<PAGE>
As filed with the Securities and Exchange Commission on January 5, 2001
Registration No. 333-52022
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
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)
---------------
Oil Service HOLDRS SM Trust
yet-to-be formed
[Issuer with respect to the receipts]
<TABLE>
<CAPTION>
<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>
<CAPTION>
<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
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Title of Each Class of Proposed Maximum Proposed Maximum
Securities to Be Amount to Be Offering Price Aggregate Offering Amount of
Registered Registered Per Receipt(1) Price(1) Registration Fee(2)(3)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Oil Service HOLDRS..... 1,000,000,000 $100 $349,750,000 $87,438
receipts
</TABLE>
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act. 2,500,000 receipts are
estimated to be offered in the initial offering at $100 per receipt and
997,500,000 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
December 15, 2000, $2,640 of the Registration Fee.
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.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<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 January 5, 2001
PROSPECTUS
[LOGO OF HOLDRS]
1,000,000,000 Depositary Receipts
Oil Service HOLDRS SM Trust
The Oil Service HOLDRS SM Trust will issue Depositary Receipts called Oil
Service HOLDRS SM representing your undivided beneficial ownership in the
common stock of a group of specified companies that, among other things,
provide drilling, well-site management and related products and services for
the oil service industry. The Bank of New York will be the trustee. You only
may acquire, hold or transfer Oil Service HOLDRS in a round-lot amount of 100
Oil Service HOLDRS or round-lot multiples. Oil Service HOLDRS are separate from
the underlying common stock that are represented by the Oil Service HOLDRS. For
a list of the names and the number of shares of the companies that make up a
Oil Service HOLDR, see "Highlights of Oil Service HOLDRS--The Oil Service
HOLDRS" starting on page 9. The trust will issue the additional Oil Service
HOLDRS on a continuous basis.
Investing in Oil Service HOLDRS involves significant risks. See "Risk
Factors" starting on page 4.
The initial public offering price for a round-lot of 100 Oil Service HOLDRS
will equal the sum of the closing market price on the primary U.S. trading
market on the pricing date for each deposited share multiplied by the share
amount specified in this prospectus, plus an underwriting fee.
Oil Service 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 Oil Service
HOLDRS. Application has been made to list the Oil Service HOLDRS on the
American Stock Exchange under the symbol "OIH".
-----------
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 Oil Service HOLDR........................ 2%
</TABLE>
-----
* Includes underwriting fee.
For purchases of Oil Service HOLDRS in excess of Oil Service HOLDRS,
the underwriting fee will be %.
-----------
Merrill Lynch & Co.
<TABLE>
<S> <C> <C>
Robert W. Baird & Co. First Union Securities, Inc.
Legg Mason Wood Walker Morgan Keegan & Company, Inc.
Incorporated
</TABLE>
Raymond James & Associates, Inc.
Sutro & Co. Incorporated
Tucker Anthony Capital Markets
The date of this prospectus is , 2001.
"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 Oil Service HOLDRS........................................... 9
The Trust.................................................................. 16
Description of Oil Service HOLDRS.......................................... 16
Description of The Underlying Securities................................... 17
Description of The Depositary Trust Agreement.............................. 19
Federal Income Tax Consequences............................................ 23
Erisa Considerations....................................................... 26
Plan of Distribution....................................................... 26
Legal Matters.............................................................. 27
Where You Can Find More Information........................................ 27
</TABLE>
---------------
This prospectus contains information you should consider when making your
investment decision. With respect to information about Oil Service 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 Oil Service HOLDRS in any
jurisdiction where the offer or sale is not permitted.
The Oil Service HOLDRS are not registered for public sale outside of the
United States. Non-U.S. receipt holders should refer to "Federal Income Tax
Consequences--Non-U.S. receipt holders" and we recommend that non-U.S. receipt
holders consult their tax advisors regarding U.S. withholding and other taxes
which may apply to ownership of the Oil Service HOLDRS or of the underlying
securities through an investment in the Oil Service HOLDRS.
2
<PAGE>
SUMMARY
The Oil Service HOLDRS Trust will be formed under the depositary trust
agreement, dated as of , 2001 among The Bank of New York, as trustee,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, other depositors and the
owners of the Oil Service HOLDRS. The trust is not a registered investment
company under the Investment Company Act of 1940.
The trust will hold shares of common stock issued by 20 specified
companies that, among other things, provide drilling, well-site management and
related products and services for oil service industry. The number of shares of
each company's common stock held by the trust with respect to each round-lot of
Oil Service HOLDRS is specified under "Highlights of Oil Service HOLDRS--The
Oil Service HOLDRS." This group of common stocks is collectively referred to in
this prospectus as the securities or the underlying securities.
The trust will issue Oil Service HOLDRS that represent your undivided
beneficial ownership interest in the securities held by the trust on your
behalf. The Oil Service HOLDRS are separate from the underlying securities that
are represented by the Oil Service HOLDRS.
3
<PAGE>
RISK FACTORS
An investment in Oil Service HOLDRS involves risks similar to investing
in each of the underlying securities outside of the Oil Service HOLDRS.
General Risk Factors
. Loss of investment. Because the value of Oil Service HOLDRS
directly relates to the value of the underlying securities, you
may lose a substantial portion of your investment in the Oil
Service HOLDRS if the underlying securities decline in value.
. Discount trading price. Oil Service HOLDRS may trade at a discount
to the aggregate value of the underlying securities.
. Not necessarily representative of the oil service industry. While
the underlying securities are securities of companies generally
considered to be involved in various aspects of the oil service
industry, the underlying securities and the Oil Service HOLDRS may
not necessarily follow the price movements of the entire oil
service industry generally. If the underlying securities decline
in value, your investment in the Oil Service HOLDRS will decline
in value even if the market prices of the securities of companies
in the oil service industry generally increase in value.
Furthermore, after the initial deposit, one or more of the issuers
of the underlying securities may no longer be involved in the oil
service industry. In this case, the Oil Service HOLDRS may no
longer consist of securities issued only by companies involved in
the oil service industry.
. Not necessarily comprised only of oil service companies. As a
result of distributions of securities by companies included in the
Oil Service HOLDRS or other corporate events, such as mergers,
securities of companies that are not currently included in the Oil
Service HOLDRS and that are not involved in the oil service
industry may be included in the Oil Service HOLDRS. The securities
of a new company will only be distributed from the Oil Service
HOLDRS if the securities have a different Standard & Poor's
Corporation sector classification than any of the underlying
issuers included in Oil Service HOLDRS at the time of the
distribution or the corporate event or if the securities are not
listed for trading on a U.S. national securities exchange or
through Nasdaq NMS. As there are only 11 broadly defined sector
classifications, the use of Standard & Poor's sector
classifications to determine whether a new company will be
included in the Oil Service HOLDRS provides no assurance that each
new company included in the Oil Service HOLDRS will be involved in
the oil service industry. Currently, the underlying securities
included in the Oil Service HOLDRS are represented in the Energy
sector. As each Standard & Poor's sector classification is defined
so broadly, the securities of a new company could have the same
sector classification as a company currently included in the Oil
Service HOLDRS yet not be involved in the oil service industry. In
addition, the sector classifications of securities included in the
Oil Service HOLDRS may change over time if the companies that
issued these securities change their focus of operations or if
Standard & Poor's alters the criteria it uses to determine sector
classifications, or both. Therefore, additional sector
classifications may be represented in the Oil Service HOLDRS which
may also result in the inclusion in the Oil Service HOLDRS of the
securities of a new company that is not involved in the oil
service industry.
. No investigation of underlying securities. The underlying
securities included in the Oil Service HOLDRS were selected by
Merrill Lynch, Pierce, Fenner & Smith Incorporated based on the
market capitalization of issuers and the market liquidity of
securities in the oil service industry, without regard for the
value, price performance, volatility or investment merit of the
underlying securities. Consequently, the Oil Service HOLDRS Trust,
the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
and each of their respective affiliates,
4
<PAGE>
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 respective affiliates.
. Concentration of investment. As a result of market fluctuations
and/or reconstitution events, an investment in Oil Service HOLDRS
may represent a more concentrated investment in one or more of the
underlying securities or one or more industries. A concentrated
investment will reduce the diversification of the Oil Service
HOLDRS and increase your exposure to the risks of concentrated
investments.
. Conflicting investment choices. In order to sell one or more of
the underlying securities individually or to participate in a
tender offer relating to one or more of the underlying securities,
you will be required to cancel your Oil Service HOLDRS and receive
delivery of each of the underlying securities. The cancellation of
your Oil Service HOLDRS will allow you to sell individual
underlying securities or to deliver individual underlying
securities in a tender offer. The cancellation of Oil Service
HOLDRS will involve payment of a cancellation fee to the trustee.
. Trading halts. Trading in Oil Service HOLDRS on the American Stock
Exchange may be halted if trading in one or more of the underlying
securities is halted. Trading in Oil Service HOLDRS may be halted
even if trading continues in some or all of the underlying
securities. If trading is halted in the Oil Service HOLDRS, you
will not be able to trade Oil Service HOLDRS and you will only be
able to trade the underlying securities if you cancel your Oil
Service HOLDRS and receive each of the underlying securities.
. Delisting from the American Stock Exchange. If the number of
companies whose securities are held in the trust falls below nine,
the American Stock Exchange may consider delisting the Oil Service
HOLDRS. If the Oil Service HOLDRS are delisted by the American
Stock Exchange, a termination event will result unless the Oil
Service HOLDRS are listed for trading on another U.S. national
securities exchange or through Nasdaq NMS within five business
days from the date the Oil Service HOLDRS are delisted.
. Possible conflicts of interest. Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as initial depositor, has selected the
underlying securities and may face possible conflicts of interest
in connection with its activities. For example, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and its affiliates,
collectively referred to as Merrill Lynch, may engage in
investment banking and other activities, may provide services to
issuers of the underlying securities in connection with its
business, or may make purchases or sales, including establishing
long or short positions, in the underlying securities for its own
account. In addition, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as initial depositor, will purchase, in the
secondary market, the underlying securities that will be deposited
into the trust. Merrill Lynch may make these purchases before the
deposit into the trust, or it may borrow securities for the
deposit and subsequently purchase the securities to repay to the
lenders the securities previously borrowed. In either event, the
purchases of the underlying securities will be made at various
prices. As the initial offering price for the Oil Service HOLDRS
will be based on the closing market price of each of the
underlying securities on the pricing date, Merrill Lynch may
recognize a gain on its purchases of the underlying securities.
Specifically, if the closing market price for the underlying
securities on the pricing date is higher than the price at which
Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial
depositor, purchases the underlying securities then it will
recognize a gain in connection with such purchases. Merrill Lynch
may recognize this gain on any of the underlying securities that
comprise the Oil Service HOLDRS or on all of the underlying
securities in the aggregate. The potential profit of Merrill Lynch
also is affected by any
5
<PAGE>
hedging activities that it may engage in while it purchases the
underlying securities in the secondary market for deposit into the
trust. All of these activities may result in conflicts of interest
with respect to the financial interest of Merrill Lynch, on the
one hand, and, on the other hand, the initial selection of the
underlying securities included in the Oil Service HOLDRS, Merrill
Lynch's activity in the secondary market in the underlying
securities, and the creation and cancellation of Oil Service
HOLDRS by Merrill Lynch.
. Temporary price increases in the underlying securities. Purchasing
activity in the secondary trading market associated with acquiring
the underlying securities for deposit into the trust may
temporarily increase the market price of the deposited shares,
which will result in a higher initial offering price for the Oil
Service HOLDRS. Large volumes of purchasing activity, which may
occur in connection with the issuance of Oil Service HOLDRS,
particularly in connection with the initial issuance of Oil
Service HOLDRS, could temporarily increase the market price of the
underlying securities, resulting in a higher price on that date.
This purchasing activity could create a temporary imbalance
between the supply and demand of the underlying securities,
thereby limiting the liquidity of the underlying securities due to
a temporary increased demand for underlying securities. Temporary
increases in the market price of the underlying securities may
also occur as a result of the purchasing activity of other market
participants. Other market participants may attempt to benefit
from increases in the market price of the underlying securities
that may occur as a result of the increased purchasing activity in
the underlying securities resulting from the issuance of the Oil
Service HOLDRS. Consequently, prices for the underlying securities
may decline immediately after the pricing date. If the trading
prices for the underlying securities decline, the trading price of
Oil Service HOLDRS will also decline.
Risk Factors Specific to Companies Involved in the Oil Service HOLDRS
. Downturns in the oil and gas industry have had, and may in the
future have, a negative effect on the sales and profitability of
oil service companies. Oil service companies depend upon the level
of activity in oil and gas exploration and production for their
revenues. Negative short-term and long-term trends in oil and gas
prices affect the level of this activity. Factors that contribute
to the volatility of oil and gas prices include the following:
. the ability of the Organization of Petroleum Exporting
Countries (OPEC) to set and maintain production levels and
pricing;
. the level of production in non-OPEC countries;
. the demand for oil and gas, which is negatively impacted by
economic downturns;
. the policies of various governments regarding exploration and
development of oil and gas reserves;
. advances in exploration and development technology; and
. the political environment of oil-producing regions.
. The oil service industry is exposed to significant and numerous
operating hazards. Oil service companies' operations are subject
to hazards inherent in the oil and gas industry, such as fire,
explosion, blowouts, loss of well control and oil spills. The
occurrence of any of these events can cause personal injury or
loss of life, damage to property, equipment, the environment and
marine life, and delays to or suspension of operations. Operations
also may be suspended because of machinery breakdowns, abnormal
drilling conditions, failure of subcontractors to perform or
supply goods or services and personnel shortages. In addition, oil
service companies with offshore drilling operations are subject to
perils peculiar to marine operations, including capsizing of
drilling rigs or other equipment, grounding, collision and
6
<PAGE>
loss or damage from severe weather; and insurance and
indemnification agreements may not provide complete protection
against these losses.
. Oil service companies operate in a highly competitive and cyclical
industry, with intense price competition. The oil service industry
is highly competitive with numerous industry participants, none of
which has a dominant market share at the present time. Drilling
contracts are traditionally awarded on a competitive bid process.
Intense price competition is often the primary factor in
determining which qualified contractor is awarded a job. In
addition, the oil service industry has historically been extremely
cyclical. During periods of slower growth or depressed market
conditions, oil service companies compete more aggressively for
contracts that result in increased contractual liabilities and
lower revenues.
. The revenues of oil service companies may be negatively affected
by contract termination and renegotiation. Many of the companies
included in the Oil Service HOLDRS provide drilling services. In
the oil service industry, it is customary for contracts to provide
for either automatic termination or termination at the option of
the customer if the drilling unit is destroyed or lost or if
drilling operations are suspended for a specified period of time
as a result of events beyond the control of either party or
because of breakdown of equipment. In periods of depressed market
conditions, the customers of oil service companies may not honor
the terms of existing contracts and may terminate contracts or
seek to renegotiate contract rates and terms to reduce their
obligations.
. The international operations of the companies included in the Oil
Service HOLDRS 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. The companies included in the
Oil Service HOLDRS have international operations that are
essential parts of their businesses. The risks of international
business that these companies are exposed to include the
following:
. volatility in general economic, social and political
conditions;
. differing tax rates, tariffs, exchange controls or other
similar restrictions;
. inability to repatriate income or capital;
. 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;
. reduction in the number or capacity of personnel in
international markets; and
. seizure of equipment.
. Oil service companies are subject to extensive federal, state,
local and foreign regulatory laws, rules and regulations. Oil
service companies are subject to extensive laws and regulations in
various countries. The adoption of laws and regulations curtailing
exploration and development drilling for oil and gas for economic,
environmental and other policy reasons may adversely affect the
operations of oil service companies' by limiting available
drilling and other opportunities in the oil service industry. Oil
service companies may also be required to make significant capital
expenditures to comply with governmental laws and regulations. It
is also possible that these laws and regulations may significantly
add to operating costs. Failure to comply with these laws and
regulations could subject oil service companies to substantial
civil and criminal penalties as well as potential court
injunctions.
. Compliance with or breach of environmental laws can be costly for
oil service companies. The operations of oil service companies are
subject to regulations controlling the discharge of materials into
the environment, requiring removal and cleanup of materials
7
<PAGE>
that may harm the environment or otherwise relating to the
protection of the environment. Laws and regulations protecting the
environment have tended to become more stringent in recent years,
and may in some cases render a company liable for environmental
damage without regard to negligence of fault on the part of that
company. These laws and regulations may expose oil service
companies to liability for the conduct of or conditions caused by
others or for acts that were in compliance with all applicable
laws at the time they were performed. The application of these
requirements or the adoption of new requirements could have a
material adverse effect on the operating results and financial
condition of oil service companies included in the Oil Service
HOLDRS.
8
<PAGE>
HIGHLIGHTS OF OIL SERVICE HOLDRS
This discussion highlights information regarding Oil Service HOLDRS. We
present certain information more fully in the rest of this prospectus. You
should read the entire prospectus carefully before you purchase Oil Service
HOLDRS.
Issuer....................... Oil Service HOLDRS Trust.
The trust.................... The Oil Service HOLDRS Trust will be formed
under the depositary trust agreement, dated as
of , 2001 among The Bank of New York, as
trustee, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, other depositors and the owners
of the Oil Service 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 Oil Service Oil ServiceHOLDRS are designed to achieve the
HOLDRS.................. following:
Diversification. Oil Service HOLDRS are
designed to allow you to diversify your
investments in the oil service industry through
a single, exchange-listed instrument
representing your undivided beneficial
ownership of the underlying securities.
Flexibility. The beneficial owners of Oil
Service HOLDRS have undivided beneficial
ownership interests in each of the underlying
securities represented by the Oil Service
HOLDRS, and can cancel their Oil Service HOLDRS
to receive each of the underlying securities
represented by the Oil Service HOLDRS.
Transaction costs. The expenses associated with
buying and selling Oil Service HOLDRS in the
secondary market are expected to be less than
separately buying and selling each of the
underlying securities in a traditional
brokerage account with transaction-based
charges.
Trust assets................. The trust will hold securities issued by
specified companies in the oil service
industry. The trust's assets may increase or
decrease as a result of in-kind deposits and
withdrawals of the underlying securities during
the life of the trust.
The Oil Service HOLDRS....... The trust will issue Oil Service HOLDRS that
represent your undivided beneficial ownership
interest in the shares of U.S.-traded
securities held by the trust on your behalf.
The Oil Service HOLDRS themselves are separate
from the underlying securities that are
represented by the Oil Service HOLDRS.
The specific share amounts for each round-lot
of 100 Oil Service HOLDRS will be determined on
the pricing date so that the initial issue
price will be approximately $90-$100 per Oil
Service HOLDR and the initial weightings of
each underlying security included in the Oil
Service HOLDRS approximates the relative
9
<PAGE>
market capitalizations of the specified
companies (based on the market capitalizations
of the underlying securities on the trading
date immediately preceding the pricing date),
subject to a maximum weight of 10%. For
purposes of this preliminary prospectus the
indicative share amounts and indicative
weightings of each underlying security, based
on market capitalizations as of January 3, 2001
are set forth in the table below. However, such
share amounts and weightings may change during
the period between January 3, 2001 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.
The following table provides:
. the names of the 20 issuers of the
underlying securities represented by the Oil
Service HOLDRS,
. stock ticker symbols,
. indicative share amounts represented by a
round-lot of 100 Oil Service HOLDRS as of
January 3, 2001,
. indicative weightings as of January 3, 2001,
and
. the principal U.S. market on which the
underlying securities are traded.
<TABLE>
<CAPTION>
Indicative Primary U.S.
Share Indicative Trading
Name of Company Ticker Amounts Weightings Market
----------------------- ------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
Halliburton Company HAL 25 9.97% NYSE
Baker Hughes
Incorporated BHI 22 9.93% NYSE
Schlumberger N.V. SLB 11 9.64% NYSE
Transocean Sedco Forex
Inc.* RIG 18 9.02% NYSE
Nabors Industries, Inc. NBR 13 7.87% AMEX
BJ Services Company BJS 7 5.15% NYSE
Noble Drilling
Corporation NE 11 4.87% NYSE
Diamond Offshore
Drilling, Inc. DO 11 4.57% NYSE
Global Marine Inc. GLM 15 4.45% NYSE
R&B Falcon Corporation* FLC 18 4.40% NYSE
Weatherford
International, Inc. WFT 9 4.39% NYSE
ENSCO International
Incorporated ESV 12 4.28% NYSE
Santa Fe International
Corporation SDC 10 3.47% NYSE
Smith International,
Inc. SII 4 3.18% NYSE
National-Oilwell, Inc. NOI 7 2.82% NYSE
Hanover Compressor
Company HC 6 2.62% NYSE
Cooper Cameron
Corporation CAM 4 2.60% NYSE
Tidewater Inc. TDW 5 2.36% NYSE
Rowan Companies, Inc. RDC 8 2.31% NYSE
Grant Prideco, Inc. GRP 9 2.11% NYSE
</TABLE>
--------
* On August 19, 2000, Transocean Sedco Forex
Inc. and R&B Falcon Corporation entered into
a merger agreement. For further information,
please see the business descriptions for
Transocean and R&B Falcon in Annex A. If the
merger is completed prior to the pricing
date, the Oil Service HOLDRS will consist of
the securities of only 19 companies. For
further information, please see "--
Reconstitution Events".
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 Oil Service HOLDRS. These
companies are generally considered to be 20 of
the largest and most
10
<PAGE>
liquid companies with U.S.-traded securities
involved in the oil service industry, as
measured by market capitalization and trading
volume on December 12, 2000. The market
capitalization of a company is determined by
multiplying the market price of its common
stock by the number of its outstanding shares
of common stock.
The trust only will issue and cancel, and you
only may obtain, hold, trade or surrender Oil
Service HOLDRS in a round-lot of 100 Oil
Service HOLDRS and round-lot multiples. The
trust will only issue Oil Service HOLDRS upon
the deposit of the whole shares represented by
a round-lot of 100 Oil Service HOLDRS. In the
event that a fractional share comes to be
represented by a round-lot of Oil Service
HOLDRS, the trust may require a minimum of more
than one round-lot of 100 Oil Service HOLDRS
for an issuance so that the trust will always
receive whole share amounts for issuance of Oil
Service HOLDRS.
The number of outstanding Oil Service 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 Oil Service HOLDRS on a continuous
basis when an investor deposits the required
securities with the trustee.
Public offering price........
The initial public offering price for 100 Oil
Service HOLDRS will equal the sum of the
closing market price on the primary U.S.
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 Oil Service HOLDR.
Purchases....................
After the initial offering, you may acquire Oil
Service HOLDRS in two ways:
. through an in-kind deposit of the required
number of securities of the underlying
issuers with the trustee, or
. through a cash purchase in the secondary
trading market.
Underwriting fees............
If you purchase Oil Service HOLDRS in the
initial public offering, you will pay an
underwriting fee equal to:
. For purchases of Oil Service HOLDRS or
fewer, 2%.
. For purchases in excess of Oil Service
HOLDRS, %.
You will not be charged any issuance fee or
other sales commission in connection with
purchases of Oil Service HOLDRS made in the
initial public offering.
Issuance and cancellation
fees........................ After the initial offering, if you wish to
create Oil Service HOLDRS by delivering to the
trust the requisite securities represented by a
round-lot of 100 Oil Service HOLDRS, The Bank
of New York, as trustee, will charge you an
issuance fee of up to
11
<PAGE>
$10.00 for each round-lot of 100 Oil Service
HOLDRS. If you wish to cancel your Oil Service
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 Oil Service HOLDRS.
Commissions..................
If you choose to deposit underlying securities
in order to receive Oil Service 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.
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 Oil
Service 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 Oil
Service 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 Oil You have the right to withdraw the underlying
Service HOLDRS......... securities upon request by delivering a round-
lot or integral multiple of a round-lot of Oil
Service 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 Oil Service 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 Oil Service HOLDRS themselves will
not have voting rights.
Rights relating to the
underlying securities....... You have the right to:
. Receive all shareholder disclosure
materials, including annual and quarterly
reports, distributed by the issuers of the
underlying securities.
. Receive all proxy materials distributed by
the issuers of the underlying securities and
to instruct the trustee to vote the
underlying securities or attend shareholder
meetings yourself.
. Receive dividends and other distributions on
the underlying securities, if any are
declared and paid to the trustee by an
issuer of the underlying securities, net of
any applicable taxes or fees. However, any
distribution of securities by an issuer of
12
<PAGE>
underlying securities will be deposited into
the trust and will become part of the Oil
Service HOLDRS unless the distributed
securities are not listed for trading on a
U.S. national securities exchange or through
Nasdaq NMS or the distributed securities have
a different Standard & Poor's sector
classification than any of the underlying
securities represented in the Oil Service
HOLDRS at the time of the distribution. In
addition, if the issuer of underlying
securities offers rights to acquire
additional underlying securities or other
securities, the rights may be made available
to you, may be disposed of or may lapse.
If you wish to participate in a tender offer for
underlying securities, or any form of stock
repurchase program by an issuer of an underlying
security, you must obtain the underlying
securities by surrendering your Oil Service
HOLDRS and receiving all of your underlying
securities. For specific information about
obtaining your underlying securities, you should
read the discussion under the caption
"Description of the depositary trust agreement."
Reconstitution events.......
The depositary trust agreement provides for the
automatic distribution of underlying securities
from the Oil Service HOLDRS to you in the
following four circumstances:
A. If an issuer of underlying securities no
longer has a class of securities registered
under section 12 of the Securities Exchange
Act of 1934, then its securities will no
longer be an underlying security and the
trustee will distribute the shares of that
company to the owners of the Oil Service
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 Oil Service
HOLDRS.
C. If the underlying securities of an issuer
cease to be outstanding as a result of a
merger, consolidation or other corporate
combination, the trustee will distribute the
consideration paid by and received from the
acquiring company or the securities received
in exchange for the securities of the
underlying issuer whose securities cease to
be outstanding to the beneficial owners of
Oil Service HOLDRS only if the distributed
securities have a different Standard & Poor's
sector classification than any of the
underlying securities represented in the Oil
Service HOLDRS at the time of the
distribution or exchange or if the securities
received are not listed for trading on a U.S.
national securities exchange or through
Nasdaq NMS. In any other case, the additional
securities received will be deposited into
the trust.
13
<PAGE>
D. If an issuer's underlying securities are
delisted from trading on a U.S. national
securities exchange or through Nasdaq NMS
and are not listed for trading on another
U.S. national securities exchange or through
Nasdaq NMS within five business days from
the date the securities are delisted.
To the extent a distribution of underlying
securities from the Oil Service HOLDRS is
required as a result of a reconstitution event,
the trustee will deliver the underlying
security to you as promptly as practicable
after the date that the trustee has knowledge
of the occurrence of a reconstitution event.
In addition, securities of a new company will
be added to the Oil Service HOLDRS, as a result
of a distribution of securities by an
underlying issuer, where a corporate event
occurs, or where the securities of an
underlying issuer are exchanged for the
securities of another company, unless the
securities received have a Standard & Poor's
sector classification that is different from
the sector classification of any other security
then included in the Oil Service HOLDRS or are
not listed for trading on a U.S. national
securities exchange or through Nasdaq NMS.
It is anticipated, as a result of the broadly
defined Standard & Poor's sector
classifications, that most distributions or
exchanges of securities will result in the
inclusion of new securities in Oil Service
HOLDRS. The trustee will review the publicly
available information that identifies the
Standard & Poor's sector classifications of
securities to determine whether securities
received as a result of a distribution by an
underlying issuer or as consideration for
securities included in the Oil Service HOLDRS
will be distributed from the Oil Service HOLDRS
to you.
Standard & Poor's sector Standard & Poor's Corporation is an
classification......... independent source of market information that,
among other things, classifies the securities
of public companies into various sector
classifications based on its own criteria.
There are 11 Standard & Poor's sector
classifications and each class of publicly
traded securities of a company are given only
one sector classification. The securities
included in the Oil Service HOLDRS are
currently represented in the Energy sector. The
Standard & Poor's sector classifications of the
securities included in the Oil Service HOLDRS
may change over time if the companies that
issued these securities change their focus of
operations or if Standard & Poor's alters the
criteria it uses to determine sector
classifications, or both.
Termination events...........
A. The Oil Service HOLDRS are delisted from the
American Stock Exchange and are not listed
for trading on another U.S. national
securities exchange or through Nasdaq NMS
within five business days from the date the
Oil Service HOLDRS are delisted.
14
<PAGE>
B. The trustee resigns and no successor trustee
is appointed within 60 days from the date
the trustee provides notice to Merrill
Lynch, Pierce, Fenner & Smith Incorporated,
as initial depositor, of its intent to
resign.
C. 75% of beneficial owners of outstanding Oil
Service 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 Oil Service HOLDRS as directly owning
the underlying securities. The Oil Service
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 Oil
Service HOLDRS on the American Stock Exchange
under the symbol "OIH." Trading will take place
only in round-lots of 100 Oil Service HOLDRS
and round-lot multiples. A minimum of 150,000
Oil Service 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 Oil
Service HOLDRS. Bid and ask prices, however,
will be quoted per single Oil Service HOLDR.
Clearance and settlement.....
The trust will issue Oil Service HOLDRS in
book-entry form. Oil Service 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 Oil
Service HOLDRS."
15
<PAGE>
THE TRUST
General. This discussion highlights information about the Oil Service
HOLDRS trust. You should read this information, information about the
depositary trust agreement as well as the depositary trust agreement before you
purchase Oil Service HOLDRS. The material terms of the depositary trust
agreement are described in this prospectus under the heading "Description of
the depositary trust agreement."
The Oil Service HOLDRS trust. The trust will be formed pursuant to the
depositary trust agreement, dated as of , 2001. The Bank of New York will
be the trustee. The Oil Service HOLDRS Trust is not a registered investment
company under the Investment Company Act of 1940.
The Oil Service HOLDRS trust is intended to hold deposited shares for the
benefit of owners of Oil Service 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 OIL SERVICE HOLDRS
The trust will issue Oil Service 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 Oil Service HOLDRS on a continuous basis when an investor deposits
the requisite underlying securities with the trustee.
You may only acquire, hold, trade and surrender Oil Service HOLDRS in a
round-lot of 100 Oil Service HOLDRS and round-lot multiples. The trust will
only issue Oil Service HOLDRS upon the deposit of the whole shares of
underlying securities that are represented by a round-lot of 100 Oil Service
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 Oil Service HOLDRS, the
trust may require a minimum of more than one round-lot of 100 Oil Service
HOLDRS for an issuance so that the trust will always receive whole share
amounts for issuance of Oil Service HOLDRS.
Oil Service HOLDRS will represent your individual and undivided
beneficial ownership interest in the specified underlying securities. The 20
companies selected as part of this receipt program are listed above in the
section entitled "Highlights of Oil Service HOLDRS--The Oil Service HOLDRS."
Beneficial owners of Oil Service HOLDRS will have the same rights and
privileges as they would have if they beneficially owned the underlying
securities outside of the trust. These include the right of investors to
instruct the trustee to vote the securities, to receive dividends and other
distributions on the underlying securities, if any are declared and paid to the
trustee by an issuer of an underlying security, and the right to cancel Oil
Service HOLDRS to receive the underlying securities. See "Description of The
Depositary Trust Agreement." Oil Service HOLDRS are not intended to change your
beneficial ownership in the underlying securities under federal securities
laws, including sections 13(d) and 16(a) of the Securities Exchange Act of
1934, referred to herein as the Exchange Act.
The trust will not publish or otherwise calculate the aggregate value of
the underlying securities represented by a receipt. Oil Service 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 Oil
Service HOLDRS wishes to realize the dollar value of the underlying securities,
that owner will have to cancel the Oil Service HOLDRS. Such cancellation will
require payment of fees and expenses as described in "Description of The
Depositary Trust Agreement--Withdrawal of Underlying Securities."
Oil Service 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. Oil Service HOLDRS will be available only in book-entry
form. Owners of Oil Service HOLDRS may hold their Oil Service HOLDRS through
DTC, if they are participants in DTC, or indirectly through entities that are
participants in DTC.
16
<PAGE>
DESCRIPTION OF THE UNDERLYING SECURITIES
Selection criteria. The underlying securities of the Oil Service HOLDRS
are the common stock of a group of 20 specified companies that, among other
things, provide drilling, well-site management and related products and
services for the oil service industry and whose securities are registered under
section 12 of the Exchange Act. The issuers of the underlying securities are
considered to be 20 of the largest, most liquid companies involved in the oil
service industry as measured by market capitalization and trading volume. The
companies included in the Oil Service HOLDRS also meet the following minimum
selection criteria as of December 12, 2000:
. Market capitalization equal to or greater than $500 million;
. Average daily trading volume of at least 100,000 shares over the
60 trading days before December 12, 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 December 12, 2000) of at least $5 million over the
60 trading days before December 12, 2000; and
. A trading history of at least 90 calendar days.
The market capitalization of a company is determined by multiplying the
market price of its common stock by the number of its outstanding shares of
common stock. In determining whether a company was to be considered for
inclusion in the Oil Service HOLDRS, Merrill Lynch, Pierce, Fenner & Smith
Incorporated examined available public information about the company, including
analysts' reports and other independent market sources. The ultimate
determination of the inclusion of the 20 specified companies, however, rested
solely within the discretion of Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
After the initial deposit, one or more of the issuers of the underlying
securities may no longer be involved in various segments of the oil service
industry. In addition, as a result of a reconstitution event or a distribution
of securities, the securities of a non-oil service company may be included in
the Oil Service HOLDRS. Merrill Lynch, Pierce, Fenner & Smith Incorporated will
determine, in its sole discretion, whether the issuer of a particular
underlying security continues to have a leading market capitalization and will
undertake to make adequate disclosure when necessary.
Underlying securities. For a list of the underlying securities
represented by Oil Service HOLDRS, please refer to "Highlights of Oil Service
HOLDRS--The Oil Service HOLDRS." If the underlying securities change because of
a reconstitution event, a distribution of securities by an underlying issuer or
other event, a revised list of underlying securities will be set forth in a
prospectus supplement and will be available from the American Stock Exchange
and through a widely used electronic information dissemination system such as
Bloomberg or Reuters.
No investigation. In selecting the underlying securities, the trust, the
trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and any affiliate
of these entities, have not performed any investigation or review of the
selected companies, including the public filings by the companies, other than
to the extent required to determine whether the companies satisfied the
program's stated selection criteria. Accordingly, before you acquire Oil
Service HOLDRS, you should consider publicly available financial and other
information about the issuers of the underlying securities. See "Risk Factors"
and "Where You Can Find More Information." Investors and market participants
should not conclude that the inclusion of a company in the list is any form of
investment recommendation of that company by the trust, the trustee, Merrill
Lynch, Pierce, Fenner & Smith Incorporated, the selling group or any of their
respective affiliates.
General background and historical information. For a brief description of
the business of each of the issuers of the underlying securities and monthly
pricing information showing the historical performance of each underlying
issuer's securities see "Annex A."
17
<PAGE>
The following table and graph set forth the composite performance of all
of the underlying securities represented by a single Oil Service HOLDR based
upon the indicative share amounts set forth in the table on page 10 of this
preliminary prospectus, measured at the close of each business day from March
21, 2000, the first date when all of the underlying securities were publicly
traded, through January 3, 2001. The performance table and graph data are
adjusted for any splits that may have occurred over the measurement period.
Past movements of the underlying securities are not necessarily indicative of
future values. The actual share amounts will be determined on the pricing date
and may differ from the indicative share amounts.
<TABLE>
<CAPTION>
2000 Value
---- -----
<S> <C>
March 21........ 80.23
March 22........ 85.03
March 23........ 84.69
March 24........ 86.66
March 27........ 86.73
March 28........ 85.05
March 29........ 90.04
March 30........ 88.57
March 31........ 89.69
April 3......... 92.41
April 4......... 87.04
April 5......... 82.56
April 6......... 84.05
April 7......... 83.89
April 10........ 78.80
April 11........ 83.73
April 12........ 85.99
April 13........ 82.60
April 14........ 80.90
April 17........ 77.20
April 18........ 82.30
April 19........ 81.97
April 20........ 83.92
April 24........ 83.45
April 25........ 82.44
April 26........ 84.48
April 27........ 87.36
April 28........ 87.12
May 1........... 87.60
May 2........... 90.97
May 3........... 87.27
May 4........... 90.29
May 5........... 91.58
May 8........... 92.99
</TABLE>
<TABLE>
<CAPTION>
2000 Value
---- -----
<S> <C>
May 9........... 93.95
May 10.......... 92.44
May 11.......... 94.27
May 12.......... 95.52
May 15.......... 98.34
May 16.......... 96.47
May 17.......... 98.40
May 18.......... 94.80
May 19.......... 94.24
May 22.......... 89.50
May 23.......... 92.31
May 24.......... 91.06
May 25.......... 90.56
May 26.......... 88.33
May 30.......... 89.17
May 31.......... 93.91
June 1.......... 92.41
June 2.......... 86.06
June 5.......... 82.62
June 6.......... 87.34
June 7.......... 87.39
June 8.......... 89.34
June 9.......... 87.15
June 12......... 91.55
June 13......... 92.17
June 14......... 91.54
June 15......... 90.14
June 16......... 93.93
June 19......... 92.07
June 20......... 91.07
June 21......... 95.30
June 22......... 92.74
June 23......... 92.65
June 26......... 91.46
</TABLE>
<TABLE>
<CAPTION>
2000 Value
---- ------
<S> <C>
June 27......... 92.22
June 28......... 89.54
June 29......... 91.96
June 30......... 91.29
July 3.......... 91.62
July 5.......... 86.06
July 6.......... 86.95
July 7.......... 86.35
July 10......... 84.71
July 11......... 92.52
July 12......... 91.51
July 13......... 91.01
July 14......... 91.28
July 17......... 88.45
July 18......... 92.10
July 19......... 91.69
July 20......... 91.42
July 21......... 87.92
July 24......... 84.07
July 25......... 82.65
July 26......... 84.68
July 27......... 87.94
July 28......... 88.78
July 31......... 88.85
August 1........ 91.39
August 2........ 92.92
August 3........ 91.50
August 4........ 93.62
August 7........ 94.32
August 8........ 96.01
August 9........ 99.42
August 10....... 97.96
August 11....... 97.07
August 14....... 100.52
</TABLE>
<TABLE>
<CAPTION>
2000 Value
---- ------
<S> <C>
August 15....... 99.35
August 16....... 102.66
August 17....... 103.67
August 18....... 102.01
August 21....... 101.62
August 22....... 101.78
August 23....... 104.90
August 24....... 103.21
August 25....... 102.80
August 28....... 105.04
August 29....... 104.26
August 30....... 102.76
August 31....... 102.73
September 1..... 103.79
September 5..... 104.12
September 6..... 108.19
September 7..... 105.96
September 8..... 103.51
September 11.... 108.17
September 12.... 108.11
September 13.... 105.18
September 14.... 105.52
September 15.... 107.20
September 18.... 102.80
September 19.... 100.77
September 20.... 98.14
September 21.... 96.25
September 22.... 94.74
September 25.... 95.24
September 26.... 97.54
September 27.... 99.57
September 28.... 99.36
September 29.... 100.70
October 2....... 102.64
</TABLE>
<TABLE>
<CAPTION>
2000 Value
---- ------
<S> <C>
October 3....... 101.56
October 4....... 96.77
October 5....... 95.93
October 6....... 95.08
October 9....... 95.71
October 10...... 99.16
October 11...... 100.86
October 12...... 103.11
October 13...... 99.15
October 16...... 95.97
October 17...... 96.77
October 18...... 96.55
October 19...... 96.44
October 20...... 99.39
October 23...... 95.96
October 24...... 93.16
October 25...... 88.52
October 26...... 89.32
October 27...... 85.60
October 30...... 86.87
October 31...... 87.80
November 1...... 92.72
November 2...... 90.47
November 3...... 91.19
November 6...... 90.05
November 7...... 91.10
November 8...... 93.40
November 9...... 91.31
November 10..... 88.88
November 13..... 85.74
November 14..... 87.84
November 15..... 92.16
November 16..... 91.95
November 17..... 88.91
</TABLE>
<TABLE>
<CAPTION>
2000 Value
---- -----
<S> <C>
November 20..... 87.12
November 21..... 87.92
November 22..... 84.77
November 24..... 87.43
November 27..... 86.32
November 28..... 84.98
November 29..... 79.16
November 30..... 74.09
December 1...... 76.50
December 4...... 77.06
December 5...... 76.84
December 6...... 76.41
December 7...... 77.99
December 8...... 80.25
December 11..... 84.52
December 12..... 85.23
December 13..... 83.75
December 14..... 81.54
December 15..... 83.59
December 18..... 90.62
December 19..... 92.90
December 20..... 89.34
December 21..... 89.42
December 22..... 89.42
December 26..... 94.22
December 27..... 93.47
December 28..... 95.94
December 29..... 94.26
<CAPTION>
2001 Value
---- -----
<S> <C>
January 2....... 94.58
January 3....... 91.02
</TABLE>
[GRAPH]
18
<PAGE>
DESCRIPTION OF THE DEPOSITARY TRUST AGREEMENT
General. The depositary trust agreement, dated as of , 2001, among
Merrill Lynch, Pierce, Fenner & Smith Incorporated, The Bank of New York, as
trustee, other depositors and the owners of the Oil Service HOLDRS, provides
that Oil Service HOLDRS will represent an owner's undivided beneficial
ownership interest in the securities of the underlying companies.
The trustee. The Bank of New York will serve as trustee. The Bank of New
York, which was founded in 1784, was New York's first bank and is the oldest
bank in the country still operating under its original name. The Bank is a
state-chartered New York banking corporation and a member of the Federal
Reserve System. The Bank conducts a national and international wholesale
banking business and a retail banking business in the New York City, New Jersey
and Connecticut areas, and provides a comprehensive range of corporate and
personal trust, securities processing and investment services.
Issuance, transfer and surrender of Oil Service HOLDRS. You may create
and cancel Oil Service HOLDRS only in round-lots of 100 Oil Service HOLDRS. You
may create Oil Service HOLDRS by delivering to the trustee the requisite
underlying securities. The trust will only issue Oil Service HOLDRS upon the
deposit of the whole shares represented by a round-lot of 100 Oil Service
HOLDRS. In the event that a fractional share comes to be represented by a
round-lot of Oil Service HOLDRS, the trust may require a minimum of more than
one round-lot of 100 Oil Service HOLDRS for an issuance so that the trust will
always receive whole share amounts for issuance of Oil Service HOLDRS.
Similarly, you must surrender Oil Service HOLDRS in integral multiples of 100
Oil Service HOLDRS to withdraw deposited shares from the trust. The trustee
will not deliver fractional shares of underlying securities, and to the extent
that any cancellation of Oil Service HOLDRS would otherwise require the
delivery of fractional shares, the trust will deliver cash in lieu of such
shares. You may request withdrawal of your deposited shares during the
trustee's normal business hours. The trustee expects that in most cases it will
deliver your deposited shares within one business day of your withdrawal
request.
Voting rights. The trustee will deliver proxy solicitation materials
provided by issuers of the underlying securities to you so as to permit you to
give the trustee instructions as to how to vote on matters to be considered at
any annual or special meetings held by issuers of the underlying securities.
Under the depositary trust agreement, any beneficial owner of Oil Service
HOLDRS, other than Merrill Lynch, Pierce, Fenner & Smith Incorporated owning
Oil Service HOLDRS for its own proprietary account as principal, will have the
right to vote to dissolve and liquidate the trust.
Distributions. You will be entitled to receive, net of trustee fees,
distributions of cash, including dividends, securities or property, if any,
made with respect to the underlying securities. The trustee will use its
reasonable efforts to ensure that it distributes these distributions as
promptly as practicable after the date on which it receives the distribution.
Therefore, you may receive your distributions substantially later than you
would have had you held the underlying securities directly. Any distributions
of securities by an issuer of underlying securities will be deposited into the
trust and will become part of the Oil Service HOLDRS unless such securities are
not listed for trading on a U.S. national securities exchange or through Nasdaq
NMS or such distributed securities have a different Standard & Poor's sector
classification than any of the underlying securities represented in the Oil
Service HOLDRS at the time of the distribution of such securities. In addition,
if the issuer of underlying securities offers rights to acquire additional
underlying securities or other securities the rights will be made available to
you through the trustee, if practicable and if the rights and the securities
that those rights relate to are exempt from registration or are registered
under the Securities Act. Otherwise, if practicable, the rights will be
disposed of and the proceeds provided to you by the trustee. In all other
cases, the rights will lapse.
You will be obligated to pay any tax or other charge that may become due
with respect to Oil Service 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
19
<PAGE>
round-lot of 100 Oil Service 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 Oil Service HOLDR,
the trustee will waive that portion of the fee which exceeds the total cash
dividends and other cash distributions received, or to be received, and payable
with respect to such calendar year.
Record dates. With respect to dividend payments and voting instructions,
the trustee expects to fix the trust's record dates as close as possible to the
record date fixed by the issuer of the underlying securities.
Shareholder communications. The trustee promptly will forward to you all
shareholder communications that it receives from issuers of the underlying
securities.
Withdrawal of underlying securities. You may surrender your Oil Service
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 Oil
Service 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 Oil Service
HOLDRS.
Further issuances of Oil Service HOLDRS. The depositary trust agreement
provides for further issuances of Oil Service HOLDRS on a continuous basis
without your consent.
Reconstitution events. The depositary trust agreement provides for the
automatic distribution of underlying securities to you in the following four
circumstances:
A. If an issuer of underlying securities no longer has a class of
securities registered under section 12 of the Exchange Act, 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 Oil
Service 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 Oil Service HOLDRS.
C. If the underlying securities of an issuer cease to be outstanding as
a result of a merger, consolidation, corporate combination or other
event, the trustee will distribute the consideration paid by and
received from the acquiring company to the beneficial owners of Oil
Service HOLDRS only if the distributed securities have a different
Standard & Poor's sector classification than any of the underlying
securities represented in the Oil Service HOLDRS at the time of the
distribution or exchange or if the securities received are not listed
for trading on a U.S. national securities exchange or through Nasdaq
NMS. In any other case, the additional securities received as
consideration will be deposited into the trust.
D. If an issuer's underlying securities are delisted from trading on a
U.S. national securities exchange or through Nasdaq NMS and are not
listed for trading on another U.S. national securities exchange or
through Nasdaq NMS within 5 business days from the date the
securities are delisted.
To the extent a distribution of underlying securities is required as a
result of a reconstitution event, the trustee will deliver the underlying
security to you as promptly as practicable after the date that the trustee has
knowledge of the occurrence of a reconstitution event.
As provided in the depositary trust agreement, securities of a new
company will be added to the Oil Service HOLDRS, as a result of a distribution
of securities by an underlying issuer or where an event occurs, such as a
merger, where the securities of an underlying issuer are exchanged for the
securities of another
20
<PAGE>
company, unless the securities received (1) have a different Standard & Poor's
sector classification than any of the underlying securities represented in the
Oil Service HOLDRS at the time of distribution or exchange or (2) are not
listed for trading on a U.S. national securities exchange or through Nasdaq
NMS.
It is anticipated, as a result of the broadly defined sector
classifications, that most distributions or exchanges of securities will result
in the inclusion of new securities in the Oil Service HOLDRS. The trustee will
review the publicly available information that identifies the Standard & Poor's
sector classifications of securities to determine whether securities received
as a result of a distribution by an underlying issuer or as consideration for
securities included in the Oil Service HOLDRS will be distributed from the Oil
Service HOLDRS to you.
Standard & Poor's sector classifications. Standard & Poor's Corporation
is an independent source of market information that, among other things,
classifies the securities of public companies into various sector
classifications based on its own criteria. There are 11 Standard & Poor's
sector classifications and each class of publicly traded securities of a
company are given only one sector classification. The securities included in
the Oil Service HOLDRS are currently represented in the Energy sector. The
Standard & Poor's sector classifications of the securities included in the Oil
Service HOLDRS may change over time if the companies that issued these
securities change their focus of operations or if Standard & Poor's alters the
criteria it uses to determine sector classifications, or both.
Termination of the trust. The trust will terminate if the trustee resigns
and no successor trustee is appointed by Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as initial depositor, within 60 days from the date the trustee
provides notice to Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
initial depositor, of its intent to resign. Upon termination, the beneficial
owners of Oil Service HOLDRS will surrender their Oil Service 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 Oil Service HOLDRS are delisted from the American Stock Exchange
and are not listed for trading on another U.S. national securities exchange or
through Nasdaq NMS within 5 business days from the date the Oil Service HOLDRS
are delisted. Finally, the trust will terminate if 75% of the owners of
outstanding Oil Service HOLDRS other than Merrill Lynch, Pierce, Fenner & Smith
Incorporated vote to dissolve and liquidate the trust.
If a termination event occurs, the trustee will distribute the underlying
securities to you as promptly as practicable after the termination event
occurs.
Amendment of the depositary trust agreement. The trustee and Merrill
Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, may amend any
provisions of the depositary trust agreement without the consent of any other
depositor or any of the owners of the Oil Service 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 Oil Service 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 Oil Service HOLDRS will not become effective
until 30 days after notice of the amendment is given to the owners of Oil
Service HOLDRS.
Issuance and cancellation fees. After the initial public offering, the
trust expects to issue more Oil Service HOLDRS. If you wish to create Oil
Service 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 Oil Service HOLDRS. If you wish to cancel your Oil Service 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 Oil Service HOLDRS issued. The
trustee may negotiate either of these fees depending on the volume, frequency
and size of the issuance or cancellation transactions.
21
<PAGE>
Commissions. If you choose to create or cancel Oil Service HOLDRS after
the conclusion of the initial public offering, you will not be charged the
underwriting fee. However, in addition to the issuance and cancellation fees
described above, you will be responsible for paying any sales commissions
associated with your purchase of the underlying securities that are charged by
your broker, whether it be any of the members of the selling group or another
broker, in addition to the issuance or cancellation fee, as the case may be,
described above.
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 Oil
Service 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 Oil Service
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 Oil Service 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 Oil Service HOLDRS.
The trustee undertakes to perform only those duties as are specifically
set forth in the depositary trust agreement. Subject to the preceding sentence,
the trustee will be liable for its own negligence or misconduct except for good
faith errors in judgment so long as the trustee was not negligent in
ascertaining the relevant facts.
22
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
General
The following is a summary of the U.S. federal income tax consequences
relating to the Oil Service HOLDRS for:
. a citizen or resident of the United States;
. a corporation or partnership created or organized in the United
States or under the laws of the United States;
. an estate, the income of which is includible in gross income for U.S.
federal income tax purposes regardless of its source;
. a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or
more U.S. persons have the authority to control all substantial
decisions of the trust (each of the above, a "U.S. receipt holder");
and
. any person other than a U.S. receipt holder (a "non-U.S. receipt
holder").
This summary is based upon laws, regulations, rulings and decisions
currently in effect, all of which are subject to change, possibly on a
retroactive basis. The discussion does not deal with all U.S. federal income
tax consequences applicable to all categories of investors, some of which may
be subject to special rules. In addition, this summary generally is limited to
investors who will hold the Oil Service 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 recommend that you consult with
your own tax advisor.
Taxation of the trust
The trust will provide for flow through tax consequences as it will be
treated as a grantor trust or custodial arrangement for U.S. federal income tax
purposes.
Taxation of Oil Service HOLDRS
A receipt holder purchasing and owning Oil Service HOLDRS will be
treated, for U.S. federal income tax purposes, as directly owning a
proportionate share of the underlying securities represented by Oil Service
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 Oil Service
HOLDRS among the underlying securities based on their relative fair market
values at the time of purchase. Similarly, when a holder sells a receipt, it
will determine the amount realized with respect to each security by allocating
the sales price among the underlying securities based on their relative fair
market values at the time of sale. A holder's gain or loss with respect to each
security will be computed by subtracting its adjusted basis in the security
from the amount realized on the security. With respect to purchases of Oil
Service 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 Oil Service HOLDRS. Similarly, with respect to sales of Oil
Service HOLDRS for cash in the secondary market, the amount realized with
respect to a sale of Oil Service 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 Oil
Service HOLDRS, the occurrence of a reconstitution event, or a termination
event will not be a taxable event, except to the extent that
23
<PAGE>
cash is distributed in lieu of fractional shares. The receipt holder's holding
period with respect to the distributed securities will include the period that
the holder held the securities through the trust.
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 Oil Service HOLDRS
will reduce the amount realized with respect to the underlying securities.
A holder will be required to include in its income the full amount of
dividends paid on the underlying securities, even though the depositary trust
agreement provides that the custodian fees will be deducted directly from any
dividends paid. These custodian fees will be treated as an expense incurred in
connection with a holder's investment in the underlying securities and may be
deductible. If a holder is an individual, estate or trust, however, the
deduction of its share of custodian fees will be a miscellaneous itemized
deduction that may be disallowed in whole or in part.
Special considerations with respect to underlying securities of foreign issuers
With respect to underlying securities of foreign issuers, the gross
amount of any taxable cash distribution will not be eligible for the dividends
received deduction generally allowed to corporate U.S. receipt holders.
If a foreign issuer pays a dividend in a currency other than in U.S.
dollars, the amount of the dividend for U.S. federal income tax purposes will
be the U.S. dollar value (determined at the spot rate on the date of the
payment) regardless of whether the payment is later converted into U.S.
dollars. In this case, the U.S. receipt holder may recognize ordinary income or
loss as a result of currency fluctuations between the date on which the
dividend is paid and the date the dividend amount is converted into U.S.
dollars.
Subject to conditions and limitations, any foreign tax withheld on
dividends may be deducted from taxable income or credited against a U.S.
receipt holder's U.S. federal income tax liability. The limitation on foreign
taxes eligible for the U.S. foreign tax credit is calculated separately with
respect to specific classes of income. For this purpose, dividends distributed
by a foreign issuer generally will constitute "passive income" or, in the case
of some U.S. holders, "financial services income." For purposes of the U.S.
foreign tax credit limitation, dividends received by a U.S. receipt holder with
respect to an underlying security of a foreign issuer generally will be treated
as foreign source income while any gain or loss recognized from the sale of
such security generally will be treated as from sources within the United
States. The rules relating to the determination of the foreign tax credit are
complex and we recommend that U.S. receipt holders consult their own tax
advisors to determine whether and to what extent a credit would be available.
Dividends and distributions made by a foreign issuer may be subject to a
withholding tax. Some foreign issuers have made arrangements through which
holders of their American depositary shares can apply for a refund of withheld
taxes. It is expected that holders of Oil Service HOLDRS will be able to use
these arrangements to apply for a refund of withheld taxes.
Additionally, special U.S. federal income tax rules apply to U.S. persons
owning shares of a "passive foreign investment company" (a "PFIC"). We do not
believe that any of the foreign issuers of the underlying securities is
currently a PFIC and do not anticipate that any issuer will become a PFIC in
the future, although no assurances can be made that the applicable tax law or
other relevant circumstances will not change in a manner which affects the PFIC
determination. A foreign corporation generally will be classified as a PFIC for
U.S. federal income tax purposes in any taxable year in which, after applying
relevant look-through rules, either:
24
<PAGE>
. at least 75% of its gross income is "passive income;" or
. on average at least 50% of the gross value of its assets is
attributable to assets that produce "passive income" or are held for
the production of passive income.
Passive income for this purpose generally includes dividends, interest,
royalties, rents, and gains from commodities and securities transactions.
If a corporation were classified as a PFIC, a U.S. receipt holder could
be subject to increased tax liability, possibly including an interest charge,
upon the sale or other disposition of the Oil Service HOLDRS or of the
underlying securities or upon the receipt of "excess distributions," unless the
U.S. receipt holder elected to be taxed currently on its pro rata portion of
the corporation's income, whether or not the income was distributed in the form
of dividends or otherwise.
Non-U.S. receipt holders
A non-U.S. receipt holder generally will be subject to U.S. withholding
tax at a rate of 30% or a lower rate as may be specified by an applicable tax
treaty with respect to dividends received on underlying securities of U.S.
issuers. However, if that income is effectively connected with a U.S. trade or
business conducted by the holder or, where a tax treaty applies, is
attributable to a permanent establishment maintained in the United States by
the holder, then those dividends will be exempt from withholding tax, provided
the holder complies with applicable certification and disclosure requirements.
A non-U.S. receipt holder generally will not be subject to U.S. federal
income or withholding tax with respect to dividends received on underlying
securities of foreign issuers, unless that income is effectively connected with
a U.S. trade or business conducted by the holder or, where a tax treaty
applies, is attributable to a permanent establishment maintained in the United
States by the holder.
With respect to dividends of both U.S. and foreign issuers, a non-U.S.
receipt holder's dividends that are effectively connected with a U.S. trade or
business or dividends attributable to a permanent establishment, net of
relevant deductions and credits, will be subject to U.S. federal income
taxation at the same graduated rates applicable to U.S. persons. In addition to
this graduated tax, effectively connected dividends or dividends attributable
to a permanent establishment received by a corporate non-U.S. receipt holder
may also be subject to a branch profits tax at a rate of 30% or a lower rate as
may be specified by an applicable tax treaty. Under some circumstances, a non-
U.S. receipt holder whose dividends are so effectively connected or
attributable shall be entitled to a dividends received deduction equal to 70%
or 80% of the amount of the dividend.
A non-U.S. receipt holder that is eligible for a reduced rate of
withholding tax pursuant to a tax treaty may obtain a refund of any excess
amounts withheld by filing an appropriate claim for refund with the Internal
Revenue Service.
A non-U.S. receipt holder generally will not be subject to U.S. federal
income or withholding tax with respect to gain recognized upon the sale or
other disposition of Oil Service HOLDRS or of the underlying securities unless:
. that gain is effectively connected with a U.S. trade or business
conducted by the holder or, where a tax treaty applies, is
attributable to a permanent establishment maintained in the United
States by the holder,
. in the case of any gain realized by an individual non-U.S. receipt
holder, the holder is present in the United States for 183 days or
more in the taxable year of the sale or other disposition and certain
other conditions are met, or
. the underlying securities issuer is or has been a U.S. real property
holding corporation for U.S. federal income tax purposes at any time
during the shorter of the five-year period ending on the
25
<PAGE>
date of the disposition or the period during which the non-U.S.
receipt holder held the common stock of such issuer and (a) the
common stock is not considered to be "regularly traded on an
established securities market" or (b) the non-U.S. receipt holder
owned, actually or constructively, at any time during the shorter of
the periods described above, more than 5% of the common stock of such
issuer.
Effectively connected or attributable gains generally will be subject to
U.S. federal income taxation at the same graduated rates applicable to U.S.
persons, and may, in the case of a corporate non-U.S. receipt holder, also be
subject to the branch profits tax. We recommend that non-U.S. receipt holders
consult their own tax advisors to determine whether any applicable tax
treaties provide for different rules.
The preceding discussion does not address all aspects of U.S. federal
income taxation that may be relevant in light of a non-U.S. receipt holder's
or an issuer's particular facts and circumstances. We recommend that investors
consult their own tax advisors.
Backup withholding tax, withholding tax and information reporting requirements
Final U.S. Treasury Regulations relating to backup withholding,
withholding and information reporting have been issued that modify certain
rules with respect to payments made after December 31, 2000. Investors are
urged to consult their own tax advisors regarding the application of the
backup withholding, withholding and information reporting requirements,
including the new regulations, with respect to their particular circumstances.
ERISA CONSIDERATIONS
Any plan fiduciary which proposes to have a plan acquire Oil Service
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 Oil Service 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 Oil Service HOLDRS. Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Robert W. Baird & Co. Incorporated, First Union Securities,
Inc., Legg Mason Wood Walker, Incorporated, Morgan Keegan & Company, Inc.,
Raymond James & Associates, Inc., Sutro & Co. Incorporated and Tucker Anthony
Incorporated, the selling group, propose to offer the Oil Service HOLDRS to
the public at the offering price set forth on the cover page of this
prospectus, which includes an underwriting fee of 2%.
Investors who purchase Oil Service HOLDRS through a fee-based brokerage
account should consider that the underwriting fee is in addition to the fees
charged in that account. We recommend that investors review the terms of their
brokerage accounts for details on applicable charges.
Merrill Lynch, Pierce, Fenner & Smith Incorporated will provide Oil
Service HOLDRS to the other members of the selling group at the public
offering price, as set forth on the cover page of this prospectus, less a
concession that is not in excess of %. The selling group may allow to
certain dealers, and the dealers may reallow, a discount on sales of Oil
Service HOLDRS not in excess of % of the public offering price
26
<PAGE>
as set forth on the cover page of this prospectus. We expect the trust to
deliver the initial distribution of Oil Service HOLDRS against deposit of the
underlying securities in New York, New York on , 2001. After the initial
offering, the public offering price, concession and discount may be changed.
The trust will continue to issue Oil Service HOLDRS in connection with deposits
of underlying securities. This offering is being made in compliance with
Conduct Rule 2810 of the National Association of Securities Dealers, Inc.
Accordingly, sales will not be made to a discretionary account without the
prior written approval of a purchaser of Oil Service HOLDRS.
Members of the selling group and their affiliates have from time to time
provided investment banking and other financial services to some of the issuers
of the underlying securities and expect in the future to provide these
services, for which they have received and will receive customary fees and
commissions. They also may have served as counterparties in other transactions
with some of the issuers of the underlying securities.
Merrill Lynch, Pierce, Fenner & Smith Incorporated may use this
prospectus, as updated from time to time, in connection with offers and sales
related to market-making transactions in the Oil Service HOLDRS. Merrill Lynch,
Pierce, Fenner & Smith Incorporated may act as principal or agent in these
transactions. Market-making sales will be made at prices related to prevailing
market prices at the time of sale.
Merrill Lynch, Pierce, Fenner & Smith Incorporated has agreed to
indemnify the trustee against some civil liabilities related to acts performed
or not performed by the trustee in accordance with the depositary trust
agreement or periodic reports filed or not filed with the SEC with respect to
the Oil Service HOLDRS. Should a court determine not to enforce the
indemnification provision, Merrill Lynch, Pierce, Fenner & Smith Incorporated
also has agreed to contribute to payments the trustee may be required to make
with respect to these liabilities.
LEGAL MATTERS
Legal matters, including the validity of the Oil Service HOLDRS, will be
passed upon for Merrill Lynch, Pierce, Fenner & Smith Incorporated, the initial
depositor and the underwriters, by Shearman & Sterling, New York, New York.
Shearman & Sterling, as special U.S. tax counsel to the trust, also will render
an opinion regarding the material federal income tax consequences relating to
the Oil Service HOLDRS.
WHERE YOU CAN FIND MORE INFORMATION
Merrill Lynch, Pierce, Fenner & Smith Incorporated has filed a
registration statement on Form S-1 with the SEC covering the Oil Service
HOLDRS. While this prospectus is a part of the registration statement, it does
not contain all the exhibits filed as part of the registration statement. You
should consider reviewing the full text of those exhibits.
The registration statement is available over the Internet at the SEC's
Web site at http://www.sec.gov. You also may read and copy the registration
statement at the SEC's public reference rooms in Washington, D.C., New York,
New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for more
information on the public reference rooms and their copy charges. Merrill
Lynch, Pierce, Fenner & Smith Incorporated will not file any reports pursuant
to the Exchange Act. The trust will file modified reports pursuant to the
Exchange Act.
Since the securities of the issuers of the underlying securities are
registered under the Exchange Act, the issuers of the underlying securities are
required to file periodically financial and other information specified by the
SEC. For more information about the issuers of the underlying securities,
information provided to or filed with the SEC by the issuers of the underlying
securities with respect to their registered securities can be
27
<PAGE>
inspected at the SEC's public reference facilities or accessed through the
SEC's Web site referenced above. However, some of the issuers of the underlying
securities may be considered foreign issuers. The requirements for filing
periodic financial and other information for foreign issuers differ from that
of domestic issuers. In particular, foreign issuers are not required to file
quarterly reports with the SEC and are not required to file periodic financial
and other information on EDGAR. Therefore, this information may not be
accessible through the SEC's Web site. Information regarding the issuers of the
underlying securities may also be obtained from other sources including, but
not limited to, press releases, newspaper articles and other publicly
disseminated information.
The trust and the selling group and their affiliates are not affiliated
with the issuers of the underlying securities, and the issuers of the
underlying securities have no obligations with respect to Oil Service HOLDRS.
This prospectus relates only to Oil Service HOLDRS and does not relate to the
other securities of the issuers of the underlying securities. The information
in this prospectus regarding the issuers of the underlying securities has been
derived from the publicly available documents described in the preceding
paragraph. We have not participated in the preparation of these documents or
made any due diligence inquiries with respect to the issuers of the underlying
securities in connection with Oil Service HOLDRS. We make no representation
that these publicly available documents or any other publicly available
information regarding the issuers of the underlying securities are accurate or
complete. Furthermore, we cannot assure you that all events occurring prior to
the date of this prospectus, including events that would affect the accuracy or
completeness of the publicly available documents described in the preceding
paragraph, that would affect the trading price of the securities of the issuers
of the underlying securities, and therefore the offering and trading prices of
the Oil Service HOLDRS have been publicly disclosed.
28
<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 U.S. trading
market, of each of the underlying securities in each month during 1995, 1996,
1997, 1998, 1999 and 2000. A table outlining the primary U.S. stock market on
which the securities of the issuers are listed can be found on page 10. The
foreign stock market or markets on which the equity securities of the foreign
issuers included in the Oil Service HOLDRS, if any, are listed is described
below. An asterisk (*) denotes that no shares of the issuer were trading on a
U.S. stock market during that month. The historical prices of the underlying
securities should not be taken as an indication of future performance.
BAKER HUGHES INCORPORATED (BHI)
Baker Hughes Incorporated provides products and services for oil and gas
exploration and for the drilling, completion and production of oil and gas
wells. Baker Hughes also offers oil and gas well reservoir maintenance and
evaluation. Baker Hughes' principal markets include all major oil and gas
producing regions in the world. Customers of Baker Hughes include multi-
national, independent and government-owned oil companies. On November 30, 2000
Baker Hughes announced, subject to regulatory approval, the completion of a
joint venture with Schlumberger N.V. Baker Hughes will retain ownership of 30%
of the joint venture and will contribute the technology to analyze the
producing potential of seismic basins. Schlumberger will contribute $500
million in cash to Baker Hughes. In addition, in October 2000, the board of
directors of Baker Hughes approved a plan to sell Baker Hughes' oil and gas
exploration business.
<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 17.63 January 25.88 January 39.00 January 38.50 January 16.88 January 24.69
February 19.13 February 26.38 February 35.50 February 40.94 February 18.00 February 25.88
March 20.38 March 29.13 March 38.38 March 40.25 March 24.31 March 30.25
April 22.50 April 31.75 April 34.50 April 40.50 April 29.88 April 31.81
May 22.50 May 31.38 May 37.50 May 36.00 May 31.19 May 36.25
June 20.50 June 32.88 June 38.69 June 34.56 June 33.50 June 32.00
July 22.13 July 29.38 July 44.06 July 25.00 July 34.81 July 34.63
August 22.50 August 30.25 August 42.50 August 18.25 August 34.13 August 36.56
September 20.38 September 30.38 September 43.81 September 21.00 September 29.00 September 37.13
October 19.63 October 35.50 October 45.94 October 22.06 October 27.94 October 34.38
November 20.38 November 36.63 November 41.88 November 18.31 November 25.25 November 33.06
December 24.38 December 34.50 December 43.63 December 17.63 December 21.06 December 41.56
</TABLE>
The closing price on January , 2001 was .
A-1
<PAGE>
BJ SERVICES COMPANY (BJS)
BJ Services Company provides pressure pumping and other oilfield services
to the petroleum industry. BJ Services pressure pumping services facilitate the
completion of onshore and offshore oil and natural gas wells and in remedial
work on existing wells. These services are designed to improve the strength and
enhance the performance of oil and natural gas wells. BJ Services oilfield
services also include product and equipment sales for pressure pumping
services, tabular services provided to the oil and natural gas exploration and
production industry, commissioning and inspection services to refineries,
pipelines and offshore platforms and specialty chemical services.
<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 8.56 January 13.38 January 23.13 January 30.28 January 14.75 January 42.88
February 9.31 February 13.81 February 19.88 February 34.38 February 14.06 February 57.06
March 10.25 March 16.75 March 23.94 March 36.44 March 23.25 March 73.88
April 11.50 April 19.19 April 23.56 April 37.50 April 26.75 April 70.38
May 12.75 May 16.88 May 27.63 May 32.69 May 27.56 May 71.63
June 11.38 June 17.56 June 26.81 June 29.06 June 29.44 June 60.50
July 12.44 July 16.56 July 32.69 July 21.06 July 30.56 July 58.38
August 12.50 August 18.81 August 36.13 August 12.63 August 34.25 August 67.00
September 12.63 September 18.13 September 37.13 September 16.25 September 31.81 September 61.13
October 11.81 October 22.44 October 42.38 October 20.44 October 34.31 October 52.44
November 12.31 November 23.88 November 35.91 November 13.81 November 34.88 November 53.25
December 14.50 December 25.50 December 35.97 December 15.63 December 41.81 December 68.88
</TABLE>
The closing price on January , 2001 was .
COOPER CAMERON CORPORATION (CAM)
Cooper Cameron Corporation manufactures oil and gas pressure control
equipment and aftermarket products for the energy industry and industrial
markets. Cooper Cameron's products include control equipment and systems used
in onshore, offshore and subsea oil and gas drilling, production and
transmission. Cooper Cameron also designs, manufactures, markets and services
compression and power equipment including air compressors, engines and
turbochargers. Cooper Cameron markets its products through its own sales and
marketing employees and distributors and agents in various international
locations.
<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 18.63 January 36.44 January 51.44 January 23.38 January 49.50
February * February 16.25 February 32.75 February 53.63 February 23.50 February 55.25
March * March 21.00 March 34.25 March 60.38 March 33.88 March 66.88
April * April 22.56 April 35.63 April 66.44 April 38.50 April 75.00
May * May 22.69 May 40.94 May 59.50 May 36.19 May 69.75
June 9.44 June 21.88 June 46.75 June 51.00 June 37.06 June 66.00
July 11.19 July 23.13 July 58.00 July 35.06 July 36.25 July 64.63
August 11.81 August 26.38 August 64.88 August 21.75 August 41.63 August 77.81
September 12.94 September 28.69 September 71.81 September 28.50 September 37.75 September 73.69
October 12.50 October 31.94 October 72.25 October 34.75 October 38.69 October 54.50
November 13.00 November 32.88 November 60.94 November 24.38 November 42.88 November 54.25
December 17.75 December 38.25 December 61.00 December 24.50 December 48.94 December 66.06
</TABLE>
The closing price on January , 2001 was .
A-2
<PAGE>
DIAMOND OFFSHORE DRILLING, INC. (DO)
Diamond Offshore Drilling, Inc. is principally engaged in the contract
drilling of offshore oil and gas wells. Diamond provides offshore drilling
services to both independent and government-owned oil and gas companies.
Diamond also offers project management, extended well tests and drilling and
completion operations.
<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 19.06 January 33.06 January 44.63 January 23.00 January 27.81
February * February 18.31 February 29.31 February 46.06 February 20.69 February 31.75
March * March 21.44 March 34.25 March 45.38 March 31.63 March 39.94
April * April 24.88 April 32.19 April 50.63 April 33.06 April 40.31
May * May 23.94 May 35.56 May 47.81 May 27.25 May 40.88
June * June 28.50 June 38.94 June 40.31 June 28.38 June 35.13
July * July 23.63 July 46.63 July 32.81 July 32.00 July 37.56
August * August 25.50 August 54.63 August 20.88 August 38.25 August 44.81
September * September 27.50 September 55.19 September 26.06 September 33.38 September 41.00
October 12.44 October 30.44 October 62.25 October 30.69 October 32.00 October 34.56
November 14.44 November 31.88 November 49.88 November 22.25 November 30.25 November 30.19
December 16.88 December 28.50 December 48.13 December 23.69 December 30.56 December 40.00
</TABLE>
The closing price on January , 2001 was .
ENSCO INTERNATIONAL INCORPORATED (ESV)
Ensco International Incorporated is an international offshore contract
drilling company that drills and completes oil and gas wells throughout the
world. Ensco also provides marine transportation services in the Gulf of
Mexico, including rig towing and other towing services and supply vessels to
support general drilling and production activity by ferrying supplies from land
to offshore drilling sites. Ensco's customer base includes major international,
government-owned and independent oil and gas companies.
<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 6.06 January 11.94 January 27.56 January 27.13 January 9.50 January 22.88
February 5.88 February 12.06 February 21.69 February 29.00 February 8.88 February 30.06
March 7.06 March 13.94 March 24.63 March 27.88 March 13.31 March 36.13
April 8.38 April 15.00 April 23.75 April 28.38 April 18.56 April 33.00
May 8.31 May 15.19 May 24.94 May 25.25 May 17.75 May 34.94
June 8.06 June 16.25 June 26.38 June 17.50 June 19.94 June 35.81
July 8.00 July 13.50 July 33.06 July 13.56 July 20.44 July 33.75
August 9.00 August 14.63 August 31.75 August 10.50 August 21.31 August 39.88
September 8.63 September 16.25 September 39.44 September 10.88 September 18.06 September 38.25
October 8.44 October 21.63 October 42.06 October 13.19 October 19.38 October 33.25
November 8.44 November 21.94 November 35.94 November 9.69 November 20.06 November 24.31
December 11.50 December 24.25 December 33.50 December 10.69 December 22.88 December 34.06
</TABLE>
The closing price on January , 2001 was .
A-3
<PAGE>
GLOBAL MARINE INC. (GLM)
Global Marine Inc. provides contract drilling services and offshore
drilling management services. Global Marine also conducts oil and gas
exploration, development and production activities, including participation in
the development and operation of properties for oil and gas production.
<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 3.75 January 8.63 January 22.50 January 23.00 January 8.50 January 17.88
February 4.13 February 8.88 February 18.75 February 23.31 February 7.81 February 22.44
March 4.25 March 10.00 March 21.38 March 24.88 March 11.75 March 25.38
April 4.50 April 11.38 April 20.13 April 23.38 April 14.88 April 24.06
May 5.38 May 12.25 May 22.50 May 22.25 May 14.06 May 28.13
June 5.88 June 13.88 June 23.31 June 18.81 June 15.50 June 28.19
July 5.63 July 13.63 July 28.63 July 13.69 July 16.63 July 28.31
August 6.75 August 14.38 August 28.44 August 9.31 August 17.75 August 32.31
September 7.13 September 15.75 September 33.31 September 11.13 September 16.44 September 30.88
October 6.50 October 18.38 October 31.13 October 12.38 October 15.19 October 26.50
November 6.75 November 19.50 November 26.31 November 9.25 November 15.31 November 21.94
December 8.75 December 20.63 December 24.56 December 9.00 December 16.63 December 28.38
</TABLE>
The closing price on January , 2001 was .
GRANT PRIDECO, INC. (GRP)
Grant Prideco, Inc. is a manufacturer and supplier of products used for
the exploration and production of oil and gas. Grant Prideco provides drill
stem products, such as drill pipe, tubes and engineered connections, used for
casing and subsea structures. Grant Prideco has manufacturing facilities
located in the United States, Mexico, Canada, Europe and Asia and has sales,
service and repair locations throughout the world.
<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 *
February * February * February * February * February * February *
March * March * March * March * March * March 18.88
April * April * April * April * April * April 19.25
May * May * May * May * May * May 23.25
June * June * June * June * June * June 25.00
July * July * July * July * July * July 20.13
August * August * August * August * August * August 23.50
September * September * September * September * September * September 21.94
October * October * October * October * October * October 18.56
November * November * November * November * November * November 14.13
December * December * December * December * December * December 21.94
</TABLE>
The closing price on January , 2001 was .
A-4
<PAGE>
HALLIBURTON COMPANY (HAL)
Halliburton Company offers engineering and construction services to the
oil and gas industry throughout the world, including the provision and
operation of the facilities that are needed for the production and transport of
oil and gas. Halliburton also offers services ranging from initial evaluation
of oil producing formations to drilling, production enhancement and well
maintenance. Halliburton markets most of its products and services through
internal servicing and sales organizations.
<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 18.13 January 25.81 January 36.19 January 44.94 January 29.69 January 36.13
February 18.63 February 27.44 February 32.31 February 46.56 February 28.50 February 38.19
March 18.19 March 28.44 March 33.88 March 50.13 March 38.50 March 41.13
April 19.19 April 28.69 April 35.31 April 54.75 April 42.63 April 44.19
May 19.50 May 27.81 May 38.69 May 47.50 May 41.38 May 50.94
June 17.88 June 27.75 June 39.63 June 44.44 June 45.25 June 47.19
July 20.31 July 26.06 July 46.00 July 36.25 July 46.13 July 46.13
August 21.19 August 26.31 August 47.75 August 26.56 August 46.38 August 53.00
September 20.88 September 25.81 September 52.00 September 28.75 September 41.00 September 48.94
October 20.75 October 28.31 October 59.63 October 36.00 October 37.69 October 37.06
November 21.69 November 30.13 November 53.94 November 29.38 November 38.63 November 33.38
December 25.31 December 30.13 December 51.88 December 29.63 December 40.25 December 36.25
</TABLE>
The closing price on January , 2001 was .
HANOVER COMPRESSOR COMPANY (HC)
Hanover Compressor Company offers comprehensive natural gas compression
services and provides natural gas handling service, fabrication and equipment.
In addition, Hanover Compressor designs, fabricates, and sells or rents
equipment designed to heat, separate, dehydrate and measure crude oil and
natural gas. Hanover markets and sells its products and services though its own
sales force to companies engaged in all aspects of the oil and gas industry.
<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 8.84 January 11.97 January 19.81
February * February * February * February 9.69 February 10.94 February 23.47
March * March * March * March 12.50 March 13.25 March 28.44
April * April * April * April 12.94 April 14.34 April 29.13
May * May * May * May 12.97 May 13.88 May 29.34
June * June * June * June 13.53 June 16.06 June 38.00
July * July * July 12.09 July 11.50 July 18.31 July 34.13
August * August * August 11.81 August 9.28 August 17.97 August 31.75
September * September * September 12.25 September 12.09 September 15.91 September 32.94
October * October * October 10.81 October 12.63 October 18.50 October 32.63
November * November * November 10.50 November 11.31 November 17.13 November 30.69
December * December * December 10.22 December 12.84 December 18.88 December 44.56
</TABLE>
The closing price on January , 2001 was .
A-5
<PAGE>
NABORS INDUSTRIES, INC. (NBR)
Nabors Industries, Inc. conducts oil, gas and geothermal land drilling
operations in the United States, Canada, South and Central America and the
Middle East. Nabors provides well servicing, and major well overhaul,
redrilling and initial drilling services. Nabors provides ancillary well-site
services, including oilfield management, engineering, transportation,
maintenance and other support services.
<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 6.50 January 12.13 January 18.50 January 23.94 January 12.50 January 29.63
February 6.75 February 12.88 February 15.38 February 22.88 February 11.50 February 35.88
March 7.50 March 14.25 March 19.52 March 23.75 March 18.19 March 38.81
April 9.44 April 15.38 April 18.75 April 25.19 April 20.50 April 39.44
May 8.63 May 15.38 May 22.44 May 23.56 May 20.00 May 43.00
June 8.44 June 16.25 June 25.00 June 20.00 June 24.38 June 41.56
July 9.06 July 14.38 July 31.25 July 17.06 July 23.31 July 41.63
August 9.25 August 14.88 August 34.44 August 11.81 August 27.00 August 47.56
September 9.44 September 13.63 September 39.13 September 15.19 September 25.00 September 52.40
October 8.63 October 16.63 October 41.13 October 18.50 October 22.69 October 50.90
November 9.88 November 19.38 November 35.06 November 13.25 November 26.56 November 43.94
December 11.25 December 19.25 December 31.63 December 13.50 December 30.94 December 59.15
</TABLE>
The closing price on January , 2001 was .
NATIONAL-OILWELL, INC. (NOI)
National-Oilwell, Inc. designs, manufactures and sells comprehensive
systems and components used in oil and gas drilling and production and offers
supply chain integration services to the oil and gas industry. National-
Oilwell's drilling products include major drilling rig components, drilling
motors and specialized drilling tools. National-Oilwell also offers supply
chain integration services through its network of distribution service centers
that provide procurement, inventory management and logistics services.
<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 16.00 January 26.50 January 9.75 January 18.75
February * February * February 15.38 February 28.00 February 8.88 February 24.25
March * March * March 16.00 March 32.94 March 11.56 March 30.88
April * April * April 19.44 April 37.94 April 13.00 April 23.94
May * May * May 24.19 May 34.94 May 12.06 May 26.00
June * June * June 28.75 June 26.81 June 14.00 June 32.88
July * July * July 31.03 July 21.06 July 15.94 July 33.00
August * August * August 30.78 August 7.75 August 17.00 August 34.69
September * September * September 37.41 September 12.38 September 16.44 September 31.25
October * October 11.63 October 38.28 October 15.88 October 13.56 October 29.25
November * November 14.13 November 31.69 November 9.88 November 14.25 November 31.88
December * December 15.38 December 34.19 December 11.19 December 15.69 December 38.68
</TABLE>
The closing price on January , 2001 was .
A-6
<PAGE>
NOBLE DRILLING CORPORATION (NE)
Noble Drilling Corporation is a provider of diversified services for the
oil and gas industry. Noble performs contract drilling services through its
offshore drilling units located in markets throughout the world. In addition,
Noble also provides engineering services for the design of drilling equipment
for offshore well development, production management services and fixed price
contract drilling services.
<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 5.00 January 9.81 January 21.88 January 26.75 January 13.40 January 29.31
February 5.50 February 9.75 February 17.63 February 28.38 February 12.13 February 36.00
March 6.13 March 12.38 March 17.38 March 30.56 March 17.38 March 41.38
April 6.63 April 15.00 April 17.38 April 32.31 April 19.63 April 39.94
May 7.38 May 13.50 May 21.75 May 29.50 May 18.13 May 43.38
June 7.38 June 13.88 June 22.50 June 24.06 June 19.69 June 41.19
July 6.50 July 13.75 July 28.13 July 18.88 July 22.69 July 43.56
August 8.00 August 14.25 August 28.44 August 11.00 August 24.63 August 48.50
September 7.75 September 15.13 September 32.50 September 14.75 September 21.88 September 50.25
October 7.00 October 18.63 October 35.56 October 17.19 October 22.19 October 41.56
November 7.25 November 19.25 November 30.06 November 11.56 November 27.88 November 28.81
December 9.00 December 19.88 December 30.63 December 12.94 December 32.75 December 43.44
</TABLE>
The closing price on January , 2001 was .
R&B FALCON CORPORATION (FLC)
R&B Falcon Corporation provides offshore contract drilling and ancillary
services throughout the world. R&B Falcon provides the equipment and personnel
for drilling wells, conducting well overhauls and redrilling of onshore and
offshore wells. R&B Falcon also provides equipment for ocean transportation of
materials in connection with offshore construction projects. On August 19,
2000, R&B Falcon entered into a definitive agreement and plan of merger with
Transocean Sedco Forex Inc. The merger has been approved by the shareholders of
R&B Falcon and Transocean, but the merger is subject to foreign regulatory
approval and customary closing conditions.
<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 30.38 January 7.13 January 12.69
February * February * February * February 26.50 February 5.63 February 15.38
March * March * March * March 29.63 March 8.63 March 19.69
April * April * April * April 32.06 April 10.00 April 20.75
May * May * May * May 28.69 May 9.19 May 23.13
June * June * June * June 22.63 June 9.38 June 23.56
July * July * July * July 16.56 July 10.19 July 19.94
August * August * August * August 9.00 August 12.81 August 28.50
September * September * September * September 12.06 September 13.13 September 27.88
October * October * October * October 13.63 October 12.44 October 25.00
November * November * November * November 9.25 November 12.38 November 19.00
December * December * December * December 7.56 December 13.25 December 22.94
</TABLE>
The closing price on January , 2001 was .
A-7
<PAGE>
ROWAN COMPANIES, INC. (RDC)
Rowan Companies, Inc. provides international and domestic contract
drilling and aviation services and operates mini-steel mill, manufacturing and
marine construction divisions. Rowan provides its contract drilling services
primarily in the Gulf of Mexico, the North Sea, Eastern Canada it uses its
fleet of mobile offshore drilling platforms and land drilling rigs in Texas and
Louisiana. Rowan also produces heavy equipment for the mining, timber and
transportation industries through its manufacturing and mini-steel mill
operations and designs and builds mobile offshore drilling rigs through its
marine construction division. Rowan's aviation operations provide contract and
charter aviation services principally in Alaska, Louisiana, Texas and the
western United States.
<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 5.88 January 10.88 January 25.25 January 26.38 January 8.81 January 22.69
February 6.25 February 10.88 February 19.88 February 28.19 February 8.63 February 24.88
March 6.50 March 12.75 March 22.62 March 29.00 March 12.69 March 29.44
April 6.88 April 14.75 April 18.38 April 29.44 April 16.00 April 27.94
May 7.50 May 15.13 May 23.13 May 25.56 May 16.88 May 31.06
June 8.13 June 14.75 June 28.19 June 19.44 June 18.25 June 30.38
July 7.25 July 14.38 July 32.88 July 14.13 July 18.81 July 25.25
August 8.13 August 15.38 August 29.88 August 9.50 August 18.63 August 31.00
September 7.50 September 18.63 September 35.81 September 11.31 September 16.25 September 29.00
October 6.63 October 22.38 October 38.88 October 14.56 October 15.63 October 25.19
November 7.50 November 23.63 November 34.00 November 9.81 November 17.13 November 19.88
December 9.63 December 22.63 December 30.50 December 9.88 December 21.69 December 27.00
</TABLE>
The closing price on January , 2001 was .
SANTA FE INTERNATIONAL CORPORATION (SDC)
Santa Fe International is an international offshore and land contract
driller providing drilling related services to the petroleum industry
throughout the world, including third party drilling rig operations, incentive
drilling and engineering and project management services. Santa Fe's customers
consist primarily of major, government-owned and independent oil companies.
<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 36.63 January 13.75 January 26.75
February * February * February * February 35.31 February 13.38 February 28.69
March * March * March * March 37.94 March 18.69 March 37.00
April * April * April * April 39.19 April 21.75 April 34.38
May * May * May * May 35.00 May 20.25 May 38.81
June * June * June 34.00 June 30.25 June 23.00 June 34.94
July * July * July 41.25 July 23.00 July 20.88 July 35.13
August * August * August 44.81 August 13.50 August 26.38 August 39.31
September * September * September 46.50 September 15.38 September 21.56 September 45.06
October * October * October 49.19 October 18.44 October 21.06 October 36.50
November * November * November 41.94 November 12.25 November 22.81 November 24.69
December * December * December 40.75 December 14.50 December 25.88 December 32.06
</TABLE>
The closing price on January , 2001 was .
A-8
<PAGE>
SCHLUMBERGER N.V. (SLB)
Schlumberger N.V. provides technical services to the oil and gas,
utility, semiconductor, smart card, network and Internet solutions industries.
Schlumberger provides virtually all exploration and production services
required during the life of an oil and gas reservoir. In addition, Schlumberger
assists utility companies throughout the world, help them manage resources and
enhance transactions. Schlumberger also supplies productivity enhancing
technology, products, services and systems to the semiconductor, banking,
telecommunications and transportation industries.
<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 23.60 January 31.38 January 49.72 January 65.95 January 42.62 January 61.06
February 25.45 February 32.61 February 45.03 February 67.68 February 43.46 February 73.86
March 26.68 March 35.41 March 47.99 March 67.79 March 53.86 March 76.50
April 28.13 April 39.49 April 49.55 April 74.28 April 57.16 April 76.56
May 29.09 May 37.31 May 53.30 May 69.86 May 53.86 May 73.56
June 27.80 June 37.70 June 55.93 June 61.13 June 57.00 June 74.63
July 29.98 July 35.80 July 68.35 July 54.20 July 54.20 July 73.92
August 28.86 August 37.75 August 68.18 August 39.21 August 59.68 August 85.33
September 29.25 September 37.81 September 75.34 September 45.53 September 55.77 September 82.31
October 27.86 October 44.36 October 78.30 October 46.98 October 54.20 October 76.13
November 28.41 November 46.65 November 73.66 November 39.99 November 54.33 November 62.00
December 30.99 December 44.69 December 72.04 December 41.50 December 56.13 December 79.94
</TABLE>
The closing price on January , 2001 was .
SMITH INTERNATIONAL, INC. (SII)
Smith International, Inc. supplies products and services to the oil and
gas exploration and production industry, the petrochemical industry, and other
industries throughout the world. Smith International's products include
drilling and lubrication systems, waste-management services and the manufacture
of diamond drill bits and drilling tools. Smith International also offers
engineering services designed to optimize drilling operations and the use of
its products. Smith International also operates a supply-chain network that
provides well maintenance 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 11.63 January 23.50 January 45.50 January 49.63 January 25.31 January 51.31
February 13.38 February 20.38 February 40.63 February 53.25 February 24.50 February 62.69
March 14.25 March 25.25 March 45.63 March 55.06 March 40.00 March 77.50
April 17.25 April 29.75 April 47.38 April 58.75 April 44.88 April 76.00
May 17.88 May 31.50 May 52.38 May 49.06 May 43.25 May 79.06
June 16.75 June 30.13 June 60.75 June 34.81 June 43.44 June 72.81
July 17.00 July 33.50 July 71.69 July 26.13 July 43.31 July 71.38
August 17.50 August 34.75 August 72.75 August 17.75 August 46.69 August 79.50
September 17.38 September 35.13 September 77.69 September 27.44 September 40.50 September 81.56
October 16.00 October 38.00 October 76.25 October 35.94 October 34.56 October 70.50
November 16.88 November 40.88 November 64.00 November 24.13 November 39.88 November 58.06
December 23.50 December 44.88 December 61.38 December 25.19 December 49.69 December 74.56
</TABLE>
The closing price on January , 2001 was .
A-9
<PAGE>
TIDEWATER INC. (TDW)
Tidewater Inc. provides services and equipment to the offshore energy
industry through its offshore service vessels. Tidewater's vessels can be used
to tow drilling rigs and act as supply vessels for use in transporting supplies
and equipment from shore bases to offshore drilling rigs, platforms and other
installations. Tidewater also has smaller classes of vessels that are used in
transporting small quantities of supplies and personnel and for various other
purposes. Tidewater's fleet is deployed in major offshore oil and gas areas
throughout the world, including the Gulf of Mexico and Australia, Brazil and
Egypt, the North Sea and the Persian Gulf.
<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 16.75 January 33.13 January 47.00 January 40.88 January 21.50 January 28.44
February 19.63 February 34.13 February 43.00 February 44.50 February 18.88 February 28.31
March 20.38 March 38.00 March 46.00 March 43.81 March 25.88 March 31.81
April 23.75 April 42.50 April 40.13 April 39.63 April 26.50 April 29.75
May 25.00 May 41.25 May 42.25 May 38.13 May 25.75 May 38.88
June 25.13 June 43.88 June 44.00 June 33.00 June 30.50 June 36.00
July 25.38 July 33.75 July 50.50 July 29.00 July 33.06 July 32.13
August 24.75 August 38.38 August 52.50 August 21.00 August 32.50 August 40.38
September 28.13 September 37.38 September 59.25 September 20.75 September 25.50 September 45.50
October 26.38 October 43.75 October 65.69 October 28.31 October 30.00 October 46.19
November 28.63 November 43.75 November 56.06 November 23.06 November 31.94 November 40.50
December 31.50 December 45.25 December 55.38 December 23.19 December 36.00 December 44.38
</TABLE>
The closing price on January , 2001 was .
TRANSOCEAN SEDCO FOREX INC. (RIG)
Transocean Sedco Forex Inc. is an international provider of offshore,
contract drilling services for oil and gas exploration, development and
production. Transocean's contracts these drilling units out on a daily rate
basis to drill offshore wells. On August 19, 2000, Transocean entered into a
definitive agreement and plan of merger with R&B Falcon Corporation. The merger
has been approved by the shareholders of Transocean and R&B Falcon, but the
merger is subject to foreign regulatory approval and customary closing
conditions.
<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 10.13 January 23.06 January 32.75 January 39.75 January 25.56 January 31.81
February 10.44 February 21.75 February 27.94 February 43.38 February 20.63 February 39.44
March 11.63 March 25.50 March 28.06 March 51.44 March 28.81 March 51.31
April 13.50 April 27.44 April 30.31 April 55.88 April 29.69 April 47.00
May 14.25 May 26.50 May 34.50 May 49.31 May 24.63 May 49.19
June 14.38 June 25.25 June 36.31 June 44.50 June 26.25 June 53.44
July 16.75 July 24.50 July 40.84 July 39.44 July 30.69 July 49.50
August 17.13 August 27.31 August 47.53 August 24.56 August 33.84 August 59.75
September 16.31 September 30.63 September 47.94 September 34.69 September 30.63 September 58.63
October 15.88 October 31.63 October 54.00 October 36.94 October 27.25 October 53.00
November 17.25 November 30.13 November 47.44 November 24.69 November 28.19 November 39.88
December 22.38 December 31.31 December 48.19 December 26.81 December 33.69 December 46.00
</TABLE>
The closing price on January , 2001 was .
A-10
<PAGE>
WEATHERFORD INTERNATIONAL, INC. (WFT)
Weatherford International, Inc. provides equipment and services used for
the drilling, completion and production of oil and natural gas wells and
proprietary and patented technologies for maximizing such production throughout
the world. Weatherford International also provides artificial lift systems for
raising well reservoir pressure and various compression services, which are
used to increase pressure in a well.
<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 4.25 January 8.05 January 20.01 January 26.93 January 11.80 January 25.05
February 4.71 February 8.63 February 17.01 February 32.73 February 11.34 February 28.78
March 4.38 March 8.88 March 20.55 March 30.89 March 17.43 March 39.02
April 5.13 April 10.00 April 22.30 April 35.52 April 22.60 April 40.63
May 6.09 May 11.13 May 25.02 May 33.73 May 22.01 May 43.06
June 6.00 June 10.84 June 28.02 June 24.68 June 24.43 June 40.00
July 7.00 July 9.80 July 32.60 July 17.18 July 26.14 July 40.06
August 6.67 August 10.96 August 35.06 August 10.17 August 23.76 August 46.94
September 7.75 September 13.51 September 42.69 September 14.43 September 21.34 September 43.00
October 6.34 October 14.68 October 42.82 October 18.14 October 22.60 October 36.50
November 7.00 November 16.38 November 34.31 November 12.17 November 23.30 November 33.31
December 8.42 December 16.97 December 34.52 December 12.93 December 26.64 December 47.25
</TABLE>
The closing price on January , 2001 was .
A-11
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[LOGO OF HOLDRS]
1,000,000,000 Depositary Receipts
Oil Service HOLDRS SM Trust
---------------------
PROSPECTUS
---------------------
Merrill Lynch & Co.
Robert W. Baird & Co.
First Union Securities, Inc.
Legg Mason Wood Walker
Incorporated
Morgan Keegan & Company, Inc.
Raymond James & Associates, Inc.
Sutro & Co. Incorporated
Tucker Anthony Capital Markets
, 2001
Until , 2001 (25 days after the date of this prospectus), all
dealers effecting transactions in the offered Oil Service 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............. $ 87,438
Printing and engraving expenses................................. 150,000
Legal fees and expenses......................................... 200,000
Miscellaneous................................................... 12,562
--------
Total......................................................... $450,000
========
</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.
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-1
<PAGE>
(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
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, on January 5, 2001.
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
By: *
---------------------
Ahmass L. Fakahany
Senior Vice President and
Chief Financial Officer
POWER OF ATTORNEY
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 January 5, 2001.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
* Chief Executive Officer,
___________________________________________ Chairman of the Board and
John L. Steffens Director
* Director
___________________________________________
E. Stanley O'Neal
* Director
___________________________________________
George A. Schieren
* Director
___________________________________________
Thomas H. Patrick
* Senior Vice President and
___________________________________________ Chief Financial Officer
Ahmass L. Fakahany
* First Vice President and
___________________________________________ Controller
Dominic A. Carone
By: /s/ Stephen G. Bodurtha Attorney-in-Fact
___________________________________________
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 New York, as
Trustee dated as of September 2, 1999, and included as exhibits
thereto, form of Depositary Trust Agreement and form of HOLDRS and
Amendment No. 2 to the Standard Terms for Depositary Trust
Agreements, dated as of November 22, 2000
5.1 Opinion of Shearman & Sterling regarding the validity of the Oil
Service 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.
II-4
