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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 21, 2001
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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STRUCTURED PRODUCTS CORP.
INITIAL DEPOSITOR
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
HEALTHCARE SECTORSSM TRUST
YET-TO-BE FORMED
[ISSUER WITH RESPECT TO THE RECEIPTS]
DELAWARE 6189 13-5692801
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
SEVEN WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 783-6645
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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COPIES TO:
ANDREW ALTER, SECRETARY ALAN L. BELLER, ESQ.
STRUCTURED PRODUCTS CORP. CLEARY, GOTTLIEB, STEEN & HAMILTON
SEVEN WORLD TRADE CENTER ONE LIBERTY PLAZA
NEW YORK, NEW YORK 10048 NEW YORK, NEW YORK 10006
(212) 783-6645 (212) 225-2000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement.
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, 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(2) PER RECEIPT(1) OFFERING PRICE(1) REGISTRATION FEE
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Healthcare SECTORS............ 10,500,000 receipts $100.00 $51,000,000.00 $12,750.00
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 under the Securities Act. 500,000 receipts are estimated to be
offered in the initial offering at $100 per receipt and 10,000,000 receipts
are estimated to be offered continuously after the initial offering at
$0.10.
(2) Includes an indeterminate number of securities that may be offered or sold
by affiliates of the registrant in market making transactions.
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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 SAID
SECTION 8(a), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JUNE 21, 2001
PRELIMINARY PROSPECTUS
HEALTHCARE SECTORSSM
DEPOSITARY RECEIPTS
HEALTHCARE SECTORS(SM) TRUST
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The Healthcare SECTORS(SM) Trust will issue Healthcare SECTORS(SM)
representing your undivided beneficial ownership in the common stocks or
American depositary shares of a group of 37 specified companies in the
healthcare industry. U.S. Bank Trust National Association will be the trustee.
You may only acquire, hold or transfer Healthcare SECTORS in round lots of 100
Healthcare SECTORS. Healthcare SECTORS are separate from the underlying
deposited securities held by the trust. For a list of the names and the number
of shares of the companies underlying a round lot of 100 Healthcare SECTORS, see
"Summary -- The Healthcare SECTORS and the Underlying Securities" starting on
page 3. The Healthcare SECTORS Trust will offer to issue the Healthcare SECTORS
on a continuous basis after the initial distribution.
The initial public offering price for a round lot of 100 Healthcare SECTORS
equals the sum of the closing market price on , 2001 for each
deposited share multiplied by the share amount specified in this prospectus,
plus an underwriting fee.
Healthcare SECTORS are neither interests in nor obligations of either the
initial depositor, Structured Products Corp., or the trustee, U.S. Bank Trust
National Association.
Before this issuance, there has been no public market for the Healthcare
SECTORS. We will apply to list the Healthcare SECTORS on the American Stock
Exchange under the symbol " ".
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INVESTING IN THE HEALTHCARE SECTORS INVOLVES A NUMBER OF RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 9.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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PER HEALTHCARE
SECTORS TOTAL
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Public Offering Price....................................... $ $
Underwriting Fee............................................ $ $
Proceeds to Healthcare SECTORS Trust........................ $ $
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SALOMON SMITH BARNEY
, 2001
"SECTORS" and "Selected Equity Comprised Trust Originated ReceiptS"
are service marks of Salomon Smith Barney Inc.
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TABLE OF CONTENTS
PAGE
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SUMMARY..................................................... 2
RISK FACTORS................................................ 9
AVAILABLE INFORMATION....................................... 14
HEALTHCARE SECTORS TRUST.................................... 14
DESCRIPTION OF THE HEALTHCARE SECTORS....................... 14
DESCRIPTION OF THE DEPOSITARY TRUST AGREEMENT............... 21
DESCRIPTION OF THE UNDERLYING SECURITIES.................... 22
HISTORICAL DATA ON THE UNDERLYING SECURITIES................ 22
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES............... 38
ERISA CONSIDERATIONS........................................ 40
UNDERWRITING................................................ 41
LEGAL MATTERS............................................... 42
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information contained or incorporated by reference in this prospectus is
accurate as of any date other than the date on the cover of this prospectus.
UNTIL , 2001, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO UNSOLD ALLOTMENTS
AND SUBSCRIPTIONS.
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SUMMARY
This summary highlights selected information from this prospectus to help
you understand the Healthcare SECTORS. You should carefully read the entire
prospectus to fully understand the terms of the Healthcare SECTORS, as well as
the principal tax and other considerations that are important to you in making a
decision about whether to invest in the Healthcare SECTORS. You should, in
particular, carefully review the section entitled "Risk Factors," which
highlights a number of risks to determine whether an investment in the
Healthcare SECTORS is appropriate for you. All of the information set forth
below is qualified in its entirety by a more detailed explanation set forth
elsewhere in this prospectus.
The address of the Healthcare SECTORS Trust is: Healthcare SECTORS Trust,
c/o Structured Products Corp., Seven World Trade Center, New York, New York
10048, and its telephone number is (212) 783-6645.
GENERAL
Healthcare SECTORS will represent your undivided beneficial ownership
interest in the shares of common stock or American depositary shares held by the
Healthcare SECTORS Trust on your behalf. The Healthcare SECTORS are separate
from the underlying securities held by the trust.
The Healthcare SECTORS Trust will hold shares of common stock or American
depositary shares issued by 37 specified companies in the healthcare industry.
We specify below under "-- The Healthcare SECTORS and the Underlying Securities"
the number of shares of each common stock or American depositary shares held by
the Healthcare SECTORS Trust with respect to each round lot of 100 Healthcare
SECTORS. We refer to this group of common stocks and American depositary shares
as the underlying securities. Except when a reconstitution event or a
distribution of securities occurs, the underlying securities will not change and
the securities of a new company will not be added to the underlying securities
of the Healthcare SECTORS Trust.
SELECTED PURCHASE CONSIDERATIONS
- DIVERSIFICATION -- Healthcare SECTORS are designed to allow you to
diversify your investment in the healthcare industry through a single,
exchange-listed instrument representing your undivided beneficial
ownership of the underlying securities.
- FLEXIBILITY -- Healthcare SECTORS allow you to hold undivided beneficial
ownership interests in each of the underlying securities represented by
the Healthcare SECTORS. At any time, you can cancel your Healthcare
SECTORS to receive each of the underlying securities represented by the
Healthcare SECTORS.
- TRANSACTION COSTS -- The expenses associated with trading Healthcare
SECTORS are expected to be less than trading each of the underlying
securities separately.
SELECTED RISK CONSIDERATIONS
An investment in the Healthcare SECTORS involves significant risks. These
risks are explained in more detail in the "Risk Factors" section of this
prospectus beginning on page 9. Some are summarized here.
- YOUR INVESTMENT IN THE HEALTHCARE SECTORS WILL RESULT IN A LOSS IF THE
PRICES OF THE UNDERLYING SECURITIES DECLINE -- Since the value of the
Healthcare SECTORS will depend on the prices of the underlying
securities, you may lose all or a substantial portion of your investment
in the Healthcare SECTORS if the underlying securities decline in price.
- THE PRICE AT WHICH YOU MAY BE ABLE TO SELL YOUR HEALTHCARE SECTORS MAY BE
LESS THAN THE PRICE OF THE UNDERLYING SECURITIES -- Healthcare SECTORS
may trade at a discount to the aggregate value of the underlying
securities.
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- YOUR INVESTMENT IN THE HEALTHCARE SECTORS WILL BE SUBJECT TO RISKS
INHERENT IN THE HEALTHCARE INDUSTRY -- Since the value of the Healthcare
SECTORS will depend on the prices of the underlying securities, your
investment may be affected by general conditions of the healthcare
industry, including the pharmaceutical and biotechnology industries.
- YOUR INVESTMENT IN THE HEALTHCARE SECTORS MAY NOT CONTINUE TO BE A
DIVERSIFIED INVESTMENT IN THE HEALTHCARE INDUSTRY -- As a result of
business developments, mergers, consolidations or other corporate
combinations, reorganizations or market fluctuations affecting issuers of
the underlying securities, Healthcare SECTORS may not necessarily
continue to be a diversified investment in the healthcare industry.
- YOUR DECISION TO INVEST IN HEALTHCARE SECTORS MUST BE BASED ON YOUR
EVALUATION OF THE UNDERLYING SECURITIES -- The selection criteria for the
underlying securities are subjective. Therefore, while these criteria may
provide useful guidelines for evaluating the selection process, they are
not a substitute for your need to evaluate the underlying securities in
making your investment decision.
- YOU WILL HAVE TO CANCEL YOUR HEALTHCARE SECTORS AND RECEIVE ALL OF THE
UNDERLYING SECURITIES IN ORDER TO MAKE AN INVESTMENT DECISION WITH
RESPECT TO ANY ONE OR MORE OF THE INDIVIDUAL UNDERLYING SECURITIES -- In
order to sell one or more underlying securities or to participate in a
tender offer for one or more of the underlying securities, you will be
required to cancel your Healthcare SECTORS and receive delivery of all
the underlying securities. Cancellation of any Healthcare SECTORS will
require you to pay a cancellation fee to the trustee.
- THE MARKET PRICE OF THE HEALTHCARE SECTORS MAY DECLINE FOLLOWING
TEMPORARY PRICE INCREASES IN THE UNDERLYING SECURITIES -- Activity in the
secondary trading market, including purchasing activity associated with
Structured Products Corp.'s acquisition of the underlying securities for
deposit into the Healthcare SECTORS Trust, may temporarily increase the
market price of the underlying securities, resulting in a higher price
for the Healthcare SECTORS, including at the time of their issuance.
Prices for the underlying securities and the Healthcare SECTORS may
decline subsequent to these purchases as the volume of purchases
subsides.
THE HEALTHCARE SECTORS TRUST
The Healthcare SECTORS Trust will be formed under the depositary trust
agreement, dated as of , 2001, among U.S. Bank Trust National
Association, as trustee, Structured Products Corp., as initial depositor, other
depositors and the owners of the Healthcare SECTORS. The Healthcare SECTORS
Trust is not a registered investment company under the Investment Company Act of
1940.
The Healthcare SECTORS Trust will hold shares of common stock or American
depositary shares issued by 37 specified companies in the healthcare industry.
Except when a reconstitution event or distribution of securities occurs, the
group of companies will not change and the securities of a new company will not
be added to the securities underlying the Healthcare SECTORS.
The Healthcare SECTORS Trust's assets may increase or decrease as a result
of deposits and withdrawals of the underlying securities during the life of the
Healthcare SECTORS Trust.
THE HEALTHCARE SECTORS AND THE UNDERLYING SECURITIES
The Healthcare SECTORS represent undivided beneficial ownership interest in
the shares of the underlying securities held by the Healthcare SECTORS Trust on
your behalf. The Healthcare SECTORS themselves are separate from the underlying
securities that are held by the trust.
The specific share amounts represented by each round lot of 100 Healthcare
SECTORS are set forth in the chart below and were determined on ,
2001. The underlying securities of the Healthcare SECTORS were selected by
Structured Products Corp., based on the investment research of Salomon Smith
Barney Inc., from the following subsectors of the healthcare industry: United
States pharmaceuticals, European pharmaceuticals, generic and specialty
pharmaceuticals, medical devices, biotechnology and healthcare services (health
maintenance organizations, hospitals and distribu-
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tors). Selection criteria included the longevity of the Healthcare SECTORS, the
current performance of the companies and an assessment of prospects of growth
and profitability. Asset allocation for each particular subsector was determined
by assessing trends and weighting the various subsectors accordingly. Within
each of the subsectors, the individual underlying securities were weighted based
upon an assessment of current performance, valuation, prospects of competitive
advantage, product pipeline and future growth. Because of the long term nature
of the Healthcare SECTORS, current valuations do not carry as much weight as
they would for an investment of a shorter duration. All the criteria described
above were applied in the sole discretion of Structured Products Corp. The
ultimate determination of the inclusion of the underlying securities in
Healthcare SECTORS rested solely in the discretion of Structured Products Corp.
Neither Salomon Smith Barney Inc. nor Structured Products Corp. have made any
investigation or review of the issuers of the underlying securities except in
connection with Salomon Smith Barney Inc.'s investment research on the issuers,
which provided information used in applying the selection criteria. All
determinations made by Structured Products Corp. were based solely on publicly
available information, which neither Salomon Smith Barney Inc. nor Structured
Products Corp. independently verified and for the accuracy of which neither
takes responsibility. A decision by you to invest in Healthcare SECTORS must be
made by you on the basis of your evaluation of the underlying securities and not
on the basis of the selection criteria or the application by Structured Products
Corp. of these criteria. Because these weightings are a function of market
prices, it is expected that these weightings will change substantially over
time, including during the period between , 2001 and the date the
Healthcare SECTORS are first issued to the public.
The share amounts set forth below will not change, except for changes due
to corporate events such as stock splits or reverse stock splits, stock
distributions and reconstitution events. The chart set forth below provides the
names of the 37 issuers of the underlying securities represented by the
Healthcare SECTORS, stock ticker symbols, share amounts represented by each
round lot of 100 Healthcare SECTORS, initial weightings as of ,
2001, and the principal market on which the underlying securities are traded.
PRIMARY
SHARE INITIAL TRADING
NAME OF COMPANY SYMBOL AMOUNTS WEIGHTING MARKET
- --------------- ------ ------- --------- -------
Abbott Laboratories..................... ABT 6 3.88% NYSE
American Home Product Corp. ............ AHP 4 3.06% NYSE
Amgen Inc. ............................. AMGN 5 4.05% NASDAQ
AstraZeneca PLC*........................ AZN 8 4.83% NYSE
Aventis*................................ AVE 3 2.78% NYSE
Barr Laboratories, Inc. ................ BRL 4 3.08% NYSE
Baxter International Inc. .............. BAX 3 3.61% NYSE
Beckman Coulter Inc. ................... BEC 7 3.14% NYSE
Biogen, Inc. ........................... BGEN 1 .78% NASDAQ
Bristol-Myers Squibb Co. ............... BMY 4 2.69% NYSE
Cardinal Health, Inc. .................. CAH 2 1.66% NYSE
Celltech Group PLC*..................... CLL 5 2.13% NYSE
CIGNA Corp. ............................ CI 1 1.15% NYSE
Elan Corporation PLC*................... ELN 1 .69% NYSE
Eli Lilly and Co. ...................... LLY 3 3.14% NYSE
Forest Laboratories, Inc. .............. FRX 4 3.44% NYSE
Genentech............................... DNA 6 3.80% NYSE
Genzyme Corp. .......................... GENZ 2 2.68% NASDAQ
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PRIMARY
SHARE INITIAL TRADING
NAME OF COMPANY SYMBOL AMOUNTS WEIGHTING MARKET
- --------------- ------ ------- --------- -------
Guidant Corp. .......................... GDT 2 .91% NYSE
HCA-The Healthcare Co. ................. HCA 5 2.25% NYSE
Idec Pharmaceuticals Corp. ............. IDPH 3 2.21% NASDAQ
Immunex Corp. .......................... IMNX 9 1.95% NASDAQ
IMS Health.............................. RX 4 1.42% NYSE
Johnson & Johnson....................... JNJ 3 3.63% NYSE
MedImmune, Inc. ........................ MEDI 2 1.02% NASDAQ
Medtronic, Inc. ........................ MDT 9 4.89% NYSE
Merck & Co., Inc. ...................... MRK 3 2.75% NYSE
Millennium Pharmaceuticals, Inc. ....... MLNM 4 2.16% NASDAQ
MiniMed Inc. ........................... MNMD 4 2.19% NASDAQ
Novartis AG*............................ NVS 8 3.98% NYSE
Pfizer Inc. ............................ PFE 9 4.84% NYSE
Pharmacia Corp. ........................ PHA 8 4.84% NYSE
Schering AG*............................ SHR 3 1.95% NYSE
Schering-Plough Corp. .................. SGP 5 2.54% NYSE
Shire Pharmaceuticals Group, PLC*....... SHPGY 3 1.77% NASDAQ
Stryker Corp. .......................... SYK 3 2.11% NYSE
Watson Pharmaceuticals, Inc............. WPI 3 2.04% NYSE
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* The securities of these non-U.S. companies trade in the United States as
American depository receipts.
The Healthcare SECTORS Trust will only issue and cancel, and you may only
obtain, hold, trade or surrender, Healthcare SECTORS in round lots of 100
Healthcare SECTORS. The Healthcare SECTORS Trust will only issue Healthcare
SECTORS upon the deposit of the whole shares represented by a round lot of 100
Healthcare SECTORS. In the event that a fractional share is represented by a
round lot of Healthcare SECTORS, the Healthcare SECTORS Trust may require a
minimum issuance of more than one round lot of 100 Healthcare SECTORS so that
only whole share amounts of the underlying securities are deposited with the
Healthcare SECTORS Trust.
The number of outstanding Healthcare SECTORS will increase and decrease as
a result of deposits and withdrawals of the underlying securities. The
Healthcare SECTORS Trust will stand ready to issue additional Healthcare SECTORS
on a continuous basis when an investor deposits the required shares of the
underlying securities with the trustee.
HISTORICAL PERFORMANCE OF UNDERLYING STOCKS
The following table sets forth the composite performance of all of the
underlying securities represented by a single Healthcare SECTORS, measured at
the close of each month from January 30, 1998 to present. The performance table
is adjusted to reflect any stock splits and stock dividends that
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occurred over the measurement period. Past movements of the prices of the
underlying securities are not necessarily indicative of future prices.
DATE CLOSING PRICE
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January 30, 1998............................................ $ 47.39
February 27, 1998........................................... 50.21
March 31, 1998.............................................. 52.17
April 30, 1998.............................................. 52.59
May 29, 1998................................................ 52.18
June 30, 1998............................................... 54.10
July 31, 1998............................................... 54.37
August 31, 1998............................................. 48.30
September 30, 1998.......................................... 52.98
October 30, 1998............................................ 54.41
November 30, 1998........................................... 58.08
December 31, 1998........................................... 62.72
January 29, 1999............................................ 63.04
February 26, 1999........................................... 60.87
March 31, 1999.............................................. 62.04
April 30, 1999.............................................. 58.99
May 31, 1999................................................ 58.37
June 30, 1999............................................... 60.40
July 30, 1999............................................... 59.39
August 31, 1999............................................. 62.36
September 30, 1999.......................................... 57.61
October 29, 1999............................................ 61.55
November 30, 1999........................................... 63.75
December 31, 1999........................................... 64.86
January 31, 2000............................................ 68.49
February 29, 2000........................................... 72.80
March 31, 2000.............................................. 73.49
April 28, 2000.............................................. 72.09
May 31, 2000................................................ 72.63
June 30, 2000............................................... 83.92
July 31, 2000............................................... 82.77
August 31, 2000............................................. 88.00
September 29, 2000.......................................... 90.50
October 31, 2000............................................ 89.67
November 30, 2000........................................... 88.78
December 29, 2000........................................... 92.23
January 31, 2001............................................ 84.24
February 29, 2001........................................... 83.65
March 30, 2001.............................................. 76.38
April 30, 2001.............................................. 78.71
May 22, 2001................................................ 81.83
PUBLIC OFFERING PRICE
The initial public offering price for each round lot of 100 Healthcare
SECTORS will equal the sum of the closing market price of each underlying stock
on the date the Healthcare SECTORS are priced for
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initial sale to the public multiplied by the share amount appearing in the above
table, plus an underwriting fee.
After the initial offering, you may acquire Healthcare SECTORS in two ways:
- through a deposit of the required number of shares of underlying
securities with the trustee or
- through a cash purchase in the secondary trading market.
RIGHTS RELATING TO HEALTHCARE SECTORS
You have the right to withdraw the underlying securities upon request by
delivering a round lot or integral multiple of a round lot of Healthcare SECTORS
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 Healthcare SECTORS would
otherwise require the delivery of a fractional share of underlying securities,
the trustee will sell the share in the market and the Healthcare SECTORS Trust
will deliver cash in lieu of such share. Except with respect to the right to
vote for dissolution of the Healthcare SECTORS Trust, the Healthcare SECTORS
themselves will not have voting rights.
RIGHTS RELATING TO THE UNDERLYING SECURITIES
You have the right to:
- receive all shareholder disclosure materials distributed by the issuers
of the underlying securities, including annual and quarterly reports;
- receive all proxy materials distributed by the issuers of the underlying
securities, instruct the trustee to vote the underlying securities and
attend shareholder meetings yourself; and
- receive dividends and other distributions on the underlying securities if
any are declared and paid to the trustee by an issuer of the underlying
securities net of any applicable taxes or fees.
If you wish to participate in a tender offer for any of the underlying
securities, you must obtain that security by surrendering your Healthcare
SECTORS and receiving all of your underlying securities. For specific
information about obtaining your underlying securities, you should read the
discussion under "Description of the Healthcare SECTORS" in this prospectus.
LISTING
We will apply to list the Healthcare SECTORS on the American Stock Exchange
under the symbol " ". Trading will take place only in round lots of 100
Healthcare SECTORS. A minimum of 150,000 Healthcare SECTORS will be required to
be outstanding when trading begins. Bid and ask prices will be quoted per single
Healthcare SECTORS, even though investors will only be able to acquire, hold,
transfer and surrender in round lots of 100 Healthcare SECTORS.
STRUCTURED PRODUCTS CORP.
Structured Products Corp. was incorporated in the State of Delaware on
November 23, 1992, as an indirect, wholly-owned, limited-purpose finance
subsidiary of Salomon Smith Barney Holdings Inc., the parent of Salomon Smith
Barney Inc. Structured Products Corp. will not engage in any business or other
activities other than issuing and selling securities from time to time and
acquiring, owning, holding, pledging and transferring assets in connection
therewith or with the creation of trusts and in activities related or incidental
thereto. Structured Products Corp. does not have, nor is it expected to have,
any significant unencumbered assets.
THE ROLE OF OUR AFFILIATE, SALOMON SMITH BARNEY INC.
Salomon Smith Barney Inc. is the underwriter for the offering and sale of
the Healthcare SECTORS. After the initial offering, Salomon Smith Barney Inc.
and/or its other broker-dealer affiliates intend to buy
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and sell Healthcare SECTORS to create a secondary market for holders of the
Healthcare SECTORS. However, neither Salomon Smith Barney Inc. nor any of its
affiliates will be obligated to engage in any market-making activities, or
continue them once it has started.
UNDERWRITING FEES AND OTHER FEES
If you purchase Healthcare SECTORS in the initial public offering, you will
pay Salomon Smith Barney Inc., in its role as underwriter, an underwriting fee
of 2%. You will not be charged any issuance fee or other sales commission in
connection with purchases of Healthcare SECTORS made in the initial public
offering.
After the initial offering, if you wish to create Healthcare SECTORS by
delivering to the Healthcare SECTORS Trust the requisite shares of the
underlying securities represented by a round lot of 100 Healthcare SECTORS, U.S.
Bank Trust National Association, as trustee, will charge you an issuance fee of
up to $10.00 for each round lot of 100 Healthcare SECTORS. If you wish to cancel
your Healthcare SECTORS and withdraw your underlying securities, U.S. Bank Trust
National Association, as trustee, will charge you a cancellation fee of up to
$10.00 for each round lot of 100 Healthcare SECTORS.
If you choose to deposit underlying securities in order to receive
Healthcare SECTORS after the conclusion of the initial public offering, you will
not be charged the underwriting fee. However, in addition to the issuance fee
charged by the trustee described above, you will be responsible for paying any
sales commission associated with your purchase of the underlying securities that
is charged by your broker, whether it be Salomon Smith Barney Inc. or another
broker.
U.S. Bank Trust National Association, as trustee and as custodian, will
charge you a quarterly custody fee of $2.00 for each round lot of 100 Healthcare
SECTORS to be deducted from any cash dividend or other cash distributions on
underlying securities received by the Healthcare SECTORS Trust. With respect to
the aggregate custody fee payable in any calendar year for each Healthcare
SECTORS, 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.
U.S. FEDERAL INCOME TAXES
The federal income tax laws will treat a U.S. holder of Healthcare SECTORS
as directly owning the underlying securities. The Healthcare SECTORS themselves
will not result in any federal tax consequences separate from the tax
consequences associated with ownership of the underlying securities. You should
refer to the section "United States Federal Income Tax Consequences" in this
prospectus.
ERISA
It is our view that employee benefit plans subject to ERISA and individual
retirement accounts, Keogh plans and other similar plans can, generally,
purchase Healthcare SECTORS. However, each plan and account should consider
whether the purchase of Healthcare SECTORS is prudent and consistent with the
documents governing the plan or account. The fiduciary rules governing plans and
accounts are complex and individual considerations may apply to a particular
plan or account. Accordingly, any fiduciary of any plan or account should
consult with its legal advisers to determine whether the purchase of Healthcare
SECTORS is permissible under the fiduciary rules. Each employee benefit plan
subject to the fiduciary responsibility provisions of ERISA and each individual
retirement account, Keogh plan and other similar plan will be deemed to have
made certain representations concerning its purchase or other acquisition of
Healthcare SECTORS. You should refer to the section "ERISA Considerations" in
this prospectus.
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RISK FACTORS
You should carefully consider the following risk factors in addition to the
other information in this prospectus before investing in the Healthcare SECTORS.
GENERAL RISK FACTORS
- Your investment in the Healthcare SECTORS will result in a loss if the
prices of the underlying securities decline. Since the value of the
Healthcare SECTORS will depend on the prices of the underlying
securities, you may lose all or a substantial portion of your investment
in the Healthcare SECTORS if the underlying securities decline in price.
- The price at which you may be able to sell your Healthcare SECTORS may be
less than the price of the underlying securities. We expect that the
market value of the Healthcare SECTORS will depend substantially on the
amount by which the prices of the underlying securities change from the
prices at the time the Healthcare SECTORS are issued. The Healthcare
SECTORS may, however, trade at a discount to the aggregate value of the
underlying securities.
- Your investment in the Healthcare SECTORS may not necessarily continue to
be a diversified investment in the healthcare industry. As a result of
business developments, reorganizations or market fluctuations affecting
issuers of the underlying securities, Healthcare SECTORS may not
necessarily continue to be a diversified investment in the healthcare
industry. As a result of reconstitution events, the securities of issuers
in industries other than the healthcare industry may be added to the
Healthcare SECTORS Trust. As a result of market fluctuation and/or
reconstitution events, Healthcare SECTORS may become a more 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.
- Your decision to invest in Healthcare SECTORS must be based on your
evaluation of the underlying securities. The selection criteria for the
underlying securities are subjective. Therefore, while these criteria may
provide useful guidelines for evaluating the selection process, they are
not a substitute for your need to evaluate the underlying securities in
making your investment decision.
- Your investment in Healthcare SECTORS may result in conflicting
investment choices. In order to sell one or more of the underlying
securities or to participate in a tender offer relating to one or more of
the underlying securities, you will be required to cancel your Healthcare
SECTORS and receive delivery of all the underlying securities.
Cancellation of your Healthcare SECTORS will require you to pay a
cancellation fee to the trustee.
- You may not be able to sell your Healthcare SECTORS because trading in
the Healthcare SECTORS may be halted. Trading in Healthcare SECTORS may
be halted in the event trading in one or more of the underlying
securities is halted. If so, you will not be able to trade your
Healthcare SECTORS even though there is trading in some of the underlying
securities. You will, however, be able to cancel your Healthcare SECTORS
to receive the underlying securities. If the number of companies whose
common stock is held in the Healthcare SECTORS Trust falls below nine,
the American Stock Exchange may consider delisting the Healthcare
SECTORS. If the Healthcare SECTORS are delisted by the American Stock
Exchange, a termination event will result if the Healthcare SECTORS are
not listed for trading on another national securities exchange in the
United States or through NASDAQ within five business days from the date
the Healthcare SECTORS are delisted.
- Salomon Smith Barney Inc. and its affiliates may have a conflict with the
Healthcare SECTORS Trust. Salomon Smith Barney Inc., which is acting as
underwriter and has provided the investment research for the selection of
the underlying securities, may face possible conflicts of interest in
connection with its activities. Salomon Smith Barney Inc. and its
affiliates may engage in investment banking and other activities with
respect to the underlying securities and their issuers, may provide
research to clients with respect to the issuers of the underlying
securities, may provide
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services to issuers of the underlying securities in connection with its
business and may trade in the underlying securities or derivative
instruments relating to the underlying securities for its own account or
for accounts under its management. All of these activities may impact the
prices of the underlying securities and therefore the Healthcare SECTORS
in a manner contrary to the interests of holders of Healthcare SECTORS.
- The market price of the Healthcare SECTORS may decline following early
temporary price increases in the underlying securities. Activity in the
secondary trading market, including purchasing activity associated with
Structured Products Corp.'s acquisition of underlying securities for
deposit into the Healthcare SECTORS Trust, particularly in connection
with the initial issuance of Healthcare SECTORS, may temporarily increase
the market price of the underlying securities, resulting in a higher
price for the Healthcare SECTORS, including at the time of their
issuance. 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. Prices for the underlying
securities may subsequently decline as the volume of purchases subsides,
which would in turn be likely to reduce the trading price of Healthcare
SECTORS.
- You will have limited rights with respect to the Healthcare SECTORS
Trust. Your voting rights will be limited to the right to dissolve and
liquidate the Healthcare SECTORS Trust. The trustee and Structured
Products Corp. may amend any terms of the depositary trust agreement
without your consent.
RISK FACTORS SPECIFIC TO THE HEALTHCARE INDUSTRY
In evaluating the underlying securities, you should consider, among other
things, the following risk factors specific to the healthcare industry.
- Healthcare companies stock prices have been and will likely continue to
be extremely volatile. The trading prices of the stocks of healthcare
companies have been and are likely to be extremely volatile. Healthcare
companies' stock prices could be subject to wide fluctuations in response
to a variety of factors, including:
- announcements of technological innovations or new commercial
products;
- developments in patent or proprietary rights;
- government regulatory initiatives;
- public concern as to the safety or other implications of products;
- fluctuations in quarterly and annual financial results; and
- market conditions.
- Healthcare companies face uncertainty with respect to pricing and third
party reimbursement. Certain healthcare 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 healthcare costs. For
example, in certain foreign markets pricing or profitability of certain
healthcare products and technologies is subject to control. In the United
States, there has been, and there will likely to continue to be, a number
of federal and state proposals to implement similar government control.
Also, an increasing emphasis on managed healthcare in the United States
will continue to put pressure on the pricing of the products and
technologies of healthcare companies. The announcement or adoption of
such proposals could have a material adverse affect on a healthcare
companies' business and financial condition. Further, the sales of the
products of many healthcare 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 healthcare
products and technologies and denying or
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limiting coverage for new products. Even if a healthcare 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.
- Protection of patent and proprietary rights of certain healthcare
companies is difficult and costly. The success of many healthcare
companies is highly dependent on 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 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 healthcare industry regarding patent and other intellectual
property rights. Litigation is costly and could subject a healthcare
company to significant liabilities to third parties. In addition, a
healthcare company could be forced to obtain costly third-party licenses
or cease using the technology or product in dispute.
- Healthcare companies are subject to extensive government
regulation. Products and technologies offered by healthcare companies
are subject to strict regulation by the Food and Drug Administration in
the United States and similar agencies in other countries. Many of the
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 healthcare company's current or future product 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.
- Healthcare companies must keep pace with rapid technological change to
remain competitive. The healthcare industry is highly competitive and is
subject to rapid and significant technological change. Healthcare
companies will face continued competition as new products enter the
market and advanced technologies become available. The success of a
healthcare company will depend on its ability to develop products and
technologies that are at least as clinically effective or cost-effective
than its competitor's products and technologies or that would render its
competitors' products and technologies obsolete or uncompetitive.
- Results of research and development of new products and technologies are
unpredictable. Successful product or technology development in the
healthcare industry is very 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.
- Healthcare companies may be exposed to extensive product liability
costs. The testing, manufacturing, marketing and sale of many of the
products and technologies developed by healthcare companies inherently
expose these companies to potential product liability risks. Many
healthcare companies obtain limited products liability insurance;
further, there can be no assurance that a healthcare 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.
- Many healthcare companies are dependent on key personnel for
success. The success of many healthcare companies is highly dependent on
the experience, abilities and continued services of key
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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 healthcare
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 healthcare companies will be able to continue to
attract and retain qualified personnel or develop and maintain
relationships with clinical researchers.
- Healthcare companies in the biotechnology industry 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,
particularly in Europe where securing governmental approvals for, and
achieving consumer confidence in, these products continues to pose
numerous challenges. 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 issuers. Companies representing the underlying
securities of the Healthcare SECTORS may become involved in the
development of genetically engineered agricultural and food products.
- Certain healthcare companies in the pharmaceutical industry face intense
competition from new products and less costly generic products. The
pharmaceutical industry is highly competitive and rapidly changing. Many
pharmaceutical companies are major international corporations with
substantial resources for research and development, production and
marketing. Proprietary pharmaceutical products, which are products under
patent protection, face intense competition from other competitors'
similar proprietary products and many pharmaceutical companies also face
increasing competition from similar generic products. Generic
pharmaceutical competitors generally are able to obtain regulatory
approval for drugs no longer covered by patents without investing in
costly and time-consuming clinical trials, and need only demonstrate that
their product is equivalent to the drug they wish to copy. As a result of
their substantially reduced development costs, generic pharmaceutical
products are sold at lower prices than the original proprietary product.
The introduction of a generic product can significantly reduce revenues
received from a patented pharmaceutical product.
RISK FACTORS SPECIFIC TO FOREIGN ISSUERS OF UNDERLYING SECURITIES
- The international operations of certain companies included in the
Healthcare SECTORS 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. Some of the companies included in the Healthcare
SECTORS have international operations which are essential parts of their
businesses. The risks of international business that these companies are
exposed to include the following:
- general economic, social and political conditions;
- the difficulty of enforcing intellectual property rights, agreements
and collecting receivables through certain foreign legal systems;
- differing tax rates, tariffs, exchange controls or other similar
restrictions;
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- currency fluctuations;
- 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; and
- reduction in the number or capacity of personnel in international
markets.
- It may be impossible for you to initiate legal proceedings or to enforce
judgments against certain companies included in the Healthcare
SECTORS. Some of the companies included in the Healthcare SECTORS were
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 these companies included in the
Healthcare SECTORS or to enforce judgments made against them in courts in
the United States based on civil liability provisions of the United
States securities laws. In addition, judgments obtained in the United
States, especially those awarding punitive damages, may not be
enforceable in foreign countries.
- Potential voting impediments may exist with respect to the ownership of
some of the underlying securities included in the Healthcare
SECTORS. Holders of American depositary shares, including those
underlying the Healthcare SECTORS, may only exercise voting rights with
respect to the securities represented by the 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 holders of the American
depositary shares. Even then, holders of American depository shares may
not exercise voting rights unless they take a variety of steps, which
include registration in the share registry of the issuer of the
securities underlying the American depositary shares. These required
steps may make it impractical for holders of American depositary shares
to exercise the voting rights attached to the underlying securities.
- The low trading volume of certain underlying securities on a United
States stock exchange may result in a decline in the market price of the
Healthcare SECTORS. The primary trading market of some of the underlying
securities of the Healthcare SECTORS are not United States stock
exchanges; accordingly, the trading volume of some of the underlying
securities may be very low, which could adversely affect the Healthcare
SECTORS. In some cases, the trading volume of certain underlying
securities on a United States stock exchange is or may become limited. A
low trading volume or liquidity of any of the underlying securities on
United States stock exchange may result in a decline of the market price
of that underlying security and of the Healthcare SECTORS.
- Exchange rate fluctuations could result in a decline of the market price
of some of the underlying securities included in the Healthcare SECTORS
and the value of the dividends paid by those companies. The result of
operations and the financial position of some of the companies underlying
the Healthcare SECTORS are reported in local currencies. Exchange rate
fluctuations between these currencies and the United States dollar may
result in a decline in the market price of the corresponding United
States exchange listed security and the Healthcare SECTORS. In addition,
any dividends that are declared by foreign issuers of underlying
securities will probably not be in United States dollars. As a result,
exchange rate fluctuations may also negatively affect the value of
dividends declared by certain companies included in the Healthcare
SECTORS.
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AVAILABLE INFORMATION
Structured Products Corp., as initial depositor, has filed a registration
statement, of which this prospectus forms a part, which contains additional
information not included in the prospectus with the Securities and Exchange
Commission.
You may read and copy any document Salomon Smith Barney Inc. files 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 further information
on the public reference rooms. Structured Products Corp.'s SEC filings are also
available to the public from the SEC's web site at http://www.sec.gov.
Structured Products Corp. will not file any reports on its own behalf pursuant
to the Securities Exchange Act of 1934. Healthcare SECTORS Trust will file
modified reports pursuant to the Exchange Act.
Because 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 inspected at the
SEC's public reference rooms or accessed through the SEC's web site set forth
above. However, some of the issuers of the underlying securities are considered
foreign issuers. The requirements for filing periodic financial and other
information by foreign issuers differ from those 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
through the SEC's electronic filing system. Therefore, information regarding
foreign issuers 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.
You should rely only on the information incorporated by reference or
provided in this prospectus. We have authorized no one to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of the document.
HEALTHCARE SECTORS TRUST
The Healthcare SECTORS Trust will be formed pursuant to the depositary
trust agreement, dated as of , 2001. U.S. Bank Trust National
Association will be the trustee. The Healthcare SECTORS Trust is not a
registered investment company under the Investment Company Act of 1940.
The Healthcare SECTORS Trust is intended to hold deposited shares of the
underlying securities for the benefit of owners of the Healthcare SECTORS. The
trustee will perform only administrative and ministerial acts. The property of
the Healthcare SECTORS Trust will consist of the underlying securities and all
monies or other property, if any, received by the trustee. The Healthcare
SECTORS Trust will not have the power to vary the investment of the holders of
Healthcare SECTORS. The Healthcare SECTORS Trust will terminate on ,
2041, or earlier if a termination event occurs.
DESCRIPTION OF THE HEALTHCARE SECTORS
The Healthcare SECTORS Trust will issue the Healthcare SECTORS under the
depositary trust agreement described in this prospectus under the heading
"Description of the Depositary Trust Agreement." After the initial offering, the
Healthcare SECTORS Trust may issue additional Healthcare SECTORS on a continuous
basis when an investor deposits the requisite underlying securities with the
trustee.
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GENERAL
You may only acquire, hold, trade and surrender the Healthcare SECTORS in
round lots of 100 Healthcare SECTORS. The Healthcare SECTORS Trust will only
issue the Healthcare SECTORS upon the deposit of the whole shares of underlying
securities that are represented by a round lot of 100 Healthcare SECTORS. 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 the Healthcare SECTORS, the Healthcare SECTORS
Trust may require a minimum of more than one round lot of 100 Healthcare SECTORS
for an issuance so that the Healthcare SECTORS Trust will always receive whole
share amounts of underlying securities in exchange for issuance of the
Healthcare SECTORS.
The Healthcare SECTORS will represent your individual and undivided
beneficial ownership interest in the underlying securities held by the trust.
The specific share amounts for each round lot of 100 Healthcare SECTORS are set
forth in the chart below and were determined on , 2001.
The share amounts set forth below will not change, except for changes due
to corporate events such as stock splits or reverse stock splits on the
underlying securities, stock distributions and reconstitution events. Because
the initial weightings are a function of market price, it is expected that
weightings will change substantially over time, including during the period
between , 2001 and the date the Healthcare SECTORS are first issued
to the public.
The initial public offering price for each round lot of 100 Healthcare
SECTORS will equal the sum of the closing market price of each underlying
security on the date the Healthcare SECTORS are priced for initial sale to the
public multiplied by the share amount appearing in the table below, plus an
underwriting fee.
After the initial offering, you may acquire the Healthcare SECTORS in two
ways:
- through a deposit of the required number of shares of underlying
securities with the trustee or
- through a cash purchase in the secondary trading market.
The chart set forth below provides the names of the 37 issuers of the
underlying securities represented by the Healthcare SECTORS, stock ticker
symbols, share amounts represented by each round lot of 100 Healthcare SECTORS,
initial weightings as of , 2001, and the principal market on which
the underlying securities are traded.
PRIMARY
SHARE INITIAL TRADING
NAME OF COMPANY SYMBOL AMOUNTS WEIGHTING MARKET
- --------------- ------ ------- --------- -------
Abbott Laboratories ABT 6 3.88% NYSE
American Home Products Corp. AHP 4 3.06% NYSE
Amgen Inc. AGN 5 4.05% NASDAQ
AstraZeneca PLC* AZN 8 4.83% NYSE
Aventis* AVE 3 2.78% NYSE
Barr Laboratories, Inc. BRL 4 3.08% NYSE
Baxter International Inc. BAX 3 3.61% NYSE
Beckman Coulter Inc. BEC 7 3.14% NYSE
Biogen, Inc. BGEN 1 .78% NASDAQ
Bristol-Myers Squibb Co. BMY 4 2.69% NYSE
Cardinal Health, Inc. CAH 2 1.66% NYSE
Celltech Group PLC* CLL 5 2.13% NYSE
CIGNA Corp. CI 1 1.15% NYSE
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PRIMARY
SHARE INITIAL TRADING
NAME OF COMPANY SYMBOL AMOUNTS WEIGHTING MARKET
- --------------- ------ ------- --------- -------
Elan Corporation PLC* ELN 1 .69% NYSE
Eli Lilly and Co. LLY 3 3.14% NYSE
Forest Laboratories, Inc. FRX 4 3.44% NYSE
Genentech DNA 6 3.80% NYSE
Genzyme Corp. GENZ 2 2.68% NASDAQ
Guidant Corp. GDT 2 .91% NYSE
HCA - The Healthcare Co. HCA 5 2.25% NYSE
Idec Pharmaceuticals Corp. IDPH 3 2.21% NASDAQ
Immunex Corp. IMNX 9 1.95% NASDAQ
IMS Health Inc. RX 4 1.42% NYSE
Johnson & Johnson ANJ 3 3.63% NYSE
MedImmune, Inc. MEDI 2 1.02% NASDAQ
Medtronic, Inc. MDT 9 4.89% NYSE
Merck & Co., Inc. MRK 3 2.75% NYSE
Millennium Pharmaceuticals, Inc. MLNM 4 2.16% NASDAQ
MiniMed Inc. MNMD 4 2.19% NASDAQ
Novartis AG* NVS 8 3.98% NYSE
Pfizer Inc. PFE 9 4.84% NYSE
Pharmacia Corp. PHA 8 4.84% NYSE
Schering AG* SHR 3 1.95% NYSE
Schering-Plough Corp. SGP 5 2.54% NYSE
Shire Pharmaceuticals Group,PLC* SHPGY 3 1.77% NASDAQ
Stryker Corp. SYK 3 2.11% NYSE
Watson Pharmaceuticals, Inc. WPI 3 2.04% NYSE
- ---------------
* The securities of these non-U.S. companies trade in the United States as
American depository receipts.
Beneficial owners of the Healthcare SECTORS will have the same rights and
privileges as they would have if they beneficially owned the underlying
securities outside of the Healthcare SECTORS Trust. These include the right of
investors to instruct the trustee to vote the underlying securities, and to
receive dividends and other distributions on the underlying securities, if any
are declared and paid to the trustee, as well as the right to cancel the
Healthcare SECTORS to receive the underlying securities. The Healthcare SECTORS
are not intended to change your beneficial ownership obligations under federal
securities laws, including Sections 13(d) and 16(a) of the Securities Exchange
Act, with respect to the underlying securities from that which would apply if
you owned the underlying securities directly.
The Healthcare SECTORS Trust will not publish or otherwise calculate net
asset value per receipt. The Healthcare SECTORS 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 the Healthcare SECTORS
wishes to realize the dollar value of the underlying securities, that owner will
have to cancel the Healthcare SECTORS and receive all of the underlying
securities. Such cancellation will require payment of fees and expenses as
described in "Description of the Healthcare SECTORS -- Withdrawal of Underlying
Securities."
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We will apply to list the Healthcare SECTORS on the American Stock Exchange
under the symbol " ". Trading will take place only in round lots of 100
Healthcare SECTORS. A minimum of 150,000 Healthcare SECTORS will be required to
be outstanding when trading begins. Bid and ask prices will be quoted per single
Healthcare SECTORS, even though investors will only be able to acquire, hold,
transfer and surrender in round lots of 100 Healthcare SECTORS.
CREATION, SURRENDER AND CANCELLATION OF THE HEALTHCARE SECTORS
You may only create and cancel Healthcare SECTORS in round lots of 100
Healthcare SECTORS. You may create Healthcare SECTORS by delivering to the
trustee the requisite underlying securities. The Healthcare SECTORS Trust will
only issue the Healthcare SECTORS upon the deposit of the whole shares
represented by a round lot of 100 Healthcare SECTORS. In the event that a
fractional share is represented in a round lot of Healthcare SECTORS, the
Healthcare SECTORS Trust may require a minimum of more than one round lot of 100
Healthcare SECTORS so that only whole share amounts of the underlying securities
are deposited with the Healthcare SECTORS Trust. Similarly, you must surrender
Healthcare SECTORS in integral multiples of 100 Healthcare SECTORS to withdraw
deposited shares from the Healthcare SECTORS Trust. The trustee will not deliver
fractional shares of underlying securities. To the extent that any cancellation
of Healthcare SECTORS would otherwise require the delivery of fractional shares,
the Healthcare SECTORS 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.
You may surrender your Healthcare SECTORS 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 your Healthcare SECTORS 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 Healthcare SECTORS.
If you choose to deposit underlying securities in order to receive
Healthcare SECTORS after the conclusion of the initial public offering, you will
not be charged the underwriting fee. However, in addition to the issuance fee
charged by the trustee described above, you will be responsible for paying any
sales commission associated with your purchase of the underlying securities that
is charged by your broker, whether it be Salomon Smith Barney Inc. or another
broker.
The depositary trust agreement provides for further issuances of the
Healthcare SECTORS on a continuous basis without your consent.
RIGHTS RELATING TO THE HEALTHCARE SECTORS
Under the depositary trust agreement, the beneficial owners of the
Healthcare SECTORS, other than Salomon Smith Barney Inc. owning Healthcare
SECTORS for its own proprietary account as principal, will have the right to
vote to dissolve and liquidate the Healthcare SECTORS Trust.
RIGHTS RELATING TO THE UNDERLYING SECURITIES
The trustee will deliver proxy soliciting materials provided by issuers of
the underlying securities to enable you to give the trustee voting instructions
on matters under consideration at any annual or special meetings held by issuers
of the underlying securities. If you wish to participate in a tender offer for
any of the underlying securities, you must obtain that security by surrendering
your Healthcare SECTORS and receiving all of your underlying securities.
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 makes these distributions as promptly as practicable after the date
which it receives the distribution. However, 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 Healthcare SECTORS Trust and will become part of the
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Healthcare SECTORS if such securities are listed for trading on a national
securities exchange in the United States or through NASDAQ. You will be
obligated to pay any tax or other charge that may become due with respect to the
Healthcare SECTORS. The trustee may deduct the amount of any tax or other
governmental charge from a distribution before making payment to you. In
addition, the trustee will deduct its quarterly custody fee of $2.00 for each
round lot of 100 Healthcare SECTORS 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 Healthcare SECTORS,
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 promptly will forward to you all shareholder communications
that it receives from issuers of the underlying securities.
With respect to dividend payments and voting instructions, the trustee will
fix the record dates of the Healthcare SECTORS Trust as close as possible to the
record date fixed by the issuer of the underlying securities.
RECONSTITUTION EVENTS
The depositary trust agreement provides for the automatic distribution of
underlying securities to you in the following four circumstances:
- If an issuer of underlying securities no longer has a class of securities
registered under section 12 of the Securities 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 Healthcare
SECTORS.
- If the SEC finds that an issuer of an underlying security 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 Healthcare
SECTORS.
- If the underlying securities of an issuer cease to be outstanding as a
result of a merger, consolidation or other corporate combination, its
securities will no longer be an underlying security and the trustee will
distribute the consideration paid by and received from the acquiring
company to the beneficial owners of the Healthcare SECTORS, unless the
consideration received is securities that are listed for trading on a
national securities exchange in the United States or through NASDAQ. In
this case, the securities received will be treated as additional
underlying securities and will be deposited into the Healthcare SECTORS
Trust.
- If an issuer's underlying securities are delisted from trading on a
national securities exchange in the United States or through NASDAQ and
are not listed for trading on another national securities exchange in the
United States or through NASDAQ within five business days from the date
such securities are delisted, then its securities will no longer be an
underlying security and the trustee will distribute the shares of that
company to the beneficial owners of the Healthcare SECTORS.
If a reconstitution event occurs, the trustee will deliver the underlying
securities to you as promptly as practicable after the date of the occurrence of
a reconstitution event. However, any distributions of securities that are listed
for trading on a national securities exchange in the United States or through
NASDAQ will be deposited into the trust and will become part of the Healthcare
SECTORS.
TERMINATION OF THE HEALTHCARE SECTORS TRUST
Any of the following will constitute a termination event:
- The Healthcare SECTORS are delisted from the American Stock Exchange and
are not listed for trading on another national securities exchange in the
United States or through NASDAQ within five business days from the date
the Healthcare SECTORS are delisted.
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- The trustee resigns and no successor trustee is appointed within 60 days
from the date the trustee provides notice to the initial depositor of its
intent to resign.
- 75% of beneficial owners of outstanding Healthcare SECTORS vote to
dissolve and liquidate the Healthcare SECTORS Trust.
If a termination event occurs, the trustee will distribute the underlying
securities to you as promptly as practicable after the termination event occurs,
and the beneficial owners of the Healthcare SECTORS will surrender their
Healthcare SECTORS 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.
FEES
After the initial public offering, the Healthcare SECTORS Trust expects to
issue additional Healthcare SECTORS. If you wish to create Healthcare SECTORS by
delivering to the Healthcare SECTORS Trust the requisite underlying securities,
the trustee will charge you an issuance fee of up to $10.00 for each round lot
of 100 Healthcare SECTORS. If you wish to cancel your Healthcare SECTORS and
withdraw your underlying securities, the trustee will charge you a cancellation
fee of up to $10.00 for each round lot of 100 Healthcare SECTORS cancelled. The
trustee may negotiate either of these fees depending on the volume, frequency
and size of the issuance or cancellation transactions.
If you choose to create Healthcare SECTORS after the conclusion of the
initial public offering, you will not be charged the underwriting fee. However,
in addition to the issuance and cancellation fees described above, you will be
responsible for paying any sales commissions associated with your purchase of
the underlying securities that is charged by your broker, whether it be Salomon
Smith Barney Inc. or another broker.
U.S. Bank Trust National Association, as trustee and as custodian, will
charge you a quarterly custody fee of $2.00 for each round lot of 100 Healthcare
SECTORS. This fee will 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 Healthcare
SECTORS, 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 recover unpaid
custody fees from prior years.
GOVERNING LAW
The Healthcare SECTORS will be governed by the laws of the state of New
York.
BOOK-ENTRY ONLY ISSUANCE
The Depository Trust Company, or DTC, will act as securities depositary for
the Healthcare SECTORS. The Healthcare SECTORS will be issued only as
fully-registered securities registered in the name of DTC's nominee, Cede & Co.
One or more fully-registered global Healthcare SECTORS certificates,
representing the total aggregate number of Healthcare SECTORS, will be issued
and will be deposited with DTC.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. These laws
may impair the ability to transfer beneficial interests in the global Healthcare
SECTORS as represented by a global certificate.
DTC has advised Structured Products Corp. as follows: DTC is a
limited-purpose trust company organized under the laws of the State of New York,
a "banking organization" within the meaning of the New York banking law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered under section 17A of the Securities Exchange Act of 1934. The rules
applicable to DTC and its participants are on file
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with the SEC. DTC holds securities that its participants deposit with DTC. DTC
also facilitates the settlement among participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct participants
in DTC include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of its
direct participants and by the New York Stock Exchange, the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others, such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a direct participant, either directly or indirectly.
Purchases of the Healthcare SECTORS within the DTC system must be made by
or through direct participants, which will receive a credit for the Healthcare
SECTORS on DTC's records. The ownership interest of each beneficial owner
actually purchasing the Healthcare SECTORS will be recorded on the direct
participants' and indirect participants' records. Beneficial owners will not
receive written confirmation from DTC of their purchases, but beneficial owners
are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the direct
or indirect participants through which the beneficial owners purchased the
Healthcare SECTORS. Transfers of ownership interests in the Healthcare SECTORS
are to be accomplished by entries made on the books of participants and indirect
participants acting on behalf of beneficial owners. Beneficial owners will not
receive certificates representing their ownership interests in the Healthcare
SECTORS, except in the event that use of the book-entry system for the
Healthcare SECTORS is discontinued. Account holders in the Euroclear or
Clearstream Banking clearance systems may hold beneficial interests in the
Healthcare SECTORS through the accounts each such system maintains as a
participant in DTC.
To facilitate subsequent transfers, all the Healthcare SECTORS deposited by
participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Healthcare SECTORS with DTC and their registration in the name of
Cede & Co. effect no change in beneficial ownership, and DTC has no knowledge of
the actual beneficial owners of the Healthcare SECTORS. DTC's records reflect
only the identity of the direct participants to whose accounts such Healthcare
SECTORS are credited, which may or may not be the beneficial owners. The
participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
that may be in effect from time to time.
Although voting with respect to the Healthcare SECTORS is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will itself consent
or vote with respect to the Healthcare SECTORS. Under its usual procedures, DTC
would mail an Omnibus Proxy to the Healthcare SECTORS Trust as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co. consenting or voting
rights for those direct participants to whose accounts the Healthcare SECTORS
are credited on the record date, identified in a listing attached to the Omnibus
Proxy. Structured Products Corp. and the Healthcare SECTORS Trust believe that
the arrangements among DTC, direct and indirect participants, and beneficial
owners will enable the beneficial owners to exercise rights equivalent in
substance to the rights that can be directly exercised by a holder of a
beneficial interest in the Healthcare SECTORS Trust.
Payments on the Healthcare SECTORS will be made to DTC. DTC's practice is
to credit direct participants' accounts on the relevant payment date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payments on such payment date.
Payments by participants to beneficial owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the account of customers in bearer form or registered in "street name," and such
payments will be the responsibility of such participant and not of DTC, the
Healthcare SECTORS Trust or Structured Products Corp., subject to any statutory
or regulatory
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requirements to the contrary that may be in effect from time to time. Payment of
distributions to DTC is the responsibility of the Healthcare SECTORS Trust,
disbursement of such payments to direct participants is the responsibility of
DTC, and disbursement of such payments to the beneficial owners is the
responsibility of direct and indirect participants.
Except as provided in the next paragraph, a beneficial owner in a global
Healthcare SECTORS will not be entitled to receive physical delivery of
Healthcare SECTORS. Accordingly, each beneficial owner must rely on the
procedures of DTC to exercise any rights under the Healthcare SECTORS.
DTC may discontinue providing its services as securities depositary with
respect to the Healthcare SECTORS at any time by giving reasonable notice to
Healthcare SECTORS Trust. Under such circumstances, in the event that a
successor securities depositary is not obtained, Healthcare SECTORS certificates
are required to be printed and delivered. Additionally, the trustee with the
consent of Structured Products Corp., may decide to discontinue use of the
system of book-entry transfers through DTC or any successor depositary with
respect to the Healthcare SECTORS. In that event, certificates for the
Healthcare SECTORS will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Structured Products Corp. and the Healthcare
SECTORS Trust believe to be reliable, but neither Structured Products Corp. nor
the Healthcare SECTORS Trust takes responsibility for the accuracy thereof.
DESCRIPTION OF THE DEPOSITARY TRUST AGREEMENT
The Healthcare SECTORS will be issued pursuant to a depositary trust
agreement, dated as of , 2001, among Structured Products Corp., as
initial depositor, U.S. Bank Trust National Association, as trustee, other
depositors and the owners of the Healthcare SECTORS. The depositary trust
agreement provides that the Healthcare SECTORS will represent undivided
beneficial ownership interests in the common stock of the underlying companies.
U.S. Bank Trust National Association will serve as trustee. The address of
the trustee is 100 Wall Street, Suite 1600, New York, New York 10005 and its
telephone number is (212) 361-2519.
The trustee and the 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 Healthcare SECTORS, provided that the trustee or initial
depositor is provided with an opinion of counsel to the effect that such
amendment will not affect the trust's status as a grantor trust or custodial
arrangement for U.S. federal income tax purposes. 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 the Healthcare SECTORS. 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 the Healthcare SECTORS will not become effective
until 30 days after notice of the amendment is given to the owners of Healthcare
SECTORS.
The depositary trust agreement 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.
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.
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DESCRIPTION OF THE UNDERLYING SECURITIES
The underlying securities are the common stocks or American depository
shares of a group of 37 specified companies. The following criteria were used in
selecting the underlying securities on , 2001:
- registration under Section 12 of the Securities Exchange Act;
- market capitalization equal to or greater than $75 million;
- a trading history of at least one year; and
- investment research by Salomon Smith Barney Inc. on the healthcare
industry.
The market capitalization of a company is determined by multiplying the
market price of its securities by the number of its outstanding securities. In
determining whether a company was to be considered for inclusion in the
Healthcare SECTORS, Structured Products Corp. examined available public
information about the company, including analysts' reports and other independent
market sources.
The underlying securities of the Healthcare SECTORS were selected by
Structured Products Corp., based on the investment research of Salomon Smith
Barney Inc., from the following subsectors of the healthcare industry: United
States pharmaceuticals, European pharmaceuticals, generic and specialty
pharmaceuticals, medical devices, biotechnology and healthcare services (health
maintenance organizations, hospitals and distributors). Selection criteria
included the longevity of the Healthcare SECTORS, the current performance of the
companies and an assessment of prospects of growth and profitability. Asset
allocation for each particular subsector was determined by assessing trends and
weighting the various subsectors accordingly. Within each of the subsectors, the
individual underlying securities were weighted based upon an assessment of
current performance, valuation, prospects of competitive advantage, product
pipeline and future growth. Because of the long term nature of the Healthcare
SECTORS, current valuations do not carry as much weight as they would for an
investment of a shorter duration. All the criteria described above were applied
in the sole discretion of Structured Products Corp. The ultimate determination
of the inclusion of the underlying securities in the Healthcare SECTORS rested
solely in the discretion of Structured Products Corp. Neither Salomon Smith
Barney Inc. nor Structured Products Corp. have made any investigation or review
of the issuers of the underlying securities except in connection with Salomon
Smith Barney Inc.'s investment research on the issuers, which provided
information used in applying the selection criteria. All determinations made by
Structured Products Corp. were based solely on publicly available information,
which neither Salomon Smith Barney Inc. nor Structured Products Corp.
independently verified and for the accuracy of which neither takes
responsibility. A decision by you to invest in Healthcare SECTORS must be made
by you on the basis of your evaluation of the underlying securities and not on
the basis of the selection criteria or the application by Structured Products
Corp. of these criteria.
For a list of the underlying securities represented by the Healthcare
SECTORS, please refer to "Description of the Healthcare SECTORS" in this
prospectus. If the underlying securities change because of a reconstitution
event, a revised list of underlying securities will be provided to you from the
American Stock Exchange and through a widely used electronic information
dissemination system such as Bloomberg or Reuters.
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 Healthcare SECTORS Trust, the trustee, Structured Products Corp., Salomon
Smith Barney Inc. or any of their affiliates.
HISTORICAL DATA ON THE UNDERLYING SECURITIES
The following table and graph set forth the composite performance of all of
the underlying securities represented by a single Healthcare SECTORS, measured
at the close of each month from January 30, 1998 to present. The performance
table and graph data are adjusted to reflect any stock splits and stock
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dividends that may have occurred over the measurement period. Past movements of
the prices of the underlying securities are not necessarily indicative of future
prices.
DATE CLOSING PRICE
- ---- -------------
January 30, 1998............................................ $ 47.39
February 27, 1998........................................... 50.21
March 31, 1998.............................................. 52.17
April 30, 1998.............................................. 52.59
May 29, 1998................................................ 52.18
June 30, 1998............................................... 54.10
July 31, 1998............................................... 54.37
August 31, 1998............................................. 48.30
September 30, 1998.......................................... 52.98
October 30, 1998............................................ 54.41
November 30, 1998........................................... 58.08
December 31, 1998........................................... 62.72
January 29, 1999............................................ 63.04
February 26, 1999........................................... 60.87
March 31, 1999.............................................. 62.04
April 30, 1999.............................................. 58.99
May 31, 1999................................................ 58.37
June 30, 1999............................................... 60.40
July 30, 1999............................................... 59.39
August 31, 1999............................................. 62.36
September 30, 1999.......................................... 57.61
October 29, 1999............................................ 61.55
November 30, 1999........................................... 63.75
December 31, 1999........................................... 64.86
January 31, 2000............................................ 68.49
February 29, 2000........................................... 72.80
March 31, 2000.............................................. 73.49
April 28, 2000.............................................. 72.09
May 31, 2000................................................ 72.63
June 30, 2000............................................... 83.92
July 31, 2000............................................... 82.77
August 31, 2000............................................. 88.00
September 29, 2000.......................................... 90.50
October 31, 2000............................................ 89.67
November 30, 2000........................................... 88.78
December 29, 2000........................................... 92.23
January 31, 2001............................................ 84.24
February 29, 2001........................................... 83.65
March 30, 2001.............................................. 76.38
April 30, 2001.............................................. 78.71
May 22, 2001................................................ 81.83
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HISTORICAL PERFORMANCE OF THE UNDERLYING STOCKS
[GRAPH]
The following tables provide a brief description of the business of each of
the issuers of the underlying securities and set forth the securities' quarterly
closing prices, as reported by the applicable securities exchange and as
adjusted to reflect stock splits and stock dividends. An asterisk (*) denotes
that no shares of the issuer were trading on a United States stock market during
that quarter. The historical prices of the underlying securities should not be
taken as an indication of future performance.
ABBOTT LABORATORIES
Abbott Laboratories' principal business is the discovery, development,
manufacture and sale of a broad and diversified line of health care products and
services.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 20.3750 0.105 First 28.0625 0.120 First 37.6563 0.135
Second 21.7500 0.120 Second 33.3750 0.135 Second 41.0000 0.150
Third 24.6250 0.120 Third 31.9688 0.135 Third 43.4375 0.150
Fourth 25.3750 0.120 Fourth 32.7500 0.135 Fourth 49.0000 0.150
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 46.8125 0.150 First 35.1875 0.170 First 47.1900 0.190
<$d
Second 45.3750 0.170 Second 44.5625 0.190
<$d
Third 36.6875 0.170 Third 47.5625 0.190
<$d
Fourth 36.3125 0.170 Fourth 48.4375 0.190
The closing price of the common stock of Abbott Laboratories on , 2001
was $ . During the period reflected in the above table, Abbott Laboratories
split its common stock 2-for-1 on June 1, 1998. The data appearing in the above
table has been adjusted to reflect this split.
AMERICAN HOME PRODUCTS CORP
American Home Products Corporation is currently engaged in the discovery,
development, manufacture, distribution and sale of a diversified line of
products in two primary businesses: Pharmaceuticals and Consumer Health Care.
Pharmaceuticals include branded and generic human ethical pharmaceuticals,
biologicals, nutritionals, and animal biologicals and pharmaceuticals. Consumer
Health Care products include analgesics, cough, cold and allergy remedies,
nutritional supplements, herbal products, and hemorrhoidal, antacid, asthma and
other relief items sold over-the-counter.
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CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 27.0938 0.193 First 30.0000 0.205 First 47.6875 0.215
Second 30.0625 0.193 Second 38.2500 0.205 Second 51.7500 0.215
Third 31.8750 0.193 Third 36.5000 0.205 Third 52.6250 0.215
Fourth 29.3125 0.205 Fourth 38.2500 0.215 Fourth 56.3750 0.225
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
<$d
First 65.2500 0.225 First 53.7500 0.230 First 58.7500 0.230
<$d
Second 57.3750 0.225 Second 58.7500 0.230
<$d
Third 41.5000 0.225 Third 56.4375 0.230
<$d
Fourth 39.2500 0.230 Fourth 63.5500 0.230
The closing price of the common stock of American Home Products on
, 2001 was $ . During the period reflected in the above
table, American Home Products split its common stock 2-for-1 on each of May 7,
1996 and May 6, 1998. The data appearing in the above table has been adjusted to
reflect each of these splits.
AMGEN INC.
Amgen, Inc. is a global biotechnology company that discovers, develops,
manufactures and markets human therapeutics based on advances in cellular and
molecular biology. Amgen manufactures and markets four human therapeutic
products and uses wholesale distributors of pharmaceutical products as the
principal means of distributing its products to clinics, hospitals and
pharmacies.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 14.5313 0.000 First 13.9688 0.000 First 15.2188 0.000
Second 13.5000 0.000 Second 14.5313 0.000 Second 16.3438 0.000
Third 15.7813 0.000 Third 11.9844 0.000 Third 18.8906 0.000
Fourth 13.5938 0.000 Fourth 13.5313 0.000 Fourth 26.1406 0.000
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 37.4375 0.000 First 61.3750 0.000 First 60.1875 0.000
<$d
Second 30.4375 0.000 Second 70.2500 0.000
<$d
Third 40.7500 0.000 Third 69.8281 0.000
<$d
Fourth 60.0625 0.000 Fourth 63.9375 0.000
The closing price of the common stock of Amgen on , 2001 was
$ . During the period reflected in the above table, Amgen split its
common stock 2-for-1 on each of March 1, 1999 and November 22, 1999. The data
appearing in the above table has been adjusted to reflect each of these splits.
Amgen has never paid dividends on its common stock.
ASTRAZENECA PLC
AstraZeneca is a major international Healthcare business engaged in the
research, development, manufacture and marketing of ethical (prescription)
pharmaceuticals and the supply of Healthcare services. It is one of the top five
pharmaceutical companies in the world with leading positions in sales of
gastrointestinal, oncology, anaesthesia (including pain management),
cardiovascular, central nervous system (CNS) and respiratory products. Shares of
AstraZeneca also trade on the London International Stock Exchange.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 20.7689 0.000 First 27.6918 0.000 First 42.8409 0.000
Second 21.9091 0.317 Second 32.3343 0.387 Second 42.8816 0.441
Third 24.1896 0.000 Third 31.8049 0.000 Third 34.2075 0.000
Fourth 27.366 0.218 Fourth 35.1849 0.239 Fourth 43.8590 0.247
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 45.9969 0.000 First 39.5830 0.000 First 48.25 0.000
<$d
Second 38.3002 0.446 Second 45.4472 0.470
<$d
Third 41.2934 0.000 Third 51.3724 0.000
<$d
Fourth 40.8047 0.230 Fourth 51.5000 0.230
The closing price of the American depository shares of AstraZeneca on
, 2001 was $ . During the period reflected in the above table,
AstraZeneca split its American depository shares 3-for-1 on April 8, 1998. The
data appearing in the above table has been adjusted to reflect this split.
AVENTIS
Aventis is a leader in the global life sciences industry, providing
innovative products and services for health and nutrition. Its core competencies
are in the global fields of prescription drugs, vaccines, therapeutic proteins,
diagnostics and crop sciences, as well as in the fields of animal health and
nutrition. Shares of Aventis also trade on the Paris Stock Exchange.
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CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 25.8750 0.000 First 33.2500 0.000 First 50.3750 0.000
Second 26.5000 0.000 Second 41.6250 0.000 Second 56.1875 0.468
Third 28.0000 0.435 Third 40.4375 0.447 Third 41.7500 0.000
Fourth 33.8750 0.000 Fourth 44.1875 0.000 Fourth 50.2500 0.000
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 44.0000 0.000 First 54.0000 0.000 First 76.8500 0.000
<$d
Second 46.3125 0.479 Second 72.5625 0.322
<$d
Third 51.2500 0.000 Third 75.3125 0.000
<$d
Fourth 56.8750 0.000 Fourth 84.2500 0.000
The closing price of the American depository shares of Aventis on ,
2001 was $ .
BARR LABORATORIES, INC.
Barr Laboratories, Inc. is an established specialty pharmaceutical company
engaged in the development, manufacture and marketing of generic and proprietary
prescription pharmaceuticals. Barr's product line is principally focused on the
development and marketing of generic and proprietary products in the oncology,
female healthcare (including hormone replacement and oral contraceptives) and
cardiovascular therapeutic categories. In addition, Barr also maintains active
development and marketing efforts in a second tier of therapeutic categories
including anti-infectives, pain management and psychotherapeutic agents.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 10.9444 0.000 First 17.1111 0.000 First 26.9167 0.000
Second 11.4444 0.000 Second 29.3333 0.000 Second 26.5000 0.000
Third 12.6111 0.000 Third 26.0000 0.000 Third 20.2500 0.000
Fourth 11.2778 0.000 Fourth 22.7500 0.000 Fourth 32.0000 0.000
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 20.3333 0.000 First 28.0000 0.000 First 57.1700 0.000
<$d
Second 26.5833 0.000 Second 44.8125 0.000
<$d
Third 21.1667 0.000 Third 66.3125 0.000
<$d
Fourth 20.9167 0.000 Fourth 72.9375 0.000
The closing price of the common stock of Barr on , 2001 was $ .
During the period reflected in the above table, Barr split its common stock
3-for-2 on each of March 26, 1996, May 8, 1997 and June 29, 2000. The data
appearing in the above table has been adjusted to reflect each of these splits.
Barr has never paid dividends on its common stock.
BAXTER INTERNATIONAL INC.
Baxter International Inc. engages in the worldwide development, manufacture
and distribution of a diversified line of products, systems and services used
primarily in the healthcare field. Baxter International manufactures products in
27 countries and sells them in over 100 countries. Its products are used by
hospitals, clinical and medical research laboratories, blood and blood dialysis
centers, rehabilitation centers, nursing homes, doctors' offices and by
patients, at home, under physician supervision.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 40.2412 0.283 First 41.2332 0.283 First 52.7068 0.291
Second 42.0198 0.283 Second 50.0176 0.283 Second 51.4518 0.291
Third 41.3528 0.303 Third 49.9579 0.283 Third 57.0691 0.291
Fourth 39.2014 0.303 Fourth 48.2249 0.283 Fourth 61.4912 0.291
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 63.1047 0.291 First 59.9375 0.291 First 94.140 1.164
<$d
Second 57.9655 0.291 Second 70.3125
<$d
Third 57.6069 0.291 Third 79.8125
<$d
Fourth 60.0570 0.291 Fourth 88.3125
The closing price of the common stock of Baxter International on ,
2001 was $ .
BECKMAN COULTER INC.
Beckman Coulter, Inc. simplifies and automates laboratory processes used in
all phases of the battle against disease. The company designs, manufactures and
markets systems which consist of instruments, chemistries, software and supplies
that meet a variety of laboratory needs. Its products are used in a range of
applications, from instruments used for pioneering medical research, clinical
trials and drug discovery to diagnostic tools found in hospitals and physicians'
offices. Beckman Coulter's product lines include virtually all blood tests
routinely performed in hospital laboratories and a range of systems for medical
and pharmaceutical research.
26
29
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 19.5000 0.065 First 21.0000 0.075 First 28.6563 0.075
Second 18.8750 0.065 Second 24.1250 0.075 Second 29.1250 0.075
Third 19.4375 0.065 Third 21.2813 0.075 Third 25.8125 0.075
Fourth 19.1875 0.065 Fourth 20.0000 0.075 Fourth 27.1250 0.080
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 22.1250 0.080 First 32.0938 0.080 First 39.0900 0.850
<$d
Second 24.3125 0.080 Second 29.2070 0.080
<$d
Third 22.5625 0.080 Third 38.5625 0.080
<$d
Fourth 25.4375 0.080 Fourth 41.9375 0.850
The closing price of the common stock of Beckman Coulter on , 2001
was $ . During the period reflected in the above table, Beckman Coulter
split its common stock 2-for-1 on December 8, 2000. The data appearing in the
above table has been adjusted to reflect this split.
BIOGEN INC.
Biogen, Inc. is a biopharmaceutical company principally engaged in the
business of developing, manufacturing and marketing drugs for human health care.
Biogen currently derives revenues from sales of its product for the treatment of
relapsing forms of multiple sclerosis and from royalties on worldwide sales by
the Biogen's licensees of a number of products covered under patents controlled
by Biogen.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 14.8750 0.000 First 18.6875 0.000 First 24.0938 0.000
Second 13.7188 0.000 Second 16.9375 0.000 Second 24.5000 0.000
Third 19.0000 0.000 Third 16.2188 0.000 Third 32.9063 0.000
Fourth 19.3750 0.000 Fourth 18.1875 0.000 Fourth 41.5000 0.000
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 57.153 0.000 First 69.8750 0.000 First 63.3125 0.000
<$d
Second 64.3125 0.000 Second 64.5000 0.000
<$d
Third 78.8125 0.000 Third 61.0000 0.000
<$d
Fourth 84.5000 0.000 Fourth 60.0625 0.000
The closing price of the common stock of Biogen on , 2001 was
$ . During the period reflected in the above table, Biogen split its common
stock 2-for-1 on each of November 18, 1996 and June 28, 1999. The data appearing
in the above table has been adjusted to reflect each of these splits. Biogen has
never paid dividends on its common stock.
BRISTOL-MYERS SQUIBB COMPANY
Bristol-Myers Squibb Company, through its divisions and subsidiaries, is a
producer and distributor of consumer medicines, pharmaceuticals, nutritionals,
medical devices and beauty care products.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 21.3984 0.188 First 29.5000 0.190 First 52.1563 0.195
Second 22.5000 0.188 Second 40.5000 0.190 Second 57.4688 0.195
Third 24.0938 0.188 Third 41.3750 0.190 Third 51.9375 0.195
Fourth 27.2500 0.188 Fourth 47.3125 0.190 Fourth 66.9063 0.195
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 64.1250 0.215 First 57.1250 0.245 First 59.4000 0.275
<$d
Second 70.4375 0.215 Second 58.2500 0.245
<$d
Third 67.5000 0.215 Third 57.5000 0.245
<$d
Fourth 64.1875 0.215 Fourth 73.9375 0.245
The closing price of the common stock of Bristol-Myers Squibb on ,
2001 was $ . During the period reflected in the above table, Bristol-Myers
Squibb split its common stock 2-for-1 on each of March 3, 1997 and March 1,
1999. The data appearing in the above table has been adjusted to reflect each of
these splits.
CARDINAL HEALTH, INC.
Cardinal Health, Inc. is structured as a holding company conducting
business through a number of separate operating subsidiaries. Cardinal Health is
a leading provider of products and services to Healthcare providers and
manufacturers to help them improve the efficiency and quality of Healthcare.
These services and products include Pharmaceutical Distribution and Provider
Services, Medical-Surgical Products and Services, Pharmaceutical Technologies
and Services and Automation and Information Services.
27
30
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 19.0370 0.009 First 24.1667 0.011 First 39.1944 0.011
Second.. 21.3704 0.009 Second 25.4444 0.011 Second 41.6667 0.013
Third.. 24.4815 0.009 Third 31.5556 0.011 Third 45.8889 0.013
Fourth.. 25.8889 0.009 Fourth 33.3889 0.011 Fourth 50.5833 0.017
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 44.0000 0.017 First 30.5833 0.017 First 64.5000 0.020
<$d
Second 42.7500 0.017 Second 49.3333 0.017
<$d
Third 36.3333 0.017 Third 58.7917 0.020
<$d
Fourth 31.9167 0.017 Fourth 66.4167 0.020
The closing price of the common stock of Cardinal Health on ,
2001 was $ . During the period reflected in the above table, Cardinal Health
split its common stock 3-for-2 on each of December 17, 1996, November 2, 1998
and April 23, 2001. The data appearing in the above table has been adjusted to
reflect each of these splits.
CELLTECH GROUP PLC
Celltech is one of the largest European-based biopharmaceutical companies.
It possesses significant discovery and development capabilities, a broad
late-stage pipeline, and an international pharmaceutical business which includes
substantial US operations. Celltech's discovery and development activities are
focused on immune and inflammatory diseases, cancer and bone disorders. Shares
of Celltech also trade on the London International Stock Exchange.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First * * First * * First * *
Second * * Second * * Second * *
Third * * Third * * Third * *
Fourth * * Fourth * * Fourth * *
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ---- ------- ----- ----- ------- -----
First * * First 34.7500 0.000 First 33.3000 0.000
<$d
Second * * Second 37.8750 0.000
<$d
Third * * Third 39.1250 0.000
<$d
Fourth * * Fourth 32.5000 0.000
The closing price of the common stock of Celltech on , 2001 was
$ . Celltech has never paid dividends on its common stock.
CIGNA CORPORATION
CIGNA Corporation and its subsidiaries constitute one of the largest
investor-owned employee benefits organizations in the United States. Its
subsidiaries are major providers of employee benefits offered through the
workplace, including health care products and services, group life, accident and
disability insurance, retirement products and services and investment
management.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 38.0833 0.253 First 48.6667 0.267 First 68.3333 0.277
Second 39.2917 0.267 Second 59.1667 0.277 Second 69.0000 0.287
Third 39.9583 0.267 Third 62.0833 0.277 Third 66.1250 0.287
Fourth 45.5417 0.267 Fourth 57.4583 0.277 Fourth 77.3125 0.287
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
<$d
First 83.8125 0.287 First 75.7500 0.300 First 107.360 0.310
<$d
Second 89.0000 0.300 Second 93.5000 0.310
<$d
Third 77.7500 0.300 Third 104.400 0.310
<$d
Fourth 80.5625 0.300 Fourth 132.300 0.310
The closing price of the common stock of CIGNA on , 2001 was
$ . During the period reflected in the above table, CIGNA split its common
stock 3-for-1 on May 18, 1998. The data appearing in the above table has been
adjusted to reflect this split.
ELAN CORPORATION PLC
Elan Corporation, PLC, a public limited company organized under the laws of
Ireland, is a worldwide pharmaceutical and biotechnology company, headquartered
in Dublin, Ireland. Elan's principal research and development, manufacturing and
marketing facilities are located in Ireland, the United States and Israel.
Traditionally, Elan has focused on the development and commercialization of
products for pharmaceutical industry clients utilizing its proprietary drug
delivery systems. Elan continues to focus on drug delivery systems, but has also
embarked on a strategy to expand its therapeutic focus through the development
and commercialization of new pharmaceutical products for selected target
markets, including the areas of neurology, pain management and oncology. Shares
of Elan also trade on the Dublin Stock Exchange.
28
31
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS 1999 PRICE DENDS 2000 PRICE DENDS
- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- -----
First 16.0625 0.000 First 17.0625 0.000 First 32.3125 0.000 First 34.8750 0.000 First 47.5000 0.000
Second 14.3125 0.000 Second 22.6250 0.000 Second 32.1563 0.000 Second 27.7500 0.000 Second 48.4375 0.000
Third 14.9375 0.000 Third 25.0313 0.000 Third 36.0313 0.000 Third 33.5625 0.000 Third 54.7500 0.000
Fourth 16.6250 0.000 Fourth 25.5938 0.000 Fourth 34.9688 0.000 Fourth 29.5000 0.000 Fourth 46.8125 0.000
CLOSING DIVI-
1996 2001 PRICE DENDS
- ------ ------ ------- -----
First First 52.2500 0.000
<$deli
Second
<$deli
Third
<$deli
Fourth
The closing price of the common stock of Elan on , 2001 was
$ . During the period reflected in the above table, Elan split its common
stock 2-for-1 on each of August 23, 1996 and June 7, 1999. The data appearing in
the above table has been adjusted to reflect each of these splits. Elan has
never paid dividends on its common stock.
ELI LILLY AND COMPANY
Eli Lilly and Company discovers, develops, manufactures, and sells products
in one significant business segment -- pharmaceutical products. Eli Lilly
directs its research efforts primarily toward the search for products to
diagnose, prevent and treat human diseases. It also conducts research to find
products to treat diseases in animals and increase the efficiency of animal food
production.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 32.50 0.171 First 41.1250 0.180 First 59.6250 0.200
Second 32.50 0.171 Second 54.6563 0.180 Second 66.2500 0.200
Third 32.25 0.171 Third 60.5000 0.180 Third 78.3125 0.200
Fourth 36.50 0.171 Fourth 69.6250 0.200 Fourth 88.8750 0.200
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
<$d
First 84.8750 0.23 First 62.6250 0.260 First 76.6600 0080
<$d
Second 71.6250 0.23 Second 99.8750 0.260
<$d
Third 64.1875 0.23 Third 81.1250 0.260
<$d
Fourth 66.5000 0.23 Fourth 93.0625 0.260
The closing price of the common stock of Eli Lilly on , 2001
was $ . During the period reflected in the above table, Eli Lilly split
its common stock 2-for-1 on October 16, 1997. The data appearing in the above
table has been adjusted to reflect this split.
FOREST LABORATORIES, INC.
Forest Laboratories, Inc. and its subsidiaries develop, manufacture and
sell both branded and generic forms of ethical drug products which require a
physician's prescription, as well as non-prescription pharmaceutical products
sold over-the-counter. Forest Laboratories' most important United States
products consist of branded ethical drug specialties marketed directly to
physicians by Forest Pharmaceuticals', Forest Therapeutics' and Forest Specialty
Sales' salesforces.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS 1999 PRICE DENDS 2000 PRICE DENDS
- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- -----
First 12.1875 0.000 First 9.4063 0.000 First 18.7500 0.000 First 28.1875 0.000 First 42.2500 0.000
Second 9.6563 0.000 Second 10.3594 0.000 Second 17.8750 0.000 Second 23.1250 0.000 Second 50.5195 0.000
Third 9.0313 0.000 Third 10.5313 0.000 Third 17.1875 0.000 Third 21.0625 0.000 Third 57.3438 0.000
Fourth 8.1875 0.000 Fourth 12.3281 0.000 Fourth 26.5938 0.000 Fourth 30.7188 0.000 Fourth 66.4375 0.000
CLOSING DIVI-
1996 2001 PRICE DENDS
- ------ ----- ------- -----
First First 59.2400 0.000
<$deli
Second
<$deli
Third
<$deli
Fourth
The closing price of the common stock of Forest Laboratories on ,
2001 was $ . During the period reflected in the above table, Forest
Laboratories split its common stock 2-for-1 on each of March 26, 1998 and
January 12, 2001. The data appearing in the above table has been adjusted to
reflect each of these splits. Forest Laboratories has never paid dividends on
its common stock.
GENENTECH
Genentech is a leading biotechnology company using human genetic
information to discover, develop, manufacture and market human pharmaceuticals
that address significant unmet medical needs. Fourteen of the approved products
of biotechnology stem from Genentech's science.
29
32
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS 1999 PRICE DENDS 2000 PRICE DENDS
- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- -----
First * * First * * First * * First * * First 76.0000 0.000
Second * * Second * * Second * * Second * * Second 85.9492 0.000
Third * * Third * * Third * * Third 36.5781 0.000 Third 92.8438 0.000
Fourth * * Fourth * * Fourth * * Fourth 67.2500 0.000 Fourth 81.5000 0.000
CLOSING DIVI-
1996 2001 PRICE DENDS
- ------ ----- ------- -----
First First 50.5000 0.000
<$deli
Second
<$deli
Third
<$deli
Fourth
The closing price of the common stock of Genentech on , 2001 was
$ . During the period reflected in the above table, Genentech split its
common stock 2-for-1 on each of November 3, 1999 and October 25, 2000. The data
appearing in the above table has been adjusted to reflect each of these splits.
Genetech has never paid dividends on its common stock.
GENZYME CORP.
Genzyme Corp. is a biotechnology and human Healthcare company that develops
innovative products and provides services for major unmet medical needs. Genzyme
currently has three operating divisions: Genzyme General, which develops and
markets therapeutic products and diagnostic products and services with an
emphasis on genetic disorders and other chronic debilitating diseases with
well-defined patient populations; Genzyme Biosurgery, which develops and markets
instruments, devices, biomaterials and biotherapeutic products to improve or
replace surgery; with an emphasis on the orthopaedics and cardiothoracic
markets; and Genzyme Molecular Oncology, which is utilizing its functional
genomics and antigen discovery technology platforms to develop novel cancer
products focused on cancer vaccines and angiogenesis inhibitors.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 26.2063 0.000 First 21.4415 0.000 First 30.8600 0.000
Second 23.9431 0.000 Second 26.4446 0.000 Second 24.6519 0.000
Third 24.3004 0.000 Third 28.6902 0.000 Third 34.8381 0.000
Fourth 20.7268 0.000 Fourth 26.7614 0.000 Fourth 48.9428 0.000
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
<$d
First 49.6191 0.000 First 50.1250 0.000 First 90.3300 0.000
<$d
Second 48.5000 0.000 Second 59.4375 0.000
<$d
Third 45.0625 0.000 Third 68.1875 0.000
<$d
Fourth 45.0000 0.000 Fourth 89.9375 0.000
The closing price of the common stock of Genzyme on , 2001 was
$ . During the period reflected in the above table, Genzyme split its
common stock 2-for-1 on July 26, 1996. The data appearing in the above table has
been adjusted to reflect this split. Genzyme Corp. has never paid dividends on
its common stock.
GUIDANT CORP.
A pioneer in emerging therapies for cardiovascular and vascular disease,
Guidant Corporation is a global leader in the medical technology industry.
Guidant provides cost-effective, minimally-invasive products and services
designed to improve clinical outcomes and prolong life with quality. Guidant is
a global company with principal operations in the United States, Western Europe,
and Japan.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS 1999 PRICE DENDS 2000 PRICE DENDS
- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- -----
First 13.5000 0.006 First 15.3750 0.006 First 36.6875 0.006 First 60.5000 0.000 First 58.8750 0.000
Second 12.3125 0.006 Second 21.2500 0.006 Second 35.6563 0.006 Second 51.1250 0.000 Second 49.5000 0.000
Third 13.8125 0.006 Third 28.0000 0.006 Third 37.1250 0.006 Third 53.6250 0.000 Third 70.6875 0.000
Fourth 14.2500 0.006 Fourth 31.1250 0.006 Fourth 55.0000 0.006 Fourth 47.0000 0.000 Fourth 53.9375 0.000
CLOSING DIVI-
1996 2001 PRICE DENDS
- ------ ----- ------- -----
<$deli
First First 44.9900 0.000
<$deli
Second
<$deli
Third
<$deli
Fourth
The closing price of the common stock of Guidant on , 2001 was
$ . During the period reflected in the above table, Guidant split its
common stock 2-for-1 on each of September 17, 1997 and January 28, 1999. The
data appearing in the above table has been adjusted to reflect each of these
splits.
30
33
HCA -- THE HEALTHCARE CO.
HCA -- The Healthcare Company is one of the leading health care services
companies in the United States. At December 31, 2000, HCA operated 196
hospitals, comprised of 179 general, acute care hospitals, 8 psychiatric
hospitals, and 9 hospitals in joint ventures. In addition, HCA operated 78
freestanding surgery centers. HCA's facilities are located in 24 states, England
and Switzerland.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 36.7113 0.020 First 32.0628 0.020 First 30.7517 0.020
Second 34.0891 0.020 Second 37.4860 0.020 Second 27.7719 0.020
Third 36.1551 0.020 Third 27.4143 0.020 Third 19.1304 0.020
Fourth 38.8568 0.020 Fourth 28.2486 0.020 Fourth 23.6001 0.020
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
<$d
First 18.0577 0.020 First 25.3125 0.020 First 40.2700 0.020
<$d
Second 22.8125 0.020 Second 30.3750 0.020
<$d
Third 21.1875 0.020 Third 37.1250 0.020
<$d
Fourth 29.3125 0.020 Fourth 44.0100 0.020
The closing price of the common stock of HCA on , 2001 was
$ . During the period reflected in the above table, HCA split its common
stock 3-for-2 on October 16, 1996. The data appearing in the above table has
been adjusted to reflect this split.
IDEC PHARMACEUTICAL CORP.
IDEC Pharmaceuticals Corporation is a biopharmaceutical company engaged
primarily in the research, development and commercialization of targeted
therapies for the treatment of cancer and autoimmune and inflammatory diseases,
such as certain B-cell non-Hodgkin's lymphomas, rheumatoid arthritis and
psoriasis.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 3.7083 0.000 First 3.9688 0.000 First 7.3750 0.000
Second 3.8542 0.000 Second 4.0417 0.000 Second 3.9271 0.000
Third 4.0000 0.000 Third 6.9792 0.000 Third 3.9583 0.000
Fourth 3.9583 0.000 Fourth 5.7292 0.000 Fourth 7.8333 0.000
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 8.5625 0.000 First 32.7500 0.000 First 40.0000 0.000
<$d
Second 12.8438 0.000 Second 39.1042 0.000
<$d
Third 15.6719 0.000 Third 58.4531 0.000
<$d
Fourth 32.7500 0.000 Fourth 63.1875 0.000
The closing price of the common stock of IDEC Pharmaceuticals on
, 2001 was $ . During the period reflected in the above table,
IDEC Pharmaceuticals split its common stock 2-for-1 on December 21, 1999 and
3-for-1 on January 18, 2001. The data appearing in the above table has been
adjusted to reflect each of these splits. IDEC Pharmaceuticals has never paid
dividends on its common stock.
IMMUNEX CORP.
Immunex Corp. is a leading biopharmaceutical company dedicated to
developing immune system science to protect human health. Applying scientific
expertise in the fields of immunology, cytokine biology, vascular biology,
antibody-based therapeutics and small molecule research, Immunex works to
discover new targets and new therapeutics for treating rheumatoid arthritis,
asthma and other inflammatory diseases, as well as cancer and cardiovascular
diseases.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 1.3438 0.000 First 2.2083 0.000 First 5.6146 0.000
Second 1.1354 0.000 Second 3.0208 0.000 Second 5.5208 0.000
Third 1.0833 0.000 Third 5.6042 0.000 Third 4.6146 0.000
Fourth 1.6250 0.000 Fourth 4.5000 0.000 Fourth 10.4844 0.000
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 13.8750 0.000 First 63.4375 0.000 First 14.3125 0.000
<$d
Second 21.2396 0.000 Second 49.4375 0.000
<$d
Third 14.4583 0.000 Third 43.5000 0.000
<$d
Fourth 36.5000 0.000 Fourth 40.6250 0.000
The closing price of the common stock of Immunex on , 2001 was
$ . During the period reflected in the above table, Immunex split its
common stock 2-for-1 on each of March 26, 1999 and August 27, 1999 and 3-for-1
on March 21, 2000. The data appearing in the above table has been adjusted to
reflect each of these splits. Immunex has never paid dividends on its common
stock.
31
34
IMS HEALTH INC.
IMS Health Inc. is a global provider of information solutions to the
pharmaceutical and healthcare industries. IMS Health's products and services
include marketing management for prescription drugs and over-the-counter
pharmaceutical products, sales management and product development for
pharmaceutical companies and strategic planning for the pharmaceutical and
healthcare industries.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First * * First * * First * *
Second * * Second * * Second 26.0313 0.015
Third * * Third * * Third 27.0977 0.015
Fourth * * Fourth * * Fourth 33.0039 0.015
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 28.9844 0.020 First 16.4893 0.020 First 24.9000 0.020
<$d
Second 27.3438 0.020 Second 17.5237 0.020
<$d
Third 22.2088 0.020 Third 20.7500 0.020
<$d
Fourth 26.4680 0.020 Fourth 27.0000 0.020
The closing price of the common stock of IMS Health on , 2001
was $ . During the period reflected in the above table, IMS Health split
its common stock 2-for-1 on January 19, 1999. The data appearing in the above
table has been adjusted to reflect this split.
JOHNSON & JOHNSON
Johnson & Johnson is engaged in the manufacture and sale of a broad range
of products in the health care field. It conducts business in virtually all
countries of the world. Johnson & Johnson's primary interest, both historically
and currently, has been in products related to human health and well-being.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 46.1250 0.165 First 52.8750 0.190 First 73.4375 0.220
Second 49.5000 0.190 Second 64.3750 0.220 Second 74.0000 0.250
Third 51.2500 0.190 Third 57.6875 0.220 Third 78.2500 0.250
Fourth 49.7500 0.190 Fourth 65.8750 0.220 Fourth 83.8750 0.250
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ -------- ----- ------ ------- -----
<$d
First 93.5000 0.250 First 70.2500 .0280 First 87.47 0.320
<$d
Second 98.0000 .0280 Second 101.8750 0.320
<$d
Third 91.8750 .0280 Third 93.9375 0.320
<$d
Fourth 93.2500 .0280 Fourth 105.0625 0.320
The closing price of the common stock of Johnson & Johnson on ,
2001 was $ . During the period reflected in the above table, Johnson &
Johnson split its common stock 2-for-1 on June 12, 1996. The data appearing in
the above table has been adjusted to reflect this split.
MEDIMMUNE, INC.
MedImmune, Inc. is a biotechnology company with five products on the market
and a diverse product portfolio. MedImmune is focused on using advances in
immunology and other biological sciences to develop important new products that
address significantly unmet medical needs in areas of infectious disease and
immune regulation. MedImmune also focuses on oncology through its wholly-owned
subsidiary, MedImmune Oncology, Inc.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ------- ------ ------- ----- ------ ------- -----
First 2.6250 0.000 First 2.2917 0.000 First 9.1875 0.000
Second 2.8333 0.000 Second 3.0833 0.000 Second 10.3958 0.000
Third 2.3750 0.000 Third 6.1250 0.000 Third 10.7917 0.000
Fourth 2.8333 0.000 Fourth 7.1458 0.000 Fourth 16.5729 0.000
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
<$d
First 19.7292 0.000 First 58.0417 0.000 First 35.8750 0.000
<$d
Second 22.5833 0.000 Second 74.0000 0.000
<$d
Third 33.2188 0.000 Third 77.2500 0.000
<$d
Fourth 55.2917 0.000 Fourth 47.6875 0.000
The closing price of the common stock of MedImmune on , 2001
was $ . During the period reflected in the above table, MedImmune split its
common stock 2-for-1 on January 4, 1999 and 3-for-1 on June 5, 2000. The data
appearing in the above table has been adjusted to reflect each of these splits.
MedImmune has never paid dividends on its common stock.
MEDTRONIC, INC.
Medtronic, Inc. is the world's leading medical technology company,
providing lifelong solutions for people with chronic disease. Primary products
include those for bradycardia pacing, tachyarrhythmia management, atrial
fibrillation management, heart failure management, coronary and peripheral
vascular disease, heart valve replacement, extracorporeal cardiac support,
minimally invasive cardiac surgery,
32
35
malignant and non-malignant pain, movement disorders, spinal and neurosurgery,
neurodegenerative disorders, and ear, nose and throat (ENT) surgery. On May 30,
2001, Medtronic announced that it has agreed to purchase MiniMed Inc. for $48 a
share.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ------- ------ ------- ----- ------ ------- -----
First 14.9063 0.016 First 15.5625 0.024 First 25.9375 0.024
Second 14.0000 0.016 Second 20.6250 0.024 Second 31.8750 0.024
Third 16.0313 0.024 Third 23.5625 0.024 Third 29.0000 0.033
Fourth 17.0000 0.024 Fourth 26.2500 0.024 Fourth 37.1406 0.033
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
<$d
First 35.9375 0.033 First 51.4375 0.040 First 45.7400 0.050
<$d
Second 38.9375 0.033 Second 49.8125 0.040
<$d
Third 35.5625 0.040 Third 51.8125 0.050
<$d
Fourth 36.4375 0.040 Fourth 60.3750 0.050
The closing price of the common stock of Medtronic on , 2001
was $ . During the period reflected in the above table, Medtronic split its
common stock 2-for-1 on each of September 15, 1997 and September 27, 1999. The
data appearing in the above table has been adjusted to reflect each of these
splits.
MERCK & CO., INC.
Merck & Co., Inc. is a global research-driven pharmaceutical company that
discovers, develops, manufactures and markets a broad of human and animal health
products, directly and through its joint ventures, and provides pharmaceutical
benefit services through Merck-Medco Managed Care, L.L.C. Merck's operations are
principally managed on a products and services basis and are comprised of two
segments: Merck Pharmaceutical, which includes products marketed either directly
or through joint ventures with other companies, and Merck-Medco. Merck
Pharmaceutical products consists of therapeutic agents, sold by prescription,
for the treatment of human disorders. Merck-Medco revenues are derived from the
filling and management of prescriptions and health management programs.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS 1999 PRICE DENDS 2000 PRICE DENDS
- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- -----
First 31.1250 0.000 First 42.1250 0.000 First 64.0938 0.000 First 80.1250 0.000 First 62.1250 0.000
Second 32.3125 0.000 Second 51.1563 0.000 Second 66.8750 0.000 Second 73.6250 0.000 Second 76.6250 0.000
Third 35.1875 0.000 Third 49.9688 0.000 Third 64.7813 0.000 Third 64.8125 0.000 Third 74.4375 0.000
Fourth 39.8125 0.000 Fourth 53.0000 0.000 Fourth 73.7500 0.000 Fourth 67.1875 0.000 Fourth 93.6250 0.000
CLOSING DIVI-
1996 2001 PRICE DENDS
- ------ ------ ------- -----
First First 75.9000 0.000
<$deli
Second
<$deli
Third
<$deli
Fourth
The closing price of the common stock of Merck & Co. on , 2001
was $ . During the period reflected in the above table, Merck & Co. split
its common stock 2-for-1 on February 17, 1999. The data appearing in the above
table has been adjusted to reflect this split.
MILLENNIUM PHARMACEUTICALS, INC.
The goal of Millennium Pharmaceuticals, Inc. is to become the
biopharmaceutical company of the future. It plans to develop breakthrough drugs
and predictive medicine products that ultimately enable physicians to more
closely customize medical treatment by combining knowledge of the genetic basis
for disease and the genetic characteristics of a particular patient.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS 1999 PRICE DENDS 2000 PRICE DENDS
- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- -----
First * * First 3.4063 0.000 First 4.6563 0.000 First 7.8125 0.000 First 32.4688 0.000
Second 3.8750 0.000 Second 4.0313 0.000 Second 3.5313 0.000 Second 9.0000 0.000 Second 55.9375 0.000
Third 4.5625 0.000 Third 4.8750 0.000 Third 4.3438 0.000 Third 16.2500 0.000 Third 73.0313 0.000
Fourth 4.34380 0.000 Fourth 4.7500 0.000 Fourth 6.4688 0.000 Fourth 30.5000 0.000 Fourth 61.8750 0.000
CLOSING DIVI-
1996 2001 PRICE DENDS
- ------ ------ ------- -----
First First 30.4600 0.000
<$deli
Second
<$deli
Third
<$deli
Fourth
The closing price of the common stock of Millenium Pharmaceuticals on
, 2001 was $ . During the period reflected in the above table,
Millenium Pharmaceuticals split its common stock 2-for-1 on each of April 19,
2000 and October 5, 2000. The data appearing in the above table has been
adjusted to reflect each of these splits. Millennium Pharmaceuticals has never
paid dividends on its common stock.
33
36
MINIMED INC.
MiniMed Inc. designs, develops, manufactures, markets and sells advanced
microinfusion systems and continuous glucose monitoring systems for the
intensive management of diabetes. MiniMed also uses its drug delivery expertise
to develop infusion devices for the treatment of other chronic medical
conditions. Its development efforts are focused on creating products which will
offer patients a comprehensive and integrated approach to enhanced disease
management. On May 30, 2001, Medtronic Inc. agreed to acquire MiniMed for $48.00
a share.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS 1999 PRICE DENDS 2000 PRICE DENDS
- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- ----- ------ ------- -----
First 4.5000 0.000 First 6.4375 0.000 First 11.0625 0.000 First 25.4063 0.000 First 64.7500 0.000
Second 7.4375 0.000 Second 6.6563 0.000 Second 13.0938 0.000 Second 38.4688 0.000 Second 59.0000 0.000
Third 6.2813 0.000 Third 9.8125 0.000 Third 16.5000 0.000 Third 49.1250 0.000 Third 89.3750 0.000
Fourth 8.0625 0.000 Fourth 9.7188 0.000 Fourth 26.1875 0.000 Fourth 36.6250 0.000 Fourth 42.0313 0.000
CLOSING DIVI-
1996 2001 PRICE DENDS
- ------ ------ ------- -----
First First 29.0625 0.000
<$deli
Second
<$deli
Third
<$deli
Fourth
The closing price of the common stock of MiniMed on , 2001 was
$ . During the period reflected in the above table, MiniMed split its
common stock 2-for-1 on each of April 19, 1999 and August 21, 2000. The data
appearing in the above table has been adjusted to reflect each of these splits.
MiniMed has never paid dividends on its common stock.
NOVARTIS AG
Novartis AG, a public company incorporated under the laws of Switzerland,
is a world leader both in sales and in innovation in its continuing core
businesses: pharmaceuticals, generics, consumer health, eyecare products and
medicines and animal health. It aims to hold a leadership position in all of
these businesses. Novartis is committed to improving health and well-being
through innovative products and services. Prior to listing on the New York Stock
Exchange on May 11, 2000, Novartis' American depositary shares were traded in
the United States in the over-the-counter market. Shares of Novartis also trade
on the Swiss Stock Exchange.
CLOSING CLOSING DIVI- CLOSING DIVI-
1996 PRICE DIVIDENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- --------- ------ ------- ----- ------ ------- -----
First 28.8696 0.000 First 29.9683 0.000 First 43.4570 0.000
Second 28.0762 0.000 Second 39.2456 0.289 Second 40.7104 0.355
Third 29.4189 0.000 Third 37.6587 0.000 Third 39.1846 0.000
Fourth 28.0762 0.000 Fourth 39.7339 0.000 Fourth 47.8516 0.000
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 39.4287 0.000 First 33.3862 0.000 First 39.3300 0.000
<$d
Second 36.1328 0.405 Second 39.0625 0.405
<$d
Third 36.0107 0.000 Third 37.7808 0.000
<$d
Fourth 35.7666 0.000 Fourth 44.7500 0.000
The closing price of the American depository shares of Novartis on
, 2001 was $ . During the period reflected in the above table,
Novartis split its American depository shares 2-for-1 on May 11, 2000. The data
appearing in the above table has been adjusted to reflect this split.
PFIZER INC.
Pfizer Inc. is a research-based, global pharmaceutical company. Pfizer
discovers, develops, manufacturers and markets innovative medicines for humans
and animals and consumer products.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 11.2083 0.050 First 14.0208 0.057 First 33.2292 0.063
Second 11.8958 0.050 Second 19.9167 0.057 Second 36.2292 0.063
Third 13.1875 0.050 Third 20.0417 0.057 Third 35.2500 0.063
Fourth 13.8333 0.050 Fourth 24.8542 0.057 Fourth 41.6667 0.063
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 46.2500 0.073 First 36.5625 0.090 First 40.9500 0.110
<$d
Second 36.3333 0.073 Second 48.0000 0.090
<$d
Third 35.8750 0.080 Third 44.9180 0.090
<$d
Fourth 32.4375 0.080 Fourth 46.0000 0.090
The closing price of the common stock of Pfizer on , 2001 was
$ . During the period reflected in the above table, Pfizer split its common
stock 2-for-1 on July 1, 1997 and 3-for-1 on July 1, 1999. The data appearing in
the above table has been adjusted to reflect each of these splits.
34
37
PHARMACIA CORP.
Pharmacia Corporation was created through the merger of Monsanto Company
and Pharmacia & Upjohn, Inc. Pharmacia's business is divided into three business
segments: Prescription Pharmaceuticals, which involves the business and
activities engaged in, supporting or related to the research, development,
registration, manufacture and sale of prescription pharmaceutical products,
including general therapeutics, opthalmology, and hospital products;
Agricultural Productivity, which consists of crop protection products, animal
agriculture and environmental technologies; and Seeds and Genomics, which is
comprised of global seeds and related trait businesses and genetic technology.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 30.7000 0.138 First 38.2500 0.150 First 52.0000 0.030
Second 32.5000 0.150 Second 43.0625 0.160 Second 55.8750 0.030
Third 36.5000 0.150 Third 39.0000 0.160 Third 56.2500 0.030
Fourth 38.8750 0.150 Fourth 42.0000 0.030 Fourth 47.5000 0.030
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 45.9375 0.030 First 51.5000 0.030 First 50.3700 0.120
<$d
Second 39.5625 0.030 Second 51.6875 0.015
<$d
Third 35.6875 0.030 Third 60.1875 0.120
<$d
Fourth 35.4375 0.030 Fourth 61.0000 0.120
The closing price of the common stock of Pharmacia on , 2001 was
$ . During the period reflected in the above table, Pharmacia split its
common stock 2-for-1 on June 6, 1996. The data appearing in the above table has
been adjusted to reflect this split.
SCHERING AG
Schering AG is a global research-based company engaged in the discovery,
development, manufacture, marketing and sale of pharmaceutical products.
Schering's focused product portfolio is comprised of products from four core
business areas: Fertility Control and Hormone Therapy; Therapeutics for selected
disabling and life-threatening conditions, including multiple sclerosis and
other diseases of the central nervous system and the cardiovascular system, and
in the field of oncology; Diagnostic and Radiopharmaceuticals including contrast
media for X-ray, magnetic reasonance imaging (MRI) and Ultrasound, innovative
application technologies for contrast media, and radiopharmaceuticals for use in
nuclear medicine; and Dermatology for the treatment of severe skin disorders
such as eczema, mycoses, hemorrhoids, acne and psoriasis. Shares of Schering
also trade on the Frankfurt Stock Exchange.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First * * First * * First * *
Second * * Second * * Second * *
Third * * Third * * Third * *
Fourth * * Fourth * * Fourth * *
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First * * First * * First 48.5000 0.000
<$d
Second * * Second * *
<$d
Third * * Third * *
<$d
Fourth * * Fourth 56.9375 0.000
The closing price of the American depository shares of Schering on
, 2001 was $ .
SCHERING-PLOUGH CORPORATION
Subsidiaries of Schering-Plough Corporation are engaged in the discovery,
development, manufacturing and marketing of pharmaceutical products worldwide.
Discovery and development efforts target the field of human health. However,
application in the field of animal health can result from these efforts.
Schering-Plough operates primarily in the prescription pharmaceutical
marketplace.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- ------
First 14.5313 0.073 First 18.1875 0.083 First 40.8750 0.0950
Second 15.6875 0.083 Second 23.9375 0.095 Second 45.8125 0.110
Third 15.3438 0.083 Third 25.7500 0.095 Third 51.8438 0.110
Fourth 16.1875 0.083 Fourth 31.0625 0.095 Fourth 55.2500 0.110
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 55.2500 0.110 First 37.2500 0.125 First 36.5300 0.140
<$d
Second 52.5000 0.125 Second 50.5000 0.140
<$d
Third 43.6250 0.125 Third 46.5625 0.140
<$d
Fourth 42.3750 0.125 Fourth 56.7500 0.140
The closing price of the common stock of Schering-Plough on , 2001
was $ . During the period reflected in the above table, Schering-Plough
split its common stock 2-for-1 on each of June 4,
35
38
1997 and December 3, 1998. The data appearing in the above table has been
adjusted to reflect each of these splits.
SHIRE PHARMACEUTICALS GROUP, PLC
Shire Pharmaceuticals Group, PLC is an international specialty
pharmaceutical company with a strategic focus on four therapeutic areas: central
nervous system disorders, metabolic diseases, oncology and gastroenterology.
Shire operates and manages its business in three geographic areas -- the United
States, Europe and the rest of the world. On December 11, 2000, Shire announced
that it had entered into an agreement to merge with BioChem Pharma Inc. Shares
of Shire Pharmaceuticals also trade on the London International Stock Exchange.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ -------- -----
First * * First * * First 21.43750 0.000
Second * * Second * * Second 21.3700 0.000
Third * * Third * * Third 21.8750 0.000
Fourth * * Fourth * * Fourth 20.2500 0.000
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 22.8125 0.000 First 51.2500 0.000 First 43.7500 0.000
<$d
Second 26.0000 0.000 Second 51.8750 0.000
<$d
Third 28.8125 0.000 Third 51.6250 0.000
<$d
Fourth 29.1250 0.000 Fourth 46.0625 0.000
The closing price of the common stock of Shire Pharmaceuticals on ,
2001 was $ . Shire Pharmaceuticals has never paid dividends on its common
stock.
STRYKER CORP.
Stryker Corporation and its subsidiaries develop, manufacture and market
specialty surgical and medical products, including orthopaedic implants, bone
cement, trauma systems used in bone repair, powered surgical instruments,
endoscopic systems, craniomaxillofacial fixation devices, specialty surgical
equipment used in neurosurgery and patient care and handling equipment for he
global market and provide outpatient physical and occupational rehabilitative
services in the United States. Stryker has developed the bone growth factor
osteogenic protein-1 ("OP-1"), which is in the final state of the marketing
authorization process in Europe and Australia for the use of OP-1 for the
treatment of specific nonunion fractures of long bones.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 12.2969 0.023 First 12.4375 0.050 First 23.4375 0.055
Second 11.3750 0.000 Second 17.4375 0.000 Second 19.1875 0.000
Third 15.0625 0.000 Third 21.8438 0.000 Third 17.2500 0.000
Fourth 14.9375 0.000 Fourth 18.6250 0.000 Fourth 27.5313 0.000
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 25.2188 0.060 First 34.8750 0.065 First 52.25 0.080
<$d
Second 30.0625 0.000 Second 43.7500 0.000
<$d
Third 25.5625 0.000 Third 42.9375 0.000
<$d
Fourth 34.8125 0.000 Fourth 50.5900 0.000
The closing price of the common stock of Stryker on , 2001 was
$ . During the period reflected in the above table, Stryker split its common
stock 2-for-1 on each of June 11, 1996 and May 15, 2000. The data appearing in
the above table has been adjusted to reflect each of these splits.
WATSON PHARMACEUTICALS, INC.
Watson Pharmaceuticals, Inc. is primarily engaged in the development,
manufacture, marketing and distribution of branded and off-patent (generic)
pharmaceutical products. Currently, Watson markets more than 28 branded
pharmaceutical product-lines and approximately 140 off-patent pharmaceutical
products. Watson also develops advanced drug delivery systems designed to
enhance the therapeutic benefits of existing drug forms.
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1996 PRICE DENDS 1997 PRICE DENDS 1998 PRICE DENDS
------ ------- ----- ------ ------- ----- ------ ------- -----
First 20.0000 0.000 First 17.8750 0.000 First 36.0000 0.000
Second 18.9375 0.000 Second 21.1250 0.000 Second 46.6875 0.000
Third 18.7500 0.000 Third 29.8750 0.000 Third 51.7500 0.000
Fourth 22.4688 0.000 Fourth 32.4375 0.000 Fourth 62.8750 0.000
CLOSING DIVI- CLOSING DIVI- CLOSING DIVI-
1999 PRICE DENDS 2000 PRICE DENDS 2001 PRICE DENDS
------ ------- ----- ------ ------- ----- ----- ------- -----
First 44.1250 0.000 First 39.6875 0.000 First 52.6000 0.000
<$d
Second 35.0625 0.000 Second 53.7500 0.000
<$d
Third 30.5625 0.000 Third 65.0000 0.000
<$d
Fourth 35.8125 0.000 Fourth 51.1875 0.000
36
39
The closing price of the common stock of Watson on , 2001 was
$ . During the period reflected in the above table, Watson split its common
stock 2-for-1 on October 30, 1997. The data appearing in the above table has
been adjusted to reflect this split. Watson has never paid dividends on its
common stock.
37
40
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a summary of U.S. federal income tax consequences material
to the purchase, ownership and disposition of Healthcare SECTORS. This summary
does not purport to be a comprehensive description of all of the tax
consequences that may be relevant to the decision to purchase Healthcare SECTORS
by any particular investor, including tax consequences that arise from rules of
general application to all taxpayers or to certain classes of taxpayers or that
are generally assumed to be known by investors. This summary addresses the tax
consequences only to a person that is (i) an individual citizen or resident of
the United States, (ii) a corporation organized in or under the laws of the
United States or any state thereof or the District of Columbia or (iii)
otherwise subject to U.S. federal income taxation on a net income basis in
respect of the Healthcare SECTORS (a "U.S. Holder"). This summary also does not
address the tax consequences to (i) persons that are not U.S. Holders, (ii)
persons that may be subject to special treatment under U.S. federal income tax
law, such as banks, insurance companies, thrift institutions, regulated
investment companies, real estate investment trusts, tax-exempt organizations,
traders in securities that elect to mark to market and dealers in securities or
currencies, (iii) persons that will hold Healthcare SECTORS as part of a
position in a "straddle" or as part of a "hedging", "conversion" or other
integrated investment transaction for federal income tax purposes, (iv) persons
whose functional currency is not the U.S. dollar or (v) persons that do not hold
Healthcare SECTORS as capital assets.
This summary does not address tax consequences specific to the underlying
securities except where otherwise stated. Before acquiring Healthcare SECTORS,
prospective investors should consult other publicly available sources of
information concerning the tax treatment of the underlying securities.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury regulations promulgated thereunder, and administrative and
judicial interpretations thereof, as of the date hereof, all of which are
subject to change, possibly on a retroactive basis.
PROSPECTIVE INVESTORS ARE URGED TO CONSULT WITH THEIR TAX ADVISORS AS TO
THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF HEALTHCARE SECTORS, AS WELL AS THE EFFECT OF ANY STATE, LOCAL, OR
FOREIGN TAX LAWS.
CLASSIFICATION OF THE TRUST
In the opinion of Cleary, Gottlieb, Steen & Hamilton, special tax counsel
to the Healthcare SECTORS Trust, assuming full compliance with the terms of the
Trust Agreement (and certain other documents), the Trust will be classified as a
grantor trust or as a custodial arrangement for U.S. federal income tax purposes
and not as an association taxable as a corporation. Accordingly, for U.S.
federal income tax purposes, each U.S. Holder of Healthcare SECTORS generally
will be considered the owner of an undivided interest in the underlying
securities held by the Healthcare SECTORS Trust.
TAXATION OF DISTRIBUTIONS ON THE UNDERLYING STOCKS
In general, the gross amount of any distribution by a corporation of cash
or property (other than certain distributions, if any, of shares distributed pro
rata to all shareholders) to its shareholders with respect to stock is
includable in income as dividend income to the extent such distribution is paid
out of the current or accumulated earnings and profits of the issuer as
determined under U.S. federal income tax principles. To the extent, if any, that
the amount of any distribution exceeds current and accumulated earnings and
profits, it will be treated first as a tax-free return of the shareholder's
adjusted tax basis in the stock and thereafter as capital gain.
If there is a taxable distribution on an underlying security, a U.S. Holder
will recognize income with respect to the distribution at the time that the
distribution is received by the trustee, not at the time that
38
41
the U.S. Holder receives the cash distribution from the trustee. A U.S. Holder
must recognize income with respect to the entire amount of the distribution even
if all or part of the distribution is retained by the trustee to pay its
quarterly custodian fee.
U.S. Holders of Healthcare SECTORS will be eligible for dividends received
deductions (in the case of corporate U.S. Holders) or foreign tax credits (in
the case of distributions on American Depositary Shares) with respect to taxable
cash distributions on the underlying securities to the extent otherwise
permitted under applicable law (see also -- "Special Considerations With Respect
To Underlying American Depositary Shares", below).
TAXATION OF SALE OR OTHER DISPOSITION OF HEALTHCARE SECTORS
A U.S. Holder generally will recognize gain or loss on the sale or other
taxable disposition of Healthcare SECTORS equal to the difference between the
amount realized on each of the underlying securities on such sale or other
taxable disposition and the U.S. Holder's adjusted tax basis in each of the
underlying securities. Gain or loss recognized by a U.S. Holder on the sale or
other taxable disposition of Healthcare SECTORS will be capital gain or loss and
generally will be long-term capital gain or loss if the Healthcare SECTORS have
been held more than one year. Under the "wash sale" rules, a deduction for a
loss on the sale of Healthcare SECTORS may be disallowed in part or in whole if
the U.S. Holder purchases shares of the underlying securities or enters into
certain other transactions with respect to such underlying securities within 30
days of the sale.
A U.S. Holder's gain or loss will be computed separately with respect to
each underlying security by subtracting its basis in that underlying security
from the amount realized with respect to that underlying security. When a U.S.
Holder sells or makes any other taxable disposition of Healthcare SECTORS, it
will determine the amount realized with respect to each underlying security by
allocating the sales price among the underlying securities based on the relative
fair market values of the underlying securities at the moment of sale.
A U.S. Holder's initial tax basis in each of the underlying securities will
be determined by allocating the purchase price for the Healthcare SECTORS among
all of the shares of the underlying securities based on the relative fair market
values of the underlying securities at the time of purchase. The American Stock
Exchange has indicated that it intends to dedicate space on its web site
(www.amex.com) to provide quotes for the Healthcare SECTORS, including a
day-by-day breakdown of the daily closing values of the underlying securities.
If the U.S. Holder acquired the Healthcare SECTORS in the initial offering, its
initial tax basis in each of the underlying securities will be determined by
allocating the purchase price for the Healthcare SECTORS among all of the shares
of the underlying securities based on the relative fair market values of the
underlying securities at the closing market price on , 2001.
DEPOSIT AND WITHDRAWAL OR DISTRIBUTION OF STOCKS
The deposit of underlying securities in the Healthcare SECTORS Trust in
exchange for Healthcare SECTORS will not be a taxable event. The holding period
with respect to the deposited underlying security will include the period that
the U.S. Holder held the underlying security before deposit. The basis of the
underlying security deposited will be equal such U.S. Holder's tax basis in the
underlying security immediately before the underlying security was deposited.
Similarly, the withdrawal of any underlying securities from the Healthcare
SECTORS Trust upon the surrender of Healthcare SECTORS, or their distribution by
the Healthcare SECTORS Trust upon the occurrence of a reconstitution event or a
termination event, will not be a taxable event. A U.S. Holder will, however,
recognize gain upon the receipt of cash in lieu of a fractional share of
underlying security equal to the amount of cash so received less such U.S.
Holder's tax basis in such fractional share. The holding period with respect to
the withdrawn or distributed underlying security will include the period that
the U.S. Holder held the underlying security through the Healthcare SECTORS
Trust. The basis of the withdrawn or distributed underlying security in the
hands of the U.S. Holder will be equal to such U.S.
39
42
Holder's tax basis in the underlying security immediately before withdrawal or
distribution, less the basis allocated to any fractional share for which cash is
received.
SPECIAL CONSIDERATIONS WITH RESPECT TO UNDERLYING AMERICAN DEPOSITARY SHARES
Certain special considerations may apply to a U.S. Holder if the Healthcare
SECTORS Trust holds American Depositary Shares. For example, if a foreign issuer
pays a dividend in a currency other than U.S. dollars, a U.S. Holder may be
required to recognize ordinary income or loss as a result of currency
fluctuations between the date on which the dividend is paid and the date on
which the dividend amount is converted into U.S. dollars. In addition, subject
to conditions and limitations, a U.S. Holder may be entitled to a foreign tax
credit or a deduction with regards to any foreign withholding tax on dividends.
Special U.S. federal income tax rules apply to U.S. persons owning shares of a
"passive foreign investment company" (a "PFIC"). Prospective investors should
consult publicly available sources of information and their own tax advisers as
to the consequences of owning stock of foreign issuers through American
Depositary Shares.
TAX TREATMENT OF FEES
The underwriting fee will be included in the initial public offering price
on , 2001 and consequently will be treated as part of the cost of the
underlying securities. Similarly, the brokerage fee incurred in purchasing
Healthcare SECTORS also will be treated as part of the cost of the underlying
securities. Accordingly, a U.S. Holder includes these fees in its tax basis in
the underlying securities. A U.S. Holder will allocate the underwriting fee and
brokerage fee among the underlying securities either using a fair market value
allocation or pro rata based on the number of shares of each underlying security
represented by each Healthcare SECTOR. The brokerage fee incurred in selling
Healthcare SECTORS will reduce the amount realized with respect to the
underlying securities.
A U.S. 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 U.S. Holder's investment in the underlying securities and may
be deductible. If a U.S. 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.
INFORMATION REPORTING
Generally, income on the Healthcare SECTORS will be reported to U.S.
Holders on Forms 1099, which forms should be mailed to U.S. Holders of
Healthcare SECTORS by January 31 following each calendar year.
THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR
GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
HEALTHCARE SECTORS, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN,
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN U.S. FEDERAL OR OTHER
TAX LAWS.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended, imposes
certain requirements on "employee benefit plans", as defined in Section 3(3) of
ERISA, subject to ERISA, including entities such as collective investment funds
and separate accounts whose underlying assets include the assets of such plans
(collectively, "ERISA Plans") and on those persons who are fiduciaries with
respect to ERISA Plans. Section 406 of ERISA and Section 4975 of the Internal
Revenue Code of 1986 prohibit certain
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transactions involving the assets of an ERISA Plan or a plan, such as a Keogh
plan or an individual retirement account, that are not subject to ERISA but
which are subject to Section 4975 of the Internal Revenue Code (together with
ERISA Plans, "Plans") and certain persons, referred to as "parties in interest"
under ERISA or "disqualified persons" under the Internal Revenue Code, having
certain relationships to such Plans, unless a statutory or administrative
exception or exemption is applicable to the transaction.
The U.S. Department of Labor has promulgated a regulation, 29 C.F.R.
Section 2510.3-101, describing what constitutes the assets of a Plan with
respect to the Plan's investment in an entity for purposes of certain provisions
of ERISA, including the fiduciary responsibility provisions of Title I of ERISA
and Section 4975 of the Internal Revenue Code. Under this regulation, if a Plan
invests in a beneficial interest in a trust or a profits interest in a
partnership, the Plan's assets include both the equity interest and an undivided
interest in each of the entity's underlying assets, unless the interest is a
"publicly-offered security" or certain other conditions are satisfied. It is
anticipated that the Healthcare SECTORS should constitute "publicly-offered
securities" within the meaning of the regulation, and that, consequently,
transactions engaged in by the Healthcare SECTORS Trust, including the forward
contract, should not be subject to the provisions of ERISA or Section 4975 of
the Internal Revenue Code.
Any Plan fiduciary which proposes to cause a Plan to purchase the
Healthcare SECTORS should consult with its counsel regarding the applicability
of the fiduciary responsibility and prohibited transaction provisions of ERISA
and Section 4975 of the Internal Revenue Code to such an investment, and to
confirm that such investment will not constitute or result in a prohibited
transaction or any other violation of an applicable requirement of ERISA or the
Internal Revenue Code for which an exemption is not available. Governmental
plans and certain church plans not subject to the fiduciary responsibility
provisions of ERISA or the provisions of Section 4975 of the Internal Revenue
Code but subject to state or other federal laws that are substantially similar
to the foregoing provisions of ERISA and the Internal Revenue Code should also
consult with their counsel before purchasing any Healthcare SECTORS.
By its purchase of any Healthcare SECTORS, each initial purchaser and
subsequent transferee will be deemed to have represented and warranted on each
day from the date on which the purchaser or transferee acquires the Healthcare
SECTORS through and including the date on which the purchaser or transferee
disposes of its interest in the Healthcare SECTORS, either that (A) it is not an
ERISA Plan, or other Plan, or a governmental plan which is subject to any
federal, state, or local law that is substantially similar to the provisions of
Section 406 of ERISA or Section 4975 of the Internal Revenue Code or (B) its
purchase, holding and disposition of such Healthcare SECTORS will not result in
a prohibited transaction under Section 406 of ERISA or Section 4975 of the
Internal Revenue Code or any other violation of an applicable requirement of
ERISA or the Internal Revenue Code (or in the case of a governmental plan, any
substantially similar federal, state or local law) for which exemption is not
available, all of the conditions of which have been satisfied.
UNDERWRITING
In accordance with the depositary trust agreement, the Healthcare SECTORS
Trust will issue Healthcare SECTORS to Structured Products Corp. and Structured
Products Corp. will deposit the underlying securities to receive Healthcare
SECTORS. Subject to the terms and conditions stated in the underwriting
agreement dated , 2001, Salomon Smith Barney Inc., as underwriter, has
agreed to purchase from Structured Products Corp., and Structured Products Corp.
has agreed to sell Salomon Smith Barney Inc. Healthcare SECTORS.
The underwriting agreement provides that the obligation of Salomon Smith
Barney Inc. is subject to approval of certain legal matters by counsel and
certain other conditions. Salomon Smith Barney Inc. is required to purchase all
of the Healthcare SECTORS if it purchases any of the Healthcare SECTORS.
Salomon Smith Barney Inc. proposes to offer the Healthcare SECTORS to the
public at the offering price set forth on the cover page of this prospectus,
which includes an underwriting fee of 2%. Salomon
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Smith Barney Inc. expects to deliver the Healthcare SECTORS to purchasers in New
York, New York on , 2001.
Salomon Smith Barney Inc. proposes to offer some of the Healthcare SECTORS
directly to the public at the public offering price set forth on the cover page
of this prospectus and some of the Healthcare SECTORS to certain dealers at the
public offering price less a concession not in excess of $ per Healthcare
SECTORS. Salomon Smith Barney Inc. may allow, and such dealers may allow, a
concession not in excess of $ per Healthcare SECTORS on sales to certain
other dealers. After the initial offering, the public offering price and the
other selling terms may be changed.
The underwriting agreement provides that Structured Products Corp. will
indemnify Salomon Smith Barney Inc. against certain liabilities, including
liabilities under the Securities Act of 1933, and will make certain
contributions in respect thereof or will contribute payments that Salomon Smith
Barney Inc. may be required to have in respect of any of those liabilities and
will reimburse Salomon Smith Barney Inc. for certain other legal and other
expenses.
Prior to this offering, there has been no public market for the Healthcare
SECTORS. Consequently, the initial public offering price for the Healthcare
SECTORS was determined by negotiations among the Healthcare SECTORS Trust,
Structured Products Corp. and Salomon Smith Barney Inc. There can be no
assurance, however, that the prices at which the Healthcare SECTORS will sell in
the public market after this offering will not be lower than the price at which
they are sold by Salomon Smith Barney Inc. or that an active trading market in
the Healthcare SECTORS will develop and continue after this offering.
Structured Products Corp. and the Healthcare SECTORS Trust will apply to
list the Healthcare SECTORS on the American Stock Exchange under the symbol
" ".
In connection with the offering, Salomon Smith Barney Inc., as the
underwriter, may purchase and sell Healthcare SECTORS and the underlying
securities in the open market. These transactions may include covering
transactions and stabilizing transactions. Covering transactions involve
purchases of Healthcare SECTORS in the open market after the distribution has
been completed to cover short positions. Stabilizing transactions consist of
certain bids or purchases of Healthcare SECTORS or the underlying securities
made for the purpose of preventing or retarding a decline in the market price of
the Healthcare SECTORS or the underlying securities while the offering is in
progress. These activities may cause the price of the Healthcare SECTORS to be
higher than the price that otherwise would exist in the open market in the
absence of such transactions. These transactions may be effected in the
over-the-counter market or otherwise and, if commenced, may be discontinued at
any time.
The offer and sale of the Healthcare SECTORS will comply with the
requirements of Rule 2810 of the Conduct Rules of the National Association of
Securities Dealers, Inc. regarding direct participation programs.
This prospectus may be used by Salomon Smith Barney Inc. or its affiliates
in connection with offers and sales of the Healthcare SECTORS (subject to
obtaining any necessary approval of the American Stock Exchange for any such
offers and sales) in market-making transactions at negotiated prices related to
prevailing market prices at the time of sale. Any such entity may act as
principal or agent in such transactions. No such entity is obligated to make a
market in the Healthcare SECTORS and any such entity may discontinue any
market-making at any time without notice, at its sole discretion. There can be
no assurance of the liquidity or existence of a secondary market for any
Healthcare SECTORS.
LEGAL MATTERS
The validity of the Healthcare SECTORS, will be passed upon for Structured
Products Corp., as initial depositor, and Salomon Smith Barney Inc., as
underwriter, by Cleary, Gottlieb, Steen & Hamilton, New York, New York. Certain
matters with respect to U.S. federal income tax law will be passed upon for the
Healthcare SECTORS Trust by Cleary, Gottlieb, Steen & Hamilton as special U.S.
tax counsel to the Healthcare SECTORS Trust.
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STRUCTURED PRODUCTS CORP.,
AS INITIAL DEPOSITOR
HEALTHCARE SECTORS(SM)
DEPOSITARY RECEIPTS
HEALTHCARE SECTORS(SM) TRUST
------------------------
PROSPECTUS
------------------------
SALOMON SMITH BARNEY
, 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
46
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
SEC Registration Fee........................................ $12,750.00
Printing and Engraving Fees.................................
Legal Fees and Expenses.....................................
Miscellaneous...............................................
----------
Total............................................. $
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Structured Products Corp.'s by-laws provide for indemnification of
directors and officers of Structured Products Corp. to the fullest extent
permitted by Delaware law.
Section 145 of the Delaware General Corporation Law provides, in substance,
that Delaware corporations shall have the power, under specified circumstances,
to indemnify their directors, officers, employees and agents in connection with
actions, suits or proceedings brought against them by a third party or in the
right of the corporation, by reason of the fact that they were or are such
directors, officers, employees or agents, against expenses incurred in any such
action, suit or proceeding.
Salomon Smith Barney Holdings Inc. carries directors' and officers'
liability insurance that covers certain liabilities and expenses of Structured
Products Corp.'s directors and officers.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
1 Form of Underwriting Agreement*
4.1 Form of Standard Terms for Depositary Trust Agreements
between Structured Products Corp. and U.S. Bank Trust
National Association, as trustee, and included as exhibits
thereto, form of Depositary Trust Agreement and form of
SECTORS
4.2 Form of Healthcare SECTORS (included in Exhibit 4.1)
5 Opinion of counsel as to certain corporate law matters*
8 Opinion of counsel as to certain federal income tax matters*
24 Power of Attorney
- ---------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of the prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
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47
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) 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 14 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 Securities
Act and will be governed by the final adjudication of such issue.
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48
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement or amendment thereto to be signed on
its behalf by the undersigned, thereunto duly authorized, in the city of New
York, state of New York, on June 21, 2001.
STRUCTURED PRODUCTS CORP.,
as initial depositor
By: /s/ MATTHEW R. MAYERS
------------------------------------
Matthew R. Mayers
Assistant Vice President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following
persons in the capacities with Structured Products Corp. indicated below on June
21, 2001.
SIGNATURE TITLE
--------- -----
/s/ TIMOTHY BEAULAC President (Principal Executive Officer)
- ---------------------------------------------------
Timothy Beaulac
/s/ MARK I. KLEINMAN Vice President, Treasurer and Finance Officer
- --------------------------------------------------- (Principal Financial and Accounting Officer)
Mark I. Kleinman
* Director
- ---------------------------------------------------
Nathanial H. Leff
* Director
- ---------------------------------------------------
Marcy Engel
*By: /s/ MATTHEW R. MAYERS Attorney-in-Fact
---------------------------------------------
Matthew R. Mayers
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
1 Form of Underwriting Agreement*
4.1 Form of Standard Terms for Depositary Trust Agreements
between Structured Products Corp. and U.S. Bank Trust
National Association, as trustee, and included as exhibits
thereto, form of Depositary Trust Agreement and form of
SECTORS
4.2 Form of Healthcare SECTORS (included in Exhibit 4.1)
5 Opinion of counsel as to certain corporate law matters*
8 Opinion of counsel as to certain federal income tax matters*
24 Power of Attorney
- ---------------
* To be filed by amendment.