Registration No. 333-93265
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 395
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 January 4, 2000 at 2:00 p.m. pursuant to Rule 487.
________________________________
BANDWIDTH SELECT PORTFOLIO, SERIES 2
E-BUSINESS SELECT PORTFOLIO, SERIES 2
GLASS-STEAGALL FINANCIAL OPPORTUNITY SELECT PORTFOLIO SERIES
INTERNET SELECT PORTFOLIO, SERIES 2
NEW E-CONOMY SELECT PORTFOLIO SERIES
ONLINE MEDIA SELECT PORTFOLIO SERIES
PHARMACEUTICAL SELECT PORTFOLIO, SERIES 2
TECHNOLOGY SELECT PORTFOLIO, SERIES 2
BANDWIDTH PORTFOLIO, SERIES 2
E-BUSINESS PORTFOLIO, SERIES 2
ENERGY PORTFOLIO, SERIES 7
GLASS-STEAGALL FINANCIAL OPPORTUNITY PORTFOLIO SERIES
INTERNET PORTFOLIO, SERIES 9
NEW E-CONOMY PORTFOLIO SERIES
ONLINE MEDIA PORTFOLIO SERIES
PHARMACEUTICAL PORTFOLIO, SERIES 8
TECHNOLOGY PORTFOLIO, SERIES 11
FT 395
FT 395 is a series of a unit investment trust, the FT Series. Each of
the 17 portfolios listed above (each, a "Trust," and collectively, the
"Trusts") is a separate portfolio, or series, of FT 395 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. Each Select Portfolio Series has an expected
maturity of approximately 18 months. Each Portfolio Series has an
expected maturity of approximately five years.
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 January 4, 2000
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 8
Report of Independent Auditors 12
Statements of Net Assets 13
Schedules of Investments 18
The FT Series 36
Portfolios 37
Risk Factors 43
Public Offering 46
Distribution of Units 48
The Sponsor's Profits 50
The Secondary Market 50
How We Purchase Units 50
Expenses and Charges 50
Tax Status 51
Retirement Plans 52
Rights of Unit Holders 52
Income and Capital Distributions 53
Redeeming Your Units 54
Removing Securities from a Trust 55
Amending or Terminating the Indenture 55
Information on the Sponsor, Trustee and Evaluator 56
Other Information 57
Page 2
Summary of Essential Information
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Glass-Steagall
Financial
Bandwidth e-Business Opportunity Internet Select
Select Portfolio Select Portfolio Select Portfolio Portfolio
Series 2 Series 2 Series Series 2
____________ ____________ ____________ ___________
<S> <C> <C> <C> <C>
Initial Number of Units (1) 15,010 14,947 14,995 14,957
Fractional Undivided Interest
in the Trust per Unit (1) 1/15,010 1/14,947 1/14,995 1/14,957
Public Offering Price:
Aggregate Offering Price Evaluation
of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of
3.25% of the Public Offering Price per Unit
(3.283% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .325 $ .325 $ .325 $ .325
Less Deferred Sales Charge per Unit $ (.225) $ (.225) $ (.225) $ (.225)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.675 $ 9.675 $ 9.675 $ 9.675
Redemption Price per Unit
(based on aggregate underlying value
of Securities less deferred sales charge) (5) $ 9.675 $ 9.675 $ 9.675 $ 9.675
Cash CUSIP Number 30264K 368 30264K 384 30264K 400 30264K 426
Reinvestment CUSIP Number 30264K 376 30264K 392 30264K 418 30264K 434
Wrap CUSIP Number 30264K 731 30264K 749 30264K 756 30264K 764
Security Code 57947 57943 57939 57935
Mandatory Termination Date (6) July 3, 2001 July 3, 2001 July 3, 2001 July 3, 2001
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January 7, 2000
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2000.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2000.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 7.
</FN>
</TABLE>
Page 3
Summary of Essential Information
FT 395
At the Opening of Business on the Initial Date of Deposit-January 4, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
New Online
e-Conomy Media Pharmaceutical Technology
Select Portfolio Select Portfolio Select Portfolio Select Portfolio
Series Series Series 2 Series 2
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Initial Number of Units (1) 15,022 15,026 15,024 15,017
Fractional Undivided Interest
in the Trust per Unit (1) 1/15,022 1/15,026 1/15,024 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
3.25% of the Public Offering Price
per Unit (3.283% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .325 $ .325 $ .325 $ .325
Less Deferred Sales Charge per Unit $ (.225) $ (.225) $ (.225) $ (.225)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.675 $ 9.675 $ 9.675 $ 9.675
Redemption Price per Unit
(based on aggregate underlying value
of Securities less deferred sales charge) (5) $ 9.675 $ 9.675 $ 9.675 $ 9.675
Cash CUSIP Number 30264K 442 30264K 467 30264K 483 30264K 509
Reinvestment CUSIP Number 30264K 459 30264K 475 30264K 491 30264K 517
Wrap CUSIP Number 30264K 772 30264K 780 30264K 798 30264K 806
Security Code 57931 57927 57923 57951
Mandatory Termination Date (6) July 3, 2001 July 3, 2001 July 3, 2001 July 3, 2001
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January 7, 2000
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2000.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2000.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 7.
</FN>
</TABLE>
Page 4
Summary of Essential Information
FT 395
At the Opening of Business on the Initial Date of Deposit-January 4, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Glass-Steagall
Bandwidth e-Business Energy Financial
Portfolio Portfolio Portfolio Opportunity
Series 2 Series 2 Series 7 Portfolio Series
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Initial Number of Units (1) 15,010 14,947 14,990 14,995
Fractional Undivided Interest
in the Trust per Unit (1) 1/15,010 1/14,947 1/14,990 1/14,995
Public Offering Price:
Aggregate Offering Price Evaluation
of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of
4.50% 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 30264K 525 30264K 541 30264K 566 30264K 582
Reinvestment CUSIP Number 30264K 533 30264K 558 30264K 574 30264K 590
Wrap CUSIP Number 30264K 814 30264K 822 30264K 830 30264K 848
Security Code 57949 57945 57955 57941
Mandatory Termination Date (6) January 14, 2005 January 14, 2005 January 14, 2005 January 14, 2005
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January 7, 2000
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2000.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2000.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 7.
</FN>
</TABLE>
Page 5
Summary of Essential Information
FT 395
At the Opening of Business on the Initial Date of Deposit-January 4, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Internet New Online Pharmaceutical
Portfolio e-Conomy Media Portfolio
Series 9 Portfolio Series Portfolio Series Series 8
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Initial Number of Units (1) 14,957 15,022 15,026 15,024
Fractional Undivided Interest
in the Trust per Unit (1) 1/14,957 1/15,022 1/15,026 1/15,024
Public Offering Price:
Aggregate Offering Price Evaluation
of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of
4.50% 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 30264K 608 30264K 624 30264K 640 30264K 665
Reinvestment CUSIP Number 30264K 616 30264K 632 30264K 657 30264K 673
Wrap CUSIP Number 30264K 855 30264K 863 30264K 871 30264K 889
Security Code 57937 57933 57929 57925
Mandatory Termination Date (6) January 14, 2005 January 14, 2005 January 14, 2005 January 14, 2005
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January 7, 2000
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2000.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2000.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 7.
</FN>
</TABLE>
Page 6
Summary of Essential Information
FT 395
At the Opening of Business on the Initial Date of Deposit-January 4, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Technology
Portfolio
Series 11
___________
<S> <C>
Initial Number of Units (1) 15,017
Fractional Undivided Interest in the Trust per Unit (1) 1/15,017
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 9.900
Maximum Sales Charge of
4.50% of the Public Offering Price per Unit (4.545% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .450
Less Deferred Sales Charge per Unit $ (.350)
Public Offering Price per Unit (4) $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.550
Redemption Price per Unit
(based on aggregate underlying value of Securities less deferred sales charge) (5) $ 9.550
Cash CUSIP Number 30264K 681
Reinvestment CUSIP Number 30264K 699
Wrap CUSIP Number 30265H 224
Security Code 57953
Mandatory Termination Date (6) January 14, 2005
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January 7, 2000
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2000.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2000.
______________
<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 Tables" 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 Tables."
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 7
Fee Table
This Fee Table describes the fees and expenses that you may, directly or
indirectly, pay if you buy and hold Units of a Trust. See "Public
Offering" and "Expenses and Charges." Although each Select Portfolio
Series has a term of approximately 18 months, each Portfolio Series has
a term of approximately five years, and each is a unit investment trust
rather than a mutual fund, this information allows you to compare fees.
<TABLE>
<CAPTION>
Bandwidth e-Business Glass-Steagall
Select Select Financial Opportunity
Portfolio Portfolio Select Portfolio
Series 2 Series 2 Series
______________ _______________ _____________________
<S> <C> <C> <C> <C> <C> <C>
Amount Amount Amount
per Unit per Unit per Unit
________ ________ ________
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Initial sales charge imposed on purchase 1.00%(a) $ .100 1.00%(a) $ .100 1.00%(a) $ .100
Deferred sales charge 2.25%(b) .225 2.25%(b) .225 2.25%(b) .225
_____ ______ _____ ______ _____ _______
Maximum sales charge 3.25% $ .325 3.25% $ .325 3.25% $ .325
===== ====== ===== ====== ===== ======
Maximum sales charge imposed on reinvested dividends 2.25%(c) $ .225 2.25%(c) $ .225 2.25%(c) $ .225
===== ====== ===== ====== ===== ======
Organization Costs
(as a percentage of public offering price)
Estimated organization costs .260%(d) $.0260 .260%(d) $.0260 .260%(d) $.0260
===== ====== ===== ====== ===== ======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping,
administrative and evaluation fees .079% $.0080 .079% $.0080 .079% $.0080
Trustee's fee and other operating expenses .116%(e) .0117 .116%(e) .0117 .116%(e) .0117
_____ ______ _____ ______ _____ ______
Total .195% $.0197 .195% $.0197 .195% $.0197
===== ====== ===== ====== ===== ======
</TABLE>
<TABLE>
<CAPTION>
Internet Select New e-Conomy Online Media
Portfolio Select Portfolio Select Portfolio
Series 2 Series Series
________________ _________________ ________________
<S> <C> <C> <C> <C> <C> <C>
Amount Amount Amount
per Unit per Unit per Unit
________ ________ ________
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Initial sales charge imposed on purchase 1.00%(a) $ .100 1.00%(a) $ .100 1.00%(a) $ .100
Deferred sales charge 2.25%(b) .225 2.25%(b) .225 2.25%(b) .225
_____ ______ _____ ______ _____ _______
Maximum sales charge 3.25% $ .325 3.25% $ .325 3.25% $ .325
===== ====== ===== ====== ===== ======
Maximum sales charge imposed on reinvested dividends 2.25%(c) $ .225 2.25%(c) $ .225 2.25%(c) $ .225
===== ====== ===== ====== ===== ======
Organization Costs
(as a percentage of public offering price)
Estimated organization costs .260%(d) $.0260 .260%(d) $.0260 .260%(d) $.0260
===== ====== ===== ====== ===== ======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping,
administrative and evaluation fees .079% $.0080 .079% $.0080 .079% $.0080
Trustee's fee and other operating expenses .116%(e) .0117 .116%(e) .0117 .116%(e) .0117
_____ ______ _____ ______ _____ ______
Total .195% $.0197 .195% $.0197 .195% $.0197
===== ====== ===== ====== ===== ======
</TABLE>
<TABLE>
<CAPTION>
Pharmaceutical Technology
Select Portfolio Select Portfolio
Series 2 Series 2
________________ ________________
<S> <C> <C> <C> <C>
Amount Amount
per Unit per Unit
_________ ________
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Initial sales charge imposed on purchase 1.00%(a) $ .100 1.00%(a) $ .100
Deferred sales charge 2.25%(b) .225 2.25%(b) .225
_____ ______ _____ ______
Maximum sales charge 3.25% $ .325 3.25% $ .325
===== ====== ===== ======
Maximum sales charge imposed on reinvested dividends 2.25%(c) $ .225 2.25%(c) $ .225
===== ====== ===== ======
Organization Costs
(as a percentage of public offering price)
Estimated organization costs .260%(d) $.0260 .260%(d) $.0260
===== ====== ===== ======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping,
administrative and evaluation fees .079% $.0080 .079% $.0080
Trustee's fee and other operating expenses .116%(e) .0117 .116%(e) .0117
_____ ______ _____ ______
Total .195% $.0197 .195% $.0197
===== ====== ===== ======
</TABLE>
Page 8
<TABLE>
<CAPTION>
Bandwidth e-Business Energy
Portfolio Portfolio Portfolio
Series 2 Series 2 Series 7
______________ _______________ ______________
<S> <C> <C> <C> <C> <C> <C>
Amount Amount Amount
per Unit per Unit per Unit
________ ________ ________
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Initial sales charge imposed on purchase 1.00%(a) $ .100 1.00%(a) $ .100 1.00%(a) $ .100
Deferred sales charge 3.50%(b) .350 3.50%(b) .350 3.50%(b) .350
______ ______ _____ ______ _____ ______
Maximum sales charge 4.50% $ .450 4.50% $ .450 4.50% $ .450
===== ====== ===== ====== ===== ======
Maximum sales charge imposed on reinvested dividends 3.50%(c) $ .350 3.50%(c) $ .350 3.50%(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
===== ====== ===== ====== ===== ======
</TABLE>
<TABLE>
<CAPTION>
Glass-Steagall
Financial Internet New e-Conomy
Opportunity Portfolio Portfolio
Portfolio Series Series 9 Series
______________ _______________ ______________
<S> <C> <C> <C> <C> <C> <C>
Amount Amount Amount
per Unit per Unit per Unit
________ ________ ________
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Initial sales charge imposed on purchase 1.00%(a) $ .100 1.00%(a) $ .100 1.00%(a) $ .100
Deferred sales charge 3.50%(b) .350 3.50%(b) .350 3.50%(b) .350
______ ______ _____ ______ _____ ______
Maximum sales charge 4.50% $ .450 4.50% $ .450 4.50% $ .450
===== ====== ===== ====== ===== ======
Maximum sales charge imposed on reinvested dividends 3.50%(c) $ .350 3.50%(c) $ .350 3.50%(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
===== ====== ===== ====== ===== ======
</TABLE>
<TABLE>
<CAPTION>
Online Media Pharmaceutical Technology
Portfolio Portfolio Portfolio
Series Series 8 Series 11
________________ ________________ _________________
<S> <C> <C> <C> <C> <C> <C>
Amount Amount Amount
per Unit per Unit per Unit
_________ ________ ________
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Initial sales charge imposed on purchase 1.00%(a) $ .100 1.00%(a) $ .100 1.00%(a) $ .100
Deferred sales charge 3.50%(b) .350 3.50%(b) .350 3.50%(b) .350
_____ ______ _____ ______ _____ ______
Maximum sales charge 4.50% $ .450 4.50% $ .450 4.50% $ .450
===== ====== ===== ====== ===== ======
Maximum sales charge imposed on reinvested dividends 3.50%(c) $ .350 3.50%(c) $ .350 3.50%(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
(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
===== ====== ===== ====== ===== ======
</TABLE>
Page 9
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 18 Months (f) 3 Years 5 Years
______ _____________ _______ _______
<S> <C> <C> <C> <C>
Bandwidth Select Portfolio, Series 2 $371 $381 $ - $ -
e-Business Select Portfolio, Series 2 371 381 - -
Glass-Steagall Financial Opportunity Select Portfolio Series 371 381 - -
Internet Select Portfolio, Series 2 371 381 - -
New e-Conomy Select Portfolio Series 371 381 - -
Online Media Select Portfolio Series 371 381 - -
Pharmaceutical Select Portfolio, Series 2 371 381 - -
Technology Select Portfolio, Series 2 371 381 - -
Bandwidth Portfolio, Series 2 498 N.A. 549 606
e-Business Portfolio, Series 2 498 N.A. 549 606
Energy Portfolio, Series 7 498 N.A. 549 606
Glass-Steagall Financial Opportunity Portfolio Series 498 N.A. 549 606
Internet Portfolio, Series 9 498 N.A. 549 606
New e-Conomy Portfolio Series 498 N.A. 549 606
Online Media Portfolio Series 498 N.A. 549 606
Pharmaceutical Portfolio, Series 8 498 N.A. 549 606
Technology Portfolio, Series 11 498 N.A. 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 of 3.25% of the
Public Offering Price for each Select Portfolio Series (4.50% in the
case of each Portfolio Series) and the maximum remaining deferred sales
charge (initially $.225 per Unit for each Select Portfolio Series and
$.350 per Unit for each Portfolio Series). When the Public Offering
Price exceeds $10.00 per Unit, the initial sales charge will exceed
1.00% of the Public Offering Price per Unit.
(b) The deferred sales charge is a fixed dollar amount equal to $.225
per Unit for each Select Portfolio Series and $.350 per Unit for each
Portfolio Series, which will be deducted in five monthly installments of
$.045 per Unit for each Select Portfolio Series and $.07 per Unit for
each Portfolio Series on the 20th day of each month (or the preceding
business day if the 20th day is not a business day) from August 18, 2000
Page 10
through December 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 2.25% of the Public Offering Price for each Select Portfolio Series
or more than 3.50% of the Public Offering Price for each Portfolio
Series. 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.
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.
(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) For the Portfolio Series, other operating expenses include the costs
incurred by each Portfolio Series for annually updating those Trusts'
registration statements. Other operating expenses do not, however,
include brokerage costs and other portfolio transaction fees for any of
the Trusts. In certain circumstances the Trusts may incur additional
expenses not set forth above. See "Expenses and Charges."
(f) For each Select Portfolio Series, the Example represents the
estimated costs incurred through each Trust's approximate 18-month life.
</FN>
</TABLE>
Page 11
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 395
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 395, comprised of the Bandwidth Select
Portfolio, Series 2; e-Business Select Portfolio, Series 2; Glass-
Steagall Financial Opportunity Select Portfolio Series; Internet Select
Portfolio, Series 2; New e-Conomy Select Portfolio Series; Online Media
Select Portfolio Series; Pharmaceutical Select Portfolio, Series 2;
Technology Select Portfolio, Series 2; Bandwidth Portfolio, Series 2; e-
Business Portfolio, Series 2; Energy Portfolio, Series 7; Glass-Steagall
Financial Opportunity Portfolio Series; Internet Portfolio, Series 9;
New e-Conomy Portfolio Series; Online Media Portfolio Series;
Pharmaceutical Portfolio, Series 8; and Technology Portfolio, Series 11,
as of the opening of business on January 4, 2000. 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 January 4, 2000. 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 395,
comprised of the Bandwidth Select Portfolio, Series 2; e-Business Select
Portfolio, Series 2; Glass-Steagall Financial Opportunity Select
Portfolio Series; Internet Select Portfolio, Series 2; New e-Conomy
Select Portfolio Series; Online Media Select Portfolio Series;
Pharmaceutical Select Portfolio, Series 2; Technology Select Portfolio,
Series 2; Bandwidth Portfolio, Series 2; e-Business Portfolio, Series 2;
Energy Portfolio, Series 7; Glass-Steagall Financial Opportunity
Portfolio Series; Internet Portfolio, Series 9; New e-Conomy Portfolio
Series; Online Media Portfolio Series; Pharmaceutical Portfolio, Series
8; and Technology Portfolio, Series 11, at the opening of business on
January 4, 2000 in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Chicago, Illinois
January 4, 2000
Page 12
Statements of Net Assets
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<TABLE>
<CAPTION>
Glass-Steagall
Financial
Bandwidth e-Business Opportunity Internet Select
Select Portfolio Select Portfolio Select Portfolio Portfolio
Series 2 Series 2 Series Series 2
____________ ____________ ____________ _______________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,599 $147,976 $148,448 $148,072
Less liability for reimbursement to Sponsor
for organization costs (3) (390) (389) (390) (389)
Less liability for deferred sales charge (4) (3,377) (3,363) (3,374) (3,365)
________ ________ ________ ________
Net assets $144,832 $144,224 $144,684 $144,318
======== ======== ======== ========
Units outstanding 15,010 14,947 14,995 14,957
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,100 $149,471 $149,947 $149,568
Less maximum sales charge (5) (4,878) (4,858) (4,873) (4,861)
Less estimated reimbursement to Sponsor
for organization costs (3) (390) (389) (390) (389)
________ ________ ________ ________
Net assets $144,832 $144,224 $144,684 $144,318
======== ======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 17.
</FN>
</TABLE>
Page 13
Statements of Net Assets (cont'd.)
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<TABLE>
<CAPTION>
New e-Conomy Online Media Pharmaceutical Technology
Select Portfolio Select Portfolio Select Portfolio Select Portfolio
Series Series Series 2 Series 2
__________ __________ ______________ ______________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,716 $148,761 $148,738 $148,666
Less liability for reimbursement to Sponsor
for organization costs (3) (391) (391) (391) (390)
Less liability for deferred sales charge (4) (3,380) (3,381) (3,380) (3,379)
________ ________ ________ ________
Net assets $144,945 $144,989 $144,967 $144,897
======== ======== ======== ========
Units outstanding 15,022 15,026 15,024 15,017
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,218 $150,264 $150,241 $150,167
Less maximum sales charge (5) (4,882) (4,884) (4,883) (4,880)
Less estimated reimbursement to Sponsor
for organization costs (3) (391) (391) (391) (390)
________ ________ ________ ________
Net assets $144,945 $144,989 $144,967 $144,897
======== ======== ======== ========
__________________
<FN>
See "Notes to Statements of Net Assets" on page 17.
</FN>
</TABLE>
Page 14
Statements of Net Assets (cont'd.)
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<TABLE>
<CAPTION>
Bandwidth e-Business Energy Glass-Steagall
Portfolio Portfolio Portfolio Financial Opportunity
Series 2 Series 2 Series 7 Portfolio Series
___________ __________ ___________ ___________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,599 $147,976 $148,401 $148,448
Less liability for reimbursement to Sponsor
for organization costs (3) (338) (336) (337) (337)
Less liability for deferred sales charge (4) (5,254) (5,231) (5,247) (5,248)
________ ________ ________ ________
Net assets $143,007 $142,409 $142,817 $142,863
======== ======== ======== ========
Units outstanding 15,010 14,947 14,990 14,995
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,099 $149,471 $149,899 $149,948
Less maximum sales charge (5) (6,754) (6,726) (6,745) (6,748)
Less estimated reimbursement to Sponsor
for organization costs (3) (338) (336) (337) (337)
________ ________ ________ ________
Net assets $143,007 $142,409 $142,817 $142,863
======== ======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 17.
</FN>
</TABLE>
Page 15
Statements of Net Assets (cont'd.)
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<TABLE>
<CAPTION>
Internet New e-Conomy Online Media Pharmaceutical
Portfolio Portfolio Portfolio Portfolio
Series 9 Series Series Series 8
____________ __________ __________ ______________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,072 $148,716 $148,761 $148,738
Less liability for reimbursement to Sponsor
for organization costs (3) (337) (338) (338) (338)
Less liability for deferred sales charge (4) (5,235) (5,258) (5,259) (5,258)
________ ________ ________ ________
Net assets $142,500 $143,120 $143,164 $143,142
======== ======== ======== ========
Units outstanding 14,957 15,022 15,026 15,024
ANALYSIS OF NET ASSETS
Cost to investors (5) $149,568 $150,218 $150,264 $150,241
Less maximum sales charge (5) (6,731) (6,760) (6,762) (6,761)
Less estimated reimbursement to Sponsor
for organization costs (3) (337) (338) (338) (338)
________ ________ ________ ________
Net assets $142,500 $143,120 $143,164 $143,142
======== ======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 17.
</FN>
</TABLE>
Page 16
Statements of Net Assets (cont'd.)
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<TABLE>
<CAPTION>
Technology
Portfolio
Series 11
______________
<S> <C>
NET ASSETS
Investment in Securities represented by purchase contracts (1) (2) $148,666
Less liability for reimbursement to Sponsor for organization costs (3) (338)
Less liability for deferred sales charge (4) (5,256)
________
Net assets $143,072
========
Units outstanding 15,017
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,168
Less maximum sales charge (5) (6,758)
Less estimated reimbursement to Sponsor for organization costs (3) (338)
________
Net assets $143,072
========
_____________
<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 $3,400,000 will be allocated among each of the 17 Trusts in FT
395, 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 $.0260 per
Unit for each Select Portfolio Series and $.0225 per Unit for each
Portfolio Series. 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 of $.225 per Unit in the case of each Select Portfolio
Series, or $.35 per Unit in the case of each Portfolio Series, payable
to us in five equal monthly installments beginning on August 18, 2000
and on the 20th day of each month thereafter (or if such date is not a
business day, on the preceding business day) through December 20, 2000.
If you redeem your Units before December 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 3.25% of the Public Offering Price per Unit for
each Select Portfolio Series (equivalent to 3.283% of the net amount
invested, exclusive of the deferred sales charge) or 4.50% of the Public
Offering Price per Unit for each Portfolio Series (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 17
Schedule of Investments
Bandwidth Select Portfolio, Series 2
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<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
_____________________
111 T AT&T Corp. 4% $ 53.375 $ 5,925
101 COVD Covad Communications Group, Inc. 4% 59.000 5,959
121 GBLX Global Crossing Ltd. (3) 4% 49.125 5,944
70 LVLT Level 3 Communications, Inc. 4% 85.063 5,954
114 WCOM MCI WorldCom, Inc. 4% 51.938 5,921
141 Q Qwest Communications International Inc. 4% 42.125 5,940
Communications Equipment
_____________________
82 ADCT ADC Telecommunications, Inc. 4% 72.500 5,945
111 CMTN Copper Mountain Networks, Inc. 4% 53.500 5,939
77 LU Lucent Technologies Inc. 4% 77.125 5,939
59 NT Nortel Networks Corporation (3) 4% 100.938 5,955
91 TLAB Tellabs, Inc. 4% 65.625 5,972
Fiber Optics
_____________________
64 HLIT Harmonic Inc. 4% 92.469 5,918
32 JDSU JDS Uniphase Corporation 4% 187.750 6,008
Networking Products
_____________________
55 CSCO Cisco Systems, Inc. 4% 108.063 5,943
17 JNPR Juniper Networks, Inc. 4% 344.000 5,848
33 RBAK Redback Networks Inc. 4% 182.000 6,006
Semiconductors
_____________________
45 AMCC Applied Micro Circuits Corporation 4% 132.250 5,951
22 BRCM Broadcom Corporation (Class A) 4% 273.125 6,009
91 CNXT Conexant Systems, Inc. 4% 65.063 5,921
37 PMCS PMC-Sierra, Inc. 4% 158.750 5,874
106 VTSS Vitesse Semiconductor Corporation 4% 56.250 5,962
Wireless Communications
_____________________
87 ERICY L.M. Ericsson AB (ADR) 4% 68.063 5,921
40 MOT Motorola, Inc. 4% 149.000 5,960
32 NOK Nokia Oy (ADR) 4% 186.500 5,968
33 QCOM QUALCOMM Incorporated 4% 179.313 5,917
______ _________
Total Investments 100% $148,599
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 18
Schedule of Investments
e-Business Select Portfolio, Series 2
FT 395
At the Opening of Business on the Initial Date of Deposit-January 4, 2000
<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>
Horizontal Portals
_________________
60 AOL America Online, Inc. 3.36% $ 82.750 $ 4,965
26 ARBA Ariba, Inc. 3.37% 191.750 4,986
24 CMRC Commerce One, Inc. 3.30% 203.625 4,887
34 PPRO PurchasePro.com, Inc. 3.30% 143.594 4,882
29 VERT VerticalNet, Inc. 3.38% 172.625 5,006
10 YHOO Yahoo! Inc. 3.21% 474.938 4,749
Infrastructure
_________________
71 BEAS BEA Systems, Inc. 3.34% 69.625 4,943
26 BVSN BroadVision, Inc. 3.33% 189.438 4,925
23 CHKP Check Point Software Technologies Ltd. (3) 3.40% 218.500 5,026
43 ISLD Digital Island 3.31% 113.875 4,897
52 EXDS Exodus Communications, Inc. 3.37% 96.000 4,992
58 LVLT Level 3 Communications, Inc. 3.33% 85.063 4,934
95 WCOM MCI WorldCom, Inc. 3.33% 51.938 4,934
42 MSFT Microsoft Corporation 3.31% 116.563 4,896
50 PRSF Portal Software, Inc. 3.32% 98.188 4,909
58 SCNT Scient Corporation 3.34% 85.125 4,937
58 SEBL Siebel Systems, Inc. 3.33% 85.000 4,930
33 TIBX TIBCO Software Inc. 3.30% 147.875 4,880
26 VRSN VeriSign, Inc. 3.34% 190.125 4,943
26 VIGN Vignette Corporation 3.31% 188.563 4,903
Procurement
_________________
46 CSCO Cisco Systems, Inc. 3.36% 108.063 4,971
97 DELL Dell Computer Corporation 3.34% 50.875 4,935
26 ITWO i2 Technologies, Inc. 3.31% 188.531 4,902
43 IBM International Business Machines Corporation 3.36% 115.563 4,969
42 ORCL Oracle Corporation 3.35% 118.125 4,961
Venture Capital
_________________
15 CMGI CMGI Inc. 3.31% 326.625 4,899
25 ICGE Internet Capital Group, Inc. 3.38% 200.000 5,000
Vertical Portals
_________________
41 CMDX Chemdex Corporation 3.32% 119.938 4,918
128 HLTH Healtheon/WebMD Corporation 3.35% 38.688 4,952
92 PCOR pcOrder.com, Inc. 3.34% 53.750 4,945
______ ________
Total Investments 100% $147,976
====== ========
_________________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 19
Schedule of Investments
Glass-Steagall Financial Opportunity Select Portfolio Series
FT 395
At the Opening of Business on the Initial Date of Deposit-January 4, 2000
<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>
Banks & Thrifts
_________________
102 BAC Bank of America Corporation 3.33% $ 48.438 $ 4,941
68 CMB The Chase Manhattan Corporation 3.34% 72.875 4,956
241 FSR Firstar Corporation 3.34% 20.563 4,956
147 FBF Fleet Boston Financial Corporation 3.32% 33.563 4,934
239 KEY KeyCorp 3.34% 20.750 4,959
154 MEL Mellon Financial Corporation 3.34% 32.188 4,957
98 NTRS Northern Trust Corporation 3.33% 50.469 4,946
71 STT State Street Corporation 3.34% 69.750 4,952
127 WFC Wells Fargo Company 3.35% 39.125 4,969
Financial Services
_________________
31 AXP American Express Company 3.28% 157.250 4,875
107 COF Capital One Financial Corporation 3.33% 46.188 4,942
94 C Citigroup Inc. 3.35% 52.875 4,970
143 HI Household International, Inc. 3.34% 34.688 4,960
184 KRB MBNA Corporation 3.33% 26.875 4,945
59 PVN Providian Financial Corporation 3.32% 83.563 4,930
Insurance
_________________
111 AFL AFLAC Incorporated 3.35% 44.750 4,967
48 AIG American International Group, Inc. 3.36% 103.938 4,989
52 MMC Marsh & McLennan Companies, Inc. 3.31% 94.563 4,917
184 NFS Nationwide Financial Services, Inc. (Class A) 3.33% 26.875 4,945
Investment Services
_________________
210 AMTD Ameritrade Holding Corporation (Class A) 3.33% 23.563 4,948
105 DLJ Donaldson, Lufkin & Jenrette, Inc. 3.32% 46.938 4,928
176 EGRP E*TRADE Group, Inc. 3.33% 28.063 4,939
131 EV Eaton Vance Corp. 3.33% 37.688 4,937
56 GS The Goldman Sachs Group, Inc. 3.33% 88.313 4,946
105 NITE Knight/Trimark Group, Inc. (Class A) 3.32% 47.000 4,935
63 LEH Lehman Brothers Holdings Inc. 3.36% 79.063 4,981
61 MER Merrill Lynch & Co., Inc. 3.31% 80.625 4,918
37 MWD Morgan Stanley Dean Witter & Co. 3.36% 135.000 4,995
141 TROW T. Rowe Price Associates, Inc. 3.34% 35.125 4,953
134 SCH The Charles Schwab Corporation 3.34% 37.000 4,958
______ _________
Total Investments 100% $148,448
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 20
Schedule of Investments
Internet Select Portfolio, Series 2
FT 395
At the Opening of Business on the Initial Date of Deposit-January 4, 2000
<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
_____________________
93 T AT&T Corp. 3.35% $ 53.375 $ 4,964
60 AOL America Online, Inc. 3.35% 82.750 4,965
95 WCOM MCI WorldCom, Inc. 3.33% 51.938 4,934
118 Q Qwest Communications International Inc. 3.36% 42.125 4,971
Communications Equipment
_____________________
26 JDSU JDS Uniphase Corporation 3.30% 187.750 4,881
64 LU Lucent Technologies Inc. 3.33% 77.125 4,936
75 TLAB Tellabs, Inc. 3.32% 65.625 4,922
Computers & Peripherals
_____________________
97 DELL Dell Computer Corporation 3.33% 50.875 4,935
43 EMC EMC Corporation 3.34% 115.000 4,945
71 GTW Gateway Inc. 3.33% 69.375 4,926
42 HWP Hewlett-Packard Company 3.33% 117.438 4,932
65 SUNW Sun Microsystems, Inc. 3.36% 76.500 4,972
Internet Content
_____________________
15 CMGI CMGI Inc. 3.31% 326.625 4,899
25 ICGE Internet Capital Group, Inc. 3.38% 200.000 5,000
58 LCOS Lycos, Inc. 3.34% 85.234 4,944
10 YHOO Yahoo! Inc. 3.21% 474.938 4,749
Internet Software & Services
_____________________
26 BVSN BroadVision, Inc. 3.33% 189.438 4,925
23 CHKP Check Point Software Technologies Ltd. (3) 3.39% 218.500 5,026
52 EXDS Exodus Communications, Inc. 3.37% 96.000 4,992
82 INTU Intuit Inc. 3.34% 60.375 4,951
42 MSFT Microsoft Corporation 3.31% 116.563 4,896
42 ORCL Oracle Corporation 3.35% 118.125 4,961
43 RNWK RealNetworks, Inc. 3.36% 115.750 4,977
Networking Products
_____________________
46 CSCO Cisco Systems, Inc. 3.36% 108.063 4,971
14 JNPR Juniper Networks, Inc. 3.25% 344.000 4,816
27 RBAK Redback Networks Inc. 3.32% 182.000 4,914
Semiconductors
_____________________
76 CNXT Conexant Systems, Inc. 3.34% 65.063 4,945
57 INTC Intel Corporation 3.35% 86.875 4,952
31 PMCS PMC-Sierra, Inc. 3.32% 158.750 4,921
88 VTSS Vitesse Semiconductor Corporation 3.34% 56.250 4,950
______ _________
Total Investments 100% $148,072
====== =========
______________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 21
Schedule of Investments
New e-Conomy Select Portfolio Series
FT 395
At the Opening of Business on the Initial Date of Deposit-January 4, 2000
<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>
Bandwidth
_____________
111 T AT&T Corp. 4% $ 53.375 $ 5,925
55 CSCO Cisco Systems, Inc. 4% 108.063 5,943
77 LU Lucent Technologies Inc. 4% 77.125 5,939
114 WCOM MCI WorldCom, Inc. 4% 51.938 5,921
91 TLAB Tellabs, Inc. 4% 65.625 5,972
e-Business
_____________
31 ARBA Ariba, Inc. 4% 191.750 5,944
31 BVSN BroadVision, Inc. 4% 189.438 5,873
29 CMRC Commerce One, Inc. 4% 203.625 5,905
62 EXDS Exodus Communications, Inc. 4% 96.000 5,952
30 ICGE Internet Capital Group, Inc. 4% 200.000 6,000
e-Infrastructure
_____________
117 DELL Dell Computer Corporation 4% 50.875 5,952
52 EMC EMC Corporation 4% 115.000 5,980
68 INTC Intel Corporation 4% 86.875 5,908
50 ORCL Oracle Corporation 4% 118.125 5,906
78 SUNW Sun Microsystems, Inc. 4% 76.500 5,967
Internet
_____________
72 AOL America Online, Inc. 4% 82.750 5,958
18 CMGI CMGI Inc. 4% 326.625 5,879
70 LCOS Lycos, Inc. 4% 85.234 5,966
51 MSFT Microsoft Corporation 4% 116.563 5,945
13 YHOO Yahoo! Inc. 4% 474.938 6,174
Wireless
_____________
87 ERICY L.M. Ericsson AB (ADR) 4% 68.063 5,922
40 MOT Motorola, Inc. 4% 149.000 5,960
32 NOK Nokia Oy (ADR) 4% 186.500 5,968
33 QCOM QUALCOMM Incorporated 4% 179.313 5,917
120 VOD Vodafone AirTouch Plc (ADR) 4% 49.500 5,940
______ _________
Total Investments 100% $148,716
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 22
Schedule of Investments
Online Media Select Portfolio Series
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<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>
Advertising
___________
137 IPG The Interpublic Group of Companies, Inc. 5% $ 54.375 $ 7,449
77 OMC Omnicom Group Inc. 5% 96.875 7,459
53 TMPW TMP Worldwide Inc. 5% 138.938 7,364
106 YNR Young & Rubicam Inc. 5% 69.938 7,413
Internet
_________
90 AOL America Online, Inc. 5% 82.750 7,448
28 DCLK DoubleClick Inc. 5% 268.000 7,504
87 LCOS Lycos, Inc. 5% 85.234 7,415
64 RNWK RealNetworks, Inc. 5% 115.750 7,408
16 YHOO Yahoo! Inc. 5% 474.938 7,599
Media/Content
_________
249 DIS The Walt Disney Company 5% 29.875 7,439
94 GCI Gannett Co., Inc. 5% 78.688 7,397
129 KRI Knight-Ridder, Inc. 5% 57.750 7,450
155 NYT The New York Times Company (Class A) 5% 48.000 7,440
196 NWS The News Corporation Limited (ADR) 5% 37.813 7,411
105 TWX Time Warner Inc. 5% 71.000 7,455
141 TRB Tribune Company 5% 52.500 7,402
130 VIA/B Viacom Inc. (Class B) 5% 56.938 7,402
Webcasting
_________
125 CBS CBS Corporation 5% 59.625 7,453
85 CCU Clear Channel Communications, Inc. 5% 87.750 7,459
65 EMMS Emmis Communications Corporation (Class A) 5% 113.750 7,394
______ _________
Total Investments 100% $148,761
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 23
Schedule of Investments
Pharmaceutical Select Portfolio, Series 2
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<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>
213 ABT Abbott Laboratories 5% $ 34.875 $ 7,428
118 AMGN Amgen Inc. 5% 62.938 7,427
85 BGEN Biogen, Inc. 5% 87.438 7,432
115 BMY Bristol-Myers Squibb Company 5% 64.438 7,410
166 CHIR Chiron Corporation 5% 44.688 7,418
249 ELN Elan Corporation Plc (ADR) 5% 29.875 7,439
169 GENZ Genzyme Corporation (General Division) 5% 43.813 7,404
134 GLX Glaxo Wellcome Plc (ADR) 5% 55.563 7,446
80 IDPH IDEC Pharmaceuticals Corporation 5% 93.250 7,460
73 IMNX Immunex Corporation 5% 102.000 7,446
81 JNJ Johnson & Johnson 5% 92.188 7,467
113 LLY Eli Lilly and Company 5% 65.688 7,423
48 MEDI MedImmune, Inc. 5% 155.500 7,464
110 MRK Merck & Co., Inc. 5% 67.625 7,439
102 NVTSY Novartis AG (ADR) 5% 73.020 7,448
233 PFE Pfizer Inc. 5% 31.875 7,427
63 ROHHY Roche Holdings AG (ADR) 5% 118.070 7,438
182 SGP Schering-Plough Corporation 5% 40.813 7,428
119 SBH SmithKline Beecham Plc (ADR) 5% 62.500 7,438
91 WLA Warner-Lambert Company (4) 5% 81.938 7,456
______ _________
Total Investments 100% $148,738
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 24
Schedule of Investments
Technology Select Portfolio, Series 2
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<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>
Computer & Peripherals
_____________________
117 DELL Dell Computer Corporation 4% $ 50.875 $ 5,952
52 EMC EMC Corporation 4% 115.000 5,980
86 GTW Gateway Inc. 4% 69.375 5,966
51 HWP Hewlett-Packard Company 4% 117.438 5,989
64 SLR Solectron Corporation 4% 92.750 5,936
78 SUNW Sun Microsystems, Inc. 4% 76.500 5,967
Computer Software & Services
_____________________
70 BMCS BMC Software, Inc. 4% 85.188 5,963
27 CHKP Check Point Software Technologies Ltd. (3) 4% 218.500 5,900
162 CPWR Compuware Corporation 4% 36.625 5,933
88 LGTO Legato Systems, Inc. 4% 67.750 5,962
51 MSFT Microsoft Corporation 4% 116.563 5,945
50 ORCL Oracle Corporation 4% 118.125 5,906
Data Networking/Communications Equipment
__________________________________
82 ADCT ADC Telecommunications, Inc. 4% 72.500 5,945
55 CSCO Cisco Systems, Inc. 4% 108.063 5,943
77 LU Lucent Technologies Inc. 4% 77.125 5,938
32 NOK Nokia Oy (ADR) 4% 186.500 5,968
91 TLAB Tellabs, Inc. 4% 65.625 5,972
Semiconductor Equipment
___________________
47 AMAT Applied Materials, Inc. 4% 126.500 5,946
48 NVLS Novellus Systems, Inc. 4% 123.313 5,919
Semiconductors
____________
113 ALTR Altera Corporation 4% 52.438 5,925
68 INTC Intel Corporation 4% 86.875 5,908
121 MXIM Maxim Integrated Products, Inc. 4% 49.063 5,937
32 QLGC QLogic Corporation 4% 185.500 5,936
58 TXN Texas Instruments Incorporated 4% 102.875 5,967
106 VTSS Vitesse Semiconductor Corporation 4% 56.250 5,963
______ _________
Total Investments 100% $148,666
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 25
Schedule of Investments
Bandwidth Portfolio, Series 2
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<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
_____________________
111 T AT&T Corp. 4% $ 53.375 $ 5,925
101 COVD Covad Communications Group, Inc. 4% 59.000 5,959
121 GBLX Global Crossing Ltd. (3) 4% 49.125 5,944
70 LVLT Level 3 Communications, Inc. 4% 85.063 5,954
114 WCOM MCI WorldCom, Inc. 4% 51.938 5,921
141 Q Qwest Communications International Inc. 4% 42.125 5,940
Communications Equipment
_____________________
82 ADCT ADC Telecommunications, Inc. 4% 72.500 5,945
111 CMTN Copper Mountain Networks, Inc. 4% 53.500 5,939
77 LU Lucent Technologies Inc. 4% 77.125 5,939
59 NT Nortel Networks Corporation (3) 4% 100.938 5,955
91 TLAB Tellabs, Inc. 4% 65.625 5,972
Fiber Optics
_____________________
64 HLIT Harmonic Inc. 4% 92.469 5,918
32 JDSU JDS Uniphase Corporation 4% 187.750 6,008
Networking Products
_____________________
55 CSCO Cisco Systems, Inc. 4% 108.063 5,943
17 JNPR Juniper Networks, Inc. 4% 344.000 5,848
33 RBAK Redback Networks Inc. 4% 182.000 6,006
Semiconductors
_____________________
45 AMCC Applied Micro Circuits Corporation 4% 132.250 5,951
22 BRCM Broadcom Corporation (Class A) 4% 273.125 6,009
91 CNXT Conexant Systems, Inc. 4% 65.063 5,921
37 PMCS PMC-Sierra, Inc. 4% 158.750 5,874
106 VTSS Vitesse Semiconductor Corporation 4% 56.250 5,962
Wireless Communications
_____________________
87 ERICY L.M. Ericsson AB (ADR) 4% 68.063 5,921
40 MOT Motorola, Inc. 4% 149.000 5,960
32 NOK Nokia Oy (ADR) 4% 186.500 5,968
33 QCOM QUALCOMM Incorporated 4% 179.313 5,917
______ _________
Total Investments 100% $148,599
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 26
Schedule of Investments
e-Business Portfolio, Series 2
FT 395
At the Opening of Business on the Initial Date of Deposit-January 4, 2000
<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>
Horizontal Portals
_________________
60 AOL America Online, Inc. 3.36% $ 82.750 $ 4,965
26 ARBA Ariba, Inc. 3.37% 191.750 4,986
24 CMRC Commerce One, Inc. 3.30% 203.625 4,887
34 PPRO PurchasePro.com, Inc. 3.30% 143.594 4,882
29 VERT VerticalNet, Inc. 3.38% 172.625 5,006
10 YHOO Yahoo! Inc. 3.21% 474.938 4,749
Infrastructure
_________________
71 BEAS BEA Systems, Inc. 3.34% 69.625 4,943
26 BVSN BroadVision, Inc. 3.33% 189.438 4,925
23 CHKP Check Point Software Technologies Ltd. (3) 3.40% 218.500 5,026
43 ISLD Digital Island 3.31% 113.875 4,897
52 EXDS Exodus Communications, Inc. 3.37% 96.000 4,992
58 LVLT Level 3 Communications, Inc. 3.33% 85.063 4,934
95 WCOM MCI WorldCom, Inc. 3.33% 51.938 4,934
42 MSFT Microsoft Corporation 3.31% 116.563 4,896
50 PRSF Portal Software, Inc. 3.32% 98.188 4,909
58 SCNT Scient Corporation 3.34% 85.125 4,937
58 SEBL Siebel Systems, Inc. 3.33% 85.000 4,930
33 TIBX TIBCO Software Inc. 3.30% 147.875 4,880
26 VRSN VeriSign, Inc. 3.34% 190.125 4,943
26 VIGN Vignette Corporation 3.31% 188.563 4,903
Procurement
_________________
46 CSCO Cisco Systems, Inc. 3.36% 108.063 4,971
97 DELL Dell Computer Corporation 3.34% 50.875 4,935
26 ITWO i2 Technologies, Inc. 3.31% 188.531 4,902
43 IBM International Business Machines Corporation 3.36% 115.563 4,969
42 ORCL Oracle Corporation 3.35% 118.125 4,961
Venture Capital
_________________
15 CMGI CMGI Inc. 3.31% 326.625 4,899
25 ICGE Internet Capital Group, Inc. 3.38% 200.000 5,000
Vertical Portals
_________________
41 CMDX Chemdex Corporation 3.32% 119.938 4,918
128 HLTH Healtheon/WebMD Corporation 3.35% 38.688 4,952
92 PCOR pcOrder.com, Inc. 3.34% 53.750 4,945
______ ________
Total Investments 100% $147,976
====== ========
_________________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 27
Schedule of Investments
Energy Portfolio, Series 7
FT 395
At the Opening of Business on the Initial Date of Deposit-January 4, 2000
<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>
Natural Gas
_______
156 EPG El Paso Energy Corporation 4% $38.000 $ 5,928
137 ENE Enron Corp. 4% 43.438 5,951
Oil & Gas-Drilling
_____________
383 GLM Global Marine Inc. 4% 15.500 5,937
202 NBR Nabors Industries, Inc. 4% 29.375 5,934
195 NE Noble Drilling Corporation 4% 30.500 5,947
235 SDC Santa Fe International Corporation 4% 25.250 5,934
181 RIG Transocean Offshore Inc. 4% 32.875 5,950
Oil & Gas-Exploration & Production
_____________________________
226 BRR Barrett Resources Corporation 4% 26.250 5,932
188 BR Burlington Resources Inc. 4% 31.563 5,934
383 EOG EOG Resources, Inc. 4% 15.500 5,937
104 VRI Vastar Resources, Inc. 4% 56.875 5,915
Oil-Field Services
_______________
151 BJS BJ Services Company 4% 39.250 5,927
155 HAL Halliburton Company 4% 38.313 5,939
108 SLB Schlumberger Limited 4% 54.938 5,933
180 TDW Tidewater Inc. 4% 32.938 5,929
165 WFT Weatherford International, Inc. 4% 36.063 5,950
Oil-Integrated
_____________
101 BPA BP Amoco Plc (ADR) 4% 58.813 5,940
71 CHV Chevron Corporation 4% 83.625 5,937
111 E ENI SpA (ADR) 4% 53.313 5,918
76 XOM Exxon Mobil Corporation 4% 78.313 5,952
100 RD Royal Dutch Petroleum Company (3) 4% 59.375 5,938
112 TX Texaco Inc. 4% 53.063 5,943
89 TOT Total Fina SA (ADR) 4% 66.500 5,918
245 MRO USX-Marathon Group 4% 24.250 5,941
Oil-Refining & Marketing
_____________________
230 TOS Tosco Corporation 4% 25.813 5,937
______ ________
Total Investments 100% $148,401
====== ========
_________________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 28
Schedule of Investments
Glass-Steagall Financial Opportunity Portfolio Series
FT 395
At the Opening of Business on the Initial Date of Deposit-January 4, 2000
<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>
Banks & Thrifts
_________________
102 BAC Bank of America Corporation 3.33% $ 48.438 $ 4,941
68 CMB The Chase Manhattan Corporation 3.34% 72.875 4,956
241 FSR Firstar Corporation 3.34% 20.563 4,956
147 FBF Fleet Boston Financial Corporation 3.32% 33.563 4,934
239 KEY KeyCorp 3.34% 20.750 4,959
154 MEL Mellon Financial Corporation 3.34% 32.188 4,957
98 NTRS Northern Trust Corporation 3.33% 50.469 4,946
71 STT State Street Corporation 3.34% 69.750 4,952
127 WFC Wells Fargo Company 3.35% 39.125 4,969
Financial Services
_________________
31 AXP American Express Company 3.28% 157.250 4,875
107 COF Capital One Financial Corporation 3.33% 46.188 4,942
94 C Citigroup Inc. 3.35% 52.875 4,970
143 HI Household International, Inc. 3.34% 34.688 4,960
184 KRB MBNA Corporation 3.33% 26.875 4,945
59 PVN Providian Financial Corporation 3.32% 83.563 4,930
Insurance
_________________
111 AFL AFLAC Incorporated 3.35% 44.750 4,967
48 AIG American International Group, Inc. 3.36% 103.938 4,989
52 MMC Marsh & McLennan Companies, Inc. 3.31% 94.563 4,917
184 NFS Nationwide Financial Services, Inc. (Class A) 3.33% 26.875 4,945
Investment Services
_________________
210 AMTD Ameritrade Holding Corporation (Class A) 3.33% 23.563 4,948
105 DLJ Donaldson, Lufkin & Jenrette, Inc. 3.32% 46.938 4,928
176 EGRP E*TRADE Group, Inc. 3.33% 28.063 4,939
131 EV Eaton Vance Corp. 3.33% 37.688 4,937
56 GS The Goldman Sachs Group, Inc. 3.33% 88.313 4,946
105 NITE Knight/Trimark Group, Inc. (Class A) 3.32% 47.000 4,935
63 LEH Lehman Brothers Holdings Inc. 3.36% 79.063 4,981
61 MER Merrill Lynch & Co., Inc. 3.31% 80.625 4,918
37 MWD Morgan Stanley Dean Witter & Co. 3.36% 135.000 4,995
141 TROW T. Rowe Price Associates, Inc. 3.34% 35.125 4,953
134 SCH The Charles Schwab Corporation 3.34% 37.000 4,958
______ _________
Total Investments 100% $148,448
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 29
Schedule of Investments
Internet Portfolio, Series 9
FT 395
At the Opening of Business on the Initial Date of Deposit-January 4, 2000
<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
_____________________
93 T AT&T Corp. 3.35% $ 53.375 $ 4,964
60 AOL America Online, Inc. 3.35% 82.750 4,965
95 WCOM MCI WorldCom, Inc. 3.33% 51.938 4,934
118 Q Qwest Communications International Inc. 3.36% 42.125 4,971
Communications Equipment
_____________________
26 JDSU JDS Uniphase Corporation 3.30% 187.750 4,881
64 LU Lucent Technologies Inc. 3.33% 77.125 4,936
75 TLAB Tellabs, Inc. 3.32% 65.625 4,922
Computers & Peripherals
_____________________
97 DELL Dell Computer Corporation 3.33% 50.875 4,935
43 EMC EMC Corporation 3.34% 115.000 4,945
71 GTW Gateway Inc. 3.33% 69.375 4,926
42 HWP Hewlett-Packard Company 3.33% 117.438 4,932
65 SUNW Sun Microsystems, Inc. 3.36% 76.500 4,972
Internet Content
_____________________
15 CMGI CMGI Inc. 3.31% 326.625 4,899
25 ICGE Internet Capital Group, Inc. 3.38% 200.000 5,000
58 LCOS Lycos, Inc. 3.34% 85.234 4,944
10 YHOO Yahoo! Inc. 3.21% 474.938 4,749
Internet Software & Services
_____________________
26 BVSN BroadVision, Inc. 3.33% 189.438 4,925
23 CHKP Check Point Software Technologies Ltd. (3) 3.39% 218.500 5,026
52 EXDS Exodus Communications, Inc. 3.37% 96.000 4,992
82 INTU Intuit Inc. 3.34% 60.375 4,951
42 MSFT Microsoft Corporation 3.31% 116.563 4,896
42 ORCL Oracle Corporation 3.35% 118.125 4,961
43 RNWK RealNetworks, Inc. 3.36% 115.750 4,977
Networking Products
_____________________
46 CSCO Cisco Systems, Inc. 3.36% 108.063 4,971
14 JNPR Juniper Networks, Inc. 3.25% 344.000 4,816
27 RBAK Redback Networks Inc. 3.32% 182.000 4,914
Semiconductors
_____________________
76 CNXT Conexant Systems, Inc. 3.34% 65.063 4,945
57 INTC Intel Corporation 3.35% 86.875 4,952
31 PMCS PMC-Sierra, Inc. 3.32% 158.750 4,921
88 VTSS Vitesse Semiconductor Corporation 3.34% 56.250 4,950
______ _________
Total Investments 100% $148,072
====== =========
______________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 30
Schedule of Investments
New e-Conomy Portfolio Series
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<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>
Bandwidth
_____________
111 T AT&T Corp. 4% $ 53.375 $ 5,925
55 CSCO Cisco Systems, Inc. 4% 108.063 5,943
77 LU Lucent Technologies Inc. 4% 77.125 5,939
114 WCOM MCI WorldCom, Inc. 4% 51.938 5,921
91 TLAB Tellabs, Inc. 4% 65.625 5,972
e-Business
_____________
31 ARBA Ariba, Inc. 4% 191.750 5,944
31 BVSN BroadVision, Inc. 4% 189.438 5,873
29 CMRC Commerce One, Inc. 4% 203.625 5,905
62 EXDS Exodus Communications, Inc. 4% 96.000 5,952
30 ICGE Internet Capital Group, Inc. 4% 200.000 6,000
e-Infrastructure
_____________
117 DELL Dell Computer Corporation 4% 50.875 5,952
52 EMC EMC Corporation 4% 115.000 5,980
68 INTC Intel Corporation 4% 86.875 5,908
50 ORCL Oracle Corporation 4% 118.125 5,906
78 SUNW Sun Microsystems, Inc. 4% 76.500 5,967
Internet
_____________
72 AOL America Online, Inc. 4% 82.750 5,958
18 CMGI CMGI Inc. 4% 326.625 5,879
70 LCOS Lycos, Inc. 4% 85.234 5,966
51 MSFT Microsoft Corporation 4% 116.563 5,945
13 YHOO Yahoo! Inc. 4% 474.938 6,174
Wireless
_____________
87 ERICY L.M. Ericsson AB (ADR) 4% 68.063 5,922
40 MOT Motorola, Inc. 4% 149.000 5,960
32 NOK Nokia Oy (ADR) 4% 186.500 5,968
33 QCOM QUALCOMM Incorporated 4% 179.313 5,917
120 VOD Vodafone AirTouch Plc (ADR) 4% 49.500 5,940
______ _________
Total Investments 100% $148,716
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 31
Schedule of Investments
Online Media Portfolio Series
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<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>
Advertising
_________
137 IPG The Interpublic Group of Companies, Inc. 5% $ 54.375 $ 7,449
77 OMC Omnicom Group Inc. 5% 96.875 7,459
53 TMPW TMP Worldwide Inc. 5% 138.938 7,364
106 YNR Young & Rubicam Inc. 5% 69.938 7,413
Internet
_________
90 AOL America Online, Inc. 5% 82.750 7,448
28 DCLK DoubleClick Inc. 5% 268.000 7,504
87 LCOS Lycos, Inc. 5% 85.234 7,415
64 RNWK RealNetworks, Inc. 5% 115.750 7,408
16 YHOO Yahoo! Inc. 5% 474.938 7,599
Media/Content
_________
249 DIS The Walt Disney Company 5% 29.875 7,439
94 GCI Gannett Co., Inc. 5% 78.688 7,397
129 KRI Knight-Ridder, Inc. 5% 57.750 7,450
155 NYT The New York Times Company (Class A) 5% 48.000 7,440
196 NWS The News Corporation Limited (ADR) 5% 37.813 7,411
105 TWX Time Warner Inc. 5% 71.000 7,455
141 TRB Tribune Company 5% 52.500 7,402
130 VIA/B Viacom Inc. (Class B) 5% 56.938 7,402
Webcasting
_________
125 CBS CBS Corporation 5% 59.625 7,453
85 CCU Clear Channel Communications, Inc. 5% 87.750 7,459
65 EMMS Emmis Communications Corporation (Class A) 5% 113.750 7,394
______ _________
Total Investments 100% $148,761
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 32
Schedule of Investments
Pharmaceutical Portfolio, Series 8
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<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>
213 ABT Abbott Laboratories 5% $ 34.875 $ 7,428
118 AMGN Amgen Inc. 5% 62.938 7,427
85 BGEN Biogen, Inc. 5% 87.438 7,432
115 BMY Bristol-Myers Squibb Company 5% 64.438 7,410
166 CHIR Chiron Corporation 5% 44.688 7,418
249 ELN Elan Corporation Plc (ADR) 5% 29.875 7,439
169 GENZ Genzyme Corporation (General Division) 5% 43.813 7,404
134 GLX Glaxo Wellcome Plc (ADR) 5% 55.563 7,446
80 IDPH IDEC Pharmaceuticals Corporation 5% 93.250 7,460
73 IMNX Immunex Corporation 5% 102.000 7,446
81 JNJ Johnson & Johnson 5% 92.188 7,467
113 LLY Eli Lilly and Company 5% 65.688 7,423
48 MEDI MedImmune, Inc. 5% 155.500 7,464
110 MRK Merck & Co., Inc. 5% 67.625 7,439
102 NVTSY Novartis AG (ADR) 5% 73.020 7,448
233 PFE Pfizer Inc. 5% 31.875 7,427
63 ROHHY Roche Holdings AG (ADR) 5% 118.070 7,438
182 SGP Schering-Plough Corporation 5% 40.813 7,428
119 SBH SmithKline Beecham Plc (ADR) 5% 62.500 7,438
91 WLA Warner-Lambert Company (4) 5% 81.938 7,456
______ _________
Total Investments 100% $148,738
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 34.
</FN>
</TABLE>
Page 33
Schedule of Investments
Technology Portfolio, Series 11
FT 395
At the Opening of Business on the
Initial Date of Deposit-January 4, 2000
<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>
Computer & Peripherals
_____________________
117 DELL Dell Computer Corporation 4% $ 50.875 $ 5,952
52 EMC EMC Corporation 4% 115.000 5,980
86 GTW Gateway Inc. 4% 69.375 5,966
51 HWP Hewlett-Packard Company 4% 117.438 5,989
64 SLR Solectron Corporation 4% 92.750 5,936
78 SUNW Sun Microsystems, Inc. 4% 76.500 5,967
Computer Software & Services
_____________________
70 BMCS BMC Software, Inc. 4% 85.188 5,963
27 CHKP Check Point Software Technologies Ltd. (3) 4% 218.500 5,900
162 CPWR Compuware Corporation 4% 36.625 5,933
88 LGTO Legato Systems, Inc. 4% 67.750 5,962
51 MSFT Microsoft Corporation 4% 116.563 5,945
50 ORCL Oracle Corporation 4% 118.125 5,906
Data Networking/Communications Equipment
__________________________________
82 ADCT ADC Telecommunications, Inc. 4% 72.500 5,945
55 CSCO Cisco Systems, Inc. 4% 108.063 5,943
77 LU Lucent Technologies Inc. 4% 77.125 5,938
32 NOK Nokia Oy (ADR) 4% 186.500 5,968
91 TLAB Tellabs, Inc. 4% 65.625 5,972
Semiconductor Equipment
___________________
47 AMAT Applied Materials, Inc. 4% 126.500 5,946
48 NVLS Novellus Systems, Inc. 4% 123.313 5,919
Semiconductors
____________
113 ALTR Altera Corporation 4% 52.438 5,925
68 INTC Intel Corporation 4% 86.875 5,908
121 MXIM Maxim Integrated Products, Inc. 4% 49.063 5,937
32 QLGC QLogic Corporation 4% 185.500 5,936
58 TXN Texas Instruments Incorporated 4% 102.875 5,967
106 VTSS Vitesse Semiconductor Corporation 4% 56.250 5,963
______ _________
Total Investments 100% $148,666
====== =========
<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 January 4, 2000. Each Select Portfolio Series has a
Mandatory Termination Date of July 3, 2001. Each Portfolio Series has a
Mandatory Termination Date of January 14, 2005.
(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
Page 34
(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)
_________ _______
Bandwidth Select Portfolio, Series 2 $146,896 $1,703
e-Business Select Portfolio, Series 2 145,271 2,705
Glass-Steagall Financial Opportunity Select Portfolio Series 147,027 1,421
Internet Select Portfolio, Series 2 145,836 2,236
New e-Conomy Select Portfolio Series 146,398 2,318
Online Media Select Portfolio Series 146,432 2,329
Pharmaceutical Select Portfolio, Series 2 146,624 2,114
Technology Select Portfolio, Series 2 146,699 1,967
Bandwidth Portfolio, Series 2 146,896 1,703
e-Business Portfolio, Series 2 145,271 2,705
Energy Portfolio, Series 7 146,375 2,026
Glass-Steagall Financial Opportunity Portfolio Series 147,027 1,421
Internet Portfolio, Series 9 145,836 2,236
New e-Conomy Portfolio Series 146,398 2,318
Online Media Portfolio Series 146,432 2,329
Pharmaceutical Portfolio, Series 8 146,624 2,114
Technology Portfolio, Series 11 146,699 1,967
(3)This Security represents the common stock of a foreign company which
trades directly on a U.S. national securities exchange.
(4)American Home Products Corporation ("American Home") has announced
plans to merge with Warner-Lambert Company ("Warner-Lambert") to create
a new company to be called AmericanWarner Inc. ("AmericanWarner"). As
per the terms of the merger agreement, each shareholder of Warner-
Lambert will receive 1.4919 shares of AmericanWarner for each share of
Warner-Lambert held. As a result of this expected transaction, it is
anticipated that the Pharmaceutical Select Portfolio, Series 2 and the
Pharmaceutical Portfolio, Series 8 will receive shares of common stock
of AmericanWarner in exchange for the shares of Warner-Lambert which
they hold. The transaction is subject to the approval of shareholders of
each company and various regulatory authorities.
</FN>
</TABLE>
Page 35
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 395:
- - Bandwidth Select Portfolio, Series 2
- - e-Business Select Portfolio, Series 2
- - Glass-Steagall Financial Opportunity Select Portfolio Series
- - Internet Select Portfolio, Series 2
- - New e-Conomy Select Portfolio Series
- - Online Media Select Portfolio Series
- - Pharmaceutical Select Portfolio, Series 2
- - Technology Select Portfolio, Series 2
- - Bandwidth Portfolio, Series 2
- - e-Business Portfolio, Series 2
- - Energy Portfolio, Series 7
- - Glass-Steagall Financial Opportunity Portfolio Series
- - Internet Portfolio, Series 9
- - New e-Conomy Portfolio Series
- - Online Media Portfolio Series
- - Pharmaceutical Portfolio, Series 8
- - Technology Portfolio, Series 11
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
the "Summary of Essential Information" for each Trust. 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 among 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 the portfolios of common
stocks 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 new 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
Page 36
substitute Securities ("Replacement Securities"), we will refund to you
that portion of the purchase price and sales charge resulting from the
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. Each Select Portfolio Series has an
expected maturity of approximately 18 months whereas each Portfolio
Series has an expected maturity of approximately five years.
Bandwidth Select Portfolio, Series 2 and Bandwidth Portfolio, Series 2
each consist of a portfolio of common stocks of telecommunications
companies which are focusing on bandwidth technologies. The term
bandwidth refers to the amount of information that can be transmitted
from one user to another in a given amount of time. The speed at which
these signals travel is often as important to the end-user as the
information that is being transmitted. The growing demand for bandwidth
is being driven by the surge in the volume and complexity of data
communications on the Internet. For example, it would take more
bandwidth to download a video game off the Internet in one second than a
page of text.
Now that the Internet infrastructure is firmly in place, the demand for
bandwidth should continue to grow as more people access the Web
worldwide, and as telecommunications service providers begin to mass
market their newer and faster broadband systems.
The following factors support our positive outlook for the companies in
these portfolios:
- - Communications networks presently carry nearly 30 times more voice
traffic than data. In light of the growth in Internet usage, data
traffic is expected to surpass voice communications in the years ahead.
- - Wireless communications is now the fastest growing segment of the
communications equipment market. The demand for wireless products and
services should continue to grow as analog networks are upgraded to
digital systems. Digital signals will accommodate wireless data
communications and potentially increase demand for bandwidth.
- - The transition from copper wiring to fiber-optics is occurring at a
brisk pace. In 1998, it is estimated that over 20 million miles of fiber
cables were installed across the United States.
- - Internet access revenues are expected to shift from independent
Internet service providers to telecom and cable companies.
Deregulation. The U.S. Telecommunications Act of 1996 and the 1997
Telecommunications Agreement, passed by the World Trade Organization,
have opened markets domestically and internationally to encourage
competition and capital investment. New service providers, such as Level
3 Communications, are investing aggressively in network equipment.
Broadband Systems. The future of high-speed access to the Internet lies
in Digital Subscriber Lines (DSL) and cable modems. A new DSL technology
standard, known as the G.Lite, will allow for high-speed Internet access
concurrent with normal telephone service. The technology can be
installed directly by consumers into their PCs, so there will be no
added cost to the telecommunications carriers.
Communications Equipment. The demand for value-added services, like high-
speed Internet access, should continue to fuel demand for more bandwidth
and communications equipment. On a worldwide basis, demand for
communications equipment was estimated at approximately $250 billion in
1997. With the level of competition intensifying, telecommunications
companies have the potential to spend more on equipment in the future.
e-Business Select Portfolio, Series 2 and e-Business Portfolio, Series 2
each consist of a portfolio of common stocks of companies that are
either marketing their goods and services on the Internet or selling
their products and services to those companies transacting business on
the Web.
Page 37
Until recently, the media has focused its attention primarily on
companies that are engaging in business to consumer e-commerce. It is
now becoming apparent, however, that business-to-business e-commerce is
growing at a much faster rate than the more consumer driven market.
The following factors support our positive outlook for business-to-
business e-commerce:
- - The Internet economy, though still in its formative stages, generated
$300 billion in revenue in the U.S in 1998. To put this new economy into
perspective, the auto and telecommunications industries, far more
mature, generated $350 and $270 billion of revenue respectively, over
the same period.
- - It is estimated that as e-commerce evolves, business-to-business
revenues have the potential to outpace business to consumer revenues by
approximately tenfold. Business to consumer companies may dominate the
total number of e-commerce companies (approximately 64%, compared to
approximately 36% providing business-to-business services in 1998), but
the majority of total revenue is being generated by business to business
e-commerce (approximately 23% of total revenue for business to consumer
compared to approximately 77% of total revenue for business-to-business).
- - The revenues generated by e-commerce are only half the story. The
cost savings associated with transacting business on the Internet could
be substantial. It is estimated that corporations around the world have
the potential to experience an aggregate cost savings in excess of a
trillion dollars over the next several years.
A New Breed Of Middlemen. In the bricks-and-mortar business world they
are known as middlemen, but in the cyber-world they are called
intermediaries. They serve the same purpose, which is to act as market
makers and help facilitate transactions between businesses.
Intermediaries are essentially network hubs, comparable to airline hubs
that route travelers making connecting flights. They generate revenues
by charging transaction fees for bringing buyers and sellers together.
Intermediaries help make e-Business run faster-better-cheaper.
Technology Makes it Possible. 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 the potential growth of business-to-
business e-commerce. More specifically, the emphasis will be on computer
hardware and software companies that design products to improve front
and back-office capabilities, ranging from raw materials procurement to
the delivery of finished goods. It is technology that will allow
companies to communicate effectively in real time with their customers
and suppliers.
No Boundaries. The motivation behind the business-to-business sales
model is to transact business faster-better-cheaper, but it accomplishes
much more. By conducting business online, companies are not only
removing geographical boundaries, both domestically and globally, but
are eliminating many of the boundaries that have long prevented many
smaller companies from engaging in business with their larger
counterparts. As the business-to-business marketplace expands, we
believe that the companies in the e-Business Select Portfolio Series and
e-Business Portfolio Series have the potential to participate in growth
opportunities.
Energy Portfolio, Series 7 consists of a portfolio of common stocks of
energy companies which the Sponsor believes are positioned to take
advantage of the world's increasing demand for energy. The demand for
energy, in all of its forms, tends to be driven largely by economic
prosperity and is, therefore, cyclical in nature. The global consumption
of oil, for example, increased in 1996 and 1997 due to solid economic
growth throughout most of the world; yet consumption decreased in 1998
as a result of the economic crisis developing in Russia and Southeast
Asia.
The United States consumes approximately 25% of the world's supply of
oil; however, it is anticipated that emerging countries, along with
Asia, may experience the highest rate of growth in demand in the not too
distant future. Emerging countries, which account for 43% of world
demand as of 1997, are expected to account for more than 50% of demand
by the year 2015.
The following factors support our positive outlook for the energy
industry:
- - The price of oil has moved higher in 1999 and, on a historical basis,
is back to its normal trading range.
- - Oil prices have a significant influence on capital spending. Oil
companies need a sustained upward trend in oil prices to justify risking
large amounts of investment capital on rigs and exploration. For this
reason, the oil industry tends to experience longer peaks and troughs
Page 38
than most cyclical industries.
- - Utilization rates, which reflect the percentage of rigs that are
active, can act as a barometer for energy prices. In 1981, oil prices
were high and the utilization rate was at 98%. In 1986, however, oil
prices were low and the utilization rate was at 26%. In August of 1998,
the rate was at 77%. While not always accurate, this barometer suggests
that when oil prices are strong, the percentage of active rigs tends to
increase.
- - By the year 2020, it is projected that the world will consume three
times as much energy as it did 25 years ago. The majority of the added
consumption is expected to come from the developing countries of Asia.
Horizontal Drilling. This exploration technique is not new, but it has
been improved. New instrumentation can now be attached to a drill bit to
generate real time geological information, without impeding the drilling
process. It is estimated that horizontal drilling has the potential to
out-produce a vertical well by as much as sevenfold. This technique has
been especially cost-effective in offshore drilling.
3-D Seismic Imaging. This is a relatively new technology that is used to
detect underground oil and gas reserves. Seismic imaging utilizes the
vibration from sound waves to construct a three-dimensional, computer-
generated picture of a geological formation. This process has the
potential to greatly improve the odds of locating oil and gas.
Time is Money. The technologies that are presently being employed in the
field of oil and gas exploration are helping reduce the cost of
extracting oil and natural gas by saving detection time and allowing
companies to capture a higher percentage of tapped reserves. In the
1990s, oil and natural gas stocks have been mostly out of favor, but the
companies in the industry have been consolidating and cutting costs to
position themselves for the next upward cycle.
Glass-Steagall Financial Opportunity Select Portfolio Series and Glass-
Steagall Financial Opportunity Portfolio Series each consist of a
portfolio of common stocks of companies that provide a wide variety of
financial services.
The financial industry has undergone several significant changes during
its storied history. Perhaps none have been more noteworthy than the
recent overturn of the Glass-Steagall Act of 1933. Firms can now create
"financial supermarkets" that offer traditional banking, insurance
underwriting, securities underwriting, investment brokerage and merchant
banking. Combine this with a strong job market, and a robust economy and
stock market, and business is currently booming for companies in the
financial industry.
We believe that there are a few major trends that should continue
pushing the financial industry.
The first is an aging population. Nearly three out of ten people in the
U.S. are baby boomers. Scores of them have already started, or soon will
start, planning for their retirement just as they are entering their
peak earnings years.
Another driving factor behind the industry is technological innovation.
Improved technology has enabled financial companies to increase their
volume and reduce transaction costs in order to attract consumers.
E-commerce, once viewed as a threat, is now being embraced by many in
the industry. Because most purchases made over the Internet are charged,
companies that offer credit card services are realizing that e-commerce
represents a significant source of potential revenue. Others have begun
offering products and services over the Internet simply to satisfy
growing demand or as an effective cross-selling tool.
For much of the industry, however, the greatest impact may come from
merger and acquisition activity. U.S. M&A activity continues to remain
strong, led by telecommunications, radio and TV, and banking industries.
Now that the Glass-Steagall Act is no longer a barrier, companies
throughout the industry can compete more effectively and implement new
growth strategies just as other industries have done.
The following factors support our positive outlook for the financial
services industry:
- - Through the first six months of 1999, trading volume on the New York
Stock Exchange was up nearly 30% versus the same period in the previous
year.
- - Total underwriting revenues reached record levels in 1998. Although
underwriting revenue fell slightly through the first half of 1999, it is
still high compared to historical levels.
- - We believe that the recent proposal to eliminate the pooling method of
accounting in January of 2001 will add further pressure for
consolidation within the industry.
Page 39
- - Between the end of 1990 and the end of 1998, assets under management
have grown from just over $1 trillion to more than $5.5 trillion. Much
of this growth can be attributed to increased retirement savings and
gains in the stock market.
Internet Select Portfolio, Series 2 and Internet Portfolio, Series 9
each consist 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 World Wide Web is growing
daily. A recent report by The Computer Industry Almanac projects that
there could potentially be 490 million people around the world with
Internet access by the year 2002. Business, educational, and home
Internet users in the top 15 countries are expected to account for
nearly 82% of these worldwide Internet users. The report also suggests
that by 2000, there will be 25 countries where over 10% of the
population will be Internet users.
Although the potential scope of the Internet is impressive, its effects
may be even more dramatic. One of the Internet's most significant
effects is to cut the cost of interaction-the searching, coordinating
and monitoring that people and companies must do when they exchange
goods, services or ideas. It is estimated that the costs associated with
these activities could drop by as much as 80% or more if they are
handled electronically. Pervading all economies, these costs account for
more than a third of economic activity in the United States.
Though still considered to be in its infancy, the Internet has already
had an impact on business, consumers and nearly every aspect of today's
society. Whether this rate of change will continue and where it will
take us may be determined, in our opinion, in large part by the
companies in the Internet Portfolios.
New technologies continue to be accepted faster than ever. While it took
35 years before one-quarter of U.S. households owned a telephone, the
Internet took only seven years to reach the same level of penetration.
Consider the following factors:
- - More than 110 million adults are online in the United States 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 online revenues totaled $43 billion in 1998, up
from an estimated $9.5 billion in 1997.
- - Improved security measures are helping fuel consumer transactions
over the Web. Global e-commerce spending jumped from approximately $50
billion in 1998 to an estimated $110 billion in 1999.
- - Computers have become almost as popular as other home appliances. The
number of homes with a computer nearly doubled from 29% in 1995 to
approximately 54% in 1999.
- - There are 800 million pages on the Web while another 1.5 million pages
are being created every day.
New e-Conomy Select Portfolio Series and New e-Conomy Portfolio Series
each consist of a portfolio of common stocks of companies that bring
products and services to the new technology-driven economy.
The new economy is about change: change at a dizzying pace. Most of the
focus has been on those acting on the changes. They are hoping to take
advantage of new markets and technologies to run their businesses more
efficiently and to reach consumers and each other in ways never before
possible.
In the New e-Conomy Portfolio, we are interested in the companies who
are the agents of change; those companies that are enacting change as
opposed to reacting to change. The portfolio focuses on companies
involved in business-to-business e-commerce, bandwidth technologies, the
Internet, the Internet's infrastructure and wireless technology. In our
opinion, it is these companies that are helping to redefine the new
economy.
Business. The Internet has established an entirely new method of
transacting business. It has few barriers to entry beyond that of a
personal computer, and is very cost-efficient. We believe that
corporations around the world could potentially experience significant
cost savings from e-commerce over the next several years. By conducting
business online, companies are not only removing domestic geographical
boundaries, but global boundaries as well.
The Consumer. One of the real advantages of the new economy is that the
consumer also benefits. It has been reported that technology has been
credited with reducing the rate of inflation in the United States by
Page 40
0.7% in each of the past two years. Unlike previous economic expansions,
the new economy has shown that it is possible to have sustained growth
without higher inflation. In the new economy, if inflation can be
restrained, there is a greater chance of boosting consumption across the
globe.
Convergence. It's the quintessential new economy idea: translate
everything from Seinfeld to your child's homework into the digitized 1s
and 0s of computer language, then make it all available anywhere in the
world via the Internet. Big dollars are already being wagered on the
prospect of phone, TV and PC convergence. The idea that three of the
most powerful devices of the last century can be merged into a single
seamless information system is a vision which could have profound
ramifications on the corporate media landscape in the not-too-distant
future.
Consider the following factors:
- - The Internet economy, though still in its formative stages, generated
approximately $300 billion in revenue in the United States in 1998. To
put this new economy into perspective, the auto and telecommunications
industries, far more mature, generated approximately $350 and $270
billion of revenue respectively over the same period.
- - A new computer is added to the Internet approximately every four
seconds.
- - 1.5 million web pages are being created every day.
- - The World Wide Web doubles in size every eight months.
- - Approximately half of all U.S. households own a computer. Lower-income
households are buying personal computers at a faster rate than any other
segment, in part because of the introduction of models that retail below
$1,000.
- - Approximately 110 million U.S. adults are connected to the Internet.
In addition, 28 million offices are connected, an increase of
approximately 76% over early 1998.
Online Media Select Portfolio Series and Online Media Portfolio Series
each consist of a portfolio of common stocks of media and advertising
companies that are active participants in the online segment of this
industry. The way businesses market their products has been an ongoing
evolution. Regardless of whether they have chosen newspapers, magazines,
radio, or television, the media has played an integral role in
distributing product information. In their early stages, each medium was
considered to be the new communication source of the time. However, none
grew or were accepted as fast as the newest form of media, the Internet.
It is estimated that there are currently approximately 110 million
adults using the Internet in the United States. To put this number in
perspective, the most profitable medium, the television, boasts an
audience of roughly 195 million adults. With the unprecedented growth of
the Internet as a new medium, both media companies and advertisers have
been quick to explore it as a new source of revenue.
The Media. Some of the more traditional media companies view the
Internet as a way to complement their existing businesses while others
are aggressively pursuing new growth strategies. The larger, diversified
media companies may stand to benefit the most from using the Internet.
One of the keys to online success is building and keeping an audience.
Because of their accomplishments in traditional mediums, these companies
already know what it takes to provide the quality content that people
are looking for. By adding the Internet to their impressive list of
media platforms, they are able to entice new customers to advertise with
them and allow existing customers to broaden the scope of their
advertising.
Advertisers. Perhaps no other group has adapted to new media channels as
rapidly as advertisers. Advertisers understand that as audiences migrate
from one medium to another, advertising budgets soon follow. Also,
because websites are typically geared toward a specific audience,
advertisers are able to market their clients' products and services more
efficiently.
Consider the following factors:
- - Internet companies are also spending advertising dollars to market
themselves offline. It is estimated that Internet-related advertising in
traditional media will approach $2 billion in 1999.
- - The anticipated ad spending resulting from upcoming events such as the
2000 Summer Olympics, Presidential election campaign and the ongoing dot-
com wars should bode well for advertisers, diversified media companies
and Web portals.
- - Over half of the marketers recently surveyed by Forrester Research say
that they will increase their current media budgets to pay for online
Page 41
advertising.
- - With more people using the Internet for entertainment, the companies
that offer the best content are likely to be the ones that increase
audience traffic and generate more e-commerce and advertising revenues.
- - Compared to other media, the growth of the Internet has been
unprecedented. While it took radio 38 years and television 13 years to
reach 50 million U.S. users, it took the Internet only five years to
reach the same level.
Pharmaceutical Select Portfolio, Series 2 and Pharmaceutical Portfolio,
Series 8 each consist of a portfolio of common stocks of pharmaceutical
companies. The pharmaceutical industry generated over $300 billion in
sales worldwide in 1998, nearly $125 billion of which was made by U.S.
drugmakers. The industry is highly competitive and extremely capital
intensive. Drugmakers spend in excess of $21 billion annually on
researching and developing new products. The amount of capital invested
in research and development ("R&D") has nearly doubled every five years
since 1970.
There are approximately 78 million baby boomers living in the United
States, some of whom will begin turning 65 after 2010. Currently, it is
estimated that 70% of Americans over the age of 65 suffer from
cardiovascular disease. It is believed that as average life expectancies
increase, the number of people at risk for disease will increase.
The following factors support our positive outlook for the
pharmaceutical industry:
- - Numerous pharmaceutical scientists are currently researching over
1,000 new medicines. Pharmaceutical companies have generated more than
100 new treatments in the last two years.
- - Pharmaceutical companies have staffed up their sales forces to
increase market shares. The top 40 drugmakers currently employ
approximately 59,000 representatives in the United States, up from
34,000 in 1994.
- - Foreign demand for pharmaceuticals is growing, especially in emerging
countries. U.S. drug companies sold an estimated $43 billion abroad in
1998, approximately 54% of total U.S. sales.
- - Managed care providers, especially HMOs, encourage the use of
pharmaceuticals because they are regarded as a relatively inexpensive
form of treatment and are less invasive.
- - Research-based pharmaceutical companies continue to invest record-
setting amounts on research and development. Spending is expected to
increase by 14.1% in 1999 to a new record level of $24.03 billion.
The Food & Drug Administration. In 1997, the Food and Drug
Administration (FDA) relaxed its restrictions on pharmaceutical
companies advertising drugs directly to the public. The FDA, which now
has a faster review process in place, is creating a business environment
that could make it quicker and more economical for some drugmakers to
bring new products to market.
Ad Spending Is On The Rise. Direct-To-Consumer (DTC) advertising totaled
$1.3 billion in 1998. The amount spent on television ads featuring
prescription drugs was $664 million, more than double the amount in
1997. Drugmakers are promoting their products to the public through all
of the major media outlets including television, radio, magazines and
newspapers. Advertising allows companies to educate the public about
diseases and treatments as well as gather information that will help
them target consumers in the future.
Demand Driven By Need. Pharmaceutical companies have initiated a number
of cost-containment measures such as using the Internet to reduce
administrative costs and forging alliances with biotechnology companies
to share expertise and the costs associated with R&D. Ultimately, the
demand for prescription and over-the-counter drugs is driven more by
need than price. An aging population coupled with longer life
expectancies should help support, if not boost, demand for drugs in the
future.
Technology Select Portfolio, Series 2 and Technology Portfolio, Series
11 each consist of a portfolio of common stocks of technology companies
involved in the manufacturing, sales or servicing of computers and
peripherals, computer software and services, data
networking/communications equipment, semiconductor equipment and
semiconductors. If you are looking to invest in cutting-edge technology,
you may not need to look any further than the Internet. It is now
estimated that over 200 million people are connected to the Web
worldwide. The technology that makes it all possible is developed by
computer, software, networking, communications and semiconductor
companies. Now that the infrastructure is in place, the focus of
technology is shifting to e-commerce.
Page 42
E-commerce can be divided into two main categories: business-to-consumer
and business-to-business. Business-to-business online revenues totaled
$43 billion in 1998, while business-to-consumer revenues were estimated
to be in the area of $13 billion.
The following factors support our positive outlook for the technology
industry:
- - Half of all U.S. households own a computer. Lower-income households
are buying personal computers at a faster rate than any other segment,
in part because of the introduction of models that retail below $1,000.
- - Approximately 110 million U.S. adults are connected to the Internet.
In addition, 28 million offices are connected, an increase of 76% over
early 1998.
- - Communications networks presently carry nearly 30 times more voice
traffic than data. In light of the growth in Internet usage, data
traffic is expected to surpass voice communications in the years ahead.
- - Semiconductor sales, tempered in recent years by economic weakness in
Asia, are expected to rebound and experience strong growth in 2000 and
2001.
- - The expanding use of e-commerce is expected to result in significant
cost savings in business-to-consumer transactions.
- - Using the Internet to improve forecasting and replenishment of
products, companies should be able to reduce inventory costs as
suppliers are linked by just-in-time inventory systems.
- - E-commerce should dramatically reduce the amount of time it takes to
process orders. In addition, customer service costs should be reduced
through the use of a Web customer service interface to decrease errors.
Software Solutions. E-commerce is creating demand and opportunity for
software products in many areas including supply-chain management (SCM)
and database software. These software systems can navigate massive
amounts of data to help streamline manufacturing and distribution,
monitor inventories and perform transaction management.
Data Networking. The value of information lies in its application.
Computer networks connect computers and peripheral equipment so that
information can be shared. As e-commerce evolves, the need for
businesses to network with suppliers and customers should create strong
demand for those companies that provide equipment and data networking
services.
Higher Productivity. Technology has played an integral part in the
economic prosperity enjoyed by the United States during the 1990s. It
has helped increase productivity and curb inflation. The Internet should
continue to fuel technological innovation for years to come as
businesses of all sizes go online to increase distributions and boost
efficiency. The Technology Select Portfolio Series and the Technology
Portfolio Series invest in companies that have the potential to benefit
from the future growth in e-commerce.
You should be aware that predictions stated herein for a particular
industry may not be realized. In addition, the Securities contained in
each Trust are not intended to be representative of the selected
industry as a whole and the performance of each Trust is expected to
differ from that of its comparative industry. 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 cer-
tain Trusts, foreign companies. The value of a Trust's Units will fluctuate
with changes in the value of these common stocks. Common stock prices fluc-
tuate 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,
especially the relatively short 18-month life of the Select Portfolio
Series, 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
Page 43
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.
Bandwidth Industry. Because more than 25% of each of the Bandwidth
Portfolios are invested in telecommunications companies which are
focusing on bandwidth technologies, these Trusts are considered to be
concentrated in the bandwidth industry. A portfolio concentrated in a
single industry may present more risks than a portfolio which is broadly
diversified over several industries. The market for high technology
communications products and services is characterized by rapidly
changing technology, rapid product obsolescence or loss of patent
protection, cyclical market patterns, evolving industry standards and
frequent new product introductions. Certain communications/bandwidth
companies are subject to substantial governmental regulation, which
among other things, regulates permitted rates of return and the kinds of
services that a company may offer. The communications industry has
experienced substantial deregulation in recent years. Deregulation may
lead to fierce competition for market share and can have a negative
impact on certain companies. Competitive pressures are intense and
communications stocks can experience rapid volatility.
e-Commerce Industry. The e-Business Portfolios and the New e-Conomy
Portfolios are considered to be concentrated in companies involved with
business-to-business online selling, including companies who are
marketing goods and services or transacting business online. General
risks for these companies include the state of the worldwide economy,
intense global competition, and rapid obsolescence of the utilized
technologies and their related systems, products and services. While
business-to-business e-commerce is evolving rapidly, future demand for
individual products and services is impossible to predict.
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, limited trading histories
and fewer experienced management personnel. Finally, the lack of
barriers to entry suggests a future of intense competition for online
retailers. For additional information regarding the risks associated
with the e-Business Portfolios and the New e-Conomy Portfolios, see
"Risk Factors-Technology Industry."
Energy Industry. The Energy Portfolio Series is considered to be
concentrated in companies that explore for, produce, refine, distribute
or sell petroleum or gas products, or provide parts or services to
petroleum or gas companies. General problems of the petroleum and gas
products industry include volatile fluctuations in price and supply of
energy fuels, international politics, reduced demand as a result of
increases in energy efficiency and energy conservation, the success of
exploration projects, clean-up and litigation costs relating to oil
spills and environmental damage, and tax and other regulatory policies
of various governments. Oil production and refining companies are
subject to extensive federal, state and local environmental laws and
regulations regarding air emissions and the disposal of hazardous
materials. In addition, declines in U.S. and Russian crude oil
production will likely lead to a greater world dependence on oil from
OPEC nations which may result in more volatile oil prices.
Financial Services Industry. The Glass-Steagall Financial Opportunity
Portfolios are considered to be concentrated in banks and thrifts,
insurance companies and investment firms. Banks, thrifts and their
holding companies are especially subject to the adverse effects of
economic recession; volatile interest rates; portfolio concentrations in
geographic markets and in commercial and residential real estate loans;
and competition from new entrants in their fields of business. Although
recently-enacted legislation repealed most of the barriers which
separated the banking, insurance and securities industries, these
industries are still extensively regulated at both the federal and state
level and may be adversely affected by increased regulations.
Banks and thrifts face increased competition from nontraditional lending
sources as regulatory changes, such as the recently enacted financial-
services overhaul legislation, permit new entrants to offer various
financial products. Technological advances such as the Internet allow
these nontraditional lending sources to cut overhead and permit the more
efficient use of customer data.
Brokerage firms, broker/dealers, investment banks, finance companies and
mutual fund companies are also financial services providers. These
Page 44
companies compete with banks and thrifts to provide traditional
financial service products, in addition to their traditional services,
such as brokerage and investment advice. In addition, all financial
service companies face shrinking profit margins due to new competitors,
the cost of new technology and the pressure to compete globally.
Companies involved in the insurance industry are engaged in
underwriting, selling, distributing or placing of property and casualty,
life or health insurance. Insurance company profits are affected by many
factors, including interest rate movements, the imposition of premium
rate caps, competition and pressure to compete globally. Property and
casualty insurance profits may also be affected by weather catastrophes
and other disasters. Life and health insurance profits may be affected
by mortality rates. Already extensively regulated, insurance companies'
profits may also be adversely affected by increased government
regulations or tax law changes.
Media Industry. The Online Media Portfolios are considered to be
concentrated in companies involved in the development, production, sale
and distribution of goods or services used to provide advertising,
programming and information for the Internet marketplace. Online media
companies are subject to risks which include cyclicality of revenues and
earnings, a decrease in the discretionary income of targeted
individuals, changing consumer tastes and interests, fierce competition
in the industry and the potential for increased government regulation.
Media company revenues are dependent in large part on advertising
spending. A weakening general economy or a shift from online to other
forms of advertising may lead to a reduction in discretionary spending
on online advertising. For additional information regarding specific
risks associated with the Online Media Portfolios, see "Risk Factors-
Technology."
Pharmaceutical Industry. The Pharmaceutical Portfolios are considered to
be concentrated in companies involved in drug development and
production. 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.
Technology Industry. The e-Business Portfolios, Internet Portfolios, New
e-Conomy Portfolios, Online Media Portfolios and Technology Portfolios
are considered to be concentrated in Securities issued by companies
which are involved in 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
more specific risks associated with the e-Business Portfolios and New e-
Conomy Portfolios, see "Risk Factors-e-Commerce Industry." For
additional information regarding more specific risks associated with the
Online Media Portfolios, see "Risk Factors-Media 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
Page 45
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
the Year 2000 Problem 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.
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
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
Page 46
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 1.00% of the Public
Offering Price of a Unit. This initial sales charge is actually equal to
the difference between the maximum sales charge for each Trust (3.25% of
the Public Offering Price for each Select Portfolio Series and 4.50% of
the Public Offering Price for each Portfolio Series) and the maximum
remaining deferred sales charge (initially $.225 per Unit for each
Select Portfolio Series and $.350 per Unit for each Portfolio Series).
The initial sales charge will vary from 1.00% 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 $.045 per Unit
in the case of each Select Portfolio Series or $.07 per Unit in the case
of each Portfolio Series will be deducted on the 20th day of each month
from August 18, 2000 through December 20, 2000.
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 3.25% of the Public Offering Price per Unit (equivalent
to 3.359% of the net amount invested) for each Select Portfolio Series
and 4.50% of the Public Offering Price per Unit (equivalent to 4.712% of
the net amount invested) for each Portfolio Series. For each Portfolio
Series, the sales charge will be reduced by 1/2 of 1% on each subsequent
January 31, commencing January 31, 2001, to a minimum sales charge of
3.00%.
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 for each Select Portfolio Series:
Your maximum
If you invest sales charge
(in thousands):* will be:
_________________ ________________
$50 but less than $100 3.00%
$100 but less than $150 2.75%
$150 but less than $500 2.40%
$500 but less than $1,000 2.25%
$1,000 or more 1.50%
For each Portfolio Series:
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
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 party
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
Page 47
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, daughters-in-law, brothers-in-law and sisters-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 in lieu of commissions or who charge 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, your Units will only be assessed that
portion of the sales charge retained by the Sponsor, .5% of the Public
Offering Price for the Select Portfolio Series and 1.3% of the Public
Offering Price for the Portfolio Series (1.0% in certain circumstances).
This discount for "wrap fee" purchases is available whether or not you
purchase Units with the Wrap CUSIP. However, if you purchase Units with the
Wrap CUSIP, you should be aware that all distributions of income and/or
capital will be automatically reinvested into additional Units of your Trust
subject only to that portion of the sales charge retained by the Sponsor. 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 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.
Dealer Concessions.
For the Select Portfolio Series, dealers and other selling agents can
purchase Units at prices which reflect a concession or agency commission
of 2.75% of the Public Offering Price per Unit. However, for Units sold
subject only to any remaining deferred sales charge, the amount will be
reduced to $0.175 per Unit for Units sold subject to the maximum
deferred sales charge or 78% of the then current maximum remaining
Page 48
deferred sales charge on Units sold subject to less than the maximum
deferred sales charge.
Dealers and other selling agents who sell Units of the Select Portfolio
Series 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:
_________________ ________________
$15 but less than $25 .015%
$25 but less than $40 .025%
$40 but less than $50 .050%
$50 but less than $75 .125%
$75 but less than $100 .150%
$100 or more .200%
For the Portfolio Series, 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 January 31, 2001). 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 on the
sale of Portfolio Series Units equal to .30% of the Public Offering
Price if they purchase at least $100,000 worth of Units of the Portfolio
Series 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 Portfolio Series
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 $10 .20%
$10 or more .30%
For all Trusts, 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 charge 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, BusinessWeek,
Forbes or Fortune. The investment characteristics of each Trust differ
Page 49
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
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 in the case of the Portfolio Series, costs incurred in
annually updating the Portfolio Series' registration statements. 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 at that time 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. For the Portfolio Series, legal, typesetting,
electronic filing and regulatory filing fees and expenses associated
with updating those Trusts' registration statements yearly are also now
chargeable to such Trusts. Historically, we paid these fees and
expenses. There are no such fees and expenses that will be charged to
the Select Portfolio Series. 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'
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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
- - 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 Portfolio Series 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 costs exceed $0.0050 per Unit. Otherwise, the
Portfolio Series 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 amount 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
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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
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
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.
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 your
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
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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");
- - 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. 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. Distributions on Units identified by the Wrap CUSIP will be
automatically reinvested into additional Units of your Trust. Each later
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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
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;
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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."
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 as stated in the "Summary of Essential
Information" for each Trust. 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
Page 55
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
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. See "Tax Status" for additional information. 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
Page 56
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
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.
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FIRST TRUST (registered trademark)
BANDWIDTH SELECT PORTFOLIO, SERIES 2
E-BUSINESS SELECT PORTFOLIO, SERIES 2
GLASS-STEAGALL FINANCIAL OPPORTUNITY SELECT PORTFOLIO SERIES
INTERNET SELECT PORTFOLIO, SERIES 2
NEW E-CONOMY SELECT PORTFOLIO SERIES
ONLINE MEDIA SELECT PORTFOLIO SERIES
PHARMACEUTICAL SELECT PORTFOLIO, SERIES 2
TECHNOLOGY SELECT PORTFOLIO, SERIES 2
BANDWIDTH PORTFOLIO, SERIES 2
E-BUSINESS PORTFOLIO, SERIES 2
ENERGY PORTFOLIO, SERIES 7
GLASS-STEAGALL FINANCIAL OPPORTUNITY PORTFOLIO SERIES
INTERNET PORTFOLIO, SERIES 9
NEW E-CONOMY PORTFOLIO SERIES
ONLINE MEDIA PORTFOLIO SERIES
PHARMACEUTICAL PORTFOLIO, SERIES 8
TECHNOLOGY PORTFOLIO, SERIES 11
FT 395
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. 333-93265) and
- - Investment Company Act of 1940 (file no. 811-05903)
Information about the Trusts can be reviewed and copied at the
Securities and Exchange Commission's Public Reference Room in Washington
D.C. Information regarding the operation of the Commission's Public
Reference Room may be obtained by calling the Commission at 1-202-942-
8090.
Information about the Trusts is available on the EDGAR Database on the
Commission's Internet site at
http://www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W., Washington, D.C. 20549-0102
e-mail address: [email protected]
January 4, 2000
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
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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 395 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 January 4, 2000. Capitalized terms
have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 2
Litigation
Microsoft Corporation 2
Concentrations
Communications 2
Electronic Commerce 3
Energy 3
Financial Services 4
Media 7
Pharmaceutical 8
Technology 8
Portfolios
Bandwidth 9
e-Business 10
Energy 12
Glass-Steagall Financial Opportunity 13
Internet 15
New e-Conomy 17
Online Media 19
Pharmaceutical 20
Technology 21
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
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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
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 November 5, 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
Communications. An investment in Units of the Bandwidth Portfolios
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
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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.
Electronic Commerce. An investment in Units of the e-Business Portfolios
and the New e-Conomy Portfolios should be made with an understanding of
the characteristics of the problems and risks such an investment may
entail. These portfolios consist 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 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.
Energy. An investment in the Energy Portfolio Series should be made with
an understanding of the problems and risks such an investment may entail.
The Energy Portfolio Series invests in Securities of companies involved
in the energy industry. The business activities of companies held in the
Energy Portfolio Series may include: production, generation,
transmission, marketing, control, or measurement of gas and oil; the
provision of component parts or services to companies engaged in the
above activities; energy research or experimentation; and environmental
activities related to the solution of energy problems, such as energy
conservation and pollution control. Companies participating in new
activities resulting from technological advances or research discoveries
in the energy field were also considered for the Pharmaceutical Select
Portfolio Series.
The securities of companies in the energy field are subject to changes
in value and dividend yield which depend, to a large extent, on the
price and supply of energy fuels. Swift price and supply fluctuations
may be caused by events relating to international politics, energy
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conservation, the success of exploration projects, and tax and other
regulatory policies of various governments. As a result of the
foregoing, the Securities in the Pharmaceutical Select Portfolio Series
may be subject to rapid price volatility. The Sponsor is unable to
predict what impact the foregoing factors will have on the Securities
during the life of the Pharmaceutical Select Portfolio Series.
According to the U.S. Department of Commerce, the factors which will
most likely shape the energy industry include the price and availability
of oil from the Middle East, changes in U.S. environmental policies and
the continued decline in U.S. production of crude oil. Possible effects
of these factors may be increased U.S. and world dependence on oil from
the Organization of Petroleum Exporting Countries ("OPEC") and highly
uncertain and potentially more volatile oil prices. Factors which the
Sponsor believes may increase the profitability of oil and petroleum
operations include increasing demand for oil and petroleum products as a
result of the continued increases in annual miles driven and the
improvement in refinery operating margins caused by increases in average
domestic refinery utilization rates. The existence of surplus crude oil
production capacity and the willingness to adjust production levels are
the two principal requirements for stable crude oil markets. Without
excess capacity, supply disruptions in some countries cannot be
compensated for by others. Surplus capacity in Saudi Arabia and a few
other countries and the utilization of that capacity prevented, during
the Persian Gulf crisis, and continues to prevent, severe market
disruption. Although unused capacity contributed to market stability in
1990 and 1991, it ordinarily creates pressure to overproduce and
contributes to market uncertainty. The restoration of a large portion of
Kuwait and Iraq's production and export capacity could lead to such a
development in the absence of substantial growth in world oil demand.
Formerly, OPEC members attempted to exercise control over production
levels in each country through a system of mandatory production quotas.
Because of the 1990-1991 crisis in the Middle East, the mandatory system
has since been replaced with a voluntary system. Production under the
new system has had to be curtailed on at least one occasion as a result
of weak prices, even in the absence of supplies from Kuwait and Iraq.
The pressure to deviate from mandatory quotas, if they are reimposed, is
likely to be substantial and could lead to a weakening of prices. In the
longer term, additional capacity and production will be required to
accommodate the expected large increases in world oil demand and to
compensate for expected sharp drops in U.S. crude oil production and
exports from the Soviet Union. Only a few OPEC countries, particularly
Saudi Arabia, have the petroleum reserves that will allow the required
increase in production capacity to be attained. Given the large-scale
financing that is required, the prospect that such expansion will occur
soon enough to meet the increased demand is uncertain.
Declining U.S. crude oil production will likely lead to increased
dependence on OPEC oil, putting refiners at risk of continued and
unpredictable supply disruptions. Increasing sensitivity to
environmental concerns will also pose serious challenges to the industry
over the coming decade. Refiners are likely to be required to make heavy
capital investments and make major production adjustments in order to
comply with increasingly stringent environmental legislation, such as
the 1990 amendments to the Clean Air Act. If the cost of these changes
is substantial enough to cut deeply into profits, smaller refiners may
be forced out of the industry entirely. Moreover, lower consumer demand
due to increases in energy efficiency and conservation, gasoline
reformulations that call for less crude oil, warmer winters or a general
slowdown in economic growth in this country and abroad could negatively
affect the price of oil and the profitability of oil companies. No
assurance can be given that the demand for or prices of oil will
increase or that any increases will not be marked by great volatility.
Some oil companies may incur large cleanup and litigation costs relating
to oil spills and other environmental damage. Oil production and
refining operations are subject to extensive federal, state and local
environmental laws and regulations governing air emissions and the
disposal of hazardous materials. Increasingly stringent environmental
laws and regulations are expected to require companies with oil
production and refining operations to devote significant financial and
managerial resources to pollution control. General problems of the oil
and petroleum products industry include the ability of a few influential
producers to significantly affect production, the concomitant volatility
of crude oil prices, increasing public and governmental concern over air
emissions, waste product disposal, fuel quality and the environmental
effects of fossil-fuel use in general.
In addition, any future scientific advances concerning new sources of
energy and fuels or legislative changes relating to the energy industry
or the environment could have a negative impact on the petroleum
products industry. While legislation has been enacted to deregulate
certain aspects of the oil industry, no assurances can be given that new
or additional regulations will not be adopted. Each of the problems
referred to could adversely affect the financial stability of the
issuers of any petroleum industry stocks in the Energy Portfolio Series.
Financial Services. An investment in Units of the Glass-Steagall
Financial Opportunity Portfolios should be made with an understanding of
the problems and risks inherent in the bank and financial services
sector in general.
Banks, thrifts and their holding companies are especially subject to the
adverse effects of economic recession, volatile interest rates,
portfolio concentrations in geographic markets and in commercial and
residential real estate loans, and competition from new entrants in
their fields of business. Banks and thrifts are highly dependent on net
interest margin. Recently, bank profits have come under pressure as net
interest margins have contracted, but volume gains have been strong in
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both commercial and consumer products. There is no certainty that such
conditions will continue. Bank and thrift institutions had received
significant consumer mortgage fee income as a result of activity in
mortgage and refinance markets. As initial home purchasing and
refinancing activity subsided, this income diminished. Economic
conditions in the real estate markets, which have been weak in the past,
can have a substantial effect upon banks and thrifts because they
generally have a portion of their assets invested in loans secured by
real estate. Banks, thrifts and their holding companies are subject to
extensive federal regulation and, when such institutions are state-
chartered, to state regulation as well. Such regulations impose strict
capital requirements and limitations on the nature and extent of
business activities that banks and thrifts may pursue. Furthermore, bank
regulators have a wide range of discretion in connection with their
supervisory and enforcement authority and may substantially restrict the
permissible activities of a particular institution if deemed to pose
significant risks to the soundness of such institution or the safety of
the federal deposit insurance fund. Regulatory actions, such as
increases in the minimum capital requirements applicable to banks and
thrifts and increases in deposit insurance premiums required to be paid
by banks and thrifts to the Federal Deposit Insurance Corporation
("FDIC"), can negatively impact earnings and the ability of a company to
pay dividends. Neither federal insurance of deposits nor governmental
regulations, however, insures the solvency or profitability of banks or
their holding companies, or insures against any risk of investment in
the securities issued by such institutions.
The statutory requirements applicable to and regulatory supervision of
banks, thrifts and their holding companies have increased significantly
and have undergone substantial change in recent years. To a great
extent, these changes are embodied in the Financial Institutions Reform,
Recovery and Enforcement Act; enacted in August 1989, the Federal
Deposit Insurance Corporation Improvement Act of 1991, the Resolution
Trust Corporation Refinancing, Restructuring, and Improvement Act of
1991 and the regulations promulgated under these laws. Many of the
regulations promulgated pursuant to these laws have only recently been
finalized and their impact on the business, financial condition and
prospects of the Securities in the Trust's portfolio cannot be predicted
with certainty. The recently enacted Gramm-Leach-Bliley Act repealed
most of the barriers set up by the 1933 Glass-Steagall Act which
separated the banking, insurance and securities industries. Now banks,
insurance companies and securities firms can merge to form one-stop
financial conglomerates marketing a wide range of financial service
products to investors. This legislation will likely result in increased
merger activity and heightened competition among existing and new
participants in the field. Efforts to expand the ability of federal
thrifts to branch on an interstate basis have been initially successful
through promulgation of regulations, and legislation to liberalize
interstate banking has recently been signed into law. Under the
legislation, banks will be able to purchase or establish subsidiary
banks in any state, one year after the legislation's enactment. Since
mid-1997, banks have been allowed to turn existing banks into branches.
Consolidation is likely to continue. The Securities and Exchange
Commission and the Financial Accounting Standards Board require the
expanded use of market value accounting by banks and have imposed rules
requiring market accounting for investment securities held in trading
accounts or available for sale. Adoption of additional such rules may
result in increased volatility in the reported health of the industry,
and mandated regulatory intervention to correct such problems.
Additional legislative and regulatory changes may be forthcoming. For
example, the bank regulatory authorities have proposed substantial
changes to the Community Reinvestment Act and fair lending laws, rules
and regulations, and there can be no certainty as to the effect, if any,
that such changes would have on the Securities in the Trust's portfolio.
In addition, from time to time the deposit insurance system is reviewed
by Congress and federal regulators, and proposed reforms of that system
could, among other things, further restrict the ways in which deposited
moneys can be used by banks or reduce the dollar amount or number of
deposits insured for any depositor. Such reforms could reduce
profitability as investment opportunities available to bank institutions
become more limited and as consumers look for savings vehicles other
than bank deposits. Banks and thrifts face significant competition from
other financial institutions such as mutual funds, credit unions,
mortgage banking companies and insurance companies, and increased
competition may result from legislative broadening of regional and
national interstate banking powers as has been recently enacted. Among
other benefits, the legislation allows banks and bank holding companies
to acquire across previously prohibited state lines and to consolidate
their various bank subsidiaries into one unit. The Sponsor makes no
prediction as to what, if any, manner of bank and thrift regulatory
actions might ultimately be adopted or what ultimate effect such actions
might have on the Trust's portfolio.
The Federal Bank Holding Company Act of 1956 generally prohibits a bank
holding company from (1) acquiring, directly or indirectly, more than 5%
of the outstanding shares of any class of voting securities of a bank or
bank holding company, (2) acquiring control of a bank or another bank
holding company, (3) acquiring all or substantially all the assets of a
bank, or (4) merging or consolidating with another bank holding company,
without first obtaining Federal Reserve Board ("FRB") approval. In
considering an application with respect to any such transaction, the FRB
is required to consider a variety of factors, including the potential
anti-competitive effects of the transaction, the financial condition and
future prospects of the combining and resulting institutions, the
managerial resources of the resulting institution, the convenience and
needs of the communities the combined organization would serve, the
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record of performance of each combining organization under the Community
Reinvestment Act and the Equal Credit Opportunity Act, and the
prospective availability to the FRB of information appropriate to
determine ongoing regulatory compliance with applicable banking laws. In
addition, the federal Change In Bank Control Act and various state laws
impose limitations on the ability of one or more individuals or other
entities to acquire control of banks or bank holding companies.
The FRB has issued a policy statement on the payment of cash dividends
by bank holding companies. In the policy statement, the FRB expressed
its view that a bank holding company experiencing earnings weaknesses
should not pay cash dividends which exceed its net income or which could
only be funded in ways that would weaken its financial health, such as
by borrowing. The FRB also may impose limitations on the payment of
dividends as a condition to its approval of certain applications,
including applications for approval of mergers and acquisitions. The
Sponsor makes no prediction as to the effect, if any, such laws will
have on the Securities or whether such approvals, if necessary, will be
obtained.
Some of the nation's largest banks, having already worked to upgrade
their own computer systems to meet the Year 2000 deadline, are concerned
that some borrowers have failed to upgrade their computers in time,
creating problem loans and increasing overall loan losses. Banks
considered most vulnerable by analysts include those lending primarily
to small businesses, which aren't as likely as large businesses to have
a plan for upgrading their computers. Also at risk are banks with
significant exposure overseas, where many foreign businesses are not
moving as quickly to resolve this problem. Analysts warn that it will be
difficult for banks to determine their potential loan losses related to
Year 2000 credit risk.
Companies involved in the insurance industry are engaged in
underwriting, reinsuring, selling, distributing or placing of property
and casualty, life or health insurance. Other growth areas within the
insurance industry include brokerage, reciprocals, claims processors and
multiline insurance companies. Insurance company profits are affected by
interest rate levels, general economic conditions, and price and
marketing competition. Property and casualty insurance profits may also
be affected by weather catastrophes and other disasters. Life and health
insurance profits may be affected by mortality and morbidity rates.
Individual companies may be exposed to material risks including reserve
inadequacy and the inability to collect from reinsurance carriers.
Insurance companies are subject to extensive governmental regulation,
including the imposition of maximum rate levels, which may not be
adequate for some lines of business. Proposed or potential tax law
changes may also adversely affect insurance companies' policy sales, tax
obligations, and profitability. In addition to the foregoing, profit
margins of these companies continue to shrink due to the commoditization
of traditional businesses, new competitors, capital expenditures on new
technology and the pressures to compete globally.
In addition to the normal risks of business, companies involved in the
insurance industry are subject to significant risk factors, including
those applicable to regulated insurance companies, such as: (i) the
inherent uncertainty in the process of establishing property-liability
loss reserves, particularly reserves for the cost of environmental,
asbestos and mass tort claims, and the fact that ultimate losses could
materially exceed established loss reserves which could have a material
adverse effect on results of operations and financial condition; (ii)
the fact that insurance companies have experienced, and can be expected
in the future to experience, catastrophe losses which could have a
material adverse impact on their financial condition, results of
operations and cash flow; (iii) the inherent uncertainty in the process
of establishing property-liability loss reserves due to changes in loss
payment patterns caused by new claims settlement practices; (iv) the
need for insurance companies and their subsidiaries to maintain
appropriate levels of statutory capital and surplus, particularly in
light of continuing scrutiny by rating organizations and state insurance
regulatory authorities, and in order to maintain acceptable financial
strength or claims-paying ability rating; (v) the extensive regulation
and supervision to which insurance companies' subsidiaries are subject,
various regulatory initiatives that may affect insurance companies, and
regulatory and other legal actions; (vi) the adverse impact that
increases in interest rates could have on the value of an insurance
company's investment portfolio and on the attractiveness of certain of
its products; (vii) the need to adjust the effective duration of the
assets and liabilities of life insurance operations in order to meet the
anticipated cash flow requirements of its policyholder obligations; and
(vii) the uncertainty involved in estimating the availability of
reinsurance and the collectibility of reinsurance recoverables.
The state insurance regulatory framework has, during recent years, come
under increased federal scrutiny, and certain state legislatures have
considered or enacted laws that alter and, in many cases, increase state
authority to regulate insurance companies and insurance holding company
systems. Further, the National Association of Insurance Commissioners
("NAIC") and state insurance regulators are re-examining existing laws
and regulations, specifically focusing on insurance companies,
interpretations of existing laws and the development of new laws. In
addition, Congress and certain federal agencies have investigated the
condition of the insurance industry in the United States to determine
whether to promulgate additional federal regulation. The Sponsor is
unable to predict whether any state or federal legislation will be
enacted to change the nature or scope of regulation of the insurance
industry, or what effect, if any, such legislation would have on the
industry.
All insurance companies are subject to state laws and regulations that
require diversification of their investment portfolios and limit the
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amount of investments in certain investment categories. Failure to
comply with these laws and regulations would cause non-conforming
investments to be treated as non-admitted assets for purposes of
measuring statutory surplus and, in some instances, would require
divestiture.
Environmental pollution clean-up is the subject of both federal and
state regulation. By some estimates, there are thousands of potential
waste sites subject to clean up. The insurance industry is involved in
extensive litigation regarding coverage issues. The Comprehensive
Environmental Response Compensation and Liability Act of 1980
("Superfund") and comparable state statutes ("mini-Superfund") govern
the clean-up and restoration by "Potentially Responsible Parties"
("PRP's"). Superfund and the mini-Superfunds ("Environmental Clean-up
Laws or "ECLs") establish a mechanism to pay for clean-up of waste sites
if PRP's fail to do so, and to assign liability to PRP's. The extent of
liability to be allocated to a PRP is dependent on a variety of factors.
The extent of clean-up necessary and the assignment of liability has not
been fully established. The insurance industry is disputing many such
claims. Key coverage issues include whether Superfund response costs are
considered damages under the policies, when and how coverage is
triggered, applicability of pollution exclusions, the potential for
joint and several liability and definition of an occurrence. Similar
coverage issues exist for clean up and waste sites not covered under
Superfund. To date, courts have been inconsistent in their rulings on
these issues. An insurer's exposure to liability with regard to its
insureds which have been, or may be, named as PRPs is uncertain.
Superfund reform proposals have been introduced in Congress, but none
have been enacted. There can be no assurance that any Superfund reform
legislation will be enacted or that any such legislation will provide
for a fair, effective and cost-efficient system for settlement of
Superfund related claims.
While current federal income tax law permits the tax-deferred
accumulation of earnings on the premiums paid by an annuity owner and
holders of certain savings-oriented life insurance products, no
assurance can be given that future tax law will continue to allow such
tax deferrals. If such deferrals were not allowed, consumer demand for
the affected products would be substantially reduced. In addition,
proposals to lower the federal income tax rates through a form of flat
tax or otherwise could have, if enacted, a negative impact on the demand
for such products.
Companies engaged in investment banking/brokerage and investment
management include brokerage firms, broker/dealers, investment banks,
finance companies and mutual fund companies. Earnings and share prices
of companies in this industry are quite volatile, and often exceed the
volatility levels of the market as a whole. Recently, ongoing
consolidation in the industry and the strong stock market has benefited
stocks which investors believe will benefit from greater investor and
issuer activity. Major determinants of future earnings of these
companies are the direction of the stock market, investor confidence,
equity transaction volume, the level and direction of long-term and
short-term interest rates, and the outlook for emerging markets.
Negative trends in any of these earnings determinants could have a
serious adverse effect on the financial stability, as well as the stock
prices, of these companies. Furthermore, there can be no assurance that
the issuers of the Securities included in the e-Tail Portfolio will be
able to respond in a timely manner to compete in the rapidly developing
marketplace. In addition to the foregoing, profit margins of these
companies continue to shrink due to the commoditization of traditional
businesses, new competitors, capital expenditures on new technology and
the pressures to compete globally.
Media. An investment in Units of the Online Media Portfolios should be
made with an understanding of the problems and risks inherent in the
media industry generally. The Online Media Portfolios are considered to
be concentrated in companies involved in the development, production,
sale and distribution of goods or services used to provide advertising,
programming and information for the Internet marketplace. Online media
companies are subject to risks which include cyclicality of revenues and
earnings, a decrease in the discretionary income of targeted
individuals, changing consumer tastes and interests, fierce competition
in the industry and the potential for increased government regulation.
Media company revenues are dependent in large part on advertising
spending. A weakening general economy or a shift from online to other
forms of advertising may lead to a reduction in discretionary spending
on online advertising.
Among the general risks are shifting target markets, competition from
new media and advancing technologies. Some trends are reasonably stable,
such as long-range advertising growth, but these trends are likely to
develop in unpredictable ways. For example, there is uncertainty as to
what impact the Internet will have on the printed media's circulation
and advertising over the next 10 years.
In the area of advertising, increased competition from new sources
presents substantial risks to traditional advertisers. Advertising
dollars have increasingly shifted from broadcast television, for
example, to new media. Substantially lower prices for advertising on the
Internet, for example, reduce the barriers to entry for smaller
advertisers, increasing competition. Advertising companies who operate
solely in the traditional media may be negatively impacted by companies
which can provide services on a wide variety of new media outlets. In
the past few years, the time consumers spent with media supported
primarily by advertisers-broadcast television, radio, newspaper and
consumer magazines-fell substantially.
Content publishers will struggle to reach an increasingly fragmented and
selective consumer base. Rapidly changing consumer tastes have left
publishers struggling to keep up with trends. In recent years, single
copy sales of newspapers and consumer magazines have continued to
decline. This decline is fueled by a number of factors including the
following: competition from other media, rising cover prices and
consolidation among distributors. While publishers are expected to
continue to try new strategies to compensate for this decline in sales,
expansion into new media alone is not expected to fill the gap.
Rapidly changing technology presents additional risks for media
companies. The purchase of new technologies presents substantial costs
Page 7
to content providers, particularly organizations with high labor costs
such as news organizations. In addition, the rapid obsolescence of these
technologies means that media companies will require regular and costly
upgrades to remain competitive. For additional information regarding
general technology risks associated with the Online Media Portfolios,
see "Risk Factors-Technology."
Pharmaceutical. An investment in Units of the Pharmaceutical Portfolios
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,
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.
Technology. An investment in Units of the e-Business Portfolios, the
Internet Portfolios, the New e-Conomy Portfolios and the Technology
Portfolios 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
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
Page 8
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.
Portfolios
Equity Securities Selected for Bandwidth Select Portfolio Series and
Bandwidth Portfolio Series
Both the Bandwidth Select Portfolio, Series 2 and the Bandwidth
Portfolio, Series 2 contain common stocks of the following companies:
Communications Services
_______________________
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.
Covad Communications Group, Inc., headquartered in Santa Clara,
California, provides high-speed digital communications services using
digital subscriber line technology to Internet service providers and
enterprise customers. The company's services are provided over standard
copper telephone lines at speeds up to 1.5 megabits per second.
Global Crossing Ltd., headquartered in Hamilton, Bermuda, provides
global internet and long distance telecommunications facilities and
services utilizing a network of undersea digital fiber optic cable
systems and associated terrestrial backhaul capacity. The company
operates as a carrier's carrier, providing tiered pricing and segmented
products to licensed providers of international telecommunications
services.
Level 3 Communications, Inc., headquartered in Broomfield, Colorado,
provides telecommunications and information services, including local,
long distance and data transmission. The company is building the first
international network optimized for Internet Protocol technology. The
network will combine both local and long distance networks, connecting
customers end-to-end across the United States and in Europe and Asia.
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.
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.
Copper Mountain Networks, Inc., headquartered in Palo Alto, California,
develops and markets Digital Subscriber Line (DSL) solutions that enable
high-speed Internet connectivity over the existing copper wire telephone
infrastructure.
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.
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.
Fiber Optics
_______________________
Harmonic Inc., headquartered in Sunnyvale, California, makes and sells
highly integrated fiber optic and digital systems for delivering video,
voice and data services over cable, satellite and wireless networks. The
company's "TRANsend" digital product line combines and customizes
content from a variety of sources.
JDS Uniphase Corporation, headquartered in San Jose, California,
designs, develops, makes and markets laser subsystems, laser-based
semiconductor wafer defect examination and analysis equipment and fiber
optic telecommunications equipment products.
Page 9
Networking Products
_______________________
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.
Juniper Networks, Inc., headquartered in Mountain View, California,
provides Internet infrastructure solutions for Internet service
providers and other telecommunications service providers. The company
delivers next generation Internet backbone routers that are designed for
service provider networks.
Redback Networks Inc., headquartered in Sunnyvale, California, provides
advanced networking solutions. The company's solutions enable carriers,
cable multiple system operators and service providers to rapidly deploy
high-speed broadband access to the Internet and corporate networks. The
company's subscriber management system connects and manages subscribers
using digital subscriber line, cable and wireless technologies.
Semiconductors
_______________________
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.
Conexant Systems, Inc., headquartered in Newport Beach, California,
makes semiconductor products for communications applications. The
company's applications include personal computing, digital information
and entertainment, wireless communications and network access.
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.
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
_______________________
L.M. Ericsson AB (ADR), headquartered in Stockholm, Sweden, develops and
produces advanced systems, products and services for wired and mobile
communications in public and private networks worldwide. The company's
product line includes digital and analog systems for telephones and
networks, microwave radio links, radar surveillance systems and business
systems.
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
phones and infrastructure products, transportation management
information systems and ground stations, and phones for the low-earth-
orbit satellite communications system.
Equity Securities Selected for e-Business Select Portfolio Series and e-
Business Portfolio Series
Both the e-Business Select Portfolio, Series 2 and the e-Business
Portfolio, Series 2 contain common stocks of the following companies:
Horizontal Portals
_______________
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.
Ariba, Inc., headquartered in Sunnyvale, California, provides Internet-
and intranet-based business-to-business e-commerce solutions for
operating resources that include information technology and
telecommunications equipment, professional services, facilities and
office equipment, and expense items.
Commerce One, Inc., headquartered in Walnut Creek, California, provides
business-to-business electronic procurement solutions. The company's
"The Commerce Chain Solution" dynamically links buying and supplying
organizations into real-time trading communities, increasing efficiency
and significantly reducing operational costs across the entire indirect
supply chain.
PurchasePro.com, Inc., headquartered in Las Vegas, Nevada, provides
Internet business-to-business e-commerce services. The company's
solution is a standard platform for small- and medium-sized businesses
as well as corporate purchasing departments to buy and sell products in
secure, online, open and private marketplaces.
VerticalNet, Inc., headquartered in Horsham, Pennsylvania, is one of the
Internet's leading creators and operators of vertical trade communities.
The company leverages the interactive features and global reach of the
Internet to create multi-national, targeted business-to-business
Page 10
communities. These narrowly focused Web sites attract buyers and sellers
from around the world by catering to individuals with similar
professional interests. The company's communities include industries
such as electronics, environment 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.
Infrastructure
____________
BEA Systems, Inc., headquartered in San Jose, California, markets and
supports software used by large organizations to enable and support
their most critical business processes. The company's products have been
adopted in a wide variety of industries, including telecommunications,
banking and finance, manufacturing, retail and transportation.
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.
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")
Digital Island, headquartered in San Francisco, California, is a leading
provider of network services for globalizing e-Business applications.
The Company serves corporations which operate in multiple countries that
need to securely and consistently extend business-critical applications
for marketing, selling, servicing or distributing products via the
Internet.
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.
Level 3 Communications, Inc., headquartered in Broomfield, Colorado,
provides telecommunications and information services, including local,
long distance and data transmission. The company is building the first
international network optimized for Internet Protocol technology. The
network will combine both local and long distance networks, connecting
customers end-to-end across the United States and in Europe and Asia.
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.
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.
Portal Software, Inc., headquartered in Cupertino, California, develops,
markets and supports customer management and billing software for
providers of Internet-based services. The company's products provide
account creation, user authentication and authorization, activity
tracking, pricing and rating, and billing and customer service functions.
Scient Corporation, headquartered in San Francisco, California, provides
eBusiness professional services that enable its clients to strengthen
and improve competitive positions through new technologies and the
Internet.
Siebel Systems, Inc., headquartered in San Mateo, California, designs,
sells and supports enterprise-class sales and marketing information
software systems. The company also designs, develops and markets a Web-
based application software product.
TIBCO Software Inc., headquartered in Palo Alto, California, provides
software solutions enabling businesses to integrate internal operations,
partners and customer channels in real time. The company's products and
services enable computer applications and platforms to communicate
across local or wide area networks, including the Internet.
VeriSign, Inc., headquartered in Mountain View, California, provides
digital certificate solutions and infrastructure needed by companies,
government agencies, trading partners and individuals to conduct trusted
and secure communications and commerce over the Internet and over
intranets and extranets using the Internet Protocol.
Vignette Corporation, headquartered in Austin, Texas, Vignette
Corporation is a provider of Internet Relationship Management software
products and services, which enable enterprises to develop and manage
online customer relationships and to capitalize on Internet business
opportunities.
Procurement
__________
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.
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.
Page 11
i2 Technologies, Inc., headquartered in Dallas, Texas, provides supply
chain management software, which encompasses the planning and scheduling
of manufacturing and related logistics from raw materials procurement
through work-in-process to customer delivery. The company's product,
"RHYTHM," generates integrated solutions to planning and scheduling
problems.
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.
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.
Venture Capital
_____________
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.
Internet Capital Group, Inc., headquartered in Wayne, Pennsylvania, is
an Internet holding company primarily engaged in business-to-business,
or B2B, e-commerce through a network of partner companies.
Vertical Portals
_______________
Chemdex Corporation, headquartered in Palo Alto, California, is the
leading provider of business-to-business e-commerce solutions for the
life sciences industry. The company offers a complete solution that
allows its customers to identify, locate and purchase life sciences
research products.
Healtheon/WebMD Corporation, headquartered in Santa Clara, California,
provides advanced Internet technology to connect healthcare participants
and enable them to communicate, exchange information and perform
transactions which cut across the healthcare maze. The company's
services include the areas of membership, healthcare administration,
financial management and clinical information.
pcOrder.com, Inc., headquartered in Austin, Texas, is a leading provider
of Internet-based electronic commerce solutions that enable the computer
industry's suppliers, resellers and end-users to buy and sell computer
products online.
Equity Securities Selected for Energy Portfolio, Series 7
Natural Gas
__________
El Paso Energy Corporation, headquartered in Houston, Texas, operates in
the areas of interstate and intrastate transportation; the gathering and
processing of natural gas; the marketing of natural gas, power and other
commodities; and the operation of energy infrastructure facilities
worldwide.
Enron Corp., headquartered in Houston, Texas, gathers, transports and
markets natural gas at wholesale; explores for and produces natural gas
and crude oil; produces, purchases, transports and markets natural gas
liquids, crude oil and refined petroleum products; and develops,
constructs and operates natural gas-fired power plants.
Oil & Gas-Drilling
________________
Global Marine Inc., headquartered in Houston, Texas, provides offshore
drilling services on a day rate basis and offshore drilling management
services on a turnkey basis.
Nabors Industries, Inc., headquartered in Houston, Texas, operates one
of the largest land oil and gas drilling contract businesses in the
world. The company also provides a number of ancillary well-site
services and makes top drives for a broad range of drilling rig
applications and rig instrumentation equipment to monitor rig performance.
Noble Drilling Corporation, headquartered in Houston, Texas, operates as
a major drilling contractor with offshore operations in the United
States, Africa, Canada, India, Mexico, the Middle East, the North Sea
and South America.
Santa Fe International Corporation, headquartered in Dallas, Texas,
conducts international offshore and land contract drilling. The company
also provides drilling related services to the petroleum industry
worldwide, including third-party rig operations, incentive drilling,
drilling engineering and project management services.
Transocean Offshore Inc., headquartered in Houston, Texas, provides
contract drilling of oil and gas wells in offshore areas throughout the
world. The company also provides well engineering and planning, turnkey
drilling and coiled tubing drilling.
Oil & Gas-Exploration & Production
_____________________________
Barrett Resources Corporation, headquartered in Denver, Colorado,
explores for, develops and produces oil and gas, mostly in the Rocky
Mountain region of Colorado, Utah and Wyoming. The company also operates
in the mid-continent region of the United States and the Gulf of Mexico
region of offshore Louisiana and Texas.
Burlington Resources Inc., headquartered in Houston, Texas, explores
for, develops and produces oil and gas. The company's properties are
primarily located in the United States, while its international
operations are conducted in the North Sea, South America, the United
Kingdom and Indonesia.
EOG Resources, Inc., headquartered in Houston, Texas, explores for,
develops, produces and markets natural gas and crude oil. The company's
Page 12
operations are primarily in major producing basins in the United States,
as well as in Canada, Trinidad and India and, to a lesser extent,
selected other international areas.
Vastar Resources, Inc., headquartered in Houston, Texas, explores for,
develops, produces and markets natural gas, crude oil and natural gas
liquids in four premier producing regions of the United States.
Oil-Field Services
_______________
BJ Services Company, headquartered in Houston, Texas, provides well
stimulation, cementing, sand control and coiled tubing services used in
the completion of new oil and natural gas wells and in remedial work on
existing wells, both onshore and offshore.
Halliburton Company, headquartered in Dallas, Texas, through
subsidiaries, provides services and products for the exploration,
development and production segments of the petroleum industry. The
company also provides engineering, construction, project management,
facilities operation and maintenance, and environmental services for
industrial and governmental customers.
Schlumberger Limited, headquartered in New York, New York, supplies
products and services to the petroleum industry. The company's oilfield
services cover exploration, production and completion services; and its
Omnes unit provides information technology and communications services
to oil and gas concerns. The company also supplies test and technology
services.
Tidewater Inc., headquartered in New Orleans, Louisiana, provides
services and equipment to the offshore energy industry through the
operation of one of the world's largest fleets of offshore service
vessels.
Weatherford International, Inc., headquartered in Houston, Texas,
provides marine drilling and workover services to the oil and gas
industries. The company also makes, distributes and services oilfield
equipment, drill pipes, premium tubulars and artificial lift products.
Oil-Integrated
_____________________________
BP Amoco Plc (ADR), headquartered in London, England, produces,
transports, refines and markets crude oil, natural gas and related
products; and makes and markets petrochemicals and related products. The
company also operates tankers for its own use and for third parties.
Chevron Corporation, headquartered in San Francisco, California,
explores for, develops and produces crude oil and natural gas; refines
crude oil into finished petroleum products; transports and markets crude
oil, natural gas and petroleum products; and makes chemicals for
industrial uses.
ENI SpA (ADR), headquartered in Rome, Italy, through subsidiaries,
explores for, develops and produces oil and natural gas; supplies,
transmits and distributes natural gas; refines and markets oil and
petroleum products; produces and sells petrochemicals; and provides
contracting and engineering oilfield services.
Exxon Mobil Corporation, headquartered in Irving, Texas, explores for,
produces, transports and sells crude oil and natural gas petroleum
products. The company also explores for and mines coal and other
minerals properties; makes and sells petrochemicals; and owns interests
in electrical power generation facilities.
Royal Dutch Petroleum Company, headquartered in The Hague, the
Netherlands, produces crude oil, natural gas, chemicals, coal and metals
worldwide; and provides integrated petroleum services in the United
States.
Texaco Inc., headquartered in White Plains, New York, explores for,
produces, transports, refines and markets crude oil, natural gas
liquids, natural gas and petroleum products. The company conducts its
operations in the United States and throughout the world.
Total Fina SA (ADR), headquartered in Paris, France, makes rubber-based
products and specialty chemicals; explores for and produces crude oil
and natural gas; and refines and markets petroleum products.
USX-Marathon Group, headquartered in Houston, Texas, explores for,
produces, refines, distributes and markets crude oil, natural gas and
petroleum products in the United States. The company is a business unit
of USX Corporation, and includes Marathon Oil Company and certain other
subsidiaries of USX.
Oil-Refining & Marketing
______________________
Tosco Corporation, headquartered in Stamford, Connecticut, refines and
markets petroleum products in the United States, primarily on the East
and West Coasts. The company's refineries process crude oil, feedstocks
and blendstocks into various petroleum products. The company also has
related commercial activities throughout the United States and
internationally.
Equity Securities Selected for Glass-Steagall Financial Opportunity
Select Portfolio Series and Glass-Steagall Financial Opportunity
Portfolio Series
Both the Glass-Steagall Financial Opportunity Select Portfolio Series
and the Glass-Steagall Financial Opportunity Portfolio Series contain
common stocks of the following companies:
Banks & Thrifts
_______________________
Bank of America Corporation, headquartered in Charlotte, North Carolina,
is the holding company for Bank of America and NationsBank and conducts
a general banking business in 22 states and the District of Columbia.
The company also has offices in nearly 40 countries overseas.
The Chase Manhattan Corporation, headquartered in New York, New York,
Page 13
conducts domestic and international financial services business with
operations in more than 50 countries and clients throughout the world.
Firstar Corporation, headquartered in Milwaukee, Wisconsin, is the
holding company for Firstar Bank. The company offers banking, trust,
investment, insurance and securities brokerage services. The company
also operates a consumer finance company and an investment advisory firm.
Fleet Boston Financial Corporation, headquartered in Boston,
Massachusetts, conducts a general commercial banking and trust business
through a network of branch offices, ATMs and telephone banking centers.
The company also provides other activities related to banking and finance.
KeyCorp, headquartered in Cleveland, Ohio, through subsidiaries,
conducts a commercial and retail banking business through more than
l,000 full-service banking offices across the United States. The company
also provides trust, personal financial cash management, investment
banking, securities brokerage and international banking services.
Mellon Financial Corporation, headquartered in Pittsburgh, Pennsylvania,
provides domestic retail banking through over 1,000 locations. The
company also provides worldwide commercial banking; trust banking and
investment management services, mutual fund activities, real estate
financing, mortgage servicing, and securities-related activities.
Northern Trust Corporation, headquartered in Chicago, Illinois, through
subsidiaries, provides banking and trust services to corporate and
institutional customers through offices in the United States and several
foreign countries. The company also operates a securities brokerage firm
and investment management services, and acts as a futures commission
merchant.
State Street Corporation, headquartered in Boston, Massachusetts,
through subsidiaries, provides banking, global custody, investment
management, administration and securities processing services to both
U.S. and non-U.S. customers.
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
Canada, the Caribbean, Central America and Guam; and offers various
other financial services.
Financial 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.
Citigroup Inc., headquartered in New York, New York, operates the
largest financial services company in the United States. The company
offers consumer, investment and private banking, life insurance,
property and casualty insurance and consumer finance products.
Household International, Inc., headquartered in Prospect Heights,
Illinois, through subsidiaries, provides consumer financial services,
primarily offering consumer lending products to middle market consumers
in the United States, Canada and the United Kingdom.
MBNA Corporation, headquartered in Wilmington, Delaware, is the holding
company for MBNA America Bank, N.A. The company issues bank credit cards
marketed primarily to members of associations and customers of financial
institutions. The company also makes other consumer loans, and offers
insurance and deposit products.
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.
Insurance
_________
AFLAC Incorporated, headquartered in Columbus, Georgia, writes
supplemental health insurance, mainly limited to reimbursement for
medical, non-medical and surgical expenses of cancer. The company also
sells individual and group life, and accident and health insurance.
American International Group, Inc., headquartered in New York, New York,
through subsidiaries, provides a broad range of insurance and insurance-
related activities and financial services in the United States and
abroad. The company writes property and casualty and life insurance, and
also provides financial services.
Marsh & McLennan Companies, Inc., headquartered in New York, New York,
through subsidiaries and affiliates, provides insurance and reinsurance
services worldwide as broker, agent or consultant for clients; and
designs, distributes and administers a wide range of insurance and
financial products and services. The company also provides consulting,
securities investment advisory and management services.
Nationwide Financial Services, Inc. (Class A), headquartered in
Columbus, Ohio, is the holding company for Nationwide Insurance
Enterprise. The company offers long-term savings and retirement products
Page 14
to retail and institutional customers throughout the United States.
Products offered include variable and fixed annuities, life insurance,
mutual funds and retirement products. The company also offers
administrative services.
Investment Services
________________
Ameritrade Holding Corporation (Class A), headquartered in Omaha,
Nebraska, through subsidiaries, operates as an online discount brokerage
firm which provides brokerage services and clearing services to self-
directed individual consumer investors and other financial institutions.
Donaldson, Lufkin & Jenrette, Inc., headquartered in New York, New York,
an integrated investment and merchant bank, serves institutional,
corporate, government and individual clients. The company provides
securities underwriting, sales and trading, merchant banking, financial
advisory services, investment research, correspondent brokerage services
and asset management throughout the world.
E*TRADE Group, Inc., headquartered in Menlo Park, California, provides
online discount brokerage services for self-directed investors through
its Web site. Services include automated order placement, portfolio
tracking and related market data, news and other information.
Eaton Vance Corp., headquartered in Boston, Massachusetts, through
subsidiaries, creates, markets and manages mutual funds. The company
also provides management and counseling services to individual and
institutional clients.
The Goldman Sachs Group, Inc., headquartered in New York, New York, is a
global investment banking and securities firm specializing in investment
banking, trading and principal investments, and asset management and
securities services. The company's clients include corporations,
financial institutions, government and high net-worth individuals.
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).
Lehman Brothers Holdings Inc., headquartered in New York, New York,
through wholly-owned Lehman Brothers Inc., provides securities
underwriting, financial advisory and investment and merchant banking
services, securities and commodities trading as principal and agent, and
asset management to institutional, corporate, government and high-net-
worth individual clients throughout the United States and the world.
Merrill Lynch & Co., Inc., headquartered in New York, New York, through
subsidiaries, provides a variety of financial and investment services
through offices around the world. The company serves individual and
institutional clients with a range of financial services, including
personal financial planning, trading and brokering, banking and lending,
and insurance.
Morgan Stanley Dean Witter & Co., headquartered in New York, New York,
provides a broad range of nationally-marketed credit and investment
products, with a principal focus on individual customers. The company
provides investment banking, transaction processing, private-label
credit card and various other investment advice services.
T. Rowe Price Associates, Inc., headquartered in Baltimore, Maryland,
serves as investment adviser to the T. Rowe Price family of no-load
mutual funds, and other sponsored investment portfolios and
institutional and individual private accounts. The company also provides
certain administrative and shareholder services to the Price funds and
other mutual funds.
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.
Equity Securities Selected for Internet Select Portfolio Series and
Internet Portfolio Series
Both the Internet Select Portfolio, Series 2 and the Internet Portfolio,
Series 9 contain common stocks of the following companies:
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.
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.
Page 15
Communications Equipment
______________________
JDS Uniphase Corporation, headquartered in San Jose, California,
designs, develops, makes and markets laser subsystems, laser-based
semiconductor wafer defect examination and analysis equipment and fiber
optic telecommunications equipment products.
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.
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.
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., 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.
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.
Internet Capital Group, Inc., headquartered in Wayne, Pennsylvania, is
an Internet holding company primarily engaged in business-to-business,
or B2B, e-commerce through a network of partner companies.
Lycos, Inc., headquartered in Waltham, Massachusetts, owns and operates
a free, global Internet navigation and community network. This network
provides Web search and navigation, communications and personalization
tools, homepage building and Web community services and a contemporary
shopping center.
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.
Internet Software & Services
_______________________
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.
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's
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
Page 16
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.
RealNetworks, Inc., headquartered in Seattle, Washington, develops and
markets software products and services designed to enable users of
personal computers and other digital devices to send and receive real-
time media using today's infrastructure. The company's products and
services include, "RealSystem G2," "Real Broadcast Network" and
"RealJukebox."
Networking Products
________________
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.
Juniper Networks, Inc., headquartered in Mountain View, California,
provides Internet infrastructure solutions for Internet service
providers and other telecommunications service providers. The company
delivers next generation Internet backbone routers that are designed for
service provider networks.
Redback Networks Inc., headquartered in Sunnyvale, California, provides
advanced networking solutions. The company's solutions enable carriers,
cable multiple system operators and service providers to rapidly deploy
high-speed broadband access to the Internet and corporate networks. The
company's subscriber management system connects and manages subscribers
using digital subscriber line, cable and wireless technologies.
Semiconductors
________________
Conexant Systems, Inc., headquartered in Newport Beach, California,
makes semiconductor products for communications applications. The
company's applications include personal computing, digital information
and entertainment, wireless communications and network access.
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.
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.
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.
Equity Securities Selected for New e-Conomy Select Portfolio Series and
New e-Conomy Portfolio Series
Both the New e-Conomy Select Portfolio Series and the New e-Conomy
Portfolio Series contain common stocks of the following companies:
Bandwidth
________
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.
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.
MCI WorldCom, Inc., headquartered in Clinton, Mississippi, operates as a
global communications company which provides facilities-based and fully-
integrated local, long distance and Internet services.
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.
e-Business
_________
Ariba, Inc., headquartered in Sunnyvale, California, provides intranet
and Internet-based business-to-business electronic commerce solutions
for operating resources. Operating resources include information
technology and telecommunications equipment, professional services,
facilities and office equipment, and expense items.
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.
Page 17
Commerce One, Inc., headquartered in Walnut Creek, California, provides
Web-based, enterprise procurement solutions that link buying and
supplying organizations into real-time trading communities. The
company's "Commerce Chain Solution" automates the entire indirect goods
and services supply chain.
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.
Internet Capital Group, Inc., headquartered in Wayne, Pennsylvania, is
an Internet holding company primarily engaged in business-to-business,
or B2B, e-commerce through a network of partner companies.
e-Infrastructure
_____________
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."
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.
Oracle Corporation, headquartered in Redwood Shores, California,
designs, develops, markets and supports computer software products with
a wide variety of uses, including database management, application
development, 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
_________
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.
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.
Lycos, Inc., headquartered in Waltham, Massachusetts, owns and operates
a free, global Internet navigation and community network which provides
Web search and navigation, communications and personalization tools,
home-page building and Web community services and a contemporary
shopping center.
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.
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.
Wireless
_________
L.M. Ericsson AB (ADR), headquartered in Stockholm, Sweden, develops and
produces advanced systems, products and services for wired and mobile
communications in public and private networks worldwide. The company's
product line includes digital and analog systems for telephones and
networks, microwave radio links, radar surveillance systems and business
systems.
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 18
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.
Equity Securities Selected for Online Media Select Portfolio Series and
Online Media Portfolio Series
Both the Online Media Select Portfolio Series and the Online Media
Portfolio Series contain common stocks of the following companies:
Advertising
_________
The Interpublic Group of Companies, Inc., headquartered in New York, New
York, is a worldwide provider of advertising agency and related
services. The company conducts business through the following companies:
McCann-Erickson, Ammirati Puris Lintas, The Lowe Group, Western
International Media, DraftWorldwide and other companies.
Omnicom Group Inc., headquartered in New York, New York, through
subsidiaries and affiliates, conducts advertising agency businesses
using newspapers, magazines, radio and television as the media for
advertising for its clients in North America, Africa, Australia, Europe,
the Far East, Latin America, the Middle East and the United Kingdom.
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.
Young & Rubicam Inc., headquartered in New York, New York, operates the
fifth largest consolidated marketing and communications organization in
the world. The company's services include advertising, direct marketing
and sales promotion, perception management and public relations,
branding identity consultation and design services, and healthcare
communications.
Internet
_________
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.
DoubleClick Inc., headquartered in New York, New York, provides
comprehensive Internet advertising solutions for advertisers and Web
publishers. It offers three distinct Internet advertising solutions: the
"DoubleClick Internet" advertising network, an Internet advertising
management solution for Web publishers and a service for direct marketers.
Lycos, Inc., headquartered in Framingham, Massachusetts, owns and
operates a free global Internet navigation and community network which
provides Web search and navigation, communications and personalization
tools, homepage building, Web community services and a contemporary
shopping center.
RealNetworks, Inc., headquartered in Seattle, Washington, develops and
markets software products and services designed to enable users of
personal computers and other digital devices to send and receive real-
time media using current infrastructure.
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.
Media/Content
____________
The Walt Disney Company, headquartered in Burbank, California, is a
diversified international entertainment company with operations in
filmed entertainment, theme parks and resorts and consumer products. The
company also has broadcasting (including Capital Cities/ABC, Inc.) and
publishing operations.
Gannett Co., Inc., headquartered in Arlington, Virginia, publishes daily
newspapers, including "USA TODAY" and "USA WEEKEND," a newspaper
magazine. The company also operates television stations and cable
television systems in major U.S. markets.
Knight-Ridder, Inc., headquartered in San Jose, California, publishes
daily and non-daily newspapers, with products in print and online. The
company maintains associated Web sites under the name "Knight Ridder
Real Cities."
The New York Times Company (Class A), headquartered in New York, New
York, publishes The New York Times and The Boston Globe newspapers,
other daily and non-daily papers in six states, and several magazines;
produces newsprint; operates television and radio stations, and news and
information services; produces videos and TV programming; and conducts
electronic information operations.
The News Corporation Limited (ADR), headquartered in Surry Hills, New
Page 19
South Wales, Australia, publishes newspapers, magazines and books;
produces and distributes motion pictures and television programming;
provides television broadcasting, digital broadcasting system design,
conditional access and subscriber management systems. The company also
provides electronic commerce.
Time Warner Inc., headquartered in New York, New York, publishes and
distributes magazines and books; produces and distributes recorded
music, motion pictures and television programming; owns and operate
retail stores; owns and administers music copyrights; and operates cable
TV systems.
Tribune Company, headquartered in Chicago, Illinois, publishes daily
newspapers and community publications in several states; operates
television and radio stations; provides television program production
and syndication; owns the Chicago Cubs major league baseball team; and
publishes educational materials.
Viacom Inc. (Class B), headquartered in New York, New York, operates
satellite entertainment networks, television stations and theme parks;
produces and distributes theatrical motion pictures and television
programming; operates videocassette rental and sales stores; and
publishes books and software products. The company's operations include
Blockbuster video and music retailers, MTV Networks, Paramount Pictures,
Paramount Television, Paramount Parks, Showtime Networks, and Simon &
Schuster publishing company.
Webcasting
____________
CBS Corporation, headquartered in New York, New York, provides broadcast
and cable network television and radio broadcasting to affiliated
stations, operates television and radio stations, and produces news,
sports and entertainment programming.
Clear Channel Communications, Inc., headquartered in San Antonio, Texas,
owns or programs radio and television stations in 48 domestic markets;
operates one of the largest outdoor advertising concerns in the United
States; and owns a 50% equity interest in the Australian Radio Network
Pty. Ltd.
Emmis Communications Corporation (Class A), headquartered in
Indianapolis, Indiana, owns and operates FM and AM radio stations
serving Chicago, Indianapolis, Los Angeles, New York and St. Louis; and
owns television stations in six states. The company also publishes
"Texas Monthly," "Country Sampler" and other magazines.
Equity Securities Selected for Pharmaceutical Select Portfolio Series
and Pharmaceutical Portfolio Series
Both the Pharmaceutical Select Portfolio, Series 2 and the
Pharmaceutical Portfolio, Series 8 contain common stocks of the
following companies:
Abbott Laboratories, headquartered in Abbott Park, Illinois, discovers,
develops, makes and sells a broad and diversified line of healthcare
products and services.
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.
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.
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.
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.
Elan Corporation Plc (ADR), headquartered in Dublin, Ireland, is a
specialty pharmaceutical company. The company develops and licenses drug
delivery systems formulated to increase the therapeutic value of certain
medications, with reduced side effects. The company also develops and
markets therapeutic agents to diagnose and treat central nervous systems
diseases and disorders.
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.
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.
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.
Page 20
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.
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.
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.
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
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.
Equity Securities Selected for Technology Select Portfolio Series and
Technology Portfolio Series
Both the Technology Select Portfolio, Series 2 and the Technology
Portfolio, Series 11 contain common stocks of the following companies:
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.
Solectron Corporation, headquartered in Milpitas, California, provides a
complete range of advanced manufacturing services, including
sophisticated electronic assembly and turnkey manufacturing management
services, to original equipment manufacturers in the electronics industry.
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.
Page 21
Computer Software & Services
________________________
BMC Software, Inc., headquartered in Houston, Texas, provides high-
performance systems management software products for mainframe and
client/server based information systems. The company also sells and
provides maintenance enhancement and support services for its products.
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").
Compuware Corporation, headquartered in Farmington Hills, Michigan,
develops, sells and supports an integrated line of software products as
well as client/server systems management and application development
products. The company also offers data processing professional services.
Legato Systems, Inc., headquartered in Palo Alto, California, develops,
sells and supports network storage management software products for
heterogeneous client/server computing environments and large-scale
enterprises.
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 Shores, California,
designs, develops, markets and supports computer software products with
a wide variety of uses, including database management, application
development, business intelligence and business applications.
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.
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.
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.
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.
Semiconductor Equipment
____________________
Applied Materials, Inc., 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.
Novellus Systems, Inc., headquartered in San Jose, California, designs,
makes, sells and services chemical vapor deposition equipment used in
the fabrication of integrated circuits. The company sells its products
to semiconductor manufacturers worldwide.
Semiconductors
____________
Altera Corporation, headquartered in San Jose, California, designs,
manufactures and markets programmable logic devices and associated
development tools to the telecommunications, data communications and
industrial applications markets.
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.
Maxim Integrated Products, Inc., headquartered in Sunnyvale, California,
designs and makes linear and mixed-signal integrated circuits. The
company's products include data converters, interface circuits,
microprocessor-supervisors and amplifiers.
QLogic Corporation, headquartered in Costa Mesa, California, designs and
supplies semiconductor products that provide interface connections
between computer systems and their attached data storage peripherals
such as hard disk drives, tape drives and subsystems.
Texas Instruments Incorporated, headquartered in Dallas, Texas, provides
semiconductor products and designs and supplies digital signal
processing and analog technologies. The company has worldwide
manufacturing and sales operations.
Page 22
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.
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.
Page 23
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 395, 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;
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 395, 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 January 4, 2000.
FT 395
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
David J. Allen Sole Director )
of Nike Securities )
Corporation, the ) January 4, 2000
General Partner of )
Nike Securities L.P.)
)
)
) Robert M. Porcellino
) Attorney-in-Fact**
)
)
* 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 January 4, 2000 in
Amendment No. 2 to the Registration Statement (Form S-6) (File
No. 333-93265) and related Prospectus of FT 395.
ERNST & YOUNG LLP
Chicago, Illinois
January 4, 2000
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 FT 395 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 395
File No. 333-93625
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 January 4, 2000 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 3-7 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 12 The Report of Independent Auditors has been
completed.
Pages 13-17 The Statements of Net Assets have been completed.
Pages 18-35 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
January 4, 2000
FT 395
TRUST AGREEMENT
Dated: January 4, 2000
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 BANDWIDTH SELECT PORTFOLIO, SERIES 2
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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0015 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR e-BUSINESS SELECT PORTFOLIO, SERIES 2
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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0015 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR GLASS-STEAGALL FINANCIAL OPPORTUNITY SELECT 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 January 4,
2000.
J. The minimum amount of Securities t o be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0015 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR INTERNET SELECT PORTFOLIO, SERIES 2
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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0015 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR NEW e-CONOMY SELECT 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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0015 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR ONLINE MEDIA SELECT 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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0015 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR PHARMACEUTICAL SELECT PORTFOLIO, SERIES 2
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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0015 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR TECHNOLOGY SELECT PORTFOLIO, SERIES 2
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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0015 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR BANDWIDTH PORTFOLIO, SERIES 2
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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0033 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR e-BUSINESS PORTFOLIO, SERIES 2
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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0033 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR ENERGY PORTFOLIO, SERIES 7
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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0033 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR GLASS-STEAGALL FINANCIAL OPPORTUNITY 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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0033 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR INTERNET PORTFOLIO, SERIES 9
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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0033 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR NEW e-CONOMY 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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0033 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR ONLINE MEDIA 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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0033 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR PHARMACEUTICAL 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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0033 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR TECHNOLOGY PORTFOLIO, SERIES 11
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 January 4,
2000.
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.
K. The Depositor's compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0033 per Unit.
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 24 shall include FT 395.
B. The term "Principal Account" as set forth in the
Standard Terms an 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, 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 Depositor's 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 Depositor's
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
the 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) 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 Income 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
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 per Unit amount set forth in Part II of 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 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 not 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 Principal 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 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 Trust's 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:
"The Depositor may remove the Trustee at any time with or
without cause and appoint a successor Trustee by written
instrument or instruments delivered not less than sixty days
prior to the effective date of such removal and appointment to
the Trustee so removed and 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 Raviele
Vice President
[SEAL]
ATTEST:
Rachelle Cohen
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 395
(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
January 4, 2000
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: FT 395
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of FT 395 in connection with the January 4,
2000 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. 333-93265)
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
January 4, 2000
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 395
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of FT 395 (the "Fund"), in connection with the issuance of units
of fractional undivided interest in certain of the Trusts of said
Fund (the "Trust"), under a Trust Agreement, dated January 4,
2000 (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. 333-93265)
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
January 4, 2000
The Chase Manhattan Bank, as Trustee of
FT 395
4 New York Plaza, 6th Floor
New York, New York 10004-3113
Attention: Mr. Thomas Porazzo
Vice President
Re: FT 395
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for the unit investment trust or trusts included in
FT 395, (each, a "Trust"), which will be established under a
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. 333-93265) 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
January 4, 2000
The Chase Manhattan Bank, as Trustee of
FT 395
4 New York Plaza, 6th Floor
New York, New York 10004-3113
Attention: Mr. Thomas Porazzo
Vice President
Re: FT 395
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
395 (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 thereunder (the "Certificates"), the
Closing Memorandum dated today's 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
January 4, 2000
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: FT 395
Gentlemen:
We have examined the Registration Statement File No.
333-93265 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