities or
withdrawal of Underlying Securities or otherwise), (2) a fee of $10 or less per
100 Receipts for the execution and Delivery of Receipts pursuant to Section 2.5,
and the Surrender of Receipts pursuant to Section 2.7, and (3) a fee which
shall accrue on the first day of each calendar quarter at a rate of $.02 or less
per Receipt per quarter for the Trustee's services as such under the Depositary
Trust Agreement (which fee shall be assessed against Owners of record as of the
date or dates set by the Trustee in accordance with Section 4.5 and shall be
collected at the Trustee's discretion by deducting such fee from one or more
cash dividends or other cash distributions); provided, however, that with
-------- -------
respect to the aggregate fee accrued in any calendar year under this clause
(3) with respect to each Receipt, the Trustee will waive that portion which
exceeds the total cash dividends and other cash distributions the record
date for which falls in such calendar year and payable with respect to such
Receipt.
Section 5.7. Retention of Trust Documents. The Trustee is authorized
----------------------------
to destroy those documents, records, bills and other data compiled during the
term of the Depositary Trust Agreement at the times permitted by the laws or
regulations governing the Trustee.
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<PAGE>
Section 5.8. Federal Securities Law Filings. The Initial
------------------------------
Depositor shall (i) prepare and file a registration statement with the
Commission and take such action as is necessary from time to time to qualify the
Receipts for offering and sale under the federal securities laws of the United
States, including the preparation and filing of amendments and supplements to
such registration statement, (ii) promptly notify the Trustee of any amendment
or supplement to the registration statement or prospectus, of any order
preventing or suspending the use of any prospectus, of any request for the
amending or supplementing of the registration statement or prospectus or if
any event or circumstance occurs as a result of which the registration statement
or prospectus, as then amended or supplemented, would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, (iii) provide the Trustee from time to time with
copies, including copies in electronic form, of the prospectus, as amended and
supplemented, in such quantities as the Trustee may request and (iv) prepare and
file any periodic reports or updates that may be required under the Securities
Exchange Act of 1934, as amended.
Section 5.9. Prospectus Delivery. The Trustee shall, if required by
-------------------
the federal securities laws of the United States, in any manner permitted by
such laws, deliver at the time of issuance of Receipts, a copy of the relevant
prospectus, as amended and supplemented at such time, to each Person depositing
Underlying Securities into the Trust for issuance of Receipts.
ARTICLE 6
AMENDMENT AND TERMINATION
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Section 6.1. Amendment. The Trustee and the Initial Depositor may
---------
amend any provisions of the Depositary Trust Agreement without the consent of
any Owner. Any amendment that imposes or increases any fees or charges
(other than taxes and other charges, registration fees or other
such expenses), or that otherwise prejudices any substantial existing right
of the Owners will not become effective until 30 days after notice of such
amendment is given to the Owners. Every Owner and Beneficial Owner, at the time
any amendment so becomes effective, shall be deemed, by continuing to hold any
Receipt or an interest therein, to consent and agree to such amendment and to be
bound by the Depositary Trust Agreement as amended thereby. In no event shall
any amendment impair the right of the Owner of any Receipt to Surrender such
Receipt and receive therefor the Underlying Securities represented thereby,
except in order to comply with mandatory provisions of applicable law.
Section 6.2. Early Termination. (a) The Trust shall terminate by
-----------------
the Trustee mailing notice of such termination to the Owners of all Receipts
then outstanding at least 30 days prior to the date set for termination if any
of the following occurs:
(i) The Trustee is notified that the Receipts are delisted from a
national securities exchange and are not approved for listing on another
national securities exchange within 5 business days of their delisting;
(ii) Owners of at least 75% of the outstanding Receipts notify the
Trustee that they elect to terminate the Trust; or
(iii) 60 days shall have expired after the Trustee shall have
delivered to the Initial Depositor and the Owners a written notice of its
election to resign and a
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successor trustee shall not have been appointed and accepted its
appointment as provided in Section 5.4.
(b) On and after the date of termination, the Owner of a Receipt will, upon
(i) Surrender of such Receipt at the Corporate Trust Office of the Trustee, (ii)
payment of the fee of the Trustee for the Surrender of Receipts referred to in
Section 2.7, and (iii) payment of any applicable taxes or charges, be entitled
to Delivery, to him or upon his order, of the amount of Underlying Securities
evidenced by such Receipt. If any Receipts shall remain outstanding after the
date of termination, the Trustee thereafter shall discontinue the registration
of transfers of Receipts, shall suspend the distribution of dividends or other
distribution to the Owners thereof, and shall not give any further notices or
perform any further acts under these Standard Terms or the applicable Depositary
Trust Agreement, except that the Trustee shall continue to collect dividends and
other distributions pertaining to Underlying Securities and hold the same
uninvested and without liability for interest, shall sell rights as provided in
these Standard Terms or the applicable Depositary Trust Agreement, and shall
continue to deliver Underlying Securities, together with any dividends or other
distributions received with respect thereto and the net proceeds of the sale of
any rights or other property, in exchange for Receipts Surrendered to the
Trustee (after deducting or upon payment of, in each case, the fee of the
Trustee set forth in 5.6 for the Surrender of Receipts, any expenses for the
account of the Owner of such Receipts in accordance with the terms and
conditions of the Depositary Trust Agreement, and any applicable taxes or
charges). At any time after the expiration of one year following the date of
termination, the Trustee may sell the Underlying Securities then held hereunder
and may thereafter hold uninvested the net proceeds of any such sale, together
with any other cash then held by it hereunder, unsegregated and without
liability for interest, for the pro rata benefit of the Owners of Receipts which
--- ----
have not theretofore been Surrendered, such Owners thereupon becoming
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general creditors of the Trustee with respect to such net proceeds. After making
such sale, the Trustee shall be discharged from all obligations under these
Standard Terms with respect to the Receipts and the applicable Depositary Trust
Agreement, except to account for such net proceeds and other cash (after
deducting, in each case, the fee of the Trustee for the Surrender of Receipts,
any fees of the Trustee due and owing from the Owner of such Receipts pursuant
to Section 5.6, any expenses for the account of the Owner of such Receipts in
accordance with the terms and conditions of the Depositary Trust Agreement, and
any applicable taxes or governmental charges). Upon the termination of the
applicable Depositary Trust Agreement, the Initial Depositor shall be discharged
from all obligations under such Depositary Trust Agreement except for its
obligations to the Trustee under Section 5.5.
ARTICLE 7
MISCELLANEOUS
Section 7.1. Counterparts. These Standard Terms and each Depositary
------------
Trust Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of such counterparts shall constitute one
and the same instrument. Copies of these Standard Terms and the applicable
Depositary Trust Agreement shall be filed with the Trustee and shall be open to
inspection by any Owner of a Receipt during business hours.
Section 7.2. Third-Party Beneficiaries. These Standard Terms and
--------------------------
each Depositary Trust Agreement are for the exclusive benefit of the respective
parties hereto and thereto, and shall not be deemed to give any legal or
equitable right, remedy or claim whatsoever to any other person.
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Section 7.3. Severability. In case any one or more of the
------------
provisions contained in these Standard Terms or the applicable Depositary Trust
Agreement or in the Receipts should be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall in no way be affected,
prejudiced or disturbed thereby.
Section 7.4. Owners and Beneficial Owners as Parties; Binding
------------------------------------------------
Effect. The Owners, Beneficial Owners and Depositors from time to time
shall be parties to the applicable Depositary Trust Agreement and shall be
bound by all of the terms and conditions hereof and thereof and of the Receipts
by their acceptance of Receipts or any interest therein or by their depositing
Securities, as the case may be.
Section 7.5. Notices. (a) Any and all notices to be given to the
-------
Initial Depositor shall be deemed to have been duly given if personally
delivered or sent by mail or cable, telex or facsimile transmission confirmed by
letter, addressed to Merrill Lynch, Pierce, Fenner & Smith Incorporated,
World Financial Center, New York, New York 10281, Attention: Director,
Customized Investments, or any other place to which the Initial Depositor may
have transferred its principal office with notice to the Trustee.
(b) Any and all notices to be given to the Trustee shall be deemed to
have been duly given if personally delivered or sent by mail or cable, telex or
facsimile transmission confirmed by letter, addressed to The Bank of New York,
101 Barclay Street, 22-W, New York, New York 10286, Attention: ADR
Administration, or any other place to which the Trustee may have transferred its
Corporate Trust Office with notices to the Initial Depositor.
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(c) Any and all notices to be given to any Owner shall be deemed to
have been duly given if personally delivered or sent by mail or cable, telex or
facsimile transmission confirmed by letter, addressed to such Owner at the
address of such Owner as it appears on the transfer books of the Trustee, or, if
such Owner shall have filed with the Trustee a written request that notices
intended for such Owner be mailed to some other address, at the address
designated in such request.
(d) Delivery of a notice sent by mail or cable, telex or facsimile
transmission shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a confirmation thereof in the case of a cable,
telex or facsimile transmission) is deposited, postage prepaid, in a post-office
letter box. The Trustee may, however, act upon any cable, telex or facsimile
transmission received by them, notwithstanding that such cable, telex or
facsimile transmission shall not subsequently be confirmed by letter as
aforesaid.
Section 7.6. Governing Law. This Depositary Trust Agreement and the
-------------
Receipts shall be interpreted and all rights hereunder and thereunder and
provisions hereof and thereof shall be governed by the substantive laws (but not
the choice of law rules) of the State of New York.
-37-
<PAGE>
IN WITNESS WHEREOF, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
and THE BANK OF NEW YORK have duly executed these Standard Terms as of the day
and year first set forth above.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By:
--------------------------------
Steven G. Budurtha
First Vice President
THE BANK OF NEW YORK,
as Trustee
By:
--------------------------------
Name:
Title:
-38-
<PAGE>
EXHIBIT A
[NAME OF TRUST]
[FORM OF] DEPOSITARY TRUST AGREEMENT
DEPOSITARY TRUST AGREEMENT dated as of __________ (this "Depositary
Trust Agreement"), between MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, a
Delaware corporation (the "Initial Depositor"), THE BANK OF NEW YORK, a New York
banking corporation, as trustee (the "Trustee"), and all Holders and Beneficial
Owners (each as hereinafter defined) from time to time of Depositary Trust
Receipts issued hereunder and all Depositors (as hereinafter defined) from time
to time.
Section 1. Incorporation of Standard Terms. The Standard Terms for
-------------------------------
Depositary Trust Agreements agreed to as of ____________, 1999 (the "Standard
Terms"), between the Initial Depositor and the Trustee are hereby incorporated
by reference into and made a part of this Depositary Trust Agreement. If there
is any conflict between the provisions of this Depositary Trust Agreement and
the Standard Terms, the provisions of this Depositary Trust Agreement shall
control.
Section 2. Securities to be Deposited. Initially, the securities
--------------------------
which must be deposited for issuance of one Receipt and which shall be
represented thereby shall be as follows:
Quantity which
must be deposited
Issuer and Title of Security per Receipt
---------------------------- ---------------------
[Issuer and title of security] [Quantity]
[Issuer and title of security] [Quantity]
; provided, however, that if an event to which Section 2.11 of the Standard
-------- -------
Terms applies or an event described in Sections 4.3 or 4.8 of the Standard Terms
occurs, the definition of the securities that must be deposited for issuance of
one Receipt shall be changed as provided in such Sections, if applicable.
Section 3. Creation and Declaration of Trust; Termination Date. The
---------------------------------------------------
trust created hereby shall be known as [Name of Trust], for which the Trustee,
-------------
or the Initial Depositor to the extent provided herein, may conduct the business
of the Trust, make and
A-1
<PAGE>
execute contracts, and sue and be sued. [The termination date of the Trust will
be December 31, 2039].
Section 4. Closing. The "Closing Date" shall be [specify date].
------- ------------
IN WITNESS WHEREOF, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
and THE BANK OF NEW YORK have duly executed this agreement as of the day and
year first set forth above. All Owners and Beneficial Owners shall become
parties hereto upon acceptance by them of Receipts issued in accordance with the
terms hereof or any interest therein, and all Depositors shall become parties
hereto upon depositing any Securities hereunder.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By:
---------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
---------------------------------
Name:
Title:
A-2
<PAGE>
EXHIBIT B
[Form of Receipt]
THE RECEIPTS EVIDENCED HEREBY REPRESENT RIGHTS WITH RESPECT TO UNDERLYING
SECURITIES (AS DEFINED IN THE DEPOSITARY TRUST AGREEMENT REFERRED TO HEREIN)
HELD BY THE TRUST AND DO NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND
ARE NOT GUARANTEED BY THE INITIAL DEPOSITOR OR THE TRUSTEE OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THE RECEIPTS NOR THE UNDERLYING SECURITIES ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE AGENT
AUTHORIZED BY THE ISSUER FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
B-1
<PAGE>
DEPOSITARY TRUST RECEIPTS
ISSUED BY
[NAME OF TRUST]
REPRESENTING [COMMON STOCK] OF
[LIST COMPANIES HERE]
THE BANK OF NEW YORK, as Trustee
No. CUSIP NO.
THE BANK OF NEW YORK, as Trustee (hereinafter called the "Trustee"),
hereby certifies that CEDE & CO., as nominee of the Depositary Trust Company, or
registered assigns, IS THE OWNER OF * Depositary Trust Receipts issued by
[Name of Trust], each representing the securities described in the within-
- --------------
mentioned Depositary Trust Agreement. At the date hereof, each Receipt
represents the right to receive the following securities:
Quantity Initially
Issuer and Title Represented by
of Security Each Receipt
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
which are deposited under the Depositary Trust Agreement referred to herein at
the Corporate Trust Office of the Trustee. The specification of the securities
represented by each Receipt is subject to change as provided in the Depositary
Trust Agreement. The Trustee's Corporate Trust Office is located at a different
address than its principal executive office. Its Corporate Trust Office is
located at 101 Barclay Street, New York, New York 10286, and its principal
executive office is located at One Wall Street, New York, New York 10286.
THE TRUSTEE'S CORPORATE TRUST OFFICE ADDRESS IS
101 BARCLAY STREET, NEW YORK, NEW YORK 10286
- ------------------
* That number of Receipts held at The Depository Trust Company at any given
point in time.
B-2
<PAGE>
(1) THE DEPOSITARY TRUST AGREEMENT.
------------------------------
This Receipt is issued upon the terms and conditions set forth in the
Depositary Trust Agreement, dated as of _________, 1999 (the "Depositary Trust
Agreement"), agreed to by and among the Initial Depositor, the Trustee, all
Owners and Beneficial Owners from time to time of Receipts issued thereunder and
all Depositors. By becoming an Owner or Beneficial Owner, or by depositing
Securities, such Person agrees to become a party to the Depositary Trust
Agreement and become bound by all the terms and conditions thereof. The
Depositary Trust Agreement sets forth the rights of Owners and the rights and
duties of the Trustee in respect of the Securities deposited thereunder and any
and all other securities, property and cash from time to time received in
respect of such Securities and held thereunder (such Securities, other
securities, property, and cash are herein called "Underlying Securities").
Copies of the Depositary Trust Agreement are on file at the Trustee's Corporate
Trust Office in New York City.
The statements made on the face and reverse of this Receipt are summaries
of certain provisions of the Depositary Trust Agreement and are qualified by and
subject to the detailed provisions of the Depositary Trust Agreement, to which
reference is hereby made. Capitalized terms not defined herein shall have the
meanings set forth in the Depositary Trust Agreement.
(2) SURRENDER OF RECEIPTS AND WITHDRAWAL OF SECURITIES.
--------------------------------------------------
Upon Surrender at the Corporate Trust Office of the Trustee of a Round Lot
of Receipts or integral multiples thereof for the purpose of withdrawal of the
Underlying Securities represented thereby, and upon payment of the fee of the
Trustee in connection with the Surrender of Receipts as provided in Section 5.6
of the Standard Terms and payment of all taxes and charges payable in connection
with such Surrender and withdrawal of the Underlying Securities, and subject to
the terms and conditions of the applicable Depositary Trust Agreement,
including, without limitation, Section 4.10 thereof, the Owner of such Receipts
shall be entitled to Delivery of the amount of Underlying Securities at the time
represented by such Receipts. Delivery of such Underlying Securities may be
made by (i) Delivery of Securities to such Owner or as ordered by such Owner and
(ii) any available form of delivery of any other securities, property and cash
to which such Owner is then entitled to such Owner or as ordered by such Owner.
The Trustee shall only deliver whole Underlying Securities upon Surrender of
Receipts representing such Underlying Securities.
(3) REGISTRATION OF TRANSFERS, SPLIT-UPS AND COMBINATIONS OF CERTIFICATES;
----------------------------------------------------------------------
LIMITATIONS.
-----------
The transfer of ownership of Receipts evidenced by this certificate is
registrable on the books of the Trustee at its Corporate Trust Office by the
Owner hereof in person or by a duly authorized attorney, upon Surrender of this
certificate evidencing Receipts,
B-3
<PAGE>
properly endorsed or accompanied by proper instruments of transfer, and duly
stamped as may be required by the laws of the State of New York and of the
United States of America. This certificate evidencing Receipts may be split up
into other such certificates, each evidencing any integral multiple of a Round
Lot of Receipts, or may be combined with other certificates evidencing Receipts
into one such certificate, in each case evidencing the same aggregate number of
Receipts as the certificate or certificates Surrendered.
As a condition precedent to the Delivery, registration of transfer, split-
up, combination or Surrender (including, for the avoidance of doubt, any
Surrender in connection with an exchange) of any Receipt or withdrawal of any
Underlying Securities, the Trustee or Registrar may require payment from the
Depositor of Securities or the presentor of the Receipts of a sum sufficient to
reimburse it for any tax or other charge and any stock transfer or registration
fee with respect thereto (including any such tax or charge and fee with respect
to Securities being deposited or withdrawn) and payment of any applicable fees
as herein provided, may require the production of proof satisfactory to it as to
the identity and genuineness of any signature and may also require compliance
with any regulations the Trustee may establish consistent with the provisions of
the Depositary Trust Agreement, including, without limitation, Section 2.8 of
the Standard Terms.
The Delivery of Receipts against deposits of Securities, the registration
of transfer of Receipts or the Surrender of Receipts for the purpose of
withdrawal of Underlying Securities may be suspended, generally or in particular
instances, during any period when the transfer books of the Trustee are closed
or the transfer books of a Securities Issuer are closed or if any such action is
deemed necessary or advisable by the Trustee at any time or from time to time
for any reason, subject to the provisions of the following sentence.
Notwithstanding any other provision of any applicable Depositary Trust Agreement
or the Receipts, the Surrender of Receipts and withdrawal of Underlying
Securities may not be suspended subject to only (i) temporary delays caused by
closing the transfer books of the Trustee or a Securities Issuer, (ii) the
payment of fees, taxes and similar charges, and (iii) compliance with any U.S.
laws or governmental regulations relating to the Receipts or to the withdrawal
of the Underlying Securities. Without limitation of the foregoing, the Trustee
shall not knowingly accept for deposit under the Depositary Trust Agreement any
Securities required to be registered under the provisions of the Securities Act
of 1933, as amended, for the public offer and sale thereof in the United States
unless a registration statement is in effect as to such Securities for such
offer and sale.
(4) RECONSTITUTION EVENTS
---------------------
B-4
<PAGE>
If any class of Securities ceases to be outstanding as a result of
a merger, consolidation or other corporate combination of the Securities Issuer
and Section 4.8 of the Standard Terms does not apply, the Trustee shall, if
it has actual knowledge of such event, to the extent lawful and feasible and
subject to Section 4.10 of the Standard Terms, distribute any securities
which shall be received by the Trustee in exchange for or in conversion of or in
respect of Underlying Securities which are not Securities issued by a Securities
Issuer to the Owners in proportion to their ownership of Receipts. Effective on
the date that such Securities cease to be outstanding, such class of Securities
shall cease to be part of the securities which must be deposited for
issuance of Receipts.
(b) If any class of Securities is delisted from trading on its
primary exchange or market and is not listed for trading on another national
securities exchange or through NASDAQ within five business days from the date of
such delisting, the Trustee shall, if it has actual knowledge of such event, to
the extent lawful and feasible and subject to Section 4.10 of the Standard
Terms, distribute the Underlying Securities of such class to the Owners in
proportion to their ownership of Receipts. Effective on the date of such
distribution, such class of Securities shall cease to be a part of the
securities which must be deposited for issuance of Receipts.
(c) In the event that any Securities Issuer no longer has a class of
common stock registered under section 12 of the Securities Exchange Act of 1934,
as amended, the Trustee shall, if it has actual knowledge of such event, to the
extent lawful and feasible and subject to Section 4.10 of the Standard Terms,
distribute the Underlying Securities of such Securities Issuer to the Owners in
proportion to their ownership of Receipts. Effective on the date of such
distribution, such class of Securities shall cease to be part of the
securities which must be deposited for issuance of Receipts.
(d) If the Commission determines that a Securities Issuer is an
investment company under the Investment Company Act of 1940, and the Trustee has
actual knowledge of such Commission determination, then the Trustee shall, to
the extent lawful and feasible and subject to Section 4.10 of the Standard
Terms, distribute the Underlying Securities of such Securities Issuer to the
Owners in proportion to their ownership of Receipts. Effective on the date of
such distribution, such class of Securities shall cease to be part of the
securities which must be deposited for issuance of Receipts.
(5) LIABILITY OF OWNER FOR TAXES.
----------------------------
If any tax or other governmental charge shall become payable with respect
to any Receipts or any Underlying Securities represented thereby, such tax or
other governmental charge shall be payable by the Owner hereof to the Trustee.
The Trustee
B-5
<PAGE>
shall refuse to effect any registration of transfer of such Receipts
or any withdrawal of Underlying Securities represented by such Receipt until
such payment is made, and may withhold any dividends or other distributions, or
may sell for the account of the Owner hereof Underlying Securities constituting
any multiples of the securities which must be deposited for issuance of
Receipts, and may apply such dividends or other distributions of the proceeds of
any such sale in payment of such tax or other charge and the Owner hereof shall
remain liable for any deficiency.
(6) WARRANTIES ON DEPOSIT OF SECURITIES.
-----------------------------------
Every Person depositing Securities under the Depositary Trust Agreement
shall be deemed thereby to represent and warrant that such Receipts and each
certificate therefor are validly issued and fully paid, that the person making
such deposit is duly authorized to do so and that at the time of delivery, such
Securities are free and clear of any lien, pledge, encumbrance, right, charge or
claim (other than the rights created by the Depositary Trust Agreement). Every
such person shall also be deemed to represent that such Securities are not, and
Receipts representing such Securities would not be, Restricted Securities. Such
representations and warranties shall survive the deposit of Securities, issuance
of Receipts or termination of the Depositary Trust Agreement.
(7) FILING PROOFS, CERTIFICATES AND OTHER INFORMATION.
-------------------------------------------------
Any person presenting Securities for deposit or any Owner of a Receipt may
be required from time to time to file with the Trustee such proof of citizenship
or residence, exchange control approval, or such information relating to the
registration on the books of any Securities Issuer or Securities Registrar, if
applicable, to execute such certificates and to make such representations and
warranties, as the Trustee may require. The Trustee may withhold the Delivery
or registration of transfer of any Receipts or the delivery of any Underlying
Securities until such proof or other information is filed or such certificates
are executed or such representations and warranties made.
(8) CHARGES OF TRUSTEE. The following charges shall be incurred by any party
------------------
depositing or withdrawing Securities or by any party Surrendering Receipts or to
whom Receipts are Delivered or any Owner, as applicable: (1) taxes and charges
and other fees payable in respect of the Underlying Securities assessed by
third-party custodians, depositories, transfer agents, and other service
providers in the ordinary course of their respective businesses (whether in
connection with the deposit of Securities or withdrawal of Underlying Securities
or otherwise), (2) a fee of $10 or less per 100 Receipts for the execution and
Delivery of Receipts pursuant to Section 2.5 of the Standard Terms, and the
Surrender of Receipts pursuant to Section 2.7 Standard Terms, and (3) a fee
which shall accrue on the first day of each calendar quarter at a rate of $.02
or less per Receipt per quarter for the Trustee's services as such under the
Depositary Trust Agreement (which fee shall be assessed against Owners of
B-6
<PAGE>
record as of the date or dates set by the Trustee in accordance with
Section 4.5 of the Standard Terms and shall be collected at the Trustee's
discretion by deducting such fee from one or more cash dividends or other
cash distributions); provided, however, that with respect to the aggregate
-------- -------
fee accrued in any calendar year under this clause (3) with respect to each
Receipt, the Trustee will waive that portion which exceeds the total cash
dividends and other cash distributions the record date for which falls in
such calendar year and payable with respect to such Receipt.
(9) TITLE TO RECEIPTS.
-----------------
It is a condition of the Receipts and every successive Owner of the
Receipts by accepting or holding a certificate for Receipts consents and agrees,
that title to such certificate (and the Receipts evidenced thereby) , when
properly endorsed or accompanied by proper instruments of transfer, is
transferable by delivery with the same effect as in the case of a negotiable
instrument under the laws of New York; provided, however, that the Trustee,
-------- -------
notwithstanding any notice to the contrary, may treat the person in whose name
Receipts are registered on the books of the Trustee as the absolute owner
thereof for the purpose of determining the person entitled to distribution or
dividends or other distributions or to any notice provided for in the Depositary
Trust Agreement and for all other purposes.
(10) VALIDITY OF RECEIPTS.
--------------------
Receipts shall not be entitled to any benefits under the Depositary Trust
Agreement or be valid or obligatory for any purpose, unless a certificate
evidencing such Receipts shall have been executed by the Trustee by the manual
or facsimile signature of a duly authorized signatory of the Trustee and, if a
Registrar for the Receipts shall have been appointed, countersigned by the
manual or facsimile signature of a duly authorized officer of the Registrar.
(11) REPORTS; INSPECTION OF TRANSFER BOOKS.
-------------------------------------
The issuer of each class of Securities is subject to the periodic reporting
requirements of the Securities Exchange Act of 1934 and, accordingly, files
certain reports with the Securities and Exchange Commission (herein called the
"Commission"). Such reports will be available for inspection and copying at the
public reference facilities maintained by the Commission located at 450 Fifth
Street, NW, Washington, DC 20549.
The Trustee shall, to the extent lawful, forward to Owners, any reports
and communications, including any proxy statement or other soliciting material,
received from a Securities Issuer which are received by the Trustee as the
holder of the Underlying Securities, unless such reports and communications have
been forwarded directly to Owners by such Securities Issuer.
B-7
<PAGE>
The Trustee shall keep books for the registration of Receipts and transfers
of Receipts which at all reasonable times shall be open for inspection by the
Owners.
(12) DIVIDENDS AND DISTRIBUTIONS.
---------------------------
Whenever the Trustee shall receive any cash dividend or other cash
distribution on any Underlying Securities, the Trustee shall, subject to the
Depositary Trust Agreement, distribute the amount thus received (net of the fees
of the Trustee as provided in the Depositary Trust Agreement, if applicable) to
the Owners of Receipts entitled thereto; provided, however, that in the event
-------- -------
that the respective Securities Issuer or the Trustee shall be required to
withhold and does withhold from such cash dividend or such other cash
distribution in respect of any Underlying Securities an amount on account of
taxes, the amount distributed to the Owners of the Receipts representing such
Underlying Securities shall be reduced accordingly.
Subject to the provisions of Sections 4.8 and 5.6 of the Standard Terms,
whenever the Trustee shall receive any distribution other than a distribution
described in Sections 4.1, 4.3 or 4.4 of the Standard Terms or a
distribution which would otherwise be distributed under the Depositary Trust
Agreement except that the Trustee deems such distribution not to be lawful and
feasiable, the Trustee shall, subject to Section 4.10 of the Standard Terms,
cause the securities or property received by it to be distributed to the Owners
of Receipts entitled thereto, in any manner that the Trustee may deem equitable
and practicable for accomplishing such distribution; provided, however, that if
-------- -------
in the opinion of the Trustee such distribution cannot be made proportionately
among the Owners of Receipts entitled thereto, or if for any other reason
(including, but not limited to, any requirement that a Securities Issuer or the
Trustee withhold an amount on account of taxes or other governmental charges or
that such securities must be registered under the Securities Act of 1933 in
order to be distributed to Owners) the Trustee deems such distribution not to be
feasible, the Trustee shall adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including, but not
limited to, the public or private sale of the securities or property thus
received, or any part thereof, and the net proceeds of such sale (net of the
fees of the Trustee as provided in Section 5.6 of the Standard Terms) shall be
distributed by the Trustee to the Owners entitled thereto as in the case of a
distribution received in cash.
If any distribution upon any Underlying Securities consists of a dividend
in, or free distribution of, Securities, the Trustee shall, to the extent
lawful and feasible, retain such Securities under the Depositary Trust
Agreement, and, in such case, the (i) the amount of such Securities so retained
in respect of each Receipt shall be added to the classes and quantities of
securities which must be deposited for issuance of Receipts and (ii) the
number of Receipts in an Issuance Denomination may be increased
B-8
<PAGE>
or decreased by the Trustee to the lowest multiple of 100 Receipts such that no
fractional shares are thereby represented in such Issuance Denomination.
In the event that the Trustee determines that any distribution in property
(including Securities and rights to subscribe therefor) is subject to any tax or
other charge which the Trustee is obligated to withhold, notwithstanding
anything to the contrary in the Standard Terms or the applicable Depositary
Trust Agreement, the Trustee may by public or private sale dispose of all or a
portion of such property (including Securities and rights to subscribe therefor)
in such amounts and in such manner as the Trustee deems necessary and
practicable to pay any such taxes or charges and the Trustee shall distribute
the net proceeds or any such sale after deduction of such taxes or charges to
the Owners entitled thereto.
(13) RIGHTS OFFERINGS.
----------------
(a) If a Securities Issuer offers or cause to be offered to the holders of
any Underlying Securities any rights to subscribe for additional Securities or
other securities, the Trustee shall have discretion in accordance with Section
4.4 of the Standard Terms as to the procedure to be followed in making such
rights available to any Owners or in disposing of such rights on behalf of
Owners and making the net proceeds available to Owners or, if by the terms of
such rights offering or for any other reason (including the absence of an
effective registration statement covering the distribution of securities
underlying the rights), the Depositary may not make such rights available to any
Owners or dispose of such rights and make the net proceeds available to Owners,
then the Trustee shall allow the rights to lapse.
(b) The Trustee will not offer rights to Owners unless both the rights and
the securities to which such rights relate are either exempt from registration
under the Securities Act of 1933 with respect to a distribution to all Owners or
are registered under the provisions of such Act.
(c) The Trustee shall not be responsible for any failure to determine that
it may be lawful or feasible to make such rights available to Owners in general
or any Owner in particular.
(14) RECORD DATES.
------------
Whenever any cash dividend or other cash distribution shall become payable
or any distribution other than cash shall be made, or whenever the Trustee
receives notice of a meeting of or solicitation of proxies from holders of any
Underlying Securities, or whenever a fee shall be changed by the Trustee under
Section 5.6 of the Standard Terms, or whenever for any reason there is a
reconstitution or other event under the Depositary Trust Agreement that causes a
change in the composition of the Securities which must be
B-9
<PAGE>
deposited for issuance of Receipts, or whenever the Trustee shall find it
necessary or convenient in respect of any matter, the Trustee shall fix a record
date (a) for the determination of the Owners who shall be (i) entitled to
receive such dividend, distribution or rights or the net proceeds of the sale
thereof or (ii) entitled to give instructions for the exercise of voting rights
at any such meeting or solicitation, or (iii) required to pay such fee, or (b)
on or after which each Receipt will represent such changed group of Securities,
subject to the provisions of the Depositary Trust Agreement. In the case of
subsections (a)(i) and (a)(ii) of this Article (13), the Trustee shall use its
reasonable efforts to ensure that, to the extent practicable, the record date
set under the Depositary Trust Agreement will be the same as the record date set
by the Securities Issuer.
(15) VOTING OF UNDERLYING SECURITIES.
-------------------------------
Upon receipt by the Trustee or its appointed agent of notice of any meeting
of, or solicitation of proxies from, holders of Underlying Securities, the
Trustee shall, to the extent lawful, mail to the Owners a notice which shall
contain (a) such information as is contained in such notice of meeting or
solicitation, (b) a statement that the Owners of Receipts as of the close of
business on a specified record date will be entitled, subject to applicable law
and the provisions of the corporate documents of the Securities Issuer, to
instruct the Trustee as to the exercise of the voting rights, if any, or giving
of proxies, as applicable, in respect of the amount of Underlying Securities
represented by their respective Receipts and (c) a statement as to the manner in
which such instructions may be given. Upon the written request of an Owner of a
Receipt on such record date, received on or before the date established by the
Trustee, the Trustee shall endeavor, insofar as practicable, to vote or cause to
be voted, or to give a proxy, as applicable, in respect of the amount of
Underlying Securities represented by such Receipt in accordance with the
instructions set forth in such request. The Trustee shall not vote or attempt
to exercise the right to vote that attaches to, or give a proxy with respect to,
Underlying Securities other than in accordance with such instructions.
(16) CHANGES AFFECTING UNDERLYING SECURITIES.
---------------------------------------
(a) In circumstances where the provisions of Sections 2.11 and 4.3 of the
Standard Terms do not apply, upon any change in nominal value, change in par
value, split-up, consolidation or any other reclassification of any Underlying
Securities, or upon any recapitalization, reorganization, merger or
consolidation or sale of assets affecting the issuer of any Underlying Security,
if the relevant Securities Issuer survives such event, the Trustee shall, to the
extent lawful and feasible, retain such Securities under the Depositary Trust
Agreement, and, in such case, the (A) the amount of such Securities so retained
in respect of each Receipt shall be added to the classes and quantities of
Securities which must be deposited for issuance of Receipts and (B) the number
of Receipts in an Issuance Denomination may be increased or decreased
B-10
<PAGE>
by the Trustee to the lowest multiple of 100 Receipts such that no fractional
shares are thereby represented in such Issuance Denomination.
(b) Securities of any class which are surrendered by the Trustee in
connection with any such conversion or exchange shall, effective on the date of
such surrender, no longer be part of the securities which must be deposited for
issuance of Receipts. In any such case, or in the case of an event to which
Section 2.11 of the Standard Terms applies, the Trustee may call for the
Surrender of outstanding certificates evidencing Receipts to be exchanged for
new certificates specifically describing any applicable change in the classes
and quantities of securities which must be deposited for issuance of
Receipts.
(17) LIABILITY OF THE INITIAL DEPOSITOR AND THE TRUSTEE.
--------------------------------------------------
Neither the Initial Depositor nor the Trustee nor any of their respective
directors, employees, agents or affiliates shall incur any liability to any
Owner or Beneficial Owner of any Receipt, if by reason of any provision of any
present or future law or regulation of the United States or any other country,
or of any governmental or regulatory authority or stock exchange, or by reason
of any act of God or war or other circumstances beyond its control, the Initial
Depositor or the Trustee shall be prevented or forbidden from, or be subject to
any civil or criminal penalty on account of, doing or performing any act or
thing which by the terms of the Standard Terms or the applicable Depositary
Trust Agreement it is provided shall be done or performed; nor shall the Initial
Depositor or the Trustee incur any liability to any Owner or Beneficial Owner of
any Receipt by reason of any non-performance or delay, caused as aforesaid, in
the performance of any act or thing which by the terms of the Standard Terms or
the applicable Depositary Trust Agreement it is provided shall or may be done or
performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in the Standard Terms or the applicable Depositary Trust
Agreement. Where, by the terms of an offering or distribution to which
Sections 2.11, 4.2 or 4.4 of the Standard Terms applies, or for any
other reason, it is not lawful and feasible to make such distribution or
offering available to Owners, and the Trustee may not dispose of such
distribution or offering on behalf of such Owners and make the net proceeds
available to such Owners, then the Trustee shall not make such distribution or
offering available to Owners and shall allow any rights, if applicable, to
lapse. The Trustee shall not be subject to any liability with respect to the
validity or worth of the Underlying Securities. Neither the Initial Depositor
nor the Trustee shall be under any obligation to prosecute any action, suit or
other proceeding in respect of any Underlying Securities or in respect of the
Receipts. Neither the Initial Depositor nor the Trustee shall be liable for any
action or non-action by it in reliance upon the advice of or information
from legal counsel, accountants, any person presenting Securities for deposit,
any Owner or Beneficial Owner, or any other person believed by it in good faith
to be competent to give such advice or information.
B-11
<PAGE>
The Trustee shall not be liable for any acts or omissions made by a successor
depositary whether in connection with a previous act or omission of the Trustee
or in connection with any matter arising wholly after the resignation of the
Trustee, provided that in connection with the issue out of which such potential
liability arises the Trustee performed its obligations without negligence or bad
faith while it acted as Trustee. The Trustee shall not be responsible for any
failure to carry out any instructions to vote any of the Underlying Securities,
or for the manner in which any such vote is cast or the effect of any such vote,
provided that any such action or non-action is without negligence or bad faith.
Except as specifically provided in Section 4.6 of the Standard Terms, the
Trustee shall have no obligation to monitor or to obtain any information
concerning the business or affairs of any Securities Issuer or to advise Owners
or Beneficial Owners of any event or condition affecting any Securities Issuer.
The Trustee shall have no obligation to comply with any direction or instruction
from any Owner or Beneficial Owner regarding Receipts except to the extent
specifically provided in the Standard Terms or any applicable Depositary Trust
Agreement. The Trustee shall be a fiduciary under the Standard Terms and the
applicable Depositary Trust Agreement; provided, however, that the fiduciary
duties and responsibilities and liabilities of the Trustee shall be limited by,
and shall be only those specifically set forth in, the Standard Terms and the
applicable Depositary Trust Agreement. No disclaimer of liability under the
Securities Act of 1933 is intended by any provision of the Depositary Trust
Agreement.
(18) RESIGNATION OR REMOVAL OF THE TRUSTEE.
-------------------------------------
(a) The Trustee may at any time resign as Trustee under the Depositary
Trust Agreement by written notice of its election so to do, delivered to the
Initial Depositor, and such resignation shall take effect upon the appointment
of a successor Trustee and its acceptance of such appointment.
(b) If at any time the Trustee is in material breach of its obligations
under the Depositary Trust Agreement and the Trustee fails to cure such breach
within 30 days after receipt by the Trustee of written notice from the Initial
Depositor or the Owners of 25% or more of the outstanding Receipts
specifying such default and requiring the Trustee to cure such default, the
Initial Depositor, acting on behalf of the Owners, may remove the Trustee by
written notice delivered to the Trustee, and such removal shall take effect upon
the appointment of the successor Trustee and its acceptance of such appointment.
(c) In case at any time the Trustee acting hereunder shall resign or be
removed, the Initial Depositor, acting on behalf of the Owners, shall use its
reasonable efforts to appoint a successor Trustee, which shall be a bank or
trust company having an office in the Borough of Manhattan, The City of New
York.
B-12
<PAGE>
(19) AMENDMENT.
---------
The Trustee and the Initial Depositor may amend any provisions of the
Depositary Trust Agreement without the consent of any Owner. Any amendment that
imposes or increases any fees or charges (other than taxes and other
charges, registration fees or other such expenses), or that otherwise
prejudices any substantial existing right of the Owners will not become
effective until 30 days after notice of such amendment is given to the Owners.
Every Owner and Beneficial Owner, at the time any amendment so becomes
effective, shall be deemed, by continuing to hold any Receipt or an interest
therein, to consent and agree to such amendment and to be bound by the
Depositary Trust Agreement as amended thereby. In no event shall any amendment
impair the right of the Owner of any Receipt to Surrender such Receipt and
receive therefor the Underlying Securities represented thereby, except in order
to comply with mandatory provisions of applicable law.
B-13
<PAGE>
(20) EARLY TERMINATION OF DEPOSITARY TRUST AGREEMENT.
-----------------------------------------------
(a) The Trust shall terminate by the Trustee mailing notice of such
termination to the Owners of all Receipts then outstanding at least 30 days
prior to the date set for termination if any of the following occurs:
(i) The Trustee is notified that the Receipts are delisted from a
national securities exchange and are not approved for listing on another
national securities exchange within 5 business days of their
delisting;
(ii) Owners of at least 75% of the outstanding Receipts notify the
Trustee that they elect to terminate the Trust; or
(iii) 60 days shall have expired after the Trustee shall have
delivered to the Initial Depositor and the Owners a written notice of its
election to resign and a successor trustee shall not have been appointed
and accepted its appointment.
(b) On and after the date of termination, the Owner of a Receipt will, upon
(a) Surrender of such Receipt at the Corporate Trust Office of the Trustee, (b)
payment of the fee of the Trustee for the Surrender of Receipts referred to in
Section 2.7 of the Standard Terms, and (c) payment of any applicable taxes or
charges, be entitled to Delivery, to him or upon his order, of the amount of
Underlying Securities evidenced by such Receipt. If any Receipts shall remain
outstanding after the date of termination, the Trustee thereafter shall
discontinue the registration of transfers of Receipts, shall suspend the
distribution of dividends or other distribution to the Owners thereof, and shall
not give any further notices or perform any further acts under these Standard
Terms or the applicable Depositary Trust Agreement, except that the Trustee
shall continue to collect dividends and other distributions pertaining to
Underlying Securities and hold the same uninvested and without liability for
interest, shall sell rights as provided in these Standard Terms or the
applicable Depositary Trust Agreement, and shall continue to deliver Underlying
Securities, together with any dividends or other distributions received with
respect thereto and the net proceeds of the sale of any rights or other
property, in exchange for Receipts Surrendered to the Trustee (after deducting
or upon payment of, in each case, the fee of the Trustee set forth in 5.6 of the
Standard Terms for the Surrender of Receipts, any expenses for the account of
the Owner of such Receipts in accordance with the terms and conditions of the
Depositary Trust Agreement, and any applicable taxes or charges). At any time
after the expiration of one year following the date of termination, the Trustee
may sell the Underlying Securities then held hereunder and may thereafter hold
uninvested the net proceeds of any such sale, together with any other cash then
held by it hereunder, unsegregated and without liability for interest, for the
pro rata benefit of the Owners of Receipts which have not theretofore been
- --- ----
Surrendered, such Owners thereupon becoming general creditors of the Trustee
with respect to such net proceeds.
B-14
<PAGE>
After making such sale, the Trustee shall be discharged from all obligations
under these Standard Terms with respect to the Receipts and the applicable
Depositary Trust Agreement, except to account for such net proceeds and other
cash (after deducting, in each case, the fee of the Trustee for the Surrender of
Receipts, any fees of the Trustee due and owing from the Owner of such Receipts
pursuant to Section 5.6 of the Standard Terms, any expenses for the account of
the Owner of such Receipts in accordance with the terms and conditions of the
Depositary Trust Agreement, and any applicable taxes or charges). Upon the
termination of the applicable Depositary Trust Agreement, the Initial Depositor
shall be discharged from all obligations under such Depositary Trust Agreement
except for its obligations to the Trustee under Section 5.5 of the Standard
Terms.
B-15
<PAGE>
EXHIBIT 5.1
February 10, 2000
Merrill Lynch, Pierce, Fenner & Smith Incorporated
250 Vesey Street
New York, New York 10281
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Internet Architecture HOLDRSSM Trust
Registration Statement on Form S-1
Registration No. 333-96061
-------------------------------------
Ladies and Gentlemen:
We are acting as counsel to Merrill Lynch, Pierce, Fenner & Smith
Incorporated, a Delaware corporation (the "Initial Depositor"), and as special
counsel to the Internet Architecture HOLDRSSM Trust (the "Trust") in connection
with the preparation and filing with the Securities and Exchange Commission
(the "Commission") of the Registration Statement on Form S-1, as amended from
time to time and filed by the Initial Depositor (the "Registration Statement"),
of which the prospectus forms a part (the "Prospectus"), for the registration
under the Securities Act of 1933, as amended (the "Securities Act"), of
1,000,000,000 Internet Architecture HOLDRSSM (the "HOLDRSSM") to be issued by
the Trust.
In this capacity, we have examined (a) a signed copy of the Registration
Statement and (b) a copy of the depositary trust agreement between The Bank of
New York, as trustee (the "Trustee"), and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as initial depositor (the "Depositary Trust Agreement"). We have
also examined originals, or copies certified or otherwise identified to our
satisfaction, of such other corporate records of the Initial Depositor, such
other certificates and advice of public officials and of officers of the
Initial Depositor, and such other agreements, instruments and documents as we
have deemed necessary as a basis for the opinions expressed below. In such
examination we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, and the conformity with the
originals of all documents submitted to us as copies. As to questions of fact
material to such opinions, we have relied upon such certificates and advice.
The opinions set forth below are also based upon the assumptions that: (i) the
Registration Statement, as finally amended (including any post-effective
amendments), has become effective under the Securities Act; (ii) the amount,
price, and other principal terms of the HOLDRSSM have been approved by the
Board of Directors of the Initial Depositor or an authorized designee thereof;
(iii) the Depositary Trust Agreement will be duly authorized, executed and
delivered by the parties thereto substantially in the form filed as an exhibit
to the Registration Statement; and (iv) the HOLDRSSM will be duly authenticated
by the Trustee in accordance with the Depositary Trust Agreement and sold and
delivered by the Initial Depositor against payment therefor.
Our opinions expressed herein are limited to the laws of the State of New
York, and the Federal law of the United States, and we do not express any
opinion herein concerning any other law.
Based upon and subject to the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that the
HOLDRSSM will be legally issued, fully paid and nonassessable, will be legal,
valid and binding obligations of the Trust, enforceable against the Trust in
accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar
<PAGE>
laws affecting the enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in equity).
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Prospectus. In giving this consent, we do not thereby concede
that we come within the category of persons whose consent is required by the
Securities Act or the General Rules and Regulations promulgated thereunder.
Very truly yours,
/s/ Shearman & Sterling
<PAGE>
EXHIBIT 8.1
February 10, 2000
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower--4th Floor
New York, New York 10281
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Internet Architecture HOLDRSSM Trust
Registration Statement on Form S-1
Registration No. 333-96061
-------------------------------------
Ladies and Gentlemen:
We have acted as special Tax Counsel to Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), as Initial Depositor, and the Internet
Architecture HOLDRSSM Trust in connection with the preparation and filing of a
Prospectus and Registration Statement on Form S-1, No. 333-92163, as amended
from time to time and filed by the Initial Depositor (the "Registration
Statement"), of which the prospectus forms a part (the "Prospectus"), for the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of 1,000,000,000 Internet Architecture HOLDRSSM (the "HOLDRSSM") to be
issued by the Trust. Capitalized terms used herein have the meaning ascribed to
them in the Prospectus. The HOLDRSSM are being issued pursuant to the
Depositary Trust Agreement between the Initial Depositor, The Bank of New York,
as trustee (in such capacity, the "Trustee"), other depositors and owners of
HOLDRSSM (the "Trust Agreement").
In connection with the preparation of this opinion, we have examined and
relied on such documents as we have deemed appropriate, including, inter alia,
(i) the Trust Agreement and (ii) the Prospectus. We have made such
investigations of law as we have deemed appropriate as a basis for the opinion
expressed below.
Based on the foregoing, it is our opinion that the Trust will provide for
flow through tax consequences since it will be treated as a grantor trust or
custodial arrangement for United States Federal income tax purposes. Moreover,
the discussion set forth under the caption "Federal Income Tax Consequences" in
the Prospectus represents our opinion of and, subject to the limitations
contained therein, accurately describes, the principal United States Federal
income tax consequences to a holder of HOLDRSSM receipts. The foregoing opinion
is based upon provisions of the Internal Revenue Code of 1986, as amended,
Treasury regulations and administration and judicial interpretations as of the
date hereof (all of which are subject to change, possibly with retroactive
effect, or different interpretations).
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the caption "Legal Matters" in
the Prospectus.
Very truly yours,
/s/ Shearman & Sterling
