Registration No. 333-87783
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
FT 371
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agents for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as
amended
F. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on October 15, 1999 at 2:00 p.m. pursuant to Rule
487.
________________________________
AMERICA'S LEADING BRANDS PORTFOLIO, SERIES 6
BIOTECHNOLOGY PORTFOLIO SERIES
COMMUNICATIONS PORTFOLIO, SERIES 5
E-TAIL PORTFOLIO SERIES
INTERNET PORTFOLIO, SERIES 8
MARKET LEADERS PORTFOLIO, SERIES 4
RETAIL PORTFOLIO, SERIES 4
FT 371
FT 371 is a series of a unit investment trust, the FT Series. Each of
the seven series listed above (each, a "Trust," and collectively, the
"Trusts") is a separate portfolio, or series, of FT 371 consisting of a
diversified portfolio of common stocks ("Securities") issued by
companies in the industry sector or investment focus for which each
Trust is named. The objective of each Trust is to provide above-average
capital appreciation.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (registered trademark)
1-800-621-9533
The date of this prospectus is October 15, 1999
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 5
Report of Independent Auditors 7
Statements of Net Assets 8
Schedules of Investments 10
The FT Series 17
Portfolios 18
Risk Factors 21
Portfolio Securities Descriptions 23
Public Offering 35
Distribution of Units 37
The Sponsor's Profits 38
The Secondary Market 39
How We Purchase Units 39
Expenses and Charges 39
Tax Status 40
Retirement Plans 41
Rights of Unit Holders 41
Income and Capital Distributions 42
Redeeming Your Units 42
Removing Securities from a Trust 44
Amending or Terminating the Indenture 44
Information on the Sponsor, Trustee and Evaluator 45
Other Information 46
Page 2
Summary of Essential Information
FT 371
At the Opening of Business on the
Initial Date of Deposit-October 15, 1999
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
America's
Leading Brands Biotechnology Communications e-Tail
Portfolio Portfolio Portfolio Portfolio
Series 6 Series Series 5 Series
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
Initial Number of Units (1) 14,997 14,997 15,011 15,017
Fractional Undivided Interest in the Trust per Unit (1) 1/14,997 1/14,997 1/15,011 1/15,017
Public Offering Price:
Aggregate Offering Price Evaluation of
Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of 4.5% of the Public Offering
Price per Unit (4.545% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .450 $ .450 $ .450 $ .450
Less Deferred Sales Charge per Unit $ (.350) $ (.350) $ (.350) $ (.350)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.550 $ 9.550 $ 9.550 $ 9.550
Redemption Price per Unit
(based on aggregate underlying value of Securities
less deferred sales charge) (5) $ 9.550 $ 9.550 $ 9.550 $ 9.550
Cash CUSIP Number 30264X 725 30264X 741 30264X 766 30264L 168
Reinvestment CUSIP Number 30264X 733 30264X 758 30264X 774 30264L 176
Security Code 57490 57492 57494 57502
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date October 20, 1999
Mandatory Termination Date (6) October 15, 2004
Income Distribution Record Date Fifteenth day of each June and December, commencing December 15, 1999.
Income Distribution Date (7) Last day of each June and December, commencing December 31, 1999.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 4.
</FN>
</TABLE>
Page 3
Summary of Essential Information
FT 371
At the Opening of Business on the Initial Date of Deposit-October 15, 1999
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Internet Market Leaders Retail
Portfolio Portfolio Portfolio
Series 8 Series 4 Series 4
___________ ___________ ___________
<S> <C> <C> <C>
Initial Number of Units (1) 15,023 15,065 15,025
Fractional Undivided Interest in the Trust per Unit (1) 1/15,023 1/15,065 1/15,025
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of 4.5% of the Public Offering Price
per Unit (4.545% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .450 $ .450 $ .450
Less Deferred Sales Charge per Unit $(.350) $(.350) $(.350)
Public Offering Price per Unit (4) $10.000 $10.000 $10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.550 $ 9.550 $ 9.550
Redemption Price per Unit (based on aggregate underlying value
of Securities less deferred sales charge) (5) $ 9.550 $ 9.550 $ 9.550
Cash CUSIP Number 30264X 782 30264X 808 30264X 824
Reinvestment CUSIP Number 30264X 790 30264X 816 30264X 832
Security Code 57496 57498 57500
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date October 20, 1999
Mandatory Termination Date (6) October 15, 2004
Income Distribution Record Date Fifteenth day of each June and December, commencing December 15, 1999.
Income Distribution Date (7) Last day of each June and December, commencing December 31, 1999.
______________
<FN>
NOTES TO SUMMARY OF ESSENTIAL INFORMATION
(1) As of the close of business on the Initial Date of Deposit, we may
adjust the number of Units of a Trust so that the Public Offering Price
per Unit will equal approximately $10.00. If we make such an adjustment,
the fractional undivided interest per Unit will vary from the amounts
indicated above.
(2) Each listed Security is valued at its last closing sale price. If a
Security is not listed, or if no closing sale price exists, it is valued
at its closing ask price. Evaluations for purposes of determining the
purchase, sale or redemption price of Units are made as of the close of
trading on the New York Stock Exchange ("NYSE") (generally 4:00 p.m.
Eastern time) on each day on which it is open (the "Evaluation Time").
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee Table" and "Public Offering."
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. The price you pay for your
Units will be based on their valuation at the Evaluation Time on the
date you purchase your Units. On the Initial Date of Deposit the Public
Offering Price per Unit will not include any accumulated dividends on
the Securities. After this date a pro rata share of any accumulated
dividends on the Securities will be included.
(5) Until the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period, the Sponsor's Initial Repurchase
Price per Unit and the Redemption Price per Unit will include the
estimated organization costs per Unit set forth under "Fee Table." After
such date, the Sponsor's Repurchase Price and Redemption Price per Unit
will not include such estimated organization costs. See "Redeeming Your
Units."
(6) See "Amending or Terminating the Indenture."
(7) Distributions from the Capital Account will be made monthly on the
last day of the month to Unit holders of record on the fifteenth day of
such month if the amount available for distribution equals at least
$1.00 per 100 Units. In any case, we will distribute any funds in the
Capital Account in December of each year.
</FN>
</TABLE>
Page 4
Fee Table
This Fee Table describes the fees and expenses that you may pay,
directly or indirectly, if you buy and hold Units of a Trust. See
"Public Offering" and "Expenses and Charges." Although each Trust has a
term of approximately five years and is a unit investment trust rather
than a mutual fund, this information allows you to compare fees.
<TABLE>
<CAPTION>
AMERICA'S BIOTECHNOLOGY
LEADING BRANDS GROWTH COMMUNICATIONS
PORTFOLIO, SERIES 6 PORTFOLIO, SERIES 1 PORTFOLIO, SERIES 5
___________________ ___________________ ___________________
Amount Amount Amount
per Unit per Unit per Unit
________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Initial sales charge imposed on purchase 1.0%(a) $ .100 1.0%(a) $ .100 1.0%(a) $ .100
Deferred sales charge 3.5%(b) .350 3.5%(b) .350 3.5%(b) .350
_____ ______ _____ ______ _____ ______
Maximum sales charge 4.5% $ .450 4.5% $ .450 4.5% $ .450
===== ====== ===== ====== ===== ======
Maximum sales charge imposed on reinvested dividends 3.5%(c) $ .350 3.5%(c) $ .350 3.5%(c) $ .350
===== ====== ===== ====== ===== ======
Organization Costs
(as a percentage of public offering price)
Estimated organization costs .225%(d) $.0225 .225%(d) $.0225 .225%(d) $.0225
===== ====== ===== ====== ===== ======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .100% $.0098 .100% $.0098 .100% $.0098
Trustee's fee and other operating expenses .152%(e) .0149 .152%(e) .0149 .152%(e) .0149
_____ ______ _____ ______ _____ ______
Total .252% $.0247 .252% $.0247 .252% $.0247
===== ====== ===== ====== ===== ======
E-TAIL INTERNET PORTFOLIO
PORTFOLIO SERIES SERIES 8
___________________ ___________________
Amount Amount
per Unit per Unit
________ ________
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Initial sales charge imposed on purchase 1.0%(a) $ .100 1.0%(a) $ .100
Deferred sales charge 3.5%(b) .350 3.5%(b) .350
_____ ______ _____ ______
Maximum sales charge 4.5% $ .450 4.5% $ .450
===== ====== ===== ======
Maximum sales charge imposed on reinvested dividends 3.5%(c) $ .350 3.5%(c) $ .350
===== ====== ===== ======
Organization Costs
(as a percentage of public offering price)
Estimated organization costs .225%(d) $.0225 .225%(d) $.0225
===== ====== ===== ======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .100% $.0098 .100% $.0098
Trustee's fee and other operating expenses .152%(e) .0149 .152%(e) .0149
_____ ______ _____ ______
Total .252% $.0247 .252% $.0247
===== ====== ===== ======
</TABLE>
Page 5
<TABLE>
<CAPTION>
MARKET LEADERS RETAIL
PORTFOLIO PORTFOLIO
SERIES 4 SERIES 4
___________________ ___________________
Amount Amount
per Unit per Unit
________ ________
<S> <C> <C> <C> <C>
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Initial sales charge imposed on purchase 1.0%(a) $ .100 1.0%(a) $ .100
Deferred sales charge 3.5%(b) .350 3.5%(b) .350
_____ ______ _____ ______
Maximum sales charge 4.5% $ .450 4.5% $ .450
===== ====== ===== ======
Maximum sales charge imposed on reinvested dividends 3.5%(c) $ .350 3.5%(c) $ .350
===== ====== ===== ======
Organization Costs
(as a percentage of public offering price)
Estimated organization costs .225%(d) $.0225 .225%(d) $.0225
===== ====== ===== ======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .100% $.0098 .100% $.0098
Trustee's fee and other operating expenses .152%(e) .0149 .152%(e) .0149
_____ ______ _____ ______
Total .252% $.0247 .252% $.0247
===== ====== ===== ======
</TABLE>
Example
This example is intended to help you compare the cost of investing in a
Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in a Trust for the periods shown
and sell all your Units at the end of those periods. The example also
assumes a 5% return on your investment each year and that a Trust's
operating expenses stay the same. Although your actual costs may vary,
based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years
__________ __________ __________
<S> <C> <C> <C>
America's Leading Brands Portfolio, Series 6 $498 $549 $606
Biotechnology Portfolio Series 498 549 606
Communications Portfolio, Series 5 498 549 606
e-Tail Portfolio Series 498 549 606
Internet Portfolio, Series 8 498 549 606
Market Leaders Portfolio, Series 4 498 549 606
Retail Portfolio, Series 4 498 549 606
The example will not differ if you hold rather than sell your Units at
the end of each period. The example does not reflect sales charges on
reinvested dividends and other distributions. If these sales charges
were included, your costs would be higher.
_____________
<FN>
(a) The amount of the initial sales charge will vary depending on the
purchase price of your Units. The amount of the initial sales charge is
actually the difference between the maximum sales charge (4.5% of the
Public Offering Price) and the maximum remaining deferred sales charge
(initially $.35 per Unit). When the Public Offering Price exceeds $10.00
per Unit, the initial sales charge will exceed 1.0% of the Public
Offering Price per Unit.
(b) The deferred sales charge is a fixed dollar amount equal to $.35 per
Unit which will be deducted in five monthly installments of $.07 per
Unit beginning May 19, 2000 and on the 20th day of each month thereafter
(or the preceding business day if the 20th day is not a business day)
through September 20, 2000. If you buy Units at a price of less than
$10.00 per Unit, the dollar amount of the deferred sales charge will not
change but the deferred sales charge on a percentage basis will be more
than 3.5% of the Public Offering Price. If you purchase Units after the
first deferred sales charge payment has been deducted, your purchase
price will include both the initial sales charge and any remaining
deferred sales charge payments.
(c) Reinvested dividends will be subject only to the deferred sales
charge remaining at the time of reinvestment. See "Income and Capital
Distributions."
(d) You will bear all or a portion of the costs incurred in organizing
your respective Trust. These estimated organization costs are included
in the price you pay for your Units and will be deducted from the assets
of a Trust at the earlier of six months after the Initial Date of
Deposit or the end of the initial offering period.
(e) Other operating expenses include the costs incurred by a Trust for
annually updating a Trust's registration statement. Historically, we
paid these costs. Other operating expenses do not, however, include
brokerage costs and other portfolio transaction fees. In certain
circumstances the Trusts may incur additional expenses not set forth
above. See "Expenses and Charges."
</FN>
</TABLE>
Page 6
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 371
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 371, comprised of America's Leading
Brands Portfolio, Series 6; Biotechnology Portfolio Series;
Communications Portfolio, Series 5; e-Tail Portfolio Series; Internet
Portfolio, Series 8; Market Leaders Portfolio, Series 4; and Retail
Portfolio, Series 4, as of the opening of business on October 15, 1999.
These statements of net assets are the responsibility of the Trusts'
Sponsor. Our responsibility is to express an opinion on these statements
of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statements of net assets
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
statements of net assets. Our procedures included confirmation of the
letter of credit allocated among the Trusts on October 15, 1999. An
audit also includes assessing the accounting principles used and
significant estimates made by the Sponsor, as well as evaluating the
overall presentation of the statements of net assets. We believe that
our audit of the statements of net assets provides a reasonable basis
for our opinion.
In our opinion, the statements of net assets referred to above present
fairly, in all material respects, the financial position of FT 371,
comprised of America's Leading Brands Portfolio, Series 6; Biotechnology
Portfolio Series; Communications Portfolio, Series 5; e-Tail Portfolio
Series; Internet Portfolio, Series 8; Market Leaders Portfolio, Series
4; and Retail Portfolio, Series 4, at the opening of business on October
15, 1999 in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
October 15, 1999
Page 7
Statements of Net Assets
FT 371
At the Opening of Business on the
Initial Date of Deposit-October 15, 1999
<TABLE>
<CAPTION>
America's
Leading Brands Biotechnology Communications e-Tail
Portfolio Portfolio Portfolio Portfolio
Series 6 Series Series 5 Series
____________ ____________ ____________ __________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,471 $148,470 $148,606 $148,669
Less liability for reimbursement to Sponsor
for organization costs (3) (337) (337) (338) (338)
Less liability for deferred sales charge (4) (5,249) (5,249) (5,254) (5,256)
________ ________ ________ ________
Net assets $142,885 $142,884 $143,014 $143,075
======== ======== ======== ========
Units outstanding 14,997 14,997 15,011 15,017
ANALYSIS OF NET ASSETS
Cost to investors (5) $149,971 $149,970 $150,107 $150,171
Less maximum sales charge (5) (6,749) (6,749) (6,755) (6,758)
Less estimated reimbursement to Sponsor
for organization costs (3) (337) (337) (338) (338)
________ ________ ________ ________
Net assets $142,885 $142,884 $143,014 $143,075
======== ======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 9.
</FN>
</TABLE>
Page 8
Statements of Net Assets (cont'd.)
FT 371
At the Opening of Business on the
Initial Date of Deposit-October 15, 1999
<TABLE>
<CAPTION>
Internet Market Leaders Retail
Portfolio Portfolio Portfolio
Series 8 Series 4 Series 4
_______________ _______________ ______________
<S> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,730 $149,142 $148,752
Less liability for reimbursement to Sponsor
for organization costs (3) (338) (339) (338)
Less liability for deferred sales charge (4) (5,258) (5,273) (5,259)
________ ________ ________
Net assets $143,134 $143,530 $143,155
======== ======== ========
Units outstanding 15,023 15,065 15,025
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,232 $150,648 $150,254
Less maximum sales charge (5) (6,760) (6,779) (6,761)
Less estimated reimbursement to Sponsor
for organization costs (3) (338) (339) (338)
________ ________ ________
Net assets $143,134 $143,530 $143,155
======== ======== ========
_____________
<FN>
NOTES TO STATEMENTS OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) An irrevocable letter of credit issued by The Chase Manhattan Bank,
of which $1,400,000 will be allocated among each of the seven Trusts in
FT 371, has been deposited with the Trustee as collateral, covering the
monies necessary for the purchase of the Securities according to their
purchase contracts.
(3) A portion of the Public Offering Price consists of an amount
sufficient to reimburse the Sponsor for all or a portion of the costs of
establishing the Trusts. These costs have been estimated at $.0225 per
Unit for each Trust. A payment will be made at the earlier of six months
after the Initial Date of Deposit or the end of the initial offering
period to an account maintained by the Trustee from which the obligation
of the investors to the Sponsor will be satisfied. To the extent that
actual organization costs of a Trust are greater than the estimated
amount, only the estimated organization costs added to the Public
Offering Price will be reimbursed to the Sponsor and deducted from the
assets of such Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions from a Trust ($.35 per Unit), payable to us in five equal
monthly installments beginning on May 19, 2000 and on the twentieth day
of each month thereafter (or if such date is not a business day, on the
preceding business day) through September 20, 2000. If you redeem Units
before September 20, 2000 you will have to pay the remaining amount of
the deferred sales charge applicable to such Units when you redeem them.
(5) The aggregate cost to investors includes a maximum sales charge
(comprised of an initial sales charge and a deferred sales charge)
computed at the rate of 4.5% of the Public Offering Price per Unit
(equivalent to 4.545% of the net amount invested, exclusive of the
deferred sales charge), assuming no reduction of sales charge as set
forth under "Public Offering."
</FN>
</TABLE>
Page 9
Schedule of Investments
America's Leading Brands Portfolio, Series 6
FT 371
At the Opening of Business on the
Initial Date of Deposit-October 15, 1999
<TABLE>
<CAPTION>
Percentage
of Aggregate Market Cost of
Number Ticker Symbol and Offering Value per Securities to
of Shares Name of Issuer of Securities (1) Price Share the Trust (2)
_______ _______________________________________ ____________ ______ ________
<S> <C> <C> <C> <C>
APPAREL/RETAIL
____________
173 GPS The Gap, Inc. 4% $34.500 $ 5,969
225 TOM Tommy Hilfiger Corporation 4% 26.125 5,878
AUTO & TRANSPORTATION
____________
111 F Ford Motor Company 4% 53.063 5,890
BEVERAGES
____________
87 BUD Anheuser-Busch Companies, Inc. 4% 68.875 5,992
117 KO The Coca-Cola Company 4% 50.688 5,930
177 PEP PepsiCo, Inc. 4% 33.688 5,963
ENTERTAINMENT
____________
241 DIS The Walt Disney Company 4% 24.938 6,010
FOOD
____________
131 HNZ H.J. Heinz Company 4% 45.313 5,936
118 HSY Hershey Foods Corporation 4% 49.625 5,856
241 SLE Sara Lee Corporation 4% 24.938 6,010
HOUSEHOLD PRODUCTS
____________
150 CLX The Clorox Company 4% 39.500 5,925
114 CL Colgate-Palmolive Company 4% 52.000 5,928
258 DL The Dial Corporation 4% 22.938 5,918
112 KMB Kimberly-Clark Corporation 4% 53.438 5,985
62 PG Procter & Gamble Company 4% 95.938 5,948
PHARMACEUTICALS
____________
81 BMY Bristol-Myers Squibb Company 4% 73.875 5,984
62 JNJ Johnson & Johnson 4% 94.813 5,878
133 SGP Schering-Plough Corporation 4% 44.000 5,852
RECREATION
____________
142 CCL Carnival Corporation 4% 41.438 5,884
103 HDI Harley-Davidson, Inc. 4% 58.250 6,000
RESTAURANTS
____________
142 MCD McDonald's Corporation 4% 41.625 5,911
266 SBUX Starbucks Corporation 4% 22.625 6,018
TECHNOLOGY
____________
133 DELL Dell Computer Corporation 4% 44.344 5,898
81 INTC Intel Corporation 4% 73.344 5,941
TOILETRIES/COSMETICS
____________
161 G The Gillette Company 4% 37.063 5,967
______ _________
Total Investments 100% $148,471
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 16.
</FN>
</TABLE>
Page 10
Schedule of Investments
Biotechnology Portfolio Series
FT 371
At the Opening of Business on the
Initial Date of Deposit-October 15, 1999
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost o
of Ticker Symbol and Offering Value per Securities to
Shares Name of Issuer of Securities (1) Price Share the Trust (2)
______ _______________________________________ __________ ______ ______________
<S> <C> <C> <C> <C>
BIOTECH
_______
48 AFFX Affymetrix, Inc. 3.30% $102.000 $ 4,896
57 AMGN Amgen Inc. 3.28% 85.406 4,868
202 BCHE BioChem Pharma Inc. (3) 3.32% 24.438 4,936
63 BGEN Biogen, Inc. 3.35% 78.969 4,975
495 BTGC Bio-Technology General Corp. 3.36% 10.063 4,981
147 CRA Celera Genomics 3.29% 33.188 4,879
172 CHIR Chiron Corporation 3.43% 29.625 5,096
169 ENZN Enzon, Inc. 3.32% 29.125 4,922
33 DNA Genentech, Inc. 3.33% 150.000 4,950
123 GENZ Genzyme Corporation (General Division) 3.38% 40.813 5,020
61 HGSI Human Genome Sciences, Inc. 3.32% 80.750 4,926
49 IDPH IDEC Pharmaceuticals Corporation 3.29% 99.781 4,889
108 IMNX Immunex Corporation 3.33% 45.750 4,941
160 IVGN Invitrogen Corporation 3.35% 31.125 4,980
44 MEDI MedImmune, Inc. 3.28% 110.563 4,865
58 MLNM Millennium Pharmaceuticals, Inc. 3.26% 83.469 4,841
148 PDLI Protein Design Labs, Inc. 3.33% 33.375 4,940
111 TKTX Transkaryotic Therapies, Inc. 3.40% 45.500 5,050
PHARMACEUTICALS
______________
106 AHP American Home Products Corporation 3.34% 46.750 4,956
68 BMY Bristol-Myers Squibb Company 3.38% 73.875 5,024
85 GLX Glaxo Wellcome Plc (ADR) 3.36% 58.688 4,988
52 JNJ Johnson & Johnson 3.32% 94.813 4,930
73 LLY Eli Lilly and Company 3.33% 67.813 4,950
68 MRK Merck & Co., Inc. 3.36% 73.250 4,981
66 NVTSY Novartis AG (ADR) 3.36% 75.680 4,995
130 PFE Pfizer Inc. 3.30% 37.688 4,899
41 ROHHY Roche Holdings AG (ADR) 3.36% 121.610 4,986
110 SGP Schering-Plough Corporation 3.26% 44.000 4,840
78 SBH SmithKline Beecham Plc (ADR) 3.39% 64.500 5,031
71 WLA Warner-Lambert Company 3.32% 69.500 4,935
______ ________
Total Investments 100% $148,470
====== ========
_________________
<FN>
See "Notes to Schedules of Investments" on page 16.
</FN>
</TABLE>
Page 11
Schedule of Investments
Communications Portfolio, Series 5
FT 371
At the Opening of Business on the
Initial Date of Deposit-October 15, 1999
<TABLE>
<CAPTION>
Percentage
of Aggregate Market Cost of
Number Ticker Symbol and Offering Value per Securities to
of Shares Name of Issuer of Securities (1) Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
COMMUNICATIONS SERVICES
_____________________
83 AT ALLTEL Corporation 4% $ 71.875 $ 5,966
131 T AT&T Corp. 4% 44.625 5,846
93 BEL Bell Atlantic Corporation 4% 63.375 5,894
136 BLS BellSouth Corporation 4% 43.313 5,890
176 CWP Cable & Wireless Plc (ADR) 4% 33.813 5,951
136 DT Deutsche Telekom AG (ADR) 4% 43.625 5,933
80 WCOM MCI WorldCom, Inc. 4% 74.469 5,957
172 QWST Qwest Communications International Inc. 4% 34.969 6,015
116 SBC SBC Communications Inc. 4% 51.313 5,952
122 TEF Telefonica S.A. (ADR) 4% 49.063 5,986
DATA NETWORKING/COMMUNICATIONS EQUIPMENT
____________________________________
133 ADCT ADC Telecommunications, Inc. 4% 45.000 5,985
101 AMCC Applied Micro Circuits Corporation 4% 58.750 5,934
49 BRCM Broadcom Corporation (Class A) 4% 116.813 5,724
86 CSCO Cisco Systems, Inc. 4% 69.375 5,966
62 CMVT Comverse Technology, Inc. 4% 95.969 5,950
205 ECIL ECI Telecom Limited (3) 4% 29.938 6,137
95 LU Lucent Technologies Inc. 4% 62.063 5,896
107 NT Nortel Networks Corporation (3) 4% 54.813 5,865
72 PMCS PMC-Sierra, Inc. (3) 4% 82.750 5,958
102 TLAB Tellabs, Inc. 4% 58.031 5,919
73 VTSS Vitesse Semiconductor Corporation 4% 80.531 5,879
WIRELESS COMMUNICATIONS
_____________________
65 MOT Motorola, Inc. 4% 93.000 6,045
62 NOK Nokia Oy (ADR) 4% 95.188 5,902
30 QCOM QUALCOMM Incorporated 4% 204.031 6,121
123 VOD Vodafone AirTouch Plc (ADR) 4% 48.250 5,935
______ _________
Total Investments 100% $148,606
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 16.
</FN>
</TABLE>
Page 12
Schedule of Investments
e-Tail Portfolio Series
FT 371
At the Opening of Business on the
Initial Date of Deposit-October 15, 1999
<TABLE>
<CAPTION>
Percentage
of Aggregate Market Cost of
Number Ticker Symbol and Offering Value per Securities to
of Shares Name of Issuer of Securities (1) Price Share the Trust (2)
_______ _______________________________________ __________ ______ ________
<S> <C> <C> <C> <C>
ACCESS PROVIDERS & PORTALS
____________________
108 T AT&T Corp. 3.24% $ 44.625 $ 4,820
43 AOL America Online, Inc. 3.32% 114.875 4,940
117 ELNK EarthLink Network, Inc. (4) 3.42% 43.500 5,090
67 WCOM MCI WorldCom, Inc. 3.36% 74.469 4,989
143 QWST Qwest Communications International Inc. 3.36% 34.969 5,001
29 YHOO Yahoo! Inc. 3.38% 173.375 5,028
E-TAILERS
_________
61 AMZN Amazon.com, Inc. 3.27% 79.594 4,855
101 CDWC CDW Computer Centers, Inc. 3.36% 49.375 4,987
111 DELL Dell Computer Corporation 3.31% 44.344 4,922
35 EBAY eBay Inc. 3.33% 141.625 4,957
145 GPS The Gap, Inc. 3.36% 34.500 5,003
91 GTW Gateway Inc. 3.38% 55.188 5,022
115 IBI Intimate Brands, Inc. 3.32% 42.875 4,931
67 LE Lands' End, Inc. 3.32% 73.625 4,933
168 SCH The Charles Schwab Corporation 3.38% 29.875 5,019
94 WMT Wal-Mart Stores, Inc. 3.31% 52.375 4,923
FINANCIAL/TRANSACTION SERVICES
________________________________
35 AXP American Express Company 3.34% 141.813 4,963
124 COF Capital One Financial Corporation 3.27% 39.250 4,867
114 FDC First Data Corporation 3.29% 42.938 4,895
58 PVN Providian Financial Corporation 3.34% 85.688 4,970
INTERNET INFRASTRUCTURE
_________________________
31 BVSN BroadVision, Inc. 3.23% 154.688 4,795
72 CSCO Cisco Systems, Inc. 3.36% 69.375 4,995
71 EMC EMC Corporation 3.35% 70.188 4,983
77 EXDS Exodus Communications, Inc. 3.42% 66.094 5,089
60 HWP Hewlett-Packard Company 3.30% 81.813 4,909
68 INTC Intel Corporation 3.36% 73.344 4,987
47 IBM International Business Machines Corporation 3.38% 106.875 5,023
54 MSFT Microsoft Corporation 3.29% 90.688 4,897
106 ORCL Oracle Corporation 3.34% 46.781 4,959
55 SUNW Sun Microsystems, Inc. 3.31% 89.406 4,917
_____ _________
Total Investments 100% $148,669
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 16.
</FN>
</TABLE>
Page 13
Schedule of Investments
Internet Portfolio, Series 8
FT 371
At the Opening of Business on the Initial Date of Deposit-October 15, 1999
<TABLE>
<CAPTION>
Percentage
of Aggregate Market Cost of
Number Ticker Symbol and Offering Value per Securities to
of Shares Name of Issuer of Securities (1) Price Share the Trust (2)
_______ _______________________________________ __________ ______ ________
<S> <C> <C> <C> <C>
ACCESS/INFORMATION PROVIDERS
________________________
109 T AT&T Corp. 3.27% $ 44.625 $ 4,864
44 AOL America Online, Inc. 3.40% 114.875 5,055
118 ELNK EarthLink Network, Inc. (4) 3.45% 43.500 5,133
67 WCOM MCI WorldCom, Inc. 3.36% 74.469 4,990
143 QWST Qwest Communications International Inc. 3.36% 34.969 5,001
DATA NETWORKING/COMMUNICATIONS EQUIPMENT
____________________________________
41 BRCM Broadcom Corporation (Class A) 3.22% 116.813 4,789
72 CSCO Cisco Systems, Inc. 3.36% 69.375 4,995
79 LU Lucent Technologies Inc. 3.30% 62.063 4,903
90 NT Nortel Networks Corporation (3) 3.32% 54.813 4,933
60 PMCS PMC-Sierra, Inc. (3) 3.34% 82.750 4,965
85 TLAB Tellabs, Inc. 3.32% 58.031 4,933
61 VTSS Vitesse Semiconductor Corporation 3.30% 80.531 4,912
COMPUTERS & PERIPHERALS
_____________________
111 DELL Dell Computer Corporation 3.31% 44.344 4,922
71 EMC EMC Corporation 3.35% 70.188 4,983
91 GTW Gateway Inc. 3.38% 55.188 5,022
60 HWP Hewlett-Packard Company 3.30% 81.813 4,909
68 INTC Intel Corporation 3.35% 73.344 4,988
47 IBM International Business Machines Corporation 3.38% 106.875 5,023
55 SUNW Sun Microsystems, Inc. 3.31% 89.406 4,917
INTERNET CONTENT
_____________
49 CMGI CMGI Inc. 3.43% 104.250 5,108
86 TMPW TMP Worldwide Inc. 3.24% 56.063 4,822
29 YHOO Yahoo! Inc. 3.38% 173.375 5,028
ONLINE BROKERAGE
______________
211 NITE Knight/Trimark Group, Inc. (Class A) 3.36% 23.688 4,998
168 SCH The Charles Schwab Corporation 3.37% 29.875 5,019
SOFTWARE
_______
31 BVSN BroadVision, Inc. 3.22% 154.688 4,795
57 CHKP Check Point Software Technologies Ltd. (3) 3.31% 86.250 4,916
77 EXDS Exodus Communications, Inc. 3.42% 66.094 5,089
187 INTU Intuit Inc. 3.27% 26.000 4,862
54 MSFT Microsoft Corporation 3.29% 90.688 4,897
106 ORCL Oracle Corporation 3.33% 46.781 4,959
_____ _________
Total Investments 100% $148,730
====== =========
______________
<FN>
See "Notes to Schedules of Investments" on page 16.
</FN>
</TABLE>
Page 14
Schedule of Investments
Market Leaders Portfolio, Series 4
FT 371
At the Opening of Business on the
Initial Date of Deposit-October 15, 1999
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of
of Ticker Symbol and Offering Value per Securities to
Shares Name of Issuer of Securities (1) Price Share the Trust (2)
______ _______________________________________ __________ ______ _________
<S> <C> <C> <C> <C>
132 AXP American Express Company 12.55% $ 141.813 $ 18,719
10 BRK/B Berkshire Hathaway Inc. (Class B) 12.80% 1,909.000 19,090
367 KO The Coca-Cola Company 12.47% 50.688 18,602
750 DIS The Walt Disney Company 12.54% 24.938 18,704
367 FRE Freddie Mac 12.35% 50.188 18,419
503 G The Gillette Company 12.50% 37.063 18,643
36 WPO The Washington Post Company (Class B) 12.33% 510.750 18,387
458 WFC Wells Fargo Company 12.46% 40.563 18,578
______ ________
Total Investments 100% $149,142
====== ========
_________________
<FN>
See "Notes to Schedules of Investments" on page 16.
</FN>
</TABLE>
Page 15
Schedule of Investments
Retail Portfolio, Series 4
FT 371
At the Opening of Business on the Initial Date of Deposit-October 15, 1999
<TABLE>
<CAPTION>
Percentage
of Aggregate Market Cost of
Number Ticker Symbol and Offering Value per Securities to
of Shares Name of Issuer of Securities (1) Price Share the Trust (2)
_______ _______________________________________ __________ ______ ________
<S> <C> <C> <C> <C>
295 ANF Abercrombie & Fitch Co. (Class A) 5% $25.063 $ 7,394
248 BJ BJ's Wholesale Club, Inc. 5% 30.563 7,580
227 BBBY Bed Bath & Beyond Inc. 5% 33.438 7,590
152 CDWC CDW Computer Centers, Inc. 5% 49.375 7,505
160 CC Circuit City Stores-Circuit City Group 5% 45.875 7,340
94 COST Costco Wholesale Corporation 5% 78.938 7,420
113 DH Dayton Hudson Corporation 5% 65.375 7,387
256 DG Dollar General Corporation 5% 28.688 7,344
195 DLTR Dollar Tree Stores, Inc. 5% 39.125 7,629
216 GPS The Gap, Inc. 5% 34.500 7,452
282 TOM Tommy Hilfiger Corporation 5% 26.125 7,367
105 HD The Home Depot, Inc. 5% 70.938 7,449
173 IBI Intimate Brands, Inc. 5% 42.875 7,417
339 KR The Kroger Co. 5% 21.688 7,352
146 LOW Lowe's Companies, Inc. 5% 50.938 7,437
198 MAY The May Department Stores Company 5% 37.063 7,339
209 SWY Safeway Inc. 5% 35.500 7,420
340 SPLS Staples, Inc. 5% 21.906 7,448
307 WAG Walgreen Co. 5% 24.250 7,445
142 WMT Wal-Mart Stores, Inc. 5% 52.375 7,437
______ _________
Total Investments 100% $148,752
====== =========
_____________
<FN>
NOTES TO SCHEDULES OF INVESTMENTS
(1)All Securities are represented by regular way contracts to purchase
such Securities which are backed by an irrevocable letter of credit
deposited with the Trustee. We entered into purchase contracts for the
Securities on October 14 and 15, 1999.
(2)The cost of the Securities to a Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the closing sale prices of the listed Securities and the
ask prices of the over-the-counter traded Securities at the Evaluation
Time on the business day preceding the Initial Date of Deposit). The
valuation of the Securities has been determined by the Evaluator, an
affiliate of ours. The cost of the Securities to us and our profit or
loss (which is the difference between the cost of the Securities to us
and the cost of the Securities to a Trust) are set forth below:
Cost of
Securities Profit
to Sponsor (Loss)
_________ _______
America's Leading Brands Portfolio, Series 6 $148,571 $(100)
Biotechnology Portfolio Series $148,592 $(122)
Communications Portfolio, Series 5 $148,654 $ (48)
e-Tail Portfolio Series $148,734 $ (65)
Internet Portfolio, Series 8 $148,846 $(116)
Market Leaders Portfolio, Series 4 $149,219 $ (77)
Retail Portfolio, Series 4 $148,663 $ 89
(3)This Security represents the common stock of a foreign company which
trades directly on a U.S. national securities exchange.
(4)EarthLink Network, Inc. ("EarthLink") has recently agreed to be
acquired by MindSpring Enterprises, Inc. ("MindSpring") to form a new
company which will carry the EarthLink name and will trade under
EarthLink's Nasdaq symbol, ELNK. As a result of this expected
transaction, it is anticipated that the e-Tail Portfolio Series and the
Internet Portfolio, Series 8 will receive 1.615 shares of stock in the
new company in exchange for each share of EarthLink held.
</FN>
</TABLE>
Page 16
The FT Series
The FT Series Defined.
We, Nike Securities L.P. (the "Sponsor"), have created several similar
yet separate series of a unit investment trust which we have named the
FT Series. We designate each of these series of the FT Series with a
different series number. Each of the following is a separate portfolio,
or series, of FT 371:
- - America's Leading Brands Portfolio, Series 6
- - Biotechnology Portfolio Series
- - Communications Portfolio, Series 5
- - e-Tail Portfolio Series
- - Internet Portfolio, Series 8
- - Market Leaders Portfolio, Series 4
- - Retail Portfolio, Series 4
YOU MAY GET MORE SPECIFIC DETAILS CONCERNING THE NATURE, STRUCTURE AND
RISKS OF THIS PRODUCT IN AN "INFORMATION SUPPLEMENT" BY CALLING THE
TRUSTEE AT 1-800-682-7520.
Mandatory Termination Date.
Each Trust will terminate on the Mandatory Termination Date set forth in
"Summary of Essential Information." Each Trust was created under the
laws of the State of New York by a Trust Agreement (the "Indenture")
dated the Initial Date of Deposit. This agreement, entered into between
Nike Securities L.P., as Sponsor, The Chase Manhattan Bank as Trustee
and First Trust Advisors L.P. as Portfolio Supervisor and Evaluator,
governs the operation of the Trusts.
How We Created the Trusts.
On the Initial Date of Deposit, we deposited contracts to buy the
Securities with the Trustee and in turn, the Trustee delivered documents
to us representing our ownership of the Trusts in the form of units
("Units").
With our deposit of Securities on the Initial Date of Deposit we
established a percentage relationship among the Securities in each
Trust's portfolio, as stated under "Schedule of Investments" for each
Trust. After the Initial Date of Deposit, we may deposit additional
Securities in the Trusts, or cash (including a letter of credit) with
instructions to buy more Securities to create new Units for sale. If we
create additional Units, we will attempt, to the extent practicable, to
maintain the percentage relationship established among the Securities on
the Initial Date of Deposit, and not the percentage relationship
existing on the day we are creating Units, since the two may differ.
This difference may be due to the sale, redemption or liquidation of any
of the Securities.
Since the prices of the Securities will fluctuate daily, the ratio of
Securities in the Trusts, on a market value basis, will also change
daily. The portion of Securities represented by each Unit will not
change as a result of the deposit of additional Securities or cash in a
Trust. If we deposit cash, you and new investors may experience a
dilution of your investment. This is because prices of Securities will
fluctuate between the time of the cash deposit and the purchase of the
Securities, and because the Trusts pay the associated brokerage fees. To
reduce this dilution, the Trusts will try to buy the Securities as close
to the Evaluation Time and as close to the evaluation price as possible.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may retain and pay us (or our affiliate) to act as agent for the
Trusts to buy Securities. If we or an affiliate of ours act as agent to
the Trusts, we will be subject to the restrictions under the Investment
Company Act of 1940, as amended.
We cannot guarantee that a Trust will keep its present size and
composition for any length of time. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be reinvested. However, Securities will not be sold to take
advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation, or if they no longer meet the criteria by
which they were selected. You will not be able to dispose of or vote any
of the Securities in the Trusts. As the holder of the Securities, the
Trustee will vote all of the Securities and will do so based on our
instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Securities initially deposited in a Trust fails, unless we can purchase
substitute Securities ("Replacement Securities"), we will refund to you
that portion of the purchase price and sales charge resulting from the
Page 17
failed contract on the next Income Distribution Date. Any Replacement
Security a Trust acquires will be identical to those from the failed
contract.
Portfolios
Objectives. The objective of each Trust is to provide investors with the
potential for above-average capital appreciation through an investment
in a diversified portfolio of common stocks of companies in the industry
sector or investment focus for which the Trust is named. A diversified
portfolio helps to offset the risks normally associated with such an
investment, although it does not eliminate them entirely. The companies
selected for the Trusts have been researched and evaluated using
database screening techniques, fundamental analysis, and the judgment of
the Sponsor's research analysts.
America's Leading Brands Portfolio, Series 6 consists of a portfolio of
common stocks of companies considered to be leaders in their industries.
Almost every American is familiar with brand name companies like Coca-
Cola, Walt Disney, Gillette and McDonald's. They are household names
whose products can be found in almost every home across the country.
This is also increasingly becoming the case overseas as more markets
open in developing countries. Typically, leading brands companies have
large advertising budgets and strong research and development enabling
them to further expand into new markets.
While many of these companies already have a strong presence in
international markets, we believe they stand to benefit even more from
the following factors:
- - As a result of growing populations and rising standards of living,
demand for goods continues to increase.
- - Relaxed trade agreements and improved political climates are opening
more markets for producers of leading brand name products.
- - Leading brands companies use their large advertising budgets and
strong research and development to further expand into new markets.
- - Generally, consumer goods companies perform well, even during
uncertain economic times, since their products and services typically
remain in demand.
Biotechnology Portfolio Series consists of a portfolio of common stocks
of biotechnology companies and pharmaceutical companies actively
participating in the biotechnology industry.
The biotechnology industry was founded in the seventies and successfully
launched its first products in the early eighties. By the start of the
nineties, many in the investment community believed that biotechnology
was on the verge of becoming a revolutionary growth industry, somewhat
like the Internet is now. Eventually, however, the demand for biotech
stocks diminished for various reasons, including a limited supply of
products.
As the nineties draw to a close, interest in biotechnology is being
reignited thanks to a strong pipeline of promising new medicines. On
average, it takes 10-15 years for a new drug to go from development to
market, and there are currently over 300 products in the late stages of
clinical trials, compared to only 30 back in 1991. Since the first
biotech breakthrough in 1982, which involved genetically engineered
human insulin, another 53 products have come to market. A faster FDA
approval process, an increase in the length of patent protection and
advances in computer technology are improvements which have the
potential to help biotech and pharmaceutical companies expedite the
development and approval of their products and grow their businesses.
Therefore, the outlook for the biotechnology industry has improved due
to a more efficient infrastructure that now incorporates product
development, marketing and distribution.
The following factors support our positive outlook for the biotechnology
industry:
- - The biotechnology industry is projected to generate over $20 billion
in revenues in 1999, approximately a 21% increase over 1998.
- - Currently, there are approximately 140 pharmaceutical and
biotechnology companies testing biotechnology products. The costs
associated with developing these products can range from $250-300
million per drug. The leading biotech companies commit 15-50% of total
revenues to research and development. Such excessive costs have inspired
many biotech firms to seek capital investment from pharmaceutical
companies through licensing agreements and other collaborations. By
combining resources, biotech firms not only receive the capital that
they need to operate, but also gain access to marketing and distribution
channels. Nearly 1,000 such deals have been made since 1993.
Page 18
- - We believe that future growth prospects for the industry are bright
due to the potential for an increased demand from an aging population
that is facing longer life expectancies.
- - The industry is focusing on society's most pressing healthcare needs.
For example, approximately 151 of the 350 products in the developmental
stage are related to the treatment of cancer, which is currently the
second leading cause of death in the United States, after cardiovascular
disease. That constitutes more than 40% of the new treatments in
development.
Communications Portfolio, Series 5 consists of a portfolio of common
stocks of communications companies, diversified across domestic and
international companies involved in communications services, data
networking/communications equipment and wireless communications. In
general, we believe these companies have above-average growth prospects
for both sales and earnings, established market shares for their
services and lower-than-average debt.
The communications industry is expected to benefit from the convergence
of a variety of industries, including entertainment, media and
publishing. Deregulation and privatization of telecommunications
services both domestically and internationally have heightened
competition. As a result, leading companies in the communications
industry are poised for increased revenue and earnings growth potential
over the next several years.
The following factors support our positive outlook for companies in the
communications industry:
- - The Telecommunications Act of 1996 broke down many regulatory barriers
in the United States. Companies that were once prevented from offering
multiple communications services can now do so.
- - Foreign markets are opening at a rapid pace. In fact, 69 countries
representing more than 90% of world telecommunications revenue recently
signed an agreement to move to deregulation and privatization.
- - Recent advances, such as wireless phones, fiber optics and the
Internet are allowing businesses, individuals and governments greater
access to more services at lower costs.
e-Tail Portfolio Series consists of a portfolio of common stocks of
retailers that market their goods and services on the Internet and the
technology companies that create the tools to make it possible.
In the past three years, online retail sales have jumped from $1.1
billion in 1996 to approximately $8 billion in 1998. Some companies
believe so strongly in the future of e-tailing that they have abandoned
more traditional business models in favor of a total commitment to e-
commerce, while others are moving quickly to incorporate the Internet
into their existing infrastructures.
The most obvious benefit to companies selling online is that the
Internet provides a new method of product distribution. Because the
Internet allows companies to operate without geographical limitations
and potentially grow their businesses in a cost-effective manner, the
future growth potential of selling goods and services online could
impact more than just the retail industry. We believe that technology-
based companies, especially those involved in creating the Internet
infrastructure and those that provide access to the Internet, are in an
ideal position to capitalize on this growth potential. These companies
include a diversified group of technology companies that are developing
and marketing products and services to help other companies manage their
online businesses more effectively.
Another valuable benefit to engaging in e-commerce is customer
interaction. It is proving to be a very effective way of conducting
marketing research to learn about the buying habits of consumers. In
fact, a recent survey in The Industry Standard stated that more than 50%
of top level executives reported that factors such as data collected for
marketing, improved customer service and the degree of customer
interaction were key elements to the online success of their businesses.
In addition, factors such as cost reduction, sales completed and the
number of website hits/visits were also cited as significant.
The following factors support our positive outlook for the online retail
industry:
- - Over 24 million Internet users purchased something online in the
second quarter of 1999, an increase of approximately 10 million over the
second quarter of 1998.
- - It is estimated that there will be a record number of online
purchases this holiday season, with U.S. companies poised to collect a
Page 19
majority of these e-commerce revenues.
The information technology industry, which includes personal computer
makers, software companies and data networking equipment makers,
generated at least a third of the nation's economic growth between 1995
and 1998.
55% of all Internet-linked machines have been used for e-commerce and
related activities, which include purchases, financial transactions and
shopping.
Like technology, the retail industry has experienced a bit of a
revolution during the nineties. The new buzzword in retail is "value"
and it pertains to consumers demanding higher quality, greater selection
and convenience at reasonable prices. Today, the average consumer is
spending less time shopping, but more dollars per visit. We believe the
companies selected are committed to e-commerce and to delivering value
to the consumer.
Internet Portfolio, Series 8 consists of a portfolio of common stocks of
technology companies which provide products or services for, or conduct
business on, the Internet. The number of individuals connecting to the
WorldWide Web is growing daily. More people are signing up with Internet
access companies, and still more are upgrading their computers to make
Internet linkage possible. We believe Internet usage will continue to
expand and companies involved in businesses related to the Internet will
benefit.
The following factors support our positive outlook for the companies in
the Internet-related industry:
- - More than 58 million adults are online in the U.S. alone, and the
number of online users is expected to dramatically increase in the future.
- - A new computer is added to the Internet approximately every four
seconds.
- - Business-to-business electronic commerce is anticipated to exceed $20
billion by 2000, up from an estimated $9.5 billion in 1997.
- - Nearly 3000 new websites are added every day.
- - Improved security measures are helping fuel consumer transactions
over the web.
- - New technologies are making high-speed data and video connections to
the Internet possible.
- - There has been an increase in consolidation and mergers among
Internet related companies.
- - Faster, more efficient technology continues to become more affordable.
- - Rising standards of living and more disposable income worldwide make
Internet usage possible for more people.
Market Leaders Portfolio, Series 4 consists of a portfolio of common
stocks of companies that are widely regarded as front-runners in their
respective industries. One important advantage that blue-chip companies
enjoy over most companies is that they are usually very well
capitalized, which has the potential to provide their stockholders with
a greater degree of stability and performance over time.
The Trust is invested in companies that market essential consumer
products and services, have skilled management, possess strong balance
sheets and have demonstrated the ability to generate earnings growth.
Their products and services often remain in demand, even during periods
of slow economic growth.
The following factors support our positive outlook for these market
leaders:
- - The global economy appears to be in the early stages of a rebound
thanks to the modest recoveries underway in Asia and Europe. Coca-Cola,
Disney and American Express have the potential to benefit from an
increase in consumer spending overseas.
- - The economic environment in the United States continues to reflect
strong growth and attractive interest rate levels. The housing market is
robust, which could continue to fuel demand for the services of Freddie
Mac.
- - Online banking is one area where Wells Fargo is getting a jump on the
competition. They are the nation's largest online banker servicing
approximately one million accounts. Their online customers typically
cost less to service than traditional bank customers.
Retail Portfolio, Series 4 consists of a portfolio of common stocks of
retail companies. When it comes to the power of the vote, few do it
better than the consumer. Every day consumers cast their votes with
dollars. Now more than ever, consumers demand quality and selection at a
reasonable price. Additionally, consumers are spending less time
shopping, but spending more money per visit. In fact, industry analysts
have even coined a new phrase for this called "precision shopping."
The key to success in retail is to win over the consumer. After all,
Page 20
their spending accounts for a significant portion of the annual U.S. GDP.
The following factors support our positive outlook for the retail
industry:
- - Retailers tend to prosper during economic cycles that boast low
interest rates, low unemployment, personal income growth and high levels
of consumer confidence. The U.S. economy is healthy and is currently
enjoying a sustained period of low inflation and stable interest rates.
Unemployment rates are historically low and consumer confidence levels
hover near the 1998 record high.
- - The retail industry employs over 20 million people. That equates to
one in five U.S. workers, according to the U.S. Department of Labor.
- - The Internet could play a key role in the retail sector because it
enables companies to market and distribute products cost-effectively
without geographical limitations.
- - Success often hinges on finding new growth opportunities. Some
historical retail trends that proved successful were department stores,
malls, specialty retail stores and national discounters. The Internet
could evolve into the next successful trend. It offers benefits like
convenience, selection and pricing. Though still in its infancy, more
than 58 million adults are online in the United States alone, a figure
that is expected to grow substantially over the years to come.
Retailers all share a common challenge which is to increase profits
while reducing costs. We believe that growth in the retail sector will
come from such initiatives as opening new stores, the Internet, brand
building and mergers. It is our belief that a portfolio of industry
leading retailers offers value and growth potential for the future.
Of course, as with any similar investments, there can be no guarantee
that the objective of the Trusts will be achieved. See "Risk Factors"
for a discussion of the risks of investing in the Trusts.
Risk Factors
Price Volatility. The Trusts invest in common stocks of U.S. and, for
certain Trusts, foreign companies. The value of a Trust's Units will
fluctuate with changes in the value of these common stocks. Common stock
prices fluctuate for several reasons including changes in investors'
perceptions of the financial condition of an issuer or the general
condition of the relevant stock market, or when political or economic
events affecting the issuers occur.
Because the Trusts are not managed, the Trustee will not sell stocks in
response to or in anticipation of market fluctuations, as is common in
managed investments. As with any investment, we cannot guarantee that
the performance of any Trust will be positive over any period of time or
that you won't lose money. Units of the Trusts are not deposits of any
bank and are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Certain of the Securities in certain Trusts may be issued by companies
with market capitalizations of less than $1 billion. The share prices of
these small-cap companies are often more volatile than those of larger
companies as a result of several factors common to many such issuers,
including limited trading volumes, products or financial resources,
management inexperience and less publicly available information.
Dividends. There is no guarantee that the issuers of the Securities will
declare dividends in the future or that if declared they will either
remain at current levels or increase over time.
Biotechnology/Pharmaceutical Industries. The Biotechnology Portfolio
Series includes companies involved in drug development and production.
Biotech and pharmaceutical companies are subject to changing government
regulation, including price controls, national health insurance, managed
care regulation and tax incentives or penalties related to medical
insurance premiums, which could have a negative effect on the price and
availability of their products and services. In addition, such companies
face increasing competition from generic drug sales, the termination of
their patent protection for certain drugs and technological advances
which render their products or services obsolete. The research and
development costs required to bring a drug to market are substantial and
may include a lengthy review by the government, with no guarantee that
the product will ever go to market or show a profit. Many of these
companies may not offer certain drugs or products for several years, and
as a result, may have significant losses of revenue and earnings.
Communications Industry. The Communications Portfolio, Series 5 includes
Page 21
companies that are involved in the communications industry.
Communications companies are generally subject to the risks of rapidly
changing technologies; short product life cycles; fierce competition;
aggressive pricing and reduced profit margins; the loss of patent,
copyright and trademark protections; cyclical market patterns; evolving
industry standards and frequent new product introductions. Rapid
deregulation, both in the United States and internationally, allows
companies to develop products and services for a larger market, but also
exposes them to fierce global competition.
Consumer Products Industry. The America's Leading Brands Portfolio,
Series 6 mainly consists of consumer products companies. General risks
of these companies include cyclicality of revenues and earnings,
changing consumer tastes, extensive competition, product liability
litigation and increased governmental regulation. Generally, spending on
consumer products is affected by the economic health of consumers. A
weak economy and its effect on consumer spending would adversely affect
consumer products companies.
Market Leaders. The Market Leaders Portfolio, Series 4 is concentrated
in Berkshire Hathaway, Inc. common stock and the common stock of certain
companies in which Berkshire Hathaway, Inc. owns an equity interest.
This lack of diversification increases risks to investors. Berkshire
Hathaway, Inc. and the other issuers of Securities included in the
Market Leaders Portfolio, Series 4 have in no way participated in the
creation of this Trust.
Retail Industry (Traditional and e-Tail). The Retail Portfolio, Series 4
and the e-Tail Portfolio include companies involved in the retail
industry. General risks of these companies include the general state of
the economy, intense competition and consumer spending trends. A decline
in the economy which results in a reduction of consumers' disposable
income can negatively impact spending habits. Competitiveness in the
retail industry will require large capital outlays for the installation
of automated checkout equipment to control inventory, track the sale of
items and gauge the success of sales campaigns.
Retailers who sell their products over the Internet have the potential
to access more consumers, but will require the capital to acquire and
maintain sophisticated technology. E-commerce company stocks have
experienced extreme price and volume fluctuations that are often
unrelated to their operating performance. Many such companies have
exceptionally high price-to-earnings ratios with little or no earnings
histories. In addition, numerous e-commerce companies have only recently
begun operations, and may have limited product lines, markets or
financial resources, as well as fewer experienced management personnel.
Finally, the lack of barriers to entry suggests a future of intense
competition for online retailers.
Technology Industry. The Internet Portfolio, Series 8 and e-Tail
Portfolio Series are concentrated in Securities issued by companies
which are involved in the Internet area of the technology industry.
Technology companies are generally subject to the risks of rapidly
changing technologies; short product life cycles; fierce competition;
aggressive pricing and reduced profit margins; the loss of patent,
copyright and trademark protections; cyclical market patterns; evolving
industry standards and frequent new product introductions. Technology
companies may be smaller and less experienced companies, with limited
product lines, markets or financial resources and fewer experienced
management or marketing personnel. Technology company stocks, especially
those which are Internet-related, have experienced extreme price and
volume fluctuations that are often unrelated to their operating
performance. Also, the stocks of many Internet companies have
exceptionally high price-to-earnings ratios with little or no earnings
histories. For additional information regarding the risks associated
with the e-Tail Sector, see "Risk Factors-Retail Industry."
Legislation/Litigation. From time to time, various legislative
initiatives are proposed in the United States and abroad which may have
a negative impact on certain of the companies represented in the Trusts.
In addition, litigation regarding any of the issuers of the Securities,
such as that concerning Microsoft Corporation, or of the industries
represented by such issuers, may negatively impact the share prices of
these Securities. We cannot predict what impact any pending or proposed
legislation or pending or threatened litigation will have on the share
prices of the Securities.
Year 2000 Problem. Many computer systems were not designed to properly
process information and data involving dates of January 1, 2000 and
thereafter. This is commonly known as the "Year 2000 Problem." We do not
expect that any of the computer system changes necessary to prepare for
Page 22
January 1, 2000 will cause any major operational difficulties for the
Trusts. However, we are unable to predict what impact the Year 2000
Problem will have on any of the issuers of the Securities, but you
should note that foreign issuers may have greater complications than
other issuers.
Foreign Stocks. Certain of the Securities in certain Trusts are issued
by foreign companies, which makes these Trusts subject to more risks
than if they invested solely in domestic common stocks. These Securities
are either directly listed on a U.S. securities exchange or are in the
form of American Depositary Receipts ("ADRs") which are listed on a U.S.
securities exchange. Risks of foreign common stocks include higher
brokerage costs; different accounting standards; expropriation,
nationalization or other adverse political or economic developments;
currency devaluations, blockages or transfer restrictions; restrictions
on foreign investments and exchange of securities; inadequate financial
information; and lack of liquidity of certain foreign markets.
Portfolio Securities Descriptions
America's Leading Brands Portfolio, Series 6.
Apparel/Retail
____________
The Gap, Inc., headquartered in San Francisco, California, operates
specialty retail stores in the United States, Canada, France, Germany,
Japan and the United Kingdom. The company's stores sell casual apparel,
shoes and other accessories for men, women and children under a variety
of brand names, including "Gap," "GapKids," "babyGap," "Banana Republic"
and "Old Navy."
Tommy Hilfiger Corporation, headquartered in New York, New York, through
subsidiaries, designs, sources and markets designer men's and women's
sportswear, jeanswear and childrenswear under the "Tommy Hilfiger"
trademarks. The products are sold through retail stores in the United
States and internationally.
Auto & Transportation
___________________
Ford Motor Company, headquartered in Dearborn, Michigan, manufactures,
assembles and sells cars, vans, trucks and tractors and their related
parts and accessories. The company also provides financial services
through its subsidiary, Ford Motor Credit Company, and operates a car
rental business through its subsidiary, The Hertz Corporation.
Beverages
_________
Anheuser-Busch Companies, Inc., headquartered in St. Louis, Missouri,
produces and distributes beer under brand names such as "Budweiser,"
"Busch" and "Michelob." The company also manufactures metal beverage
containers, recycles metal and glass beverage containers, and operates
rice milling and barley seed processing plants. The company also owns
and operates theme parks.
The Coca-Cola Company, headquartered in Atlanta, Georgia, makes and
distributes soft drink concentrates and syrups, and also markets juice
and juice-drink products. The company's products are sold in over 200
countries and include the leading soft drink products in most of these
countries.
PepsiCo, Inc., headquartered in Purchase, New York, markets and
distributes beverages including "Pepsi-Cola," "Diet Pepsi," "Pepsi Max,"
"Mountain Dew," "7UP," "Diet 7UP," "Mirinda," "Slice" and "Tropicana
Pure Premium." The company, which operates internationally, also makes
and distributes ready-to-drink Lipton tea products and snacks, with
"Frito-Lay" representing the North American business.
Entertainment
________________
The Walt Disney Company, headquartered in Burbank, California, operates
as a diversified international entertainment company with operations
consisting of filmed entertainment, theme parks and resorts and consumer
products. Disney also has broadcasting (including Capital Cities/ABC,
Inc.) and publishing operations.
Food
______
H.J. Heinz Company, headquartered in Pittsburgh, Pennsylvania,
manufactures, packages and sells processed food products throughout the
world. The company's products include ketchup, sauces/condiments, pet
food, seafood products, baby food, soups, lower-calorie products, bakery
products, frozen dinners and entrees, and frozen pizza. The company also
provides weight control services.
Hershey Foods Corporation, headquartered in Hershey, Pennsylvania,
manufactures, distributes and sells consumer food products. The company
produces and distributes a line of chocolate and non-chocolate,
confectionery and grocery products in the United States and
internationally.
Page 23
Sara Lee Corporation, headquartered in Chicago, Illinois, manufactures,
markets and distributes packaged food, packaged consumer goods, and
household and personal care products throughout the world. The company's
products include "Sara Lee" food items, "Jimmy Dean" packaged meats,
"Coach" leatherware, "Hanes" clothing and hosiery and "Champion"
activewear.
Household Products
________________
The Clorox Company, headquartered in Oakland, California, manufactures
and sells household products, including the brand names "Armor All,"
"Black Flag," "Brita," "Clorox," "Combat," "Fresh Step," "Glad," "Hidden
Valley," "Jonny Cat," "Kingsford," "Liquid-Plumr," "Pine-Sol," "S.O.S,"
"STP," "Scoop Away" and "Tilex."
Colgate-Palmolive Company, headquartered in New York, New York, is an
international consumer products company. The company's products include
toothpaste, toothbrushes, shampoos, deodorants, bar and liquid soaps,
dishwashing liquid and laundry products, among others. The company's
brand names include "Ajax," "Colgate," "Fab," "Mennen," "Palmolive,"
"Prescription Diet," "Protex," "Science Diet" and "Soupline/Suavitel."
The Dial Corporation, headquartered in Scottsdale, Arizona, produces and
sells personal care, detergent, air freshener and shelf-stable food
products. The company's products include such well known brands as
"Dial" and "Liquid Dial" soaps, "Purex" detergents, "Renuzit" air
fresheners and "Armour Star" canned meats.
Kimberly-Clark Corporation, headquartered in Dallas, Texas, is an
international company which manufactures and markets tissue products,
personal care and healthcare products, as well as business,
correspondence and technical papers. The company sells its products
under the brand names, "Depend," "Huggies," "Kleenex," "Kotex," "Page"
and "Tecnol."
Procter & Gamble Company, headquartered in Cincinnati, Ohio,
manufactures consumer products worldwide, including detergents, fabric
conditioners and hard surface cleaners; products for personal cleansing,
oral care, digestive health, hair and skin; paper tissue, disposable
diapers, and pharmaceuticals; and shortenings, oils, snacks, baking
mixes, peanut butter, coffee, drinks and citrus products.
Pharmaceuticals
_____________
Bristol-Myers Squibb Company, headquartered in New York, New York,
through divisions and subsidiaries, produces and distributes
pharmaceutical and non-prescription health products, toiletries and
beauty aids, and medical devices.
Johnson & Johnson, headquartered in New Brunswick, New Jersey, makes and
sells pharmaceuticals, personal healthcare products, medical and
surgical equipment, and contact lenses.
Schering-Plough Corporation, headquartered in Madison, New Jersey,
develops, makes and markets pharmaceutical and healthcare products
worldwide. Products include prescription drugs, animal health products
and over-the-counter foot care and sun care products.
Recreation
_________
Carnival Corporation, headquartered in Miami, Florida, operates one of
the world's largest multiple-night cruise lines under the names
"Carnival Cruise Lines," "Holland America Line," "Windstar Cruises,"
"Cunard Line," "Seabourn Cruise Line," "Costa Crociere SpA" and
"Airtours' Sun Cruises." The company markets sightseeing tours and
operates several "Westmark" hotels.
Harley-Davidson, Inc., headquartered in Milwaukee, Wisconsin, designs,
manufactures and sells heavyweight touring and custom motorcycles and
related products and accessories internationally. The company also
provides financing and insurance services for its products.
Restaurants
__________
McDonald's Corporation, headquartered in Oak Brook, Illinois, develops,
franchises, operates and services a worldwide system of quick-service
restaurants under the name "McDonald's." The company's restaurants
prepare, assemble, package and sell a limited menu of moderately-priced
foods including hamburgers, chicken, salads, breakfast foods and
beverages.
Starbucks Corporation, headquartered in Seattle, Washington, buys and
roasts whole bean coffees and sells its own brand of specialty coffee.
The company has retail operations in North America and the Pacific Rim.
The company also produces and sells the bottled "Frappucino" coffee
drink and a line of ice creams.
Technology
__________
Dell Computer Corporation, headquartered in Round Rock, Texas, designs,
Page 24
develops, makes, sells, services and supports a broad range of computer
systems, including desktops, notebooks and servers compatible with
industry standards under the "Dell" brand name. The company also sells
software, peripheral equipment, and service and support programs.
Intel Corporation, headquartered in Santa Clara, California, designs,
develops, makes and markets advanced microcomputer components and
related products at various levels of integration. Principal components
consist of silicon-based semiconductors etched with complex patterns of
transistors.
Toiletries/Cosmetics
_________________
The Gillette Company, headquartered in Boston, Massachusetts, is a
worldwide manufacturer of grooming products, writing instruments and
correction products, toothbrushes and oral care appliances, and alkaline
batteries.
Biotechnology Portfolio Series
Biotech
_______
Affymetrix, Inc., headquartered in Santa Clara, California, develops and
manufactures DNA chip technology which consists of DNA probe arrays
containing gene sequences on a chip; a scanner to process probe arrays;
and software to analyze the information. The company's "GeneChip" system
acquires, analyzes and manages complex genetic information in order to
improve the diagnosis, monitoring and treatment of disease.
Amgen Inc., headquartered in Thousand Oaks, California, is a global
biotechnology concern which develops, makes and markets human
therapeutics based on advanced cellular and molecular biology, including
a protein that stimulates red blood cell production and a protein that
stimulates white blood cell production
BioChem Pharma Inc., headquartered in Laval, Quebec, Canada, is an
international biopharmaceutical company that researches and develops
therapeutic products. The company also researches, develops, makes and
sells vaccine and diagnostic products for a broad range of infectious
and other diseases.
Biogen, Inc., headquartered in Cambridge, Massachusetts, develops and
makes pharmaceuticals for human healthcare through genetic engineering.
The company's primary focus is on developing and testing products for
the treatment of multiple sclerosis, inflammatory and respiratory
diseases, kidney diseases and certain viruses and cancers.
Bio-Technology General Corp., headquartered in Iselin, New Jersey,
develops, makes and markets human healthcare products, including
therapeutic products for conditions such as endocrine/metabolic and
ophthalmic/skin disorders and cardio/pulmonary diseases. The company
distributes its products in the United States and internationally.
Celera Genomics, headquartered in Rockville, Maryland, is a subsidiary
of PE Corporation. The company is involved in the sequencing of the
human genome (and other biologically important model organisms) and
generates, sells and supports genomic information and related
information management and analysis software. The company also
discovers, validates and licenses proprietary gene products, genetic
markets and information concerning genetic variability.
Chiron Corporation, headquartered in Emeryville, California, develops,
produces and sells products related to the diagnosis, prevention and
treatment of human diseases, including certain types of cancer and
cardiovascular and infectious diseases. The company participates in
markets for biopharmaceuticals, blood testing and vaccines.
Enzon, Inc., headquartered in Piscataway, New Jersey, researches,
develops, makes and sells enhanced therapeutics based on the application
of proprietary technologies in the areas of blood substitutes, genetic
diseases and oncology.
Genentech, Inc., headquartered in South San Francisco, California,
discovers, develops, makes and sells human pharmaceuticals based on
recombinant DNA technology (gene splicing). The company also makes and
markets certain products within the United States which are sold to F.
Hoffmann-La Roche Ltd. (HLR) for distribution outside the United States.
Genzyme Corporation (General Division), headquartered in Cambridge,
Massachusetts, develops and markets specialty therapeutic, surgical and
diagnostic products, pharmaceuticals and genetic diagnostic services.
The company also develops, makes and markets biological products for the
treatment of cartilage damage, severe burns, chronic skin ulcers and
neurodegenerative diseases.
Page 25
Human Genome Sciences, Inc., headquartered in Rockville, Maryland,
researches and develops potential proprietary drug and diagnostic
products based on the discovery and understanding of the medical uses of
genes.
IDEC Pharmaceuticals Corporation, headquartered in San Diego,
California, develops products for the long-term management of immune
system cancers and autoimmune and inflammatory diseases. The company's
lead immune system cancer and rheumatoid arthritis products are
genetically engineered to combat disease through the patient's immune
system.
Immunex Corporation, headquartered in Seattle, Washington, discovers,
develops, makes and markets therapeutic products for the treatment of
cancer, infectious diseases and immunological disorders. The company's
products are sold worldwide.
Invitrogen Corporation, headquartered in Carlsbad, California, develops,
manufactures and sells research kits and provides research services to
corporate, academic and government entities. The company's kits and
products are used in gene cloning, expression and analysis techniques as
well as other molecular biology activities.
MedImmune, Inc., headquartered in Gaithersburg, Maryland, develops and
markets products for the prevention and treatment of infectious
diseases, autoimmune diseases and cancer. The company's products are
also used in transplantation medicine.
Millennium Pharmaceuticals, Inc., headquartered in Cambridge,
Massachusetts, is a drug discovery and development company that
researches and develops a broad range of therapeutic and diagnostic
products for the commercial application of genetics, genomics and
bioinformatics.
Protein Design Labs, Inc., headquartered in Fremont, California,
develops human and humanized antibodies and other products to treat or
prevent a variety of viral, immune-mediated and inflammatory diseases as
well as certain cancers and cardiovascular conditions.
Transkaryotic Therapies, Inc., headquartered in Cambridge,
Massachusetts, develops and commercializes therapeutic proteins and gene
therapy products for the long-term treatment and cure of a broad range
of human diseases.
Pharmaceuticals
______________
American Home Products Corporation, headquartered in Madison, New
Jersey, makes nutritionals, cardiovascular and metabolic disease
therapies, mental health products, anti-inflammatory/analgesic products
and vaccines, and over-the-counter drugs. The company also makes crop
protection and pest control products.
Bristol-Myers Squibb Company, headquartered in New York, New York,
through divisions and subsidiaries, produces and distributes
pharmaceutical and non-prescription health products, toiletries and
beauty aids, and medical devices.
Glaxo Wellcome Plc (ADR), headquartered in London, England, conducts
research into and develops, makes and markets ethical pharmaceuticals
around the world. Products include gastrointestinal, respiratory, anti-
emesis, anti-migraine, systemic antibiotics, cardiovascular,
dermatological, foods and animal health.
Johnson & Johnson, headquartered in New Brunswick, New Jersey, makes and
sells pharmaceuticals, personal healthcare products, medical and
surgical equipment, and contact lenses.
Eli Lilly and Company, headquartered in Indianapolis, Indiana, with
subsidiaries, develops, makes and markets pharmaceutical and animal
health products sold in countries around the world. The company also
provides healthcare management services in the United States.
Merck & Co., Inc., headquartered in Whitehouse Station, New Jersey, is a
leading pharmaceutical concern that discovers, develops, makes and
markets a broad range of human and animal health products and services.
The company also administers managed prescription drug programs.
Novartis AG (ADR), headquartered in Basel, Switzerland, manufactures
healthcare products for use in a broad range of medical fields, as well
as nutritional and agricultural products. The company markets its
products worldwide.
Pfizer Inc., headquartered in New York, New York, produces and
distributes anti-infectives, anti-inflammatory agents, cardiovascular
agents, antifungal drugs, central nervous system agents, orthopedic
implants, food science products, animal health products, toiletries,
baby care products, dental rinse and other proprietary health items.
Roche Holdings AG (ADR), headquartered in Basel, Switzerland, develops
and manufactures pharmaceutical and chemical products. Through its
subsidiaries, the company develops pharmaceuticals and drugs, fine
Page 26
chemicals and vitamins, fragrances and flavors, diagnostic equipment and
liquid crystals. Products are distributed throughout Europe, Asia, Latin
America and the United States.
Schering-Plough Corporation, headquartered in Madison, New Jersey,
develops, makes and markets pharmaceutical and healthcare products
worldwide. Products include prescription drugs, animal health products
and over-the-counter foot care and sun care products.
SmithKline Beecham Plc (ADR), headquartered in Middlesex, England,
discovers, develops, makes and sells pharmaceuticals, vaccines, over-the-
counter medicines and health-related consumer products. The company also
provides healthcare services, including disease management, clinical
laboratory testing and pharmaceutical benefit management.
Warner-Lambert Company, headquartered in Morris Plains, New Jersey,
makes consumer healthcare products including over-the-counter health
products, shaving products and pet care products; confectionery products
including chewing gums, breath mints and hard candies; and ethical
pharmaceuticals, biologicals and empty gelatin capsules.
Communications Portfolio, Series 5.
Communications Services
________________________
ALLTEL Corporation, headquartered in Little Rock, Arkansas, through
subsidiaries, provides wireline local, long-distance, network access and
Internet services; wireless communications and information processing
management services; and advanced applications software. The company
also publishes telephone directories.
AT&T Corp., headquartered in New York, New York, provides voice, data
and video telecommunications services; regional, domestic, international
and local communication transmission services; cellular telephone and
other wireless services; and billing, directory and calling card services.
Bell Atlantic Corporation, headquartered in New York, New York, operates
a diversified telecommunications concern that provides voice and data
transport and calling services network access, directory publishing and
public telephone services to customers in the mid-Atlantic and New
England regions.
BellSouth Corporation, headquartered in Atlanta, Georgia, through its
two wholly-owned subsidiaries, BellSouth Telecommunications, Inc. and
BellSouth Enterprises, Inc., provides wireline telecommunications to
substantial portions of the population in the southeastern United States
including the states of Georgia, Alabama, Florida, Kentucky, Louisiana,
Mississippi, North Carolina, South Carolina and Tennessee. The company
also provides wireless communications, publishes telephone directories
and holds interests in communications ventures overseas.
Cable & Wireless Plc (ADR), headquartered in London, England, operates
as an international provider of telecommunications and multimedia
communications services in more than 70 countries, including the United
Kingdom, Australia, the Caribbean, Hong Kong, Japan and the United
States. The company also operates a fleet of vessels and submersible
vehicles for laying and burying cable.
Deutsche Telekom AG (ADR), headquartered in Bonn, Germany, is one of
Europe's, and the world's, largest telecommunications services
providers. The company offers domestic and international public fixed-
link voice telephone service in Germany. The company also offers data
transmission services, network services, on-line services, telephone
directory publishing, dial-in information lines, paging and mobile
telecommunications services, and supplies and services
telecommunications equipment.
MCI WorldCom, Inc., headquartered in Clinton, Mississippi, operates as a
global communications company which provides facilities-based and fully-
integrated local, long distance, international and Internet services in
over 65 countries encompassing the Americas, Europe and the Asia-Pacific
regions. The company also offers wireless and 800 services, calling
cards, private lines and debit cards.
Qwest Communications International Inc., headquartered in Denver,
Colorado, provides broadband Internet-based data, voice and image
communications for businesses and consumers. The company also constructs
and installs fiber optic systems for other communications providers and
its own use.
SBC Communications Inc., headquartered in San Antonio, Texas, provides
landline and wireless telecommunications services and equipment,
directory advertising, publishing and cable television services in
Texas, Arkansas, California, Connecticut, Kansas, Missouri, Nevada and
Oklahoma.
Page 27
Telefonica S.A. (ADR), headquartered in Madrid, Spain, is the exclusive
supplier of voice telephone services in Spain under a contract with the
Spanish State. The company also provides telecommunications services in
Argentina, Brazil, El Salvador, Peru, Portugal, Puerto Rico, the United
States and Venezuela.
Data Networking/Communications Equipment
_________________________________________
ADC Telecommunications, Inc., headquartered in Minnetonka, Minnesota,
designs, makes and markets a broad range of products and services that
enable its customers to construct and upgrade their telecommunications
networks to support increasing user demand for voice, data and video
services.
Applied Micro Circuits Corporation, headquartered in San Diego,
California, designs, makes and markets high-performance, high-bandwidth
silicon products for automated test equipment, high-speed computing and
military markets throughout the world.
Broadcom Corporation (Class A), headquartered in Irvine, California,
develops highly integrated silicon solutions that enable broadband
digital data transmission to the home and within the business enterprise.
Cisco Systems, Inc., headquartered in San Jose, California, provides
networking solutions that connect computing devices and computer
networks. The company offers various products to utilities,
corporations, universities, governments and small to medium businesses
worldwide.
Comverse Technology, Inc., headquartered in Woodbury, New York, makes
and sells computer and telecommunications systems for multimedia
communications and information processing applications, which are used
by telephone network operators, government agencies, call centers,
financial institutions and other public and commercial organizations
worldwide.
ECI Telecom Limited, headquartered in Petah Tikva, Israel, designs,
makes, sells and supports a range of advanced products that are designed
to enhance the effectiveness of existing telecommunications networks by
enabling carriers to increase transmission capacity and provide
additional services without new or additional communications
infrastructure. The company's equipment supports traffic in service
networks worldwide.
Lucent Technologies Inc., headquartered in Murray Hill, New Jersey,
designs, develops and manufactures communications systems, software and
products worldwide. The company's research and development activities
are conducted through Bell Laboratories.
Nortel Networks Corporation, headquartered in Brampton, Ontario, Canada,
makes fully-digital telecommunications switching equipment and
communications equipment and systems for business and residential use.
The company operates worldwide.
PMC-Sierra, Inc., headquartered in Burnaby, British Columbia, Canada,
designs, develops, markets and supports high-performance semiconductor
system solutions used in broadband communications infrastructures, high-
bandwidth networks and multimedia personal computers.
Tellabs, Inc., headquartered in Lisle, Illinois, makes and services
voice, data and video transport and network access systems used by
public telephone companies, long-distance carriers, alternate service
providers, cellular providers, cable operators, government agencies,
utilities and business end-users.
Vitesse Semiconductor Corporation, headquartered in Camarillo,
California, designs, develops, makes and sells digital gallium arsenide
integrated circuits primarily for telecommunications, data
communications and automated test equipment systems providers.
Wireless Communications
_______________________
Motorola, Inc., headquartered in Schaumburg, Illinois, designs, makes
and sells, mainly under the "Motorola" brand name, two-way land mobile
communication systems, paging and wireless data systems, personal
communications equipment and systems; semiconductors; and electronic
equipment for military and aerospace use.
Nokia Oy (ADR), headquartered in Espoo, Finland, supplies
telecommunications systems and equipment, including mobile phones,
battery chargers for mobile phones, computer monitors, multimedia
network terminals and satellite receivers. The company provides its
products and services worldwide.
QUALCOMM Incorporated, headquartered in San Diego, California, designs,
develops, makes, sells, licenses and operates advanced communications
systems and products based on proprietary digital wireless technology.
The company's products include "CDMA" integrated circuits, wireless
Page 28
phones and infrastructure products, transportation management
information systems and ground stations, and phones for the low-earth-
orbit satellite communications system.
Vodafone AirTouch Plc (ADR), headquartered in Newbury, Berkshire,
England, provides mobile telecommunication services, supplying its
customers with digital and analog cellular telephone, paging and
personal communications services. The company offers its services in
many countries, including Australia, Egypt, Fiji, France, Germany,
Greece, Malta, the Netherlands, New Zealand, South Africa, Sweden,
Uganda and the United States.
e-Tail Portfolio Series.
Access Providers & Portals
______________________
AT&T Corp., headquartered in New York, New York, provides voice, data
and video telecommunications services; regional, domestic, international
and local communication transmission services; cellular telephone and
other wireless services; and billing, directory and calling card services.
America Online, Inc., headquartered in Dulles, Virginia, provides online
services to consumers in the United States, Canada, Europe and Japan
offering subscribers a wide variety of services, including electronic
mail, conferencing, news, sports, Internet access, entertainment,
weather, stock quotes, software, computing support and online classes.
EarthLink Network, Inc., headquartered in Pasadena, California, is an
Internet service provider with a nationwide telecommunications network
providing reliable access, useful information, assistance and services
to its customers to encourage their introduction to the Internet.
MCI WorldCom, Inc., headquartered in Clinton, Mississippi, operates as a
global communications company which provides facilities-based and fully-
integrated local, long distance, international and Internet services in
over 65 countries encompassing the Americas, Europe and the Asia-Pacific
regions. The company also offers wireless and 800 services, calling
cards, private lines and debit cards.
Qwest Communications International Inc., headquartered in Denver,
Colorado, provides broadband Internet-based data, voice and image
communications for businesses and consumers. The company also constructs
and installs fiber optic systems for other communications providers and
its own use.
Yahoo! Inc., headquartered in Santa Clara, California, is a global
Internet media company that offers a family of branded on-line media
properties, including "YAHOO!" The company's Web site enables users to
locate and access information and services through hypertext links from
a hierarchical, subject-based directory of Web sites.
e-tailers
_______
Amazon.com, Inc., headquartered in Seattle, Washington, operates as an
on-line retailer of books, music, videotapes, audiotapes and other
products via a commercial site on the World Wide Web. Additionally, the
company is involved in hosting on-line auctions.
CDW Computer Centers, Inc., headquartered in Vernon Hills, Illinois,
sells microcomputer hardware and peripherals to business, government,
educational, institutional and home office users in the United States.
The company's products include desktop computers, notebooks and laptops,
printing devices, video monitors, communication equipment, add-on boards
and memory and data storage devices; accessories; networking products;
and software.
Dell Computer Corporation, headquartered in Round Rock, Texas, designs,
develops, makes, sells, services and supports a broad range of computer
systems, including desktops, notebooks and servers compatible with
industry standards under the "Dell" brand name. The company also sells
software, peripheral equipment, and service and support programs.
eBay Inc., headquartered in San Jose, California, operates an online
person-to-person trading community on the Internet, bringing together
buyers and sellers in an auction format to trade personal items such as
antiques, coins, collectibles, computers, memorabilia, stamps and toys.
The Gap, Inc., headquartered in San Francisco, California, operates
specialty retail stores in the United States, Canada, France, Germany,
Japan and the United Kingdom. The company's stores sell casual apparel,
shoes and other accessories for men, women and children under a variety
of brand names, including "Gap," "GapKids," "babyGap," "Banana Republic"
and "Old Navy."
Gateway Inc. (formerly Gateway 2000 Inc.), headquartered in San Diego,
California, markets personal computers (PCs) and related products and
Page 29
services. The company develops, manufactures, markets and supports a
broad line of desktop and portable personal computers, digital media
(convergence) PCs, servers, workstations and PC-related products for use
by individuals, businesses, government agencies and educational
institutions.
Intimate Brands, Inc., headquartered in San Francisco, California, sells
women's intimate apparel and related products under the "Victoria's
Secret" name; personal care products under the "Bath and Body Works"
name; and lingerie and sleepwear under the "Cacique" name. The company
sells its products throughout the United States and also owns Gryphon
Development, Inc., which creates, sources and develops personal care
products.
Lands' End, Inc., headquartered in Dodgeville, Wisconsin, sells
traditionally-styled casual clothing, accessories, domestics, shoes and
soft luggage through mail order catalogs and outlet stores.
The Charles Schwab Corporation, headquartered in San Francisco,
California, through subsidiaries, provides discount securities brokerage
and related financial services, and offers trade execution services for
Nasdaq securities to broker-dealers and institutional customers.
Wal-Mart Stores, Inc., headquartered in Bentonville, Arkansas, is one of
the largest retailers in the United States measured by total revenues.
The company operates "Wal-Mart" retail discount department stores, "Wal-
Mart Supercenters" and "Sam's" wholesale clubs in the United States and
several other countries.
Financial/Transactional Services
__________________________
American Express Company, headquartered in New York, New York, through
subsidiaries, provides travel-related services (including travelers'
cheques, American Express cards, consumer lending, tour packages and
itineraries, and publications); investors' diversified financial
products and services; and international banking services.
Capital One Financial Corporation, headquartered in Falls Church,
Virginia, through subsidiaries, issues Visa and MasterCard credit card
products to customers in the United States and the United Kingdom. The
company also provides consumer lending and deposit services.
First Data Corporation, headquartered in Atlanta, Georgia, provides
processing services to issuers of VISA and MasterCards; payment
instrument processing services to institutions and consumers; telephone
and information processing services; shareholder services; information
systems; and data processing.
Providian Financial Corporation, headquartered in San Francisco,
California, provides consumer loans, deposit products and other banking
services to consumers nationwide, including credit cards, revolving
lines of credit, home loans, secured credit cards and fee-based services.
Internet Infrastructure
__________________
BroadVision, Inc., headquartered in Redwood City, California, develops,
markets and supports application software solutions. The company
provides an integrated software application system, "BroadVision One-To-
One," that enables businesses to create applications for interactive
marketing and selling services on the World Wide Web.
Cisco Systems, Inc., headquartered in San Jose, California, provides
networking solutions that connect computing devices and computer
networks. The company offers various products to utilities,
corporations, universities, governments and small to medium businesses
worldwide.
EMC Corporation, headquartered in Hopkinton, Massachusetts, designs,
manufactures, markets and supports hardware, software and service
products for the enterprise storage market. The company's products are
sold as integrated storage solutions for customers on various computing
platforms including "UNIX" and "Windows NT."
Exodus Communications, Inc., headquartered in Santa Clara, California,
provides Internet system and network management solutions for
enterprises with mission-critical Internet operations. The company's
data centers are located throughout the United States and in England.
Hewlett-Packard Company, headquartered in Palo Alto, California,
designs, makes and services equipment and systems for measurement,
computation and communications including computer systems, personal
computers, printers, calculators, electronic test equipment, medical
electronic equipment, electronic components and instrumentation for
chemical analysis.
Intel Corporation, headquartered in Santa Clara, California, designs,
develops, makes and markets advanced microcomputer components and
related products at various levels of integration. Principal components
Page 30
consist of silicon-based semiconductors etched with complex patterns of
transistors.
International Business Machines Corporation, headquartered in Armonk,
New York, provides customer solutions through the use of advanced
information technologies. The company offers a variety of solutions that
include services, software, systems, products, financing and technologies.
Microsoft Corporation, headquartered in Redmond, Washington, develops,
manufactures, licenses and supports a wide range of software products.
The company offers operating system software, server application
software, business and consumer applications software, software
development tools and Internet and intranet software. "Windows" is the
company's flagship PC operating system. The company also develops the
MSN network of Internet products and services.
Oracle Corporation, headquartered in Redwood City, California, designs,
develops, markets and supports computer software products with a wide
variety of uses, including database management, application development
and business intelligence, and business applications.
Sun Microsystems, Inc., headquartered in Palo Alto, California, supplies
network computing products, including desktop systems, storage
subsystems, network switches, servers, software, microprocessors and a
full range of services and support, using the UNIX operating system.
Internet Portfolio, Series 8.
Access/Information Providers
____________________________
AT&T Corp., headquartered in New York, New York, provides voice, data
and video telecommunications services; regional, domestic, international
and local communication transmission services; cellular telephone and
other wireless services; and billing, directory and calling card services.
America Online, Inc., headquartered in Dulles, Virginia, provides online
services to consumers in the United States, Canada, Europe and Japan
offering subscribers a wide variety of services, including electronic
mail, conferencing, news, sports, Internet access, entertainment,
weather, stock quotes, software, computing support and online classes.
EarthLink Network, Inc., headquartered in Pasadena, California, is an
Internet service provider with a nationwide telecommunications network
providing reliable access, useful information, assistance and services
to its customers to encourage their introduction to the Internet.
MCI WorldCom, Inc., headquartered in Clinton, Mississippi, operates as a
global communications company which provides facilities-based and fully-
integrated local, long distance, international and Internet services in
over 65 countries encompassing the Americas, Europe and the Asia-Pacific
regions. The company also offers wireless and 800 services, calling
cards, private lines and debit cards.
Qwest Communications International Inc., headquartered in Denver,
Colorado, provides broadband Internet-based data, voice and image
communications for businesses and consumers. The company also constructs
and installs fiber optic systems for other communications providers and
its own use.
Data Networking/Communications Equipment
________________________________________
Broadcom Corporation (Class A), headquartered in Irvine, California,
develops highly integrated silicon solutions that enable broadband
digital data transmission to the home and within the business enterprise.
Cisco Systems, Inc., headquartered in San Jose, California, provides
networking solutions that connect computing devices and computer
networks. The company offers various products to utilities,
corporations, universities, governments and small to medium businesses
worldwide.
Lucent Technologies Inc., headquartered in Murray Hill, New Jersey,
designs, develops and manufactures communications systems, software and
products worldwide. The company's research and development activities
are conducted through Bell Laboratories.
Nortel Networks Corporation, headquartered in Brampton, Ontario, Canada,
makes fully-digital telecommunications switching equipment and
communications equipment and systems for business and residential use.
The company operates worldwide.
PMC-Sierra, Inc., headquartered in Burnaby, British Columbia, Canada,
designs, develops, markets and supports high-performance semiconductor
system solutions used in broadband communications infrastructures, high-
bandwidth networks and multimedia personal computers.
Tellabs, Inc., headquartered in Lisle, Illinois, makes and services
Page 31
voice, data and video transport, and network access systems used by
public telephone companies, long-distance carriers, alternate service
providers, cellular providers, cable operators, government agencies,
utilities and business end-users.
Vitesse Semiconductor Corporation, headquartered in Camarillo,
California, designs, develops, makes and sells digital gallium arsenide
integrated circuits primarily for telecommunications, data
communications and automated test equipment systems providers.
Computers & Peripherals
_____________________
Dell Computer Corporation, headquartered in Round Rock, Texas, designs,
develops, makes, sells, services and supports a broad range of computer
systems, including desktops, notebooks and servers compatible with
industry standards under the "Dell" brand name. The company also sells
software, peripheral equipment, and service and support programs.
EMC Corporation, headquartered in Hopkinton, Massachusetts, designs,
manufactures, markets and supports hardware, software and service
products for the enterprise storage market. The company's products are
sold as integrated storage solutions for customers on various computing
platforms including "UNIX" and "Windows NT."
Gateway Inc. (formerly Gateway 2000 Inc.), headquartered in San Diego,
California, markets personal computers (PCs) and related products and
services. The company develops, manufactures, markets and supports a
broad line of desktop and portable personal computers, digital media
(convergence) PCs, servers, workstations and PC-related products for use
by individuals, businesses, government agencies and educational
institutions.
Hewlett-Packard Company, headquartered in Palo Alto, California,
designs, makes and services equipment and systems for measurement,
computation and communications including computer systems, personal
computers, printers, calculators, electronic test equipment, medical
electronic equipment, electronic components and instrumentation for
chemical analysis.
Intel Corporation, headquartered in Santa Clara, California, designs,
develops, makes and markets advanced microcomputer components and
related products at various levels of integration. Principal components
consist of silicon-based semiconductors etched with complex patterns of
transistors.
International Business Machines Corporation, headquartered in Armonk,
New York, provides customer solutions through the use of advanced
information technologies. The company offers a variety of solutions that
include services, software, systems, products, financing and technologies.
Sun Microsystems, Inc., headquartered in Palo Alto, California, supplies
network computing products, including desktop systems, storage
subsystems, network switches, servers, software, microprocessors and a
full range of services and support, using the UNIX operating system.
Internet Content
______________
CMGI Inc., headquartered in Andover, Massachusetts, invests in and
develops Internet companies; operates direct marketing companies and
venture funds focused on the Internet; and, through subsidiaries,
provides fulfillment services.
TMP Worldwide Inc., headquartered in New York, New York, provides
comprehensive, individually tailored advertising services, including
development of creative content, media planning, production and
placement of corporate advertising, market research, direct marketing
and other ancillary products and services.
Yahoo! Inc., headquartered in Santa Clara, California, is a global
Internet media company that offers a family of branded on-line media
properties, including "YAHOO!" The company's Web site enables users to
locate and access information and services through hypertext links from
a hierarchical, subject-based directory of Web sites.
Online Brokerage
______________
Knight/Trimark Group, Inc. (Class A), headquartered in Jersey City, New
Jersey, through its subsidiaries, Trimark Securities, Inc., and Knight
Securities, Inc., operates as a market maker in Nasdaq securities, other
over-the-counter (OTC) equity securities, and equity securities listed
on the New York Stock Exchange (NYSE) and the American Stock Exchange
(AMEX).
The Charles Schwab Corporation, headquartered in San Francisco,
California, through subsidiaries, provides discount securities brokerage
and related financial services, and offers trade execution services for
Nasdaq securities to broker-dealers and institutional customers.
Software
________
BroadVision, Inc., headquartered in Redwood City, California, develops,
markets and supports application software solutions. The company
Page 32
provides an integrated software application system, "BroadVision One-To-
One," that enables businesses to create applications for interactive
marketing and selling services on the World Wide Web.
Check Point Software Technologies Ltd., headquartered in Ramat-Gan,
Israel, develops, sells and supports secure enterprise networking
solutions. The company's integrated architecture includes network
security ("FireWall-1," "VPN-1," "Open Security Manager" and "Provider-
1"), traffic control ("FloodGate-1" and "ConnectControl") and Internet
protocol address management ("Meta IP").
Exodus Communications, Inc., headquartered in Santa Clara, California,
provides Internet system and network management solutions for
enterprises with mission-critical Internet operations. The company data
centers are located throughout the United States and in England.
Intuit Inc., headquartered in Mountain View, California, develops, sells
and supports personal finance, small business accounting, tax
preparation and other consumer software products, and related electronic
services and supplies that enable users to automate commonly performed
financial tasks. The company sells its products worldwide.
Microsoft Corporation, headquartered in Redmond, Washington, develops,
manufactures, licenses and supports a wide range of software products.
The company offers operating system software, server application
software, business and consumer applications software, software
development tools and Internet and intranet software. "Windows" is the
company's flagship PC operating system. The company also develops the
MSN network of Internet products and services.
Oracle Corporation, headquartered in Redwood City, California, designs,
develops, markets and supports computer software products with a wide
variety of uses, including database management, application development
and business intelligence, and business applications.
Market Leaders Portfolio, Series 4.
American Express Company, headquartered in New York, New York, through
subsidiaries, provides travel-related services (including travelers'
cheques, American Express cards, consumer lending, tour packages and
itineraries, and publications); investors' diversified financial
products and services; and international banking services.
Berkshire Hathaway Inc. (Class B), headquartered in Omaha, Nebraska, is
a holding company with subsidiaries in a variety of business sectors.
The company sells property and casualty insurance and other insurance
products. The company also manufactures and markets home cleaning
systems, manufactures and sells confectionery products, retails home
furnishings and owns The Buffalo News. (Class B voting rights equal one-
two-hundredth (1/200th) of a vote for each share held. Class B dividend
rights equal one-thirtieth (1/30th) of the amount declared for each
Class A share held.)
The Coca-Cola Company, headquartered in Atlanta, Georgia, makes and
distributes soft drink concentrates and syrups, and also markets juice
and juice-drink products. The company's products are sold in over 200
countries and include the leading soft drink products in most of these
countries.
The Walt Disney Company, headquartered in Burbank, California, operates
as a diversified international entertainment company with operations
consisting of filmed entertainment, theme parks and resorts and consumer
products. Disney also has broadcasting (including Capital Cities/ABC,
Inc.) and publishing operations.
Freddie Mac, headquartered in McLean, Virginia, was chartered by
Congress in 1970 to create a continuous flow of funds to mortgage
lenders in support of home ownership and rental housing. The company
purchases first lien, conventional and residential mortgages, including
both whole loans and participation interests in such mortgages.
The Gillette Company, headquartered in Boston, Massachusetts, is a
worldwide manufacturer of grooming products, writing instruments and
correction products, toothbrushes and oral care appliances, and alkaline
batteries.
The Washington Post Company (Class B), headquartered in Washington,
D.C., with subsidiaries, publishes newspapers and magazines, including
The Washington Post, The Herald, The Gazette Newspapers and Newsweek;
owns and operates VHF and cable television systems; and provides
electronic information, educational, and career and hiring management
services.
Wells Fargo Company, headquartered in San Francisco, California,
operates a general banking business in a number of states and operates
mortgage banking offices throughout the United States. The company also
provides consumer finance services throughout the United States and in
Page 33
Canada, the Caribbean, Central America and Guam; and offers various
other financial services.
Retail Portfolio, Series 4.
Abercrombie & Fitch Co. (Class A), headquartered in Reynoldsburg, Ohio,
operates "Abercrombie & Fitch" stores throughout the United States
selling high-quality casual apparel for men and women. The company also
publishes the A&F Quarterly.
BJ's Wholesale Club, Inc., headquartered in Natick, Massachusetts,
operates warehouse clubs in the eastern United States with over 4.5
million members. The company sells a mix of food and general merchandise
items at discounted prices.
Bed Bath & Beyond Inc., headquartered in Union, New Jersey, operates a
chain of stores throughout the United States selling domestic
merchandise (bed linens, bath accessories and kitchen textiles) and home
furnishings (cookware, dinnerware, glassware and basic housewares).
CDW Computer Centers, Inc., headquartered in Vernon Hills, Illinois,
sells microcomputer hardware and peripherals to business, government,
educational, institutional and home office users in the United States.
The company's products include desktop computers, notebooks and laptops,
printing devices, video monitors, communication equipment, add-on boards
and memory and data storage devices; accessories; networking products;
and software.
Circuit City Stores-Circuit City Group, headquartered in Richmond,
Virginia, is one of the nation's largest retailers of brand name
consumer electronics products, including video and audio equipment, home
office products and major appliances. The company operates retail
superstores, consumer electronics-only stores and mall-based "Circuit
City Express" stores throughout the United States.
Costco Wholesale Corporation, headquartered in Issaquah, Washington,
operates a chain of wholesale cash-and-carry membership warehouses that
sell high-quality, nationally branded and selected private label
merchandise at low prices to businesses and individuals who are members
of selected employee groups. The company's warehouses are located in the
United States, Canada, Japan, Korea, Mexico, Taiwan and the United
Kingdom.
Dayton Hudson Corporation, headquartered in Minneapolis, Minnesota,
operates "Hudson's," "Marshall Field's" and "Dayton's" department
stores. The company also operates "Target" discount stores selling
everyday needs, apparel and recreational items, and "Mervyn's
California" retail stores selling mainly apparel and soft goods.
Dollar General Corporation, headquartered in Nashville, Tennessee, owns
and operates "Dollar General Stores" selling general merchandise such as
health and beauty aids, packaged food products, housewares, cleaning
supplies, stationery, seasonal goods, basic apparel and domestics. The
company's stores are located predominantly in small towns in the
midwestern and southeastern United States.
Dollar Tree Stores, Inc., headquartered in Chesapeake, Virginia,
operates discount variety stores throughout the United States which
offer merchandise at the $1 price point, including housewares, toys,
seasonal goods, gifts, food, stationery, health and beauty aids, books,
party goods, hardware and other consumer items.
The Gap, Inc., headquartered in San Francisco, California, operates
specialty retail stores in the United States, Canada, France, Germany,
Japan and the United Kingdom. The company's stores sell casual apparel,
shoes and other accessories for men, women and children under a variety
of brand names, including "Gap," "GapKids," "babyGap," "Banana Republic"
and "Old Navy."
Tommy Hilfiger Corporation, headquartered in New York, New York, through
subsidiaries, designs, sources and markets designer men's and women's
sportswear, jeanswear and childrenswear under the "Tommy Hilfiger"
trademarks. The products are sold through retail stores in the United
States and internationally.
The Home Depot, Inc., headquartered in Atlanta, Georgia, operates do-it-
yourself warehouse stores in the United States, Canada and Chile. These
stores sell a wide assortment of building material, home improvement,
and lawn and garden products. The company also operates EXPO Design
Centers in several states which offer interior design and renovation
products.
Intimate Brands, Inc., headquartered in San Francisco, California, sells
women's intimate apparel and related products under the "Victoria's
Secret" name; personal care products under the "Bath and Body Works"
Page 34
name; and lingerie and sleepwear under the "Cacique" name. The company
sells its products throughout the United States and also owns Gryphon
Development, Inc., which creates, sources and develops personal care
products.
The Kroger Co., headquartered in Cincinnati, Ohio, is one of the largest
food retailers in the United States. The company operates supermarkets
and convenience stores under the names of "Dillon Food Stores," "City
Market," "Sav-Mor," "Kwik Shop" and "Mini Mart." The company also makes
and processes food sold at its supermarkets.
Lowe's Companies, Inc., headquartered in North Wilkesboro, North
Carolina, operates numerous stores in the United States selling building
commodities and millwork; heating, cooling and water systems; home
decorating and illumination products; kitchens, bathrooms and laundries;
yard, patio and garden products; tools; home entertainment products; and
special order products.
The May Department Stores Company, headquartered in St. Louis, Missouri,
operates department stores under the trade names "Famous-Barr,"
"Filene's," "Foley's," "Hecht's," "Kaufmann's," "L.S. Ayres," "Lord &
Taylor," "Meier & Frank," "Robinsons-May" and "Strawbridge's" throughout
the United States.
Safeway Inc., headquartered in Pleasanton, California, operates a large
chain of food and drug stores in the United States and Canada under the
names of "Safeway," "Dominick's," "Vons" and "Carr-Gottstein." The
company's stores offer a wide selection of food and general merchandise
and feature specialty departments such as bakery, delicatessen, floral
and pharmacy. The company also has a network of distribution,
manufacturing and food-processing facilities and holds an interest in
Casa Ley, S.A. de C.V., an operator of food and general merchandise
stores in western Mexico.
Staples, Inc., headquartered in Framingham, Massachusetts, operates high-
volume office superstores and smaller stores throughout the United
States, Canada, Germany and the United Kingdom which provide office
supplies, business machines, computers and related products, office
furniture and other business-related products.
Walgreen Co., headquartered in Deerfield, Illinois, operates a
nationwide chain of retail drugstores throughout the United States and
Puerto Rico. The company's stores sell prescription and nonprescription
drugs, general merchandise, cosmetics, liquor and beverages, toiletries
and tobacco products. The company also operates two mail-order facilities.
Wal-Mart Stores, Inc., headquartered in Bentonville, Arkansas, is one of
the largest retailers in the United States measured by total revenues.
The company operates "Wal-Mart" retail discount department stores, "Wal-
Mart Supercenters" and "Sam's" wholesale clubs in the United States and
several other countries.
We have obtained the foregoing descriptions from sources we deem
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the per Unit price of
which is comprised of the following:
- - The aggregate underlying value of the Securities;
- - The amount of any cash in the Income and Capital Accounts;
- - Dividends receivable on Securities; and
- - The total sales charge (which combines an initial upfront sales
charge and a deferred sales charge).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities and changes in
the value of the Income and/or Capital Accounts.
Securities purchased with the portion of the Public Offering Price
intended to be used to reimburse the Sponsor for a Trust's organization
costs (including costs of preparing the registration statement, the
Indenture and other closing documents, registering Units with the
Securities and Exchange Commission ("SEC") and states, the initial audit
of each Trust portfolio, legal fees and the initial fees and expenses of
the Trustee) will be purchased in the same proportionate relationship as
all the Securities contained in a Trust. Securities will be sold to
reimburse the Sponsor for a Trust's organization costs at the earlier of
Page 35
six months after the Initial Date of Deposit or the end of the initial
offering period (a significantly shorter time period than the life of
the Trusts). During the period ending with the earlier of six months
after the Initial Date of Deposit or the end of the initial offering
period, there may be a decrease in the value of the Securities. To the
extent the proceeds from the sale of these Securities are insufficient
to repay the Sponsor for Trust organization costs, the Trustee will sell
additional Securities to allow a Trust to fully reimburse the Sponsor.
In that event, the net asset value per Unit of a Trust will be reduced
by the amount of additional Securities sold. Although the dollar amount
of the reimbursement due to the Sponsor will remain fixed and will never
exceed the per Unit amount set forth for a Trust in "Notes to Statements
of Net Assets," this will result in a greater effective cost per Unit to
Unit holders for the reimbursement to the Sponsor. To the extent actual
organization costs are less than the estimated amount, only the actual
organization costs will be deducted from the assets of a Trust. When
Securities are sold to reimburse the Sponsor for organization costs, the
Trustee will sell Securities, to the extent practicable, which will
maintain the same proportionate relationship among the Securities
contained in a Trust as existed prior to such sale.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Minimum Purchase.
The minimum amount you can purchase of a Trust is $1,000 worth of Units
($500 if you are purchasing Units for your Individual Retirement Account
or any other qualified retirement plan).
Sales Charges.
The sales charge you will pay has both an initial and a deferred
component. The initial sales charge, which you will pay at the time of
purchase, is initially equal to approximately 1.0% of the Public
Offering Price of a Unit. This initial sales charge is actually equal to
the difference between the maximum sales charge of 4.5% of the Public
Offering Price and the maximum remaining deferred sales charge
(initially $.35 per Unit). The initial sales charge will vary from 1.0%
with changes in the aggregate underlying value of the Securities,
changes in the Income and Capital Accounts and as deferred sales charge
payments are made. In addition, five monthly deferred sales charge
payments of $.07 per Unit will be deducted from each Trust's assets on
approximately the twentieth day of each month from May 19, 2000 through
September 20, 2000. The maximum sales charge assessed during the initial
offering period will be 4.5% of the Public Offering Price per Unit
(equivalent to 4.545% of the net amount invested, exclusive of the
deferred sales charge).
After the initial offering period, if you purchase Units after the last
deferred sales charge payment has been assessed, your sales charge will
consist of a one-time initial sales charge of 4.5% of the Public
Offering Price (equivalent to 4.712% of the net amount invested), which
will be reduced by 1/2 of 1% on each subsequent October 31, commencing
October 31, 2000, to a minimum sales charge of 3.0%.
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for a "wrap
fee account" as described below), the maximum sales charge is reduced,
as follows:
Your maximum
If you invest sales charge
(in thousands):* will be:
_________________ ________________
$50 but less than $100 4.25%
$100 but less than $250 4.00%
$250 but less than $500 3.50%
$500 or more 2.50%
* Breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be
applied on whichever basis is more favorable to the investor. The
breakpoints will be adjusted to take into consideration purchase orders
stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer. To
help you reach the above levels, you can combine the Units you purchase
of the Trusts in this prospectus with any other same day purchases of
Page 36
other trusts for which we are Principal Underwriter and are currently in
the initial offering period. In addition, we will also consider Units
you purchase in the name of your spouse or child under 21 years of age
to be purchases by you. The reduced sales charges will also apply to a
trustee or other fiduciary purchasing Units for a single trust estate or
single fiduciary account. You must inform your dealer of any combined
purchases before the sale in order to be eligible for the reduced sales
charge. Any reduced sales charge is the responsibility of the
broker/dealer or other selling agent making the sale.
If you own units of any other unit investment trusts sponsored by us you
may use your redemption or termination proceeds from these trusts to
purchase Units of the Trusts subject only to any remaining deferred
sales charge to be collected on Units of the Trusts. Please note that
you will be charged the amount of any remaining deferred sales charge on
units you redeem when you redeem them.
The following persons may purchase Units at the Public Offering Price
less the applicable dealer concession:
- - Employees, officers and directors of the Sponsor, our related
companies, dealers and their affiliates, and vendors providing services
to us.
- - Immediate family members of the above (spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-
in-law, sons-in-law and daughters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons).
If you purchase Units through registered broker/dealers who charge
periodic fees for financial planning, investment advisory or asset
management services or provide these services as part of an investment
account where a comprehensive "wrap fee" charge is imposed, you may
purchase Units at the Public Offering Price, subject only to the
Sponsor's retention of the sales charge. See "Distribution of Units-
Dealer Concessions."
You will be charged the deferred sales charge per Unit regardless of any
discounts. However, if you are eligible to receive a discount such that
the maximum sales charge you must pay is less than the applicable
maximum deferred sales charge, you will be credited the difference
between your maximum sales charge and the maximum deferred sales charge
at the time you buy your Units.
The Value of the Securities.
The Evaluator will appraise the aggregate underlying value of the
Securities in a Trust as of the Evaluation Time on each business day and
will adjust the Public Offering Price of the Units according to this
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the
Trustee receive orders for purchases, sales or redemptions after that
time, or on a day which is not a business day, they will be held until
the next determination of price. The term "business day" as used in this
prospectus will exclude Saturdays, Sundays and certain national holidays
on which the NYSE is closed.
The aggregate underlying value of the Securities in a Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, their value is generally based on
the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). However, if there is no closing sale price on that exchange
or system, they are valued based on the closing ask prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, their value will
generally be based on the current ask prices on the over-the-counter
market (unless it is determined that these prices are not appropriate as
a basis for valuation). If current ask prices are unavailable, the
valuation is generally determined:
a) On the basis of current ask prices for comparable securities;
b) By appraising the value of the Securities on the ask side of the
market; or
c) By any combination of the above.
After the initial offering period is over, the aggregate underlying
value of the Securities will be determined in the same manner as set
forth above, except that bid prices are used instead of ask prices when
necessary.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
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Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
reflect a concession or agency commission of 3.2% of the Public Offering
Price per Unit (or 65% of the maximum sales charge after October 31,
2000). However, dealers and other selling agents will receive a
concession on the sale of Units subject only to any remaining deferred
sales charge equal to $.22 per Unit on Units sold subject to the maximum
deferred sales charge or 63% of the then current maximum remaining
deferred sales charge on Units sold subject to less than the maximum
deferred sales charge. Dealers and other selling agents will receive an
additional volume concession or agency commission of .30% of the Public
Offering Price if they purchase at least $100,000 worth of Units of the
Trusts on the Initial Date of Deposit or $250,000 on any day thereafter
or if they were eligible to receive a similar concession in connection
with sales of similarly structured trusts sponsored by us which are
currently in the initial offering period.
Dealers and other selling agents who sell Units of the Trusts during the
initial offering period in the dollar amounts shown below will be
entitled to the following additional sales concessions as a percentage
of the Public Offering Price:
Total Sales
per Trust Additional
(in millions): Concession:
_________________ ________________
$1 but less than $2 .10%
$2 but less than $3 .15%
$3 but less than $10 .20%
$10 or more .30%
Dealers and other selling agents who, during any consecutive 12-month
period, sell at least $2 billion worth of primary market units of unit
investment trusts sponsored by us will receive a concession of $30,000
in the month following the achievement of this level. We reserve the
right to change the amount of concessions or agency commissions from
time to time. Certain commercial banks may be making Units of the Trusts
available to their customers on an agency basis. A portion of the sales
charge paid by these customers is kept by or given to the banks in the
amounts shown above.
Award Programs.
From time to time we may sponsor programs which provide awards to a
dealer's registered representatives who have sold a minimum number of
Units during a specified time period. We may also pay fees to qualifying
dealers for services or activities which are meant to result in sales of
Units of the Trusts. In addition, we will pay to dealers who sponsor
sales contests or recognition programs that conform to our criteria, or
participate in our sales programs, amounts equal to no more than the
total applicable sales charges on Units sold by such persons during such
programs. We make these payments out of our own assets and not out of
Trust assets. These programs will not change the price you pay for your
Units.
Investment Comparisons.
From time to time we may compare the estimated returns of the Trusts
(which may show performance net of the expenses and charges the Trusts
would have incurred) and returns over specified periods of other similar
trusts we sponsor in our advertising and sales materials, with (1)
returns on other taxable investments such as the common stocks
comprising various market indexes, corporate or U.S. Government bonds,
bank CDs and money market accounts or funds, (2) performance data from
Morningstar Publications, Inc. or (3) information from publications such
as Money, The New York Times, U.S. News and World Report, Business Week,
Forbes or Fortune. The investment characteristics of each Trust differ
from other comparative investments. You should not assume that these
performance comparisons will be representative of a Trust's future
performance.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales
charge per Unit of a Trust less any reduced sales charge as stated in
"Public Offering." Also, any difference between our cost to purchase the
Securities and the price at which we sell them to a Trust is considered
a profit or loss (see Note 2 of "Notes to Schedules of Investments").
During the initial offering period, dealers and others may also realize
profits or sustain losses as a result of fluctuations in the Public
Offering Price they receive when they sell the Units.
In maintaining a market for the Units, any difference between the price
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at which we purchase Units and the price at which we sell or redeem them
will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units
after the initial offering period and continuously offer to purchase
Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees, Trustee costs to transfer and record the ownership of
Units and costs incurred in annually updating a Trust's registration
statement. We may discontinue purchases of Units at any time. IF YOU
WISH TO DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET
PRICES BEFORE MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. If you sell
or redeem your Units before you have paid the total deferred sales
charge on your Units, you will have to pay the remainder at that time.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid is equal to or greater than the Redemption Price per Unit, we may
purchase the Units. You will receive your proceeds from the sale no
later than if they were redeemed by the Trustee. We may tender Units
that we hold to the Trustee for redemption as any other Units. If we
elect not to purchase Units, the Trustee may sell tendered Units in the
over-the-counter market, if any. However, the amount you will receive is
the same as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of each Trust are listed under "Fee
Table." If actual expenses of a Trust exceed the estimate, that Trust
will bear the excess. The Trustee will pay operating expenses of a Trust
from the Income Account of such Trust if funds are available, and then
from the Capital Account. The Income and Capital Accounts are
noninterest-bearing to Unit holders, so the Trustee may earn interest on
these funds, thus benefiting from their use.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trusts, and will receive brokerage fees
when a Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. Legal and regulatory filing fees and expenses
associated with updating a Trust's registration statement yearly are
also now chargeable to that Trust. Historically, we paid these fees and
expenses. First Trust Advisors L.P., an affiliate of ours, acts as both
Portfolio Supervisor and Evaluator to the Trusts and will receive the
fees set forth under "Fee Table" for providing portfolio supervisory and
evaluation services to the Trusts. In providing portfolio supervisory
services, the Portfolio Supervisor may purchase research services from a
number of sources, which may include underwriters or dealers of the
Trusts.
The fees payable to us, First Trust Advisors L.P. and the Trustee are
based on the largest aggregate number of Units of a Trust outstanding at
any time during the calendar year, except during the initial offering
period, in which case these fees are calculated based on the largest
number of Units outstanding during the period for which compensation is
paid. These fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fees paid to us or our
affiliates for providing a given service to all unit investment trusts
for which we provide such services be more than the actual cost of
providing such services in such year.
In addition to a Trust's operating expenses and those fees described
above, each Trust may also incur the following charges:
- - All legal and annual auditing expenses of the Trustee according to its
responsibilities under the Indenture;
- - The expenses and costs incurred by the Trustee to protect a Trust and
your rights and interests;
- - Fees for any extraordinary services the Trustee performed under the
Indenture;
- - Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of a Trust;
- - Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of a
Trust; and/or
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- - All taxes and other government charges imposed upon the Securities or
any part of a Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
the Trusts. Since the Securities are all common stocks and dividend
income is unpredictable, we cannot guarantee that dividends will be
sufficient to meet any or all expenses of the Trusts. If there is not
enough cash in the Income or Capital Account, the Trustee has the power
to sell Securities in a Trust to make cash available to pay these
charges which may result in capital gains or losses to you. See "Tax
Status."
The Trusts will be audited annually. So long as we are making a
secondary market for Units, we will bear the cost of these annual audits
to the extent the cost exceeds $0.0050 per Unit. Otherwise, the Trusts
will pay for the audit. You can request a copy of the audited financial
statements from the Trustee.
Tax Status
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trusts. This section is current as
of the date of this prospectus. Tax laws and interpretations change
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, these summaries generally do
not describe your situation if you are a non-U.S. person, a
broker/dealer, or other investor with special circumstances. In
addition, this section does not describe your state or foreign taxes. As
with any investment, you should consult your own tax professional about
your particular consequences.
Trust Status.
The Trusts will not be taxed as corporations for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Securities and other assets held by your Trust, and
as such you will be considered to have received a pro rata share of
income (i.e., dividends and capital gains, if any) from each Security
when such income is considered to be received by your Trust. This is
true even if you elect to have your distributions automatically
reinvested into additional Units. In addition, the income from a Trust
which you must take into account for federal income tax purposes is not
reduced by amounts used to pay a deferred sales charge.
Your Tax Basis and Income or Loss upon Disposition.
If your Trust disposes of Securities, you will generally recognize gain
or loss. If you dispose of your Units or redeem your Units for cash, you
will also generally recognize gain or loss. To determine the amount of
this gain or loss, you must subtract your tax basis in the related
Securities from your share of the total proceeds received in the
transaction. You can generally determine your initial tax basis in each
Security or other Trust asset by apportioning the cost of your Units
among each Security or other Trust asset ratably according to their
value on the date you purchase your Units. In certain circumstances,
however, you may have to adjust your tax basis after you purchase your
Units (for example, in the case of certain dividends that exceed a
corporation's accumulated earnings and profits).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (10% for certain taxpayers in the lowest
tax bracket). Net capital gain equals net long-term capital gain minus
net short-term capital loss for the taxable year. Capital gain or loss
is long-term if the holding period for the asset is more than one year
and is short-term if the holding period for the asset is one year or
less. You must exclude the date you purchase your Units to determine the
holding period of your Units. The tax rates for capital gains realized
from assets held for one year or less are generally the same as for
ordinary income. The tax code may, however, treat certain capital gains
as ordinary income in special situations.
In-Kind Distributions.
Under certain circumstances, you may request a distribution of shares of
Securities (an "In-Kind Distribution") when you redeem your Units or at
a Trust's termination. If you request an In-Kind Distribution you will
be responsible for any expenses related to this distribution. By
electing to receive an In-Kind Distribution, you will receive an
undivided interest in whole shares of stock plus, possibly, cash.
You will not recognize gain or loss if you only receive Securities in
exchange for your pro rata portion of the Securities held by a Trust.
However, if you also receive cash in exchange for a fractional share of
a Security held by a Trust, you will generally recognize gain or loss
Page 40
based on the difference between the amount of cash you receive and your
tax basis in such fractional share of the Security.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of a Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by a Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of the Trusts as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Some distributions by a Trust may be subject to foreign withholding
taxes. Any dividends withheld will nevertheless be treated as income to
you. However, because you are deemed to have paid directly your share of
foreign taxes that have been paid or accrued by a Trust, you may be
entitled to a foreign tax credit or deduction for U.S. tax purposes with
respect to such taxes.
Under the existing income tax laws of the State and City of New York,
the Trusts will not be taxed as corporations, and the income of the
Trusts will be treated as the income of the Unit holders in the same
manner as for federal income tax purposes. You should consult your tax
advisor regarding potential foreign, state or local taxation with
respect to your Units.
Retirement Plans
You may purchase Units of the Trusts for:
- - Individual Retirement Accounts;
- - Keogh Plans;
- - Pension funds; and
- - Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
advisor. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. It is your responsibility to notify the Trustee when
you become Record Owner, but normally your broker/dealer provides this
notice. You may elect to hold your Units in either certificated or
uncertificated form.
Certificated Units. When you purchase your Units you can request that
they be evidenced by certificates, which will be delivered shortly after
your order. Certificates will be issued in fully registered form,
transferable only on the books of the Trustee in denominations of one
Unit or any multiple thereof. You can transfer or redeem your
certificated Units by endorsing and surrendering the certificate to the
Trustee, along with a written instrument of transfer. You must sign your
name exactly as it appears on the face of the certificate with signature
guaranteed by an eligible institution. In certain cases the Trustee may
require additional documentation before they will transfer or redeem
your Units.
You may be required to pay a nominal fee to the Trustee for each
certificate reissued or transferred, and to pay any government charge
that may be imposed for each transfer or exchange. If a certificate gets
lost, stolen or destroyed, you may be required to furnish indemnity to
the Trustee to receive replacement certificates. You must surrender
mutilated certificates to the Trustee for replacement.
Uncertificated Units. You may also choose to hold your Units in
uncertificated form. If you choose this option, the Trustee will
establish an account for you and credit your account with the number of
Units you purchase. Within two business days of the issuance or transfer
of Units held in uncertificated form, the Trustee will send you:
- - A written initial transaction statement containing a description of
the Trust;
- - The number of Units issued or transferred;
- - Your name, address and Taxpayer Identification Number ("TIN");
Page 41
- - A notation of any liens or restrictions of the issuer and any adverse
claims; and
- - The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per Unit amount of income (if any)
distributed. After the end of each calendar year, the Trustee will
provide you with the following information:
- - A summary of transactions in your Trust for the year;
- - Any Securities sold during the year and the Securities held at the
end of that year by your Trust;
- - The Redemption Price per Unit, computed on the 31st day of December
of such year (or the last business day before); and
- - Amounts of income and capital distributed during the year.
You may request from the Trustee copies of the evaluations of the
Securities as prepared by the Evaluator to enable you to comply with
federal and state tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit dividends received on a
Trust's Securities to the Income Account of such Trust. All other
receipts, such as return of capital, are credited to the Capital Account
of such Trust.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." No income distribution will be paid if accrued expenses of
a Trust exceed amounts in the Income Account on the Income Distribution
Dates. Distribution amounts will vary with changes in a Trust's fees and
expenses, in dividends received and with the sale of Securities. The
Trustee will distribute amounts in the Capital Account, net of amounts
designated to meet redemptions, pay the deferred sales charge or pay
expenses on the last day of each month to Unit holders of record on the
fifteenth day of each month provided the amount equals at least $1.00
per 100 Units. provided the amount equals at least $1.00 per 100 Units.
If the Trustee does not have your TIN, it is required to withhold a
certain percentage of your distribution and deliver such amount to the
Internal Revenue Service ("IRS"). You may recover this amount by giving
your TIN to the Trustee, or when you file a tax return. However, you
should check your statements to make sure the Trustee has your TIN to
avoid this "back-up withholding."
We anticipate that there will be enough money in the Capital Account of
a Trust to pay the deferred sales charge. If not, the Trustee may sell
Securities to meet the shortfall.
Within a reasonable time after a Trust is terminated, you will receive
the pro rata share of the money from the sale of the Securities.
However, if you are eligible, you may elect to receive an In-Kind
Distribution as described under "Amending or Terminating the Indenture."
You will receive a pro rata share of any other assets remaining in your
Trust after deducting any unpaid expenses.
The Trustee may establish reserves (the "Reserve Account") within a
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of such Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust by notifying the Trustee at least 10 days before any
Record Date. Each later distribution of income and/or capital on your
Units will be reinvested by the Trustee into additional Units of your
Trust. You will have to pay the remaining deferred sales charge on any
Units acquired pursuant to this distribution reinvestment option. This
option may not be available in all states. PLEASE NOTE THAT EVEN IF YOU
REINVEST DISTRIBUTIONS, THEY ARE STILL CONSIDERED DISTRIBUTIONS FOR
INCOME TAX PURPOSES.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending the
certificates representing the Units you want to redeem to the Trustee at
Page 42
its unit investment trust office. If your Units are uncertificated, you
need only deliver a request for redemption to the Trustee. In either
case, the certificates or the redemption request must be properly
endorsed with proper instruments of transfer and signature guarantees as
explained in "Rights of Unit Holders-Unit Ownership" (or by providing
satisfactory indemnity if the certificates were lost, stolen, or
destroyed). No redemption fee will be charged, but you are responsible
for any governmental charges that apply. Three business days after the
day you tender your Units (the "Date of Tender") you will receive cash
in an amount for each Unit equal to the Redemption Price per Unit
calculated at the Evaluation Time on the Date of Tender.
The Date of Tender is considered to be the date on which the Trustee
receives your certificates or redemption request (if such day is a day
the NYSE is open for trading). However, if your certificates or
redemption request are received after 4:00 p.m. Eastern time (or after
any earlier closing time on a day on which the NYSE is scheduled in
advance to close at such earlier time), the Date of Tender is the next
day the NYSE is open for trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account if funds are available for that purpose, or from
the Capital Account. All other amounts paid on redemption will be taken
from the Capital Account. The IRS will require the Trustee to withhold a
portion of your redemption proceeds if it does not have your TIN, as
generally discussed under "Income and Capital Distributions."
If you tender 1,000 Units or more for redemption, rather than receiving
cash, you may elect to receive an In-Kind Distribution in an amount
equal to the Redemption Price per Unit by making this request in writing
to the Trustee at the time of tender. However, no In-Kind Distribution
requests submitted during the nine business days prior to a Trust's
Mandatory Termination Date will be honored. Where possible, the Trustee
will make an In-Kind Distribution by distributing each of the Securities
in book-entry form to your bank or broker/dealer account at the
Depository Trust Company. The Trustee will subtract any customary
transfer and registration charges from your In-Kind Distribution. As a
tendering Unit holder, you will receive your pro rata number of whole
shares of the Securities that make up the portfolio, and cash from the
Capital Account equal to the fractional shares to which you are entitled.
The Trustee may sell Securities to make funds available for redemption.
If Securities are sold, the size and diversification of a Trust will be
reduced. These sales may result in lower prices than if the Securities
were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- - If the NYSE is closed (other than customary weekend and holiday
closings);
- - If the SEC determines that trading on the NYSE is restricted or that
an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- - For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of a Trust not designated to
purchase Securities;
2. the aggregate value of the Securities held in a Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of a Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of a Trust, if any;
4. cash held for distribution to Unit holders of record of a Trust as of
the business day before the evaluation being made; and
5. other liabilities incurred by a Trust; and
dividing
1. the result by the number of outstanding Units of a Trust.
Any remaining deferred sales charge on the Units when you redeem them
will be deducted from your redemption proceeds. In addition, until the
earlier of six months after the Initial Date of Deposit or the end of
the initial offering period, the Redemption Price per Unit will include
estimated organization costs as set forth under "Fee Table."
Page 43
Removing Securities from a Trust
The portfolios of the Trusts are not managed. However, we may, but are
not required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- - The issuer of the Security defaults in the payment of a declared
dividend;
- - Any action or proceeding prevents the payment of dividends;
- - There is any legal question or impediment affecting the Security;
- - The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- - The issuer has defaulted on the payment of any other of its
outstanding obligations; or
- - The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to a Trust.
Except in the limited instance in which a Trust acquires Replacement
Securities, as described in "The FT Series," a Trust may not acquire any
securities or other property other than the Securities. The Trustee, on
behalf of the Trusts, will reject any offer for new or exchanged
securities or property in exchange for a Security, such as those
acquired in a merger or other transaction. If such exchanged securities
or property are nevertheless acquired by a Trust, at our instruction,
they will either be sold or held in such Trust. In making the
determination as to whether to sell or hold the exchanged securities or
property we may get advice from the Portfolio Supervisor. Any proceeds
received from the sale of Securities, exchanged securities or property
will be credited to the Capital Account for distribution to Unit holders
or to meet redemption requests. The Trustee may retain and pay us or an
affiliate of ours to act as agent for a Trust to facilitate selling
Securities, exchanged securities or property from the Trusts. If we or
our affiliate act in this capacity, we will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
The Trustee may sell Securities designated by us or, absent our
direction, at its own discretion, in order to meet redemption requests
or pay expenses. In designating Securities to be sold, we will try to
maintain the proportionate relationship among the Securities. If this is
not possible, the composition and diversification of a Trust may be
changed. To get the best price for a Trust we may specify minimum
amounts (generally 100 shares) in which blocks of Securities are to be
sold. We may consider sales of units of unit investment trusts which we
sponsor when we make recommendations to the Trustee as to which
broker/dealers they select to execute a Trust's portfolio transactions,
or when acting as agent for a Trust in acquiring or selling Securities
on behalf of the Trusts.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- - To cure ambiguities;
- - To correct or supplement any defective or inconsistent provision;
- - To make any amendment required by any governmental agency; or
- - To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trusts will terminate on
the Mandatory Termination Date. The Trusts may be terminated earlier:
- - Upon the consent of 100% of the Unit holders of a Trust;
- - If the value of the Securities owned by a Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- - In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination, the Trustee will send written notice to all Unit
holders which will specify how you should tender your certificates, if
any, to the Trustee. If a Trust is terminated due to this last reason,
we will refund your entire sales charge; however, termination of a Trust
before the Mandatory Termination Date for any other stated reason will
result in all remaining unpaid deferred sales charges on your Units
Page 44
being deducted from your termination proceeds. For various reasons, a
Trust may be reduced below the Discretionary Liquidation Amount and
could therefore be terminated before the Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of a Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner and timing of the sale of
Securities. Because the Trustee must sell the Securities within a
relatively short period of time, the sale of Securities as part of the
termination process may result in a lower sales price than might
otherwise be realized if such sale were not required at this time.
If you own at least 1,000 Units of a Trust the Trustee will send you a
form at least 30 days prior to the Mandatory Termination Date which will
enable you to receive an In-Kind Distribution (reduced by customary
transfer and registration charges) rather than the typical cash
distribution. You must notify the Trustee at least ten business days
prior to the Mandatory Termination Date if you elect this In-Kind
Distribution option. If you do not elect to participate in the In-Kind
Distribution option, you will receive a cash distribution from the sale
of the remaining Securities, along with your interest in the Income and
Capital Accounts, within a reasonable time after such Trust is
terminated. Regardless of the distribution involved, the Trustee will
deduct from the Trusts any accrued costs, expenses, advances or
indemnities provided for by the Indenture, including estimated
compensation of the Trustee and costs of liquidation and any amounts
required as a reserve to pay any taxes or other governmental charges.
Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, Nike Securities L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust"
brand name and other securities. An Illinois limited partnership formed
in 1991, we act as Sponsor for successive series of:
- - The First Trust Combined Series
- - FT Series (formerly known as The First Trust Special Situations Trust)
- - The First Trust Insured Corporate Trust
- - The First Trust of Insured Municipal Bonds
- - The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $25 billion in First Trust unit
investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(630) 241-4141. As of December 31, 1998, the total partners' capital of
Nike Securities L.P. was $18,506,548 (audited).
This information refers only to us and not to the Trusts or to any
series of the Trusts or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
The Trustee.
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. If you have questions regarding the Trusts, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities for the
Trusts; it only provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for
not taking any action in good faith according to the Indenture. We will
also not be accountable for errors in judgment. We will only be liable
for our own willful misfeasance, bad faith, gross negligence (ordinary
negligence in the Trustee's case) or reckless disregard of our
Page 45
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- - Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC;
- - Terminate the Indenture and liquidate the Trusts; or
- - Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information,
but will not be liable to the Trustee, Sponsor or Unit holders for
errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to federal tax law. Carter, Ledyard &
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trusts.
Experts.
Ernst & Young LLP, independent auditors, have audited the Trusts'
statements of net assets, including the schedules of investments, at the
opening of business on the Initial Date of Deposit, as set forth in
their report. We've included the Trusts' statements of net assets,
including the schedules of investments, in the prospectus and elsewhere
in the registration statement in reliance on Ernst & Young LLP's report,
given on their authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
Page 46
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Page 47
FIRST TRUST (registered trademark)
America's Leading Brands Portfolio, Series 6
Biotechnology Portfolio Series
Communications Portfolio, Series 5
e-Tail Portfolio Series
Internet Portfolio, Series 8
Market Leaders Portfolio, Series 4
Retail Portfolio, Series 4
FT 371
Sponsor:
NIKE SECURITIES L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
This prospectus contains information relating to the above-mentioned
unit investment trusts, but does not contain all of the information
about this investment company as filed with the Securities and Exchange
Commission in Washington, D.C. under the:
- -Securities Act of 1933 (file no. 333-87783) and
- - Investment Company Act of 1940 (file no. 811-05903)
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W., Washington, D.C. 20549-6009
Call: 1-800-SEC-0330
Visit: http://www.sec.gov
October 15, 1999
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 44
First Trust (registered trademark)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of unit investment trusts ("Trusts")
contained in FT 371 not found in the prospectus for the Trusts. This
Information Supplement is not a prospectus and does not include all of
the information that a prospective investor should consider before
investing in a Trust. This Information Supplement should be read in
conjunction with the prospectus for the Trust in which an investor is
considering investing.
This Information Supplement is dated October 15, 1999. Capitalized terms
have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 1
Litigation
Microsoft Corporation 2
Concentrations
Biotechnology/Pharmaceutical 2
Communications 3
Consumer Products 3
Electronic Commerce 3
Market Leaders Portfolio 4
Retail 4
Technology 4
Risk Factors
Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the Securities or
the general condition of the relevant stock market may worsen, and the
value of the Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value, as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Both U.S. and foreign
markets have experienced substantial volatility and significant declines
recently as a result of certain or all of these factors.
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. Common stocks do not represent an obligation of
the issuer and, therefore, do not offer any assurance of income or
provide the same degree of protection of capital as do debt securities.
The issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer
to declare or pay dividends on its common stock or the rights of holders
of common stock with respect to assets of the issuer upon liquidation or
bankruptcy.
Foreign Issuers. Since certain of the Securities included in the Trusts
consist of securities of foreign issuers, an investment in the Trusts
involves certain investment risks that are different in some respects
from an investment in a trust which invests entirely in the securities
of domestic issuers. These investment risks include future political or
governmental restrictions which might adversely affect the payment or
receipt of payment of dividends on the relevant Securities, the
possibility that the financial condition of the issuers of the
Securities may become impaired or that the general condition of the
relevant stock market may worsen (both of which would contribute
directly to a decrease in the value of the Securities and thus in the
value of the Units), the limited liquidity and relatively small market
capitalization of the relevant securities market, expropriation or
confiscatory taxation, economic uncertainties and foreign currency
devaluations and fluctuations. In addition, for foreign issuers that are
Page 1
not subject to the reporting requirements of the Securities Exchange Act
of 1934, there may be less publicly available information than is
available from a domestic issuer. Also, foreign issuers are not
necessarily subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those
applicable to domestic issuers. The securities of many foreign issuers
are less liquid and their prices more volatile than securities of
comparable domestic issuers. In addition, fixed brokerage commissions
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and issuers
in foreign countries than there is in the United States. However, due to
the nature of the issuers of the Securities selected for the Trusts, the
Sponsor believes that adequate information will be available to allow
the Supervisor to provide portfolio surveillance for the Trusts.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the U.S. dollar value of these securities will vary
with fluctuations in the U.S. dollar foreign exchange rates for the
various Securities.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trusts are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trusts of dividends due on, or proceeds
from the sale of, the Securities. However, there can be no assurance
that exchange control regulations might not be adopted in the future
which might adversely affect payment to the Trusts. The adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the
Trusts and on the ability of the Trusts to satisfy its obligation to
redeem Units tendered to the Trustee for redemption. In addition,
restrictions on the settlement of transactions on either the purchase or
sale side, or both, could cause delays or increase the costs associated
with the purchase and sale of the foreign Securities and correspondingly
could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to the Trusts relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trusts will generally be effected only in foreign securities
markets. Although the Sponsor does not believe that the Trusts will
encounter obstacles in disposing of the Securities, investors should
realize that the Securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as
liquid as those in the United States. The value of the Securities will
be adversely affected if trading markets for the Securities are limited
or absent.
Litigation
Microsoft Corporation. Microsoft Corporation is currently engaged in
litigation with Sun Microsystems, Inc., the U.S. Department of Justice,
several state Attorneys General and Caldera, Inc. The complaints against
Microsoft include copyright infringement, unfair competition and anti-
trust violations. The claims seek injunctive relief and monetary
damages. As of September 28, 1999, Microsoft's management asserted that
resolving these matters will not have a material adverse impact on its
financial position or its results of operation.
Concentrations
Biotechnology/Pharmaceutical. An investment in Units of the
Biotechnology Portfolio should be made with an understanding of the
problems and risks such an investment may entail.
Companies involved in advanced medical devices and instruments, drugs
and biotech have potential risks unique to their sector of the
healthcare field. These companies are subject to governmental regulation
of their products and services, a factor which could have a significant
and possibly unfavorable effect on the price and availability of such
products or services. Furthermore, such companies face the risk of
increasing competition from new products or services, generic drug
sales, the termination of patent protection for drug or medical supply
products and the risk that technological advances will render their
products obsolete. The research and development costs of bringing a drug
to market are substantial, and include lengthy governmental review
processes with no guarantee that the product will ever come to market.
Many of these companies may have losses and may not offer certain
products for several years. Such companies may also have persistent
losses during a new product's transition from development to production,
and revenue patterns may be erratic.
As the population of the United States ages, the companies involved in
the healthcare field will continue to search for and develop new drugs,
medical products and medical services through advanced technologies and
diagnostics. On a worldwide basis, such companies are involved in the
development and distributions of drugs, vaccines, medical products and
medical services. These activities may make the
biotechnology/pharmaceuticals sector very attractive for investors
seeking the potential for growth in their investment portfolio. However,
Page 2
there are no assurances that the Trust's objectives will be met.
Legislative proposals concerning healthcare are proposed in Congress
from time to time. These proposals span a wide range of topics,
including cost and price controls (which might include a freeze on the
prices of prescription drugs). The Sponsor is unable to predict the
effect of any of these proposals, if enacted, on the issuers of
Securities in the Trust.
Communications. An investment in Units of the Communications Portfolio
should be made with an understanding of the problems and risks such an
investment may entail. The market for high-technology communications
products and services is characterized by rapidly changing technology,
rapid product obsolescence, cyclical market patterns, evolving industry
standards and frequent new product introductions. The success of the
issuers of the Securities depends in substantial part on the timely and
successful introduction of new products and services. An unexpected
change in one or more of the technologies affecting an issuer's products
or in the market for products based on a particular technology could
have a material adverse affect on an issuer's operating results.
Furthermore, there can be no assurance that the issuers of the
Securities will be able to respond in a timely manner to compete in the
rapidly developing marketplace.
The communications industry is subject to governmental regulation.
However, as market forces develop, the government will continue to
deregulate the communications industry, promoting vigorous economic
competition and resulting in the rapid development of new communications
technologies. The products and services of communications companies may
be subject to rapid obsolescence. These factors could affect the value
of the Trust's Units. For example, while telephone companies in the
United States are subject to both state and federal regulations
affecting permitted rates of returns and the kinds of services that may
be offered, the prohibition against phone companies delivering video
services has been lifted. This creates competition between phone
companies and cable operators and encourages phone companies to
modernize their communications infrastructure. Certain types of
companies represented in the Trust's portfolio are engaged in fierce
competition for a share of the market of their products. As a result,
competitive pressures are intense and the stocks are subject to rapid
price volatility.
Many communications companies rely on a combination of patents,
copyrights, trademarks and trade secret laws to establish and protect
their proprietary rights in their products and technologies. There can
be no assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology.
Consumer Products. An investment in the America's Leading Brands
Portfolio should be made with an understanding of the problems and risks
inherent in an investment in the consumer products industry in general.
These include the cyclicality of revenues and earnings, changing
consumer demands, regulatory restrictions, product liability litigation
and other litigation resulting from accidents, extensive competition
(including that of low-cost foreign competition), unfunded pension fund
liabilities and employee and retiree benefit costs and financial
deterioration resulting from leveraged buy-outs, takeovers or
acquisitions. In general, expenditures on consumer products will be
affected by the economic health of consumers. A weak economy with its
consequent effect on consumer spending would have an adverse effect on
consumer products companies. Other factors of particular relevance to
the profitability of the industry are the effects of increasing
environmental regulation on packaging and on waste disposal, the
continuing need to conform with foreign regulations governing packaging
and the environment, the outcome of trade negotiations and the effect on
foreign subsidies and tariffs, foreign exchange rates, the price of oil
and its effect on energy costs, inventory cutbacks by retailers,
transportation and distribution costs, health concerns relating to the
consumption of certain products, the effect of demographics on consumer
demand, the availability and cost of raw materials and the ongoing need
to develop new products and to improve productivity.
Electronic Commerce. An investment in Units of the e-Tail Portfolio
should be made with an understanding of the characteristics of the
problems and risks such an investment may entail. The e-Tail Portfolio
consists of common stocks of retailers that market their goods and
services on the Internet and technology companies that create the tools
to make it possible. The profitability of companies engaged in the
retail industry will be affected by various factors including the
general state of the economy and consumer spending trends. Recently,
there have been major changes in the retail environment due to the
declaration of bankruptcy by some of the major corporations involved in
the retail industry, particularly the department store segment. The
continued viability of the retail industry will depend on the industry's
ability to adapt and to compete in changing economic and social
conditions, to attract and retain capable management, and to finance
expansion. Weakness in the banking or real estate industry, a
recessionary economic climate with the consequent slowdown in employment
growth, less favorable trends in unemployment or a marked deceleration
in real disposable personal income growth could result in significant
pressure on both consumer wealth and consumer confidence, adversely
affecting consumer spending habits. In addition, competitiveness of the
retail industry will require large capital outlays for investment in the
installation of automated checkout equipment to control inventory, to
track the sale of individual items and to gauge the success of sales
campaigns. Increasing employee and retiree benefit costs may also have
Page 3
an adverse effect on the industry. In many sectors of the retail
industry, competition may be fierce due to market saturation, converging
consumer tastes and other factors. Because of these factors and the
recent increase in trade opportunities with other countries, American
retailers are now entering global markets which entail added risks such
as sudden weakening of foreign economies, difficulty in adapting to
local conditions and constraints and added research costs.
Retailers who sell their products over the Internet have the potential
to access more consumers, but will require the capital to acquire and
maintain sophisticated technology. E-commerce company stocks have
experienced extreme price and volume fluctuations that are often
unrelated to their operating performance. Many such companies have
exceptionally high price-to-earnings ratios with little or no earnings
histories. In addition, numerous e-commerce companies have only recently
begun operations, and may have limited product lines, markets or
financial resources, as well as fewer experienced management personnel.
Finally, the lack of barriers to entry suggests a future of intense
competition for online retailers.
See "Technology" below, for additional information concerning the risks
of companies engaged in the technology industry.
Market Leaders Portfolio. The Market Leaders Portfolio, Series 4 is
concentrated in Berkshire Hathaway, Inc. common stock and the common
stock of certain companies in which Berkshire Hathaway, Inc. owns an
equity interest. This lack of diversification increases risks to
investors. Berkshire Hathaway, Inc. and the other issuers of Securities
included in the Market Leaders Portfolio, Series 4 have in no way
participated in the creation of this Trust.
Retail. An investment in Units of the Retail Portfolio should be made
with an understanding of the characteristics of the problems and risks
such an investment may entail. The profitability of companies engaged in
the retail industry will be affected by various factors including the
general state of the economy and consumer spending trends. Recently,
there have been major changes in the retail environment due to the
declaration of bankruptcy by some of the major corporations involved in
the retail industry, particularly the department store segment. The
continued viability of the retail industry will depend on the industry's
ability to adapt and to compete in changing economic and social
conditions, to attract and retain capable management, and to finance
expansion. Weakness in the banking or real estate industry, a
recessionary economic climate with the consequent slowdown in employment
growth, less favorable trends in unemployment or a marked deceleration
in real disposable personal income growth could result in significant
pressure on both consumer wealth and consumer confidence, adversely
affecting consumer spending habits. In addition, competitiveness of the
retail industry will require large capital outlays for investment in the
installation of automated checkout equipment to control inventory, to
track the sale of individual items and to gauge the success of sales
campaigns. Increasing employee and retiree benefit costs may also have
an adverse effect on the industry. In many sectors of the retail
industry, competition may be fierce due to market saturation, converging
consumer tastes and other factors. Because of these factors and the
recent increase in trade opportunities with other countries, American
retailers are now entering global markets which entail added risks such
as sudden weakening of foreign economies, difficulty in adapting to
local conditions and constraints and added research costs.
Technology. An investment in Units of the Internet Portfolio should be
made with an understanding of the characteristics of the problems and
risks such an investment may entail. Technology companies generally
include companies involved in the development, design, manufacture and
sale of computers and peripherals, software and services, data
networking/communications equipment, internet access/information
providers, semiconductors and semiconductor equipment and other related
products, systems and services. The market for these products,
especially those specifically related to the Internet, is characterized
by rapidly changing technology, rapid product obsolescence, cyclical
market patterns, evolving industry standards and frequent new product
introductions. The success of the issuers of the Securities depends in
substantial part on the timely and successful introduction of new
products. An unexpected change in one or more of the technologies
affecting an issuer's products or in the market for products based on a
particular technology could have a material adverse affect on an
issuer's operating results. Furthermore, there can be no assurance that
the issuers of the Securities will be able to respond in a timely manner
to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements
of new products or development of new technologies and general
conditions of the industry have caused and are likely to cause the
market price of high-technology common stocks to fluctuate
substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to
the operating performance of such companies. This market volatility may
adversely affect the market price of the Securities and therefore the
ability of a Unit holder to redeem Units at a price equal to or greater
than the original price paid for such Units.
Some key components of certain products of technology issuers are
currently available only from single sources. There can be no assurance
that in the future suppliers will be able to meet the demand for
components in a timely and cost effective manner. Accordingly, an
issuer's operating results and customer relationships could be adversely
affected by either an increase in price for, or an interruption or
reduction in supply of, any key components. Additionally, many
technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require
Page 4
product vendors to comply with rigorous industry standards. Any failure
to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies
are often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance
that these customers will place additional orders, or that an issuer of
Securities will obtain orders of similar magnitude as past orders from
other customers. Similarly, the success of certain technology companies
is tied to a relatively small concentration of products or technologies.
Accordingly, a decline in demand of such products, technologies or from
such customers could have a material adverse impact on issuers of the
Securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can be no
assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology. In addition, due to the increasing
public use of the Internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, and quality of Internet products and services. For
example, recent proposals would prohibit the distribution of obscene,
lascivious or indecent communications on the Internet. The adoption of
any such laws could have a material adverse impact on the Securities in
the Trust.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
unanticipated change. Recent industry downturns have resulted, in part,
from weak pricing, persistent overcapacity, slowdown in Asian demand and
a shift in retail personal computer sales toward the low end, or "sub-
$1,000" segment. Industry growth is dependent upon several factors,
including: the rate of global economic expansion; demand for products
such as personal computers and networking and communications equipment;
excess productive capacity and the resultant effect on pricing; and the
rate of growth in the market for low-priced personal computers.
Page 5
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
The Registrant, FT 371, hereby identifies The First Trust
Special Situations Trust, Series 4; The First Trust Special
Situations Trust, Series 18; The First Trust Special Situations
Trust, Series 69; The First Trust Special Situations Trust,
Series 108; The First Trust Special Situations Trust, Series 119;
and The First Trust Special Situations Trust, Series 190; FT 286;
and The First Trust Combined Series 272 for purposes of the
representations required by Rule 487 and represents the
following:
(1) that the portfolio securities deposited in the series
as to the securities of which this Registration Statement is
being filed do not differ materially in type or quality from
those deposited in such previous series;
(2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide
essential financial information for, the series with respect to
the securities of which this Registration Statement is being
filed, this Registration Statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities
Act of 1933.
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 371, has duly caused this Amendment to
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Village of Lisle
and State of Illinois on October 15, 1999.
FT 371
By NIKE SECURITIES L.P.
Depositor
By Robert M. Porcellino
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
Robert D. Van Kampen Director of )
Nike Securities )
Corporation, the ) October 15, 1999
General Partner of )
Nike Securities L.P.)
)
)
David J. Allen Director of ) Robert M. Porcellino
Nike Securities ) Attorney-in-Fact**
Corporation, the )
General Partner of )
Nike Securities L.P.)
* The title of the person named herein represents his
capacity in and relationship to Nike Securities L.P.,
Depositor.
** An executed copy of the related power of attorney
was filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of The
First Trust Combined Series 258 (File No. 33-63483) and
the same is hereby incorporated herein by this reference.
S-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated October 15, 1999 in
Amendment No. 2 to the Registration Statement (Form S-6) (File
No. 333-87783) and related Prospectus of FT 371.
ERNST & YOUNG LLP
Chicago, Illinois
October 15, 1999
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement
will be filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and First Trust
Advisors L.P. as Portfolio Supervisor (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
43693] filed on behalf of The First Trust Special
Situations Trust, Series 22).
1.1.1 Form of Trust Agreement for Series 371 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank,
as Trustee, First Trust Advisors L.P., as Evaluator, and
First Trust Advisors L.P., as Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42755] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
S-5
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to advancement of funds by
Trustee.
4.1 Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
63483] filed on behalf of The First Trust Combined
Series 258).
S-6
MEMORANDUM
FT 371
File No. 333-87783
The Prospectus and the Indenture filed with Amendment No. 2
of the Registration Statement on Form S-6 have been revised to
reflect information regarding the execution of the Indenture and
the deposit of Securities on October 15, 1999 and to set forth
certain statistical data based thereon. In addition, there are a
number of other changes described below.
THE PROSPECTUS
Cover Page The date of the Trusts has been added.
Pages 3-4 The following information for the Trusts appears:
The Aggregate Value of Securities initially
deposited have been added.
The initial number of units of the Trusts
Sales charge
The Public Offering Price per Unit as of the
business day before the Initial Date of Deposit
The Mandatory Termination Date has been added.
Page 7 The Report of Independent Auditors has been
completed.
Pages 8-9 The Statements of Net Assets have been completed.
Pages 10-16 The Schedules of Investments have been completed.
Back Cover The date of the Prospectus has been included.
THE TRUST AGREEMENT AND STANDARD TERMS AND CONDITIONS OF TRUST
The Trust Agreement has been conformed to reflect
the execution thereof.
CHAPMAN AND CUTLER
October 15, 1999
FT 371
TRUST AGREEMENT
Dated: October 15, 1999
The Trust Agreement among Nike Securities L.P., as Depositor, The
Chase Manhattan Bank, as Trustee and First Trust Advisors L.P.,
as Evaluator and Portfolio Supervisor, sets forth certain
provisions in full and incorporates other provisions by reference
to the document entitled "Standard Terms and Conditions of Trust
for The First Trust Special Situations Trust, Series 22 and
certain subsequent Series, Effective November 20, 1991" (herein
called the "Standard Terms and Conditions of Trust"), and such
provisions as are incorporated by reference constitute a single
instrument. All references herein to Articles and Sections are
to Articles and Sections of the Standard Terms and Conditions of
Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee, the
Evaluator and the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III hereof,
all the provisions contained in the Standard Terms and Conditions
of Trust are herein incorporated by reference in their entirety
and shall be deemed to be a part of this instrument as fully and
to the same extent as though said provisions had been set forth
in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR AMERICA'S LEADING BRANDS PORTFOLIO, SERIES 6
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0030 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0095 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is October
15, 1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR BIOTECHNOLOGY PORTFOLIO SERIES
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0030 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0095 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is October
15, 1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR COMMUNICATIONS PORTFOLIO, SERIES 5
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0030 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0095 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is October
15, 1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR E-TAIL PORTFOLIO SERIES
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0030 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0095 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is October
15, 1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR INTERNET PORTFOLIO, SERIES 8
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0030 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0095 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is October
15, 1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR MARKET LEADERS PORTFOLIO, SERIES 4
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0030 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0095 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is October
15, 1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR RETAIL PORTFOLIO, SERIES 4
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0030 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0095 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is October
15, 1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART III
A. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, references to subsequent
Series established after the date of effectiveness of the First
Trust Special Situations Trust, Series 22 shall include FT 371.
B. The term "Principal Account" as set forth in the
Standard Terms and Conditions of Trust shall be replaced with the
term "Capital Account."
C. Section 1.01(2) shall be amended to read as follows:
"(2) "Trustee" shall mean The Chase Manhattan Bank, or
any successor trustee appointed as hereinafter provided."
All references to United States Trust Company of New York in
the Standard Terms and Conditions of Trust shall be amended to
refer to The Chase Manhattan Bank.
D. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean First Trust Advisors L.P.
and its successors in interest, or any successor evaluator
appointed as hereinafter provided."
E. Section 1.01(4) shall be amended to read as follows:
"(4) "Portfolio Supervisor" shall mean First Trust
Advisors L.P. and its successors in interest, or any
successor portfolio supervisor appointed as hereinafter
provided."
F. Paragraph (b) of Section 2.01 shall be restated in its
entirety as follows:
"(b)(1)From time to time following the Initial Date of
Deposit, the Depositor is hereby authorized, in its
discretion, to assign, convey to and deposit with the
Trustee (i) additional Securities, duly endorsed in blank or
accompanied by all necessary instruments of assignment and
transfer in proper form, (ii) Contract Obligations relating
to such additional Securities, accompanied by cash and/or
Letter(s) of Credit as specified in paragraph (c) of this
Section 2.01, and/or (iii) cash (or a Letter of Credit in
lieu of cash) with instructions to purchase additional
Securities, in an amount equal to the portion of the Unit
Value of the Units created by such deposit attributable to
the Securities to be purchased pursuant to such
instructions. Except as provided in the following
subparagraphs (2), (3) and (4) the Depositor, in each case,
shall ensure that each deposit of additional Securities
pursuant to this Section shall maintain, as nearly as
practicable, the Percentage Ratio. Each such deposit of
additional Securities shall be made pursuant to a Notice of
Deposit of Additional Securities delivered by the Depositor
to the Trustee. Instructions to purchase additional
Securities shall be in writing, and shall specify the name
of the Security, CUSIP number, if any, aggregate amount,
price or price range and date to be purchased. When
requested by the Trustee, the Depositor shall act as broker
to execute purchases in accordance with such instructions;
the Depositor shall be entitled to compensation therefor in
accordance with applicable law and regulations. The Trustee
shall have no liability for any loss or depreciation
resulting from any purchase made pursuant to the Depositor's
instructions or made by the Depositor as broker.
(2) Additional Securities (or Contract Obligations
therefor) may, at the Depositor's discretion, be deposited
or purchased in round lots. If the amount of the deposit is
insufficient to acquire round lots of each Security to be
acquired, the additional Securities shall be deposited or
purchased in the order of the Security in the Trust most
under-represented immediately before the deposit with
respect to the Percentage Ratio.
(3) If at the time of a deposit of additional
Securities, Securities of an issue deposited on the Initial
Date of Deposit (or of an issue of Replacement Securities
acquired to replace an issue deposited on the Initial Date
of Deposit) are unavailable, cannot be purchased at
reasonable prices or their purchase is prohibited or
restricted by applicable law, regulation or policies, the
Depositor may (i) deposit, or instruct the Trustee to
purchase, in lieu thereof, another issue of Securities or
Replacement Securities or (ii) deposit cash or a letter of
credit in an amount equal to the valuation of the issue of
Securities whose acquisition is not feasible with
instructions to acquire such Securities of such issue when
they become available.
(4) Any contrary authorization in the preceding
subparagraphs (1) through (3) notwithstanding, deposits of
additional Securities made after the 90-day period
immediately following the Initial Date of Deposit (except
for deposits made to replace Failed Contract Obligations if
such deposits occur within 20 days from the date of a
failure occurring within such initial 90-day period) shall
maintain exactly the Percentage Ratio existing immediately
prior to such deposit.
(5) In connection with and at the time of any deposit
of additional Securities pursuant to this Section 2.01(b),
the Depositor shall exactly replicate Cash (as defined
below) received or receivable by the Trust as of the date of
such deposit. For purposes of this paragraph, "Cash" means,
as to the Capital Account, cash or other property (other
than Securities) on hand in the Capital Account or
receivable and to be credited to the Capital Account as of
the date of the deposit (other than amounts to be
distributed solely to persons other than holders of Units
created by the deposit) and, as to the Income Account, cash
or other property (other than Securities) received by the
Trust as of the date of the deposit or receivable by the
Trust in respect of a record date for a payment on a
Security which has occurred or will occur before the Trust
will be the holder of record of a Security, reduced by the
amount of any cash or other property received or receivable
on any Security allocable (in accordance with the Trustee's
calculations of distributions from the Income Account
pursuant to Section 3.05) to a distribution made or to be
made in respect of a Record Date occurring prior to the
deposit. Such replication will be made on the basis of a
fraction, the numerator of which is the number of Units
created by the deposit and the denominator of which is the
number of Units which are outstanding immediately prior to
the deposit."
G. The following shall be added immediately following the
first sentence of paragraph (c) of Section 2.01:
"The Trustee may allow the Depositor to substitute for any
Letter(s) of Credit deposited with the Trustee in connection with
the deposits described in Section 2.01(a) and (b) cash in an
amount sufficient to satisfy the obligations to which the
Letter(s) of Credit relates. Any substituted Letter(s) of Credit
shall be released by the Trustee."
H. Section 2.03(a) of the Standard Terms and Conditions of
Trust shall be amended by adding the following sentence after the
first sentence of such section:
"The number of Units may be increased through a split
of the Units or decreased through a reverse split thereof,
as directed in writing by the Depositor, at any time when
the Depositor is the only beneficial holder of Units, which
revised number of Units shall be recorded by the Trustee on
its books. The Trustee shall be entitled to rely on the
Depositor's direction as certification that no person other
than the Depositor has a beneficial interest in the Units
and the Trustee shall have no liability to any person for
action taken pursuant to such direction."
I. Section 3.01 of the Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"Section 3.01. Initial Cost. Subject to reimbursement
as hereinafter provided, the cost of organizing the Trust
and the sale of the Trust Units shall be borne by the
Depositor, provided, however, that the liability on the part
of the Depositor under this section shall not include any
fees or other expenses incurred in connection with the
administration of the Trust subsequent to the deposit
referred to in Section 2.01. At the earlier of six months
after the Initial Date of Deposit or the conclusion of the
primary offering period (as certified by the Depositor to
the Trustee), the Trustee shall withdraw from the Account or
Accounts specified in the Prospectus or, if no Account is
therein specified, from the Capital Account, and pay to the
Depositor the Depositor's reimbursable expenses of
organizing the Trust in an amount certified to the Trustee
by the Depositor. In no event shall the amount paid by the
Trustee to the Depositor for the Depositors reimbursable
expenses of organizing the Trust exceed the estimated per
Unit amount of organization costs set forth in the
prospectus for the Trust multiplied by the number of Units
of the Trust outstanding at the earlier of six months after
the Initial Date of Deposit or the conclusion of the primary
offering period; nor shall the Depositor be entitled to or
request reimbursement for expenses of organizing the Trust
incurred after the earlier of six months after the Initial
Date of Deposit or the conclusion of the primary offering
period. If the cash balance of the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as
directed by the Depositor, sell Securities identified by the
Depositor, or distribute to the Depositor Securities having
a value, as determined under Section 4.01 as of the date of
distribution, sufficient for such reimbursement. Securities
sold or distributed to the Depositor to reimburse the
Depositor pursuant to this Section shall be sold or
distributed by the Trustee, to the extent practicable, in
the percentage ratio then existing. The reimbursement
provided for in this section shall be for the account of the
Unit holders of record at the earlier of six months after
the Initial Date of Deposit or the conclusion of the primary
offering period. Any assets deposited with the Trustee in
respect of the expenses reimbursable under this Section 3.01
shall be held and administered as assets of the Trust for
all purposes hereunder. The Depositor shall deliver to the
Trustee any cash identified in the Statement of Net Assets
of the Trust included in the Prospectus not later than the
expiration of the Delivery Period and the Depositors
obligation to make such delivery shall be secured by the
letter of credit deposited pursuant to Section 2.01. Any
cash which the Depositor has identified as to be used for
reimbursement of expenses pursuant to this Section 3.01
shall be held by the Trustee, without interest, and reserved
for such purpose and, accordingly, prior to the earlier of
six months after the Initial Date of Deposit or the
conclusion of the primary offering period, shall not be
subject to distribution or, unless the Depositor otherwise
directs, used for payment of redemptions in excess of the
per Unit amount payable pursuant to the next sentence. If a
Unit holder redeems Units prior to the earlier of six months
after the Initial Date of Deposit or the conclusion of the
primary offering period, the Trustee shall pay to the Unit
holder, in addition to the Redemption Value of the tendered
Units, unless otherwise directed by the Depositor, an amount
equal to the estimated per Unit cost of organizing the Trust
set forth in the Prospectus, or such lower revision thereof
most recently communicated to the Trustee by the Depositor
pursuant to Section 5.01, multiplied by the number of Units
tendered for redemption; to the extent the cash on hand in
the Trust is insufficient for such payment, the Trustee
shall have the power to sell Securities in accordance with
Section 5.02. As used herein, the Depositor's reimbursable
expenses of organizing the Trust shall include the cost of
the initial preparation and typesetting of the registration
statement, prospectuses (including preliminary
prospectuses), the indenture, and other documents relating
to the Trust, SEC and state blue sky registration fees, the
cost of the initial valuation of the portfolio and audit of
the Trust, the initial fees and expenses of the Trustee, and
legal and other out-of-pocket expenses related thereto, but
not including the expenses incurred in the printing of
preliminary prospectuses and prospectuses, expenses incurred
in the preparation and printing of brochures and other
advertising materials and any other selling expenses."
J. The second paragraph of Section 3.02 of the Standard
Terms and Conditions is hereby deleted and replaced with the
following sentence:
"Any non-cash distributions (other than a non-taxable
distribution of the shares of the distributing corporation
which shall be retained by a Trust) received by a Trust
shall be dealt with in the manner described at Section 3.11,
herein, and shall be retained or disposed of by such Trust
according to those provisions. The proceeds of any
disposition shall be credited to the Income Account of a
Trust. Neither the Trustee nor the Depositor shall be
liable or responsible in any way for depreciation or loss
incurred by reason of any such sale."
K. Section 3.05.II(a) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (a) On each Distribution Date, the Trustee shall
distribute to each Unit holder of record at the close of
business on the Record Date immediately preceding such
Distribution Date an amount per Unit equal to such Unit
holder's Income Distribution (as defined below), plus such
Unit holder's pro rata share of the balance of the Capital
Account (except for monies on deposit therein required to
purchase Contract Obligations) computed as of the close of
business on such Record Date after deduction of any amounts
provided in Subsection I, provided, however, that the
Trustee shall not be required to make a distribution from
the Capital Account unless the amount available for
distribution shall equal $1.00 per 100 Units.
Each Trust shall provide the following distribution
elections: (1) distributions to be made by check mailed to
the post office address of the Unit holder as it appears on
the registration books of the Trustee, or (2) if provided
for in the Prospectus, the following reinvestment option:
The Trustee will, for any Unit holder who provides
the Trustee written instruction, properly executed and
in form satisfactory to the Trustee, received by the
Trustee no later than its close of business 10 business
days prior to a Record Date (the "Reinvestment Notice
Date"), reinvest such Unit holder's distribution from
the Income and Capital Accounts in Units of the Trust,
purchased from the Depositor, to the extent the
Depositor shall make Units available for such purchase,
at the Depositor's offering price as of the third
business day prior to the following Distribution Date,
and at such reduced sales charge as may be described in
the prospectus for the Trusts. If, for any reason, the
Depositor does not have Units of the Trust available
for purchase, the Trustee shall distribute such Unit
holder's distribution from the Income and Capital
Accounts in the manner provided in clause (1) of the
preceding paragraph. The Trustee shall be entitled to
rely on a written instruction received as of the
Reinvestment Notice Date and shall not be affected by
any subsequent notice to the contrary. The Trustee
shall have no responsibility for any loss or
depreciation resulting from any reinvestment made in
accordance with this paragraph, or for any failure to
make such reinvestment in the event the Depositor does
not make Units available for purchase.
Any Unit holder who does not effectively elect
reinvestment in Units of their respective Trust pursuant to
the preceding paragraph shall receive a cash distribution in
the manner provided in clause (1) of the second preceding
paragraph."
L. Section 3.05.II(b) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (b) For purposes of this Section 3.05, the Unit
holder's Income Distribution shall be equal to such Unit
holder's pro rata share of the cash balance in the Income
Account computed as of the close of business on the Record
Date immediately preceding such Income Distribution after
deduction of (i) the fees and expenses then deductible
pursuant to Section 3.05.I. and (ii) the Trustee's estimate
of other expenses properly chargeable to the Income Account
pursuant to the Indenture which have accrued, as of such
Record Date, or are otherwise properly attributable to the
period to which such Income Distribution relates."
M. Paragraph (c) of Subsection II of Section 3.05 of the
Standard Terms and Conditions of Trust is hereby amended to read
as follows:
"On each Distribution Date the Trustee shall distribute
to each Unit holder of record at the close of business on
the Record Date immediately preceding such Distribution Date
an amount per Unit equal to such Unit holder's pro rata
share of the balance of the Capital Account (except for
monies on deposit therein required to purchase Contract
Obligations) computed as of the close of business on such
Record Date after deduction of any amounts provided in
Subsection I."
N. Section 3.05 of Article III of the Standard Terms and
Conditions of Trust is hereby amended to include the following
subsection:
"Section 3.05.I(e) deduct from the Interest Account
or, to the extent funds are not available in such Account,
from the Capital Account and pay to the Depositor the amount
that it is entitled to receive pursuant to Section 3.14."
O. Section 3.11 of the Standard Terms and Conditions of
Trust is hereby deleted in its entirety and replaced with the
following language:
"Section 3.11. Notice to Depositor.
In the event that the Trustee shall have been notified
at any time of any action to be taken or proposed to be
taken by at least a legally required number of holders of
any Securities deposited in a Trust, the Trustee shall take
such action or omit from taking any action, as appropriate,
so as to insure that the Securities are voted as closely as
possible in the same manner and the same general proportion
as are the Securities held by owners other than such Trust.
In the event that an offer by the issuer of any of the
Securities or any other party shall be made to issue new
securities, or to exchange securities, for Trust Securities,
the Trustee shall reject such offer. However, should any
issuance, exchange or substitution be effected
notwithstanding such rejection or without an initial offer,
any securities, cash and/or property received shall be
deposited hereunder and shall be promptly sold, if
securities or property, by the Trustee pursuant to the
Depositor's direction, unless the Depositor advises the
Trustee to keep such securities or property. The Depositor
may rely on the Portfolio Supervisor in so advising the
Trustee. The cash received in such exchange and cash
proceeds of any such sales shall be distributed to Unit
holders on the next distribution date in the manner set
forth in Section 3.05 regarding distributions from the
Capital Account. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by
reason of any such sale.
Neither the Depositor nor the Trustee shall be liable
to any person for any action or failure to take action
pursuant to the terms of this Section 3.11.
Whenever new securities or property is received and
retained by a Trust pursuant to this Section 3.11, the
Trustee shall provide to all Unit holders of such Trust
notices of such acquisition in the Trustee's annual report
unless prior notice is directed by the Depositor."
P. The first sentence of Section 3.13. shall be amended to
read as follows:
"As compensation for providing supervisory portfolio
services under this Indenture, the Portfolio Supervisor
shall receive, in arrears, against a statement or statements
therefor submitted to the Trustee monthly or annually an
aggregate annual fee in the amount of $.0035 per Unit,
calculated based on the largest number of Units outstanding
during the calendar year except during the initial offering
period as determined in Section 4.01 of this Indenture, in
which case the fee is calculated based on the largest number
of Units outstanding during the period for which the
compensation is paid (such annual fee to be pro rated for
any calendar year in which the Portfolio Supervisor provides
services during less than the whole of such year). Such fee
may exceed the actual cost of providing such portfolio
supervision services for the Trust, but at no time will the
total amount received for portfolio supervision services
rendered to unit investment trusts of which Nike Securities
L.P. is the sponsor in any calendar year exceed the
aggregate cost to the Portfolio Supervisor of supplying such
services in such year."
Q. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraphs
which shall be entitled Section 3.14:
"Section 3.14. Bookkeeping and Administrative Expenses.
As compensation for providing bookkeeping and other
administrative services of a character described in Section
26(a)(2)(C) of the Investment Company Act of 1940 to the
extent such services are in addition to, and do not
duplicate, the services to be provided hereunder by the
Trustee or the Portfolio Supervisor, the Depositor shall
receive against a statement or statements therefor submitted
to the Trustee monthly or annually an aggregate annual fee
in the amount of $.0033 per Unit, calculated based on the
largest number of Units outstanding during the calendar year
except during the initial offering period as determined in
Section 4.01 of this Indenture, in which case the fee is
calculated based on the largest number of Units outstanding
during the period for which the compensation is paid (such
annual fee to be pro rated for any calendar year in which
the Depositor provides services during less than the whole
of such year). Such fee may exceed the actual cost of
providing such bookkeeping and administrative services for
the Trust, but at no time will the total amount received for
bookkeeping and administrative services rendered to unit
investment trusts of which Nike Securities L.P. is the
sponsor in any calendar year exceed the aggregate cost to
the Depositor of supplying such services in such year. Such
compensation may, from time to time, be adjusted provided
that the total adjustment upward does not, at the time of
such adjustment, exceed the percentage of the total
increase, after the date hereof, in consumer prices for
services as measured by the United States Department of
Labor Consumer Price Index entitled "All Services Less Rent
of Shelter" or similar index, if such index should no longer
be published. The consent or concurrence of any Unit holder
hereunder shall not be required for any such adjustment or
increase. Such compensation shall be paid by the Trustee,
upon receipt of an invoice therefor from the Depositor, upon
which, as to the cost incurred by the Depositor of providing
services hereunder the Trustee may rely, and shall be
charged against the Income and Capital Accounts on or before
the Distribution Date following the Monthly Record Date on
which such period terminates. The Trustee shall have no
liability to any Certificateholder or other person for any
payment made in good faith pursuant to this Section.
If the cash balance in the Income and Capital Accounts
shall be insufficient to provide for amounts payable
pursuant to this Section 3.14, the Trustee shall have the
power to sell (i) Securities from the current list of
Securities designated to be sold pursuant to Section 5.02
hereof, or (ii) if no such Securities have been so
designated, such Securities as the Trustee may see fit to
sell in its own discretion, and to apply the proceeds of any
such sale in payment of the amounts payable pursuant to this
Section 3.14.
Any moneys payable to the Depositor pursuant to this
Section 3.14 shall be secured by a prior lien on the Trust
Fund except that no such lien shall be prior to any lien in
favor of the Trustee under the provisions of Section 6.04
herein."
R. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraph
which shall be entitled Section 3.15:
"Section 3.15. Deferred Sales Charge. If the
prospectus related to the Trust specifies a deferred sales
charge, the Trustee shall, on the dates specified in and as
permitted by such Prospectus (the "Deferred Sales Charge
Payment Dates"), withdraw from the Capital Account, an
amount per Unit specified in such Prospectus and credit such
amount to a special non-Trust account designated by the
Depositor out of which the deferred sales charge will be
distributed to or on the order of the Depositor on such
Deferred Sales Charge Payment Dates (the "Deferred Sales
Charge Account"). If the balance in the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as
directed by the Depositor, advance funds in an amount
required to fund the proposed withdrawal and be entitled to
reimbursement of such advance upon the deposit of additional
monies in the Capital Account, and/or sell Securities and
credit the proceeds thereof to the Deferred Sales Charge
Account, provided, however, that the aggregate amount
advanced by the Trustee at any time for payment of the
deferred sales charge shall not exceed $15,000. Such
direction shall, if the Trustee is directed to sell a
Security, identify the Security to be sold and include
instructions as to the execution of such sale. In the
absence of such direction by the Depositor, the Trustee
shall sell Securities sufficient to pay the deferred sales
charge (and any unreimbursed advance then outstanding) in
full, and shall select Securities to be sold in such manner
as will maintain (to the extent practicable) the relative
proportion of number of shares of each Security then held.
The proceeds of such sales, less any amounts paid to the
Trustee in reimbursement of its advances, shall be credited
to the Deferred Sales Charge Account. If a Unit holder
redeems Units prior to full payment of the deferred sales
charge, the Trustee shall, if so provided in the related
Prospectus, on the Redemption Date, withhold from the
Redemption Price payable to such Unit holder an amount equal
to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated for reasons other than that set
forth in Section 6.01(g), the Trustee shall, if so provided
in the related Prospectus, on the termination of the Trust,
withhold from the proceeds payable to Unit holders an amount
equal to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated pursuant to Section 6.01(g), the
Trustee shall not withhold from the proceeds payable to Unit
holders any amounts of unpaid deferred sales charges. If
pursuant to Section 5.02 hereof, the Depositor shall
purchase a Unit tendered for redemption prior to the payment
in full of the deferred sales charge due on the tendered
Unit, the Depositor shall pay to the Unit holder the amount
specified under Section 5.02 less the unpaid portion of the
deferred sales charge. All advances made by the Trustee
pursuant to this Section shall be secured by a lien on the
Trust prior to the interest of the Unit holders."
S. Notwithstanding anything to the contrary in Sections
3.15 and 4.05 of the Standard Terms and Conditions of Trust, so
long as Nike Securities L.P. is acting as Depositor, the Trustee
shall have no power to remove the Portfolio Supervisor.
T. The first sentence of Section 4.03 shall be amended to
read as follows:
"As compensation for providing evaluation services under
this Indenture, the Evaluator shall receive, in arrears, against
a statement or statements therefor submitted to the Trustee
monthly or annually an aggregate annual fee equal to the amount
specified as compensation for the Evaluator in the Trust
Agreement, calculated based on the largest number of Units
outstanding during the calendar year except during the initial
offering period as determined in Section 4.01 of this Indenture,
in which case the fee is calculated based on the largest number
of Units outstanding during the period for which the compensation
is paid (such annual fee to be pro rated for any calendar year in
which the Evaluator provides services during less than the whole
of such year). Such compensation may, from time to time, be
adjusted provided that the total adjustment upward does not, at
the time of such adjustment, exceed the percentage of the total
increase, after the date hereof, in consumer prices for services
as measured by the United States Department of Labor Consumer
Price Index entitled "All Services Less Rent of Shelter" or
similar index, if such index should no longer be published. The
consent or concurrence of any Unit holder hereunder shall not be
required for any such adjustment or increase. Such compensation
shall be paid by the Trustee, upon receipt of invoice therefor
from the Evaluator, upon which, as to the cost incurred by the
Evaluator of providing services hereunder the Trustee may rely,
and shall be charged against the Income and/or Capital Accounts,
in accordance with Section 3.05."
U. Section 5.01 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The second sentence of the first paragraph of Section
5.01 shall be amended by deleting the phrase "and (iii)" and
adding the following "(iii) amounts representing unpaid accrued
organization costs and (iv)"; and
(ii) The following text shall immediately precede the last
sentence of the first paragraph of Section 5.01:
"Prior to the payment to the Depositor of its
reimbursable organization costs to be made at the
earlier of six months after the Initial Date of Deposit
or the conclusion of the primary offering period in
accordance with Section 3.01, for purposes of
determining the Trust Fund Evaluation under this
Section 5.01, the Trustee shall rely upon the amounts
representing unpaid accrued organization costs in the
estimated amount per Unit set forth in the Prospectus
until such time as the Depositor notifies the Trustee
in writing of a revised estimated amount per Unit
representing unpaid accrued organization costs. Upon
receipt of such notice, the Trustee shall use this
revised estimated amount per Unit representing unpaid
accrued organization costs in determining the Trust
Fund Evaluation but such revision of the estimated
expenses shall not effect calculations made prior
thereto and no adjustment shall be made in respect
thereof. "
V. Section 5.02 of the Standard Terms and Conditions of
Trust is amended by adding the following after the second
paragraph of such section:
"Notwithstanding anything herein to the contrary, in
the event that any tender of Units pursuant to this Section
5.02 would result in the disposition by the Trustee of less
than a whole Security, the Trustee shall distribute cash in
lieu thereof and sell such Securities as directed by the
Sponsors as required to make such cash available.
Subject to the restrictions set forth in the
Prospectus, Unit holders may redeem 1,000 Units or more of a
Trust and request a distribution in kind of (i) such Unit
holder's pro rata portion of each of the Securities in such
Trust, in whole shares, and (ii) cash equal to such Unit
holder's pro rata portion of the Income and Capital Accounts
as follows: (x) a pro rata portion of the net proceeds of
sale of the Securities representing any fractional shares
included in such Unit holder's pro rata share of the
Securities and (y) such other cash as may properly be
included in such Unit holder's pro rata share of the sum of
the cash balances of the Income and Capital Accounts in an
amount equal to the Unit Value determined on the basis of a
Trust Fund Evaluation made in accordance with Section 5.01
determined by the Trustee on the date of tender less amounts
determined in clauses (i) and (ii)(x) of this Section.
Subject to Section 5.05 with respect to Rollover Unit
holders, if applicable, to the extent possible,
distributions of Securities pursuant to an in kind
redemption of Units shall be made by the Trustee through the
distribution of each of the Securities in book-entry form to
the account of the Unit holder's bank or broker-dealer at
the Depository Trust Company. Any distribution in kind will
be reduced by customary transfer and registration charges."
W. Paragraph (g) of Section 6.01 of the Standard Terms and
Conditions of Trust is hereby amended by inserting the following
after the first word thereof:
"(i) the value of any Trust as shown by an evaluation
by the Trustee pursuant to Section 5.01 hereof shall be less
than the lower of $2,000,000 or 20% of the total value of
Securities deposited in such Trust during the initial
offering period, or (ii)"
X. The third paragraph of Section 6.02 of the Standard
Terms and Conditions of Trust shall be deleted in its entirety
and replaced with the following:
"The Trustee shall pay, or reimburse to the Depositor, the
expenses related to the updating of the Trusts registration
statement, to the extent of legal fees, typesetting fees,
electronic filing expenses and regulatory filing fees. Such
expenses shall be paid from the Income Account, or to the extent
funds are not available in such Account, from the Capital
Account, against an invoice or invoices therefor presented to the
Trustee by the Depositor. By presenting such invoice or
invoices, the Depositor shall be deemed to certify, upon which
certification the Trustee is authorized conclusively to rely,
that the amounts claimed therein are properly payable pursuant to
this paragraph. The Depositor shall provide the Trustee, from
time to time as requested, an estimate of the amount of such
expenses, which the Trustee shall use for the purpose of
estimating the accrual of Trust expenses. The amount paid by the
Trust pursuant to this paragraph in each year shall be separately
identified in the annual statement provided to Unitholders. The
Depositor shall assure that the Prospectus for the Trust contains
such disclosure as shall be necessary to permit payment by the
Trust of the expenses contemplated by this paragraph under
applicable laws and regulations.
The provisions of this paragraph shall not limit the
authority of the Trustee to pay, or reimburse to the Depositor or
others, such other or additional expenses as may be determined to
be payable from the Trust as provided in Section 6.02 of the
Standard Terms and Conditions of Trust."
Y. The third sentence of paragraph (a) of Section 6.05 of
the Standard Terms and Conditions of Trust shall be replaced in
its entirety by the following:
"In case at any time the Trustee shall become incapable
of acting, or if a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of the
Trustee in an involuntary case, or the Trustee shall commence a
voluntary case, under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or any receiver,
liquidator, assignee, custodian, trustee, sequestrator (or
similar official) for the Trustee or for any substantial part of
its property shall be appointed, or the Trustee shall make any
general assignment for the benefit of creditors, or shall
generally fail to pay its debts as they become due, or if the
Sponsor shall determine in good faith that there has occurred
either (1) a material deterioration in the creditworthiness of
the Trustee or (2) one or more negligent acts on the part of the
Trustee having a materially adverse effect, either singly or in
the aggregate, on the Trust or on one or more Trusts of one or
more Funds, such that the replacement of the Trustee is in the
best interests of the Unit holders, the Sponsor may remove the
Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which shall be delivered to the Trustee so
removed and one copy to the successor trustee."
Z. Section 8.02 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The fourth sentence of the second paragraph shall
be deleted and replaced with the following:
"The Trustee will honor duly executed requests for in-
kind distributions received (accompanied by the electing
Unit holder's Certificate, if issued) by the close of
business ten business days prior to the Mandatory
Termination Date."
(ii) The first sentence of the fourth paragraph shall
be deleted and replaced with the following:
"Commencing no earlier than the business day following
that date on which Unit holders must submit to the Trustee
notice of their request to receive an in-kind distribution
of Securities at termination, the Trustee will liquidate the
Securities not segregated for in-kind distributions during
such period and in such daily amounts as the Depositor shall
direct."
IN WITNESS WHEREOF, Nike Securities L.P., The Chase
Manhattan Bank and First Trust Advisors L.P. have each caused
this Trust Agreement to be executed and the respective corporate
seal to be hereto affixed and attested (if applicable) by
authorized officers; all as of the day, month and year first
above written.
NIKE SECURITIES L.P.,
Depositor
By Robert M. Porcellino
Senior Vice President
THE CHASE MANHATTAN BANK,
Trustee
By Rosalia A. Raviele
Vice President
[SEAL]
ATTEST:
Joan Currie
Assistant Treasurer
FIRST TRUST ADVISORS L.P.,
Evaluator
By Robert M. Porcellino
Senior Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Robert M. Porcellino
Senior Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
FT 371
(Note: Incorporated herein and made a part hereof for the
Trust is the "Schedule of Investments" for the Trust as set forth
in the Prospectus.)
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
October 15, 1999
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: FT 371
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of FT 371 in connection with the
preparation, execution and delivery of a Trust Agreement dated
October 15, 1999 among Nike Securities L.P., as Depositor, The
Chase Manhattan Bank, as Trustee and First Trust Advisors L.P. as
Evaluator and Portfolio Supervisor, pursuant to which the
Depositor has delivered to and deposited the Securities listed in
Schedule A to the Trust Agreement with the Trustee and pursuant
to which the Trustee has issued to or on the order of the
Depositor a certificate or certificates representing units of
fractional undivided interest in and ownership of the Fund
created under said Trust Agreement.
In connection therewith, we have examined such pertinent
records and documents and matters of law as we have deemed
necessary in order to enable us to express the opinions
hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. the execution and delivery of the Trust Agreement and
the execution and issuance of certificates evidencing the Units
in the Fund have been duly authorized; and
2. the certificates evidencing the Units in the Fund when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement, will
constitute valid and binding obligations of the Fund and the
Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-87783)
relating to the Units referred to above, to the use of our name
and to the reference to our firm in said Registration Statement
and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EFF:erg
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
October 15, 1999
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Re: FT 371
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of FT 371 (the "Fund"), in connection with the issuance of units
of fractional undivided interest in the Trusts of said Fund (the
"Trust"), under a Trust Agreement, dated October 15, 1999 (the
"Indenture"), among Nike Securities L.P., as Depositor, The Chase
Manhattan Bank, as Trustee and First Trust Advisors L.P., as
Evaluator and Portfolio Supervisor.
In this connection, we have examined the Registration
Statement, the form of Prospectus proposed to be filed with the
Securities and Exchange Commission, the Indenture and such other
instruments and documents we have deemed pertinent. The opinions
expressed herein assume that the Trusts will be administered, and
investments by a Trust from proceeds of subsequent deposits, if
any, will be made, in accordance with the terms of the Indenture.
Each Trust holds Equity Securities as such term is defined in the
Prospectus. For purposes of the following discussion and
opinion, it is assumed that each Equity Security is equity for
Federal income tax purposes.
Based upon the foregoing and upon an investigation of such
matters of law as we consider to be applicable, we are of the
opinion that, under existing United States Federal income tax
law:
I. Each Trust is not an association taxable as a
corporation for Federal income tax purposes; each Unit holder
will be treated as the owner of a pro rata portion of each of the
assets of the Trust under the Internal Revenue Code of 1986 (the
"Code") in the proportion that the number of Units held by him
bears to the total number of Units outstanding; under Subpart E,
Subchapter J of Chapter 1 of the Code, income of a Trust will be
treated as income of the Unit holders in the proportion described
above; and an item of Trust income will have the same character
in the hands of a Unit holder as it would have in the hands of
the Trustee. Each Unit holder will be considered to have
received his pro rata share of income derived from each Trust
asset when such income is considered to be received by a Trust.
II. The price a Unit holder pays for his Units, generally
including sales charges, is allocated among his pro rata portion
of each Equity Security held by a Trust (in proportion to the
fair market values thereof on the valuation date closest to the
date the Unit holder purchases his Units) in order to determine
his tax basis for his pro rata portion of each Equity Security
held by a Trust. For Federal income tax purposes, a Unit
holder's pro rata portion of distributions of cash or property by
a corporation with respect to an Equity Security ("dividends" as
defined by Section 316 of the Code) is taxable as ordinary income
to the extent of such corporation's current and accumulated
"earnings and profits." A Unit holder's pro rata portion of
dividends paid on such Equity Security which exceeds such current
and accumulated earnings and profits will first reduce a Unit
holder's tax basis in such Equity Security, and to the extent
that such dividends exceed a Unit holder's tax basis in such
Equity Security shall be treated as gain from the sale or
exchange of property.
III. Gain or loss will be recognized to a Unit holder
(subject to various nonrecognition provisions under the Code)
upon redemption or sale of his Units, except to the extent an in
kind distribution of stock is received by such Unit holder from a
Trust as discussed below. Such gain or loss is measured by
comparing the proceeds of such redemption or sale with the
adjusted basis of his Units. Before adjustment, such basis would
normally be cost if the Unit holder had acquired his Units by
purchase. Such basis will be reduced, but not below zero, by the
Unit holder's pro rata portion of dividends with respect to each
Equity Security which is not taxable as ordinary income.
IV. If the Trustee disposes of a Trust asset (whether by
sale, taxable exchange, liquidation, redemption, payment on
maturity or otherwise) gain or loss will be recognized to the
Unit holder (subject to various nonrecognition provisions under
the Code) and the amount thereof will be measured by comparing
the Unit holder's aliquot share of the total proceeds from the
transaction with his basis for his fractional interest in the
asset disposed of. Such basis is ascertained by apportioning the
tax basis for his Units (as of the date on which his Units were
acquired) among each of a Trust's assets (as of the date on which
his Units were acquired) ratably according to their values as of
the valuation date nearest the date on which he purchased such
Units. A Unit holder's basis in his Units and of his fractional
interest in each Trust asset must be reduced, but not below zero,
by the Unit holder's pro rata portion of dividends with respect
to each Equity Security which is not taxable as ordinary income.
V. Under the Indenture, under certain circumstances, a
Unit holder tendering Units for redemption may request an in kind
distribution of Equity Securities upon the redemption of Units or
upon the termination of a Trust. As previously discussed, prior
to the redemption of Units or the termination of a Trust, a Unit
holder is considered as owning a pro rata portion of each of a
Trust's assets. The receipt of an in kind distribution will
result in a Unit holder receiving an undivided interest in whole
shares of stock and possibly cash. The potential federal income
tax consequences which may occur under an in kind distribution
with respect to each Equity Security owned by a Trust will depend
upon whether or not a Unit holder receives cash in addition to
Equity Securities. An "Equity Security" for this purpose is a
particular class of stock issued by a particular corporation. A
Unit holder will not recognize gain or loss if a Unit holder only
receives Equity Securities in exchange for his or her pro rata
portion of the Equity Securities held by a Trust. However, if a
Unit holder also receives cash in exchange for a fractional share
of an Equity Security held by a Trust, such Unit holder will
generally recognize gain or loss based upon the difference
between the amount of cash received by the Unit holder and his
tax basis in such fractional share of an Equity Security held by
a Trust. The total amount of taxable gains (or losses)
recognized upon such redemption will generally equal the sum of
the gain (or loss) recognized under the rules described above by
the redeeming Unit holder with respect to each Equity Security
owned by a Trust.
A domestic corporation owning Units in a Trust may be
eligible for the 70% dividends received deduction pursuant to
Section 243(a) of the Code with respect to such Unit holder's pro
rata portion of dividends received by such Trust (to the extent
such dividends are taxable as ordinary income, as discussed
above, and are attributable to domestic corporations), subject to
the limitations imposed by Sections 246 and 246A of the Code.
To the extent dividends received by a Trust are attributable
to foreign corporations, a corporation that owns Units will not
be entitled to the dividends received deduction with respect to
its pro rata portion of such dividends since the dividends
received deduction is generally available only with respect to
dividends paid by domestic corporations.
Section 67 of the Code provides that certain miscellaneous
itemized deductions, such as investment expenses, tax return
preparation fees and employee business expenses will be
deductible by an individual only to the extent they exceed 2% of
such individual's adjusted gross income. Unit holders may be
required to treat some or all of the expenses of a Trust as
miscellaneous itemized deductions subject to this limitation.
A Unit holder will recognize taxable gain (or loss) when all
or part of the pro rata interest in an Equity Security is either
sold by a Trust or redeemed or when a Unit holder disposes of his
Units in a taxable transaction, in each case for an amount
greater (or less) than his tax basis therefor; subject to various
nonrecognition provisions of the Code.
It should be noted that payments to a Trust of dividends on
Equity Securities that are attributable to foreign corporations
may be subject to foreign withholding taxes and Unit holders
should consult their tax advisers regarding the potential tax
consequences relating to the payment of any such withholding
taxes by a Trust. Any dividends withheld as a result thereof
will nevertheless be treated as income to the Unit holders.
Because under the grantor trust rules, an investor is deemed to
have paid directly his share of foreign taxes that have been paid
or accrued, if any, an investor may be entitled to a foreign tax
credit or deduction for United States tax purposes with respect
to such taxes. The Taxpayer Relief Act of 1997 imposes a required
holding period for such credits.
Any gain or loss recognized on a sale or exchange will,
under current law, generally be capital gain or loss.
The scope of this opinion is expressly limited to the
matters set forth herein, and, except as expressly set forth
above, we express no opinion with respect to any other taxes,
including foreign, state or local taxes or collateral tax
consequences with respect to the purchase, ownership and
disposition of Units.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-87783)
relating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EFF/erg
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
October 15, 1999
The Chase Manhattan Bank, as Trustee of
FT 371
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Attention: Mr. Thomas Porrazzo
Vice President
Re: FT 371
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for the unit investment trust or trusts contained in
FT 371 (each, a "Trust"), which will be established under certain
Standard Terms and Conditions of Trust dated November 20, 1991,
and a related Trust Agreement dated as of today (collectively,
the "Indenture") among Nike Securities L.P., as Depositor (the
"Depositor"), First Trust Advisors L.P., as Evaluator, First
Trust Advisors L.P., as Portfolio Supervisor, and The Chase
Manhattan Bank, as Trustee (the "Trustee"). Pursuant to the
terms of the Indenture, units of fractional undivided interest in
the Trust (the "Units") will be issued in the aggregate number
set forth in the Indenture.
We have examined and are familiar with originals or
certified copies, or copies otherwise identified to our
satisfaction, of such documents as we have deemed necessary or
appropriate for the purpose of this opinion. In giving this
opinion, we have relied upon the two opinions, each dated today
and addressed to the Trustee, of Chapman and Cutler, counsel for
the Depositor, with respect to the matters of law set forth
therein.
Based upon the foregoing, we are of the opinion that the
Trust will not constitute an association taxable as a corporation
under New York law, and accordingly will not be subject to the
New York State franchise tax or the New York City general
corporation tax.
We consent to the filing of this opinion as an exhibit to
the Registration Statement (No. 333-87783) filed with the
Securities and Exchange Commission with respect to the
registration of the sale of the Units and to the references to
our name in such Registration Statement and the preliminary
prospectus included therein.
Very truly yours,
CARTER, LEDYARD & MILBURN
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
October 15, 1999
The Chase Manhattan Bank, as Trustee of
FT 371
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Attention: Mr. Thomas Porrazzo
Vice President
Re: FT 371
Dear Sirs:
We are acting as counsel for The Chase Manhattan Bank
("Chase") in connection with the execution and delivery of a
Trust Agreement ("the Trust Agreement") dated today's date (which
Trust Agreement incorporates by reference certain Standard Terms
and Conditions of Trust dated November 20, 1991, and the same are
collectively referred to herein as the "Indenture") among Nike
Securities L.P., as Depositor (the "Depositor"), First Trust
Advisors L.P., as Evaluator, First Trust Advisors L.P., as
Portfolio Supervisor, and Chase, as Trustee (the "Trustee"),
establishing the unit investment trust or trusts included in FT
371 (each, a "Trust"), and the confirmation by Chase, as Trustee
under the Indenture, that it has registered on the registration
books of the Trust the ownership by the Depositor of a number of
units constituting the entire interest in the Trust (such
aggregate units being herein called "Units"), each of which
represents an undivided interest in the respective Trust which
consists of common stocks (including, confirmations of contracts
for the purchase of certain stocks not delivered and cash, cash
equivalents or an irrevocable letter of credit or a combination
thereof, in the amount required for such purchase upon the
receipt of such stocks), such stocks being defined in the
Indenture as Securities and referenced in the Schedule to the
Indenture.
We have examined the Indenture, a specimen of the
certificates to be issued hereunder (the "Certificates"), the
Closing Memorandum dated todays date, and such other documents
as we have deemed necessary in order to render this opinion.
Based on the foregoing, we are of the opinion that:
1. Chase is a duly organized and existing corporation
having the powers of a Trust Company under the laws of the State
of New York.
2. The Trust Agreement has been duly executed and
delivered by Chase and, assuming due execution and delivery by
the other parties thereto, constitutes the valid and legally
binding obligation of Chase.
3. The Certificates are in proper form for execution and
delivery by Chase, as Trustee.
4. Chase, as Trustee, has registered on the registration
books of the Trust the ownership of the Units by the Depositor.
Upon receipt of confirmation of the effectiveness of the
registration statement for the sale of the Units filed with the
Securities and Exchange Commission under the Securities Act of
1933, the Trustee may deliver Certificates for such Units, in
such names and denominations as the Depositor may request, to or
upon the order of the Depositor as provided in the Closing
Memorandum.
In rendering the foregoing opinion, we have not considered,
among other things, whether the Securities have been duly
authorized and delivered.
Very truly yours,
CARTER, LEDYARD & MILBURN
First Trust Advisors L.P.
1001 Warrenville Road
Lisle, Illinois 60532
October 15, 1999
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: FT 371
Gentlemen:
We have examined the Registration Statement File No.
333-87783 for the above captioned fund. We hereby consent to the
use in the Registration Statement of the references to First
Trust Advisors L.P. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
First Trust Advisors L.P.
Robert M. Porcellino
Senior Vice President
