Delaware
(State or other jurisdiction of incorporation or organization)
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6211
(Primary Standard Industrial Classification Code Number)
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13-5674085
(I.R.S. Employer
Identification Number)
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Merrill Lynch, Pierce, Fenner & Smith Incorporated
One Bryant Park
New York, New York 10036
(212) 449-1000
Attn: Corporate Secretary
(Name, address, including zip code, and telephone number, including area code, of agent for service)
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Abigail Arms, Esq.
Shearman & Sterling LLP
801 Pennsylvania Avenue, NW, Suite 900
Washington, D.C. 20004
(202) 508-8000
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3
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10
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17
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18
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20
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24
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29
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29
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29
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30
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Loss of investment. Because the value of Biotech HOLDRS directly relates to the value of the underlying securities, you may lose all or a substantial portion of your investment in the Biotech HOLDRS if the underlying securities decline in value.
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Discount trading price. Biotech HOLDRS may trade at a discount to the aggregate value of the underlying securities.
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Ownership of only fractional shares in the underlying securities. As a result of distributions of securities by companies included in the Biotech HOLDRS or other corporate events, such as mergers, a Biotech HOLDR may represent an interest in a fractional share of an underlying security. You will only be entitled to voting, distribution and other beneficial ownership rights in the underlying securities in which you own only fractional shares to the extent that the depositary aggregates your fractional shares with the other fractional shares of such underlying securities included in the Biotech HOLDRS and passes on beneficial ownership rights, including distribution and voting rights, to you based on your proportional, fractional shares in the underlying securities. In addition, if you surrender your Biotech HOLDRS to receive the underlying securities, you will receive cash in lieu of your fractional shares. You will not be entitled to any securities if your interest in an underlying security is only a fraction of a share.
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Not necessarily representative of the biotechnology industry. At the time of the initial offering on November 22, 1999, the companies included in the Biotech HOLDRS were generally considered to be involved in various segments of the biotechnology industry; however, since the time of the initial offering, the companies included in the Biotech HOLDRS may not be involved in the biotechnology industry. In this case, the Biotech HOLDRS may not consist of securities issued only by companies involved in the biotechnology industry. In addition, the market price of the underlying securities and the Biotech HOLDRS may not necessarily follow the price movements of the entire biotechnology industry generally. If the underlying securities decline in value, your investment in the Biotech HOLDRS will decline in value, even if securities prices of companies in the biotechnology industry generally increase in value.
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Not necessarily comprised of solely biotechnology companies. As a result of distributions of securities by companies included in the Biotech HOLDRS or other corporate events, such as mergers, securities of companies that are not currently included in the Biotech HOLDRS and that are not involved in the biotechnology industry may be included in the Biotech HOLDRS. The securities of a new company will only be distributed from the Biotech HOLDRS if the securities have a different Standard & Poor’s Corporation (“Standard & Poor’s”) sector classification than any of the underlying issuers included in the Biotech 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. As of January 2, 2002, Standard & Poor’s Corporation sector classifications are based upon the Standard & Poor’s Global Industry Classification Standard (“GICS”) sectors. As there are only 10 broadly defined GICS sector classifications, the use of GICS sectors to determine whether a new company will be included in, or whether the securities of a new company are distributed from, the Biotech HOLDRS provides no assurance that each new company included in the Biotech HOLDRS will be involved in the biotechnology industry. Currently, the underlying securities included in the Biotech HOLDRS are represented in the Health Care GICS sector. As each Standard & Poor’s GICS sector is defined very broadly, the securities of a new company could have the same GICS sector classification as a company currently included in the Biotech HOLDRS, and yet not be involved in the biotechnology industry. In addition, the GICS sector classifications of securities included in the Biotech HOLDRS may change over time if the companies
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that issued these securities change their focus of operations resulting in a change to a GICS sector classification or if Standard & Poor’s alters the criteria it uses to determine GICS sectors, or both. Therefore, additional GICS sectors may be represented in the Biotech HOLDRS, which may also result in the inclusion in the Biotech HOLDRS of the securities of a new company that is not involved in the biotechnology industry.
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No investigation of underlying securities. The underlying securities initially included in the Biotech HOLDRS were selected by Merrill Lynch, Pierce, Fenner & Smith Incorporated based on the market capitalization of the issuers and the market liquidity of securities in the biotechnology industry, without regard for the value, price performance, volatility or investment merit of the underlying securities. Consequently, the Biotech HOLDRS Trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and each of their respective affiliates, have not performed, and will not in the future perform, 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.
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Loss of diversification. As a result of industry developments, reorganizations or market fluctuations affecting issuers of the underlying securities, Biotech HOLDRS may not necessarily be a diversified investment in the biotechnology industry. In addition, reconstitution events, distributions of securities by an underlying issuer or other events, which may result in distributions of securities from, or the inclusion of additional securities in, the Biotech HOLDRS may also reduce diversification. As a result, Biotech HOLDRS may represent a concentrated investment in one or more of the underlying securities, which would reduce investment diversification and increase your exposure to the risks of concentrated investments.
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Conflicting investment choices. In order to sell one or more of the underlying securities individually, participate in any form of stock repurchase program by an issuer of an underlying security or participate in a tender offer relating to one or more of the underlying securities, you will be required to cancel your Biotech HOLDRS and receive delivery of each of the underlying securities, including those underlying securities that you may not want to sell or are not subject to a tender offer or repurchase offer. The cancellation of your Biotech HOLDRS will allow you to sell the individual underlying securities or to deliver the individual underlying securities in a tender offer or any form of stock repurchase program. The cancellation of Biotech HOLDRS will involve payment of a cancellation fee to the trustee.
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Trading halts. Trading in Biotech HOLDRS on the NYSE Arca may be halted if (i) the Biotech HOLDRS has fewer than the required number of record and/or beneficial holders for 30 or more consecutive trading days; (ii) the number of Biotech HOLDRS issued and outstanding falls below levels prescribed by the NYSE Arca; (iii) the market value of all Biotech HOLDRS issued and outstanding falls below levels prescribed by the NYSE Arca; or (iv) any other event shall occur or conditions exists which, in the opinion of the NYSE Arca, makes further dealings on the NYSE Arca inadvisable. If trading is halted in Biotech HOLDRS, you will not be able to trade Biotech HOLDRS and you will only be able to trade the underlying securities if you cancel your Biotech HOLDRS and receive each of the underlying securities.
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Delisting from the NYSE Arca. The NYSE Arca may consider delisting the Biotech HOLDRS if (i) the Biotech HOLDRS has fewer than the required number of record and/or beneficial holders for 30 or more consecutive trading days; (ii) the number of Biotech HOLDRS issued and outstanding falls below levels prescribed by the NYSE Arca; (iii) the market value of all Biotech HOLDRS issued and outstanding falls below levels prescribed by the NYSE Arca; or (iv) any other event shall occur or conditions exists which, in the opinion of the NYSE Arca, makes further listing of the Biotech HOLDRS on the NYSE Arca inadvisable. If the Biotech HOLDRS are delisted by the NYSE Arca, a termination event will result unless the Biotech HOLDRS are listed for trading on another U.S. national securities exchange within five business days from the date the Biotech HOLDRS are delisted.
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Possible conflicts of interest. Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, selected the underlying securities that were originally included in the Biotech HOLDRS and may face possible conflicts of interest as Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates, may engage in investment banking or may provide other services for issuers of the underlying securities in connection with its business.
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Delays in distributions. The depositary trust agreement provides that the trustee will use its reasonable efforts to distribute any cash or other distributions paid in respect of the underlying securities to you as soon as practicable after receipt of such distribution. You may, however, receive such cash or other distributions later than you would if you owned the underlying securities outside of the Biotech HOLDRS. In addition, you will not be entitled to any interest on any distribution by reason of any delay in distribution by the depositary.
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The stock prices of companies involved in the biotechnology industry have been and will likely continue to be volatile, which will directly affect the price volatility of the Biotech HOLDRS, and you could lose all or a substantial part of your investment. The trading prices of the securities of biotechnology companies included in the Biotech HOLDRS have been volatile. These stock prices could be subject to wide fluctuations in response to a variety of factors, including the following:
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general market fluctuations;
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actual or anticipated variations in companies’ quarterly operating results;
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announcements of technological innovations by competitors of the companies included in the Biotech HOLDRS;
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changes in financial estimates by securities analysts;
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changes in the market valuations of biotechnology companies;
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legal or regulatory developments affecting companies included in the Biotech HOLDRS or in the biotechnology industry;
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announcements by biotechnology companies or their competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;
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additions or departures of key personnel;
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sales of biotechnology companies’ securities in the open market; and
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difficulty in obtaining additional financing.
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Biotechnology companies face uncertainty with respect to pricing and third party reimbursement. Biotechnology companies will continue to be affected by the efforts of governments and third party payors, such as government health organizations, private health insurers and health maintenance organizations, to contain or reduce health care costs. Also, an emphasis on managed health care in the United States will continue to put pressure on the pricing of the products and technologies of biotechnology companies. The announcement or adoption of such proposals could have a material adverse affect on a biotechnology companies’ business and financial condition. Further, the sales of the products of many biotechnology companies are often dependent, in part, on the availability of reimbursement from third party payors. Third party payors are increasingly challenging the prices charged for health care products and technologies and denying or limiting coverage for new products. Even if a biotechnology company can bring a product or technology to market, there can be no assurance that these products or technologies will be considered cost-effective by third party payors and that sufficient reimbursement will be available to consumers to allow for the sale of the products and services on a profitable basis.
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Protection of patent and proprietary rights of biotechnology companies is difficult and costly. The success of many biotechnology companies is highly dependent on a biotechnology company’s ability to obtain patents on current and future products and technologies, to defend its existing patents and trade secrets and operate in a manner that does not infringe on the proprietary rights of other biotechnology companies. Patent disputes are frequent and can preclude the successful commercial introduction of products and technologies. As a result, there is significant litigation in the biotechnology industry regarding patent and other intellectual property rights. Litigation is costly and could subject a biotechnology company to significant liabilities to third parties. In addition, a biotechnology company could be forced to obtain costly third-party licenses or cease using the technology or product in dispute.
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Biotechnology companies are subject to extensive government regulation. Products and technologies offered by biotechnology companies are subject to extensive regulation. Products will require extensive pre-clinical testing, clinical trials, other testing, government review and final approval before any marketing of the product will be permitted. This procedure could take a number of years and involves the expenditure of substantial resources. The success of a biotechnology company’s products will depend, in part, upon obtaining and maintaining regulatory approval to market products and, once approved, complying with the continued review by regulatory agencies. The failure to obtain necessary government approvals, the restriction of existing approvals, loss of or changes to previously obtained approvals or the failure to comply with regulatory requirements could result in fines, unanticipated expenditures, product delays, non-approval or recall, interruption of production and even criminal prosecution. Even if regulatory approval is granted for a product, the approval may be limited to only specific applications for which the product or technology is useful, as demonstrated through clinical trials.
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Biotechnology companies must keep pace with rapid technological change to remain competitive. The biotechnology industry is highly competitive and is subject to rapid and significant technological change. Biotechnology companies will face continued competition as new products enter the market and advanced technologies become available. The success of a biotechnology company will depend on its ability to develop products and technologies that are at least as clinically effective or cost-effective than its competitors’ products and technologies or that would render its competitors’ products and technologies obsolete or uncompetitive.
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Results of research and development of new products and technologies are unpredictable. Successful product or technology development in the biotechnology industry is uncertain and only a small number of research and development programs will result in the marketing and sale of a new product or technology. Many products and technologies that appear promising may fail to reach the market for many reasons, including results indicating lack of effectiveness or harmful side effects in clinical or pre-clinical testing, failure to receive necessary regulatory approvals, uneconomical manufacturing costs or competing proprietary rights. In addition, there is no certainty that any product or technology in development will achieve market acceptance from the medical community, third party payors or individual users.
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Biotechnology companies may be exposed to extensive product liability costs. The testing, manufacturing, marketing and sale of many of the products and technologies developed by biotechnology companies inherently expose biotechnology companies to potential product liability risks. Many biotechnology companies obtain limited product liability insurance. Furthermore, there can be no assurance that a biotechnology company will be able to maintain its product liability insurance, that it will continue to be able to obtain adequate product liability insurance on reasonable terms or that any product liability insurance obtained will provide adequate coverage against potential liabilities.
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Biotechnology companies face challenges gaining governmental and consumer acceptance of genetically altered products. Biotechnology companies may be involved in the development of genetically engineered agricultural and food products. The commercial success of these products will depend, in part, on governmental and public acceptance of their cultivation, distribution and consumption. Public attitudes may be influenced by the media and by opponents who claim that genetically engineered products are unsafe for consumption, pose unknown health risks, risks to the environment or to social or economic practices. Biotechnology companies may continue to have to expend significant resources to foster governmental and consumer acceptance of genetically engineered agricultural and food products. The success of any genetically engineered agricultural and food products may be delayed or impaired in certain geographical areas due to the existing or future regulatory, legislative or public acceptance issues. Other companies representing underlying securities of the Biotech HOLDRS may become involved in the development of genetically engineered agricultural and food products.
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Many biotechnology companies are dependent on key personnel for success. The success of many biotechnology companies is highly dependent on the experience, abilities and continued services of key executive officers and key scientific personnel. If these companies lose the services of any of these officers or key scientific personnel, their future success could be undermined. The success of many biotechnology companies also depends upon their ability to attract and retain other highly qualified scientific, managerial sales and manufacturing personnel and their ability to develop and maintain relationships with qualified clinical researchers. Competition for such personnel and relationships is intense and many of these companies compete with each other and with universities and non-profit research organizations. There is no certainty that any of these biotechnology companies will be able to continue to attract and retain qualified personnel or develop and maintain relationships with clinical researchers.
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It may be impossible to initiate legal proceedings or enforce judgments against some of the companies included in the Biotech HOLDRS. Some of the companies included in the Biotech HOLDRS may be incorporated under the laws of a jurisdiction other than the United States and a substantial portion of their assets are located outside the United States. As a result, it may be impossible to effect service of process within the United States on some of the companies included in the Biotech HOLDRS or enforce judgments made against them in courts in the United States based on civil liability provisions of the securities laws of the United States. In addition, judgments obtained in the United States, especially those awarding punitive damages, may not be enforceable in foreign countries.
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Potential voting impediments may exist with respect to the ownership of some of the underlying securities included in the Biotech HOLDRS. Holders of American depositary shares, including those that may, from time to time, be included in the Biotech HOLDRS, may only exercise voting rights with respect to the securities represented by American depositary shares in accordance with the provisions of deposit agreements entered into in connection with the issuance of the American depositary shares. These deposit agreements may not permit holders of American depositary shares to exercise voting rights that attach to the securities underlying the American depositary shares without the issuer first instructing the depositary to send voting information to the holder of the American depositary share. Also, holders of American depositary shares may not exercise voting rights unless they take a variety of steps, which include registration in the share registry of the company that has issued the securities underlying the American depositary shares. The cumulative effect of these steps may make it impractical for holders of American depositary shares to exercise the voting rights attached to the underlying securities.
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Companies whose securities are included in the Biotech HOLDRS may need additional financing, which may be difficult to obtain. Failure to obtain necessary financing or doing so on unattractive terms could
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adversely affect development and marketing efforts and other operations of companies whose securities are included in the Biotech HOLDRS. Companies whose securities are included in the Biotech HOLDRS may need to raise additional capital in order to fund the continued development and marketing of their products or to fund strategic acquisitions or investments. Their ability to obtain additional financing will depend on a number of factors, including market conditions, operating performance and investor interest. These factors may make the timing, amount, terms and conditions of any financing unattractive. If adequate funds are not available or are not available on acceptable terms, companies whose securities are included in the Biotech HOLDRS may have to forego strategic acquisitions or investments, reduce or defer their development activities, delay their introduction of new products and services, or, in certain circumstances, suspend or terminate their operations. Any of these actions may reduce the market price of stocks in the biotechnology industry.
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Issuer
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Biotech HOLDRS Trust.
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The trust
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The Biotech HOLDRS Trust was formed under the depositary trust agreement, dated as of November 18, 1999, among The Bank of New York Mellon, as trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, other depositors and the owners of the Biotech HOLDRS. The depositary trust agreement was amended on November 22, 2000. The trust is not a registered investment company under the Investment Company Act of 1940.
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Initial depositor
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Merrill Lynch, Pierce, Fenner & Smith Incorporated.
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Trustee
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The Bank of New York Mellon, a New York state-chartered banking organization, is the trustee and receives compensation as set forth in the depositary trust agreement. The trustee is responsible for receiving deposits of underlying securities and delivering Biotech HOLDRS representing the underlying securities issued by the trust. The trustee holds the underlying securities on behalf of the holders of Biotech HOLDRS.
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Purpose of Biotech HOLDRS
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Biotech HOLDRS were designed to achieve the following:
Diversification. Biotech HOLDRS were initially designed to allow you to diversify your investments in the biotechnology industry through a single, exchange-listed instrument representing your undivided beneficial ownership of the underlying securities. See “Risk Factors—General Risk Factors.”
Flexibility. The beneficial owners of Biotech HOLDRS have undivided beneficial ownership interests in each of the underlying securities represented by the Biotech HOLDRS, and can cancel their Biotech HOLDRS to receive each of the underlying securities represented by the Biotech HOLDRS.
Transaction costs. The expenses associated with buying and selling Biotech 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.
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Trust assets
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The trust holds securities traded on U.S. stock markets that, when initially selected, were issued by companies involved in the biotechnology industry. Except when a reconstitution event, distribution of securities by an underlying issuer or other event occurs, the underlying securities will not change and the securities of a new company will not be added to the securities underlying the Biotech HOLDRS. Reconstitution events are described in this prospectus under the heading “Description of the Depositary Trust Agreement—Distributions” and “—Reconstitution events.” 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.
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The Biotech HOLDRS
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The trust has issued, and may continue to issue, Biotech HOLDRS that represent an undivided beneficial ownership interest in the shares of U.S.-traded securities that are held by the trust on your behalf. The Biotech HOLDRS themselves are separate from the underlying securities that are represented by Biotech HOLDRS.
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The following table provides:
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the names of the issuers of the underlying securities currently represented by the Biotech HOLDRS;
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the stock ticker symbols;
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the share amounts currently represented by a round-lot of 100 Biotech HOLDRS; and
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the primary U.S. market on which the underlying securities of the selected companies are traded.
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Name of Company
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Ticker
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Share Amounts
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Primary U.S.
Trading Market |
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Affymetrix, Inc.
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AFFX
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4.0000
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NASDAQ GS
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Alkermes, Inc.
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ALKS
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4.0000
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NASDAQ GS
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Amgen Inc.
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AMGN
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64.4800
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NASDAQ GS
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Biogen Idec Inc.
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BIIB
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26.9500
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NASDAQ GS
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Celera Corporation
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CRA
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4.0000
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NASDAQ GS
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Enzon Pharmaceuticals, Inc.
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ENZN
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3.0000
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NASDAQ GM
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Genzyme Corporation
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GENZ
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14.0000
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NASDAQ GS
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Gilead Sciences, Inc.
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GILD
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64.0000
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NASDAQ GS
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Human Genome Sciences, Inc.
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HGSI
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8.0000
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NASDAQ GM
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Life Technologies Corporation
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LIFE
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8.1774
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NASDAQ GS
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QLT Inc.
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QLTI
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5.0000
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NASDAQ GS
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Shire plc
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SHPGY
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6.8271
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NASDAQ GS
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The companies whose securities were initially included in the Biotech HOLDRS at the time Biotech HOLDRS were originally issued on November 22, 1999 were generally considered to be among the largest and most liquid companies with U.S.-traded securities involved in the biotechnology industry, as measured by market capitalization and trading volume on October 27, 1999. The market capitalization of a company is determined by multiplying the market price of its securities by the number of its outstanding securities.
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The trust will only issue and cancel, and you may only obtain, hold, trade or surrender, Biotech HOLDRS in a round-lot of 100 Biotech HOLDRS and round-lot multiples. The trust will only issue Biotech HOLDRS upon the deposit of the whole shares represented by a round-lot of 100 Biotech HOLDRS. In the event that a fractional share comes to be represented by a round-lot of Biotech HOLDRS, the trust may require a minimum of more than one round-lot of 100 Biotech HOLDRS for an issuance so that the trust will always receive whole share amounts for issuance of Biotech HOLDRS.
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The number of outstanding Biotech 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 Biotech HOLDRS on a continuous
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basis when an investor deposits the required securities with the trustee. | |
Purchases
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You may acquire Biotech HOLDRS in two ways:
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through an in-kind deposit of the required number of securities of the underlying issuers with the trustee; or
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through a cash purchase in the secondary trading market.
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Issuance and cancellation fees
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If you wish to create Biotech HOLDRS by delivering to the trust the requisite securities represented by a round-lot of 100 Biotech HOLDRS, The Bank of New York Mellon, as trustee, will charge you an issuance fee of up to $10.00 for each round-lot of 100 Biotech HOLDRS. If you wish to cancel your Biotech HOLDRS and withdraw your underlying securities, The Bank of New York Mellon, as trustee, will charge you a cancellation fee of up to $10.00 for each round-lot of 100 Biotech HOLDRS.
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Commissions
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If you choose to deposit underlying securities in order to receive Biotech HOLDRS, you will be responsible for paying any sales commission associated with your purchase of the underlying securities that is charged by your broker in addition to the issuance fee charged by the trustee that is described above.
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Custody fees
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The Bank of New York Mellon, as trustee and as custodian, will charge you a quarterly custody fee of $2.00 for each round-lot of 100 Biotech HOLDRS, to be deducted from any cash dividend 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 Biotech 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.
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Rights relating to Biotech HOLDRS
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You have the right to withdraw the underlying securities upon request by delivering a round-lot or integral multiple of a round-lot of Biotech 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 Biotech HOLDRS would otherwise require the delivery of a fractional share, the trustee will sell the fractional share in the market and the trust, in turn, will deliver cash in lieu of such fractional share. Except with respect to the right to vote for dissolution of the trust, the Biotech HOLDRS themselves will not have voting rights.
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Rights relating to the underlying securities
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Biotech HOLDRS represents your beneficial ownership of the underlying securities. Owners of Biotech HOLDRS have the same rights and privileges as if they beneficially owned the underlying securities in “street name” outside of Biotech HOLDRS. These include the right to instruct the trustee to vote the underlying securities or attend shareholder meetings yourself, the right to receive any dividends and other distributions on the underlying securities that are declared and paid to the trustee by an issuer of an underlying security, the right to pledge Biotech HOLDRS and the right to surrender Biotech HOLDRS to receive the underlying securities. See “Description of the Depositary Trust Agreement.” Biotech HOLDRS does not change your beneficial ownership in the underlying securities under United States federal securities laws, including sections 13(d) and 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result, you have the same obligations to file insider trading reports that you would have if you held the underlying
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securities outside of Biotech HOLDRS. However, due to the nature of Biotech HOLDRS, you will not be able to participate in any dividend reinvestment program of an issuer of underlying securities unless you cancel your Biotech HOLDRS (and pay the applicable fees) and receive all of the underlying securities.
A holder of Biotech HOLDRS is not a registered owner of the underlying securities. In order to become a registered owner, a holder of Biotech HOLDRS would need to surrender their Biotech HOLDRS, pay the applicable fees and expenses, receive all of the underlying securities and follow the procedures established by the issuers of the underlying securities for registering their securities in the name of such holder.
You retain the right to receive any reports and communications that the issuers of underlying securities are required to send to beneficial owners of their securities. As such, you will receive such reports and communications from the broker through which you hold your Biotech HOLDRS in the same manner as if you beneficially owned your underlying securities outside of Biotech HOLDRS in “street name” through a brokerage account. The trustee will not attempt to exercise the right to vote that attaches to, or give a proxy with respect to, the underlying securities other than in accordance with your instructions.
The depositary trust agreement entitles you to receive, subject to certain limitations and net of any fees and expenses of the trustee, any distributions of cash (including dividends), securities or property made with respect to the underlying securities. However, any distribution of securities by an issuer of underlying securities will be deposited into the trust and will become part of the underlying securities unless the distributed securities are not listed for trading on a U.S. national securities exchange or the distributed securities have a Standard & Poor’s GICS sector classification that is different from the GICS sector classifications represented by the companies included in the Biotech 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 distributed to you, may be disposed of for your benefit or may lapse.
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There may be a delay between the time any cash or other distribution is received by the trustee with respect to the underlying securities and the time such cash or other distributions are distributed to you. In addition, you are not entitled to any interest on any distribution by reason of any delay in distribution by the trustee. If any tax or other governmental charge becomes due with respect to Biotech HOLDRS or any underlying securities, you will be responsible for paying that tax or governmental charge.
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If you wish to participate in a tender offer for any of the underlying securities, or any form of stock repurchase program by an issuer of an underlying security, you must surrender your Biotech HOLDRS (and pay the applicable fees and expenses) and receive all of your underlying securities in exchange for your Biotech HOLDRS, including those underlying securities not subject to a tender offer or repurchase offer. For specific information about obtaining your underlying securities, you should read the discussion under the caption “Description of the Depositary Trust Agreement—Withdrawal of underlying securities.”
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Ownership rights in fractional
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As a result of distributions of securities by companies included in the Biotech
|
shares in the underlying securities | HOLDRS or other corporate events, such as mergers, a Biotech HOLDR may represent an interest in a fractional share of an underlying security. You are entitled to receive distributions proportionate to your fractional shares.
In addition, you are entitled to receive proxy materials and other shareholder communications and you are entitled to exercise voting rights proportionate to your fractional shares. The trustee will aggregate the votes of all of the share fractions represented by Biotech HOLDRS and will vote the largest possible number of whole shares. If, after aggregation, there is a fractional remainder, this fraction will be ignored, because the issuer will only recognize whole share votes. For example, if 100,001 round-lots of 100 Biotech HOLDRS are outstanding and each round-lot of 100 Biotech HOLDRS represents 1.75 shares of an underlying security, there will be 175,001.75 votes of the underlying security represented by Biotech HOLDRS. If holders of 50,000 round-lots of 100 Biotech HOLDRS vote their underlying securities “yes” and holders of 50,001 round-lots of 100 Biotech HOLDRS vote their underlying securities “no,” there will be 87,500 affirmative votes and 87,501.75 negative votes. The trustee will ignore the .75 negative votes and will deliver to the issuer 87,500 affirmative votes and 87,501 negative votes.
|
Reconstitution events
|
The depositary trust agreement provides for the automatic distribution of underlying securities from the Biotech 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 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 Biotech HOLDRS.
|
|
B. |
If the Securities and Exchange Commission (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 its securities will no longer be an underlying security and the trustee will distribute the shares of that company to the owners of the Biotech 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 Biotech HOLDRS; provided that any securities received as consideration will be distributed only if the distributed securities have a different Standard & Poor’s GICS sector classification than any of the underlying securities represented in the Biotech 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. 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 and are not listed for trading on another U.S. national securities exchange within five business days from the date the securities are delisted.
|
To the extent a distribution of underlying securities from the Biotech 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 Biotech 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 have a Standard & Poor’s GICS sector classification that is different from the GICS sector classification of any other security then included in the Biotech HOLDRS or if the securities received are not listed for trading on a U.S. national securities exchange.
|
|
It is anticipated that, as a result of the broadly defined Standard & Poor’s GICS sectors, most distributions or exchanges of securities will result in the inclusion of new securities in the Biotech HOLDRS. The trustee will review the Standard & Poor’s GICS sector classifications of securities to determine whether securities received as a result of a distribution by an underlying issuer or as consideration for securities will be included in the Biotech HOLDRS or distributed from the Biotech HOLDRS to you.
|
|
Standard & Poor’s sector classifications
|
Standard & Poor’s Corporation is an independent source of market information that, among other things, maintains the Global Industry Classification Standard, which classifies the securities of public companies into various sector classifications based upon GICS sectors, which are derived from its own criteria. The GICS classification standards were effective as of January 2, 2002. There are 10 Standard & Poor’s GICS sector classifications and each class of publicly traded securities of a company is given only one GICS sector classification. The securities included in the Biotech HOLDRS are currently represented in the Health Care GICS sector. The Standard & Poor’s GICS sector classifications of the securities included in the Biotech 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 GICS sectors, or both.
|
Termination events
|
A. |
The Biotech HOLDRS are delisted from the NYSE Arca and are not listed for trading on another U.S. national securities exchange within five business days from the date the Biotech HOLDRS are delisted.
|
B. |
The trustee resigns and no successor trustee is appointed within 60 days from the date the trustee provides notice to Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, of its intent to resign.
|
|
C. |
Beneficial owners of at least 75% of outstanding Biotech 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 as promptly as practicable after the termination event.
Upon termination of the depositary trust agreement and prior to distributing the underlying securities to you, the trustee will charge you a cancellation fee of up to $10.00 per round-lot of 100 Biotech HOLDRS surrendered, along with any taxes or other governmental charges, if any.
|
|
U.S. federal income tax consequences
|
The U.S. federal income tax laws will treat a U.S. receipt holder of Biotech HOLDRS as directly owning the underlying securities. The Biotech HOLDRS themselves will not result in any U.S. federal income tax consequences separate from the tax consequences associated with ownership of the
|
underlying securities. See “U.S. Federal Income Tax Consequences.” | |
Listing
|
The Biotech HOLDRS are listed on the NYSE Arca under the symbol “BBH.”
|
Trading
|
Investors are only able to acquire, hold, transfer and surrender a round-lot of 100 Biotech HOLDRS. Bid and ask prices, however, are quoted per single Biotech HOLDR.
|
Clearance and settlement
|
Biotech HOLDRS have been issued only in book-entry form. Biotech HOLDRS are evidenced by one or more global certificates that the trustee has deposited 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 Biotech HOLDRS.”
|
1999
|
Closing
Price
|
2000
|
Closing
Price
|
2001
|
Closing
Price
|
2002
|
Closing
Price
|
||||||||||||
July 30
|
62.91 |
January 31
|
117.14 |
January 31
|
120.69 |
January 31
|
100.65 | ||||||||||||
August 31
|
70.11 |
February 29
|
152.38 |
February 28
|
116.99 |
February 28
|
99.64 | ||||||||||||
September 30
|
65.57 |
March 31
|
113.85 |
March 30
|
97.22 |
March 28
|
101.00 | ||||||||||||
October 29
|
65.85 |
April 28
|
98.70 |
April 30
|
107.66 |
April 30
|
84.44 | ||||||||||||
November 30
|
74.16 |
May 31
|
99.97 |
May 31
|
114.34 |
May 31
|
77.26 | ||||||||||||
December 31
|
104.52 |
June 30
|
133.92 |
June 29
|
115.47 |
June 28
|
67.47 | ||||||||||||
July 31
|
123.84 |
July 31
|
104.63 |
July 31
|
72.23 | ||||||||||||||
August 31
|
147.49 |
August 31
|
108.16 |
August 30
|
69.81 | ||||||||||||||
September 29
|
144.56 |
September 28
|
96.22 |
September 30
|
67.48 | ||||||||||||||
October 31
|
129.27 |
October 31
|
106.36 |
October 31
|
73.65 | ||||||||||||||
November 30
|
120.53 |
November 30
|
118.52 |
November 29
|
71.64 | ||||||||||||||
December 31
|
129.70 |
December 31
|
110.22 |
December 31
|
70.61 | ||||||||||||||
2003
|
Closing
Price
|
2004
|
Closing
Price
|
2005
|
Closing
Price
|
2006
|
Closing
Price
|
||||||||||||
January 31
|
74.07 |
January 30
|
123.61 |
January 31
|
131.83 |
January 31
|
178.01 | ||||||||||||
February 28
|
74.51 |
February 27
|
131.18 |
February 28
|
124.15 |
February 28
|
180.49 | ||||||||||||
March 31
|
80.17 |
March 31
|
127.59 |
March 31
|
128.96 |
March 31
|
176.43 | ||||||||||||
April 30
|
85.42 |
April 30
|
134.94 |
April 29
|
142.77 |
April 28
|
165.52 | ||||||||||||
May 30
|
103.16 |
May 28
|
133.30 |
May 31
|
156.10 |
May 31
|
168.36 | ||||||||||||
June 30
|
105.79 |
June 30
|
131.61 |
June 30
|
155.42 |
June 30
|
166.89 | ||||||||||||
July 31
|
116.79 |
July 30
|
123.99 |
July 29
|
179.35 |
July 31
|
168.92 | ||||||||||||
August 29
|
113.61 |
August 31
|
126.56 |
August 31
|
183.23 |
August 31
|
170.36 | ||||||||||||
September 30
|
110.92 |
September 30
|
130.30 |
September 30
|
175.56 |
September 29
|
174.87 | ||||||||||||
October 31
|
110.57 |
October 29
|
122.22 |
October 31
|
177.27 |
October 31
|
179.86 | ||||||||||||
November 28
|
110.64 |
November 30
|
127.61 |
November 30
|
187.47 |
November 30
|
175.57 | ||||||||||||
December 31
|
117.85 |
December 31
|
139.79 |
December 30
|
183.99 |
December 29
|
172.01 |
2007
|
Closing
Price
|
2008
|
Closing
Price
|
2009
|
Closing
Price
|
2010
|
Closing
Price
|
||||||||||||
January 31
|
179.24 |
January 31
|
160.09 |
January 30
|
169.46 |
January 29
|
102.38 | ||||||||||||
February 28
|
173.38 |
February 29
|
163.41 |
February 27
|
163.29 |
February 26
|
102.12 | ||||||||||||
March 30
|
166.69 |
March 31
|
169.73 |
March 31
|
91.26 |
March 31
|
103.26 | ||||||||||||
April 30
|
174.15 |
April 30
|
157.66 |
April 30
|
88.77 |
April 30
|
97.10 | ||||||||||||
May 31
|
170.52 |
May 30
|
163.67 |
May 29
|
90.35 |
May 28
|
87.84 | ||||||||||||
June 29
|
164.43 |
June 30
|
166.14 |
June 30
|
92.91 |
June 30
|
87.22 | ||||||||||||
July 31
|
160.85 |
July 31
|
198.85 |
July 31
|
101.97 |
July 30
|
93.17 | ||||||||||||
August 31
|
161.05 |
August 29
|
196.53 |
August 31
|
99.77 |
August 31
|
89.39 | ||||||||||||
September 28
|
171.57 |
September 30
|
180.14 |
September 30
|
101.81 |
September 30
|
95.84 | ||||||||||||
October 31
|
177.06 |
October 31
|
170.00 |
October 30
|
90.44 |
October 29
|
101.81 | ||||||||||||
November 30
|
176.75 |
November 28
|
159.07 |
November 30
|
97.25 |
November 30
|
96.83 | ||||||||||||
December 31
|
157.80 |
December 31
|
172.13 |
December 31
|
97.62 |
December 31
|
99.70 |
2011
|
Closing
Price
|
|
|||
January 31
|
101.43
|
|
|||
February 28
|
100.89
|
|
|
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 Biotech 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 Biotech 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 Biotech HOLDRS; provided that any securities received as consideration will be distributed only if the distributed securities have a different Standard & Poor’s GICS sector classification than any of the underlying securities represented in the Biotech 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. 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 and are not listed for trading on another U.S. national securities exchange within five business days from the date such securities are delisted.
|
|
·
|
an individual who is a citizen or resident of the United States;
|
|
·
|
a corporation (or an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
|
|
·
|
an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
|
|
·
|
a trust if either (i) it is subject to the primary supervision of a U.S. court and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.
|
|
·
|
a foreign corporation that is eligible for the benefits of a comprehensive U.S. income tax treaty, which the Secretary of the Treasury determines to be satisfactory and that includes an exchange of information program;
|
|
·
|
a foreign corporation if the stock to which the dividend is paid is readily tradable on an established market in the United States; and
|
|
·
|
a corporation that is incorporated in a possession of the United States;
|
|
·
|
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.
|
|
·
|
in the case of any gain realized by an individual non-U.S. receipt holder, the non-U.S. receipt 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;
|
|
·
|
that gain is effectively connected with a U.S. trade or business conducted by the non-U.S. receipt holder or, where a tax treaty applies, is attributable to a permanent establishment maintained in the United States by the non-U.S. receipt holder; 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 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 five percent of the common stock of such issuer. It is expected that the underlying securities are currently “regularly traded on an established securities market” although no assurances can be made that the securities will continue to be so traded.
|
2006
|
Closing Price
|
2007
|
Closing Price
|
2008
|
Closing Price
|
2009
|
Closing Price
|
2010
|
Closing Price
|
2011
|
Closing Price
|
||||||||||||||||||
January
|
38.18 |
January
|
24.95 |
January
|
20.06 |
January
|
3.18 |
January
|
5.28 |
January
|
4.85 | ||||||||||||||||||
February
|
35.51 |
February
|
25.73 |
February
|
19.18 |
February
|
2.13 |
February
|
7.31 |
February
|
4.91 | ||||||||||||||||||
March
|
32.93 |
March
|
30.07 |
March
|
17.41 |
March
|
3.27 |
March
|
7.34 | ||||||||||||||||||||
April
|
28.65 |
April
|
26.27 |
April
|
10.91 |
April
|
4.69 |
April
|
6.95 | ||||||||||||||||||||
May
|
27.51 |
May
|
25.98 |
May
|
12.06 |
May
|
4.81 |
May
|
6.55 | ||||||||||||||||||||
June
|
25.60 |
June
|
24.89 |
June
|
10.29 |
June
|
5.93 |
June
|
5.90 | ||||||||||||||||||||
July
|
21.57 |
July
|
24.38 |
July
|
7.88 |
July
|
8.84 |
July
|
4.89 | ||||||||||||||||||||
August
|
21.31 |
August
|
22.66 |
August
|
8.58 |
August
|
7.72 |
August
|
4.12 | ||||||||||||||||||||
September
|
21.56 |
September
|
25.37 |
September
|
7.74 |
September
|
8.78 |
September
|
4.56 | ||||||||||||||||||||
October
|
25.50 |
October
|
25.46 |
October
|
3.69 |
October
|
5.23 |
October
|
4.50 | ||||||||||||||||||||
November
|
25.30 |
November
|
20.85 |
November
|
2.74 |
November
|
4.75 |
November
|
4.16 | ||||||||||||||||||||
December
|
23.06 |
December
|
23.14 |
December
|
2.99 |
December
|
5.84 |
December
|
5.03 |
2006
|
Closing
Price |
2007
|
Closing
Price |
2008
|
Closing
Price |
2009
|
Closing
Price |
2010
|
Closing
Price |
2011
|
Closing
Price |
||||||||||||||||||
January
|
24.34 |
January
|
14.92 |
January
|
13.32 |
January
|
11.47 |
January
|
10.94 |
January
|
12.91 | ||||||||||||||||||
February
|
25.41 |
February
|
16.40 |
February
|
12.94 |
February
|
10.08 |
February
|
11.46 |
February
|
14.33 | ||||||||||||||||||
March
|
22.05 |
March
|
15.44 |
March
|
11.88 |
March
|
12.13 |
March
|
12.97 | ||||||||||||||||||||
April
|
21.47 |
April
|
16.43 |
April
|
12.43 |
April
|
7.65 |
April
|
13.11 | ||||||||||||||||||||
May
|
19.82 |
May
|
16.06 |
May
|
12.67 |
May
|
8.12 |
May
|
11.36 | ||||||||||||||||||||
June
|
18.92 |
June
|
14.60 |
June
|
12.36 |
June
|
10.82 |
June
|
12.45 | ||||||||||||||||||||
July
|
17.16 |
July
|
14.24 |
July
|
15.75 |
July
|
10.32 |
July
|
12.90 | ||||||||||||||||||||
August
|
16.35 |
August
|
16.85 |
August
|
13.37 |
August
|
9.05 |
August
|
13.27 | ||||||||||||||||||||
September
|
15.85 |
September
|
18.40 |
September
|
13.30 |
September
|
9.19 |
September
|
14.65 | ||||||||||||||||||||
October
|
16.80 |
October
|
16.20 |
October
|
9.88 |
October
|
7.97 |
October
|
11.57 | ||||||||||||||||||||
November
|
15.18 |
November
|
14.26 |
November
|
7.38 |
November
|
8.98 |
November
|
10.48 | ||||||||||||||||||||
December
|
13.37 |
December
|
15.59 |
December
|
10.65 |
December
|
9.41 |
December
|
12.28 |
2006
|
Closing
Price |
2007
|
Closing
Price |
2008
|
Closing
Price |
2009
|
Closing
Price |
2010
|
Closing
Price |
2011
|
Closing
Price |
||||||||||||||||||
January
|
72.89 |
January
|
70.37 |
January
|
46.59 |
January
|
54.85 |
January
|
58.48 |
January
|
55.08 | ||||||||||||||||||
February
|
75.48 |
February
|
64.26 |
February
|
45.52 |
February
|
48.93 |
February
|
56.61 |
February
|
51.33 | ||||||||||||||||||
March
|
72.75 |
March
|
55.88 |
March
|
41.78 |
March
|
49.52 |
March
|
59.84 | ||||||||||||||||||||
April
|
67.70 |
April
|
64.14 |
April
|
41.87 |
April
|
48.47 |
April
|
57.31 | ||||||||||||||||||||
May
|
67.59 |
May
|
56.45 |
May
|
44.03 |
May
|
49.94 |
May
|
51.78 | ||||||||||||||||||||
June
|
65.23 |
June
|
55.29 |
June
|
47.16 |
June
|
52.94 |
June
|
52.60 | ||||||||||||||||||||
July
|
69.71 |
July
|
53.74 |
July
|
62.63 |
July
|
62.31 |
July
|
54.53 | ||||||||||||||||||||
August
|
68.03 |
August
|
50.11 |
August
|
62.85 |
August
|
59.78 |
August
|
51.04 | ||||||||||||||||||||
September
|
71.53 |
September
|
56.57 |
September
|
59.27 |
September
|
60.23 |
September
|
55.11 | ||||||||||||||||||||
October
|
75.91 |
October
|
58.11 |
October
|
59.89 |
October
|
53.62 |
October
|
57.19 | ||||||||||||||||||||
November
|
71.04 |
November
|
55.25 |
November
|
55.54 |
November
|
56.35 |
November
|
52.69 | ||||||||||||||||||||
December
|
68.31 |
December
|
46.44 |
December
|
57.75 |
December
|
56.57 |
December
|
54.90 |
2006
|
Closing
Price |
2007
|
Closing
Price |
2008
|
Closing
Price |
2009
|
Closing
Price |
2010
|
Closing
Price |
2011
|
Closing
Price |
||||||||||||||||||
January
|
44.75 |
January
|
48.34 |
January
|
60.95 |
January
|
48.65 |
January
|
53.74 |
January
|
65.47 | ||||||||||||||||||
February
|
47.25 |
February
|
45.19 |
February
|
58.36 |
February
|
46.04 |
February
|
55.01 |
February
|
68.40 | ||||||||||||||||||
March
|
47.10 |
March
|
44.38 |
March
|
61.69 |
March
|
52.42 |
March
|
57.39 | ||||||||||||||||||||
April
|
44.85 |
April
|
47.21 |
April
|
60.69 |
April
|
48.34 |
April
|
53.29 | ||||||||||||||||||||
May
|
46.63 |
May
|
52.22 |
May
|
62.75 |
May
|
51.79 |
May
|
47.43 | ||||||||||||||||||||
June
|
46.32 |
June
|
53.50 |
June
|
55.89 |
June
|
45.15 |
June
|
47.45 | ||||||||||||||||||||
July
|
42.05 |
July
|
56.54 |
July
|
69.76 |
July
|
47.55 |
July
|
55.88 | ||||||||||||||||||||
August
|
44.20 |
August
|
63.82 |
August
|
50.93 |
August
|
50.20 |
August
|
53.80 | ||||||||||||||||||||
September
|
44.68 |
September
|
66.33 |
September
|
50.29 |
September
|
50.52 |
September
|
56.12 | ||||||||||||||||||||
October
|
47.60 |
October
|
74.44 |
October
|
42.55 |
October
|
42.13 |
October
|
62.71 | ||||||||||||||||||||
November
|
52.26 |
November
|
74.12 |
November
|
42.31 |
November
|
46.94 |
November
|
63.97 | ||||||||||||||||||||
December
|
49.19 |
December
|
56.92 |
December
|
47.63 |
December
|
53.50 |
December
|
67.05 |
2006
|
Closing
Price |
2007
|
Closing
Price |
2008
|
Closing
Price |
2009
|
Closing
Price |
2010
|
Closing
Price |
2011
|
Closing
Price |
||||||||||||||||||
January
|
11.76 |
January
|
15.86 |
January
|
15.32 |
January
|
8.44 |
January
|
6.73 |
January
|
6.19 | ||||||||||||||||||
February
|
11.49 |
February
|
13.87 |
February
|
13.86 |
February
|
6.43 |
February
|
5.99 |
February
|
6.36 | ||||||||||||||||||
March
|
11.69 |
March
|
14.20 |
March
|
14.70 |
March
|
7.63 |
March
|
7.10 | ||||||||||||||||||||
April
|
11.99 |
April
|
14.00 |
April
|
13.38 |
April
|
8.09 |
April
|
7.47 | ||||||||||||||||||||
May
|
11.20 |
May
|
13.35 |
May
|
12.88 |
May
|
7.57 |
May
|
7.07 | ||||||||||||||||||||
June
|
12.95 |
June
|
12.40 |
June
|
11.36 |
June
|
7.62 |
June
|
6.55 | ||||||||||||||||||||
July
|
13.50 |
July
|
12.02 |
July
|
13.65 |
July
|
6.00 |
July
|
6.69 | ||||||||||||||||||||
August
|
13.92 |
August
|
13.17 |
August
|
14.00 |
August
|
6.54 |
August
|
6.60 | ||||||||||||||||||||
September
|
13.92 |
September
|
14.06 |
September
|
15.45 |
September
|
6.24 |
September
|
6.74 | ||||||||||||||||||||
October
|
15.52 |
October
|
16.31 |
October
|
11.31 |
October
|
6.19 |
October
|
5.71 | ||||||||||||||||||||
November
|
14.35 |
November
|
15.12 |
November
|
9.74 |
November
|
6.24 |
November
|
5.67 | ||||||||||||||||||||
December
|
13.99 |
December
|
15.87 |
December
|
11.13 |
December
|
6.90 |
December
|
6.30 |
2006
|
Closing
Price |
2007
|
Closing
Price |
2008
|
Closing
Price |
2009
|
Closing
Price |
2010
|
Closing
Price |
2011
|
Closing
Price |
||||||||||||||||||
January
|
7.28 |
January
|
8.92 |
January
|
8.37 |
January
|
6.51 |
January
|
9.97 |
January
|
11.20 | ||||||||||||||||||
February
|
6.76 |
February
|
8.28 |
February
|
8.59 |
February
|
5.29 |
February
|
9.29 |
February
|
10.68 | ||||||||||||||||||
March
|
8.10 |
March
|
8.15 |
March
|
9.21 |
March
|
6.07 |
March
|
10.18 | ||||||||||||||||||||
April
|
8.50 |
April
|
8.48 |
April
|
8.72 |
April
|
5.75 |
April
|
10.58 | ||||||||||||||||||||
May
|
7.45 |
May
|
8.47 |
May
|
8.80 |
May
|
7.95 |
May
|
10.70 | ||||||||||||||||||||
June
|
7.54 |
June
|
7.85 |
June
|
7.12 |
June
|
7.91 |
June
|
10.65 | ||||||||||||||||||||
July
|
8.01 |
July
|
7.20 |
July
|
8.17 |
July
|
8.13 |
July
|
10.94 | ||||||||||||||||||||
August
|
8.18 |
August
|
8.11 |
August
|
9.05 |
August
|
7.17 |
August
|
10.25 | ||||||||||||||||||||
September
|
8.25 |
September
|
8.81 |
September
|
7.38 |
September
|
8.25 |
September
|
11.24 | ||||||||||||||||||||
October
|
8.56 |
October
|
9.53 |
October
|
4.97 |
October
|
8.39 |
October
|
11.25 | ||||||||||||||||||||
November
|
8.33 |
November
|
9.46 |
November
|
4.91 |
November
|
9.71 |
November
|
11.12 | ||||||||||||||||||||
December
|
8.51 |
December
|
9.53 |
December
|
5.83 |
December
|
10.53 |
December
|
12.16 |
2006
|
Closing
Price |
2007
|
Closing
Price |
2008
|
Closing
Price |
2009
|
Closing
Price |
2010
|
Closing
Price |
2011
|
Closing
Price |
||||||||||||||||||
January
|
70.94 |
January
|
65.73 |
January
|
78.13 |
January
|
68.92 |
January
|
54.26 |
January
|
73.35 | ||||||||||||||||||
February
|
69.34 |
February
|
61.80 |
February
|
70.92 |
February
|
60.93 |
February
|
57.20 |
February
|
75.45 | ||||||||||||||||||
March
|
67.22 |
March
|
60.02 |
March
|
74.54 |
March
|
59.39 |
March
|
51.83 | ||||||||||||||||||||
April
|
61.16 |
April
|
65.31 |
April
|
70.35 |
April
|
53.33 |
April
|
53.22 | ||||||||||||||||||||
May
|
59.50 |
May
|
64.48 |
May
|
68.46 |
May
|
59.14 |
May
|
48.65 | ||||||||||||||||||||
June
|
61.05 |
June
|
64.40 |
June
|
71.88 |
June
|
55.67 |
June
|
50.77 | ||||||||||||||||||||
July
|
68.38 |
July
|
63.07 |
July
|
76.65 |
July
|
51.89 |
July
|
69.56 | ||||||||||||||||||||
August
|
66.23 |
August
|
62.41 |
August
|
78.30 |
August
|
55.71 |
August
|
70.11 | ||||||||||||||||||||
September
|
67.47 |
September
|
61.96 |
September
|
80.89 |
September
|
56.73 |
September
|
70.79 | ||||||||||||||||||||
October
|
67.51 |
October
|
75.97 |
October
|
72.88 |
October
|
50.60 |
October
|
72.25 | ||||||||||||||||||||
November
|
64.46 |
November
|
74.93 |
November
|
64.02 |
November
|
50.70 |
November
|
71.22 | ||||||||||||||||||||
December
|
61.58 |
December
|
74.44 |
December
|
66.37 |
December
|
49.01 |
December
|
71.20 |
2006
|
Closing
Price |
2007
|
Closing
Price |
2008
|
Closing
Price |
2009
|
Closing
Price |
2010
|
Closing
Price |
2011
|
Closing
Price |
||||||||||||||||||
January
|
30.44 |
January
|
32.16 |
January
|
45.69 |
January
|
50.77 |
January
|
48.27 |
January
|
38.38 | ||||||||||||||||||
February
|
31.14 |
February
|
35.78 |
February
|
47.32 |
February
|
44.80 |
February
|
47.61 |
February
|
38.98 | ||||||||||||||||||
March
|
31.11 |
March
|
38.33 |
March
|
51.53 |
March
|
46.32 |
March
|
45.47 | ||||||||||||||||||||
April
|
28.75 |
April
|
40.86 |
April
|
51.76 |
April
|
45.80 |
April
|
39.71 | ||||||||||||||||||||
May
|
28.67 |
May
|
41.39 |
May
|
55.32 |
May
|
43.10 |
May
|
35.92 | ||||||||||||||||||||
June
|
29.58 |
June
|
38.80 |
June
|
52.95 |
June
|
46.84 |
June
|
34.28 | ||||||||||||||||||||
July
|
30.76 |
July
|
37.23 |
July
|
53.98 |
July
|
48.93 |
July
|
33.32 | ||||||||||||||||||||
August
|
31.70 |
August
|
36.37 |
August
|
52.68 |
August
|
45.06 |
August
|
31.83 | ||||||||||||||||||||
September
|
34.39 |
September
|
40.87 |
September
|
45.63 |
September
|
46.50 |
September
|
35.61 | ||||||||||||||||||||
October
|
34.45 |
October
|
46.19 |
October
|
45.85 |
October
|
42.55 |
October
|
39.67 | ||||||||||||||||||||
November
|
32.98 |
November
|
46.54 |
November
|
44.79 |
November
|
46.11 |
November
|
36.50 | ||||||||||||||||||||
December
|
32.47 |
December
|
46.01 |
December
|
51.14 |
December
|
43.27 |
December
|
36.24 |
2006
|
Closing
Price |
2007
|
Closing
Price |
2008
|
Closing
Price |
2009
|
Closing
Price |
2010
|
Closing
Price |
2011
|
Closing
Price |
||||||||||||||||||
January
|
11.00 |
January
|
11.78 |
January
|
5.58 |
January
|
1.81 |
January
|
26.47 |
January
|
24.26 | ||||||||||||||||||
February
|
12.52 |
February
|
11.00 |
February
|
5.91 |
February
|
1.89 |
February
|
28.16 |
February
|
25.03 | ||||||||||||||||||
March
|
10.87 |
March
|
10.62 |
March
|
5.89 |
March
|
0.83 |
March
|
30.20 | ||||||||||||||||||||
April
|
11.41 |
April
|
10.77 |
April
|
6.55 |
April
|
2.19 |
April
|
27.69 | ||||||||||||||||||||
May
|
10.96 |
May
|
10.59 |
May
|
5.88 |
May
|
2.47 |
May
|
24.76 | ||||||||||||||||||||
June
|
10.70 |
June
|
8.92 |
June
|
5.21 |
June
|
2.87 |
June
|
22.66 | ||||||||||||||||||||
July
|
9.71 |
July
|
7.76 |
July
|
6.63 |
July
|
14.30 |
July
|
25.94 | ||||||||||||||||||||
August
|
11.23 |
August
|
9.21 |
August
|
7.41 |
August
|
19.76 |
August
|
29.07 | ||||||||||||||||||||
September
|
11.54 |
September
|
10.29 |
September
|
6.35 |
September
|
18.82 |
September
|
29.79 | ||||||||||||||||||||
October
|
13.35 |
October
|
9.46 |
October
|
3.23 |
October
|
18.69 |
October
|
26.88 | ||||||||||||||||||||
November
|
12.52 |
November
|
10.41 |
November
|
1.73 |
November
|
27.82 |
November
|
24.53 | ||||||||||||||||||||
December
|
12.44 |
December
|
10.44 |
December
|
2.12 |
December
|
30.58 |
December
|
23.89 |
2006
|
Closing
Price |
2007
|
Closing
Price |
2008
|
Closing
Price |
2009
|
Closing
Price |
2010
|
Closing
Price |
2011
|
Closing
Price |
||||||||||||||||||
January
|
34.44 |
January
|
30.63 |
January
|
42.84 |
January
|
25.46 |
January
|
49.71 |
January
|
54.29 | ||||||||||||||||||
February
|
35.47 |
February
|
31.63 |
February
|
42.25 |
February
|
29.15 |
February
|
50.76 |
February
|
53.37 | ||||||||||||||||||
March
|
35.07 |
March
|
31.83 |
March
|
42.74 |
March
|
32.48 |
March
|
52.27 | ||||||||||||||||||||
April
|
33.01 |
April
|
32.74 |
April
|
46.79 |
April
|
37.30 |
April
|
54.76 | ||||||||||||||||||||
May
|
31.87 |
May
|
36.22 |
May
|
45.96 |
May
|
38.78 |
May
|
50.06 | ||||||||||||||||||||
June
|
33.04 |
June
|
36.88 |
June
|
39.26 |
June
|
41.72 |
June
|
47.25 | ||||||||||||||||||||
July
|
30.90 |
July
|
35.90 |
July
|
44.35 |
July
|
45.53 |
July
|
42.99 | ||||||||||||||||||||
August
|
30.43 |
August
|
38.95 |
August
|
42.46 |
August
|
44.53 |
August
|
42.78 | ||||||||||||||||||||
September
|
31.71 |
September
|
40.87 |
September
|
37.80 |
September
|
46.55 |
September
|
46.69 | ||||||||||||||||||||
October
|
29.01 |
October
|
45.44 |
October
|
28.79 |
October
|
47.17 |
October
|
50.18 | ||||||||||||||||||||
November
|
27.51 |
November
|
48.51 |
November
|
26.10 |
November
|
49.78 |
November
|
49.81 | ||||||||||||||||||||
December
|
28.30 |
December
|
46.71 |
December
|
23.31 |
December
|
52.22 |
December
|
55.50 |
2006
|
Closing
Price |
2007
|
Closing
Price |
2008
|
Closing
Price |
2009
|
Closing
Price |
2010
|
Closing
Price |
2011
|
Closing
Price |
||||||||||||||||||
January
|
6.02 |
January
|
9.38 |
January
|
3.67 |
January
|
2.23 |
January
|
4.56 |
January
|
7.00 | ||||||||||||||||||
February
|
7.15 |
February
|
8.40 |
February
|
3.02 |
February
|
1.70 |
February
|
4.70 |
February
|
6.75 | ||||||||||||||||||
March
|
7.69 |
March
|
7.83 |
March
|
3.55 |
March
|
1.77 |
March
|
5.10 | ||||||||||||||||||||
April
|
8.22 |
April
|
6.64 |
April
|
3.72 |
April
|
2.02 |
April
|
6.32 | ||||||||||||||||||||
May
|
7.22 |
May
|
7.53 |
May
|
3.95 |
May
|
2.27 |
May
|
5.96 | ||||||||||||||||||||
June
|
7.08 |
June
|
7.40 |
June
|
3.43 |
June
|
2.12 |
June
|
5.75 | ||||||||||||||||||||
July
|
7.07 |
July
|
6.57 |
July
|
3.70 |
July
|
3.45 |
July
|
5.72 | ||||||||||||||||||||
August
|
7.71 |
August
|
5.87 |
August
|
3.92 |
August
|
4.27 |
August
|
5.76 | ||||||||||||||||||||
September
|
7.60 |
September
|
5.69 |
September
|
3.26 |
September
|
3.70 |
September
|
6.29 | ||||||||||||||||||||
October
|
8.50 |
October
|
4.78 |
October
|
2.59 |
October
|
3.49 |
October
|
5.60 | ||||||||||||||||||||
November
|
8.66 |
November
|
4.94 |
November
|
1.90 |
November
|
4.98 |
November
|
6.05 | ||||||||||||||||||||
December
|
8.46 |
December
|
4.42 |
December
|
2.41 |
December
|
4.96 |
December
|
7.33 |
2006
|
Closing
Price |
2007
|
Closing
Price |
2008
|
Closing
Price |
2009
|
Closing
Price |
2010
|
Closing
Price |
2011
|
Closing
Price |
||||||||||||||||||
January
|
48.75 |
January
|
63.48 |
January
|
53.85 |
January
|
43.67 |
January
|
59.60 |
January
|
79.31 | ||||||||||||||||||
February
|
47.58 |
February
|
64.47 |
February
|
58.44 |
February
|
35.46 |
February
|
64.52 |
February
|
85.01 | ||||||||||||||||||
March
|
46.49 |
March
|
61.90 |
March
|
57.96 |
March
|
35.94 |
March
|
66.01 | ||||||||||||||||||||
April
|
47.36 |
April
|
69.89 |
April
|
54.94 |
April
|
37.27 |
April
|
65.84 | ||||||||||||||||||||
May
|
44.19 |
May
|
69.75 |
May
|
51.56 |
May
|
41.70 |
May
|
61.21 | ||||||||||||||||||||
June
|
44.23 |
June
|
74.13 |
June
|
49.13 |
June
|
41.48 |
June
|
61.38 | ||||||||||||||||||||
July
|
48.51 |
July
|
73.79 |
July
|
50.34 |
July
|
44.81 |
July
|
68.87 | ||||||||||||||||||||
August
|
51.25 |
August
|
78.74 |
August
|
53.08 |
August
|
49.56 |
August
|
64.72 | ||||||||||||||||||||
September
|
49.39 |
September
|
73.98 |
September
|
47.75 |
September
|
52.29 |
September
|
67.28 | ||||||||||||||||||||
October
|
54.85 |
October
|
75.15 |
October
|
39.45 |
October
|
53.30 |
October
|
70.10 | ||||||||||||||||||||
November
|
60.60 |
November
|
70.95 |
November
|
41.00 |
November
|
58.87 |
November
|
70.34 | ||||||||||||||||||||
December
|
61.76 |
December
|
68.95 |
December
|
44.78 |
December
|
58.70 |
December
|
72.38 |
Merrill Lynch, Pierce, Fenner & Smith Incorporated | |||
By: |
*
|
||
Name: | Sallie L. Krawcheck | ||
Title: | Co-Chief Executive Officer, Executive Vice | ||
President and Director |
Signature
|
Title
|
|||
*
|
Co-Chief Executive Officer, Executive Vice
President and Director
|
|||
Sallie L. Krawcheck
|
(Principal Executive Officer)
|
|||
*
|
Co-Chief Executive Officer, Executive Vice
President and Director
|
|||
Thomas K. Montag
|
(Principal Executive Officer)
|
|||
*
|
Chief Financial Officer and Senior Vice President
|
|||
Robert Qutub
|
(Principal Financial Officer and Principal
Accounting Officer)
|
|||
*
|
Executive Vice President and Director
|
|||
Bruce R. Thompson
|
||||
*By:
|
/s/ Liam B. O’Neil |
|
Attorney-in-Fact
|
|
Liam B. O’Neil
|
*4.1
|
Standard Terms for Depositary Trust Agreements between Merrill Lynch, Pierce, Fenner & Smith Incorporated and The Bank of New York Mellon (formerly known as 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, filed on October 28, 1999 as an exhibit to Amendment No. 1 to the registration statement on Form S-1 for Biotech HOLDRS.
|
|
*4.2
|
Form of Amendment No. 2 to the Standard Terms for Depositary Trust Agreements, dated as of November 22, 2000, filed on November 28, 2000 as an exhibit to post-effective Amendment No. 1 to the registration statement on Form S-1 for Biotech HOLDRS.
|
|
*4.3
|
Form of Amended and Restated Standard Terms for Depositary Trust Agreements, between Merrill Lynch, Pierce, Fenner & Smith Incorporated and The Bank of New York Mellon.
|
|
*5.1
|
Opinion of Shearman & Sterling LLP regarding the validity of the Biotech HOLDRS, filed on October 28, 1999 as an exhibit to Amendment No. 1 to the registration statement on Form S-1 for Biotech HOLDRS.
|
|
*8.1
|
Opinion of Shearman & Sterling LLP, as special U.S. tax counsel regarding the material federal income tax consequences, filed on October 28, 1999 as an exhibit to Amendment No. 1 to the registration statement on Form S-1 for Biotech HOLDRS.
|
|
*24.1
|
Power of Attorney of Sallie L. Krawcheck, Thomas K. Montag, Robert Qutub and Bruce R. Thompson.
|
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