Registration No. 333-32500
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 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 409
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 September 22, 2000 at 2:00 p.m. pursuant to Rule 487.
________________________________
The Forbes 40(TM) Portfolio, Qualified 2000 Series
FT 409
FT 409 is a series of a unit investment trust, the FT Series. FT 409
consists of a single portfolio known as The Forbes 40(TM) Portfolio,
Qualified 2000 Series (the "Trust"). The Trust invests in a diversified
portfolio of common stocks ("Securities") of companies which comprise
the Forbes 40 Index(TM). The Trust seeks to provide above-average
capital appreciation.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (registered trademark)
1-800-621-9533
The date of this prospectus is September 22, 2000
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 4
Report of Independent Auditors 5
Statement of Net Assets 6
Schedule of Investments 7
The FT Series 9
Portfolio 10
Risk Factors 10
Portfolio Securities Descriptions 12
Hypothetical Performance Information 14
Public Offering 15
Distribution of Units 17
The Sponsor's Profits 17
The Secondary Market 17
How We Purchase Units 18
Expenses and Charges 18
Tax Status 19
Rights of Unit Holders 19
Income and Capital Distributions 20
Redeeming Your Units 20
Investing in a New Trust 21
Removing Securities from the Trust 21
Amending or Terminating the Indenture 22
Information on the Sponsor, Trustee,
Shareholder Servicing Agent and Evaluator 23
Other Information 24
Page 2
Summary of Essential Information
The Forbes 40(TM) Portfolio, Qualified 2000 Series
FT 409
At the Opening of Business on the
Initial Date of Deposit-September 22, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Shareholder Servicing Agent: BISYS Fund Services Ohio, Inc.
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
<S> <C>
Initial Number of Units (1) 13,595.131
Fractional Undivided Interest in the Trust per Unit (1) 1/13,595.131
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 10.000
Maximum Sales Charge of 0.10% of the Public Offering Price per Unit
(0.10% of the net amount invested) (3) $ .010
Less Deferred Sales Charge per Unit $ (.010)
Public Offering Price per Unit (4) $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 10.000
Redemption Price per Unit (based on aggregate underlying value of Securities) (5) $ 10.000
CUSIP Number 30265U 225
Security Code 59634
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date September 25, 2000
Mandatory Termination Date (6) January 2, 2001
_____________
<FN>
NOTES TO SUMMARY OF ESSENTIAL INFORMATION
(1) As long as we are sole owner of Units of the Trust, we may adjust
the number of Units of the Trust. 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 entirely of a deferred sales
charge. On an annualized basis, the maximum sales charge is equal to
0.35%. See "Fee Table" and "Public Offering."
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. The price you pay for your
Units will be based on their valuation at the Evaluation Time on the
date you purchase your Units. On the Initial Date of Deposit the Public
Offering Price per Unit will not include any accumulated dividends on
the Securities. After this date, a pro rata share of any accumulated
dividends on the Securities will be included.
(5) During the initial offering period the Sponsor's Initial Repurchase
Price per Unit and Redemption Price per Unit will include the estimated
organization costs per Unit set forth under "Fee Table." After the
initial offering period, the Sponsor's Initial Repurchase Price per Unit
and Redemption Price per Unit will not include such estimated
organization costs. See "Redeeming Your Units."
(6) See "Amending or Terminating the Indenture."
</FN>
</TABLE>
Page 3
Fee Table
This Fee Table describes the fees and expenses that you may, directly or
indirectly, pay if you buy and hold Units of the Trust. See "Public
Offering" and "Expenses and Charges." The sales charge and expense
information are annualized amounts. Although the Trust has a term of
approximately three months and is a unit investment trust rather than a
mutual fund, this information allows you to compare fees.
<TABLE>
<CAPTION>
Amount
per Unit
_______
<S> <C> <C>
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Maximum sales charge 0.35% $.035
===== =====
Initial sales charge (paid at the time of purchase) 0.00%(a) $.000
Deferred sales charge (paid in installments or at redemption) 0.35%(b) .035
Organization Costs
(as a percentage of public offering price)
Estimated organization costs .062%(c) $.0062
===== =====
Estimated Annual Trust Operating Expenses(d)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees .078% $.0080
Creation and development fee .350%(e) .0359
Trustee's fee, Shareholder Servicing Agent's fee and other operating expenses .150%(f) .0153
_____ _____
Total .578% $.0592
===== =====
Example
This example is intended to help you compare the cost of investing in
the Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in the Trust for the periods
shown and then sell your Units at the end of those periods. The example
also assumes a 5% return on your investment each year and that the
Trust's operating expenses stay the same. Although your actual costs may
vary, based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
______ ______ ______ ________
$99 $309 $536 $1,189
The example assumes that the principal amount and distributions are
rolled annually into a New Trust, and you pay the deferred sales charge.
________________
<FN>
(a) There is no initial sales charge on Trust Units.
(b) The deferred sales charge is a fixed dollar amount equal to $.010
per Unit (approximately $.035 per Unit on an annualized basis) which will
be accrued on a daily basis and deducted monthly commencing October 20,
2000 over the life of the Trust and at the Trust's termination. The
deferred sales charge, as a percentage of the Public Offering Price,
will vary over time.
(c) Estimated organization costs will be deducted from the assets of the
Trust at the end of the initial offering period.
(d) With the exception of the creation and development fee, each of the
fees listed herein is assessed on a fixed dollar amount per Unit basis
which, as a percentage of average net assets, will vary over time. The
Sponsor will bear annual Trust Operating Expenses in excess of the
amounts set forth above (if applicable) for the Trust.
(e) The creation and development fee compensates the Sponsor for creating
and developing the Trust. During the life of the Trust, this fee is
accrued daily based on the Trust's net asset value at the annual rate of
.35%. The Trust pays the amount of any accrued creation and development
fee to the Sponsor monthly from the Trust's assets. In connection with
the creation and development fee, in no event will the Sponsor collect
over the life of the Trust more than 1.00% of a Unit holder's initial
investment.
(f) Other operating expenses do not include brokerage costs and other
portfolio transaction fees. In certain circumstances the Trust may incur
additional expenses not set forth above. See "Expenses and Charges."
</FN>
</TABLE>
Page 4
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 409
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 409, comprised of The Forbes 40(TM)
Portfolio, Qualified 2000 Series, as of the opening of business on
September 22, 2000. This statement of net assets is the responsibility
of the Trust's Sponsor. Our responsibility is to express an opinion on
this statement of net assets based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
statement of net assets is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statement of net assets. Our procedures included
confirmation of the letter of credit held by the Trustee and deposited
in the Trust on September 22, 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 statement
of net assets. We believe that our audit of the statement of net assets
provides a reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of FT 409,
comprised of The Forbes 40(TM) Portfolio, Qualified 2000 Series, at the
opening of business on September 22, 2000 in conformity with accounting
principles generally accepted in the United States.
ERNST & YOUNG LLP
Chicago, Illinois
September 22, 2000
Page 5
Statement of Net Assets
The Forbes 40(TM) Portfolio, Qualified 2000 Series
FT 409
At the Opening of Business on the
Initial Date of Deposit-September 22, 2000
<TABLE>
<CAPTION>
<S> <C>
NET ASSETS
Investment in Securities represented by purchase contracts (1) (2) $135,951
Less liability for reimbursement to Sponsor for organization costs (3) (84)
________
Net assets $135,867
========
Units outstanding 13,595.131
ANALYSIS OF NET ASSETS
Cost to investors (4) $135,951
Less sales charge (4) (0)
Less estimated reimbursement to Sponsor
for organization costs (3) (84)
________
Net assets $135,867
========
__________
<FN>
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit issued by The Chase Manhattan Bank,
of which $200,000 will be allocated to the Trust, 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 Trust. These costs have been estimated at $.0062 per
Unit for the Trust. A payment will be made at 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 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 the Trust.
(4) No initial sales charge will be assessed on Trust Units. A deferred
sales charge, which accrues on a daily basis and which will total $.010
per Unit over the life of the Trust, will be paid to us in monthly
installments beginning on October 20, 2000 and on the twentieth day of
each month thereafter (or if such date is not a business day, on the
preceding business day) over the life of the Trust and at the Trust's
termination. If you redeem Units, you will not have to pay the unaccrued
amount of the deferred sales charge applicable to such Units when you
redeem them.
</FN>
</TABLE>
Page 6
Schedule of Investments
The Forbes 40(TM) Portfolio, Qualified 2000 Series
FT 409
At the Opening of Business on the
Initial Date of Deposit-September 22, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1)(6) Offering Price Share the Trust (2)
_____ ____________________________________ __________ ______ _____________
<C> <S> <C> <C> <C>
72 T AT&T Corp. 1.60% $ 30.125 $ 2,169
34 AMZN Amazon.com, Inc. 1.00% 40.063 1,362
18 AOL America Online, Inc. (3) 0.75% 56.250 1,013
61 AIG American International Group, Inc. 3.98% 88.688 5,410
7 BRK/B Berkshire Hathaway Inc. (Class B) 9.42% 1,830.000 12,810
70 BSX Boston Scientific Corporation 0.96% 18.563 1,299
9 BRCM Broadcom Corporation (Class A) 1.59% 239.500 2,155
100 CPB Campbell Soup Company 1.87% 25.375 2,537
50 CCL Carnival Corporation 0.93% 25.188 1,259
14 CCU Clear Channel Communications, Inc. 0.60% 58.313 816
102 COX Cox Communications, Inc. (Class A) 2.46% 32.750 3,340
16 DCX DaimlerChrysler AG (4) 0.52% 44.500 712
135 DELL Dell Computer Corporation 3.77% 37.938 5,122
70 DIS The Walt Disney Company 1.92% 37.313 2,612
26 EBAY eBay Inc. 1.36% 71.188 1,851
41 EL The Estee Lauder Companies Inc. (Class A) 1.06% 35.125 1,440
31 BEN Franklin Resources, Inc. 0.97% 42.563 1,319
85 GPS The Gap, Inc. 1.45% 23.250 1,976
40 GTW Gateway Inc. 1.67% 56.800 2,272
20 GBLX Global Crossing Ltd. (4) 0.41% 28.000 560
15 HWP Hewlett-Packard Company 1.10% 99.938 1,499
26 HD The Home Depot, Inc. 1.07% 55.750 1,450
90 INTC Intel Corporation 4.07% 61.484 5,534
10 LVLT Level 3 Communications, Inc. 0.53% 71.750 718
21 LU Lucent Technologies Inc. 0.52% 33.563 705
386 MSFT Microsoft Corporation 18.22% 64.188 24,777
39 NWS The News Corporation Limited (ADR) 1.51% 52.750 2,057
</TABLE>
Page 7
Schedule of Investments (cont'd.)
The Forbes 40(TM) Portfolio, Qualified 2000 Series
FT 409
At the Opening of Business on the
Initial Date of Deposit-September 22, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1)(6) Offering Price Share the Trust (2)
_____ ____________________________________ __________ _______ _____________
<C> <S> <C> <C> <C>
20 NXTL Nextel Communications, Inc. (Class A) 0.69% $ 46.938 $ 939
45 NKE NIKE, Inc. (Class B) (5) 1.28% 38.750 1,744
65 ORCL Oracle Corporation 3.77% 78.938 5,131
32 PCLN Priceline.com Incorporated 0.51% 21.563 690
52 Q Qwest Communications International Inc. 1.76% 46.125 2,398
36 SCH The Charles Schwab Corporation 0.84% 31.688 1,141
16 VO The Seagram Company Ltd. (4) 0.65% 55.000 880
32 TWX Time Warner Inc. (3) 1.90% 80.875 2,588
49 VIA/B Viacom Inc. (Class B) 2.12% 58.938 2,888
511 WMT Wal-Mart Stores, Inc. 19.17% 51.000 26,061
33 WCOM WorldCom, Inc. 0.65% 26.625 879
17 YHOO Yahoo! Inc. 1.35% 108.125 1,838
________ ________
Total Investments 100% $135,951
======== ========
_____________
<FN>
(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 September 21, 2000. The Trust has a mandatory termination
date of January 2, 2001.
(2) The cost of the Securities to the 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 loss (which
is the difference between the cost of the Securities to us and the cost
of the Securities to the Trust) are $136,050 and $99, respectively.
(3) America Online, Inc. ("AOL") has announced plans to merge with Time
Warner Inc. ("Time Warner") to create a new company to be called AOL
Time Warner ("AOL Time Warner"). As per the terms of the merger
agreement, each shareholder of AOL will receive 1 share of AOL Time
Warner for each share of AOL held; and each shareholder of Time Warner
will receive 1.5 shares of AOL Time Warner for each share of Time Warner
held. As a result of this expected transaction and if the merger is
completed before the Trust terminates, it is anticipated that the Trust
will receive shares of common stock of AOL Time Warner in exchange for
the shares of both AOL and Time Warner which it holds. The transaction
is subject to the approval of shareholders of each company and various
regulatory authorities.
(4) This Security represents the common stock of a foreign company which
trades directly on a U.S. national securities exchange.
(5) NIKE, Inc. is not affiliated in any way with Nike Securities L.P.,
the Trust's Sponsor.
(6) As a result of the July 20, 2000 acquisition of MediaOne Group, Inc.
by AT&T Corp. (both Forbes 40 Index components), the Forbes 40 Index
currently consists of 39 stocks. AT&T Corp., as a percentage of the
Trust, reflects the combined weightings of both AT&T Corp. and MediaOne
Group, Inc.
</FN>
</TABLE>
Page 8
The FT Series
The FT Series Defined.
We, Nike Securities L.P. (the "Sponsor"), have created hundreds of
similar yet separate series of a unit investment trust which we have
named the FT Series. The series to which this prospectus relates, FT
409, consists of a single portfolio known as The Forbes 40(TM)
Portfolio, Qualified 2000 Series.
Units of the Trust are only available to employee benefit plans
established pursuant to Sections 401(a) or 457 of the Internal Revenue
Code of 1986, as amended ("Eligible Plans"). Eligible Plans will invest
in Units of the Trust in accordance with allocation instructions
received from employees pursuant to their respective terms. Accordingly,
the interests of an employee in the Units of the Trust are subject to
the terms of their respective Eligible Plan and the terms on which Units
of the Trust are offered as an investment alternative under such
Eligible Plan. As used herein, Unit holder shall refer to an Eligible
Plan.
The 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, BISYS Fund Services Ohio, Inc. as
Shareholder Servicing Agent and First Trust Advisors L.P. as Portfolio
Supervisor and Evaluator, governs the operation of the Trust.
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.
How We Created the Trust.
On the Initial Date of Deposit, we deposited a portfolio of common
stocks with the Trustee and in turn, the Trustee delivered documents to
us representing our ownership of the Trust in the form of units ("Units").
After the Initial Date of Deposit, additional Securities, or cash
(including a letter of credit) with instructions to buy more Securities,
may be deposited in the Trust to create new Units for sale. Additional
Units will be created, to the extent practicable, according to the
percentage relationship established among the Securities on the Initial
Date of Deposit (as set forth in "Schedule of Investments"), and not the
actual percentage relationship existing on the day new Units are
created, 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 Trust, 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
the Trust. If cash is deposited, 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 Trust pays the associated brokerage fees. To
reduce this dilution, the Trust 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 a
Trust to buy Securities. If we or an affiliate of ours act as agent to
the Trust we will be subject to the restrictions under the Investment
Company Act of 1940, as amended.
We cannot guarantee that the 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 Trust. 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 the Trust fails, unless we can
purchase substitute Securities ("Replacement Securities") we will refund
to you that portion of the purchase price and sales charge resulting
from the failed contract on the next Income Distribution Date. Any
Replacement Security the Trust acquires will be identical to those from
the failed contract.
Page 9
Portfolio
Objectives.
The objective of the Trust is to provide the potential for above average
capital appreciation through an investment in common stocks of companies
which comprise the Forbes 40 Index (TM).
The strategy is derived by identifying the equity holdings in public
companies for each of the individuals on the Forbes 400 list and by
applying additional steps to compile the Forbes 40 Index (TM). As
described below, the Trust consists of the securities contained in the
Forbes 40 Index (TM). The Forbes 40 Index (TM) is a weighted equity
index that is designed to track the common stock of the 40 most widely
held U.S. publicly traded companies of the Forbes 400 members, an annual
list published by Forbes magazine identifying the richest people in
America. The Trust offers investors the opportunity to draw on the
insights of this select group of individuals through one convenient
investment. Based on the list reported in the October 1999 issue of
Forbes magazine, the top ten members of the Forbes 400, and their
principal holdings, are Bill Gates-Microsoft, Paul Allen-Microsoft,
Warren Buffet-Berkshire Hathaway, Steven Ballmer-Microsoft, Michael Dell-
Dell Computer, the Walton Family-Wal-Mart Stores, Gordon Moore-Intel
Corporation, Larry Ellison-Oracle Corp., Philip Anschutz-Qwest
Communications and John Kluge-Metromedia.
The Forbes 40 Index (TM) is a strategy derived by Forbes through
application of the following steps:
- Identify the estimated equity holdings in public companies for each
of the individuals on the Forbes 400 list.
- Multiply those estimated equity holdings by the listed share price as
of August 31 of each year.
- Total the value of each public company held by the Forbes 400.
- Determine the 40 companies representing the greatest total value held
by the Forbes 400.
- The 40 companies are weighted in the Forbes 40 Index (TM) by (i)
dividing each company's total market value held by the individuals on
the Forbes 400 by (ii) the total market value of the top 40 companies
held by those individuals.
Using the 40 companies and the weightings determined above, Forbes
creates a hypothetical portfolio on each January 1 utilizing actual
closing list prices of the Securities on the last preceding day the
stock market is open. Forbes repeats this process on January 1 of each
year and makes the appropriate adjustments to the index, which is
derived from the strategy described above.
The Forbes 40 Index (TM) contains a broad mix of businesses ranging from
mature industries to the fastest growing high-tech sectors shaping our
economy today. The companies in the Forbes 40 Index (TM) can change from
one year to the next, thereby reflecting the areas where new wealth is
being created.
The Trust consists of the securities currently contained in the Forbes
40 Index (TM). The weighting of the Securities in the Trust attempts to
match the share weightings of the common stocks in the Forbes 40 Index
(TM) on January 3, 2000, subject to the limitation that only whole
shares are purchased for the Trust and that on the Initial Date of
Deposit no individual Security will represent 25% or more of the Trust
and that during the initial offering period no securities related issuer
will represent more than 5% of the Trust. The Forbes 40 Index (TM) is
reviewed and adjusted when necessary on an annual basis in accordance
with the strategy. The composition of the Trust, however, will not be
adjusted during the life of the Trust to reflect changes in the
composition of the Forbes 40 Index (TM) which occur on January 1 of any
year or at any time after the Initial Date of Deposit.
There is, of course, no guarantee that the objective of the Trust will
be achieved. "Forbes" and the "Forbes 40 Index (TM)" are trademarks of
Forbes Index, Inc. ("Forbes") and have been licensed for use for certain
purposes by us. The Trust, based on the Forbes 40 Index (TM), is not
sponsored, endorsed, sold or promoted by Forbes, and Forbes makes no
representation regarding the advisability of investing in such Trust.
See "Risk Factors" for a discussion of the risks of investing in the
Trust.
Risk Factors
Price Volatility. The Trust invests in common stocks of companies that
comprise the Forbes 40 Index (TM). The value of the Trust's Units will
fluctuate with changes in the value of these common stocks. Common stock
prices fluctuate for several reasons including changes in investors'
Page 10
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. In addition, common stock prices may
be particularly sensitive to rising interest rates, as the cost of
capital rises and borrowing costs increase.
Because the Trust is 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 the Trust will be positive over any period of time or
that you won't lose money. Units of the Trust are not deposits of any
bank and are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Three of the Securities represent approximately 47% of the value of the
Trust. If these stocks decline in value you may lose a substantial
portion of your investment.
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.
Technology Industry. Because more than 25% of the Trust is invested in
technology companies, the Forbes 40 (TM) Portfolio is considered to be
concentrated in the technology industry. A portfolio concentrated in a
single industry may present more risk than a portfolio broadly
diversified over several industries. Technology companies are generally
subject to the risks of rapidly changing technologies; short product
life cycles; fierce competition; aggressive pricing; frequent
introduction of new or enhanced products; 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. Technology company stocks have
experienced extreme price and volume fluctuations that are often
unrelated to their operating performance.
Microsoft Corporation, which represents approximately 18% of the Trust,
is currently engaged in litigation with Sun Microsystems, Inc., the U.S.
Department of Justice and several state Attorneys General. The
complaints against Microsoft include copyright infringement, unfair
competition and anti-trust violations. The claims seek injunctive relief
and monetary damages. The District Court handling the antitrust case
recently held that Microsoft exercised monopoly power in violation of
the Sherman Antitrust Act and various state antitrust laws. The court
entered into a final judgment on June 7, 2000 in which it called for
Microsoft to be broken up into two separate companies, one composed of
the company's operating systems and the other containing its
applications software business. The court also called for significant
operating restrictions to be placed on the company until such time as
the separation was completed. Microsoft has stated that it will appeal
the rulings against it after the penalty phase and final decree. It is
impossible to predict what impact the penalties will have on Microsoft
or the value of its stock.
Strategy. There is no guarantee that the strategy or the investment
objective of the Trust will be achieved. The actual performance of the
Trust will be different than the hypothetical returns of the Forbes 40
Index (TM). Because the Trust is unmanaged and follows the strategy, the
Trustee will not sell stocks in the event the strategy is not achieving
the desired results.
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 companies represented in the Trust. In
addition, litigation regarding any of the issuers of the Securities,
such as that concerning Microsoft Corporation, or of the industries
represented by these 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.
Foreign Stocks. Certain of the Securities in the Trust are issued by
foreign companies, which makes the Trust subject to more risks than if
it 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
Page 11
on foreign investments and exchange of securities; inadequate financial
information; and lack of liquidity of certain foreign markets.
Portfolio Securities Descriptions
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.
Amazon.com, Inc., headquartered in Seattle, Washington, operates as an
online retailer of books and other products via a commercial site on the
World Wide Web. The company also operates an online auction site.
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.
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.
Berkshire Hathaway Inc. (Class B), headquartered in Omaha, Nebraska, is
a holding company with subsidiaries in a variety of business sectors.
The company sells property and casualty insurance and other insurance
products. The company also manufactures and markets home cleaning
systems; manufactures and sells confectionery products; retails home
furnishings; and owns The Buffalo News. (Class B voting rights equal one-
two-hundredth (1/200th) of a vote for each share held. Class B dividend
rights equal one-thirtieth (1/30th) of the amount declared for each
Class A share held.)
Boston Scientific Corporation, headquartered in Natick, Massachusetts,
makes minimally invasive medical devices used in a broad range of
interventional medical specialties, including cardiology,
electrophysiology, gastroenterology, neuro-endovascular therapy,
radiology, urology and vascular surgery.
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.
Campbell Soup Company, headquartered in Camden, New Jersey, through
subsidiaries, makes and markets soups, sauces, biscuits and
confectionery products. The company distributes products to the food
service and home meal replacement markets worldwide.
Carnival Corporation, headquartered in Miami, Florida, operates one of
the world's largest multiple-night cruise lines under the names
"Carnival Cruise Lines," "Holland America Line," "Windstar Cruises,"
"Cunard Line," "Seabourn Cruise Line," "Costa Crociere SpA" and
"Airtours' Sun Cruises." The company markets sight-seeing tours and
operates several "Westmark" hotels.
Clear Channel Communications, Inc., headquartered in San Antonio, Texas,
owns, programs and/or sells airtime for various U.S. radio and
television stations and international radio stations. The company
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.
Cox Communications, Inc. (Class A), headquartered in Atlanta, Georgia,
is one of the nation's largest broadband communications companies. The
company has operations and investments in domestic and international
cable distribution systems, programming networks and telecommunications
technology. The company also holds interests in Sprint PCS and other
programming networks.
DaimlerChrysler AG, headquartered in Stuttgart, Germany, designs,
manufactures and markets automobiles and other vehicles worldwide. The
company also provides electronics and telecommunications services as
well as aerospace, defense and financial services.
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.
The Walt Disney Company, headquartered in Burbank, California, operates
as a diversified international entertainment company with operations
Page 12
consisting of filmed entertainment, theme parks and resorts and consumer
products. Disney also has broadcasting (including Capital Cities/ABC,
Inc.) and publishing operations.
eBay Inc., headquartered in San Jose, California, operates an online
person-to-person trading community on the Internet, bringing together
buyers and sellers in an auction format to trade personal items such as
antiques, coins, collectibles, computers, memorabilia, stamps and toys.
The Estee Lauder Companies Inc. (Class A), headquartered in New York,
New York, makes and markets quality skin care, makeup, fragrance and
hair care products, sold in numerous countries mainly under the "Estee
Lauder," "Clinique," "Aramis," "Prescriptives," "M.A.C.," "Bobbi Brown
essentials," "Origins" and "Aveda" brand names.
Franklin Resources, Inc., headquartered in San Mateo, California,
through subsidiaries, provides global and domestic investment
management, shareholder and distribution services to the Franklin
Templeton mutual funds and institutional accounts throughout the world.
The Gap, Inc., headquartered in San Francisco, California, operates
specialty retail stores in the United States, Canada, France, Germany,
Japan and the United Kingdom. The company's stores sell casual apparel,
shoes and other accessories for men, women and children under a variety
of brand names, including "Gap," "GapKids," "babyGap," "Banana Republic"
and "Old Navy."
Gateway Inc., 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.
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.
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.
The Home Depot, Inc., headquartered in Atlanta, Georgia, operates do-it-
yourself warehouse stores in the United States, Canada and Chile. These
stores sell a wide assortment of building material, home improvement,
and lawn and garden products. The company also operates EXPO Design
Centers in several states which offer interior design and renovation
products.
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.
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.
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.
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.
The News Corporation Limited (ADR), headquartered in Surry Hills, New
South Wales, Australia, is an international media company that publishes
Page 13
newspapers, magazines and books; produces and distributes motion
pictures and television programming; and provides television
broadcasting and digital broadcasting system design, conditional access
and subscriber management systems.
Nextel Communications, Inc. (Class A), headquartered in Reston,
Virginia, with subsidiaries, provides a wide array of digital and analog
wireless communications services throughout the United States.
NIKE, Inc. (Class B), headquartered in Beaverton, Oregon, through
subsidiaries, makes and sells athletic footwear, apparel, equipment and
accessories for men, women and children for competitive and recreational
wear and specific sports. The company also designs, markets and sells
dress and casual shoes, headwear and hockey equipment. The company is
not affiliated in any way with Nike Securities L.P., the Trust's Sponsor.
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.
Priceline.com Incorporated, headquartered in Norwalk, Connecticut, has
developed a new type of e-commerce where customers enter prices they are
willing to pay for products or services and then the company contacts
participating sellers to determine whether they can fulfill the
customer's offer
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.
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.
The Seagram Company Ltd., headquartered in Montreal, Quebec, Canada,
through subsidiaries, produces and sells distilled spirits, wines,
beers, coolers and mixers. The company, through Universal Studios, Inc.,
produces and distributes motion picture, television and home video
products. The company also produces and distributes recorded music and
operates theme parks and retail stores.
Time Warner Inc., headquartered in New York, New York, publishes and
distributes magazines and books; produces and distributes recorded
music, motion pictures and television programing; owns and operates
retail stores; owns and administers music copyrights; and operates cable
TV systems.
Viacom Inc. (Class B), headquartered in New York, New York, is a
worldwide entertainment and publishing company. The company's operations
include "Blockbuster" video and music, "MTV Networks," "Paramount
Pictures," "Paramount Television," "Paramount Parks," "Showtime
Networks," "Simon & Schuster," television stations and movie screens.
The company also produces and distributes television series, mini-series
and movies.
Wal-Mart Stores, Inc., headquartered in Bentonville, Arkansas, is the
largest retailer in the United States measured by total revenues. The
company operates "Wal-Mart" retail discount department stores, "Wal-Mart
Supercenters" and "Sam's" wholesale clubs in the United States and
several other countries.
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.
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.
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.
Hypothetical Performance
Information
The following table compares the hypothetical performance of the stocks
that would have been in the Forbes 40 Index (TM) with the actual
performance of the Dow Jones Industrial Average ("DJIA") and Standard &
Page 14
Poor's 500 Composite Stock Price Index ("S&P 500 Index") in each of the
full years listed below. The table does not show past performance of the
Forbes 40 Index (TM) or the Trust, neither of which were previously in
existence. The Forbes 40 Index (TM) is a strategy derived by Forbes by
applying the steps set forth in "Portfolio-Objectives."
These returns should not be used to predict future performance of the
Trust. Returns from the Trust will differ from the stocks that would
have been in the Forbes 40 Index (TM) for several reasons, including the
following:
- Total Return figures shown do not reflect brokerage commissions or
taxes.
- Hypothetical Forbes 40 Index (TM) returns are for calendar years,
while the Trust begins and ends on various dates.
- The Trust has a maturity less than one year.
- The Trust may not be fully invested at all times and the weightings
may differ from the Forbes 40 Index (TM).
- Securities are often purchased or sold at prices different from the
closing prices used in buying and selling Units.
- The composition of the Trust will not be adjusted during the life of
the Trust to reflect changes in the composition of the Forbes 40 Index
(TM) which occur after the Initial Date of Deposit.
You should note that the Trust is not designed to parallel movements in
the Forbes 40 Index (TM), DJIA or S&P 500 Index, and it is not expected
that it will do so. You should also note that the stocks that would have
been in the Forbes 40 Index (TM) have underperformed both the DJIA and
S&P 500 Index in certain years, and we cannot guarantee that the Trust
will outperform the DJIA or the S&P 500 Index over the life of the Trust
or over consecutive rollover periods, if available.
<TABLE>
<CAPTION>
COMPARISON OF TOTAL RETURN(4)
(Return figures for the Forbes 40 Stocks reflect sales charges
and trust expenses but not brokerage commissions or taxes)
______________________________________________________________
Forbes 40 S&P 500
Year Stocks (1) DJIA (2) Index (3)
____ ______ ______ ______
<S> <C> <C> <C>
1988 15.20% 15.95% 16.34%
1989 38.60% 31.71% 31.22%
1990 -7.46% -0.58% -3.13%
1991 56.61% 23.93% 30.00%
1992 11.15% 7.35% 7.43%
1993 -1.20% 16.71% 9.92%
1994 0.98% 4.95% 1.28%
1995 30.52% 36.45% 37.12%
1996 25.65% 28.58% 22.68%
1997 37.10% 24.78% 33.10%
1998 70.19% 18.00% 28.34%
1999 39.92% 27.01% 20.89%
2000 -11.62% -8.44% -0.44%
(thru 6/30)
________________
<FN>
(1) The Forbes 40 Stocks consist of the stocks which would have comprised
the Forbes 40 Index (TM) on January 1 of each year.
(2) DJIA is an index of 30 stocks compiled by Dow Jones & Company, Inc.
as being representative of the broad market and of American industry.
(3) S&P 500 Index is an index of 500 stocks chosen by Standard & Poor's
to be representative of the leaders in various industries.
(4) Total Return represents the sum of the change in market value of each
group of stocks between the first and last trading day of a period plus
the total dividends paid on each group of stocks during such period
divided by the opening market value of each group of stocks as of the
first trading day of a period. Total Return figures assume that all
dividends are reinvested annually. Based on the year-by-year returns
contained in the table, over the 12 full years as listed above, the
Forbes 40 Stocks achieved an average annual total return of 24.40%. In
addition, over this period, the Forbes 40 Stocks achieved a greater
average annual total return than that of the DJIA and S&P 500 Index,
which were 19.07% and 18.91%, respectively. Total return does not take
into consideration any commissions or taxes. For the Forbes 40 Stocks
the table assumes a deferred sales charge rate of 0.35% in the first
year and 0.35% in each of the subsequent years and an estimated annual
expense rate, including organization costs, of $6.54 per $1,000 invested.
</FN>
</TABLE>
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the price per Unit of
which is comprised of the following:
- The aggregate underlying value of the Securities;
Page 15
- The amount of any cash in the Income and Capital Accounts;
- Dividends receivable on Securities; and
- The maximum sales charge (which consists solely of 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.
Although you are not required to pay for your Units until the business
day following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Organization Costs. Securities purchased with the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for the
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 the 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 the Trust.
Securities will be sold to reimburse the Sponsor for the Trust's
organization costs at the end of the initial offering period. At 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 the Trust to
fully reimburse the Sponsor. In that event, the net asset value per Unit
of the 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 the Trust in "Statement 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 the 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 the Trust as existed
prior to such sale.
Sales Charges.
The maximum sales charge is entirely deferred. The deferred sales charge
is a fixed dollar amount equal to approximately $.010 per Unit, which
accrues on a daily basis, and will be deducted from the Trust's assets
on the twentieth day of each month over the life of the Trust and at the
Trust's termination. You will only be subject to the deferred sales
charge that accrues while you own your Units. At the Public Offering
Price per Unit set forth in "Summary of Essential Information," the
maximum sales charge equals 0.10% of the Public Offering Price. The
maximum sales charge will vary from 0.10% with changes in the Public
Offering Price but in no case will it exceed 1.0% of the Public Offering
Price (equivalent to 1.0% of the net amount invested, exclusive of the
deferred sales charge).
The Value of the Securities.
The Evaluator will appraise the aggregate underlying value of the
Securities in the 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 the 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
Page 16
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 Trust for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
Dealer Concessions.
Dealers and others can purchase Units at prices which represent a
concession or agency commission of up to $.025 per Unit.
We reserve the right to change the amount of concessions or agency
commissions from time to time. If we reacquire, or the Trustee redeems,
Units from brokers, dealers or other selling agents while a market is
being maintained for such Units, such entities agree to immediately
repay to us any concession or agency commission relating to the
reacquired Units. Certain commercial banks may be making Units of the
Trust 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 Trust. 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 Trust
(which may show performance net of the expenses and charges the Trust
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 the Trust differ
from other comparative investments. You should not assume that these
performance comparisons will be representative of the Trust's future
performance.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales
charge per Unit of the Trust as stated in "Public Offering." Also, any
difference between our cost to purchase the Securities and the price at
which we sell them to the Trust is considered a profit or loss (see Note
2 of "Schedule 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 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.
Page 17
We will pay all expenses to maintain a secondary market, except the
Evaluator fees and costs to transfer and record the ownership of Units,
if any. 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 SHAREHOLDER
SERVICING AGENT.
How We Purchase Units
The Shareholder Servicing Agent will notify us of any tender of Units
for redemption. If our bid is equal to or greater than the Redemption
Price per Unit, we may purchase the Units. You will receive your
proceeds from the sale no later than if they were redeemed by the
Trustee. We may tender Units we hold to the Trustee for redemption as
any other Units. If we elect not to purchase Units, the Shareholder
Servicing Agent or 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 the Trust are listed under "Fee Table."
If actual expenses exceed the estimate, the Trust will bear the excess.
The Trustee will pay operating expenses of the Trust from the Income
Account of the 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 Trust, and will receive brokerage fees
when the Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. First Trust Advisors L.P., an affiliate of ours,
acts as both Portfolio Supervisor and Evaluator to the Trust and will
receive the fees set forth under "Fee Table" for providing portfolio
supervisory and evaluation services to the Trust. 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 Trust.
The fees payable to us, First Trust Advisors L.P. and the Trustee are
based on the largest aggregate number of Units of the Trust outstanding
at any time during the calendar year, except during the initial offering
period for our fees and First Trust Advisors' fees, in which case these
fees are calculated based on the largest number of Units outstanding
during the period for which compensation is paid. The fees payable to
the Shareholder Servicing Agent are a fixed dollar amount for the Trust.
Each of these fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fee 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 service in such year.
As Sponsor, we will receive a fee from the Trust for creating and
developing the Trust, including determining the Trust's objectives,
policies, composition and size, selecting service providers and
information services and for providing other similar administrative and
ministerial functions. The "creation and development fee" is accrued
(and becomes a liability of the Trust) on a daily basis. The dollar
amount of the creation and development fee accrued each day, which will
vary with fluctuations in the Trust's net asset value, is determined by
multiplying the net asset value of the Trust on that day by 1/365 of the
annual creation and development fee of 0.35%. The total amount of any
accrued but unpaid creation and development fee is paid to the Sponsor
on a monthly basis from the assets of the Trust. If you redeem your
Units, you will only be responsible for any accrued and unpaid creation
and development fee through the date of redemption. In connection with
the creation and development fee, in no event will the Sponsor collect
over the life of the Trust more than 1.00% of a Unit holder's initial
investment. We do not use this fee to pay distribution expenses or as
compensation for sales efforts.
In addition to the Trust's operating expenses, and the fees described
above, the Trust may also incur the following charges:
- All legal expenses of the Trustee according to its responsibilities
under the Indenture;
- The expenses and costs incurred by the Trustee to protect the 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 the Trust;
- -Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of
the Trust; and/or
- All taxes and other government charges imposed upon the Securities or
any part of the Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
the Trust. 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 Trust. If there is not
enough cash in the Income or Capital Account, the Trustee has the power
to sell Securities to make cash available to pay these charges. Any
compensation or other consideration we or our affiliates receive on
Units held in Eligible Plans offered to employees of ours or our
affiliates will be remitted to such Eligible Plans to the extent the
receipt of such compensation or other consideration by us or our
affiliates is not permitted by ERISA.
Tax Status
The Trust is not an association taxable as a corporation for federal
income tax purposes. Because the Eligible Plans are exempt from tax
under Sections 501(a) or 457 of the Internal Revenue Code of 1986, as
amended, while Units are held by Eligible Plans, neither such Eligible
Plans nor any participating employee will be taxed on income from the
Trust.
Foreign, State and Local Taxes.
Some distributions by the Trust may be subject to foreign withholding
taxes. Any income 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 the 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 Trust is not an association taxable as a corporation.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat the Shareholder Servicing Agent as sole Record
Owner of Units on its books. The Shareholder Servicing Agent will keep a
record of all individual Unit holders on its books. It is your
responsibility to notify the Shareholder Servicing Agent when you become
Record Owner. All Units will be held in uncertificated (book-entry) form.
The Shareholder Servicing Agent 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 Shareholder Servicing Agent 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.
Unit Holder Reports.
In connection with each distribution, the Shareholder Servicing Agent
will provide you with a statement detailing the per Unit amount of
income (if any) distributed. After the end of each calendar year, the
Shareholder Servicing Agent will provide Eligible Plans with the
following information:
- A summary of transactions in the Trust for the year;
- A list of any Securities sold during the year and the Securities held
at the end of that year by the 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 Shareholder Servicing Agent copies of the
evaluations of the Securities as prepared by the Evaluator.
Page 19
Income and Capital Distributions
You are eligible to receive distributions on your Units only after you
become a Record Owner. The Trustee will credit dividends received on the
Trust's Securities to the Income Account. All other receipts, such as
return of capital, are credited to the Capital Account.
The Trustee will distribute any net income in the Income Account as well
as amounts in the Capital Account as part of the final liquidation
distribution in the case of Rollover Unit holders and others. No income
distribution will be paid if accrued expenses of the Trust exceed
amounts in the Income Account. Distribution amounts will vary with
changes in the Trust's fees and expenses, in dividends received and with
the sale of Securities. For purposes of distributions, the Record Date
shall be the Mandatory Termination Date and Unit holders on the Record
Date shall receive distributions as part of the final liquidation
distribution (the "Distribution Date").
We anticipate that there will be enough money in the Capital Account to
pay the deferred sales charge. If not, the Trustee may sell Securities
to meet the shortfall.
The Trustee may establish reserves (the "Reserve Account") within the
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of the Trust.
Redeeming Your Units
Each Eligible Plan may redeem all or a portion of its Units at any time
by sending a request for redemption to the Shareholder Servicing Agent,
who will forward such information to the Trustee. The redemption request
must be properly endorsed with proper instruments of transfer and
signature guaranteed by an eligible institution. No redemption fee will
be charged, but you are responsible for any governmental charges that
apply. One business day 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 Shareholder
Servicing Agent receives your redemption request (if such day is a day
the NYSE is open for trading). However, if your redemption request is
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 Trustee may sell Securities to make funds available for redemption.
If Securities are sold, the size and diversification of the 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 not designated to purchase
Securities;
2. the aggregate underlying value of the Securities held in the 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 the Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of the Trust, if any;
4. cash held for distribution to Unit holders of record of the Trust as
of the business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
Page 20
6. other liabilities incurred by the Trust; and
dividing
1. the result by the number of outstanding Units of the Trust.
Until the end of the initial offering period, the Redemption Price per
Unit will include estimated organization costs as set forth under "Fee
Table."
Investing in a New Trust
The Trust's portfolio has been selected on the basis of capital
appreciation potential for a limited time period. When the Trust is
about to terminate, you may have the option to roll your proceeds into
the next series of the Trust (the "New Trust") if one is available. We
intend to create the New Trust in conjunction with the termination of
the Trust and plan to apply the same strategy we used to select the
portfolio for the Trust to the New Trust.
If your Eligible Plan assets are invested in Units of the Trust on the
Mandatory Termination Date set forth under "Summary of Essential
Information" (a "Rollover Unit holder"), the Trustee, acting in its
capacity as Distribution Agent, will redeem such Units and reinvest the
proceeds into the New Trust, provided such New Trust is offered and
Units are available. If you no longer wish to have your Eligible Plan
assets invested in the Trust you can change your Eligible Plan
allocation instructions at any time as permitted by your Eligible Plan.
As a Rollover Unit holder, your Units will be redeemed and the
underlying Securities sold by the Distribution Agent on the Mandatory
Termination Date. The Distribution Agent may engage us or other brokers
as its agent to sell the Securities.
Once all of the Securities are sold, your proceeds, less any brokerage
fees, governmental charges or other expenses involved in the sales, will
be used to buy units of the New Trust or trust with a similar investment
strategy that you have selected, provided such trusts are registered and
being offered. Accordingly, proceeds may be uninvested for up to several
days. Units purchased with rollover proceeds will generally be purchased
subject only to the maximum remaining deferred sales charge on such units.
We intend to create New Trust units as quickly as possible, depending on
the availability of the Securities contained in the New Trust's
portfolio. Rollover Unit holders will be given first priority to
purchase New Trust units. We cannot, however, assure the exact timing of
the creation of New Trust units or the total number of New Trust units
we will create. Any proceeds not invested on behalf of Rollover Unit
holders in New Trust units will be distributed within a reasonable time
after such occurrence. Although we believe that enough New Trust units
can be created, monies in the New Trust may not be fully invested on the
next business day.
If you elect not to participate as a Rollover Unit holder ("Remaining
Unit holders"), you will not be charged any additional sales charge due
to the Special Redemption and Liquidation Period. We may modify, amend
or terminate this rollover option upon 60 days notice.
Removing Securities from the Trust
The portfolio of the Trust is 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;
- There has been a public tender offer made for a Security or a merger
or acquisition is announced affecting a Security, and that in our
opinion the sale or tender of the Security is in the best interest of
Unit holders; 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 the Trust.
Except in the limited instance in which the Trust acquires Replacement
Securities, as described in "The FT Series," the Trust may not acquire
any securities or other property other than the Securities. The Trustee,
on behalf of the Trust, will reject any offer for new or exchanged
Page 21
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 the Trust, at our instruction
they will either be sold or held in the 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 the Trust to facilitate selling
Securities, exchanged securities or property from the Trust. 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 the Trust may be
changed. To get the best price for the 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 the Trust's portfolio
transactions, or when acting as agent for the Trust in acquiring or
selling Securities on behalf of the Trust.
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 Trust will terminate on
the Mandatory Termination Date. The Trust may be terminated prior to the
Mandatory Termination Date:
- Upon the consent of 100% of the Unit holders;
- If the value of the Securities owned by the Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in the Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- In the event that Units of the 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 Units. If the
Trust is terminated due to this last reason, we will refund your entire
sales charge; however, we will not refund any sales charge if the Trust
is terminated before the Mandatory Termination Date for any other stated
reason. For various reasons, including Unit holders' participation as
Rollover Unit holders, the 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 the 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 do not elect to participate in the Rollover 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 the Trust is terminated. Regardless of the
distribution involved, the Trustee will deduct from the Trust 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.
Page 22
Information on the Sponsor, Trustee, Shareholder
Servicing Agent 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 $27 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, 1999, the total partners' capital of
Nike Securities L.P. was $19,881,035 (audited).
This information refers only to us and not to the Trust or to any series
of the Trust 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.
Code of Ethics. The Sponsor and the Trust have adopted a code of ethics
requiring the Sponsor's employees who have access to information on
Trust transactions to report personal securities transactions. The
purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to the Trust.
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 Trust, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities; it only
provides administrative services.
The Shareholder Servicing Agent.
The Shareholder Servicing Agent is BISYS Fund Services Ohio, Inc. with
its principal place of business at 3435 Stelzer Road, Columbus, Ohio
43219. If you have questions regarding the Trust, you may call the
Shareholder Servicing Agent at (800) 266-5240. The Shareholder Servicing
Agent has not participated in selecting the Securities; it only provides
administrative services.
Limitations of Liabilities of Sponsor, Shareholder Servicing Agent and
Trustee.
Neither we, the Shareholder Servicing Agent 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 Shareholder
Servicing Agent's and 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;
Page 23
- Terminate the Indenture and liquidate the Trust; 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, Shareholder Servicing Agent 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,
Shareholder Servicing Agent 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 Trust.
Experts.
Ernst & Young LLP, independent auditors, have audited the Trust's
statement of net assets, including the schedule of investments, at the
opening of business on the Initial Date of Deposit, as set forth in
their report. We've included the Trust's statement of net assets,
including the schedule 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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Page 27
FIRST TRUST (registered trademark)
The Forbes 40(TM) Portfolio, Qualified 2000 Series
FT 409
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Shareholder Servicing Agent: Trustee:
BISYS Fund Services Ohio, Inc. The Chase Manhattan Bank
3435 Stelzer Road 4 New York Plaza, 6th floor
Columbus, Ohio 43219 New York, New York 10004-2413
1-800-266-5240 1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
________________________
When Units of the Trust are no longer available, this prospectus may be
used as a preliminary prospectus for a future series, in which case you
should note the following:
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL, OR ACCEPT OFFERS TO BUY, SECURITIES OF A FUTURE SERIES
UNTIL THAT SERIES HAS BECOME EFFECTIVE WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO SECURITIES CAN BE SOLD IN ANY STATE WHERE A SALE WOULD BE
ILLEGAL.
________________________
This prospectus contains information relating to The Forbes 40(TM)
Portfolio, Qualified 2000 Series, 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. 333-32500) and
- Investment Company Act of 1940 (file no. 811-05903)
Information about the Trust, including its Code of Ethics, 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 Trust 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]
September 22, 2000
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 28
First Trust (registered trademark)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of the unit investment trust
contained in FT 409 not found in the prospectus for the Trust. This
Information Supplement is not a prospectus and does not include all of
the information you should consider before investing in the Trust. This
Information Supplement should be read in conjunction with the prospectus
for the Trust in which you are considering investing.
This Information Supplement is dated September 22, 2000. Capitalized
terms have been defined in the prospectus.
Table of Contents
Forbes 40 Index(TM) 1
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 2
Litigation
Microsoft Corporation 2
Concentration
Technology Companies 2
Forbes 40 Index(TM)
The Trust is not sponsored, endorsed, sold or promoted by Forbes. Forbes
makes no representation or warranty, express or implied, to the owners
of the Trust or any member of the public regarding the advisability of
investing in securities generally or in the Trust particularly. Forbes
only relationship to the Trust is the indirect licensing of certain
trademarks and trade names of Forbes and of The Forbes 40 Index (TM)
which is determined, composed and calculated by Forbes without regard to
Nike Securities L.P. or the Trust. Forbes has no obligation to take the
needs of Nike Securities L.P. or the owners of the Trust into
consideration in determining, composing or calculating The Forbes 40
Index (TM). Forbes is not responsible for and has not participated in
the determination of the timing of, prices or quantities of the Trust to
be issued or in the determination or calculation of the equation by
which the Trust is to be converted into cash. Forbes has no obligation
or liability in connection with the administration, marketing or trading
of the Trust.
FORBES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR
INTERRUPTIONS OF THE FORBES 40 INDEX (TM). FORBES MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO THE RESULTS TO BE OBTAINED BY NIKE SECURITIES
L.P., OWNERS OF THE TRUST, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF
THE FORBES 40 INDEX (TM) OR ANY DATA INCLUDED THEREIN. FORBES MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE FORBES 40 INDEX (TM) OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL FORBES HAVE
ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.
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.
Page 1
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. Common stocks do not represent an obligation of
the issuer and, therefore, do not offer any assurance of income or
provide the same degree of protection of capital as do debt securities.
The issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer
to declare or pay dividends on its common stock or the rights of holders
of common stock with respect to assets of the issuer upon liquidation or
bankruptcy.
Foreign Issuers. Since certain of the Securities included in the Trust
consist of securities of foreign issuers, an investment in the Trust
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 Trust, the
Sponsor believes that adequate information will be available to allow
the Supervisor to provide portfolio surveillance for the Trust.
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 United States 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 Trust are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trust 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 Trust. The adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the
Trust and on the ability of the Trust 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 Trust 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 the Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trust will generally be effected only in foreign securities markets.
Although the Sponsor does not believe that the Trust 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
and several state Attorneys General. The complaints against Microsoft
include copyright infringement, unfair competition and anti-trust
violations. The claims seek injunctive relief and monetary damages. The
District Court handling the antitrust case recently held that Microsoft
exercised monopoly power in violation of the Sherman Antitrust Act and
various state antitrust laws. The court entered into a final judgment on
June 7, 2000 in which it called for Microsoft to be broken up into two
separate companies, one composed of the company's operating systems and
the other containing its applications software business. The court also
called for significant operating restrictions to be placed on the
company until such time as the separation was completed. Microsoft has
Page 2
stated that it will appeal the rulings against it after the penalty
phase and final decree. It is impossible to predict what impact the
penalties will have on Microsoft or the value of its stock.
Concentration
Technology Companies. 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
superior to such issuers' technology. In addition, due to the increasing
public use of the Internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, and quality of Internet products and services. For
example, recent proposals would prohibit the distribution of obscene,
lascivious or indecent communications on the Internet. The adoption of
any such laws could have a material adverse impact on the Securities in
the Trust.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
unanticipated change. Recent industry downturns have resulted, in part,
from weak pricing, persistent overcapacity, slowdown in Asian demand and
a shift in retail personal computer sales toward the low end, or "sub-
$1,000" segment. Industry growth is dependent upon several factors,
including: the rate of global economic expansion; demand for products
such as personal computers and networking and communications equipment;
excess productive capacity and the resultant effect on pricing; and the
rate of growth in the market for low-priced personal computers.
Page 3
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 409, 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; The
First Trust Combined Series 272; FT 412; and FT 438 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 409, 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 September 22, 2000.
FT 409
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 ) September 22, 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 September 22, 2000
in Amendment No. 1 to the Registration Statement (Form S-6) (File
No. 333-32500) and related Prospectus of FT 409.
ERNST & YOUNG LLP
Chicago, Illinois
September 22, 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 409 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. 33-40955] 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).
2.2 Copy of Code of Ethics (incorporated by reference to
Amendment No. 1 to form S-6 [File No. 333-31176] filed
on behalf of FT 415).
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
